Gurdev Singh, President:
1. This complaint has been filed by Meena Bhalla, complainant, widow of Ashok Bhalla, deceased, for directing the OPs to settle her claim of Rs.29,84,699/- as per the insurance policy and to pay that amount to her along with interest at the rate of 12% per annum and to pay her Rs.5,00,000/- as damages for the harassment and mental torture suffered by her at their hands due to deficiency in service and Rs.22,000/- as costs of litigation. She averred therein that the OPs are Insurance Company and are providing service of insuring the lives of the customers/consumers against payment of premium. The deceased got his life insured from them vide Unit Linked Policy bearing No.418763397 and Proposal No.418763397 with effect from 26.2.2006 and the sum insured was Rs.29,84,699/- and a sum of Rs.60,000/- was obtained from him as the premium for the first quarter. After having minor health problem/illness he died suddenly on 3.3.2006 leaving behind her as the nominee in the insurance policy. By virtue of nominee, she is entitled to the amount due under the insurance policy as per the terms and conditions contained therein. Being the nominee, she informed the OPs immediately after the death of the deceased. OP No.3, vide letter dated 11.5.2006, demanded certain documents which were accordingly supplied by her for the settlement of the death claim. Her claim was declined, vide letter dated 27.7.2007 in which it was alleged that the deceased was suffering from hypertension from the past one year and was on Amtas 10 mg. daily and Right side Obstructive Uropathy from the last six months before his death. It was also alleged that he was under the treatment of Dr. Sanjay Mittal and some false treatment certificate dated 10.12.2006 has been procured by the OPs in collusion with the said doctor in order to avoid their liability for making the payment of the death claim. Her valid claim has been declined illegally, arbitrarily and without sufficient cause. Only one cheque of Rs.39,359/- was issued to her by the OPs which has not been got encashed till the filing of the complaint. At the time of obtaining the insurance policy, the deceased was enjoying very sound and good health and was not suffering from any disease of any kind. He was referred by the OPs to a competent doctor who medically examined him and the insurance policy was issued only after that medical examination. On account of unexpected death of the deceased, she suffered mentally and her health deteriorated due to depression and mental agony for which she remained under medical treatment since May 2006. On account of the said act of the OPs, in refusing her valid claim, her health further deteriorated and she suffered from serious tension, mental torture, pain and agony and after recovering from that illness, she approached her advocate and served legal notice dated 28.7.2007 upon the OPs.
2. The OPs contested the claim of the complainant. They admitted that the deceased obtained life insurance policy from them for Rs.29,84,699/- and paid the premium of Rs.60,000/- for the first quarter and that they repudiated the claim made by the complainant on the grounds mentioned in the letter so served upon the complainant. They also admitted that it was 'Life Maker Unit Link Investment Plan' for which the proposal form was filled up on 4.2.2006 and this insurance policy was effective from 16.2.2006 to 26.2.2006 and that the complainant submitted her claim intimation on 28.4.2006 for the death of the deceased, which took place on 3.3.2006. They denied the other contentions of the complainant and averred that there was no negligence or deficiency of service on their part as contemplated by Section 2(1)(g) of the Consumer Protection Act, 1986 (in short 'the Act') while dealing the claim of the complainant. The deceased had obtained the contract of insurance by suppressing material information about his health. The pre-existing disease prior to the taking of the policy was in the knowledge of the deceased but he concealed the same. There was wilful concealment of vital information at the proposal stage. The deceased was suffering from hypertension from the past one year and was on Amtas 10 mg. daily and was also having right side obstructive uropathy from the last six months. He was under the treatment of Dr. Sanjay Mittal, Nephrologist of National Kidney Hospital, Jalandhar and that fact was duly confirmed by that doctor. The cause of his death was right side obstructive uropathy, septicemia with acute renal failure which is directly related to the nondisclosure of the said material fact by the deceased. These items were included in the health declaration of the proposal form and the deceased had answered those items in the negative. At the time of filling up of the medical form he was specifically asked whether he was suffering from hypertension or high blood pressure or any kidney or bladder disorder, stones or prostate disorder and he gave his reply in the negative by duly signing that declaration. During the investigation that declaration was found to be false. The deceased had signed the declaration at the time of filling up of the proposal form that he had made complete true and accurate disclosure of all the facts and had not withheld any information that may enable them to make an informed decision about the acceptability of the proposal and that in case any such information given is found to be wrong or inaccurate or there was any omission on his part in disclosing the relevant information, they shall have a right to cancel the policy and forfeit the payments received. After that declaration was found to be false, they were very much within their right to repudiate the claim of the complainant. It is well settled that the contract of insurance is a contract of uberrima fides and there must be complete good faith on the part of the life insured. Thus, the deceased was under a solemn obligation to make the full disclosure of all the material facts which were relevant to them to take into account while deciding whether the proposal was to be accepted. The deceased is, thus, guilty of the breach of the principle of 'utmost good faith' which makes the contract entered into between them as nullity and void ab initio. All the documents which the complainant was asked to submit were not supplied for the reasons best known to her. The delay in repudiating the claim occurred due to the delay in the intimation of the death of the deceased and further in not supplying the requisite documents. The death took place on 3.3.2006 whereas the intimation was sent to them on 28.4.2006. The doctor who examined the deceased at the time of consideration of the proposal form was not having any means of knowing the serious ailment from which he was suffering in the absence of the information furnished to that effect by the deceased himself. This complaint involves complicated questions of fact and law which cannot be adjudicated in summary jurisdiction of this Commission as envisaged under the provisions of the Act. They also challenged the territorial and pecuniary jurisdiction of the Commission and prayed for the dismissal of the complaint.
3. Both the sides supported their respective averments by affidavits and the documents.
4. We have carefully gone through the averments of the parties, the evidence produced by them and have heard learned counsel on their behalf.
5. It was submitted by learned counsel for the complainant that from the evidence produced on the record it firmly stands proved that the deceased was not suffering from any disease at the time the insurance policy was obtained and a correct declaration was submitted by him. He was duly medically examined by the approved doctor of the OPs and even he did not find that the deceased was suffering from any such disease and he had found him medically fit and only thereafter he had given a medical certificate to that effect. From the evidence of the complainant it also stands proved that the deceased died suddenly after brief illness and had never died of the disease as alleged by the OPs. In these circumstances, the OPs were not justified in repudiating the claim of the complainant to which he was entitled to as per the terms and conditions of the insurance policy. By making a delay in paying the insurance amount, the OPs are also liable to pay compensation as on account of that delay the complainant suffered physically and mentally. He prayed that the complaint be accepted and the directions as contained in the prayer of the complaint be issuedto the OPs.
6. On the other hand, it was submitted by the learned counsel for the OPs that at the time of filling up of the proposal form, the deceased was suffering from hypertension and uropathy obstruction and was on medication. He submitted a wrong declaration that he was not suffering from any such disease by specifically giving answers in ‘no’ to the questionnaire contained in the declaration form. Even before the doctor, he made the same declaration and it was on the basis of that declaration that doctor declared him medically fit. The diseases from which he was suffering were not of such nature that the same could have been detected by simple medical examination. No such special examination was possible nor was done by the doctor before he gave his certificate regarding medical fitness. It was during the investigation conducted in regard to Section 45 of the Insurance Act that it was found that the deceased was suffering from those diseases and was under medical treatment. The making of wrong declaration makes the insurance contract null and void as by making a false declaration and by concealing the factum of previous illness thedeceased committed the breach of trust of ‘utmost good faith’ which is one of the essentials of the insurance contract. He also submitted that the complainant made a false statement that the deceased died suddenly after brief illness in the house itself whereas the evidence produced by the OPs establishes that two days before his death he was admitted in a Kidney Hospital at Jalandhar and remained under treatment for those two days and ultimately died in the hospital itself. When the complainant can go to such an extent to make a false statement, how any reliance can be placed upon her affidavit? He prayed for the dismissal of the complaint.
7. It is well settled law that a contract of insurance is a contract of uberrima fides and there must be complete good faith on the part of the life assured. It is based upon the principle of 'utmost good faith'.
The person entering into such a contract is under a legal obligation to make true and full disclosure and not to make any concealment of fact for obtaining the insurance policy. Therefore, the deceased was under a legal obligation to disclose if he was suffering from any pre-existing disease at the time he filled up the proposal form Ex.R-1. He was required to make a full and true disclosure of all the facts which might have affected the mind of the OPs to enter into such a contract. The proposal form Ex.R-1 contains specific portion under the following head:-
'Are you now or have you ever been diagnosed with any of the following conditions? If yes, please provide details or attach relevant questionnaire.'
8. That portion also contains the following two items:-
'(ii) Hypertension or high blood pressure.
(xi) Any kidney or bladder disorder, stones or prostate disorder.'
9. The following declaration is appended to this proposal form:-
'I/We hereby declare that I/We fully understand the meaning and scope of the Proposal form and the questions contained above and am submitting the completed proposal of my/our own volition and confirm that I/We have have not been induced by anyone to make the Proposal. I/We have been explained by the agent of MNYL of the nature of questions and the importance of disclosing all material information. I/We further declare that the statements and declarations herein shall be the basis of a contract between me/us and the Company and that I/We have made complete, true and accurate disclosure of all the facts and circumstances as may be relevant, and have not withheld any information that may be relevant to enable the Company to make an informed decision about the acceptability of the Proposal. Should any statement/s be incomplete, wrong or inaccurate, or should there be any omission/s on my/our part in disclosing the relevant information, the Company shall have the right to cancel the Policy, if issued, and forfeit any payments received.
I/We undertake to notify the Company, forthwith in writing, any change in any of the statements made in the Proposal subsequent to the signing of this Proposal and acceptance of risk and issuance of Policy by the Company.'
10. This declaration was duly signed by the deceased and, thus, according to him he had made an accurate disclosure of all the above said facts and circumstances.
11. The medical examination report has been proved as Annexure R2. This report was issued by Dr. Rupinder Singh, M.D., Medicines. It is very much clear from this report that the doctor gave the report on the basis of the physical examination of the deceased. It also contains the report of the urine but it cannot be inferred therefrom that there was such examination of the diseases which might have helped the doctor in discovering the diseases which were made basis of the repudiation of the claim.
12. The onus was upon the OPs to prove that the deceased had furnished false information as the complainant in her affidavit deposed that the deceased was not suffering from any such diseases at the time of filling up of the proposal form. For discharging that onus, the Ops have relied upon the investigating report Annexure R-7. According to Section 45 of the Insurance Act, no policy can be called in question on the ground of misstatement after two years from the date on which it was effected. However, before the expiry of two years the policy can be questioned on the ground that the proposal for insurance or any report of the medical officer leading to the issuance of the policy was inaccurate or false. It is incumbent upon the Insurance Company to show that such statement was of material matter or suppressed fact which it was material to disclose and the policy holder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose. The Insurance Company can get the matter investigated through an investigating agency in order to show that the insured concealed the material information or made a false declaration in respect of the pre-existing disease. How much reliance can be made upon such investigating report depends upon the facts and circumstances of each case and the supporting documents submitted therewith. The complainant may allege that this investigation report cannot be taken into consideration as it is not supported by any documents but she cannot escape so far as the hospital treatment certificate Annexure R-8 is concerned. This certificate was issued by Dr. Sanjay Mittal of National Kidney Hospital, Jalandhar, who was summoned as a witness by the OPs.
That doctor appeared before this Commission with the medical record and on the request of the OPs that record was kept on the file. No objection was taken by the complainant at that time, as is clear from the interim order dated 19.7.2011, that such a record cannot be placed on the file or that the same in the absence of the examination of the doctor cannot be treated as evidence. This record is very much relevant for deciding the controversy in question regarding furnishing of the false information and the suffering of the deceased by preexisting disease which ultimately proved to be the cause of his death. This record shows that he was admitted in National Kidney Hospital, Jalandhar on 1.3.2006. This record stands connected with the deceased from the 'consent for admission' contained therein. The consent for admission was given by the complainant herself as his wife and she had appended her signatures on that consent form. That signature resembles with her signatures on her affidavit. It is very much apparent to even the naked eye that there are a number of similarities in those signatures and no such dissimilarity. In these circumstances, we have no hesitation in concluding that the complainant put her signatures on the consent form for the admission of the deceased in that hospital. As per this record, he was previously admitted in this very hospital on 12.2.2006 when he complained of nausea. As per the history recorded therein, there was bladder stone for which open surgery was done 30 years back. There was solitary kidney on the right side and the deceased was suffering from right side obstructive uropathy from the last six months. That firmly establishes that he was suffering from that disease at the time he submitted the proposal form. It is a case where there is total concealment of facts by the insured and by doing so he committed breach of the declaration submitted by him for obtaining the insurance policy.
13. The complainant has tried to make out a false case that the deceased died suddenly after short illness in the house itself and his death was got recorded with the Registrar, Births and Deaths at Phagwara. The position as clear from the record is otherwise. He remained admitted in the above said hospital till his death on 3.3.2006. He was declared dead on that date at 1.15 P.M. and his dead body was given to his attendants.
14. From the above
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discussion, it stands proved that the deceased was having only one kidney and had been operated for the stone in the kidney and was also suffering from obstruction of uropathy from the past six months before obtaining of the policy. He concealed all these material facts for obtaining the insurance policy and made a false declaration that he was not suffering from any such disease. He died within days of obtaining of the insurance policy and the only motive on his part appears to be to obtain such a policy by the concealment of the material facts. It was held by the Hon’ble Supreme Court in P.C. Chacko and another v. Chairman, Life Insurance Corporation of India and others (AIR 2008 SUPREME COURT 424) that there are three conditions for application of second part of Section 45 of the Insurance Act which are:- '(a) the statement must be on a material matter or must suppress facts which it was material to disclose; (b) the suppression must be fraudulently made by the policyholder; and (c) the policy-holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose.' 15. In the present case all these three conditions are fulfilled and as such it is to be held that the OPs legally and validly repudiated the claim of the complainant. When the insurance policy itself was null and void on account of furnishing of a false declaration by the deceased, there was no question of payment of any insurance amount under that policy. The complainant is, therefore, not entitled to any insurance amount, compensation or costs of litigation. 16. The complaint is dismissed accordingly. 17. The arguments in this case were heard on 7.2.2013 and the order was reserved. Now, the order be communicated to the parties. 18. The complaint could not be decided within the statutory period due to heavy pendency of court cases.