State Consumer Disputes Redressal Commission
Kotak Mahindra Life Insurance Company ... vs Usha Rani on 9 March, 2026
ADDITIONAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB,DAKSHIN MARG, SECTOR-37A, CHANDIGARH.
First Appeal No.1041 of 2022
Date of Institution: 05.12.2022
Reserved on : 20.02.2026
Date of Decision : 09.03.2026
1. Kotak Mahindra Life Insurance Company Limited, Y.P. Tower,
Gurdaspur through its Branch Manager.
2. Kotak Mahindra Life Insurance Company Limited, 2nd Floor
Plot No.H C-12, G Block B.K.C. Bandra (E) Mumbai-400 051.
.....Appellants/Opposite Parties
Versus
Usha Rani widow of Deepak Kumar, resident of Mirpur, Dadiala,
Tehsil Batala, District Gurdaspur
......Respondent/Complainant
First Appeal under Section 41 of the
Consumer Protection Act, 2019 against
order dated 19.09.2022 passed
by District Consumer Disputes
Redressal Commission, Hoshiarpur in
RBT/CC/171/2018
Quorum:-
Mrs. Kiran Sibal, Presiding Member
Mr. Vishav Kant Garg, Member Argued by:-
For the appellants : Sh. K.S. Cheema, Advocate For respondent : Sh. Inderdeep Singh, Advocate .................................................................................. KIRAN SIBAL, PRESIDING MEMBER M.A.No.1634 of 2022 (Additional Evidence) This application has been filed by the appellants for placing on record certain documents i.e. affidavit of investigator, admission sheet dated 16.08.2012, patient history and ultrasound First Appeal No.1041 of 2022 2 whole abdomen in additional evidence for the purpose of assisting this Commission. In reply to this application, the respondent/complainant has stated that the present application is not maintainable at this stage, as the appellants failed to show any plausible reason for adducing additional evidence.
2. Heard.
3. It is an admitted fact that all the above said documents were readily available with the applicants but they did not file the same in evidence before the District Commission for the reasons best known to them. Now at this appellate stage, they requested for tendering some documents in additional evidence, which is against the settled principle of law, as held by Hon'ble Apex Court in case titled as 'State of Gujaraj & Ans. V. Mahendra Kumar Parshottam Bhai Desai' (2006)9 SCC 772 that "the lacuna, as such, cannot be allowed to be filled up and the additional evidence was not required by the Court to enable it to pronounce judgment. The documents, as such, which were existing at the time when the evidence was being led, could not be allowed to be brought on record at a subsequent stage".
4. It has also been clearly envisaged under order 41 Rule 27 of CPC that the party shall not be entitled to adduce the additional evidence at the appellate stage because they have to show the due diligence that they were not in possession of the documents at the trial stage. Since the said documents, were in the possession of the applicants/appellants, it was their duty to prove the same before the First Appeal No.1041 of 2022 3 District Commission so that proper opportunity may also be given to the respondent/complainant to rebut the same, but at this stage when the case has been decided at the grassroots level by the District Commission, the appellants/OPs cannot be allowed to produce the documents at this belated stage. Accordingly, the present application for tendering documents in additional evidence, is hereby dismissed.
Main Case
5. The instant appeal has been filed by the appellants/opposite parties No.1 & 2 against the order dated 19.09.2022 passed by District Consumer Disputes Redressal Commission, Hoshiarpur, (in short "District Commission"), whereby the complaint of the complainant under section 12 of the Consumer Protection Act, 1986 against opposite parties (in short "OPs") was partly allowed while granting the following relief:-
"12. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxx. Finally, in the matter pertaining to the present complaint and in the light of the all above, we set aside the OP insurers' impugned repudiation of the impugned death-claim being arbitrary (contra to laws of natural justice) and amounting to 'deficiency in service' and thus partly allow this complaint and ORDER the OP insurers to pay the same in full and in just terms of the related policy with full accrued benefits etc. with interest @ 6% PA from the date of the claim till paid in full besides Rs.10,000/- in lump sum as cost and compensation within 45 days of the receipt of the certified copy of these orders otherwise the awarded amount shall attract additional interest @3% PA from the date of the complaint till actually paid."First Appeal No.1041 of 2022 4
6. It would be apposite to mention that hereinafter the parties will be referred, as have been arrayed before the District Commission.
7. The briefs facts of the case, as stated in the complaint, are that the husband of the complainant; namely, Sh. Deepak Kumar, purchased 'Kotak Credit Term Group Plan' Policy bearing No.CR000020 for the period from 20.12.2016 to 19.12.2017 for the sum assured of Rs.4,90,000/-. The husband of the complainant was quite hale and hearty but due to heart attack, he died on 26.08.2017 at his village, Mirpur. The complainant, being his nominee lodged death claim with the OPs but the same was repudiated by them vide letter dated 05.01.2018 on the ground that the deceased was not having good health prior to the date of signing of D.O.G.H. and intentionally withheld the material information from the insurance company. The complainant alleged that the OPs just repudiated the claim merely on the presumption that the DLA had the knowledge of his ailment at the time of purchasing the insurance policy, whereas the total information of the deceased was fully available to the OPs as he purchased the policy through their agent. Alleging deficiency in service on the part of the OPs, the complainant filed consumer complaint before the District Commission and sought directions against the OPs to pay death claim under the policy along with interest @18% p.a.; besides Rs.30,000/- as compensation on account of mental torture, physical harassment and financial loss suffered by the complainant in the hands of OPs.
First Appeal No.1041 of 2022 5
8. Upon notice, the OPs appeared through counsel and filed written reply, wherein they raised certain preliminary objections, which are not required to be reproduced here for the sake of brevity. On merits, OPs stated that on receipt of death claim intimation dated 07.11.2017 from Mahindra & Mahindra Financial Services Limited stating that the member had expired on 26.08.2017, they immediately initiated the process of investigation in order to verify the authenticity of the claim. During the process of claim investigation, it was revealed that the DLA was diagnosed with Cirrhosis of liver with portal HTN, Mild Ascites and Hypertrophy of prostate Grade -01 and was undergoing treatment for the same prior to signing of the Declaration of Good Health. Had the DLA disclosed these material facts prior to availing of the insurance cover, the OPs would not have issued the cover in first instance. The OPs further stated that the Discharge summary issued by Fortis Hospital revealed the date of admission as 16.08.2012 and date of discharge as 22.08.2012, the diagnosis mentioned as 'Cirrhosis of liver with portal HTN, Mild Ascites and K/C/O bilateral hip replacement'. Further as per discharge summary issued by fortis hospital, the DLA was admitted on 29.10.2015 and discharged on 04.11.2015 and was diagnosed as 'Cirrhosis of liver with portal HTN, Mild Ascites and Hypertrophy of prostate Grade-01'. He was again admitted on 21.03.2017 and discharged on 24.03.2017 and was diagnosed as Cirrhosis of liver with Ascites & Hepatic encephalopathy. The DLA was again admitted in Fortis hospital on 21.08.2017 and was First Appeal No.1041 of 2022 6 discharged on LAMA on 25.08.2017. The DLA was a known case of above said diseases and was suffering from various complications before signing the DOGH. As such, the claim was rightly repudiated by the OPs and there was no deficiency in service on their part. After denying the other averments made in the complaint, OPs prayed for dismissal of the complaint.
9. The parties led evidence before the District Commission in support of their respective contentions and the District Commission, after going through the record and hearing learned counsel for the parties partly allowed the complaint of the complainant, vide impugned order as above. Feeling aggrieved against the order, the present appeal has been filed by the appellants/OP No.1 & 2.
10. We have heard learned counsel for the parties and have also gone through written arguments submitted by them and the record of the case.
11. Learned counsel for the appellant vehemently contended that the impugned order passed by the District Commission is completely arbitrary based on conjectures and surmises and against the documents and pleadings on record. The District Commission has failed to appreciate the fact that the DLA had himself signed the Membership Form-cum- Declaration of Good Health(DOGH). Further in order to help the DLA to understand the contents as well as the terms and conditions of the policy, Mr. Kunwar Behal has also acted as the scribe, who explained all the details of the DOGH to him in the First Appeal No.1041 of 2022 7 language that was well understood by him and both the scribe as well as the DLA have accented to the said fact by placing their signatures on the form. Moreover, the certificate of insurance is issued only after the submitting the said document with the insurance company. The certificate of insurance contains all the terms of the policy and it is a settled principle of law that at the time of filling up the DOGH, the agents acts as representative of insured and not of insurance company. The District Commission has merely picked up certain paras of the complaint and has made them a ground in allowing the complaint, instead of passing a proper and judicial order. The learned counsel has further argued that the proposal/DOGH is not merely a document to be signed and submitted for formality, rather it is the basis for the contract of insurance. The life assured and proposer are under a bounden obligation, to disclose all material information to the insurance company, at the time of proposal. The District Commission did not consider the fact that from the investigation, it was found that the DLA did not disclose the correct information about his health and he deliberately failed to disclose that he was suffering from 'Cirrhosis of liver with portal HTN, Mild Ascites and Hypertroplhy of prostate Grade-01' prior to the issuance of the policy and the same was not disclosed by the DLA in the DOGH at policy issuance stage. The DLA died within 9 months from the date of commencement of the subject policy and as such the company had rightly repudiated the claim raised by the respondent/complainant in accordance with First Appeal No.1041 of 2022 8 Section 45 of the Insurance Act, 1938 as amended from time to time. In support of his contentions, the learned counsel has relied upon the judgments of Hon'ble Supreme Court in the case of 'P.C. Chacko and another Vs. Chairman LIC and others', SCC 321 (2008) I and 'Satwant Kaur Sandhu Vs. New India Assurance Co. Ltd.' IV (2009) CPJ 8 (SC). The learned counsel further argued on the similar lines as stated in the written reply and prayed for acceptance of the present appeal.
12. On the other hand, the learned counsel for the respondent/complainant has argued that the District Commission has passed a well reasoned order after going through and considering the entire record and evidence on record. There is no illegality in the order under challenge as alleged by the appellants. The learned counsel further argued that the DLA had managed the purchase of the said policy through the appellants' agent, who had duly confirmed of the good health of the DLA suo-moto sans medical and had got completed the proposal form as well as the D.O.G.H. document etc. Thus the appellants are presently stopped to deny the claim by virtue of Section 45(3) of the Insurance Act, 1938 that bars repudiation of the policy on account of any or all such mis- statement(s) and/or suppression of fact(s) that are within the knowledge of the appellants/insurers or their representative. The learned counsel further argued on the similar lines as stated in the complaint and prayed for dismissal of the appeal. First Appeal No.1041 of 2022 9
13. We have given our thoughtful consideration to the contentions raised by the learned counsel for the parties.
14. Admittedly, the DLA got himself insured under the group policy i.e. 'Kotak Credit Term Group Plan' bearing No.CR000020 issued by the OPs covering the period w.e.f. 20.12.2016 to 19.12.2017 (Ex.C-2), to secure the loan obtained by him from Mahindra & Mahindra Financial Services Ltd., who was the Master Policy Holder. It is also not in dispute that the said policy certificate was issued by the OPs on the basis of Membership Form cum Declaration of Good Health (Annexure A-2) duly signed by the DLA. The respondent/complainant alleged that the DLA died on 26.08.2017 due to heart attack and she lodged the claim with the appellants/OPs. However, the same was repudiated by them, vide repudiation letter dated 05.01.2018 (Ex.C-3) on the ground that the DLA was suffering from Cirrhosis of Liver along with associated complications prior to the date of signing the DOGH and he intentionally withheld the material information from the insurance company and submitted a false declaration in the DOGH. Alleging deficiency in service on the part of the appellants/OPs, the respondent/complainant filed consumer complaint before the District Commission, which has been partly allowed, vide impugned order as above. Challenging the said order, present appeal has been filed by the appellants/OPs.
15. The grievance of the appellants/OPs is that the District Commission, while passing the impugned order has erroneously First Appeal No.1041 of 2022 10 ignored their objection that the DLA was suffering from pre-existing diseases and was also taking treatment for the same, prior to taking the policy. The appellants/OPs further submits that the District Commission has also failed to appreciate that the DLA had himself signed the Membership form-cum- Declaration of Good Health, wherein he did not disclose this material fact and suppressed the same, therefore, they rightly repudiated the claim of the respondent/complainant. On the other hand, the respondent/ complainant has submitted that the DLA had managed the purchase of the said policy through agent of the appellants, who had duly confirmed the good health of the DLA suo-moto sans medical and had got completed the proposal form/DOGH.
16. Now, the foremost point for consideration before us is whether the appellants/OPs are justified in repudiating the claim of the complainant on the ground of concealment of material facts with regard to pre-existing disease or not?
17. The stand of the appellants/OPs, in support of repudiation of the claim, is that the DLA was guilty of suppressing material particulars regarding his health, which should have been disclosed by him at the time of filling up the Membership form cum declaration of good health. To determine this controversy, we have perused the pleadings and entire evidence on record as well as the impugned order passed by the District Commission. A perusal of repudiation letter dated 05.01.2018, Ex. C-3 shows that the claim of the respondent/complainant was repudiated on the ground that as First Appeal No.1041 of 2022 11 per medical record of the DLA, he was suffering from Cirrhosis of liver along with associated complications prior to the date of signing the DOGH and he intentionally withheld the material information qua his health. A perusal of Membership form cum DOGH (annexure A-
2), shows that under the column 4, the DLA has specifically declared that:-
" 4. I have never suffered and am not currently suffering from:
a) High blood pressure, Heart Attack or any
other heart disease;
b) Stroke, paralysis in any form;
c) Diabetes or any other endocrinal disease,
kidney disease;
d) Any chronic liver disease."
However, the perusal of Discharge Summary issued by Fortis Hospital (Annexure-4 to 7) shows that the DLA was admitted in the said hospital four times i.e. on 16.08.2012, 29.10.2015, 21.03.2017 and 21.08.2017 and each time, he was diagnosed as a case of Cirrhosis of liver with portal HTN along with other health issues like Ascites, hypertrophy of prostate, Hepatic encephalopathy etc. Even at the time of his admission on 21.08.2017 (Annexure-7), he was admitted with the complaint of shortness of breath, fecal incontiness and lost consciousness for 20 minutes, which shows that his health condition was serious and he was put on ventilator and was discharged LAMA on 25.08.2017. The respondent/complainant has not denied the above said admission of DLA in the said hospital for taking the treatment of said ailments suffered by him and there is no dispute with regard to the authenticity of the said medical record. In the light of the above discharge summaries relied upon by the First Appeal No.1041 of 2022 12 appellants/OPs, we have no hesitation to arrive at the conclusion that the DLA was certainly having Cirrhosis of liver along with associated complications prior to the date of signing of DOGH i.e. on 10.12.2016. The appellants/OPs have been duly able to establish by leading cogent evidence in the shape of medical record of the DLA that he had undertaken the treatment for said diseases prior to taking the policy in question and the said fact has been concealed by him at the time of filling up the Membership form-cum-DOGH. So far as the contention of respondent/complainant that the DLA purchased the said policy through agent of the appellants and section 45(3) of the Insurance Act,1938 bars repudiation of claim on account of misstatements or suppression of facts that are within the knowledge of the insurer, is concerned, it is pertinent to mention here that the DLA duly signed the DOGH and in order to help the DLA to understand the contents as well as the terms and conditions of the policy, Mr. Kunwar Behal, agent of the appellants, duly explained all the details of the DOGH to him in the language that was well understood by him. Moreover, both the scribe as well as DLA have accented to the said fact by placing their signatures on the form. The Certificate of insurance was issued only after submitting the said DOGH with the insurance company. Accordingly, we do not find any force in the contention raised by the respondent/complainant.
18. It is a settled principle of law that insurance is a contract between the insured and the company and it has to be interpreted as per the terms and conditions of the document evidencing the First Appeal No.1041 of 2022 13 contract. The information given in the proposal form/DOGH by the DLA is against the Doctrine of 'Utmost Good Faith', therefore, it would be safe to conclude that the DLA was guilty of suppressing material facts with regard to his pre-existing diseases as he was suffering from Cirrhosis of liver associated with other complications before the date of filling of proposal form. We are also fortified with the recent judgment passed by the Hon'ble Supreme Court in the case titled as "Bajaj Allianz Life Insurance Co. Ltd. Vs. Balbir Kaur" in Civil Appeal No.3397 of 2020( Arising out of SLP(C) No.10652 of 2020) decided on 09.10.2020, wherein similar issue has been discussed by the Hon'ble Apex Court and observed as under:-
"9. A contract of insurance is one of utmost good faith. A proposer who seeks to obtain a policy of life insurance is duty bound to disclose all material facts bearing upon the issue as to whether the insurer would consider it appropriate to assume the risk which is proposed. It is with this principle in view that the proposal form requires a specific disclosure of pre-existing ailments, so as to enable the insurer to arrive at a considered decision based on the actuarial risk. In the present case, as we have indicated, the proposer failed to disclose the vomiting of blood which had taken place barely a month prior to the issuance of the policy of insurance and of the hospitalization which had been occasioned as a consequence. The investigation by the insurer indicated that the assured was suffering from a pre-existing ailment, consequent upon alcohol abuse and that the facts which were in the knowledge of the proposer had not been disclosed."
19. Further, it was categorically held by the Hon'ble Supreme Court in Satwant Kaur Sandhu Vs. New India Assurance Company Ltd. (IV) (2009) CPJ 8 (SC) that where there is concealment of fact regarding the health of the insured, which was in his/her knowledge, the same amounts to suppression of material fact First Appeal No.1041 of 2022 14 and the Insurance Company is justified in repudiating the Insurance Contract.
20. In P.C. Chacko & Anr. v. Chairman, Life Insurance Corporation of India & Ors. 2008(3) CPC 248 (SC) also, 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 of materiality must be disclosed otherwise there is good ground for rescission.
21. In LIC of India v. Dalbir Kaur 2011(2) CLT 281 (NC) 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 relevant 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.
First Appeal No.1041 of 2022 15
22. Still further, in Maya Devi v. Life Insurance Corpn. of India 2011 (3) CPJ 43 (NC), it was held by the Hon'ble National Commission that insurance policy is an agreement of utmost good faith between the insurer and the insured and breach by suppressing material facts on the part of the insured would result in repudiation of claim by the insurer.
23. In view of the law laid down in the above noted authorities as well as in view of our above discussion, we are of the considered opinion that the Deceased Life Assured had suppressed the material information with regard to his pre-existing diseases, while filling up the Proposal Form/DOGH. Had he given the correct information with regard to any previous ailment, the insurance company would have assessed the proposal form accordingly and taken a decision to accept or reject the said proposal for insurance. Therefore, the claim of the respondent/complainant has been legally and rightly repudiated by appellants/OPs. Accordingly, we find force in the contentions raised by the appellants and the impugned order of the District Commission is liable to be set aside.
24. Sequel to our above discussion, we allow the appeal of the appellants/OPs and the impugned order of the District Commission is hereby set aside and complaint filed by the respondent/complainant is hereby dismissed.
25. The appellant had deposited a sum of Rs.3,24,100/- at the time of filing of the appeal with this Commission. This amount, along with interest which has accrued thereon, if any, shall be First Appeal No.1041 of 2022 16 remitted by the Registry to appellants/OPs by way of demand draft/crossed cheque after the expiry of 45 days from the date of receipt of certified copy of this order, in accordance with law.
26. The appeal could not be decided within the stipulated period due to heavy pendency of Court cases.
(KIRAN SIBAL) PRESIDING MEMBER (VISHAV KANT GARG) MEMBER March 09, 2026 (Dv)