Case at a Glance
A man who took a unit-linked life insurance policy through an agent in September 2011 died on 5 April 2012. The insurer paid only the unit value of ₹92,297, saying he had answered health questions in the negative and concealed cardiac treatment. The District Forum and the Rajasthan State Commission ordered payment of ₹4,40,000 with interest, finding no proof of the earlier illness. The National Commission allowed the insurer’s revision: the hospital’s Death Summary recorded that he was a known case of dilated cardiomyopathy and was post Cardiac Resynchronization Therapy in 2008, which the fora below failed to consider, so the complaint was dismissed.
The late Rajendra Kumar submitted a proposal for a life policy with Tata AIG Life Insurance through the insurer’s agent on 30 September 2011 and paid premiums of ₹10,569, ₹10,000 and ₹10,000. He fell ill on 2 April 2012, was admitted to Fortis Escorts Hospital, Jaipur, on 3 April 2012 and died on 5 April 2012. His widow, Smt. Sulochna Devi, and two children claimed under the policy. The insurer sent a cheque for the unit value of ₹92,297, dated 1 July 2013, as full and final settlement, contending that the insured had answered health-related Questions 5, 6 and 9C in the negative and had concealed his cardiac history.
The family sought ₹9,40,000 with interest. On 12 February 2014 the District Forum, Sri Ganganagar, allowed the complaint and ordered ₹4,40,000 with 9% interest and ₹5,000 costs, holding that the hospital papers did not establish how long the illness had existed. The Rajasthan State Commission dismissed the insurer’s appeal on 25 October 2017, finding no record of suppressed illness. The insurer filed a revision before the National Commission.
The Key Question Before the Court
Was the insurer justified in repudiating the claim for non-disclosure of a pre-existing heart condition, and could the National Commission interfere with the concurrent findings of the District and State fora in revision?
The Death Summary and the Duty of Disclosure
The Commission treated the Death Summary of 5 April 2012 as the key document. It recorded that the insured was a known case of Dilated Cardiomyopathy (DCMP) and severe Left Ventricular dysfunction and was post Cardiac Resynchronization Therapy (CRT) in 2008; the cause of death was given as DCMP, heart failure and renal failure. The reference to CRT in 2008, nearly three years before the proposal, was said to assume “considerable significance”. The family argued that the insurer produced no earlier medical records and no affidavit of the treating doctor, but the Commission held that the entry was not rebutted and that the absence of separate 2008 records “does not negate the said entry.”
Relying on Mahaveer Sharma v. Exide Life Insurance Company Limited & Anr., (2025) 02 SC CK 0746 (Supreme Court, 2025), which in turn referred to Satwant Kaur Sandhu, (2009) 07 SC CK 0050 and Mahakali Sujatha, (2024) 04 SC CK 0033, the Commission held that “the proposer is under a duty to make a full and true disclosure of material facts” and that where a specific question is asked in the proposal form, a truthful answer must be given. The negative answers were inconsistent with the medical history recorded by the hospital, and the non-disclosure “was not a mere technical omission.” Although revisional jurisdiction is limited, interference was justified because the fora below had failed to consider a material document; their concurrent finding rested on an erroneous appreciation of the evidence.
What the Court Actually Held
- The Death Summary recording DCMP, severe LV dysfunction and CRT in 2008 established a pre-existing heart condition that the insured did not disclose.
- Negative answers to specific health questions in the proposal form amounted to suppression of material facts, not a mere technical omission.
- Concurrent findings can be interfered with in revision where the fora below failed to consider a material document.
- The revision was allowed, the State Commission’s order of 25 October 2017 and the District Forum’s order of 12 February 2014 were set aside, and the consumer complaint was dismissed, with no order as to costs.
Why This Judgment Matters
- It shows how a single hospital entry about past treatment can defeat a life insurance claim when proposal answers say otherwise.
- It applies the Supreme Court’s 2025 ruling in Mahaveer Sharma on the duty of full disclosure.
- It marks a rare case of the NCDRC overturning concurrent findings in favour of a family, because a material document was overlooked.
What Should Advocates Take Away From the Judgment?
For Policyholders and Families
- Answer every health question in a proposal form truthfully, even if an agent is filling it.
- Past procedures and chronic conditions recorded in later hospital papers can be used against a claim.
- Keep copies of the proposal form and any medical disclosures made at the time of buying the policy.
For Counsel
- Scrutinise discharge and death summaries for references to pre-existing conditions before filing or defending a claim.
- Lack of old treatment records may not displace an unrebutted entry in a hospital record.
- In revision, argue failure to consider a material document as the ground for interfering with concurrent findings.
Key Takeaways
- Suppression of a known heart condition in the proposal form justified repudiation.
- A hospital Death Summary’s reference to CRT in 2008 was enough evidence of prior illness in this case.
- Two concurrent orders for the family were set aside.
- The family’s claim for ₹4,40,000 with interest was dismissed.
Frequently Asked Questions
Can an insurer reject a claim if the illness was not proved by old records?
In this case, the National Commission accepted an unrebutted entry in the hospital’s Death Summary about CRT in 2008 as sufficient, holding that the absence of separate 2008 records did not negate it.
What did the family receive?
The insurer had sent a cheque for the unit value of ₹92,297 as full and final settlement; the order does not say whether it was encashed. The further award of ₹4,40,000 with interest was set aside.
Which precedent did the NCDRC rely on?
Mahaveer Sharma v. Exide Life Insurance Company Limited & Anr., a 2025 Supreme Court decision on suppression of material facts relating to the health of the insured.
Conclusion
Tata AIG Life Insurance Co. Ltd. v. Sulochna Devi is a hard outcome for a bereaved family, but a clear statement of the law on disclosure: a life policy rests on the honesty of the answers in the proposal form, and a past heart procedure is precisely the kind of fact an insurer is entitled to know.
Practical takeaway: Disclose every past illness and procedure when buying insurance; for claimants, check the hospital records before filing, because they will be read against the proposal form.
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