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Future Generali India Life Insurance Co. Ltd. Petitioner(S) v. Harinder Udayraj Singh (S).

National Consumer Disputes Redressal Commission

Jan 10, 2020

Judgment

Subsequent
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Concise Analytical Summary of the Opinion — Future Generali India Life Insurance Co. Ltd. (Revision Petition)

Factual and Procedural Background

The revision petition was filed by Future Generali India Life Insurance Co. Ltd. against the State Consumer Disputes Redressal Commission, Maharashtra's order dated 14.09.2016 in FA No. A/16/239. The deceased (the wife of the complainant) had taken an insurance policy (Policy No. 00633433) and paid two premiums; the complainant was the nominee. The deceased was admitted to L.T.M.G. Hospital, Sion, and, according to the complainant, was diagnosed with a kidney stone and jaundice. The complainant alleges that the hospital transfused A+ blood though the deceased's blood group was B+, and that this wrong transfusion caused her death on 10.10.2011.

The complainant submitted a death claim to the insurer on 20.12.2011; the insurer repudiated the claim by letter dated 02.02.2012. The complainant filed a consumer complaint seeking Rs.3,19,600 as the claim amount, Rs.1,50,000 as compensation for mental agony, and Rs.20,000 as costs. The District Forum proceeded ex parte against the insurer (the insurer did not appear despite service), found deficiency in service and partly allowed the complaint (order dated 30.11.2015), directing payment of Rs.3,19,600, compensation of Rs.25,000 and costs of Rs.15,000 with 6% p.a. interest for delay. The insurer's appeal to the State Commission was dismissed on 14.09.2016. The insurer then filed the present revision petition.

Legal Issues Presented

Whether the complaint before the District Forum (and subsequently the State Commission) was maintainable in view of an earlier complaint filed against the hospital — i.e., whether Section 10 of the Code of Civil Procedure, 1908 (doctrine of res sub judice) prevented the second complaint against the insurer.
Whether the insurer validly repudiated the insurance claim on the ground of suppression of material information in the proposal form (specifically regarding past illness/admission for jaundice) and whether such suppression disentitles the nominee to the insurance claim.
Whether the death of the life assured due to transfusion of the wrong blood group should be characterised as an accident for the purposes of the insurance claim.

Arguments of the Parties

Petitioner's (Insurer's) Arguments

There was suppression of material information in the proposal form; the life assured had been admitted to a hospital for obstructive jaundice prior to the proposal form and did not disclose this, rendering the insurance void ab initio and justifying repudiation.
The complainant had filed two complaints arising from the same cause of action: one (112 of 2012) against the hospital for medical negligence and another (309 of 2012) against the insurer. This, it was argued, violates Section 10 CPC and renders the second complaint not maintainable.
The proposal form (filled 01.10.2010) contained negative answers to health questions (columns 9.3, 9.5 and 9.6), and these were allegedly false given prior hospital admission (certificate dated 01.04.2010 showing admission on 31.03.2010 for obstructive jaundice) and leave records.

Respondent's (Complainant's) Arguments

The first complaint was against the hospital for medical negligence (wrong blood transfusion); the second complaint was against the insurer for payment under the insurance policy — these are distinct causes of action and therefore separate complaints were maintainable.
Jaundice is not necessarily a permanent disease and can be temporary; once cured it is not required to be disclosed in the proposal form according to the complainant's counsel.
The insurance policy covered the principal sum and accidental benefit (together resulting in Rs.3,19,600) and the fora below correctly allowed the claim. Concurrent findings of fact by the District Forum and State Commission should not lightly be interfered with on revision.
Leave records relied upon by the insurer did not conclusively prove continuous treatment for a pre-existing disease that would necessitate disclosure or disentitle the claim.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Sulbha Prakash Motegaonkar And Ors. vs. Life Insurance Corporation of India, Civil Appeal No. 8245 of 2015, decided 05.10.2015 (Supreme Court)	The Supreme Court held that concealment of an ailment that was not life‑threatening and had no causal connection with the death of the insured could not justify repudiation of the insurance claim; concealment of such non-material ailments does not disentitle beneficiaries from the claim.	The court relied on this authority to conclude that failure to disclose a past episode of jaundice (a non‑permanent disease not shown to have caused the death) would not disentitle the complainant to the insurance claim; consequently, repudiation on that ground was not justified.

Court's Reasoning and Analysis

The court reviewed the record and heard counsel for both sides. The analysis proceeded in distinct steps:

Maintainability under Section 10 CPC: The court examined the insurer's contention that two complaints arising from the same cause of action violated Section 10 CPC. It found that the first complaint was against the hospital for medical negligence while the second complaint was solely against the insurer for payment under the policy. Although the underlying event (death by alleged wrong transfusion) is common, the issues in the two complaints were different. Therefore, Section 10 CPC did not bar the insurer's liability case; no violation was found.
Assessment of alleged suppression in the proposal form (questions 9.3, 9.5 and 9.6): The court analysed each question and the insurer's allegations.
- Q.9.3 (investigations in last 3 years): The insurer did not identify any specific investigation that the life assured had undertaken in the prior three years. The court found no evidence that omission of a blood test report (if any) was material such that it would disentitle the claimant to the whole claim.
- Q.9.5 (treatment for specified illnesses including liver or gastrointestinal disorders): The court observed jaundice is not necessarily a permanent disease and, once cured, does not permanently impair fitness. Applying the reasoning in Sulbha Prakash Motegaonkar (supra), the court concluded that non-disclosure of a past jaundice episode, which was not shown to be life-threatening or the cause of death, could not disentitle the complainant to the claim.
- Q.9.6 (hospitalisation/treatment for more than 7 days or operations): The insurer's hospital certificate indicated only a two‑day admission. The court found no proof of hospitalisation exceeding seven days; thus the negative answer was held to be correct and not a ground for repudiation.
Characterisation of death as an accident: The District Forum and State Commission had treated the death from transfusion of the wrong blood group as an accident. The court concurred with that characterisation and accepted that, in light of that finding and the absence of a causal link between the past jaundice and death, the insurer's repudiation based on alleged non-disclosure was not tenable.
Relief and modification of awards: On the basis of the above, the court found that while the information about jaundice was not disclosed, it was not sufficiently material to disentitle the complainant to the insurance claim. However, the court set aside the interest awarded by the District Forum at 6% p.a. and also set aside the compensation amount of Rs.25,000 previously awarded by the District Forum. The remainder of the District Forum's order was modified accordingly and directed to be complied with by the insurer within a stipulated period.

Holding and Implications

MODIFIED — The revision petition resulted in modification of the orders below rather than wholesale acceptance of the insurer's contentions.

Holding (core rulings):

The court held that Section 10 CPC did not bar the complainant's action against the insurer because the earlier complaint against the hospital raised different issues; the insurer's maintainability objection failed.
The court held that alleged non-disclosure of a past episode of jaundice in the proposal form did not disentitle the complainant from the insurance claim, applying the principle in Sulbha Prakash Motegaonkar (supra).
The court agreed with the fora below that the death by transfusion of the wrong blood group amounted to an accident and therefore supported liability under the policy as assessed by the District Forum (subject to modification detailed below).
The interest awarded by the District Forum at 6% p.a. and the compensation of Rs.25,000 awarded by the District Forum were set aside by the court.
The District Forum's order, as modified by the court, was directed to be complied with by the insurer within 45 days of service of the order; failure to comply would attract interest at 9% p.a. from the date of this order until actual payment.

Implications:

Direct effect: The insurer is directed to comply with the District Forum's order as modified. The principal claim amount awarded earlier remains enforceable subject to the modifications noted (removal of the 6% interest award and the Rs.25,000 compensation award). The insurer faces a higher post-order default interest (9% p.a.) if it fails to make payment within 45 days.
Broader precedent: The court expressly relied on the Supreme Court authority (Sulbha Prakash Motegaonkar) to emphasise that non‑disclosure of a non‑life‑threatening, cured ailment not causally connected to the insured's death does not automatically disentitle beneficiaries to insurance proceeds. The opinion did not purport to lay down a new legal principle beyond applying that precedent.

Order signed by PREM NARAIN, Presiding Member.

Show all summary ...

This revision petition has been filed by the petitioner Future Generali India Life Insurance Co. Ltd., against the order dated 14.09.2016 of the State Consumer Disputes Redressal Commission, Maharashtra passed in FA No.A/16/239. Brief facts of the case are that the deceased wife of the complainant had availed Insurance2. Policy No.00633433 from opponent by paying the premium amount on 15/10/2010. She had paid two premiums of the policy. The complainants name was entered as nominee of the insured in the policy. As the deceased wife of the complainant felt uneasy she was admitted to L.T.M.G. Hospital, Sion. According to the complainant, she was diagnosed of having a kidney stone and jaundice. It is also stated that the hospital has given her blood of A +ve group whereas her blood group was B +ve. Because of giving the blood of different blood group the wife of the complainant succumbed to death on 10/10/2011. The complainant submitted the death claim to the opponent insurance company on 20/12/2011. The opponent insurance company has repudiated the insurance claim by their letter dated 02/02/2012. Alleging that not sanctioning the claim of the complainant amounts to deficiency in service on the part of the opponent, the complainant filed consumer complaint praying that the opponent be directed to pay an amount of Rs.3,19,600/- as the claim, Rs.1,50,000/- as compensation for mental agony and costs of Rs.20,000/-. The complaint was admitted and the opponent was issued with a notice. However, despite3. of service of notice the opponent failed to appear before the Forum and hence, the complaint was proceeded ex-parte against the opponent. The District Forum after going through the complaint, the evidence filed by the complainant on affidavit and the pleadings of the Advocate came to the conclusion that there is deficiency in service on the part of the opponent and partly allowed the complaint directing the opponent to pay an amount of Rs.3,19,600/-, compensation of Rs.25,000/- for mental agony and costs of Rs.15,000/- to the complainant within a period of one month failing which the amount will carry an interest @6% per annum till realisation by order dated 30.11.2015. The opponent Insurance Company preferred an appeal before the State Commission, however, the appeal was dismissed vide order dated 14.09.2016. Hence the present revision petition.4. Heard the learned counsel for the parties and perused the record. Learned counsel for the5. petitioner stated that there was suppression of material information in the proposal form and that is why insurance claim was repudiated. Learned counsel stated that the complainant filed first complaint being 112 of 2012 on 07.05.2012 alleging medical negligence against the hospital. The Insurance Company was not made party in that complaint case. After some time, another complaint being 309 of 2012 was filed on 25.07.2012 against the insurance company where the hospital was not made a party. Thus, the respondent/complainant has filed two complaints for the same cause of action. Learned counsel for the petitioner also argued that if one complaint/suit is pending in any court, another suit involving any of the issues which are being considered in the first complaint, cannot be filed as per the provision of Section 10 of the Code of Civil Procedure, 1908 (CPC). Hence, the present complaint was not maintainable. The District Forum passed an ex-parte order against the petitioner herein and in appeal, the6. State Commission dismissed the appeal by observing that the transfusion of blood of wrong blood group was an accident. Learned counsel argued that there was a suppression of material information while filling the proposal form. The proposal form was filled on 01.10.2010 whereas the life assured was admitted in the hospital on 31.03.2010 for few days as evident from the certificate given on 01.04.2010 by Manah-Sneh Maternity & Medico Surgical Hospital. In this certificate it has been clearly stated that the life assured was admitted on 31.3.2010 as she was suffering from obstructive jaundice. The life assured had not given this information in the proposal form and therefore, the insurance was ab initio void, hence the claim was not payable. Learned counsel further argued that the life assured has taken leave for treatment of her disease. On the other hand, learned counsel for the respondent/complainant stated that the first7. complaint was filed for medical negligence on the part of the hospital as wrong blood was transfused. Instead of B+ blood, A+ blood was given which ultimately caused the death of the life assured. The second complaint has been filed against the insurance company for the insurance claim. These are two different causes of action and hence two separate complaints have been filed. The compensation granted in one complaint cannot affect the compensation to be granted in the second complaint. The insurance claim will be governed by the insurance policy. The policy is for Rs.1,59,800/- along with accidental benefit for the same amount. Accordingly, the District Forum has allowed the claim of Rs.3,19,600/-. It was further argued by the learned counsel for the complainant that jaundice is not a8. permanent disease and it may be caused by water contamination. Once the person is cured from jaundice, the person is just like any other person. As this was a temporary disease for some time, it was not necessary to report in the proposal form. The life assured took leave on many counts and therefore, if one application is given for leave for on account of illness, it cannot be said that the life assured has taken all the leaves for treatment of the disease. Hence, the leave record submitted by the insurance company does not prove anything. It was also argued by the learned counsel for the complainant that the fora below have given9. concurrent finding of facts and scope under the revision petition is quite limited in such cases. The facts cannot be reassessed by this Commission in the revision petition. I have carefully considered the arguments advanced by both the learned counsel for the10. parties and have examined the material on record. The present complaint was filed before the State Commission solely against the Insurance11. Company for the insurance claim as per the policy taken by the deceased life assured (DLA). The first complaint was filed against the hospital for medical negligence and therefore, I do not see any violation of Section 10 of the CPC as the issue involved in both the complaints are different, even though the cause of action may be the same i.e. the death of the DLA by wrong transfusion of blood. So far as the present complaint is concerned, the petitioner has filed this revision petition on12. the ground that the DLA was suffering from jaundice and admitted in a Hospital. The certificate dated 01.04.2010 given by the hospital Manah-Sneh Maternity & Medico Surgical Hospital does not clearly specify as to for what period DLA was in the hospital. In the leave record also, there are a few applications where the leave has been taken on the ground of some illness. I agree with the contention of the learned counsel for the complainant that jaundice is not such a disease, which was required to be mentioned in the proposal form because a person becomes completely fit after the disease is cured. This is all the more important because the death has not occurred due to jaundice. If the cause of death is different from the alleged pre-existing disease, the issue of pre-existing disease has to be considered in this light. Honble Supreme Court in Sulbha Prakash Motegaonkar And Ors. Vs. Life Insurance Corporation of India, Civil Appeal has held the following:-No.8245 of 2015, decided on 05.10.2015 (SC)

We have heard learned counsel for the parties. It is not the case of the Insurance Company that the ailment that the deceased was suffering from was a life threatening disease which could or did cause the death of the insured. In fact, the clear case is that the deceased died due to ischaemic heart disease and also because of myocardial infarction. The concealment of lumbar spondylitis with PID with sciatica persuaded the respondent not to grant the insurance claim. We are of the opinion that National Commission was in error in denying to the appellants the insurance claim and accepting the repudiation of the claim by the respondent. The death of the insured due to ischaemic heart disease and myocardial infarction had nothing to do with this lumbar spondylitis with PID with sciatica. In our considered opinion, since the alleged concealment was not of such a nature as would disentitle the deceased from getting his life insured, the repudiation of the claim was incorrect and not justified.

The petitioner Insurance Company has alleged suppression of material information in13. respect of answers given by the life assured under column No.9.3, 9.5 and 9.6 of the proposal form. The question and answers are mentioned below:- Q No.9.3: In the past 3 years, have you undergone or been advised or are likely to undergo within next 30 days any medical investigation? Answer: No. Q No.9.5: Have you ever been treated for symptoms of cancer/ tumour/cyst, diabetes, heart related disease, high blood pressure, urinary or kidney disorder, liver or gastrointestinal disorder, epilepsy, psychiatric or nervous system disorder, respiratory or blood disorder, any physical deformity, partial or complete blindness, any eye disorders or hearing abnormality, mental retardation, AIDS, or tested positive for HIV? Answer: No. Q No.9.6 : Have you ever met with an accident or any other diseases not mentioned above which required treatment or hospital care for more than 7 days or undergone any surgical operation at a hospital or clinic or undergone any investigations with other than normal or negative results? Answer: No. In respect of question No.9.3, the question relates to investigations got done in previous14. three years. The Insurance Company has not come up with any specific allegations that a particular investigation was got done by the life assured during the previous three years. It is quite possible that the jaundice may have been diagnosed on the basis of the blood test, however, if the blood test was not reported in the proposal form, it cannot disentitle the complainant from the whole insurance claim. Similarly in respect of question no.9.5, the life assured could have given information in15. respect of the disease of jaundice as the same can be covered as a disease of liver disorder. As has already been observed that jaundice is not a permanent disease and if the information in respect of the jaundice was not given by the life assured after being cured, the same cannot disentitle the complainant for the total insurance claim in the light of the decision of the Honble Supreme Court in Sulbha Prakash Motegaonkar And Ors. Vs. Life Insurance Corporation of India (supra). Coming to the third question No.9.6, I find that the answer given for this question is correct as the Insurance Company has not filed any proof that the life assured was admitted in any hospital for about seven days. The certificate given By the Manah-Sneh Maternity & Medico Surgical Hospital is only for two days and therefore, it is not required to be mentioned against this column. The State Commission and District Forum have treated the death of the life assured from16. transfusion of blood of wrong blood group as an accident. I agree with the view taken by the fora below. From the above examination, it is found that the information of jaundice was not given in the proposal form. However, it was not that material as could disentitle the complainant to get the total insurance claim. In this background, the interest awarded by the District Forum @6% p.a. is set aside and the compensation of Rs.25,000/- awarded by the District Forum is also set aside. The order of the District Forum and the State Commission stand modified accordingly. The order of the District Forum as modified by this order be complied by the petitioner Insurance Company within a period of 45 days from the date of receipt/service of this order, failing which, an interest @9% p.a. shall be paid by the Insurance Company from the date of this order till actual payment. ...................... PREM NARAIN PRESIDING MEMBER