State Consumer Disputes Redressal Commission
Icici Prudential Life Insurance ... vs Adil Mohammad & Ors. on 12 December, 2017
CHHATTISGARH STATE
CONSUMER DISPUTES REDRESSAL COMMISSION,
PANDRI, RAIPUR (C.G).
Appeal No.FA/2017/247
Instituted on : 29.04.2017
ICICI Prudential Life Insurance Co. Ltd.,
Through : Authorised Signatory,
ICICI Pru Life Towers,
1089, Appa Sahab Marathe Marg, Prabhadevi,
Mumbai - 400025 .... Appellant (O.P. No.2)
Vs.
1. Shri Adil Mohammad.
2. Smt. Abeda Begum.
3. Shri Amil Mohammad.
4. Ms. Rani Nisha.
5. Shri Asif Mohammad.
All R/o Adarsh Chowk, Gram Mangla,
Tahsil & Dist.Bilaspur (C.G.) ... Respondent No.1 to 5 (Complainants)
6. Branch Manager,
Dewan Housing Finance Limited,
2nd Floor, Naidu Complex, Jail Road,
Raipur (C.G.) .... Respondent No.6 (O.P. No.1.)
PRESENT :
HON'BLE SHRI JUSTICE R.S. SHARMA, PRESIDENT
HON'BLE SHRI NARENDRA GUPTA, MEMBER
COUNSEL FOR THE PARTIES :
Shri Lokesh Kumar Singh, Advocate for the appellant (O.P. No.2).
Shri Jitendra Mudliyar, Advocate for the respondent No.1 to 5 (complainants).
Shri R.K. Gupta, Advocate for the respondent No.6 (O.P. No.1).
ORDER
DATED : 12/December/2017 PER :- HON'BLE SHRI JUSTICE R.S. SHARMA, PRESIDENT.
This appeal is directed against the order dated1 24.01.2017, passed by District Consumer Disputes Redressal Forum, Bilaspur (C.G.) (henceforth "District Forum") in Complaint Case No. C.C./190/2014. By the impugned // 2 // order, learned District Forum, has allowed the complaint of the complainants and directed that :-
1. The O.P. No.2 will pay within a period of one month from the date of order the remaining loan amount after the date of death of policy holder Mohammad Hussain i.e. after 14.03.2014 to the O.P. No.1 and the O.P. No.1 will deposit the amount of instalments, which were deducted during the above period, to the bank account of Adil Mohammad.
2. The O.P. No.2 will pay a sum of Rs.50,000/- (Rupees Fifty Thousand) towards compensation for mental agony to the complainants.
3. The O.P. No.2 will pay a sum of Rs.5,000/- (Rupees Five Thousand) towards cost of litigation to the complainants.
4. The O.P. No.1 will bear its own cost of litigation.
2. Briefly stated the facts of the case of the complainants are that the Late Smt. Jahida Begum, the complainant was suffering from cancer disease, therefore, initially the complaint has been filed by her son Adil Mohammad as power of attorney holder. During pendency of the complaint, Smt. Jahida Begum died, then her LR's are brought on record as complainants instead of Late Jahida Begum. During his lifetime Mohammad Husain, the husband of Smt. Jahida Begum and father of the complainants obtained home loan of Rs.4,26,801/- from O.P. No.1 on 13.03.2012. The Home Loan was insured with the O.P. No.2 in the name of Mohammad Hussain. The Policy No. is 16460111. Mohammad Hussain was a permanent employee of C.S.E.B. Korba (East). The monthly installments were being regularly deducted by the O.P. No.1. Due to ill // 3 // health, all of sudden Mohammad Husain died on 14.03.2014. According to the terms and conditions of the insurance policy, from the Bank account No.68006679636 of son of Adil Mohammad S/o Hussain Mohammad a sum of Rs.7,367/- was regularly deducted by the O.P. No.1 towards monthly installment of home loan. The policy holder died on 14.03.2014, therefore, according to the terms and conditions of the insurance policy, after death of the policy holder i.e. 14.03.2014, there is provision for exemption of entire loan amount. Even after death of Mohammad Hussain, contrary to the terms and conditions of the insurance policy, the monthly installment of Rs.7,367/- is being deducted by the O.P. No.1. The intimation regarding death of Mohammad Hussain was given to the OPs, but even then the O.P. No.1 is deducting the monthly installment amount. The OPs acted against the terms and conditions of the policy and thus committed deficiency in service and unfair trade practice. Hence, the complainants filed instant consumer complaint before the District Forum and prayed for granting reliefs as mentioned in the complaint.
3. The O.P. No.1 Diwan Housing Finance Limited has filed its written statement and averred that Mohammad Hussain had taken home loan of Rs.4,26,801/- from the O.P. No.1 in the name of his son Mohammad Adil. The O.P. No.1 did not receive the sum assured from the O.P. No.2, therefore, the amount of installment is being deducted. The amount of installment is being deducted and the same is deposited in the home loan account The loan amount and interest amount will be deducted until entire amount is paid. The O.P. No.1 did not commit any deficiency in service and did not violate terms and conditions of the agreement. The O.P. No.1 is entitled to receive the outstanding // 4 // amount of home loan and interest. The matter is related to death claim between the complainants and O.P. No.2, therefore, the complainants are not entitled to get any compensation from the O.P. No.1. The complaint of the complainant is liable to be dismissed with cost against the O.P. No.1.
4. The O.P. No.2 filed its written statement and averred that Insurance Contracts are contracts based on Utmost Good faith. As per the Contract, the insurer is bound to honour the claim under the policy provided that the Life Assured at the time of applying for the policy, had disclosed all relevant information with regard to his health, etc. which are the basis on which the insurer decides to cover the said life. Since the Life Assured did not perform his duty to disclose all material information, the contract of Insurance between the O.P. No.2 and the life assured is a void contract. Life Insurance claim payouts are made from the pooling of money by many consumer of the services of the Insurance Company. Hence to honour an illegitimate claim, would mean doing injustice to other genuine Policyholders. Hence even entertaining the said case would be against the principles of natural justice. Tthe complainants and life assured has concealed and suppressed the material facts and relevant facts of the case. The complainants have with malafide and dishonest intention not only concealed the material facts from the learned District Forum but also twisted and distorted the same to suit their own convenience and to misled the District Forum. The complainants have acted in bad faith with respect to subject of the complaint and approached the learned District Forum with unclean hand hence in view of Doctrine of clean hands - "One who seeks equity must come with clean hands". The subject policy was procured by the deceased in the life of his // 5 // son and also the life coverage under the Policy has been duly availed by the deceased. The complaint is devoid of any material particulars and has been filed merely to harass and gain undue advantage and unjustified monies from the O.P. and hence complaint deserves to be dismissed in limine. The complaint has been filed with ulterior motive and malafide intention to cause harassment and prejudice to the O.P., which is company of high repute. The complainants have failed to set up a nexus between the damages claimed in the present complaint and damage suffered by them. The damages claimed are arbitrary, without basis and is an abuse of process of law. The allegations contained in the complaint are disputed in entirety and the same may only be adjudicated by putting on record detailed evidence of both the parties and thus, the District Forum lacks jurisdiction to try the same as complaint is adjudicated only through a summary trial. The complaint being frivolous and vexatious is liable to be dismissed under Section 26 of the Consumer Protection Act, 1986 as the complainants have failed to make out a case of Deficiency in Service as alleged or otherwise within the meaning of the Consumer Protection Act, 1986. The O.P. No.2 was in receipt of duly signed and filled in proposal form from the father of the complainants for issuance of insurance policy as per detailed contained in said form. The O.P. No.2 on believing the information given by the Life Assured in the proposal form to be true and correct in all aspects and as per underwriting norms of the O.P. No.2 issued the policy in favour of the father of the complainants. The details of Policy No.16460111 as issued by the O.P. is mentioned below :-
Life Assured name Mohammad Hussen
Application Number DH00067752
Plan Home Assure M02
// 6 //
Policy number 16460111
Proposal received date 13/3/2012
Policy issuance date 13/3/2012
Premium amount 21,801/-
Sum assured 4,26,801/-
Premium frequency Single premium.
Policy Status Repudiated
Policy Dispatch Date 15/03/2012
That on the basis of policy proposal form received from the father of the complainants, Insurance Company had sent the Policy Documents to the communication address mentioned in the proposal form of the LA, stating the policy terms and conditions and a forwarding letter stating the "Free look period"
provision of cancellation of policy within 15 days time along with a copy of proposal form. The policy documents along with the Welcome Kit was duly dispatched by Insurance Company to the life assured and the same were duly received. In accordance to Clause 6(2) of the Insurance Regulatory and Development Authority (Protection of Policyholder's Interests) Regulations, 2002 every policy document sent by it is accompanied by a forwarding letter which clearly mentions that in case policyholder is not satisfied with the features or the terms and conditions of the policy, he can withdraw / return the policy within 15 days i.e. under the "Free Look Period"" provision. Clause 6(2) of the Insurance Regulatory and Development Authority (Protection of Policyholder's Interests) Regulations, 2002 further casts obligation upon the life insured to state the reasons to claim the policy amount and further provides for the verification of claim before issuance of assured amount or expenses incurred by the insurer. On the basis of replies / declaration provided in the proposal for insurance, the above policy was issued on 13th March, 2012. The Life Assured had signed a // 7 // declaration at the proposal stage. The complainants presented a Death Claim Intimation Form on 22.04.2014 before the Insurance Company by stating that the Life Assured expired on 14.03.2014. At the time of proposal for insurance, the Life Assured had replied in the negative on being asked relevant question pertaining to his medical history. The Life Assured has made a material suppression of his medical history at the proposal stage, which is evidence of his malafide intention in getting the Insurance Company to deliberately issue the insurance policy against the false information. The Insurance Company on further inquiry found that the Life Assured had been hospitalized on 9th February, 2011 for treatment of uncontrolled Diabetes Mellitus with Neuropathy and was further advised prolonged therapy and was informed for amputation.
This was prior to the issuance of the policy and the same was concealed by Life Assured at the proposal stage and further on. This was not the only medical history that had been concealed. Had the Insurance Company known all the above mentioned details at the proposal stage, the insurance policy would not have been issued. It becomes evident that the Life Assured was suffering from Diabetes Mellitus with Neuropathy already before acquiring subject policy. The Diabetes of the Life Assured was so uncontrolled that he had to be hospitalized and was on continuous treatment. The uncontrolled diabetes led to neuropathy and finally amputation. Also, uncontrolled diabetes and hypertension led to chronic kidney disease. It is clear case of material suppression being made by the Life Assured and the complainants for getting policy issued. The captioned policy was issued against loan taken by the Life Assured in case of death of the same, the loan amount would be paid in full by the O.P. No.2. It is submitted that a contract of insurance must be construed strictly as per the terms and // 8 // conditions contained therein and the L.A. and the complainants have miserably failed at doing the same. The O.P. No.2 on account of aforesaid suppression of material fact, repudiated the claim under the policy vide claim repudiation letter dated 02.06.2014. It is the primary duty of the Life Assured to disclose all the facts truly and correct in the proposal form which is not the case in policy in question. The claim has been repudiated beonafide and on the basis of documentary evidence of suppression of material facts by the Life Assred in his proposal for insurance hence the same cannot be considered as deficiency in service provide by the O.P. No.2 and complaint is liable to be dismissed. From bare perusal of the documents being placed on record shows clearly that the policy is founded on a material suppression and the same cannot have any effect legally. The story of the complainants is concocted and vexatious. The complaint filed by the complainants is baseless, frivolous and not substantiated by any evidence of any evidence or any basis for claim, it is therefore prayed that present complaint may be dismissed with costs in favour of the O.P. No.2 and no benefits become payable to the complainants.
5. The complainants have filed documents. The documents are terms and conditions of insurance policy, Rin Pustika, Sale Deed, Death Certificate of Mohammad Hussain, issued by Registrar (Birth-Deth), copy of pass book of Adil Mohammad with Bank of Maharashtra, Claimant Statement Form (Death Claims), Enveopes returned back, postal receipt, Power of Attorney, letter dated 02.06.2014 sent by the O.P. No.2 to Mrs. Zahida Begam.
// 9 //
6. The O.P. No.2 has filed documents. Annexure A/1 is proposal form, Annexure A/2 is policy document (Terms and conditions), Annexure A/3 is Claim Intimation Form (Claimant Statement Form), Annexure A/4 is Certificate dated 10.03.2011 issued by Sai Baba Heart and Kidney Centre, Bilaspur, Annexure A/5 is Fitness Certificate dated 29.04.2011, Annexure A/6 is Discharge Summary of Apollo Hospital, Bilaspur dated 07.03.2014, Annexure A/7 is Discharge Summary issued by Ramkrishna Care Hospitals, Annexure A/8 is letter dated 02.06.2014 sent by O.P. No.2 to Mrs. Zahida Begam.
7. Learned District Forum after having considered the material placed before it by the parties, has allowed the complaint of the complainants and directed the OPs to pay amounts to the complainants, as mentioned in para 1 of this order.
8. Shri Lokesh Kumar Singh, learned counsel appearing for the appellant (O.P. No.2) has argued that Late Mohammad Husain Life Assured had obtained insurance policy from the appellant (O.P. No.2). The Life Assured had submitted proposal form and policy in favour of Life Assured under the non-medical category policy was issued without conducting any medical examination. In accordance to Clause 6 (2) of the Insurance Regulatory And Development Authority (Protection of Policyholder's Interests) Regulations, 2002 , policy documents were sent along with a forwarding letter in which it is clearly mentioned that in case Deceased Life Assured (henceforth "DLA") is not satisfied with the features of terms and conditions of the policy, he can withdraw/return the policy within 15 days i.e. the under the "Free Look Period" provision. In the instant case also the terms and conditions were sent to the DLA. The DLA submitted proposal form. In the proposal form, at the time of making proposal // 10 // for insurance, the DLA had replied in the negative on being asked relevant question pertaining to his medical history, he suppressed material facts. At the time of obtaining insurance policy, the DLA was suffering from Diabetes Mellitus and Hypertension, therefore, the appellant (O.P. No.2) had rightly repudiated the claim of the complainants. The impugned order passed by the District Forum is erroneous and is liable to be set aside. The appeal filed by the appellant (O.P. No.2) be allowed. He placed reliance on Appeal (Civil) 4186-87 of 1988 - Life Insurance Corporation of India & Ors. Vs. Smt. Asha Goel & Anr. decided by Hon'ble Supreme Court vide order dated 13.12.2000, Appeal (Civil) 6075-6076 of 1995 - United India Insurance Co. Ltd. Vs. M.K.J . Corporation, decided by Hon'ble Supreme Court vide order dated 21.08.1996, Appeal (Civil) 5322 of 2007 P.C. Chacko and Another Vs. Chairman, Life Insurance Corporation of India and Others, decided by Hon'ble Supreme Court vide order dated 20.11.2007, Civil Appeal No.2776 of 2002 - Satwan Kaur Sandhu Vs. New India Assurance Company Ltd., decided by Hon'ble Supreme Court vide order dated 10.07.2009, Revision Petition N.1695 of 2012 - Tata AIG Life Insurance Co. Ltd. Vs. Orissa State Co-operative Bank, Raurkela Branch and Another, decided by Hon'ble National Commission vide order dated 20.09.2012, First Appeal No.242 of 2006 - Dineshbhai Chandarana & another Vs. Life Insurance Corporation & another, decided by Hon'ble National Commission vide order dated 27.07.2010, Civil Appeal No.1557 of 2004 - Export Credit Guarantee Corporation of India Ltd. Vs. M/s Garg Son International, decided by Hon'ble Supreme Court vide order dated 17.01.2013, Civil Appeal No.1375 of 2003 - M/s Suraj Mal Ram Niwas Oil Mills (P.) Ltd. Vs. United India Insurance Co. Ltd. & Anr. decided by Hon'ble Supreme Court vide order // 11 // dated 08.10.2010, Revision Petition No.211 of 2009 - Reliance Life Insurance Co. Ltd. and another Vs. Madhavacharya, decided by Hon'ble National Commission vide order dated 02.02.2010, General Assurance Society Ltd. Vs. Chandumull Jain and Anr., 1966 AIR 1644, 1966 SCR (3) 500 decided by Hon'ble Supreme Court vide order dated 07.02.1966, Appeal (Civil) 6277 of 2004 - United India Insurance Co. Ltd. Vs. M/s. Harchnd Rai Chandan Lal, decided by Hon'ble Supreme Court on 24.09.2004, Ashok Kumar Vs. Apollo Munich Health Insurance, decided by State Consumer Disputes Redressal Commission, U.T. Chandigarh vide order dated 23.08.2013.
9. Shri Jitendra Mudliyar, learned counsel appearing for the respondent No.1 to 5 (complainants) has argued the deceased Mohammad Hussain had obtained home loan of Rs.4,26,801/- from the respondent No.6 (O.P. No.1) Diwan Housing Finance Ltd. on 13.03.2012. The said home loan was insured with the appellant (O.P. No.2). The insurance policy was issued by the appellant (O.P. No.2) in favour of the deceased Mohammad Hussain. The deceased Mohammad Hussain was a permanent employee of C.S.E.B. Korba (East). The monthly installments of Rs.7,367/- were being deducted by the respondent No.6 (O.P. No.1) from the bank account of Adil Mohammad, who is son of Mohammad Hussain. On 14.03.2014, Mohammad Hussain had died. According to the terms and conditions of the insurance policy, after death of policy holder, the entire loan amount was required to be exempted. Even after death of Mohammad Hussain, the appellant (O.P. No.2) did not pay the loan amount and the respondent No.6 (O.P. No.1) is deducting monthly installment of Rs.7,367/- from the account of Adil Mohammad in spite of death of the Mohammad Hussain, which comes in the category of deficiency in unfair trade // 12 // practice. The impugned order passed by the District Forum, is just and proper and does not call for any interference by this Commission.
10. Shri R.K. Gupta, learned counsel appearing for the respondent No.6 (O.P. No.1) has argued that the deceased Mohammad Hussain had obtained home loan of Rs.4,26,801/- from the respondent No.6 (O.P. No.1), therefore, the respondent No.6 (O.P. No.1) is entitled to deduct the installment of the loan from the account of Adil Mohammad. The respondent No.6 (O.P. No.1), did not commit any deficiency in service or unfair trade practice. The learned District Forum has wrongly fasten liable on the respondent No.6 (O.P. No.1). The impugned order passed by the District Forum, is erroneous and is liable to be set aside.
11. We have heard learned counsel appearing for both the parties and have also perused the record of the District Forum as well as the impugned order passed by the District Forum.
12. It is not disputed fact that Mohammad Hussain obtained Home Loan of Rs.4,26,801/- from the respondent No.6 (O.P. No.1) Diwan Housing Finance Limited and the same was insured with the appellant (O.P. No.2). According to the respondent No.1 to 5 (complainants), Life Assured Mohammad Hussain died on 14.03.2014. According to the terms and conditions of the insurance policy, the entire loan amount is required to be exempted. It is the liability of the appellant (O.P. No.2) to pay the loan amount to the respondent No.6 (O.P.No.1), but the appellant (O.P. No.2) did not pay the loan amount. The respondent No.6 (O.P. No.1) is deducting monthly installment of Rs.7,367/- from the bank account of Adil Mohammad.
// 13 //
13. On the contrary, the appellant (O.P.No.2) pleaded that at the time of obtaining insurance policy, the deceased Mohammad Hussain was suffering from Diabetes Mellitus and Hypertension, and the above fact was suppressed by him. The policy is non-medical category policy.
14. The appellant (O.P. No.2) has filed Home Assure Enrollment Form and policy document. In Home Assure Enrollment Form, questions have been asked regarding health of the Life Assured, which are as under :-
S.No. Health Details Main Co-
Applicant Applicant
Yes/No. Yes/No.
d Have you consulted any doctor for any surgical NO
operations/ailments or have been hospitalized for any disorder, other than minor cough, cold or flu ?
e Have you ever been treated or told to have NO diabetes/raised blood sugar, heart attack, heart disease or any other disorder of the circulatory system, chest pain, high blood pressure, stroke / paralysis, asthma, any psychiatric disorder or any other lung conditions, cancer, tumor of any kind, jaundice, hepatitis B or C, liver disease, genitourinary or kidney disorder, digestive or bowel disorder, mental or nervous disorder, musculoskeietal disorders, blood disorders, HIV Infection or a positive test to HIV ?
f Has your proposal of Life Insurance, accident, medical NO or health related insurance ever been declined, postponed, withdrawn or accepted at extra premium or with reduced cover ?
g Are any of your family members either suffering or NO have suffered or have died from heart disease, stroke, high BP, diabetes mellitus, cancer, kidney disease, paralysis, or any other hereditary / familiar disorders or any communicable diseases such as tuberculosis etc. or any diseases not stated before 50 years of age ?
h Have you ever suffered / are suffering from any other NO ailment / disorder not mentioned above
15. The life assured had given reply of all above questions in Negative Form i.e (NO). The appellant (O.P. No.2) has filed copy of Certificate dated 10.03.2011 // 14 // issued by Sai Baba Heart and Kidney Centre, R.S.B. Hospital, Bilaspur (C.G.) in which it is mentioned that "This is to certify that Mr. Hussain 50/ M, an employee of type DM (uncontrolled) & P. neuropathy with nephropathy with sepsis admitted from 09.02.2011 to 09.03.2011. He needs prolonged therapy for the same at OPD Basis and regular follow and drug will cost near about Rs.80,000/- for next 3 months. He may need amputation in future."
16. The appellant (O.P. No.2) has also filed copy of Discharge Against Medical Advice issued by Apollo Hospitals, in which it is mentioned that Mohammad Hussain was admitted in Appollo Hospitals, Bilaspur on 28.02.2014 at 11.31 PM. and he was discharged against the medical advice on 07.03.2014. at 12.02 P.M. In the column of Principal Diagnosis it is mentioned that "the patient was suffering from Type 2 DM (since 2009), from Hypertension (since 2009), CKD (since January 2014), Sepsis (Klebsiella Bacteremia, Diabetic foot, Encephalopathy". Against the column of Past / Personal/ Family History it is mentioned that 'Type 2 DM (Since 2009), Hypertension (since 2009), CKD (since Jan. 2014), Left Diabetic foot, Right BK amputation". Against the column of Course in the Hospital, it is mentioned that "He was admitted in unconscious state. On investigation he was found to have right infected IJ catheter & features of sepsis. He was shifted to ICU & intubated for airway patency. He was treated with empiric IV antibiotic & other symptomatic treatment including hemodialysis as a renal replacement therapy. His blood culture grew Klebsiella pneumonia in both samples. USG showed raised echo texture both kidneys & bilateral perinephric inflammatory changes & cholelithiasis. General Surgeon was consulted for diabetic foot. Neurologist was also consulted for altered sensorium,. CT brain was normal. MRI brain showed atrophic change. CSF analysis was done which showed elevated protein. He was put on antiviral // 15 // drug also. His urine culture grew E coli. His general condition remained same. He did not show any improvement. Guarded prognosis was explained. Patient's relatives want discharge. He is being discharge against medical advice."
17. Looking to the above document, it appears that deceasedMohammad Hussain was suffering from Diabetes Mellitus and Hypertension since 2009. The deceased obtained home loan from the respondent No.6 (O.P. No.1) on 13.03.2012 and premium of the insurance policy was also paid by him in the month of March, 2012. The proposal form for the insurance of home loan, was also filled up by him on 12.03.2012. It appears that at the time of submission of proposal form, the deceased Mohammad Hussain was suffering from Diabetes Mellitus and Hypertension.
18. In Revision Petition No.2877 of 2013 - M/s. Aviva Life Insurance Company India Pvt. Ltd. vs. Smt. Phool Kunwar, vide order dated 04.08.2015, Hon'ble National Commission, has observed thus :-
"15. As apparent from the record of Apollo Hospital, the deceased was suffering from diabetes mellitus and hypertension for last two years prior to his death. So, it stands clearly proved that deceased life assured had concealed and suppressed material facts at the time of obtaining the insurance policy.
16. In this regard, observations made by Hon'ble Supreme Court in "Satwant Kaur Sandhu Vs. New India Assurance Company Ltd. (2009) 8 SCC 316" which are quite relevant to the present case, are quoted as under :-
"Thus, when an information on a specific aspect is asked for in the proposal form, an assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge. It is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not. Of course, obligation to disclose extends only to facts which are known to the applicant and not to what he ought to have known. The obligation to disclose necessarily depends upon the knowledge one possesses. His opinion of the materiality of that knowledge is of no moment."
// 16 // In para 29 of Satwant Kaur Sandhu's case (Supra), the Hon'ble Apex Court has held that :
"29. Judged from any angle, we have no hesitation in coming to the conclusion that the statement made by the insured in the proposal form as to the state of his health was probably untrue to his knowledge. There was clear suppression of material facts in regard to the health of the insured and, therefore, the respondent - insurer was fully justified in repudiating the insurance contract. We do not find any substance in the contention of learned counsel for the appellant that reliance could not be placed on the certificate obtained by the respondent from the hospital, where the insured was treated.
17. This Commission in Life Insurance Corporation of India Vs. Smt. Minu Kalita, R.P. No.1167 of 1997 decided on 19.03.2012" has held that :-
"It is settled law that the contract of insurance is based on good faith. The information as to the insured having suffered from Cancer before the policy was taken and the hospitalization for the same came to light afterwards and the petitioner is not to know this by an examination of their medical officer. It is for the respondent to give the correct information on his health which he did not disclose at that time. This ground of incorrect information and false statements regarding age of the insured and income make the insurance contract null and void. We find there is no deficiency of service by the petitioner Life Insurance Corporation of India. Both the District Forum and the State Commission have not appreciated the facts brought out by the petitioner in repudiating the claim."
19. In Gurmeet Kaur @ Meeto & Anr. vs. Life Insurance Corporation of India, III (2015) CPJ 246 (NC), Hon'ble National Commission has observed that "Deceased had been suffering from diabetes for the last 14-15 years and suffered from chronic renal failure for last 4-5 years. No evidence on record to prove that information given by Doctor regarding health status of insured was incorrect. Violation of conditions of policy established. Repudiation justified."
20. In Life Insurance Corporation of India v. Shahida Khatoon & Anr., IV (2013) CPJ 370 (NC), Hon'ble National Commission observed thus :-
"12. We have relied upon several judgments of Hon'ble Supreme Court in cases Satwant Kaur Sandhu v. New India Assurance Co. Ltd., IV (2009) CPJ 8 (SC) = VI (2009) SLT 338 = (2009) 8 SCC 316, P.C. Chacko and Anr. v. Chairman, LIC of India, III (2008) CPJ 78 (SC) = IX (2007) SLT 533 = IV // 17 // (2007) ACC 773 (SC) = (2008) 1 SCC 321, LIC of India v. Smt. Asha Goel, I (2001) SLT 89 = (2001) 2 SCC 160, have discussed the term "Material Fact" as fact which goes to the root of the contract of insurance and has a bearing on the risk involved would be material. The term material fact is not defined in the Act and, therefore, it has been understood and explained in general terms to mean as any fact which influence the judgment of a prudent insurer in fixing the premium or determine whether he would like to accept the risk.
13. Therefore, we do not find any force in the arguments of Counsel for complainant/respondent. Both the Fora below have erred in not considering the non-disclosure of material facts by the deceased and filled the proposal form. Accordingly, we set aside the orders passed by Fora below and allow this revision petition by dismissing the complaint. No order as to cost".
21. In L.I.C. of India v. Pratima Mishra, IV (2013) CPJ 161 (Chha.), this Commission observed thus :-
"8. Even if we presume that the deceased was required to notify anything to the Insurance Corporation as per terms and conditions of the acceptance, as per printed material available in the bottom of receipt of deposit of premium, even then requirement was only this that if there is any change in the occupation of the insured, then it was required to be notified and if there is any adverse circumstances connected with financial position or the general health of the proposer or that of any members of his family then if that circumstance may be very much unimportant, but the same if occurred between the date of proposal and date of this receipt or if on a proposal for assurance or an application for revival of a policy on the life made to any office of the Corporation, then it was required to be notified. Thus, what was required to be notified was any change in the occupation of the insured or any adverse circumstances affecting the insured or his family members. If deceased insured suffered a road accident, but immediately after treatment it was found that he was not having any bony injury. When no adverse circumstances relating to his health was stated by any of the doctors to the deceased insured, then it was not required for him to notify anything to the Insurance Corporation. Even in the receipt, which was obtained by the deceased after deposit of the premium, only such terms and conditions were printed.
// 18 //
9. Documents in respect of treatment of deceased insured, which have been brought on record by the appellant before the District Forum are photocopies of the treatment of the deceased insured in Ramkrishna Care Hospital, Raipur as well as Chandulal Chandrakar Memorial Hospital, Bhilai. From these documents, it appears that as per noting of Ramkrishna Care Hospital, Raiapur on C.T. Scan, it was found that there was no bony injury and all four limbs could be raised by him. Pupil of both eyes were normal. Thus, nothing substantial was noted by the Hospital for which it can be said that it was a circumstance which had adversely affected the health of the insured and was required to be notified by him to the Insurance Corporation. Later on he was treated with Chandulal Chandrakar Memorial Hospital, Bhilai from 15.03.2008, where ultimately he died on 16.03.2008. Thus, from record of the treatment given in Ramkrishna Care Hospital, it appears that it is not containing any such information which can be said to be relating to circumstance adversely affected the health of the deceased insured and was required to be notified by him to the Insurance Corporation."
22. In L.I.C. of India v. MU Jakia, IV (2013) CPJ 129 (NC), Hon'ble National Commission observed thus :-
"15. It is an undisputed fact that Shri Akhil Khan the deceased had taken LIC policy from the respondent for a sum of Rs.51,000/- on 1.1.2004. It is also an admitted fact that as per the bed head ticket of Maharana Bhopal Hospital, Udaipur the deceased was admitted to the hospital on 3.6.2003 for the treatment of chronic renal failure, hypertension, septicaemia, nephritis and was discharged from the hospital on 6.6.2003. While the State Commission has correctly come to the conclusion that the petitioner were justified in repudiating the claim of the respondents on the ground of suppression of material fact regarding health and that the finding of the District Forum rejecting the claim of the respondents were based on correct appreciation of entire material evidence available on record and they do not suffer from any basic infirmity or illegality or perversity and hence, no interference is called for with the same and appeal was dismissed. The State Commission erroneously went on to award an ex gratia payment on humanitarian consideration of Rs.15,000/-. This is beyond the pleadings of the respondents. Further, in P.C. Chacko and Anr. v. Chairman Life Insurance // 19 // Corportion of India and Ors., IV (2007) ACC 773 (SC) = IV (2007) CLT 229 (SC) = IX (2007) SLT 533 = III (2008) CPJ 78 (SC) = 2007 XAD (SC) 429, in which paragraph 20 which is relevant to us in this case reads as under :
"We are not unmindful of the fact that Life Insurance Corporation being a state within the meaning of Article 12 of the Constitution of India, its action must be fair, just and equitable but the same would not mean that it shall be asked to make a charity of public money, although the contract of insurance is found to be vitiated by reasons of an act of the insured. This is not a case where the contract of insurance or a clause thereof is unreasonable, unfair or irrational which could make the Court carried the bargaining powers of the contracting parties. It is also not the case of the appellants that in framing the aforesaid questionnaire in the application/proposal form, the respondents had acted unjustifiably or the conditions imposed are unconstitutional."[See also Life Insurance Corporation of India & Anr. v. Vinod Devi, IV (2013) CPJ 142 (NC)].
16. The National Commission in RP Nos. 858, 894, 995, 1435, 1446, 1503, 1504, 1505, 1553, 1554, 1679, 1680, 1722, 1723, 3631 of 2009, 1504 of 2006, 3147, 3789, 3855, 3858 to 3860, 3917, 3918, 4662, 4663, 4726, 4727, 4836, 4837, 5009, 5010, 5030 of 2008, 23, 164, 331, 359, 1909, 1926, 2945, 2946, 3094, 3097 of 2009 decided on 17.12.2009 have stated as under :-
"We are afraid in terms of provisions of Consumer Protection Act 1986, we are not free to do a 'favour' to a party. As, far as the moral obligation is concerned, that has to be done 'voluntarily' by the authority concerned. The Consumer Fora cannot pass or give direction or order to give a 'favour' otherwise the word more grounds are voluntarily will lose its very meaning.
While going through the aim and objectives of the Consumer Protection Act, 1986, as highlighted by the learned Counsel for the respondent we are of the view that a distinction needs to be made between justice - natural or otherwise and 'favour'. There is no room for favouritism while dispensing justice. The word ' ex gratia' has been interpreted / understood to mean favour', rendered 'voluntarily' and on 'moral // 20 // grounds', thus, clearly ousting the jurisdiction of quasi-judicial bodies like ours to direct a party to show favour. If we do this, this will not only run counter to the letter and spirit of Consumer Protection Act but also assume / confer powers which are not conferred upon us by Law / mandate. Any direction by Consumer Fora to the party concerned to grant ex gratia payment will defeat the very purpose and meaning of 'ex gratia', i.e., favour, grace shown voluntarily on moral grounds. However, this order would not deter directing payment of ex gratia' basis by the Consumer Forums, provided, the concurrence of the sanctioning authority of insurance company, is obtained through their Counsel (Counsel for the Insurance Company) for making the payment on 'ex gratia' basis."
23. It is settled principle of law that the contract of insurance is a contract uberrima fides and there must be complete good faith on the part of the life assured at the time of submitting proposal form for obtaining the policy and the assured is under a solemn obligation to make full disclosure of material facts with regard to his state of health because the same was relevant for the insurer to decide as to whether the Insurance Policy is to be issued to the proposer or not.
24. In the instant case, the deceased life assured Mohammad Hussain had obtained home loan from the respondent No.6 (O.P. No.1) and the same was insured with the appellant (O.P. No.2). Deceased Life Assured submitted proposal form for insurance of his home loan and in the proposal form in reply to the questions asked regarding the pre-existing diseases, he gave answer in Negative Form i.e. "No." In the proposal form the deceased did not disclose the fact that he was suffering from Diabetes Mellitus and Hypertension diseases, prior to making proposal for insurance. According to the record of the // 21 // Apollo Hospitals, Bilaspur, the death of the deceased was occurred due to Diabetes Mellitus, Hypertension and Nephropathy.
25. From bare perusal of medical treatment papers of the deceased, it appears that the Life Assured Mohammad Hussain was suffering from Diabetes Mellitus and Hypertension since 2009, but he did not disclose the above facts while making proposal statement and has violated the terms and conditions of the insurance policy, therefore, the appellant (O.P. No.2) has rightly disallowed the claim of the respondent No.1 to 5 (complainants). The respondent No.1 to 5 (complainants), are not entitled for insurable benefit under the insurance policy, therefore, the respondent No.1 to 5 (complainants) are also not entitled to get any amount from the appellant (O.P.No.2) under the insurance policy.
26. On the basis of above discussions, it appears that the finding recorded by the District Forum, is erroneous and is not sustainable in eye of law, and is liable to be set aside.
27. Hence the appeal filed by the appellant (O.P. No.2) is allowed and the impugned order dated 24.01.2017, passed by the District Forum, is set aside. Consequently, the complaint stands dismissed. No order as to the cost of this appeal.
(Justice R.S. Sharma) (Narendra Gupta)
President Member
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