At, Kerala State Consumer Disputes Redressal Commission Thiruvananthapuram
By, THE HONOURABLE MR. JUSTICE S.S. SATHEESACHANDRAN
By, PRESIDENT & THE HONOURABLE MR. V.V. JOSE
For the Appellant: P. Raj Mohan, Advocate. For the Respondent: G.S. Kalkura, Advocate.
S.S. Satheesachandran. President
Complainant is the appellant. His complaint alleging deficiency of service by opposite party over payment of sums assured under policies issued, seeking directions for payment of such benefits with compensation, was dismissed by the District Consumer Disputes Redressal Forum, for short District Forum, Kozhikode. Aggrieved, he has preferred this appeal.
2. Complainant is a PWD contractor. He sustained crucial spinal fracture while performing certain martial arts exercise on 18.03.10, according to him. He was rushed to hospital and while undergoing treatment he suffered paralysis below his waist. He had to undergo operation and also further treatment in different hospitals. He had to incur a sum of Rs.10 lakhs for his treatment. He had 5 policies of the opposite party, the first for Rs.5 lakhs issued on 27.03.99, second for Rs.25,000/- issued on 27.03.03, third and fourth for Rs.50,000/- and 1 lakh respectively both of them issued on 28.03.06, and fifth for Rs.5 lakhs issued on 22.01.10. Under these policies, he was entitled to double accident benefits and he applied for benefits th
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reof. His claim under the policies were rejected by the opposite party holding that his disability was not due to the accident but related to his previous medical history. Questioning the rejection of claims under the policies, the complainant filed the complaint."3. Opposite party resisted the claims contending that the complainant has suppressed his serious illness while submitting proposals for life insurance. He suffered from ankylosis spondylitis with kyphotic deformity of neck with stiff spine and lung disease when he applied for policies of the opposite party and there pre-existing deceases contributed for his paralysis, according to the opposite party. Since policy is issued on the principle of Uberimae Fidei and as the complainant had suppressed material facts about his pre-existing illness while obtaining policies from opposite party, his claims for double accident benefits were rejected and such rejection was proper, valid and correct, according to the opposite party.3. Evidence consisted of testimonies of the complainant as PW1 and exhibit A1 to A16 on his side. For the opposite party, 2 witnesses RW.1 and RW.2 were examined and exhibits P1 to P13 were marked.4. Appreciating the materials and hearing counsel on both sides, the forum below upholding the decision of opposite party, held that the complainant had suppressed material facts about the pre-existing illness when he made proposals and obtained policies, and, in that view of the matter the complaint was dismissed.5. Pursuant to appeal filed by the complainant over the rejection of his claims before the Zonal Review Committee of opposite party his claims under the first four policies were allowed while affirming rejection of the claim canvassed under the last policy issued on 22.01.10 for Rs.5 lakhs, during the pendency of the proceedings. So the grievance of the complainant is now confined over the rejection of the claim over the fifth policy issued on 22.01.10 for Rs.5 lakhs only (Ext.A5).6. We heard counsel on both sides. Ext.A5 policy was issued only after a thorough medical check up of appellant and he had no pre-existing disease, is the submission of his counsel. The lower forum, according to counsel, had gone wrong in affirming the rejection of the claim under A5 relying on his treatment records stating that his pre-existing diseases had contributed to his spine injury and, later paralysis below the waist. The doctors who prepared his treatment records have not been examined in the case and no material other than the statements made in treatment records was available on record to show that he suffered from any pre-existing disease, is the submission of the counsel. Conclusion drawn by the forum solely based on the treatment records without examining the doctors who prepared them is patently erroneous and unacceptable is the further submission of the counsel to urge for allowing his appeal and for granting the sum covered by the Ext.A5 also with direction to opposite party to pay the benefits thereof with compensation.7. On the other hand learned counsel for respondent urged that Ext.A5 policy was obtained by complainant suppressing his pre-existing diseases and he is not entitled to any claim under that policy as it is void.8. Now that the Zonal Review Committee of opposite party entertaining the appeal of complainant against the rejection of claims had allowed the claims under four policies and upheld only the rejection of the claim under the last policy (Ext.A5) issued to him on 22.1.2010 for the sum of Rs.5 lakhs (Rupees Five Lakhs) ,the only question surviving for consideration in this appeal is whether appellant is entitled to get accident benefits under A5 Policy as well.9. Opposite party has produced copy of proposal form signed by the applicant for obtaining Ext.A5 Policy. Ext.B5 is a photo copy of his proposal form. Suppressing his pre-existing diseases of “Ankylosing Spondylitis with kyphotic deformity of neck with stiff spine and restrictive lung disease” and making false declaration he obtained Ext.A5 policy is the case of opposite party to reject his claim. In Ext.B5 proposal form to the questions over his personal history, particularly over his general physical conditions and health, he has affirmed that his usual state of health was good and that he was not suffering from any ailment pertaining to liver, stomach, heart, kidney, brain, nervous system or any other disease. To the question whether he had any bodily defect or deficiency and also any accident or injury he answered them in the negative. He also made a declaration in the proposal form that he had given answers to the questionnaire after fully understanding the questions and they were true and complete in every particular and he had not withheld any information. He also agreed and declared that the statements made and the declaration would be the contract of assurance between him and opposite party and if any untrue statement was made then the contract would be null and void. Pertinent question therefore is whether he had any pre-existing disease and was there any suppression or withholding of information over any preexisting disease when he made the declaration as above.10. Treatment records of appellant Ext.A9 and A10, after he sustained spinal fracture on 18/3/2010 clearly demonstrate that before sustaining such fracture he was suffering from ankylosis spondylitis with kyphotic deformity with stiff neck and lung disease. Ext.A9 treatment certificate issued by Baby Memorial Hospital where he was admitted on the very day of sustaining the spinal fracture states thus: “He is a known case of Ankylosing Spondylitis with kyphotic deformity of neck with stiff spine and restrictive liung disease”. Ext.A10 discharge summary issued from that hospital narrates the history of his diseases thus :”Twisting injury to the neck while doing exercise on 18.03.2010 around 7 a.m c/o pain neck with inability to move both lower limbs and hands . c/o absence of sensation below neck. He is a known case of Ankylosing Spondylitis with kyphotic deformity of neck with stiff spine. He was doing regular exercises to improve the mobility of spine. Now c/o pain and inability to move both upper and lower limbs following injury while doing exercises……………..” Appellant later continued his treatment in Christian Medical College, Velloor. Ext.A11 discharge summary issued from that hospital also states that he had history of Spondylitis 3 years back and he was receiving treatment.11. Appellant examined as PW.1 has asserted that the history of his illness recorded in the case records referred to above in two different hospitals are not based on any statement from him, and that he had no pre-existing diseases. The above treatment records were produced by complainant to substantiate his claim for the sums covered by the Policies and also for compensation. Needless to point out the doctors in the above two hospitals have no axe to grind against appellant to record false statements over his pre-existing illness in his treatment/discharge certificates. After sustaining spinal fracture he was rushed to Mims Hospital and, later, on the same day he got admitted in Baby Memorial Hospital. Evidently he was having continuous treatment for his pre-existing illness for Ankylosing Spondalitis in that hospital and for continuity of treatment he went to that hospital. Entries in the treatment records/discharge summary spell out that he had pre-existing diseases of Ankylosing spondalitis with kyphotic deformity of neck with stiff spine much earlier to submitting of Ext.B5 proposal for Ext.A5 policy. He had suppressed material facts over his illness and made false declaration in Ext.B5 proposal submitted on 18.01.2010 on the basis of which A5 Policy was issued on 20.1.2010. False answers given to the questions covered under clause 11 of the proposal and false declaration made by him render the policy void and opposite party was fully justified in rejecting the claims under that policy. Any type of life insurance is based on a bilateral contract founded on the principle of Ubberimae Fidei meaning “utmost Good Faith”. That legal doctrine governs insurance contracts. All parties to an insurance contract must deal in Good Faith, making a full declaration of all material facts in the insurance proposal. So far as an insurance contract is concerned a higher duty is expected from parties than from parties to other contracts to ensure the disclosure of all material facts so that the contract may accurately reflect the actual risk being undertaken. The principles underlying this rule were stated by Lord Mansfield in the leading case “Carter V. Boehm (1766) 97 ER 1162:“Insurance is a contract of speculation…………The special facts, upon which the contingent chance is to be computed, lie most commonly in the knowledge of the insured only: the under-writer trusts to his representation, and proceeds upon confidence that he does not keep back any circumstances in his knowledge, to mis lead the under-writer into a belief that the circumstance does not exist…….. Good Faith forbids either party by concealing what he privately knows, to draw the other into a bargain from his ignorance of that fact, and his believing the contrary”The insured must reveal the exact nature of the potential of the risks that he transfers to the insurer, and the insurer must make sure that the potential contract fits the needs of, and benefits, the insured. Highest level of utmost good faith is considered the foundation of insurance.Every term of contract must be based on good faith and there is no material suppression. Complainant who had pre-existing diseases suppressing them made the proposal with false declaration and obtained A5 policy. Policy so obtained is void and no benefits thereof can be claimed. The District Forum rightly and correctly upheld the rejection of his claim under Ext.A5 policy and dismissed the complaint.Appeal is devoid of any merit and it is dismissed with costs of the opposite party quantified at Rs.10000/- realizable from Complainant.