Sudesh Kumari vs Bajaj Allianz Life Ins. Co. & Anr

Sudip Ahluwalia, Member

This Revision Petition has been filed by the Complainant Sudesh Kumari under Section 21 of the Consumer Protection Act, 1986 against the impugned Order dated 02.08.2012 passed by the State Consumer Disputes Redressal Commission, Haryana in F.A.  No. 435 of 2012, vide which the Appeal filed by the Respondents was allowed, the Order of the District Forum was set-aside, and the Complaint was dismissed.

The factual background, in brief, is that the Complainant’s husband Late Gulbhar Singh had obtained a Life Insurance Policy No. 117099001 dated 10.01.2009 from the Respondents. He unfortunately passed away on 17.02.2009. The Complainant being the nominee in the Policy filed her claim for the Insurance amount but the claim was rejected by the Respondents vide the letter dated 07.05.2009, on the ground that there was concealment of facts with respect to his state of health, that he was suffering from Chronic Obstructive Pulmonary Disease, HPTN and Sleep Apnea for the last two years, and this was not mentioned at the time of filling the Proposal Form. Aggrieved by the wrongful rejection of claim, she filed her Complaint before the District Forum, Karnal.

The District Forum vide its Order dated 11.01.2012 allowed the Complaint and directed the Respondents to pay the Policy amount of Rs. 5,60,000/-  @9% p.a. from the date of repudiation till its realization and Rs. 10,000/- for mental harassment. The Respondents filed an Appeal before the State Commission which, vide the impugned Order dated 02.08.2012 allowed the Appeal, set-aside the Order of the District Forum and dismissed the Complaint. The relevant extracts of the impugned Order are set out as below –

“From the perusal of record it is a case wherein Life Assured Gulbahar has died within 1 month and seven days from the date of obtaining the insurance policy and, therefore, being an earlier claim the matter was investigated by the investigator. During investigation it has come on record that life assured was suffering from pre-existing disease i.e. Chronic Obstructive Pulmonary disease HPTN and sleep apnea for the last two years for which he has taken treatment from Dr.J.K.Bhutani. The certificate dated 14.3.2009 issued by Dr.J.K.Bhutani clearly reveals that the Life Assured was suffering from Chronic Obstructive Pulmonary disease HPTN and sleep apnea for the last two years, but this fact has been concealed by him while making the proposal statement in the proposal form at the time of obtaining the policy and thus the claim submitted by the complainant was rightly repudiated by the opposite parties vide letter dated 7.5.2009. Since the complainant has violated the terms and conditions of the insurance policy, he is not entitled for any insurable benefits.

In support of his contention, learned counsel for the appellants placed reliance on case law cited as SATWANT KAUR SANDHU versus NEW INDIA ASSURANCE COMPANY, (2009) 8 SCC 316, wherein the Hon'ble Supreme Court held that:-

"Thus, when an information on a specific aspect is asked for in the proposal form, an assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge. It is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not. Of course, the obligation to disclose extends only to facts which are known to' the applicant and not to what he ought to have known. The obligation to disclose necessarily depends upon the knowledge one possess. His opinion of the materiality of that knowledge is of no moment."

In para 29 of SATWANT KAUR SANDHU's case (Supra), the Hon'ble Apex Court has held that:-

“29. Judged from any angle, we have no hesitation in coming to the conclusion that the statement made by the insured in the proposal form as to the state of his health was palpably untrue to his knowledge. There was clear suppression of material facts in regard to the health of the insured and, therefore, the respondent insurer was fully justified in repudiating the insurance contract. We do not find any substance in the contention of learned counsel for the appellant—that reliance could not be placed on the certificate obtained by the respondent from the hospital, where the insured was treated."

The National Commission in Revision Petition No. 1167 of 1997 titled as Life Insurance Corporation of India vs Smt. Minu Kalita, decided on 19.03.2002, has held that:-

"It is settled law that the contract of insurance is based on good faith. The information as to the insured having suffered from Cancer before the policy was taken and the hospitalization for the same came to light afterwards and the petitioner is not to know this by an examination of their medical officer. It is for the respondent to give the correct information on his health which he did not. disclose at that time. This ground of incorrect information and false statements regarding age of the insured and income make the insurance contract null and void. We find there is no deficiency of service by the petitioner, Life Insurance Corporation of India. Both the District Forum and the State Commission have not appreciated the facts brought out by the petitioner in repudiating the claim.'

The facts of the instant case are fully attracted to the case law cited above.

It is well settled principle of law that the contract of insurance is a contract uberrima fides and there must be complete good faith on the part of the life assured at the time of submitting proposal form for obtaining the policy and the assured is under a solemn obligation to make full disclosure of material facts with regard to his state of health because the same was relevant for the insurer to decide as to whether the Insurance Policy is to be issued to the proposer or not. Since the Life Assured was suffering from pre-existing disease of Chronic Obstructive Pulmonary disease HPTN and sleep apnea for the last two years and this fact has been concealed by the complainant while making the proposal statement in the proposal form and thus the complainant has violated the terms and conditions of the insurance policy and, therefore, he is not entitled for any compensation. The District Forum has failed to appreciate the actual controversy involved in this case and committed grave error while accepting the complaint. Hence, the impugned order under challenge is not sustainable in the eyes of law.

Accordingly, this appeal is accepted, the impugned order is set aside and the complaint is dismissed…”

Ld. Counsel for the Petitioner has argued that the State Commission without dealing with the finding of the District Forum regarding inadmissibility of the Doctor’s certificate, which finding was a mixed question of law and fact, reversed the well-reasoned order of the District Forum and allowed the appeal dehors the scope of appellate jurisdiction. The State Commission proceeded on the presumption that the certificate issued by a private Doctor in favour of the insurance company is a gospel truth notwithstanding the fact that neither any Affidavit of the doctor nor any medical records/prescription has been filed in support of the frivolous grounds of repudiation; That the State Commission by way of an Exparte order allowed the Appeal solely placing reliance on the certificate of a private Doctor which was held to be inadmissible by the District Forum. Ld. Counsel for the Respondents argued that the State Commission was correct in relying upon the Certificate of Dr. J.K. Bhutani to come to conclusion that the Deceased Life Assured was suffering from COPD, HPTN and Sleep Apnea for the last 2 years, which was concealed by him at the time of making the Statements in the Proposal Form; That the claim was repudiated also for concealment of the fact of having an earlier Policy at the time of making his statement in the Proposal Form at Column No. 7, and this fact has been admitted by the Complainant in the Complaint itself; That the Respondents had allowed the claim of the DLA of the other Policy for Rs. 5 lakhs which was issued prior to the instant policy and this shows the commitment of the Respondents to honour the Policy; Ld. Counsel for Respondents placed reliance on the cases of “Satwant Kaur Sandhu v. New India Assurance Co., (2009) 8 SCC 316”, “Reliance Life Insurance Co. Ltd. v. Rekhaben Nareshbhai Rathod, (2019) 6 SCC 175” and “Rubi (Chandra) Dutta v. United India Insurance Co. Ltd., (2011) 11 SCC 269”.

This Commission has heard both the Ld. Counsel of the Petitioner and the Respondents; and perused the material available on record.

Perusal of the Proposal Form submitted on behalf of the deceased- Life Insured (Page Nos. 46, 47 of the Paper Book) goes to show that in relation to the Question No. 7 therein which was, “At present are you carrying or applying for life, health or accident insurance with this Company or elsewhere?”, to which his categorical answer was “No”.  Again in answer to Question No. 10 which was “Name and address of your regular doctor or hospital, when did you last see your physician?  Reasons for the visit and results of the examination? (If space provided is insufficient please use separate sheet)”, the short and cryptic answer filled in by the Insured was “NO REGULAR DOCTOR”.

The Petitioner before this Commission is aggrieved that the Ld. State Commission in setting aside the Order passed by the Ld. District Forum in her favour in the original complaint  had accepted the report of Dr. J.K. Bhutani relied upon by the Insurance Company and has ignored the reasons for which the Ld. District Forum had refused to accept the report i.e. lack of formal proof in as much as no Affidavit of the concerned Doctor who had issued the aforesaid Certificate was produced on the file, and no document had also been produced to show that any prescription slip was ever issued by the said Doctor at any time during which he allegedly treated the deceased Life Insured.

In this regard, it may be observed that in consumer proceedings the hearing of complaints is to be done in a summary manner, and the strict standards of formal proof as required in ordinary judicial proceedings are not a sine qua non.  This view in accepting the defense of the Life Insured being afflicted with any pre-existing disease by tendering into evidence the treatment related documents of the said Insured without any Affidavit of the concerned Doctor(s) as was accepted by the Hon’ble Supreme Court in “Satwant Kaur Sandhu Vs. New India Assurance Co. Ltd. (2009) 8 SCC 316”, has also been adopted by this Commission in various decisions such as “Pankaj Parashar  Vs. ICICI Prudential Lie Insurance Co. Ltd. (RP No. 677 of 2017- (2017) (2) CPR 23”; as well as Life Insurance Corporation of India  Vs. Manish Gupta (2019 (4) AVR 640”.  Even otherwise the fact that in relation to Question No. 7, the deceased Insured had stated that he was carrying or applying for any life, health or accidental insurance either with the Petitioner Company or elsewhere was a palpably wrong answer, since, admittedly, he also held Policy Nos. 0004052878 and 0083954513 dated 28.02.2004 and 28.2.2008 respectively, which were both honoured by the Petitioner Company after his death, while the 3rd Policy which is the subject matter of this case (0117099001) alone was repudiated on the ground that he had suppressed about his medical condition for the last two years of having being suffering from Chronic Obstructive Pulmonary disease HPTN and Sleep Apnea, and had also made a false statement regarding existence of his earlier two Policies.

Furthermore, it has been emphasised by the Ld. Counsel for the Respondent Insurance Company, that the Certificate issued by Dr. J.K. Bhutani had been submitted by none other than the Petitioner herself alongwith the Insurance Claim Form after the death of the Insured which she had got filled from the concerned Doctor on the prescribed format for that purpose issued by the Insurance Company, and consequently even academically therefore there was no obligation upon the Company to formally prove such document which had come on record from the side of the Complainant herself.  Of course, there can also be no scope for the Complainant to challenge the repudiation on the separate ground of suppression about the existence of the previous Insurance Policies on the part of the Insured.

For the aforesaid reasons, this Commission finds that the impugned Order passed by the Ld. State Commission is just and proper, and requires no interference.

The Revision Petition is, therefore, dismissed.  Parties to bear their own costs.

Pending application(s), if any, also stand disposed off as having been rendered infructuous.