1. Dispute arising from repudiation of health insurance claim due to alleged concealment of pre-existing kidney disease at policy revival. (Para 3 )
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2026 Supreme(Online)(SCDRC) 12168
STATE CONSUMER DISPUTES REDRESSAL COMMISSION
S. P. Sood, Presiding Member, Manjula, Member
Krishan – Appellant
Versus
Life Insurance Corporation of India – Respondent
FIRST APPEAL NO. SC/6/A/959/2018
Important Points
Insurance contracts are based on the principle of utmost good faith; failure to disclose a pre-existing medical condition during the revival of a lapsed policy justifies the repudiation of the insurance claim.
Subject
Consumer Law - Insurance Claims
Act Referred
Headnote
(A) Insurance Law - Principle of Utmost Good Faith - Duty of disclosure - Non-disclosure of pre-existing disease at the time of revival of a lapsed policy constitutes concealment of material facts, entitling the insurer to repudiate the claim. (Para 7)
(B) Consumer Protection - Deficiency in Service - Repudiation of health insurance claim based on proven concealment of medical history is not a deficiency in service. (Para 7)
Issues: Whether the repudiation of the insurance claim was justified due to the concealment of a pre-existing kidney disease during the revival of the policy.
(B) Consumer Protection - Deficiency in Service - Repudiation of health insurance claim based on proven concealment of medical history is not a deficiency in service. (Para 7)
Issues: Whether the repudiation of the insurance claim was justified due to the concealment of a pre-existing kidney disease during the revival of the policy.
Legal Category Hierarchy
-
insurance law
-
health insurance
- claim repudiation
- pre-existing disease
- policy revival
- duty of disclosure
- utmost good faith
-
health insurance
-
consumer law
-
consumer disputes
- deficiency in service
-
appeals
- condonation of delay
-
consumer disputes
-
practice and procedure
-
evidence
- medical records
- certificate of treatment
-
evidence
Advocates:
For the Appellants/Petitioners: Vaibhav Parashar
For the Respondents: Piyush Sharma
For the Appellants/Petitioners: Vaibhav Parashar
For the Respondents: Piyush Sharma
Table of Contents
2. Complainant claimed valid claim for kidney treatment; insurer argued concealment of pre-existing disease in revival proposal form. (Para 3 , 4 )
3. Medical certificate confirmed complainant had kidney disease before policy revival; non-disclosure breached duty of utmost good faith. (Para 7 )
4. An insurance contract requires utmost good faith; concealment of material facts at policy revival renders the contract voidable. (Para 7 )
5. Appeal dismissed; District Commission order affirmed; no deficiency in service by insurer for repudiating claim. (Para 7 , 8 )
6. What is the duty of disclosure when reviving a lapsed insurance policy?
The policyholder must disclose all pre-existing diseases and material facts in the revival proposal, just as in a fresh policy. (Para 7 )
7. What is the consequence of concealing a pre-existing disease in an insurance policy revival?
Concealment of a pre-existing disease at revival breaches the principle of utmost good faith, allowing the insurer to repudiate the claim. (Para 7 )
8. Does the principle of utmost good faith apply to revival of a lapsed insurance policy?
Yes, the principle of utmost good faith applies equally to revival of a lapsed policy as it does to the original issuance of the policy. (Para 7 )
9. What evidence can prove concealment of a pre-existing disease in an insurance claim?
Hospital medical records and certificates showing the insured was under follow-up treatment for the disease before policy revival can prove concealment. (Para 7 )
ORDER
STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA
Date of Institution: 09.08.2018
Date of final hearing: 07.09.2026
Date of order: 07.09.2026
First Appeal No.959 of 2018
IN THE MATTER OF:-
Shri Krishan son of Sh. Sube Singh, Resident of House No.1443/44 LIG Housing Board Colony, Sector 4, Karnal.
....Appellant
Versus
Sr. Divisional Manager, Divisional Health Unit, Divisional Officer, Life Insurance Corporation of India, 489, Model Town, Karnal.
....Respondent
CORAM: MR. S.P. SOOD, PRESIDING MEMBER
MRS. MANJULA, MEMBER
Present:
Mr. Vaibhav Parashar, counsel for the appellant.
Mr. Piyush Sharma, counsel for respondent.
ORDER
PER: S.P.SOOD, PRESIDING MEMBER:
Delay of 45 days in filing of present appeal stands condoned for the reasons mentioned in the application seeking condonation of delay.
2. Challenge vide this Appeal No.959 of 2018 has been laid by appellant/then complainant qua legality of order dated 11.04.2018 passed by learned District Consumer Disputes Redressal Commission, Karnal (in short "District Commission") in complaint case No.139 of 2017, since dismissed.
3. Factual matrix: Complainant being the employee of Corporation bank at Karnal obtained a Health Insurance policy on 19.09.2012 from OP by paying premium of Rs.2,821/-. At the time of taking the said policy, complainant was hale and hearty. The sum insured under the policy was Rs.1,00,000/-. Complainant has been depositing premium of health insurance regularly since its inception. However somewhere in the year 2015, the health of complainant started deteriorating all of a sudden. Complainant went to a doctor, who conducted some tests and observed that the kidney of complainant was damaged. Complainant started his treatment of kidney problem from PGI, Chandigarh in the month of May 2015 i.e. first time admitted on 01.05.2016 in PGI at Chandigarh and continued under dialysis treatment for about 16 months. Somehow, when he was not cured then again he got admitted there for operation of kidney on 13.09.2016 and was discharged on 24.09.2016. However, during the complete process of treatment complainant spent amount of Rs.2,80,399/- in all for treatment, medicine, operation, x-ray etc. Complainant informed OP about the expenses and submitted admission slip and all necessary documents, bills etc. to OP for refund of claim expenses occurred by him during complete treatment on 17.11.2016, but OP instead of paying the claim amount repudiated the same vide letter dated 17.03.2017 on the ground that he had suppressed the details pertaining to his pre-existing disease at the time of buying the policy. However, complainant had developed problem in previous operation and again went to hospital for treatment surgery from 04.12.2016 to 14.12.2016 and complainant again spent amount of Rs.1,11,485/-. When complainant visited office of OP for submission of hospital bills, receipt with complete details for reimbursement of provisional claim and the second time expenses occurred over his treatment in the month of March, 2017, but OP refused to accept the same. Complainant spent total sum of Rs.3,91,884/- on his treatment upto 30.01.2017. Complainant visited the office of OP many times and requested for reimbursement of his claim, but OP did not heed to his request. So, there was deficiency in service on the part of OP.
4. Upon notice, OP filed its defence and submitted that complainant took the Health Insurance Policy for HCB Rs.1,000/- and MSB Rs.1,00,000/- under Table No.903 bearing Policy No.177965018 with date of commencement 15.09.2012 at a yearly premium of Rs.2,821/-. Said policy was obtained by complainant after understanding all the terms and conditions of the policy. However, the policy got lapsed on account of non-payment of premium and the same was got revived on 06.04.2015. Complainant lodged the claim for hospitalization from 13.09.2016 to 24.09.2016 for the treatment of Renal Transplantation. While processing the claim, it was revealed that the policy wa
