Sham Sunder (Retd.), President:
1. This appeal is directed against the order dated 23.10.2013, rendered by the District Consumer Disputes Redressal Forum-I, UT, Chandigarh (hereinafter to be called as the District Forum only) vide which, it dismissed the complaint, filed by the complainant (now appellant).
2. The facts, in brief, are that the husband of the complainant took a life Insurance Policy from Opposite Party No.1, valid for the period from 14.01.2010 to 14.01.2035, for the sum assured of Rs.3.00 lacs. The premium of Rs.17,902/-, was paid to Opposite Party No.2, an agent of Opposite Party No.1, on 14.01.2010. The life assured/husband of the complainant, who was working as Software Engineer, in U.S.A., died on 26.06.2011 at The Johns Hopkins Hospital, Baltimore City, U.S.A., while he was under treatment there. Thereafter, the complainant being the nominee of her husband, in the said Policy, lodged the claim, with Opposite Party No.1, on 15.12.2011, alongwith all requisite documents through Opposite Party No.2. However, the complainant was shocked to receive a letter from Opposite Party No.1, after about one year, whereby, it repudiated her claim, on the ground, that her husband/life assured had made deliberate mis-statements and withheld the material information, regarding his health, at the time of filling the proposal form and obtaining the Policy.
3. It was stated that the complainant provided the certificate, issued by the Doctor, who treated her husband, between 21.05.2011 to 25.05.2011. It was further stated that, as per the said certificate, the husband of the complainant was diagnosed with viral syndrome, abnormal lever, enzymes and fevers. He was discharged in a stable condition. The complainant also filed an appeal, before the Zonal Office of the Opposite Parties, but the same was rejected vide Ann.C-4. It was further stated that the proposal form was not filled in by the husband of the complainant, and rather, it was blank, when it was signed by him. It was further stated that the information was filled in, by Opposite Party No.2. It was further stated that repudiation of the genuine claim of the complainant was illegal and arbitrary. It was further stated that the aforesaid acts of the Opposite Parties, amounted to deficiency, in rendering service, as also indulgence into unfair trade practice. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed, directing Opposite Party No.1, to pay Rs.3 lacs, alongwith interest @12% P.A., from the date of death of the life assured; compensation, to the tune of Rs.4 lacs, for mental agony, physical harassment and cost for providing certain medical documents from the Hospital at U.S.A; and cost of litigation, to the tune of Rs.33,000/-.
4. Opposite Party No.1, in its written version, admitted the issuance of Policy, in question, in favour of the husband of the complainant, which was valid for the period from 14.01.2010 to 14.01.2035, for the sum assured of Rs.3.00 lacs. The payment of yearly premium of Rs.17,902/- was also admitted. It was stated that the life assured died, on 26.06.2011, within a period of two years, from the date of obtaining the Policy. The factum of lodging of claim by the complainant, being the nominee of the life assured and its repudiation by Opposite Party No.1, was also admitted. It was further stated that after the receipt of claim documents, from the complainant, it was investigated, as per the claim settlement procedure. It was further stated that the life assured had died in USA. It was further stated that the life assured had been getting treatment, in The Johns Hopkins Hospital, Division of Medical Oncology, 1650 Orleans Street/Crb 290, Baltimore MD 21231-8915. It was further stated that after making correspondence, the said Johns Hopkins Hospital, supplied the discharge summary of the deceased/life assured. It was further stated that during the course of investigation, it was revealed that the life assured (now deceased) had been a known case of (K/C/O) Wegener`s Granulomatosis, and IgA nephropathy since 2009. It was further stated that Wegener`s Granulomatosis is a systematic Granulomatosis vasculitis affecting upper and lower respiratory tract and IgA nephropathy is a major cause of recurrent glomeruar haematuria. It was further stated that the life assured had been getting treatment, for the same since 2009. It was further stated that, as such, the said disease was in the knowledge of the life assured, at the time of filling in the proposal form and signing the same. However, he did not mention the same, in the proposal form, and, as such, concealed the material information, relating to his health, at the time of submitting the same, for getting the Insurance Policy. It was further stated that since the life assured concealed the material information, relating to his ill health, the claim under the Policy was legally and validly, repudiated, as per the terms the conditions of the same. It was further stated that neither there was any deficiency, in rendering service, on the part of Opposite Party No.1, nor it indulged into unfair trade practice. The remaining averments, were denied, being wrong.
5. Opposite Party No.2, in his written version, stated that he being the Agent of Opposite Party No.1 got insured Mandeep Singh (deceased) under the Plan and Term-93/25, for a sum of Rs.3.00 lacs, as per the terms and conditions of the Policy. It was further stated that Opposite Party No. 2, had explained the terms, conditions and benefits of the Policy to the life assured. It was further stated that the proposal form was completed after getting the information, from the life insured, who after reading and understanding the same, signed it at different places. It was further stated that the Policy was issued by Opposite Party No.1, and the claim was also repudiated by it (Opposite Party No.1). It was further stated that Opposite Party No.1, being only an Agent and facilitator, for getting the Insurance Policy, was not at all liable. It was denied that the husband of the complainant, signed the blank proposal form. It was further stated that neither there was any deficiency, in rendering service, on the part of Opposite Party No.2, nor he indulged into unfair trade practice. The remaining averments, were denied, being wrong.
6. The Parties led evidence, in support of their case.
7. After hearing the Counsel for the parties, and, on going through the evidence, and record of the case, the District Forum, dismissed the complaint, as stated above.
8. Feeling aggrieved, the instant appeal, has been filed by the appellant/complainant.
9. We have heard the Counsel for the parties, and have gone through the evidence, and record of the case, carefully.
10. The Counsel for the appellant/complainant, submitted that the District Forum was wrong, in coming to the conclusion, that the life assured (now deceased), suppressed the material facts, at the time of signing the proposal form, that he was not suffering from any pre-existing disease(s). He further submitted that it was for the respondents/Opposite Parties, to produce the documentary evidence, to prove this factum, but they failed to do so. He further submitted that copy of the Certificate of Hospital treatment Annexure R-4, submitted by Opposite Party No.1, could not be said to be an authentic document. He further submitted that, on the other hand, as per the authorization, given by the complainant, copy of the discharge summary Annexure R-7 submitted by the Johns Hopkins Hospital, where the husband of the complainant remained admitted, and, ultimately, died could be said to be an authentic document. He further submitted that this document did not at all state that the life assured was suffering from any preexisting disease. He further submitted that the order of the District Forum, therefore, being illegal and invalid, is liable to be set aside.
11. On the other hand, the Counsel for respondents No.1 and 2/Opposite Parties No.1 and 2, submitted that the husband of the complainant, who was the life assured, suppressed the material facts, at the time of filling in the proposal form, and signing the same. He further submitted that when he was asked the questions, at the time of filling and signing the proposal form, as to whether, he was suffering from any disease, his answer was in the negative. He further submitted that the Certificate of Hospital Treatment Annexure R-4, in respect of the life assured, was obtained by the Opposite Party, from the Johns Hopkins Hospital, U.S.A., which was duly signed by the concerned Doctor. He further submitted that, in Column 7 of this document, it was, in clear-cut terms, mentioned that the life assured had been suffering from Wegener`s Granulomatosis, and IgA nephropathy, and he had been diagnosed for these disease, since 2009. He further submitted that, in this Column, it was also in clear-cut terms, mentioned that the history was given by the patient himself. He further submitted that Annexure R-7 copy of the discharge summary, no doubt, did not mention about the preexisting disease, from which the life assured/husband of the complainant was suffering, yet, this document is required to be read, in-conjunction with the document Annexure R-4, where the previous history of the disease, from which the life assured was suffering, was given. He further submitted that the claim of the complainant was, thus, legally and validly repudiated. He further submitted that the order of the District Forum, being legal and valid, is liable to be upheld.
12. After giving our thoughtful consideration, to the rival contentions, advanced by the Counsel for the parties, and the evidence, on record, we are of the considered opinion, that the appeal is liable to be dismissed, for the reasons to be recorded hereinafter. It has been repeatedly held that the contract of insurance falls in the category of contract of œUBERRIMAE FIDEI? meaning thereby, a contract of utmost good faith, between the parties. When information, on a specific aspect, is asked for, in the proposal form, the insured is under a solemn obligation, to make a true and full disclosure of the same (information), on the subject, which is within his knowledge. Of course, obligation to disclose, extends only to the facts, which are known to the assured, and not to what he ought to have known. The Hon`ble Supreme Court of India in United Insurance Co. Ltd. Vs. M.K.J. Corporation, III (1996) CPJ 8 (SC)= (1996) 6 SCC 428, laid down the principle of law, that it is a fundamental principle of Insurance Law, that utmost good faith must be observed, by the contracting parties. Good faith forbids either party from non-disclosure of the facts, which the party privately knows, to draw the other into a bargain, from his ignorance of that fact, and his believing to the contrary. To the similar effect, the principle of law, was laid down in Modern Insulators Ltd. Vs. Oriental Insurance Co. Ltd., II (2000) SLT 323 = I (2000) CPJ 1 (SC) . In P.C. Chacko and Anr. Vs. Chairman, Life Insurance Corporation of India and Ors, III(2008) CPJ 78 (SC), it was observed as under:-
11? Section 45 of the Insurance Act reads as under:-
45. Policy not to be called in question on ground of mis-statement after two years- No policy of life insurance effected before the commencement of this Act shall after the expiry of two years from the date of commencement of this Act and no policy of life insurance effected after the coming into force of this Act shall after the expiry of two years from the date on which it was effected, be called in question by an insurer on the ground that a statement made in the proposal for insurance or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the policy, was inaccurate or false, unless the insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policy-holder and that 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.
Provided that nothing in this section shall prevent the insurer from calling for proof of age at any time if he is entitled to do so, and no policy shall be deemed to be called in question merely because the terms of the policy are adjusted on subsequent proof that the age of the life insured was incorrectly stated in the proposal form.
12. Section 45 postulates repudiation of such policy within a period of two years. By reason of the aforementioned provision, a period of limitation of two years had, thus, been specified and on the expiry thereof the policy was not capable of being called in question, inter alia on the ground that certain facts have been suppressed which were material to disclose or that it was fraudulently been made by the policy holder or that the policy holder knew at the time of making it that the statement was false. Statute, therefore, itself provides for the limitation for valid repudiation of an insurance policy. It takes into account the social security aspect of the matter.
13.There are three conditions for application of Second Part of Section 45 of the Insurance Act which are:
œ(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 policy-holder; 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?.
13. The purpose of taking a Policy of insurance is not, in our opinion, very material. It may serve the purpose of social security, but then the same should not be obtained with a fraudulent act, by the insured. Proposal can be repudiated, if a fraudulent act is discovered. The proposer must show that his intention was bonafide. It must appear from the face of the record. In a case of this nature, it was not necessary for the insurer to establish that the suppression was fraudulently made by the policy holder, or that he must have been aware, at the time of making the statement that the same was false or that the fact was suppressed which was material to disclose. A deliberate wrong answer, which has a great bearing on the contract of insurance, if discovered, may lead to the Policy being vitiated in law.
14. In Rampreeti Yadav Vs. U.P.Board of High School and Intermediate Education and Ors, V(2003) SCT 394= JT 2003 (Supplt.I) SC 25, the principle of law, laid down, was to the effect that it is well settled law that mis-representation itself amounts to fraud, in some cases.
15. Keeping in view the principle of law, laid down, in the aforesaid cases, now let us see, as to whether, in the instant case, the insured (now deceased), at the time of taking the Insurance Policy suppressed the material facts, by answering the questions regarding the preexisting disease and his state of health, in the negative, fraudulently, or had made a wrong declaration or not. Copy of the proposal form is Annexure R-2. It is evident from page 44 of the District Forum file, which forms part of Annexure R-2 proposal form, that a specific question was put to the life assured, as to whether, he was suffering from or had suffered from Diabetes, Tuberculosis, High Blood Pressure, Low Blood Pressure, Cancer, Epilepsy, Hernia, Hydrocele, Leprosy or any other disease?. He answered this question, in the negative. He was also put a question, as to what was his usual state of health, to which he answered as œGood?. After giving answers to these questions, the life assured signed the proposal form. Not only this, even the life assured, signed the declaration that œthe foregoing statements and answers have been given by me after fully understanding the questions and the same are true and complete in every particulars and that I have not withheld any information and I do hereby agree and declare that these statement and this declaration shall be the basis of the contract of assurance between me and the life insurance corporation of India and that if any untrue averment be contained therein the said contract shall be absolutely null and void and all moneys which shall have been paid in respect thereof shall stand forfeited to the Corporation?. He also gave certificate, to the effect that he had signed after admitting all the answers to the questions. From the perusal of the answers to the questions, put to the life assured, and referred to above, it is evident, that he had not been suffering from any disease, and that his state of health was good. On the other hand, Certificate of Hospital treatment Annexure R-4 clearly goes to show that the life assured had been suffering from Wegners Granulomatosis, and IgA nephropathy, since 2009. This history was given by the patient himself, i.e. the life assured. There is no reason, to disbelieve this document. This document bears the signatures of the Doctor concerned, in photo-impression. Nothing was produced by the complainant, on record, to prove that this document was not authentic. No doubt, in Annexure R-7, copy of the discharge summary, issued by the Johns Hopkins Hospital, U.S.A., where the life assured remained admitted and underwent treatment, for the disease, in question, the previous history of the said disease was not given/mentioned, yet, as stated above, this document is required to be read, in-conjunction with Annexure R-4. When both these documents are read together, then only one and one conclusion, which can be arrived at, is that the life assured had been suffering from the diseases Wegners Granulomatosis, and IgA nephropathy, since 2009 i.e. before the inception of the Policy. The life assured suppressed the material facts, aforesaid, within his knowledge, fraudulently. On account of answering the questions aforesaid, falsely and suppressing the material facts, fraudulently, by the life assured, within his knowledge, the contract of insurance stood vitiated. Under these circumstances, Opposite Party No.1 was right in repudiating the claim of the complainant. The District Forum was also right, in holding so. 16. The next question, that falls for consideration, is, as to whether, in the absence of the affidavit of the Doctor, Certificate of Hospital Treatment, copy whereof, is Annexure R-4 and the discharge summary, copy whereof, is Annexure R-7, could be taken into consideration or not. In Satwant Kaur Sandhu Vs. New India Assurance Company Ltd., IV (2009) CPJ 8 (SC), in para 22, the Apex Court held as under:-
œAnswers given by the proposer to the two questions were œSound Health? and œNil? respectively. It would be beyond anybodys comprehension that the insured was not aware of the state of his health and the fact that he was suffering from diabetes as also chronic renal failure, more so, when he was stated to be on regular haemodialysis. There can hardly be any scope for doubt that the information required in the afore-extracted questions was on material facts and answers given to those questions, were definitely factors, which would have influenced and guided the respondent - Insurance Company to enter into the Contract of Mediclaim Insurance with the insured. It is also pertinent to note that, in the claim form, the appellant had stated that the deceased was suffering from Chronic Renal Failure and Diabetic Nephropathy from 1st June, 1990, i.e. within three weeks of taking the policy. 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. Apart from the fact that at no stage the appellant had pleaded that the insured was not treated at Vijaya Health Centre at Chennai, where he ultimately died. It is more than clear from the said certificate that information about the medical history of the deceased must have been supplied by his family members, at the time of admission, in the hospital, a normal practice in any hospital. Significantly, even the declaration in the proposal form by the proposer authorises the insurer to seek information from any hospital he had attended or may attend concerning any disease or illness which may affect his health?.
17. In the said case, the Apex Court, without insisting on the affidavit, in support of the certificate, issued by the Doctor, and by relying upon the same, held that the insured was guilty of suppression of material facts, in not disclosing the disease, she was suffering from. Similar principle of law, was laid down, in Puspha Chauhan Vs. Life Insurance Corporation of India, II (2011) CPJ 44 (NC). In view of the principle of law, laid down, in the aforesaid cases, the Certificate of Hospital Treatment, copy whereof, is Annexure R-4 and the discharge summary, copy whereof, is Annexure R-7, could be taken into consideration, even without the affidavit of the Doctors, who prepared the same. The submission of the Counsel for the appellant/ complainant, therefore, being without merit, must fail, and the same stands rejected.
18. Condition no.5 of the œConditions and Privileges within Referred to? of the Insurance Policy, Annexure R-3, reads as under:-
œForfeiture in certain events:- In case the premiums shall not be duly paid or in case any conditions herein contained or endorsed hereon shall be contravened or in case it is found that any untrue or incorrect statement is contained in the Proposal, and Declaration, and connected documents or any material information is withheld, then and in every such case but subject to the provisions of Section 45 of the Insurance Act, 1938, wherever applicable, this Policy shall be void and all claims to any benefit in virtue hereof, shall cease and determine in all moneys that have been paid in consequence hereof shall belong to the Corporation excepting always in so far as relief is provided in terms of the Privileges herein contained or may be lawfully granted by the Corporation?
19. It is evident, from the afore-extracted Condition no. 5 of the œConditions and Privileges within Referred to? of the Insurance Policy, Annexure R-3, that if it was found that any untrue or incorrect statement was contained, in the Proposal, and Declaration, and connected documents or any material information was withheld, then and in every such case but subject to the provisions of Section 45 of the Insurance Act, 1938, wherever applicable, this Policy shall be void and all claims to any benefit in virtue hereof, shall cease and determine in all moneys that have been paid in consequence hereof, shall belong to the Corporation, excepting always in so far as relief was provided in terms of the Privileges herein contained or may be lawfully granted by the Corporation. In the instant case, as stated above, material facts, as mentioned in paragraph number 15 above, within the knowledge of the life assured (now deceased) were fraudulently suppressed and concealed by him. The complainant was, therefore, not entitled to any benefit, under the Policy, being nominee of the life assured, for the reasons aforesaid. The District Forum was also right, in holding so.
20. Respondent No.1/Opposite Party No.1, by legally and validly repudiating the claim of the complainant was not deficient, in rendering service.
21. No other point, was urged, by the Counsel for the parties.
22. In view of the above discussion, it is held that the order passed by the District Forum, being based on the correct appreciation of evidence, and law, on the point, does not suffer from any illegality or perversity, warranting the interference of this Commission.
23. For the reasons recorded above, the appeal, being devoid of merit, must fail, and the same is dismissed, with no order as to costs. The order of the District Forum is upheld.
24. Certified copies of this order, be sent to the parties, free of charge.
25. The file be consigned to Record Room, after completion.