State Consumer Disputes Redressal Commission
Surinder Kaur vs Exide Life Insurance Co. Ltd. on 26 July, 2017
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB,
CHANDIGARH.
Consumer Complaint No.2 of 2016
Date of institution : 04.01.2016
Reserved on : 12.07.2017
Date of decision : 26.07.2017
SURINDER KAUR W/O LATE SH. AMARJIT SINGH, R/O
H.NO.409, PHASE-VI, MOHALI-160 055.
.......Complainant
Versus
1.EXIDE LIFE INSURANCE COMPANY LIMITED, FORMERLY ING VYSYA LIFE INSURANCE COMPANY LIMITED, THROUGH ITS MANAGING DIRECTOR, IST FLOOR, GOLD HILL SQUARE, NO.690, HOSUR ROAD, BEGUR HOBLI, BANGALORE-560 068. [FIRST ADDRESS] EXIDE LIFE INSURANCE COMPANY LIMITED, FORMERLY ING VYSYA LIFE INSURANCE COMPANY LIMITED, THROUGH ITS BRANCH MANAGER, SCO NO.166-167, 2nd FLOOR, MADHYA MARG, SECTOR 9-C, CHANDIGARH.
[SECOND ADDRESS].
2. THE MANAGING DIRECTOR, EXIDE LIFE INSURANCE COMPANY LIMITED, FORMERLY ING VYSYA LIFE INSURANCE COMPANY LIMITED, IST FLOOR, GOLD HILL SQUARE, NO.690, HOSUR ROAD, BEGUR HOBLI, BANGALORE-560 068.
........Opposite parties.
Consumer Complaint under Section 17(1)(a)(i) of the Consumer Protection Act, 1986.
Quorum:-
Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President Present:-
For the complainant : Shri Arun Kumar, Advocate. For the opposite parties: Shri Sanjeev Goyal, Advocate. JUSTICE PARAMJEET SINGH DHALIWAL, PRESIDENT:
The complainant, Surinder Kaur, has filed this complaint under Section 17(1)(a)(i) of the Consumer Protection Act, 1986, for the issuance of following directions to the opposite parties:- Consumer Complaint No.2 of 2016 2
i) to pay the claim of the complainant to the tune of ₹35,00,000/-;
ii) to pay interest at the rate of 18% per annum from the date of repudiation of the claim till realization;
iii) to pay a sum of ₹5,00,000/- towards mental torture and harassment suffered by her; and
iv) to pay a sum of ₹50,000/- towards litigation fee.
2. Brief facts of the case are that Amarjit Singh (since deceased) (hereinafter to be referred to as "DLA") son of Tarlochan Singh and husband of the complainant, was employed as Multi-Purpose Health Supervisor (Male), Sub Centre, Saneta under PHC Gharuan, District Mohali. On persuasion of the opposite parties, he purchased Insurance Policy bearing No.02679372 covering various risks to his life for the sum assured of ₹35,00,000/- with the policy commencement date of 18.4.2013 and risk commencement date of 10.5.2013. The premium of ₹6,638/- was to be paid bi-annually for a term of 20 years and the maturity date of the same was 18.4.2033. The complainant; being the wife, was the nominee under the Policy. At the time of taking the policy the DLA was hale and hearty and he was not suffering from any disease at that time. The DLA was attending to his office regularly and doing his duties properly. The representative of the opposite parties also got the DLA examined from their authorized Doctor and he was found to be fit in all respects and only thereafter the policy was issued. Unfortunately, the DLA died on 28.11.2013 leaving behind his wife (complainant), son and a daughter as his legal heirs. After the death of the DLA the Consumer Complaint No.2 of 2016 3 complainant; being the nominee under the policy, submitted the claim along with all the required documents with the opposite parties but the same was repudiated, vide letter dated 30.6.2014 informing the complainant that they had decided to repudiate all the liabilities under the said Policy, as the DLA was suffering from Dependence Syndrome due to some substance abuse and depression and was diagnosed as F11.2 as per ICD (International Classification of Diseases) which relates to mental and behavioral disorder due to psychoactive substance use (Dependence Syndrome) like chronic alcoholism or drug addiction and F32.1 as per ICD (International Classification of Diseases) which states moderate depressive episode. Also the DLA was taking medicines Quitipin, Nexito and Lopez and was under continuous treatment for the same prior to proposal date i.e. 30.3.2013 and 18.4.2013 and the insured was under medical leaves from his employment from 1.4.2013 to 28.4.2013. It was also mentioned in the repudiation letter dated 30.6.2014 that in this case since the duration between the Risk Commencement Date (28.03.2013 and 18.04.2013) and date of death of the DLA (28.11.2013) was only 7 months 28 days and 6 months 18 days) and the claim was being repudiated within a period of 2 years from the Policy Commencement Date, the provisions of Section 45 of the Insurance Act were not attracted. Thereafter the complainant sent legal notice dated 13.9.2014/15.9.2014 upon the opposite parties for settlement of the claim but nothing has been done in the matter. Alleging deficiency in service and adoption of unfair trade practice on the part of the opposite parties the present Consumer Complaint No.2 of 2016 4 complaint has been filed for issuance of the above mentioned directions to the opposite parties.
3. The opposite parties in their joint reply admitted the issuance of the policy in question to the DLA and took preliminary objections that the complainant is guilty of suppressing material and pertinent facts relevant for the adjudication of the present complaint apart from filing a vexatious and frivolous complaint. It has been averred that since the death of DLA took place within 7 months 28 days from the policy commencement date, therefore, the opposite parties got the claim investigated and assessed. During the course of such investigation it was revealed that DLA was suffering from dependence syndrome due to some substance abuse and depression and was diagnosed as F11.2 as per ICD (International Classification of Diseases) which relates to mental and behavioral disorder due to psychoactive substance use (Dependence Syndrome) like chronic alcoholism or drug addiction and F32.1 as per ICD (International Classification of Diseases) which states moderate depressive episode. In support of the above, the opposite parties had duly collected the outpatient card dated 27.11.2012 from Punjab Health Systems Corporation, Ajitgarh wherein DLA was prescribed to consume Quitipin, Nexito and Lepoz, which are usually preferred for treatment like Schizophrenia and used as anti- depressants. During further investigation it was also found that the DLA had availed one more policy from ICICI Prudential Life Insurance Co. Ltd having policy bearing No.17644916 for the sum assured of ₹12,00,000/-, which was not disclosed to the opposite Consumer Complaint No.2 of 2016 5 parties at the time of proposal. It is averred that the DLA was well aware about the treatment which he had been undergoing and the medicines which were prescribed to him but still not disclosed to the opposite parties at the time of availing the policy. Subsequently the DLA applied for insurance policy with other Insurance Company without mentioning the same in the proposal form. Had the DLA transparently disclosed these facts to the opposite parties, definitely they would not have ventured to expose themselves to high risk and would have either refused to accept the proposal or would have accepted the same with much reduced value of Sum Assured. Thus, with ulterior motive of making financial gain to the nominee, the DLA had suppressed that critical material information knowingly with mala fide intention and fraudulently misguided and influenced the opposite parties to issue the Policy. The opposite parties also collected the hospital record from Punjab Health Systems Corporation, Ajitgarh and a perusal of the same reveals that the DLA was admitted from 1.4.2013 till 28.4.2013 and was diagnosed as F11.2 and F32.1. Thus, it is clear that such type of the disorder will not occur within a span of one day and seeing the significance of admission in the Hospital for 28 days really triggers for pre-history of illness. The DLA in-spite of knowing the terms and conditions of the Policy answered the questions given in the questionnaire wrongly and did not disclose the material facts at the time of availing the said policy for taking undue advantage, which amounts to suppression of material facts. The DLA had fraudulently suppressed his illness from which he was suffering prior to availing the policy from the opposite parties and the Consumer Complaint No.2 of 2016 6 same was within his knowledge. As such the opposite parties were constrained to repudiate the Death Claim under the Policy and accordingly the repudiation letter was issued to the complainant. Denying any deficiency in service or adoption of unfair trade practice on their part a prayer for dismissal of the complaint has been made.
4. To prove the allegations made in the complaint, the complainant proved on record her affidavit as Ex.C-A and documents Ex.C-1 to Ex.C-6. On the other hand, opposite parties proved on record the affidavit of their Manager (Legal) Madhu N.R. as Ex.OPA and documents Ex.OP-1 to Ex.OP-12. Dr. Sunil Ahuja, PCMS of Ahuja Clinic, Phase XI, Sector 65, Mohali and Dr. Rohit Garg, Assistant Professor, Department of Psychiatry, Government Medical College and Rajindra Hospital, Patiala were examined as OPW-1 and OPW-2.
5. I have carefully gone through the averments of both the sides and the evidence produced by them in support of those averments. I have also gone through the written arguments of both the sides and have heard learned counsel for them.
6. It was vehemently argued by the learned counsel for the complainant that at the time of taking the insurance policy the DLA was hale and hearty and he was not suffering from any disease at that time. The DLA was attending to his office regularly and doing his duties properly. The representative of the opposite parties also got the DLA examined from their authorized Doctor and he was found to be fit in all respects and only thereafter the policy in question was issued in favour of the DLA. The DLA did not conceal Consumer Complaint No.2 of 2016 7 any material information from the opposite parties at the time of filling up the proposal form. The DLA stated the true and correct facts. The opposite parties wrongly repudiated the death claim in respect of the DLA, vide letter dated 30.6.2014, Ex.OP-8, on the grounds which are not made out. Moreover, Dr. Sunil Ahuja, PCMS of Ahuja Clinic, Sector 65, Mohali in his cross-examination deposed that the disease from which DLA was suffering was a temporary one and the same could be treated by way of medication in due course of time. Dr. Rohit Garg, Assistant Professor, Department of Psychiatry, Government Medical College and Rajindra Hospital, Patiala in his examination deposed that he remained posted as Medical Officer at Civil Hospital Mohali, from 3.8.2012 to 28.11.2013 and as per the record the DLA was admitted by him in that Hospital on 1.4.2013 as a case of Opioid Dependence Syndrome with Depression. He deposed in his cross-examination that the disease from which the patient was suffering was not of permanent nature and was curable by treatment. Based on the statements of these Doctors the learned counsel for the complainant further argued that even if for the sake of arguments it is presumed that the DLA was suffering from depression and anxiety, even then it was not the material information to be disclosed in the proposal form at the time of obtaining the policy as depression and anxiety is not a permanent disease and can be cured by way of medication in due course of time. Learned counsel further argued that there is no evidence on the record in the shape of literature etc. that the disease of depression and anxiety is a serious disease. There is also no document on record that the Consumer Complaint No.2 of 2016 8 DLA has died due to the aforesaid disease of depression or anxiety. The action of the opposite parties in repudiating the genuine insurance claim in respect of the death of the DLA without any valid ground not only amounts to deficiency in service but also amounts to adoption of unfair trade practice on the part of the opposite parties.
7. Per contra, it was argued by the learned counsel for the opposite parties that the DLA managed to secure the policy from the opposite parties by suppressing the material facts and while he was already under treatment in Civil Hospital, Phase 6, SAS Nagar, Mohali. The DLA was suffering from dependence syndrome due to substance abuse and depression and was diagnosed as F11.2 as per ICD (International Classification of Diseases) which relates to mental disorder due to psychoactive substance use (Dependence Syndrome) like chronic alcoholism or drug addiction and F32.1 as per ICD (International Classification of Diseases) which states moderate depression episode. This fact was not disclosed rather concealed by the DLA at the time of taking policy and he also gave wrong answers to questions Nos.52, 53, 54, 63, 65, 70, 72 and 75 in the proposal form dated 18.4.2013. This amounts to serious non- disclosure of material facts, which is violation of terms and conditions of the policy. The non-disclosure of previous ailment was material to the issuance of the policies and ought to have been disclosed by the insured. By not doing so the proposer had misled the opposite parties to grant him insurance cover. Had the DLA disclosed the said material factum of previous ailment to the opposite parties at the time of issuance of insurance policy, the opposite parties would not Consumer Complaint No.2 of 2016 9 have issued the same. It was further argued that the contracts of insurance are based on the principle of uberrima fides and utmost good faith. The DLA was under obligation to make true and full disclosure of statement within his knowledge and in case of non- disclosure the repudiation of the claim is justified. He relied upon following judgments:-
i) "Satwant Kaur Sandhu v. New India Assurance
Company Limited", 2009(IV) CPJ 8 (SC);
ii) "TATA AIG Life Insurance Co. Ltd. v. Orissa State
Cooperative Bank & Anr." 2012 (IV) CPJ 310 (NC);
iii) "Life Insurance Corporation of India & Anr. v.
Mandava Geetha" 2012 (III) CPJ 644 (NC);
iv) "Sadanand Bag v. Life Insurance Corporation of India & Anr." 2012(III) CPJ 398 (NC);
v) "LIC of India v. Rukma" 2012 (II) CPJ 44 (NC);
vi) "Life Insurance Corporation of India v. Francis
Antony D'souza" 2012(2) CLT 176 (NC);
vii) "LIC of India v. Premlata Aggarwal" 2012(2) CLT 182
(NC); and
viii) "Meenaben Ashok Kumar Patel v. Life Insurance Corporation of India" 2012(2) CLT 415 (NC).
He prayed that there is no merit in the present complaint and the same be dismissed with exemplary costs.
8. I have given my anxious consideration to the contentions raised by the learned counsel for the parties.
Consumer Complaint No.2 of 2016 10
9. In the light of the arguments raised by the learned counsel for the parties following points arise for consideration:-
i) Whether there was any deficiency in service on the part of the opposite parties in repudiating the insurance claim of the complainant?
ii) Whether the DLA was suffering from depression and anxiety and was undergoing treatment at the time of filling up the proposal form and if so, its effect?
iii) Whether there was any suppression of material facts on the part of the DLA while filling up the proposal form and if so, its effect?
10. The issuance of the insurance policy is admitted by the opposite parties. It is also admitted that the complainant is nominee in the said policy. It is also admitted that first premium of ₹6,845.75P was paid on 27.5.2013 and the policy was issued with commencement date of 18.4.2013 and with risk commencement date of 10.5.2013. It is also admitted that the DLA died on 28.11.2013 and the claim was repudiated on 30.6.2014 on the ground that the DLA was suffering from dependence syndrome due to substance abuse and depression and was diagnosed as F11.2 as per ICD (International Classification of Diseases) which relates to mental disorder due to psychoactive substance use (Dependence Syndrome) like chronic alcoholism or drug addiction and F32.1 as per ICD (International Classification of Diseases) which states moderate depression episode. There is also no dispute that before the issuance of the Policy in question the DLA was medically Consumer Complaint No.2 of 2016 11 examined by the doctors of the opposite parties. It is also not in dispute that the DLA died a natural death though untimely at the prime age of 43 years. The reasons given by the opposite parties for repudiating the claim of the complainant as mentioned in the repudiation letter dated 30.6.2014 Ex.OP-8 are as under:-
"We have reviewed all the documents and details submitted by you and regret to inform that we have decided to repudiate all liability under the said Policy as the Life Assured was diagnosed of and was suffering from Dependence Syndrome due to some substance abuse and depression and was diagnosed as F11.2 as per ICD (Internal Classification Coding) which relates to mental and behavioral disorder due to psychoactive substance use (Dependence Syndrome) like chronic alcoholism or drug addiction and F32.1 as per ICD (Internal Classification Coding) which states moderate depressive episode. Also Life assured was taking medicines Quitipin, Nexito and Lopez and was under continuous treatment for the same prior to proposal dated i.e. 30.3.2013 & 18.4.2013. Also insured was under medical leaves from employment from 01.04.2013 to 28.04.2013."
11. The main stress of the opposite parties is that the DLA did not give true and correct answers to the following questions contained in Consumer Complaint No.2 of 2016 12 the questionnaire in the proposal form, Ex.OP-3 and deliberately and intentionally suppressed the material information with regard to his state of health and family history with habits:-
52. Have you concurrently/simultaneously applied for any life, health insurance cover with us or any other life, health Insurance Company which is still under consideration? "No".
53. Have you concurrently/simultaneously applied for revival of your lapsed policies with us or any other life, health insurance company which is still under consideration?
"No".
63. Please state your alcohol drinking habit (past/present) (Quantity per week)-- "Does not drink".
65. Do you consume or have ever consumed any form of narcotic substance? "No".
70. Are you currently taking any medication or drugs, either prescribed or not prescribed by a doctor? "No".
72. Have you suffered from any illness, disorder, disability or injury during past 5 years which was required any form of medical or specialized examination (including chest X- rays, EGG, Stress Test, MRI/CT Scan or blood tests), consultation, hospitalization or Surgery? "No".
75. Have you ever been diagnosed or have suffered from any of the following:-
i) Depression, Anxiety, Multiple Sclerosis, Parkinsonism, Fits, Epilepsy, recurrent headache, paralysis, numbness Consumer Complaint No.2 of 2016 13 or any other disease or disorder of the brain, spinal cord or nervous system. "No".
He gave answer in "No" to all these queries. Being an early claim, the opposite parties got the same investigated from UNIMAX Surveillance & HR Management Private Limited and a copy of the investigation report is placed on record as Ex.OP-11. In that report the Investigator gave his Final Observation as under:-
"We observed in this case that this policy has been taken when Amarjeet Singh came to know that he was suffering with some serious disease and will not survive for long time. There are other 4 policies from ING Vysya Life Insurance. He was getting treatment from various Hospitals like Civil Hospital, Phase 6, SAS Nagar, Ahuja Clinic, Phase-II, Mohali and was getting medical leave in month of April 2013 for 28 days."
For proving the same the opposite parties produced on record Medical Certificate dated 16.5.2014 issued by Dr. Sunil Ahuja of Ahuja Clinic, Phase XI, Mohali as Ex.OP-1. A perusal of the same reveals that the DLA was suffering from Depression, Anxiety and nemosion and remained under treatment from 21.4.2013 to 28.4.2013. It was also mentioned that the DLA was advised rest for the same period and he became fit on 29.4.2013. No doubt, Dr. Sunil Ahuja in his cross-examination deposed that the disease from which the DLA was suffering was a temporary one and the same can be treated by way of medication in due course of time but the fact Consumer Complaint No.2 of 2016 14 remains that the DLA was suffering from that disease and that fact was very much in his knowledge at the time when he filled up the proposal form Ex.OP-3 on 18.4.2013. The opposite parties also produced Discharge Slip issued by Civil Hospital, Phase-VI, SAS Nagar, Mohali as Ex.OP-1. A perusal of the same reveals that the DLA was admitted in Civil Hospital, Mohali in the Department of Psychiatry with Admission No.2714 on 1.4.2013 and was discharged on 26.4.2013. The DLA was diagnosed as ICD Code F11.2 and F32.1. The ICD Code F11.2 relates to Opioid Dependence and the ICD Code F32.1 relates to Major Depressive Disorder. The opposite parties also produced on record the medical record of the DLA for the treatment taken by him in the Civil Hospital, Phase 6, Ajitgarh, SAS Nagar, Mohali as Ex.OP-2 and a perusal of the same reveals that the DLA was managed with medicines Quitipin, Nexito and Lopez. These medicines are used for the treatment of depression, anxiety disorder and phobia etc. The opposite parties also produced on record the General Case Sheet of the DLA for the period he remained admitted in that Hospital. The opposite parties have also produced the leave record of the DLA dated 16.5.2014 along with investigation report Ex.OP-11. A perusal of the same reveals that the DLA had availed leaves for the period from 11.1.2011 to 15.2.2011 (36 days); 17.4.2012 to 21.5.2012 (35 days); and from 1.4.2013 to 28.4.2013 (28 days) on medical ground except some other leaves which are less in days.
12. Dr. Rohit Garg, Assistant Professor, Department of Psychiatry, Government Medical College and Rajindra Hospital, Patiala was Consumer Complaint No.2 of 2016 15 examined on oath as OPW-2. In his statement he deposed that he remained posted as Medial Officer at Civil Hospital, Mohali from 3.8.2012 to 28.11.2013 and as per the record the DLA was admitted by him in that Hospital on 1.4.2013 as a case of Opioid Dependence Syndrome with Depression. He also identified his signatures on pages 55 to 57 and 60 to 62 of the record Ex.OP-2. He also deposed that the disease from which the DLA was suffering was not of permanent nature and was curable by treatment. But the fact remains that the DLA was admitted in the Civil Hospital, Phase-VI, SAS Nagar, Mohali on 1.4.2013 as a case of Opioid Dependence Syndrome with Depression and the same was very much in his knowledge on 18.4.2013 at the time of filling up the proposal form and giving answers to the questions posed above. No evidence has been produced by the complainant to rebut all this evidence and from that unrebutted evidence, it stands proved that the DLA was suffering from Opioid Dependence Syndrome with Depression before he filled up the proposal form. Thus, the evidence available on record would make the position crystal clear that the DLA was in the habit of consuming opioid and that he had undergone treatment for the same. The circumstance would also make it clear that the DLA deliberately concealed those facts while submitting the proposal. It would also show that the DLA willingly and deliberately gave false or incorrect answers to the questions put to him in the proposal form. So, the case of the opposite parties that the DLA suppressed material facts and that the DLA gave incorrect Consumer Complaint No.2 of 2016 16 statements or answers to the questions while submitting the proposal form for the life insurance policy is to be upheld.
13. The next aspect for consideration is as to whether false and incorrect statements or answers given by the life assured while submitting the proposal for the insurance policy can be treated as material facts. It is to be noted that it is for the Insurance Company/Insurer to decide what and which facts it requires for their purpose for acceptance of the proposal. It is for the insurer to decide on analysis of the answers given by the proposer whether the proposal is to be accepted or rejected. It is for arriving at such a conclusion the questions are formulated in the proposal form and that the proposer is expected to answer those questions truly and honestly without suppressing any facts. In this circumstance it can only be inferred that the questions formulated in the proposal form as questionnaires are only the necessary and required questions for collecting the material facts from the proposer. In such a situation, the proposer is expected to give correct answers to those questions without suppressing any fact. If any answer given to the question is false or that the proposer suppressed any fact, it would amount to suppression of material facts. Those incorrect or false statements or suppression of facts are sufficient for the insurer to rescind the contract.
14. Another important aspect to be noted at this juncture is the declaration given by the proposer. Admittedly the proposer affixed his signature to the said declaration. The proposer was an educated man and the complainant has no case that the proposer signed the Consumer Complaint No.2 of 2016 17 declaration in the proposal form without understanding the contents of the same. Therefore, it can very safely be concluded that the answers to those questions were given by fully knowing the same and that the said answers were given by the proposer by suppressing the material facts. So, it can very safely be concluded that the proposal Ex.OP-3 was submitted by the proposer with his full knowledge and volition and nobody can be found fault with in giving false and incorrect statements in the form of answers to the questionnaire in the proposal form.
15. Moreover, it is true that the syndrome is a set of physical conditions which would show that a particular person has a particular disease or medical problem. The said meaning would make it clear that syndrome denotes existence of some disease or medical problem. The Oxford Concise dictionary has given the meaning of the word syndrome as a group of symptoms of diseases. The aforesaid description given for the word syndrome would make it more clear that the word syndrome is related to disease. Nobody can say AIDS is not a disease. AIDS means acquired Immuno deficiency syndrome.
16. So far as the protection of Section 45 of the Insurance Act is concerned, the same is not applicable in the present case as the Insurance Company can within two years always rescind a contract, if it finds that there is some misstatement of facts regarding the health condition by the insured etc.
17. Repudiation of the claim is made by the opposite parties, vide letter dated 30.6.2014 Ex.OP-8. The complainant has also served Consumer Complaint No.2 of 2016 18 legal notice upon the opposite parties for wrongful repudiation of the claim and other representations were also made. The perusal of the answers given by the DLA reveals that wrong and incorrect answers were given to the aforementioned questions with regard to the health condition of the DLA. Resultantly, the DLA suppressed material facts regarding his health condition and also with regard to his habits. Giving incorrect answers to specific questions would certainly amount to suppression of material facts in the proposal form. It is true that the doctors who have been examined in this Commission have admitted the fact that the use of substance is not illness in itself and a person who consumes the same cannot be treated as a patient but when a person becomes dependent upon the same, then the said habit of consuming such substance needs treatment and that can be fatal. Admittedly in the present case the DLA underwent treatment in the Civil Hospital, Mohali for the period from 1.4.2013 to 26.4.2013 for the Opioid Dependence Syndrome with Depression. The statement made by the DLA in the proposal form was on a material matter and he suppressed the material facts, which it was very material for him to disclose. The facts were such that the concealment thereof amounts to fraudulent suppression by the DLA as he was treated in the Hospital for 26 days before he filled up the proposal form. So, it can easily be concluded that he had the knowledge about all those facts at the time he was making the statement and knew that it was false and that he was suppressing the material facts.
Consumer Complaint No.2 of 2016 19
18. Like the present case in Satwant Kaur Sandhu's case (supra) the insured was aware of the fact that he was suffering from chronic diabetes and renal failure. He did not disclose the said fact in the proposal form for the Policy. The expression 'material fact' was also interpreted by the Hon'ble Supreme Court. It was held therein that in contract of insurance any fact which would influence the mind of a prudent insurer in deciding whether to accept or not to accept the risk is a 'material fact'. If the proposer has knowledge of such fact, he is obliged to disclose it particularly while answering question in the proposal form. Needless to emphasize that any inaccurate answer will entitle the insurer to repudiate its liability because there is clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance. It was held by the Hon'ble Supreme Court that the insurer was fully justified in repudiating the insurance contract.
19. In 2008(3) CPC 248 (SC) (P.C. Chacko and another v. Chairman, Life Insurance Corporation of India and others) the insured had undergone thyroid operation, which was not disclosed by him at the time of obtaining the policy and he died within six months after taking that policy. It was held therein that the deliberate wrong answer may lead to policy being vitiated in law. The contract of insurance was held to be null and void and the repudiation of the claim was upheld. It was held therein that it is a well settled law in the field of insurance that contracts of insurance including the contracts of life assurance are contacts uberrima fides and every fact Consumer Complaint No.2 of 2016 20 of materiality must be disclosed otherwise there is good ground for rescission.
20. Like the present case in 2011(2) CLT 281 (NC) (LIC of India v. Dalbir Kaur) before taking the insurance policy, the insured had undergone treatment as an inpatient in Sony Nursing Home from 8.5.1999 to 16.5.1999 and from 1.2.2002 to 28.2.2002. He was also an outpatient in the same Nursing Home till 22.4.2012 and it was also on the record that he had been sanctioned two months' earned leave from 11.4.2002. While filling up the proposal form, he had given answers in the negative to the above said questions. It was held by the Hon'ble National Commission that the Insurance Company was entitled to repudiate the insurance claim as the declaration made by the insured was found to be false. Similar view has been taken by the Hon'ble National Commission in the judgments relied upon by the learned counsel for the opposite parties.
21. In 2010(1)CLT 481 (Sangeeta Kaushik and others v. Life Insurance Corporation of India and others) the life assured concealed the material fact of the disease of Dibetes Mellitus Type II from which he was suffering while filling the proposal form. It was held by this Commission that it was a serious disease and the concealment amounted to suppression of material fact.
22. From my above discussion, I conclude that the opposite parties were justified in repudiating the claim of the complainant on the ground that there was suppression of material information and concealment of the serious diseases by the insured at the time of Consumer Complaint No.2 of 2016 21 taking the Policy. The questions posed above are answered accordingly. I do not find any merit in this complaint and the same is hereby dismissed.
23. The complaint could not be decided within the statutory period due to heavy pendency of court cases.
(JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT July 26, 2017 Bansal