MEENA DEVI vs Director General/Additional Director General

THIS revision is directed against the order of the State Commission dated 18.07.2012 whereby the State Commission accepted the appeal of the respondents against the order of the District Forum and dismissed the complaint of the petitioner.

THE facts relevant for the disposal of this revision petition are that Shishpal purchased a postal life insurance No.APS -720183 -L from the respondents for Rs.2,00,000/ -. The insurance was to mature on 29.05.2024. Unfortunately, Shishpal died on 19.04.2009. The complainant being the mother and nominee of the deceased submitted insurance claim. The respondents opposite parties repudiated the claim on the ground of concealment of material information regarding medical condition and paid a sum of Rs.23,750/ - to the petitioner. Challenging the repudiation of the insurance claim, petitioner filed consumer complaint in District Consumer Forum Fatehgarh. Upon notice, opposite parties filed written statement justifying the repudiation of the claim on the ground of concealment of material information by the insured. It was alleged that on verification of document, medical category of the insured at the time of acceptance of proposal was S2 (T -24) with diagnosis "Acute Stress Reaction " which was not disclosed. It was also alleged that the insured died of "Massive Pulmonary Oedema " leading to Cardio Pulmonary Arrest on 19.04.2009 whereas the life assured had mentioned his category in the proposal form as Aye /Shape -I.

LEARNED District Forum on consideration of the pleadings of the parties and the evidence accepted the complaint and directed thus: "For the reasons and finding above, we accept the complaint of the complainant with cost of Rs.1000/ - and direct the Ops who are jointly and severely liable to release the remaining insured amount of the life assured to the tune of Rs.1,76,250/ - in favour of the complainant alongwith interest @ 9% per annum from the date of repudiation i.e. 19.03.2010 till actual payment. The compliance of this order be made within a period of two months failing which the complainant is at liberty to initiate the legal proceedings against the Ops ".

BEING aggrieved of the order of the District Forum, respondents opposite parties preferred an appeal and the State Commission on consideration of material on record accepted the appeal, set aside the order of the District Forum and dismissed the complaint by observing thus: "As a sequel to our aforesaid discussions, it has been established on the record that the life assured had concealed the true and material facts with respect to his state of health before purchasing the postal life insurance policy and for that reason the appellants -opposite parties cannot be held liable to pay any insurable benefits as per terms and conditions of the insurance policy. District Consumer Forum has failed to appreciate the above stated evidence. Hence the impugned order cannot be allowed to sustain ".

Mr. Pradeep Sharma, Advocate, for the petitioner has contended that impugned order of the State Commission is contrary to the facts. In support of this contention, he has drawn our attention to the proposal form submitted by the assured Shishpal for obtaining the insurance and contended that truthful information about the medical / personal history of the assured was given in the proposal form which was also certified to be correct by the superior officer of the insured. Thus, there is no question of mis -information on the part of the assured. As such, order of the State Commission setting aside the order of the District Forum is not sustainable.

MR . Roshan Lal Goel, Advocate, learned counsel for the respondents on the contrary has argued in support of the impugned order. He has contended that undisputedly the life assured was suffering from "Acute Stress Reaction " disease which fact was not disclosed in the proposal form. Therefore, the State Commission was right in concluding that the assured had concealed material information regarding his disease while obtaining the insurance claim and as such, the insurance contract which has been obtained by misrepresentation and concealment is void and the repudiation of the claim of the petitioner on aforesaid account was justified.

WE have considered the rival contentions and perused the record. It is well settled that contract of insurance is based on the doctrine of "uberrima fides " i.e. utmost good faith. The life assured while obtaining the insurance policy is under obligation to disclose several material aspect with respect to his / her life. Reference be made to the judgment of the Supreme Court in the cases of P.C. Chacko and Anr. Vs. Chairman, LIC of India (2008) 1 SCC 321, Satwant Kaur Sandhu Vs. New India Assurance Company (2009) 8 SCC 316 and judgment of this Commission in the matter of Crown Consultants Pvt. Ltd. Vs. Oriental Insurance Company Ltd. III (2011) CPJ 439 (NC). In the context of the above noted legal position, the only controversy which requires consideration in this revision petition is whether the petitioner concealed material information about his health and obtained the insurance policy by misrepresentation? In order to find answer to this question, we have perused the copy of the proposal form submitted by the deceased Shishpal for obtaining the Postal Life Insurance. Column No.15 of the proposal form deals with personal history of the assured which is reproduced thus: "Personal History : (a) Are you at present in Sound Health : (b) Have you suffered from any of the following : Insanity, Tuberculosis, Cancer, Diabetes, Kidney Diseases, Paralysis, Hypertension, HIV/AIDS, any other serious disease, any disease of brain, any physical deformity or handicap, any disease of heart or lung If yes, give details ______________ "

ON reading of the above, it is clear that in response to questions in column no.15 (a) and 15 (b), life assured had stated that he was in sound health and he had not suffered from any of the disease mentioned in column no.15 (b) of the proposal form. On further perusal of the proposal form, we notice that superior officer of the life assured in column no.17 has certified that as per the last medical examination of the deceased assured he was in medical category AYE/Shape -I which means that as per the last medical examination conducted by the Army authorities, the deceased Shishpal at the time of obtaining the insurance policy was in sound health. On perusal of the impugned order it appears that while dismissing the complaint, the learned State Commission was influenced by the letter dated 21.06.2009 addressed by Major Yashpal Bisht to the Additional Director of the respondents opposite parties wherein it is recorded thus: "(d) Medical Category during the month of taking the PLI Policy as per IAFF 958 was S2 (T -24). Cert. to this effect is enclosed. ( e) ... ... ... ... ... ... ... ... (f ) Details of LMC during entire service alongwith Medical History are mentioned below. Cert. to this effect is encl: (i) S2 (T -24) w.e.f. 11.01.2007 to 26.06.2007 with diagnosis ACUTE STRESS REACTION (upgraded to Shape -I on 27 Jun 07). (ii) P3 (T -24) w.e.f.13 Sep 07 to 27 Feb 08 with diagnosis BILATERAL RENAL CALCULI (Upgraded to Shape -I on 28 Feb 08). (iii) P3 (T -24) w.e.f. 24 Oct 08 (to till the date of death) with diagnosis PRIMARY HYPERTENSION ".

ON reading of the above, it appears that medical category of the assured Shishpal was down graded to S -2 (T -24) w.e.f.11.01.2007 to 26.06.2007 with the diagnosis "Acute Stress Reaction " ( which was later on upgraded to Shape -I on 27.06.2007). On perusal of column no. 15 (b) of the proposal form, we find that Acute Stress Reaction is not one of the disease regarding which opinion has been sought. Learned counsel for the respondents opposite parties has failed to produce any evidence on medical literature to show that "Acute Stress Reaction " is a serious disease and it is also not clear what is meant by "Acute Stress Reaction ". Further, from the above noted information given in the letter dated 21.06.2009, it appears that the deceased was upgraded to medical category Shape -I w.e.f. 28.02.08 which means that Acute Stress Reaction is of temporary nature and not a serious life threatening disease. Therefore, in our view, the State Commission has committed a grave error in holding that deceased assured obtained the insurance policy by concealment of misrepresentation of material facts. Thus, we are of the view that the impugned order of the State Commission reversing the order of the District Forum cannot be sustained. In view of the discussion above, we allow the revision petition, set aside the impugned order and restore the order of the State Commission. Respondents are directed to comply with the order of the District Forum within 30 days. No order as to costs.