Rekha Gupta, Member
Revision Petition no. 2770 of 2008 has been filed under section 21 (B) of the Consumer Protection Act, 1986 against the order dated 18.03.2008 passed by the Karnataka State Consumer Disputes Redressal Commission, Bangalore (the State Commission) in appeal no. 2308 of 2007.
2. The facts of the case as per the respondent/ complainant are that the husband of the respondent had obtained a policy of insurance bearing Policy no. 622663818, date of issue of the said policy was 10.03.2005 for a sum of Rs.50,000/-.
3. The late husband of the respondent/ complainant had obtained the afore said policy of insurance through the agent of the petitioner bearing agents code no. 7669626 and the said policy of insurance bond was issued through petitioner no. 1 by the petitioner no. 2. After obtaining of policy of insurance, the late husband of the respondent had paid three instalments of the premium of a sum of Rs.1,673/- each half yearly.
4. The late husband of the respondent died on 29.03.2006 accidently. Thereafter, the respondent approached the petitioner with all the original documents seeking payment of insurance policy bond and the original documents pertaining to said insurance policy are still in the custody of the petitioner.
5. Surprisingly, the respondent received a letter dated 15.02.2007 bearing no. Claims/ D/ Rep. 17/2006-2007, stating that the petitioner was not liable for any payment under the above policy.
6. The petitioner have no right to repudiate the claim of the respondent under the policy of Insurance stated above, as the agent of the petitioner brought the husband of the respondent under the said policy of insurance. Further the insurance policy bond was also issued in favour of late husband of the respondent by the petitioner, and later the petitioner received the instalments of premium payable by the late husband of the respondent, as the late husband of the respondent had paid three half yearly instalment with respect to the said policy of insurance.
7. The late husband of the respondent was running a hotel business, and was healthy at the time of entering into policy by insurance till his death.
8. The written reply was filed by opposite party no. 2 before the District Forum. It was admitted that the complainant is the wife of the deceased life assured Shri V M Praveen and she is the nominee of the policy obtained by the assured bearing no. 622663818 and the status of the policy is as follows:
|Policy No.||Sum Assured (in Rupees.)||Date of Commencement||First unpaid premium||Duration of death|
|622663818||50,000/-||10.03.205||9/06||1 year0month19 days|
10. The said policy commenced on 10.03.2005. The assured died on 29.03.2006. The respondent being the nominee and wife of the deceased assured, submitted claim statement requesting to settle the benefits under the said policy. Since, the said claim being an early claim and as the said policy had run only for a period of 1 year and 19 days from the date of commencement, the petitioner as per their norms took up the matter for investigation with regard to the health conditions and positions of the assured at the time of obtaining the policy.
11. At the time of investigation it was traced that the life assured had consulted the doctor Mallikarjuna H at Sanjeevini Speciality Centre, Chikmagalur on 23.02.2005 for pain in abdomen + heart burn and was diagnosed to have acid peptic disease. Later on the same day he was admitted to Holy Cross hospital, Chikmagalur with the same complaint of Heart Burn and pain in abdomen since two months and pain while passing urine Epigastric tenderness. As the diagnosis made was acid peptic disease, the life assured underwent gastroscopy on 24.02.2005 the result of which showed Mucosal Erosion at the O G junction of Esophagus and Hyperemic Mucosa over first part of Duodenum. The final diagnosis was Distal Oesophagitis + AC Duodenitis for which life assured was given treatment in the hospital regularly till 03.09.2005 and was referred to a higher centre. These facts have been traced out during the investigation after submission of claim form. In spite of this, these facts were not disclosed at the time of taking the proposal. It is, therefore, evident that the life assured made deliberate incorrect statement and with-held the real and correct information from the opponent corporation regarding the health at the time of effecting the assurance and obtaining the policy. Even the respondent “ nominee that is the wife “ being close associate of the assured ridiculously in the complaint has stated that her husband died accidentally. By this, it is evident that the respondent also successfully suppressed the real facts knowingly well aware of all the health status of her husband and the treatment obtained by him earlier to the commencement of the policy till the date of his death. It is very latent that both assured as well as respondent have intentionally suppressed the real facts and succeeded in assuring the policy. Under these circumstances the decision arrived and taken by the petitioner in repudiating the policy is quite correct and appropriate decision. Apart from the above facts even if you look into the information furnished by the assured at the time of assuring the policy it may be observed that the personal statement regarding the health made by the deceased, discloses that the assured at the time of assuring the policy was well aware of the real facts about his sufferings and his ailment and yet by suppressing all those facts he had answered the following questions as below:
|11||(a)||During the last five years did you consult a medical Practioner for any ailment requiring treatment for more than a week?||No|
|(d)||Are you suffering from or have you ever suffered from ailments pertaining to lever, stomach, heart, lungs, kidney, brain or nervous system?||No|
|(i)||What has been your usual state of health?||Good|
13. It is the fundamental principles of insurance law that utmost good faith must be observed by the contracting parties and good faith forbids either party from non-disclosure of the facts which the parties known. Hence, considering all these facts supported by the Hospital records, and after coming to the conclusions that the assured did not act promptly and intentionally suppressed the real facts and had violated the terms of the policy, the competent authority on valid grounds came to the conclusion and repudiated the policy and held that the claimant was not entitled for any benefits under the policy. The fact of repudiation was immediately communicated to the respondent vide letter Claims/D/Rep. no. 17/ 2006-2007 dated 15.02.2007. Hence, the corporation had rightly repudiated the claim for non-disclosure of material facts and justified in its act. There was no deficiency of service on the part of the corporation. It is well settled law that life insured contract is based on principle of utmost good faith œUberrima fides?.
14. District Consumer Disputes Redressal Forum at Chikmagalur (the District Forum) vide their order dated 24.08.2007 dismissed the complaint against opposite party no. 1 and 2. Further, the District Forum observed that:
12. œLearned counsel for opponents submitted in his arguments that there is no deficiency of service on the part of the opponent. Further, in view of the proposition of law laid down in the decision cited above, it is clear that, the life insurance contract is based on fundamental principles of insurance law that utmost good faith œuberrima fides?. The complainant has filed her affidavit evidence reiterating the averments made in the complaint in her affidavit evidence. In cross examination she has stated she does not know how he died or reason for his death. She has stated in cross examination that, she herself and her husband were living Channarayapattana and her husband died at Channarayapattana itself and her parental house in Sakharayapattana and the policy was taken by her husband at Kadur. She has stated in cross examination that her husband had gone to Holy Cross Hospital by saying that he is not keeping well. She is unable to say definitely as to whether her husband had been to hospital prior to or after the insurance of policy submitting of proposal for issue of policy. She was unaware of the policy taken by her husband. The agent filled the proposal form at Sakharayapattana and at the time she was present. She has stated that she had not been Sanjeevini Hospital at Chikmagalur and the statement recorded in respect of her husband in Sanjeevini Hospital. She has denied that, her husband was suffering from some disease and was taking treatment by going to hospital. She has denied that her husband suppressed the said material information and submitted proposal for issuance of policy?.
20. There is no dispute with regard to the proposition of law laid down in the decision cited above. We have already stated above that the insurance contract are, œuberrima fides? that founded upon utmost good faith. In the instant case, though the husband of the complainant deceased was suffering from the above said disease prior to submitting of proposal still he suppressed the said material facts about his health in proposal form and suppressing the said facts obtained policy. Though the complainant the wife of the deceased is well aware of taking of treatment prior to issuance of policy still she has not disclosed the said diseases in her claim form after his death. Under the above said facts and circumstances, there is no deficiency in service on the part of the opponents. The opponents rightly repudiated the claim of the complainant on the ground that the deceased suppressed the material facts regarding his health in proposal form and while obtained policy. In view of the same the complainant is not entitled to any policy amount. Accordingly, we answer point no. 1 in Negative. Point no. 2 as not entitled.
21. Point no. 3 : In view of our findings on points no. 1 and 2, the complaint filed by the complainant has to be dismissed. In the result we pass the following:
The complaint filed by the complainant against the opponents no.1 and 2 is hereby dismissed.
Having regard to the facts and circumstances of the case, there is no order as to costs.?
15. Aggrieved by the order of the District Forum, the respondent filed an appeal before the State Commission. The State Commission vide their order dated 18.03.2008 while allowing the complaint held that:
œThe case of the OPs is that the insured had taken treatment for stomach pain in several hospitals prior to the filing of the proposal form but the insured suppressed the said fact at the time of filing the proposal form and, therefore, the OPs were justified in repudiating the claim on the ground of suppression of fact. No doubt there is some evidence to show that the insured had gone to hospitals. But no one has stated that the insured had gone to the hospitals for treatment in respect of stomach pain. Therefore, no reliance could be placed on the said evidence. The case of the OPs is that the insured had taken treatment in Holy Cross Hospital at Chickmagalur. But the OPs have not filed the affidavit of any of the doctors to the effect that they have treated the insured for stomach pain prior to the filing of the proposal form. In the absence of such evidence, in our view, the OPs were not right in repudiating the claim of the complainant. Hence, the District Forum is also not right in accepting the defect putforth by the OPs. Therefore, we are of the view that direction is to be issued to the OPs to pay the assured sum to the complainant with interest.
Accordingly, we pass the following order:
(i) The appeal is allowed. The impugned order is set aside.
(ii) The complaint filed by the complainant before the District Forum is allowed with a direction to the OPs to pay the assured sum of Rs.50,000/- to the complainant with other benefits along with interest at 6% per annum from the date of the complaint filed before the District Forum till realisation.
(iii) Parties to bear their own costs?.
16. Hence, the present revision petition.
17. The main grounds for the revision petition are that :
The State Commission wrongly and illegally held that the petitioner corporation is liable to pay a sum of Rs.50,000/- with interest to the respondent.
The State Commission did not apply its judicious mind and also overlook the fact that even otherwise, the respondent is not entitled to any amount as the life assured had even at the time of submitting the proposal suppressed the condition of his health by filing wrong declaration in the proposal form.
The State Commission did not appreciate the fact that the life assured was suffering from serious disease and had also died due to the same and he had not disclosed the same at the time of filing the proposal form.
The State Commission inspite of holding that the life assured had gone to some hospitals wrongly held that there is no one who has stated that the life assured has gone to the hospitals for treatment in respect of stomach pain.
The State Commission also erred in holding that the petitioner corporation should have filed affidavit of a doctor to show that he has been treated in Holy Cross Hospital inspite of the fact the petitioner corporation has clearly established by way of documents and evidence that life assured was suffering from serious disease and it was also proved on record that the life assured was a chain smoker and alcoholic and has been advised to leave smoking and drinking by the doctors treating him in the hospital before his death.
The State Commission also wrongly held that the petitioners were not right in repudiating the claim of the respondent.
The State Commission did not even discuss the evidence produced by the petitioner corporation while passing the impugned order.
The State Commission also failed to observe that it is mandatory on the part of the life assured to give correct information in the proposal form and it is clear from the answers given by the life assured in his proposal form that he had not been suffering from any disease is incorrect.
The State Commission on the ground of suppression of facts and the plea of fraud taken by the petitioner herein should have dismissed the complaint. The State Commission seriously erred in setting aside the order of the District Forum.
18. We have heard the learned counsel for the petitioner. As no one was appearing on behalf of the respondent till date, i.e., 12.02.2014, respondent was proceeded ex parte. We have also gone through the records of the case carefully.
19. It is not understood that on what ground the State Commission in their order have stated that œno doubt there is some evidence to show that the insured had gone to hospitals. But no one has stated that the insured had gone to the hospitals for treatment in respect of stomach pain?. The medical records placed on file support the grounds given for repudiation in the petitioners letter dated 15.02.2007, which reads as under:
œWe may, however, state that all these answers were false as we have evidence and reasons to believe that he had consulted a doctor in a hospital on 23.02.2005, i.e., about a month before proposing for the above policy for complaints of Heart Burn and pain in abdomen with duration of 2 months and Epigastric tenderness. The impression was Acid Peptic Disease. He underwent Gastroscopy on 24.02.2005 the result of which showed Mucosal Erosion at OG Junction of Esophagus at Hyperemic Mucosa over first part of Duodenum. The diagnosis was Distal Oesophagitis + Ac Duodenitis. He was given treatment for the same in the hospital and advised to stop smoking and to take diabetic diet. He was also advised to come for further review. He did not however disclose these facts in his proposal. Instead he gave false answers therein as stated above.
It is therefore, evident that he made deliberate incorrect statements and withheld correct information from us regarding his health at the time of effecting the assurance and hence, in terms of the policy contract and the declaration contained in the form of proposal for assurance, we hereby repudiate the claim and accordingly, we are not liable for any payment under the above policy and also moneys that have been paid in consequence thereof belong to us?.
20. It is apparent from the medical records that he was taking treatment prior to the date of taking of the policy which was 10.03.2005. On 03.02.2005 he had visited Holy Cross Hospital, Chickmalagur for heart burn in the abdomen for the last two months as also pain while passing urine. He was also a smoker. He was advised to quit smoking. Based on the Gastroscopy on 24.02.2005 he was diagnosed as suffering from Distal Oesophagitis and AC Duodenitis. Thereafter, from the medical records on file it is quite apparent that he was suffering from pain in the abdomen, back ache, heart burn, fatigue and vomiting and epigastric tenderness and continued to take treatment for the same till his death on 29.08.2006. As per the medical records filed he had also undergone a surgery at a Bangalore Hospital.
21. In view of the above facts, it is evident that he had withheld the information from the petitioner with regard to his true state of his health prior to his death. It is also evident that he had not died accidentally as given in the complaint by the respondent. Hence, as per clause 6 of the conditions and privilege of the insurance policy, the petitioner has rightly repudiated the claim of the complainant.
22. Hence, the order dated 18.03.2008 passed by the State Commission in Appeal no. 2308 of 2007 is set aside and the order dated 24.08.2007 passed by the District Forum in complaint no. 16 of 2004 is upheld and the complaint is dismissed.