State Consumer Disputes Redressal Commission
Rohini Balaji Goli vs Aditya Birla Sunlife Insurance ... on 6 April, 2026
Date of pronouncement:- 06.04.2026
IN THE NATIONAL CONSUMER DISPUTES REDRESSAL
COMMISSION NEW DELHI
CONSUMER COMPLAINT NO. 642 OF 2018
Rohini Balaji Goli
W/o Late Sh. Balaji Dattatrya Goli
R/o 11057/58, New Pacha Peth,
Near Krishan Mandir,
Solarpur - 413 005 ..... Complainant
Versus
Aditya Birla Sunlife Insurance Company Ltd.
Through its Managing Director/ Authorised Signatory
Having its registered office at:-
One Indiabulls Centre, Tower 1, 16th Floor,
Also At:-
Aditya Birla Sunlife Insurance Company Ltd.
Through its Managing Director/ Authorised Signatory
G Corp. Tech Park, 5th & 6th Floor, Kasar Wadavli,
Ghodbunder Road, Thane -- 400 601. ....... Opp. Party
BEFORE:
HON'BLE AVM J. RAJENDRA, AVSM VSM (RETD.), PRESIDING
MEMBER
HON'BLE MR. JUSTICE ANOOP KUMAR MENDIRATTA, MEMBER
Appearance at the time of arguments:-
For the Complainant : Mr. Tarun Johri, Advocate
Mr. Ankur Gupta, Advocate
For the Opposite Parties : Ms. Meenakshi Midha, Advocate
Ms. Muskaan Garg, Advocate
Mr. Gary Singh, Advocate
Ms. Vartika Gupta, Advocate
CC/642/2018 Page 1 of 37
JUSTICE ANOOP KUMAR MENDIRATTA, MEMBER
ORDER
1. Present consumer complaint has been preferred by the complainant {wife of Deceased Life Assured (DLA) namely, Sh.Balaji Dattatrya Goli} alleging deficiency in service and unfair trade practice on the part of opposite party (Aditya Birla Sunlife Insurance Company Ltd.) on account of repudiation of Insurance claim amounting to Rs.4 crores in terms of insurance policies bearing No.006505053 and 006724887 for assured sum of Rs.2 crores each.
2. In brief as per the case of the complainant in the month of April 2014, husband of the complainant since deceased, had filled up the proposal form No.49243209 for availing of insurance policy namely ‗Easy Protect' for an assured sum of Rs.2 crores from the opposite party. On 03.04.2014, DLA was asked to undergo complete medical tests and found to be suitable for issuance of the insurance policy. Accordingly policy bearing No.006505053 was issued on payment of annual premium of Rs.55,288/-. The term of the policy was for 30 years.
3. The Deceased Life Assured (DLA) further filled up second proposal form No.50311710 for availing another insurance policy, CC/642/2018 Page 2 of 37 namely ‗Protector Plus Plan', for assured sum of Rs.2 crores on 13.03.2015. On the basis of the earlier medical examination of the deceased, policy No. 006724887 dated 13.03.2015 was issued by the opposite party on payment of annual premium of Rs.77,876/- for a period of 26 years.
4. On 23.02.2017, Deceased Life Assured (DLA) was admitted to Ashwini Sahakari Rugnalaya Ani Sansodhan Kendra Hospital, Solapur, approximately within a period of 2-3 years from the date of the issue of said policies and died on account of Septicaemia shock, acute kidney failure, metabolic acidosis, pnueumonititis on 17.03.2017.
5. On 29.04.2017 complainant submitted requisite documents with the opposite party for release of the insured amount. However, the claim was repudiated by the OP/Insurance Company vide letter dated 26.10.2017 on the ground that the assured did not give true, correct and complete information in the proposal form which would have had a bearing on underwriting of the risk, as under:-
"October 26, 2017 Mrs. Rohini Balaji Goli 1157/58, New Pacha Peth, Near Krishna Mandir, Solapur - 413005 Maharashtra.CC/642/2018 Page 3 of 37
Dear Mrs. Goli, Re: Death Claim under Policy Nos. 006505053 & 006724887 on the life of Late Mr. Balaji Dattatraya Goli This has reference to your claim received by us on April 29, 2017 for the benefits under the above policy. In this regard, we have to state and inform you as follows:
The above policies were issued on June 19, 2014 and March 27, 2015 on the basis of the proposals for insurance dated May 12, 2014 and March 13, 2015 respectively signed by Late Mr. Balaji Dattatrya Goli (the "Life Assured") on his own life, and bona fide believing the information as contained in the respective proposal forms and accompanying documents to be true and correct, without any suppression of material Information. The Policies which had lapsed on June 19, 2015 and March 27, 2016 had been revived on July 29, 2015 and May 03, 2016 respectively.
As per the "Claimant's Statement" and "Death Certificate" Life Assured expired on March 17,2017, i.e., within 32 months and 23 months respectively since policy issuance dates and 19months and 10 months respectively since policy reinstatement dates, i.e.; due to Septic Shock, Bilateral Pneumonitis, Acute Respiratory Distress Syndrome and Metabolic Acidosis.
However, we now learn that the life assured did not give true, correct and complete information without suppression of material information in the proposal forms, which would have had a bearing on underwriting of the risk by us and wrongly inducing us. For your kind information and ready recapitulation please note that in the proposal for insurance under Policy No: 006505053, the Life Assured, answered Q No 11 (D) in the negative and for Q No. 12 (A) had not provided complete details. For your reference, we are reproducing below the aforesaid questions and the reply thereto in the proposal for insurance:
11 INSURABILITY DECLARATION FOR THE LIFE TO BE INSURED D) Do you have any physical defects, impairment, deformities and/or any condition affecting mobility, sight and/or hearing?............................................................................................. No 12 INSURANCE HISTORY OF THE LIFE TO BE INSURED A) Is there any concurrent application and/or any existing insurance on your life for Life / Health / Accident / Critical illness or other riders in effect with BSLI or any other insurer in India or abroad?........................................................................................................Yes CC/642/2018 Page 4 of 37 Application / Name of the Date of Year of Sum Assured Policy No Insurer Application Issue (in Rs.) Bajaj & LIC 1 Cr In the proposal for Insurance under Policy No: 006724887, the Life Assured, replied Q No. 12 (D) in negative and for Q No. 13(A) not provided complete details. For your reference, we are reproducing below the aforesaid questions and the reply thereto in the proposal for insurance.
12 INSURABILITY DECLARATION for the LIFE TO BE INSURED D) Do you have any physical defects, impairment, deformities and/or any condition affecting mobility, sight and/or hearing?.............................................................................................No 13 INSURANCE HISTORY OF THE LIFE TO BE INSURED A) Is there any concurrent application and/or any existing insurance on your life for Life / Health / Accident / Critical illness or other riders in effect with BSLI or any other insurer in India or abroad?...............................................................................................................
.......Yes
Application / Name of the Date of Year of Sum Assured
Policy No Insurer Application Issue (in Rs.)
006505053 BSLI 2 Cr
However, our investigations have established that the Life Assured had 51% of permanent disability to his right upper limb diagnosed with Right Malunited Humerus fracture with elbow stiffness with Median Nerve Palsy. This was as a result of the Road Traffic Accident met by the Life Assured on September 18, 2010. The same was not disclosed in any of the two applications for insurance. Further it was also established that other than the insurance history mentioned in the application for insurance the Life Assured had procured more insurance policies with multiple insurance companies. The details of the same are mentioned in the below table :
Date of Policy No Company Issue Date Sum Assured Application 258398015 Max Life 19/06/2005 19/06/2005 2,50,000 Bajaj 21675985 Allianz 02/06/2006 02/06/2006 75,000 CC/642/2018 Page 5 of 37 Date of Policy No Company Issue Date Sum Assured Application 6346258 ICICI Pru 30/09/2007 30/09/2007 2,50,000 Bajaj 192010221 Allianz 13/01/2011 13/01/2011 1,25,000 16750849 ICICI Pru 21/06/2012 21/06/2012 4,75,300 990199597 LIC 15/04/2013 15/04/2013 1,00,00,000 Bajaj 304574766 Allianz 01/06/2013 01/06/2013 20,000,000 49010527606 SBI Life 16/12/2013 26/12/2013 500,000 If the true and correct material information pertaining to Life Assured's medical history and complete details of other insurance policies would have been disclosed at the proposal stage, that would have enabled us to evaluate the proposal forms in proper perspective and come to an informed conclusion about acceptance or rejection of the proposal, and thus, the suppression of material information by the life assured had impaired our decision making process, which is striking at the very root of 'utmost good faith'.
From the evidence and information available with the Company it is established that there has been a wilful intent to deceive the Company by not disclosing true facts which were material for the purpose of the issuance of policies, in utter disregard of the specific requirements and instructions as contained in the respective proposal forms for insurance, coupled with the declaration as contained in the proposal forms duly signed by the life assured. In view of this, furnishing of wrong information/suppression of material information in the proposal forms by defying the concept of 'utmost good faith' resulted in obtaining the policy contract from us by material mis- representation, which would render the respective policy contracts voidable at our option. Your kind attention is invited to the entire contents of the respective proposal forms and the respective policy terms and conditions, exclusions and exceptions, which detail the inter se rights and obligations. From the nature of information as sought for in the proposal forms, the onus is on the life assured to give all the required information in the proposal forms truly and correctly without any omission or suppression, and any omission or commission in this behalf would be fraught with adverse consequences.
The above facts clearly indicate an active concealment of material facts and information by the insured in the respective proposal forms with a mala fide intent to deceiving the Company leading to issuance of aforesaid policies CC/642/2018 Page 6 of 37 based on false disclosure and untrue statement which was well within the knowledge of the Life Assured.
Hence there has been a breach of one of the basic principles of Life Insurance Contract which is "Utmost Good Faith".
Accordingly, we are hereby constrained to repudiate your claim under each of the aforesaid insurance policies and premiums paid thereunder stands forfeited.
However, if you feel that your case deserves further consideration you may send written representation for re-examination of the matter, to the "Grievance Redressal Committee" at the following address within 60 days of receipt of this letter.
Grievance Redressal Committee Aditya Birla Sun Life Insurance Co. Ltd.
Claims Department G Corp Tech Park, 6th Floor Kasar Vadavali Ghodbunder Road Thane (W) - 400 601 In case you feel that response from the company to your representation is not satisfactory, you may approach the nearest Insurance Ombudsman for any further examination of the matter.
The address of the concerned Office of the Ombudsman is as follows:
Office of the Insurance Ombudsman, Jeevan Darshan Bldg., 3rd Floor, CTS Nos. 195 to 198, N.C. Kelkar Road, Narayan Peth, Pune - 411 030 Phone - 020-41312555 Email: [email protected] Yours Sincerely, Ms. Reshma Dhar Head of Claims"
6. Aggrieved against the repudiation of the claim by the opposite party, present complaint has been preferred by the complainant, for CC/642/2018 Page 7 of 37 payment of assured amount towards two insurance policies along with compensation.
7. OP denied any deficiency in service in the written version and claimed that complainant concealed availing of other insurance policies, prior to issue of policies in question, as referred in the repudiation letter.
OP further submitted that other concealed policies were approximately for assured sum Rs.2.08 crores. It is the specific case of the Opposite Party that the Deceased Life Assured only mentioned obtaining of policies from ‗Bajaj Allianz' and ‗LIC' for consolidated assured sum of Rs.1 crore in proposal form No.49243209 on the basis of which first policy No.006505053 was issued. Further in the second proposal form bearing No.50311710 the existence of policies availed from Bajaj Allianz and LIC was concealed except mentioning availing of first policy from BSLI (OP). Hence, only one policy availed from BSLI for assured sum of Rs.2 crores was disclosed. OP further averred that vide e-mail dated 05.05.2017 addressed from SBI Life to IDBI Federal it was revealed that the Deceased Life Assured (DLA) had a policy No.49010527606 for sum assured of Rs.5 lakhs from SBI Life prior to the issuance of two policies under consideration. Also, reference was made to five policies i.e. policy No.258398015 from Max Life with risk commencement date 19.06.2005 CC/642/2018 Page 8 of 37 for assured sum of Rs.2,50,000/-; policy No.21675985 from Bajaj Allianz with risk commencement date 02.06.2006 for assured sum of Rs.75,000/-; policy No.6346258 from ICICI Prudential with risk commencement date 30.09.2007 for assured sum of Rs.2,50,000/-; policy No.192010221 from Bajaj Allianz with risk commencement date from 13.01.2011 for assured sum of Rs.1,25,000/-; and policy No.16750849 from ICICI Prudential with risk commencement date 21.06.2012 for assured sum of Rs.4,75,300/- which were not disclosed while filling up the proposal form for first policy for assured sum of Rs.2 crores.
8. OP further emphasized that the Deceased Life Assured (DLA) had suffered 51% disability in the right upper limb in an accident suffered on 18.09.2010 which was diagnosed as ―Rt. Upper Limb Grade III B, # RtHumerus with loss of radial artery segments with loss of extensor‖.
9. In the rejoinder filed on behalf of the complainant, concealment of any material facts was denied. Complainant submitted that medical examination of the Insured was conducted by the medical practitioner empanelled by the opposite party and the same reflected that the insured was in good state of health at the time of submission of the proposal form. Further no disability which would have influenced grant CC/642/2018 Page 9 of 37 of policy was pointed out by the concerned doctor. Even otherwise the alleged disability of the insured is stated to have no co-relation with the cause of death of the DLA. Complainant further stated that the Insurance Company had only sought information with regard to physical defects, impairment, deformities and/or any condition affecting mobility, sight or hearing, which according to her were not impacted by the injuries sustained in the accident. The information as to availing of other substantial policies by the DLA is stated to have been disclosed.
10. In support of the complaint, complainant led her evidence by way of affidavit and exhibited the copy of insurance policy bearing No.006505053 as Ex.CW1/1; copy of insurance policy bearing No.006724887 as Ex.CW1/2; copy of certificate dated 15.11.2017 as Ex.CW1/3; copy of letter dated 17.03.2017 issued by the hospital detailing cause of death of the insured as Ex.CW1/4; copy of death certificate as Ex.CW1/5; copy of death claim intimation dated 29.04.2017 as Ex.CW1/6; copy of repudiation letter dated 26.10.2017 as Ex.CW1/7 and copy of the document downloaded from the web site providing meaning of the alleged disability of the insured as Ex.CW1/8.
11. On the other hand, OP in support of its case led evidence of OPW- 1 Mrs. Aakriti Manocha, Manager (Legal), OPW-2 Dr. C.H. Asrani, CC/642/2018 Page 10 of 37 Consultant Family Physician and Insurance Claims Consultant and OPW-3 Shri Prasad, Investigator appointed by the opposite party, by way of affidavits.
OPW-1 Mrs. Aakriti Manocha exhibited copy of policy bearing No.258398015 issued by Max New York Life Insurance Company in favour of the Deceased Life Assured on 19.06.2005 for a sum of Rs.2,50,000/- as Ex.OP-1/C; copy of FIR dated 18.09.2010, evidencing the involvement of DLA in vehicular accident whereby disability had been suffered as Ex.OP-2/C; copy of the hospital records pertaining to the road accident wherein DLA suffered disability as Ex.OPW-1/1 (colly); copy of in-patient Bill dated 15.10.2010 issued by Ashwini Sahakari Rugnalaya Ani Sanshodhan Kendra Niy., Solapur wherein the deceased life assured was admitted and treated since 18.09.2010 as Ex.OPW1/2; copy of letter dated 03.11.2010 addressed by the DLS to New India Assurance Co. Ltd. as Ex.OPW1/3; copy of policy schedule of policy no.0912010221 issued by Bajaj Allianz in favour of the DLA as Ex.OP- 3/C; copy of policy certificate bearing policy no.16750849 issued by ICICI Prudential Life Insurance in favour of the DLA as Ex.OP-4/C; copy of proposal form bearing no.47584424 submitted by DLA to OP on 27.02.2013 as Ex.OP-5/C; copy of the policy schedule dated 16.08.2013 CC/642/2018 Page 11 of 37 with reference to policy No.0304574766 issued by Bajaj Allianz in favour of DLA as Ex.OP-6/C; copy of proposal form bearing no.49243764 dated 17.03.2014 submitted by DLA to the OP on 17.03.2014 as Ex.OP-7/C; copy of the proposal form bearing No.49243209 submitted by DLA to the OP on 12.05.2014 as Ex.OP-8/C; copy of the pre-insurance test request form dated 12.06.2014 as Ex.OP-9/C; copy of policy bearing No.006505053 issued in the name of the DLA on 19.06.2014 for a sum of Rs.2 crores as Ex.OP-10/C; copy of the proposal form bearing No.49813603 submitted by the DLA to the OP on 28.12.2014 as Ex.OP- 11/C; copy of the proposal form bearing No.50311710 submitted by the DLA to the OP on 13.03.2015 as Ex.OP-12/C; copy of the policy bearing No.006724887 issued in the name of the DLA on 27.03.2015 for assured sum of Rs.2 crores as Ex.OP-13/C; copy of the Disability Certificate dated 09.07.2015 as Ex.OPW-1/4; copy of the document dated 29.03.2017 evidencing payment of Rs.1 crore from LIC to the complainant in respect of policy No.990199597 as Ex.OPW-1/5; copy of death claim intimation and claimant statement form to the OP referring to policies bearing No.006505053, 006724887 and 006003608 as Ex.OP- 14/C; copy of e-mail dated 05.05.2017 addressed to SBI Life to IDBI Federal as Ex.OPW-1/6; copy of the e-mail dated 24.05.2017 addressed CC/642/2018 Page 12 of 37 from ICICI Prudential Life Insurance to SBI Life as Ex.OPW-1/7; copy of the investigation report of Charter House Detective submitted to the OP on 18.08.2017 as Ex.OPW-1/8; copy of report dated 22.09.2017 issued by Dr. C.H. Asrani providing expert opinion as Ex.OPW-1/9; copy of e- mail dated 27.09.2017 addressed from SBI Life to the OP as Ex.OPW- 1/10 and copy of repudiation letter dated 26.10.2017 issued by OP as Ex.OPW-1/11.
OPW-2 Dr. C.H. Asran exhibited expert medical opinion provided by him as Ex.OPW-2/1.
OPW-3 Shri Prasad, Charterhouse Detective Services (Investigator) appointed by OP stated with respect to investigation conducted by him and affirmed that there is evidence in support of non- disclosure/misrepresentation of facts. Further, he exhibited investigation report dated 18.08.2017 submitted to OP as Ex.OPW-3/1.
12. Ld. counsel for the complainant urged that DLA had been medically examined by a doctor empanelled with OP Insurance Company prior to grant of first policy No.006505053 dated 19.06.2014 and, as such, opposite party cannot take stand of suppression of any physical disability suffered by DLA. Since the disability of the insured did not affect the mobility, sight or hearing of the insured, the same was not CC/642/2018 Page 13 of 37 adversely reflected by the doctor on medical examination. Further, all the medical test reports indicated the insured to be in a good state of health. He presses that disability in no manner impacted the grant of policies at the relevant time. He further points out that the cause of death of DLA on 17.03.2017 was on account of Septic Shock, Bilateral Pneumonitis, Acute Respiratory Distress Syndrome and Metabolic Acidosis after about 2-3 years of obtaining the policies and had no co- relation to injuries suffered in an accident in 2010. Ld. counsel emphasizes that since the alleged disability had absolutely no effect on the mobility, sight and hearing of the DLA, the reply had been furnished in negative in the proposal form. He further contends that ―right malunited humerus fracture with elbow stiffness and median nerve palsy‖ only affects the mobility of hand.
13. Ld. counsel further urged that DLA had sufficient earnings of Rs.5 lakhs for payment of premium and after being confident of paying capacity of DLA, the two policies were issued by OP. Further, merely because some policies for small sums were earlier obtained by DLA for few lakhs rupees, the same did not impact the decision of the OP to issue the policies in question. The policies obtained from LIC and Bajaj Allianz on 15.04.2013 and 01.06.2013 are stated to have been duly CC/642/2018 Page 14 of 37 disclosed in the first proposal form but there was discrepancy in mentioning the sum assured as Rs.1 crore, instead of separately bifurcating the sum assured in respect of LIC as Rs.1 crore and for Bajaj Allianz as Rs.2 crores. He also submits that the repudiation of claim by OP is violative of Section 45 of the Insurance Act as period of more than two years had expired after the issue of two policies in question. He emphasizes that non-disclosure of the information in respect of policies for lower sums, cannot not be termed as fraudulent, as contended by OP.
14. Per contra, ld. counsel for the Insurance Company referring to the factual position as noticed in the written version reiterated that Deceased Life Assured (DLA) deliberately concealed material facts regarding obtaining of various policies and disability suffered in the course of the accident in 2010. Reference was further made to various policies obtained by deceased prior to issuance of two policies in question as referred in repudiation letter by OP (i.e. Max New York Life Insurance for assured sum of Rs.2,50,000/- on 19.06.2005; Bajaj Allianz Life Insurance Co. Ltd. for assured sum of Rs.1,25,000/- on 13.01.2011; ICICI Prudential Life Insurance Co. Ltd. for assured sum of Rs.4,75,300/- on 21.06.2012; and Bajaj Allianz for assured sum of Rs.2 CC/642/2018 Page 15 of 37 crores on 16.08.2013). In addition to above, ld. counsel pointed out that proposal form No.47584424 was submitted by DLA to opposite party on 27.02.2013 subject to which policy No. 005988389 was issued for a basic assured sum of Rs.5,95,538/- which was rejected by opposite party on account of dishonour of cheque. Thereafter subject to same proposal form, policy No. 006003608 was issued on 08.03.2013 by OP which later on lapsed on 08.03.2014. Also, another proposal bearing No. 49243764 was submitted by DLA on 17.03.2014 for issuance of policy No. 006446787 which was rejected.
15. Ld. counsel for OP further argued that in proposal form No.49243209 (with reference to policy No.006505053 issued on 19.06.2014 by OP), in response to question No. 11(D), question No. 14
(i) (a), (b) & (c) and question No. 14(ii)(n), DLA mala fidely answered in negative as under:-
"It is pertinent to mention that Question No. 11(D), Question No.14(i) (a), (b) & (c) and Question No.14(ii)(n) of the said Proposal Form were malafidely answered in the negative by the Deceased Life Assured which are reproduced as under:
"11.INSURABILITY DECLARATION for the LIFE to be INSURED (MANDATORY FOR ALL PLANS) CC/642/2018 Page 16 of 37 (D) Do you have any physical defects, impairment, deformities and/or any condition affecting mobility, sight and/ or hearing?...
Ans. No ...14. MEDICAL HISTORY (MANDATORY FOR ALL PLANS OTHER THAN SIMPLIFIED PRODUCTS)
(i) Within the past 5 years have you:
a) Consulted any doctor or health practitioner except for common cold, influenza lasting less than 4 days?
Ans. No
b) Submitted an ECG, X-rays, blood tests or any other tests? If Yes, please specify below.
Ans. No
c) Admitted / been advised to be admitted to any hospital or a medical facility for medical management or surgical procedure?
(ii) Have you ever sought advice or suffered from any of the following? Please circle, whichever is applicable.
Ans. No ................
(n) Any other illness, surgery or injury?"
Ans. No CC/642/2018 Page 17 of 37 Further, in response to question No.12(A) in relation to information sought with respect to other policies, DLA mentioned ―Bajaj & LIC; Rs. 1 crore' as under...12. INSURANCE HISTORY OF THE LIFE to be INSURED (MANDATORY FOR ALL PLANS) A. Is there any concurrent application and/or any existing insurance on your life for Life/Health/ Accident/Critical Illness or other riders in effect with BSLI or any other Insurer in India or abroad?
If Yes, give details.
Yes. Bajaj & LIC: Rs. 1 Cr B. Have you ever had an application for life, accident, medical, health-related insurance or riders refused, withdrawn, declined, postponed or offered with restricted benefits or with an Increased premium or made any claim under any such policy of Insurance with BSLl or any other Insurer in India or abroad? If Yes, give details Ans. No..."
16. Ld. counsel for OP further made reference to proposal form No.50311710 dated 13.03.2015 in response to which second policy No.006724887 was issued on 27.03.2015. She emphasized that DLA only disclosed availing of earlier policy from OP while filling up the second proposal form but the policies obtained from LIC and Bajaj CC/642/2018 Page 18 of 37 Allianz for assured sum of Rs.1 crore and Rs.2 crores respectively as disclosed earlier while obtaining first policy for assured sum of Rs.2 crores were suppressed. She further urged that complainant had received Rs.1 crore from LIC in respect of policy No.990199597 on 29.03.2017. Also e-mail dated 05.05.2017, addressed by the State Bank of India Life Insurance Co. to IDBI Federal Life Insurance Company reflected that the Deceased Life Assured (DLA) had obtained policy No.490105227606 for sum assured sum of Rs.5,00,000/- prior to obtaining the two policies in dispute from OP.
17. Ld. counsel for OP emphasized that DLA intentionally suppressed material information pertaining to his disability and, as such, OP was justified in repudiating the claim. She points out that disability certificate dated 09.07.2015, issued in the name of the DLA, reflects that the DLA suffered 51% permanent disability with respect to his right upper limb on account of motor vehicular accident in 2010. Further, reference is made to the report of the Charter House Detective appointed by the opposite party along with expert medical opinion provided by Dr. C.H. Asrani whereby he observed that DLA has been suffering from above- mentioned permanent disability at the time of taking of the two policies in question.
CC/642/2018 Page 19 of 37
In support of the contentions, reliance was further placed upon Reliance General Insurance Co. Ltd. & Anr. v. Rekhaben Nareshbhai Rathod, Civil Appeal No. 4261 of 2019; Satwant Kaur Sandhu v. New India Assurance Co. Ltd., (2009) 8 SCC 316; Monica Jain v. Life Insurance Corporation of India, IV (2015) CPJ 16 (NC); ICICI Prudential Life Insurance Co. Ltd. v. Lalita Jain, II (2015) CPJ 246 (NC); LIC of India v. Smt. Vidya Devi, III (2012) CPJ 288 (NC); Dineshbhai Chandarana v. Life Insurance Corporation, III (2010) CPJ 358 (NC); Mithoolal Nayak v. Life Insurance Corporation of India, AIR 1962 SC 814; Charanjit Singh v. Life Insurance Corporation of India & Ors., II (2018) CPJ 204 (NC); Manmohan Nanda v. United India Insurance Co. Ltd. & Ors., MANU/CF/0340/2015 and C.N. Mohan Raj v. M/s New India Assurance Co. Ltd., IV(2012) CPJ 784 (NC).
18. We have given considered thought to the contentions raised and perused the record carefully.
It is well settled that a contract of insurance is contract of uberrimae fidei and there must be complete good faith on the part of the assured as observed by Hon'ble Apex Court in Life Insurance Corporation of India v. Smt. GM Channabasamma, (1991) 1 sec 357. CC/642/2018 Page 20 of 37 The concealment of a ‗material information' or representation while filling the proposal form may have a significant effect, since it influences the decision of an insurer to decide, whether or not to undertake the risk. If there is any misstatement or suppression of material facts, the policy can be called into question. Further in order to determine, if there has been suppression of any material facts, it may be necessary to examine whether the suppression relates to a fact which is in the exclusive knowledge of the policy taker and it could not be ascertained by a reasonable person.
19. What constitutes a material suppression for the purpose of contract of insurance needs to be seen in the light of the phrase ―material facts‖ as delineated in Explanation to Regulation 2(d) of Insurance Regulatory and Development Authority (Protection of Policyholders' Interest) Regulations, 2002. Explanation to said Regulation 2(d) in the context of ―proposal form‖ provides that ―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.
In the aforesaid context, observations of Hon'ble Apex Court in Manmohan Nanda v. United India Assurance Company Limited and CC/642/2018 Page 21 of 37 Another, (2022) 4 SCC 582 in paras 36 to 39 and 43 may be beneficially noticed :-
"36. The duty of the insured to observe utmost good faith is enforced by requiring him to respond to a proposal form which is so framed to seek all relevant information to be incorporated in the policy and to make it the basis of a contract. The contractual duty so imposed is that any suppression or falsity in the statements in the proposal form would result in a breach of duty of good faith and would render the policy voidable and consequently repudiate it at the instance of the insurer.
37. In relation to the duty of disclosure on the insured, any fact which would influence the judgment of a prudent insurer and not a particular insurer is a material fact. The test is, whether, the circumstances in question would influence the prudent insurer and not whether it might influence him vide Reynolds v. Phoenix Assurance Co. Ltd. [Reynolds v. Phoenix Assurance Co. Ltd., (1978) 2 Lloyd's Rep 440] Hence the test is to be of a prudent insurer while issuing a policy of insurance.
38. The basic test hinges on whether the mind of a prudent insurer would be affected, either in deciding whether to take the risk at all or in fixing the premium, by knowledge of a particular fact if it had been disclosed. Therefore, the fact must be one affecting the risk. If it has no bearing on the risk it need not be disclosed and if it would do no more than cause insurers to make inquiries delaying issue of the insurance, it is not material if the result of the inquiries would have no effect on a prudent insurer.
39. Whether a fact is material will depend on the circumstances, as proved by evidence, of the particular case. It is for the court to rule as a matter of law, whether, a particular fact is capable of being material and to give directions as to the test to be applied. Rules of universal application are not therefore to be expected, but the propositions set out in the following paragraphs are well established:
39.1. Any fact is material which leads to the inference, in the circumstances of the particular case, that the subject-matter of insurance is not an ordinary risk, but is exceptionally liable to be affected by the peril insured against. This is referred to as the "physical hazard".
39.2. Any fact is material which leads to the inference that the particular proposer is a person, or one of a class of persons, whose proposal for insurance ought to be subjected at all or CC/642/2018 Page 22 of 37 accepted at a normal rate. This is usually referred to as the "moral hazard".
39.3. The materiality of a particular fact is determined by the circumstances of each case and is a question of fact. xxxxxxxx xxx
43. The basic rules to be observed in making a proposal for insurance may be summarised as follows:
43.1. A fair and reasonable construction must be put upon the language of the question which is asked, and the answer given will be similarly construed. This involves close attention to the language used in either case, as the question may be so framed that an unqualified answer amounts to an assertion by the proposer that he has knowledge of the facts and that the knowledge is being imparted. However, provided these canons are observed, accuracy in all matters of substance will suffice and misstatements or omissions in trifling and insubstantial respects will be ignored.
43.2. Carelessness is no excuse, unless the error is so obvious that no one could be regarded as misled. If the proposer puts "no"
when he means "yes" it will not avail him to say it was a slip of the pen; the answer is plainly the reverse of the truth. 43.3. An answer which is literally accurate, so far as it extends, will not suffice if it is misleading by reason of what is not stated. It may be quite accurate for the proposer to state that he has made a claim previously on an insurance company, but the answer is untrue if in fact he has made more than one.
43.4. Where the space for an answer is left blank, leaving the question unanswered, the reasonable inference may be that there is nothing to enter as an answer. If in fact there is something to enter as an answer, the insurers are misled in that their reasonable inference is belied. It will then be a matter of construction whether this is a mere non-disclosure, the proposer having made no positive statement at all, or whether in substance he is to be regarded as having asserted that there is in fact nothing to state.
43.5. Where an answer is unsatisfactory, as being on the face of it incomplete or inconsistent the insurers may, as reasonable men, be regarded as put on inquiry, so that if they issue a policy without any further enquiry they are assumed to have waived any further information. However, having regard to the inference mentioned in Head 43.4 above, the mere leaving of a blank space will not normally be regarded as sufficient to put the insurers on inquiry.
43.6. A proposer may find it convenient to bracket together two or more questions and give a composite answer. There is no CC/642/2018 Page 23 of 37 objection to his doing so, provided the insurers are given adequate and accurate information on all points covered by the questions. 43.7. Any answer given, however accurate and honest at the time it was written down, must be corrected if, up to the time of acceptance of the proposal, any event or circumstance supervenes to make it inaccurate or misleading.
[Source : Halsbury's Laws of England, 4th Edn., Para 375, Vol. 25 : Insurance]"
20. At this stage, reference may also be made to Satwant Kaur Sandhu v. New India Assurance Co. Ltd., (2009) 8 SCC 316 as relied by the opposite party/insurance company, wherein the repudiation of claim by the Insurance Company was held to be justified since there was suppression of material fact regarding the state of health of the insured who was suffering from diabetic nephropathy as well as chronic renal failure. The non-disclosure of the same was considered to be material fact for the purpose of mediclaim policy which would have influenced and guided the respondent Insurance Company therein to enter into the contract of the mediclaim insurance with the insured.
21. Reliance Life Insurance Company Ltd. v. Rekhaben Nareshbhai Rathod, (2019) 6 SCC 175 relied by the opposite party deals with the case of repudiation of life insurance claim on account of failure of insured for wrongly withholding the information regarding non-
disclosure of previous insurance cover. The non-disclosure of policy CC/642/2018 Page 24 of 37 obtained from Max New York Life Insurance Company Ltd. for Rs.11 lakhs was admitted by claimant therein.
Hon'ble Apex Court held that repudiation of claim was justified firstly since the insured failed to disclose the policy of insurance in sum of Rs.11 lakhs obtained two months earlier in the proposal form. Also, the decision by Hon'ble Division Bench in Sheoshankar Ratanlalji Khamele v. Life Insurance Corporation of India, AIR 1971 Bom 304 was noticed wherein in relation to un-amended Section 45 of Insurance Act, 1938 (prior to 26.12.2014), it was observed as under:-
"....The section is divided into two parts. Under the first part, if the insurer calls in question the policy within a period of two years from the date on which it was effected, then the insurer company has only to show that a statement made in the proposal for insurance, or in any report of a medical officer, or referee, or friend of the insured, or in any other document, leading to the issue of the policy was inaccurate or false. Even an incorrect statement which may not be on a material fact and suppression of fact which may not be on a material point, would be enough for the insurer company to avoid the contract of policy under this part. Under the second part, where a period of two years expired after the date of policy was effected without any challenge to it by the insurer, the insurer could call it in question only on showing that such statement by the insured was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policy holder and that the policy-holder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose. The question as to the date on which the policy could be said to be CC/642/2018 Page 25 of 37 effected and the date on which the proposal can be said to have been accepted assumes importance in this case as on the determination of this question will depend whether the repudiation by the insurer has been within two years or after a period of two years from the date on which the policy was effected."
In the context of Section 45 of the Insurance Act, 1938, reference was further made to Life Insurance Corporation of India v. Asha Goel, (2001) 2 SCC 160. It was further noticed as held in Satwant Kaur Sandhu v. New India Assurance Co. Ltd. (supra), that any fact which goes to the root of the contract of insurance and has bearing on the risk involved would be material. Hon'ble Apex Court further held that materiality of a fact also depends on surrounding circumstances and the nature of information sought by the insurer. It covers a failure to disclose vital information which the insurer requires in order to firstly determine, whether or not to assume the risk of insurance and secondly, if it goes against risk, upon what terms it should do so. If the proposer has knowledge of such fact, she or he is obliged to disclose it particularly when answering the questions in proposal form. An inaccurate answer will entitle the insurer to repudiate because there is presumption that information sought in proposal form is material for purpose of entering into contract for insurance.
CC/642/2018 Page 26 of 37
22. Reverting back to the facts of the case, it may be seen that in response to question No. 11(D) and 12(D) as referred in the repudiation letter, the response of the DLA was in the negative as under:-
"11 INSURABILITY DECLARATION FOR THE LIFE TO BE INSURED D) Do you have any physical defects, impairment, deformities and/or any condition affecting mobility, sight and/or hearing?............................................................................................. No"
"12 INSURABILITY DECLARATION for the LIFE TO BE INSURED D) Do you have any physical defects, impairment, deformities and/or any condition affecting mobility, sight and/or hearing?.............................................................................................No"
However, it cannot be overlooked that the insurance policies were approved by the OP/Insurance Company only after the DLA had been medically examined and had undertaken the medical tests as directed by the doctor empanelled by OP. As such, the medical condition of the DLA was completely to the knowledge of the medical officer and DLA could not have suppressed his physical disability. It cannot be assumed that there was any intentional suppression of disability by the DLA. In case the injury/disability had any impact on grant of policy, the same could have been specified by the Medical Officer. In view of above, reply of DLA in response to query in 11D and 12D above, cannot be adversely considered against the complainant. The same also needs to CC/642/2018 Page 27 of 37 be looked from the perspective that death of the DLA in the present case is on account of Septic Shock, Bilateral Pneumonitis, Acute Respiratory Distress Syndrome and Metabolic Acidosis which occurred after a period of 2-3 years of obtaining of the policy and is totally unrelated to injuries suffered in accident in 2010. In the facts and circumstances, we are of the considered opinion that non-disclosure of the disability does not appear to be material ‗which could have influenced the decision of a prudent insurer' for granting the policy.
Reliance may further be placed upon Sulbha Prakash Motegaoneker & Ors. v. Life Insurance Corporation of India, (2021) 13 SCC 561 wherein repudiation of claim by the Insurance Company, on account of non-disclosure of certain diseases, which were neither life-threatening diseases, nor could or did cause the death of the insured, was held to be not justified. Hon'ble Apex Court held that since the death of the insured was due to myocardial infraction, the non- disclosure of 'lumbar spondylitis' suffered by the deceased policy-holder would not disentitle the deceased from getting his life insured and as such the repudiation of claim was incorrect. It was further observed that the non-disclosure to be material itself, should have a clear nexus to the risk assumed by the insured or the cause of death.
CC/642/2018 Page 28 of 37
23. Reference may also be made to Reliance Nippon Life Insurance Company Ltd. v. Nirmala Devi, Civil Appeal No.6572 of 2023 decided by Hon'ble Apex Court 13th October, 2023. In the aforesaid case, the insured did not die due to any illness or ailment but due to head injury sustained in a road traffic accident on 27.10.2015. The Insurance Company repudiated the claim relying upon response to column No.27 wherein the insured had answered in negative to the query as under, though he had suffered injuries in an earlier accident in 2014 :-
"Are you currently taking any medication or drugs, other than minor conditions, (e.g. colds and flu), either prescribed or not prescribed by a doctor, or have you suffered from any illness, disorder, disability or injury during the past 5 years which has required any form of medical or specialized examination (including chest x-rays, gynecological investigations, pap smear, or blood consultation, hospitalization or surgery"
Hon'ble Apex Court did not agree with the submission made on behalf of the counsel for the Insurance Company that there was suppression of material fact by the insured and observed that the contention would have been of significance if the insured died owing to an ailment caused due to the injury suffered by insured in the earlier road traffic accident in 2014. The insured admittedly died as a result of head injury sustained in road traffic accident occurring on 27.10.2015 while he was driving his two-wheeler. Accordingly, Hon'ble Apex Court CC/642/2018 Page 29 of 37 held that earlier head injuries sustained by the insured which had not been categorically disclosed, had no bearing on the repudiation of the policy. The Appeal was accordingly dismissed.
24. Reference may further be made to Bajaj Allianz General Insurance Co. Ltd. v. Avtar Singh Mann, First Appeal No.477 of 2020 decided on 17.08.2020 decided by this Commission, wherein complainant had obtained an Overseas Travel Insurance Policy. During his stay in Canada, complainant suffered a stroke for which he was treated at hospital. However, the claim was rejected by the Insurance Company on the ground that the policy-holder had been suffering from diabetes and hypertension and had concealed these facts while obtaining the policy. After noticing the judgement passed in P. Vankat Naidu v. Life Insurance Corporation of India & Anr., IV (2011) CPJ 6 (SC) 6 and Satish Chander Madan v. Bajaj Allianz General Insurance Co. Ltd., I (2016) CPJ 613 (NC) as relied by the State Commission, it was observed by National Commission therein that the diseases for which complainant got admitted in Canada had no relation with hypertension or diabetes, and the attending doctor in Canada was not sure that present condition of insured having suffered brain hemorrhage was due to hypertension. Also the insurer had failed to CC/642/2018 Page 30 of 37 produce any evidence on record to prove that the diseases for which insured was admitted in hospital in Canada had any bearing on the diseases which the appellant is alleged to have concealed while taking the policy. It was further noticed that the insured had been medically examined by authorized doctor of the appellant before the policy was issued. As such the repudiation by the Insurance Company was held to be unjustified.
25. For the foregoing reasons, we are of the considered opinion that repudiation of claim in respect of first insurance policy No.006505053 for assured sum of Rs.2 crores on account of non-disclosure of disability by the OP is not justified.
26. The Insurance Company has next vehemently contended that repudiation of claim is duly justified since the DLA concealed the issuance of various other policies prior to issue of the two policies in question. It is the specific case of OP that DLA only mentioned obtaining of policies from Bajaj Allianz and LIC for assured sum of Rs.1 crore while filling the first proposal form No.49243209 on the basis of which policy No.006505053 was issued. Further, in the second proposal formNo.50311710 for policy No.006724887, only the issue of earlier policy by OP (ABSIC) for Rs.2 crores was disclosed. CC/642/2018 Page 31 of 37
27. Repudiation letter dated 26.10.2017 by the Insurance Company/OP refers to the fact that DLA had got issued eight policies but failed to disclose the six policies obtained from Max Life (assured sum- Rs.2,50,000/-), Bajaj Allianz (assured sum-Rs.75,000/-), ICICI Pru (assured sum-Rs.2,50,000/-), Bajaj Allianz (assured sum-Rs.1,25,000/-), ICICI Pru (assured sum-Rs.4,75,000/-) and SBI Life (assured sum- Rs.5,00,000/-) as under :-
Date of Issue Date Sum Assured Policy No Company Application 258398015 Max Life 19/06/2005 19/06/2005 2,50,000 Bajaj 21675985 Allianz 02/06/2006 02/06/2006 75,000 6346258 ICICI Pru 30/09/2007 30/09/2007 2,50,000 Bajaj 192010221 Allianz 13/01/2011 13/01/2011 1,25,000 16750849 ICICI Pru 21/06/2012 21/06/2012 4,75,300 990199597 LIC 15/04/2013 15/04/2013 1,00,00,000 Bajaj 304574766 Allianz 01/06/2013 01/06/2013 20,000,000 49010527606 SBI Life 16/12/2013 26/12/2013 500,000 The LIC and Bajaj Allianz policies obtained by DLA were disclosed in the proposal form for first policy No.006505053 but assured sum was CC/642/2018 Page 32 of 37 partially reflected as Rs.1 crore instead of LIC (for assured sum of Rs.1 crore) and Bajaj Allianz (for assured sum of Rs.2 crores).
28. In order to appreciate the contentions in respect of partial disclosure and non-disclosure of earlier policies, reference may be made to Mahaveer Sharma v. Exide Life Insurance Company Limited and Another, 2025 SCC OnLine SC 435. Therein the claim in respect of insurance policy obtained by the father of the complainant was repudiated on the ground of concealing of other insurance policies obtained by insured. The appeal preferred on behalf of the complainant was dismissed by the National Commission placing reliance upon Reliance Life Insurance Company Ltd. v. Rekhaben Nareshbhai Rathod (supra) and Satwant Kaur Sandhu v. New India Assurance Co. Ltd. (supra). The stand of the complainant therein was that the death of the insured in the said case had occurred on account of accident and not account of any illness, and non-mentioning of earlier policies issued by LIC was a mere omission, though the policy availed from Aviva was disclosed. Also, the policy which was availed from Aviva was disclosed for assured sum of Rs.4 lakhs instead of Rs.40 lakhs. Hon'ble Apex Court after considering the principles laid down in Manmohan Nanda v. United India Assurance Company Limited and CC/642/2018 Page 33 of 37 Another (supra) and after referring to Satwant Kaur Sandhu v. New India Assurance Co. Ltd. (supra) and Reliance Life Insurance Company Ltd. v. Rekhaben Nareshbhai Rathod (supra) observed that the other policies obtained by the insured amounting to Rs.2,30,000/- which had not been disclosed, would not have influenced the decision of a prudent insurer to issue the policy proposed. It was further observed that the policy in question is not a mediclaim policy but a life insurance cover and the death of the deceased had taken place on account of accident. Accordingly, failure to mention about other policies did not amount to a ‗material fact' in relation to the policy availed. Consequently, the claim could not have been repudiated by the Insurance Company. The judgment relied upon by the Insurance Company was further found to be distinguishable since the same related to a complete failure to disclose two policies being availed in a short span of time. It was further observed that since the insurer decided to issue a policy though it was aware that there was another policy for a higher sum assured from Aviva, the insurer was confident of the fact that the insured had capability and capacity to pay the premium of the policy obtained from Aviva. As such, the insured had capacity to pay the premium in respect of the policy which was issued to the insured for a CC/642/2018 Page 34 of 37 lesser assured sum of Rs.25 lakhs. The order passed by the National Commission was accordingly set aside and the appeal filed by the complainant was allowed.
29. Admittedly, in the present case, proposal form in respect of first policy No.006505053 issued on 19.06.2014 reflects disclosure by DLA of obtaining of policies from Bajaj Allianz and LIC but the assured sum is disclosed as Rs.1 crore instead of specifying that policy No. 990199597 from LIC was for assured sum of Rs.1 crore and policy No.304574766 obtained on 01.06.2013 from Bajaj Allianz is for Rs.2 crores. The disclosure, as such, is partial.
We are of the considered opinion that mis-description of assured sum only in respect of substantive policies obtained from LIC and Bajaj Allianz may not amount to fraudulent suppression and the same could be a bona fide mistake. The insurer could have called for clarification in respect of bifurcated assured sum for the aforesaid two policies prior to issuing the first policy in question. So far as the other six policies are concerned, the same appear for assured sum ranging from Rs.75,000/- to Rs.5,00,000/- totalling about Rs.16 lakhs approximately over a period of 08 years and would not have influenced the prudent insurer, since the proposal for consideration by OP was for issuing the policy of Rs.2 CC/642/2018 Page 35 of 37 crores. Also, the DLA had sufficient earning capacity to pay the premium, since the OP subsequently went ahead for issuing second policy for assured sum of Rs.2 crores. Accordingly, we are of the considered opinion that Insurance Company is not justified to repudiate the claim in respect of first Policy No.006505053 for assured sum of Rs.2 crores.
30. However, so far as the second policy No.006724887 for assured sum of Rs.2 crores is concerned, the DLA failed to disclose the earlier policies obtained from LIC and Bajaj Allianz and only mentioned the first policy obtained from OP for assured sum of Rs.2 crores. There does not appear to be any plausible reason for not disclosing the earlier policies obtained from LIC and Bajaj Allianz for sum assured of Rs.1 crore and Rs.2 crores respectively. The failure of the DLA to give a complete disclosure in this regard cannot be ignored since the correct disclosure of having already obtained earlier policies would have enabled the insurer to take a considered decision based on the egregious risk. The contention of the ld. counsel for the complainant, that second policy duly reflected obtaining of the earlier policy of Rs.2 crores from the OP and the earlier proposal form was within the notice of the opposite party, CC/642/2018 Page 36 of 37 cannot be accepted. Both the proposals are independent and had to be separately assessed by OP.
In the facts and circumstances, we are of the considered opinion that repudiation of the second policy No.006724887 by the Insurance Company/OP is fully justified.
31. For the foregoing reasons, complaint is partially allowed, thereby directing the Insurance Company/OP to release the benefits in respect of policy No.006505053 for assured sum of Rs.2 crores along with interest @ 6% per annum from the date the amount became due till the date of its realization. Further, the repudiation in respect of second policy No.006724887 for assured sum of Rs.2 crores by the Insurance Company is upheld. Complaint Case is accordingly disposed of. No order as to costs. Pending applications, if any, also stand disposed of. A copy of this Order be provided to both the parties by the Registry.
................................................ (AVM J. RAJENDRA, AVSM VSM (RETD.) PRESIDING MEMBER ........................................... (ANOOP KUMAR MENDIRATTA, J) MEMBER ar/sd/B-4/reserved matter CC/642/2018 Page 37 of 37