State Consumer Disputes Redressal Commission
Lic vs Sandeep Das on 12 October, 2018
Daily Order M. P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PLOT NO.76, ARERA HILLS, BHOPAL FIRST APPEAL NO. 340 OF 2011 (Arising out of order dated 14.01.2011 passed in C. C. No. 64/2008 by District Forum, Neemuch) LIFE INSURANCE CORPORATION OF INDIA, THROUGH BRANCH MANAGER, BRANCH OFFICE- 22-A VIKAS NAGAR, AMBEDKAR MARG, NEEMUCH (M.P.) .... APPELLANT. Versus SANDEEP DAS, S/O LATE SHRI KARUDAS BAIRAGI, R/O VILLAGE-CHITAKHEDA, TEHSIL & DISTRICT- NEEMUCH (M.P.). .... RESPONDENT. BEFORE : HON'BLE SHRI S. D. AGARWAL : PRESIDING MEMBER
HON'BLE DR. (MRS) MONIKA MALIK : MEMBER COUNSEL FOR PARTIES : Ms. Chitra Sharma, learned counsel for the appellant. None for the respondent. O R D E R (Passed On 12.10.2018)
The following order of the Commission was delivered by Dr. (Mrs) Monika Malik, Member:
This appeal is by the opposite party/appellant, against the order dated 14.01.2011 passed by the District Consumer Disputes Redressal Forum, Neemuch in C.C.No. 64/2008, whereby the complaint filed by the complainant/respondent against them, has been partially allowed.
2. The complainant's husband Late Shri Karudas had obtained three insurance policies from the opposite party out of which the complainant is the nominee in policy no. 344935758. The complainant's father (hereinafter referred as 'deceased') died on 17.09.2007, during the policy cover period. The complainant subsequently lodged a claim with the opposite party, accompanied with requisite documents which was not paid by the opposite party. The complainant therefore, filed a complaint before the District Forum, alleging deficiency in service on part of the opposite party.
3. The opposite party resisted the complaint stating that the deceased had suppressed the material facts, while filling up the proposal form in order to obtain the -2- policy cover. The deceased was suffering from Cancer and was treated in Gujarat Cancer & Research Institute for the same. The deceased died within a short period of obtaining policy cover and due to suppression of material information, his claim is not payable.
4. The District Forum observed that the complainant's late father died because of kidney failure and there is no evidence substantiating the opposite party's submission that the deceased had cancer and he had suppressed this information while filling up the proposal form. The District Forum allowed the complaint.
5. Heard learned counsel for the opposite party/appellant. None appeared for the complainant/respondent. Perused the record.
6. Learned counsel for opposite party/appellant made a submission that the complainant/respondent had obtained the policy cover on 27.02.2007. The deceased died on 17.09.2007. Since the deceased died within a short period of commencement of the policy cover, an investigation was done in this matter. Upon investigation it was found that the deceased had suffered from cancer and was treated in Gujarat Hospital & Research Centre for the same, but the deceased had replied in negative to the query in the proposal form wherein it was enquired Whether he consulted a Medical Practitioner for any ailment requiring treatment for more than a week in last five years. He had also replied in negative to the query wherein it was asked Whether he had ever suffered from cancer. She further argued that there is suppression of material facts by the deceased/insured while filling up the proposal form on 26.02.2007, therefore this claim is not payable as per policy schedule. She further argued that the Commission also sent summons to the concerned hospital for submission of documents pertaining to illness of the insured/deceased. It is well established from the documentation that the deceased was treated for 'Metastasis Squamous Cell Carcinoma'.
-3-7. We observe that in the repudiation letter, the opposite party/appellant has denied the complainant's/respondent's claim citing three clauses of the proposal form:
11(a) During the last five years did you ever consult a Medical Practitioner for any ailment requiring treatment for more than a week ?
NO 11(e) Are you suffering from or have you ever suffered from Diabetes, Tuberculosis, High Blood Pressure, Low Blood Pressure, Cancer, Epilepsy, Hernia, Hydrocele, Leprosy or any other disease ?
NO 11(j) What has been your usual state of health?
Good
8. The deceased was admitted on 17.06.2007 in Nursing Home and died because of kidney failure. In response to the summons from this Commission demanding the list of documents pertaining to treatment of the deceased, the Gujarat Cancer & Research Institute sent medical papers of the insured/deceased Kaludas Hiradas Bairagi. It is mentioned by the Chief RMO of the concerned hospital vide his letter dated 13.05.2013 that Shri Kaludas Hiradas Bairagi's provisional diagnosis was Metastasis of neck nodes left side of unknown origin. He was examined and investigated on 20.06.2006 and his last follow up at the institute was 21.06.2006. Diagnosis of Shri Kaludas in this post is mentioned as "Metastasis of neck nodes left side of unknown origin." FNAC report- Metastasis Squamous Cell Carcinoma.
9. From the above discussion, there remains no doubt that the insured/ deceased was treated in Gujarat Cancer & Research Institute for Carcinoma. However, clearly he had suppressed the material information in this regard, while filling up the proposal form. He was diagnosed on 20.06.2006 and filled up the proposal form on 26.02.2007 in order to obtain the policy cover.
10. The Hon'ble Supreme Court in Satwant Kaur Sandhu Vs New India Assurance Company Limited 2009 CTJ (Supreme Court) (CP) has observed in Paragraph 12:
"Thus it needs little emphasis is that when an information on a specific aspect is asked for in the proposal form, an assured is under a solemn obligation to make a -4- 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 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."
11. The Hon'ble Supreme Court further in para 19 has observed:
In this regard it would be apposite to make reference to Regulation 2(1)(d) of the Insurance Regulatory and Development Authority (Protection of Policyholders' Interests) Regulations, 2002, which explains the meaning of term "material". The Regulation reads thus:
"2 Definitions--In these regulations, unless the context otherwise requires--
xxx xxx xxx xxx xxx xxx xxx xxx xxx
"Proposal Form" means a form to be filled in by the proposer for insurance for furnishing all material information required by the insurer in respect of a risk, in order to enable the insurer to decide whether to accept or decline to undertake the risk, and in the event of acceptance of the risk, to determine the rates, terms and conditions of a cover to be granted.
Explanation:- "Material" for the purpose of these regulations shall mean and include all important, essential and relevant information in the context of underwriting the risk to be covered by the insurer."
Thus the regulation also defines the word "material" to mean and include all "important", "essential" and "relevant" information in the context of guiding the insurer to decide whether to undertake the risk or not.
Therefore, the upshot of entire discussion is that in a 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 to the questions in the proposal form.
12. It is settled position that the insured was under obligation to fill up the details correctly in the proposal form. Either proposal for insurance would have been rejected or insured would have been subjected to further investigations before providing the policy cover. Law is well settled on this matter.
13. Therefore in wake of the above discussion we are of the considered view that the complainant/respondent does not deserve the claim amount. The -5- impugned order is set-aside and this appeal is allowed. The complaint is consequently dismissed. However, no order as to costs of this appeal.
(S. D. AGARWAL) (DR. MRS MONIKA MALIK) PRESIDING MEMBER MEMBER