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Judgment
Heard learned Counsels for both sides.
Challenge is to the order dated 14.01.2026 of the State Commission vide which First Appeal filed by the Petitioner was dismissed and the order of the District Commission was upheld. Earlier, District Commission vide its order dated 20.01.2020 allowed the Complaint with following reliefs to the Complainant/directions to the Opposite Parties:
10.In view of the aforesaid discussion, we hereby allow the present complaint and direct the OPs in the following manner:-
(i)To pay the insured amount of Rs.10,50,000/- to the complainants alongwith interest @ 6% per annum w.e.f. 27.9.2018 i.e. the date of filing the present complaint, till its realization.
(ii)To pay Rs.10,000/- as compensation for mental agony and physical harassment suffered by the complainants.
(iii)To pay Rs.5,000/- as litigation expenses.
The OPs are further directed to comply with the aforesaid directions jointly and severally within the period of 30 days from the date of preparation of certified copy of this order, falling which, the complainants will be at liberty to initiate proceedings under Section 25/27 of the Act against the OPs. It is made clear that all the complainants would be entitled for equal share of the entire awarded amount (insured amount + compensation+ litigation expenses). The share of the minors i.e. complainants No.2 & 3, will be deposited in shape of Fixed Deposit in the favour of complainants No.2 & 3, till attaining their age of maturity. Certified copy of this order be supplied to the parties concerned, forthwith, free of cost as permissible under Rules. File be Indexed and consigned to the record-room, after due compliance.
At the outset, learned Counsel for the petitioner contended that the order of the State Commission is a non-speaking order and no concrete reasons have been given for dismissing the First Appeal. He relied upon the judgment of the Hon'ble Supreme Court in M. Jagannadha Rao And Doraiswamy Raju, JJ, AIR 2000 Supreme Court 3586(1) wherein following orders were passed:
"In a number of cases coming up in appeal in this Court, we find that the State Consumer Disputes Redressal Commission, Haryana at Chandigarh is passing a standard order in the following terms:
'We have heard the Law Officer of HVPN, appellant and have also perused the impugned order. We do not find any legal infirmity in the detailed and well-reasoned order passed by District Forum, Kaithal. Accordingly, we uphold the impugned order and dismiss the appeal.'
2.We may point out that while dealing with a first appeal, this is not the way to dispose of the matter. The appellate forum is bound to refer to the pleadings of the case, the submissions of the counsel, necessary points for consideration, discuss the evidence and dispose of the matter by giving valid reasons. It is very easy to dispose of any appeal in this fashion and the higher courts would not know whether learned State Commission had applied its mind to the case. We hope that such orders will not be passed by the State Consumer Disputes Redressal Commission, Haryana at Chandigarh in future. A copy of this order may be communicated to the Commission.
3.Issue notice for remand of the matter to the State Commission, for disposal afresh in accordance with law.
4.Status quo, as of today, shall be maintained by the parties."
In the present case, the State Commission, while dismissing the Appeal, passed the following orders:
6.We have heard learned counsel for the parties at length. With their able assistance; record too has been perused.
7.Learned counsel for appellants/insurer has urged that life assured was suffering from pre-existing diseases prior to inception of the insurance policy. Life assured intentionally stated false declarations in the Declaration of Good Health (DOGH). Hence, the appellants has rightly repudiated the claim of complainants on the basis of non-disclosure of material facts and false declarations.
8.Learned Counsel for complainants/respondents has contended that impugned order dated 20.01.2020 passed by learned District Consumer Commission does not warrant any interference. All facts have been dealt with by learned District Consumer Commission in proper legal perspective.
9.Admittedly, life assured/husband of complainant no.1 purchased Insurance Policy from appellants, which was valid from 22.12.2017 to 21.12.2022. Admittedly, cover amount at inception under said policy was Rs. 10,50,000/-. It is the specific case of the appellants while repudiating the claim of the complainants that life assured Mr. Sanjeev Kumar was suffering from Chronic Liver Disease with Portal Hypertension prior to the date of signing the Declaration of Good Health. This stance of the appellants carries no credence because appellants failed to prove on record the medical record of life assured to prove that he was taking treatment for the Chronic Liver Disease with Portal Hypertension prior to taking the said insurance policy. A perusal of the Investigation Report reflects that the cause of death of life .that learned District Consumer Commission has examined all relevant facets/evidence brought on record. There is no fallacy, legal or factual committed by learned District Consumer Commission while passing impugned order dated 20.01.2020. This order is affirmed, maintained and upheld. Present appeal is hereby dismissed being devoid of merit.
The claim in question was repudiated by the Petitioner Insurance Company vide its letter dated 30.06.2018 primarily on the ground of suppression of material facts with respect to pre-existing ailments. The said letter is reproduced below:
We have received your claim intimation form on June 01, 2018 under the above mentioned Policy in relation to death of the Member i.e. Mr. Sanjeev Kumar on May 01, 2018.
The above mentioned Cover for insurance was issued upon receipt of Declaration of Good Health (DOGH) basis which the Certificate of insurance was issued dated December 22, 2017 on the life of Mr. Sanjeev Kumar. In the said DOGH, the Member had declared that he had never suffered from any serious disease. He had also declared that if statement in the DOGH were found to be untrue, his heirs/assignees would not be entitled to receive any benefits under the said cover.
Upon investigation and assessment of the above mentioned claim, we have received documents which prove that the Member was suffering from Chronic Liver Disease with Portal Hypertension. The Member was under treatment for the aforesaid ailments prior to the date of signing the DOGH. In this regard, we have relied on:-
1.The OPD details from Agarwal Nursing home dated June 09, 2017 procured during the assessment of the claim;
2.The medical details from Maharaja Agresan Hospital dated August 01, 2017 procured during the assessment of the claim;
3.The Out Patient Slip from Adesh Medical college and hospital dated September 01, 2017 procured during the assessment of the claim;
4.The USG Abdomen report from Adesh Medical college and hospital dated September 01, 2017 procured during the assessment of the claim;
5.The Out patient slip from Adesh Medical college and hospital dated September 06, 2017 procured during the assessment of the claim;
6.The Medical records from Agarwal Nursing home admission dated September 17, 2017 and discharged on September 21, 2017 procured during the assessment of the claim;
7.The Out patient details from Pt. B.D.Sharma PGIMS, Rohtak dated October 14, 2017 procured during the assessment of the claim;
8.All the information and other documents procured during the assessment of the said claim;
It is noted that the above mentioned information was not disclosed by the Member in the DOGH. Had such information been disclosed, we would not have issued the Cover at the existing terms and conditions.
In view of the cited facts, we hereby repudiate the subject Claim due to non-disclosure of the material facts by the Member in the DOGH.
Please understand that the above discussion does not absolve our liberty to adduce additional grounds of defense with respect to subject Cover.
In case, you need any further clarification in this respect, you can contact our Claims Department at Mumbai on +91-(022)-6605 7294 or you can mail us at Claims Grievance Cell. [Claims Department, 7th Floor, Building No 21, Infinity Park, Off Western Express Highway General A K Vaidya Marg, Malad (E) Mumbai 400097]
In this letter they have referred to very specific medical records indicating that the deceased life insured was suffering from diseases like chronic liver disease, hypertension etc. but these were not declared in the proposal form. Our attention was also drawn to the membership cum declaration of good health form at page 83 wherein the deceased life insured had specifically declared that he had never suffered and is not currently suffering from various diseases as listed in para 4 of this declaration, which includes any chronic liver disease.
During the hearing, learned Counsel for the Petitioner Insurance Company took us through various medical records listed in their repudiation letter which are available at page 91 onwards. They have also drawn our attention to the investigation report which is available at page 113 onwards.
A careful perusal of the above stated medical records and the investigation report indicates that the deceased insured was suffering from ailments like chronic liver disease etc. but failed to declare the same in the declaration of good health form. No satisfactory explanation was given by the learned Counsel for the Respondent except stating that photocopies of the medical records have been produced and these should not be relied upon. He denied the authenticity of these documents. However, the Respondent has not placed on record any evidence which will show whether any of these medical records are false or fabricated and whether the deceased insured did not undergo any such medical treatment evidenced from these medical records. Obviously the original medical records will be with the family of the deceased/Complainant. Hence, we are of the considered view that the Petitioner Insurance Company has been able to prima facie establish their case that the deceased insured was suffering from certain diseases like chronic liver disease etc., but they did not declare the same in the declaration of good health form.
As has been held by Hon'ble Supreme Court in a catena of judgments1, suppression of material facts related to pre existing ailments in the proposal form entitle the Insurance Company to repudiate the claim but as was laid down by the Hon'ble Supreme Court in Life Insurance Corporation of India Vs. G.M. Channabasamma (1991) 1 SCC 357, the burden of proving that the insured had made false representations and/or suppressed material facts is undoubtedly on the Insurance Company. In the present case, we are of the considered view that the Petitioner Insurance Company has been successful in discharging this onus through relevant medical records. Hence, the Insurance Company was justified in repudiating the claim through its repudiation letter dated 30.06.2018. The District Commission went wrong in allowing the Complaint and State Commission went wrong in dismissing the First Appeal filed by the Petitioner herein. The State Commission ought to have dealt at length the contentions of the Petitioner Insurance Company and considered the evidence in the form of medical records, which it failed to do so. Such medical records were available before the fora below also.
In view of the foregoing, we are of the considered view that the orders of the State Commission cannot be sustained. Accordingly, the orders of the State Commission as well as the District Commission are set aside. Revision Petition No.452 of 2026 is allowed and the Complaint is dismissed.
Pending IAs, if any, also stand disposed of.
Registry of NCDRC is directed to send a copy of this order (free certified copy) to both sides, in particular the Respondent(s), on the address given in the Memo of Parties, within a maximum period of one week from the date of this order.
Footnotes
- 1.Manmohan Nanda Vs. United India Assurance Company Limited and Anr. (2022) 4 SCC 582, Branch Manager, Bajaj Allianz Life Insurance Company Limited & Ors. Vs. Dalbir Kaur (2021) 13 SCC 553, Satwant Kaur Sandhu Vs. New India Assurance Co. Ltd. (2009) 8 SCC 316 and LIC of India Vs. Smt. G.M. Channabasamma (1991) 1 SCC 357.