National Consumer Disputes Redressal
Sanjay Atmaram Patel vs Divisional Manager, Lic Of India & 2 Ors. on 14 December, 2017
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 1573 OF 2012 (Against the Order dated 29/12/2011 in Appeal No. 774/2009 of the State Commission NCDRC) 1. SANJAY ATMARAM PATEL Near Mota Apa, Chani Jakatnaka Chani Cirlce Vadodra - 390 002 Gujarat ...........Petitioner(s) Versus 1. DIVISIONAL MANAGER, LIC OF INDIA & 2 ORS. Suraj Plaza,2,6th floor, Sayajigunj Vadodra Gujarat 2. The Executive Directors, LIC Of India MKTG/CS/Crc/Dept/ Yogkshema Building Mumbai - 2 Maharastra 3. LIC of India, Jeevan Prakash Building Relief Road Ahmedabad - 380001 Gujarat 4. LIC of India, Jeevan Prakash Building Relief Road Ahmedabad - 380001 Gujarat ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE D.K. JAIN,PRESIDENT HON'BLE MRS. M. SHREESHA,MEMBER For the Petitioner : Mr. Priank Adhyaru, Advocate For the Respondent : Mr. Rakesh K. Gupta, Advocate Dated : 14 Dec 2017 ORDER Challenge in this Revision Petition, by the Complainant, is to the order dated 29.12.2011, passed by the Gujarat State Consumer Disputes Redressal Commission at Ahmedabad (for short "the State Commission") in Appeal No. 774/2009. By the said order, while overturning the order dated 15.10.2008, passed by the District Consumer Disputes Redressal Forum at Vadodara (for short "the District Forum") in Complaint Case No. 253/2004, the State Commission has allowed the Appeal, filed by the Life Insurance Corporation of India (for short "the Insurance Company") and has dismissed the Complaint, filed by the Petitioner.
In the first instance, while accepting the Complaint, filed by the Petitioner alleging deficiency in service on the part of the Insurance Company in repudiating the claim made under the Jeewan Shree Without Profit (Without Accident Benefit) Policy, obtained by the Insured on 22.04.2002, in the assured sum of ₹5,00,000/-, on the ground that the Insured had failed to disclose the details of the earlier policy taken by him on 15.12.2001, the District Forum had directed the Insurance Company to pay to the Complainant the assured sum of ₹5,00,000/- along with interest @ 9% p.a. from 17.01.2003 till realization as also a sum of ₹10,000/- as compensation for mental torture.
As noted above, the short ground, on which the claim preferred by the Petitioner has been repudiated by the Insurance Company, is that the Complainant/Insured had failed to disclose information about an earlier policy and the same being a material fact and having been withheld at the time of obtaining the policy in question, the Insurance Company was not liable to honour the claim preferred.
Ld. Counsel appearing for the Petitioner has strenuously urged that apart from the fact that non-disclosure of the earlier policy was not a material fact, in as much as even on disclosure of the said fact the Insured would have only been subjected to certain Serum tests, like CBC, ESR and ECG, which would have otherwise no bearing on the death of the Insured. The said omission was by the Agent of the Insurance Company, who had filled up the proposal form. It is, thus, asserted that for the fault of the Agent, the Complainant should not be made to suffer. In support, Ld. Counsel has pressed into service the following orders passed by this Commission:
Sahara India Life Insurance Co. Ltd. & Anr. v. Rayani Ramanjaneyulu, III (2014) CPJ 582 (NC);
Smt. Sulochana Indurkar v. Life Insurance Corporation of India & Anr. (Revision Petition No. 587 of 2015, decided on 11.09.2015);
Reliance Life Insurance Co. Ltd. & Anr. v. Rekhaben Nareshbhai Rathod (Revision Petition No. 359 of 2015, decided on 20.02.2015);
Yash Construction & Land Development Co. v. Metlife India Insurance Co. Ltd. (Consumer Case No. 119 of 2011 decided on 15.01.2016);
Aviva Life Insurance Co. Ltd. & Ors. v. Rekhaben Ramjibhai Parmar (Revision Petition No. 4204 of 2011, decided on 12.04.2017).
Per contra, Ld. Counsel appearing for the Insurance Company, while supporting the view taken by the State Commission, has relied on the decision dated 27.07.2010, rendered by this Commission in Dineshbhai G. Chandrana v. LIC of India (Appeal No. 242 of 2006), wherein it has been held that obtaining the last policy without disclosing the earlier policy, the Insured did not act with utmost good faith that was required of him and, therefore, the Insurance Company was within its rights to repudiate the claim under the policy and in doing so it did not commit any deficiency in service falling within the ambit of Section 2(1)(d) of the Consumer Protection Act, 1986.
It is trite that the term "material fact" is not defined in the Act and, therefore, it has to be understood and explained by the Courts in general terms to mean as any fact which would influence the judgment of a prudent insurer in fixing the premium or determining whether he would like to accept the risk. Any fact which goes to the root of the Contract of Insurance and has a bearing on the risk involved would be "material". Any fact the knowledge or ignorance of which would materially influence an insurer in making the contract or in estimating the degree and character of risks in fixing the rate of premium is a material fact [See: Satwant Kaur Sandhu Vs. New India Assurance Company Ltd. IV (2009) CPJ 8 (SC)].
It is not in dispute that in the present case, the Insured did have two previous insurance policies but failed to disclose this fact at the time of obtaining the policy in question. In our opinion, in the light of the afore-noted settled proposition of law, non-disclosure of earlier policy amounted to suppression of a material fact, particularly in a medi-claim policy and, therefore, the Insurance Company was justified in repudiating the claim in question. In that view of the matter, we do not find any jurisdictional error in the impugned order, warranting our interference in the Revisional Jurisdiction.
Consequently, the Revision Petition fails and is dismissed accordingly, leaving the parties to bear their own costs.
......................J D.K. JAIN PRESIDENT ...................... M. SHREESHA MEMBER