JUSTICE V.K.JAIN (ORAL)
Late Smt. Raj Kumari, mother of the complainant obtained a life insurance policy from the petitioner Corporation for a sum insured of Rs.2,00,000/-, submitting a proposal dated 04.03.2013. She having died on 14.02.2016 at Fortis Hospital, Mohali a claim for the payment of the benefit available under the policy was submitted by the complainant. The claim was rejected vide letter dated 02.12.2017 which to the extent it is relevant reads as under:-
"While examining the claim, we note from the Proposal Forms dated 04/03/2013 that the deceased life assured had answered the following questions as noted hereinbelow:-
11(a) During the last five years did you consult a Medical Practitioner for any ailment requiring treatment fore more than a week? NO
11(c) Have you remained absent from place of work on grounds of health during the last 5 years? NO
11(d) Are you suffering from or have you ever suffered from ailment pertaining to Liver, Stomach, Heart, Lungs, Kidney, Brain or Nervous System? NO
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11(e) Are you suffering from or have you ever suffered from Diabetes, Tuberculosis, High Blood Pressure, Cancer, low Blood Pressure, Epilepsy, Hernia, Hydrocele, Leprosy or any other disease? NO 11(i) What has been your usual state of health? GOOD 11(j) Have you ever received or at present availing/undergoing medical advice/treatment or test in connection with Hepatitis B or on AIDS related condition? NO
We may, however, state that all the afore-said answers were false as can be seen from the following documents. Copies enclosed.
Medical Certificate from Fortis Hospital, Mohali.Deceased Life Assured had taken treatment for Diabetes Melitas Type 2 and Hypertension.
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Leave Record from Child Development Project Officer Darmpur Distt. Solan. (2010 to 2012 before Date of commencement).
This suppression of material facts, which had a bearing on the granting of the risk, was clearly done with intent to mislead the corporation. Hence, it has been decided to repudiate all the liabilities under the policy and in terms of provisions of Section 45 of the Insurance Act, 1938, we are refunding premiums paid under the policy No. 154646440 amounting to Rs.81216/- (Eighty One Thousand Two Hundred Sixteen only) towards full and final settlement of the your claim."
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2. Being aggrieved from the repudiation of the claim the respondent/complainant approached the concerned District Forum by way of a consumer complaint.
3. The complaint was resisted by the petitioner Corporation primarily on the grounds on which the claim had been repudiated. It was also stated in paragraph 6 of the written version that the deceased insured was suffering from high blood pressure and diabetes since prior to taking the policy. The copy of the medical treatment and leave certificates of the deceased
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were annexed to the written version as annexure OP-4 and annexure OP-5.
4. The District Forum having allowed the consumer complaint, the petitioner Corporation approached the concerned State Commission by way of an appeal. The said appeal also having been dismissed the Corporation is before this Commission. It is evident from a perusal of the proposal form that while replying the question No. 11 of the proposal form the insured had denied having consulted any medical practitioner for any ailment requiring treatment for more than a week in last 5 years. She had also denied suffering from or having ever suffered from diabetes. She also denied having remained absent from work on ground of health during last 5 years.
5. Paragraph 6, 8, 9 and 13 of the written version to the consumer complaint to the extent they are relevant read as under:-
"6.………….It is further submitted that life assured had availed medical leave from her department for treatment of her disease i.e. High Blood Pressure and Type-II Diabetes which she was suffering prior to obtaining policy. Copy of medical treatment and leave certificate is annexed as Annexure OP-4 and Annexure OP-5 respectively.
8. That the contents of this para regarding repudiating of claim for suppression of material facts i.e. Deceased Life Assured had taken treatment of Diabetes, Melitas Type-2 and hypertension prior to obtaining policy are admitted while rest of the contents are denied. It is submitted that hypertension (High Blood Pressure) is mentioned in question 11(e) in the proposal form. It is further submitted that deceased life assured was a known case of Rheumatic Heart Disease (RHD Type II DM) since September, 2010 which was cause of her death and which occurred due to high blood pressure and diabetes she was suffering from.
9. That the contents of para 9 of the complaint are admitted to the extent that life deceased assured had taken medical leave from her department i.e. Child Development Project Officer from 2010 to 2012 which coincide with the treatment she had taken from hospitals. It is submitted that these leave periods are prior to obtaining policy and she had taken treatment for the disease she was suffering from during these leave periods, which clearly establishes that life assured had deliberately hided true picture of her health status while obtaining policy in question.
13. That the contents of this para regarding obtaining of leave record of deceased life assured from her employer are admitted while rest of the contents are denied. It is submitted that record of leave during 2010 and 2012 is material for proving that deceased life assured had suppressed her medical history while obtaining the
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policy. The period prior to obtaining policy has bearing while deciding claim of the complainant."
6. A rejoinder to the written version was filed by the complainant and para 6, 8, 9 and 13 of the rejoinder to the extent they are relevant read as under:-
"6. That the averments of para no. 6 of the reply are wrong hence denied. The reference made by the Insurance Law Amendment Act, 2015 is in favour of the claimant and the claimant has claimed the Insurance Claim within a period of three years as per the Amendment Insurance Act, 2015 rest of the para is a interpretation of section 45 of Insurance Law Amendment Act, 2015 and the petitioner reserve to right to argune at the time of final hearing. It appears that the respondent has interpolated clause 11(a) (c) and (e) which require serious consideration of this Hon'ble Forum. It is submitted that the record taken from Fortis Hospital, Mohali is contradicted to the proposal form and medical certificates issued by the Fortis Hospital, Mohali dated 24.02.2014 and the Late Sh. Raj Kumari passed away on 14.02.2016 at Fortis Hospital due to multi organ failure as per annexure OP-4 which was issued on 13.09.2010. It is submitted that Smt. Raj Kumari earlier operated on February 24, 2014 wherein she was suffering from OP-4 and she was survived till 14.02.2016, number of medical certificates. (illegible) also with the reply and numbers of doctors certified that Late Smt. Raj Kumari fit for joining the duty from 13.09.2010 to 05.12.2012.
8. That the averments of para no. 8 of the reply are wrong hence denied. It is submitted that the Death of the Smt. Raj Kumari was caused due to multi organ failure as per certificate issued by the Fortis Hospital, Mohali. It is further submitted here that there is an interpolation in the proposal form in order to deprive the claimant from the insurance claim.
9. That the averments of para no. 9 of the reply are wrong hence denied. It is specifically denied that Late Smt. Raj Kumari had taken a medical leave on department from 06.09.2010 to 25.05.2014 as commuted leave and from 16.08.2011 to 14.12.2016 as earned leave and from 25.06.2015 to 28.12.2015 as casual leave and as such it is not a medical leave. The certificate issued by the child development project annexure - (OP-SA) does not indicate that the she has taken a medical leave, even certificate issued by the Rogi Kalyan Samiti from 13.09.2010 to 03.12.2012 certified that she is fit to join the duty. Smt. Raj Kuamri has deliberately hide the true health status at the time of obtaining the policy is wrong.
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13. That the averments of para no. 13 of the reply are wrong hence denied. The Govt. Employee has every right to obtain the leave due to him/her, moreover annexure OP-5A do not reflect the medical leave prior to obtaining the policy and it is submitted here that detailed reply have already been given in para supra. It is further submitted that the period prior to obtaining the policy has no bearing for deducting the insurance claim. No such term and condition has explained to the deceased while giving the policy to the holder."
7. It would thus be seen that though in paragraph 6 of the written version the petitioner Corporation specifically referred to medical treatment and leave certificates annexures OP-4 and OP-5, the said documents were not disputed in paragraph 6 of the rejoinder. A perusal of the certificate on page 78 which forms a part of annexure OP-4 would show that Smt. Raj Kumari was treated at Rogi Kalyan Samiti, Kasauli and was advised leave from duty from 06.09.2010 to 12.09.2010. The certificate shows that she was suffering from diabetes type-II at the time the certificate was issued. The medical certificate at page 79 of the paper book of Smt. Raj Kumari advising leave from 05.03.2011 to 01.04.2011 would also show that she was suffering from rheumatic heart disease and LVF when the certificate was issued on 01.04.2011. The medical certificate on page 80 of the paper book would show that she was advised rest from 31.01.2012 to 27.02.2021 and at that time also she was suffering from RHD and other ailments recorded in the certificate. The medical certificate issued to Raj Kumari available on page 81 of the paper book also refers to the said ailments advising leave to her from 03.09.2012 to 08.09.2012. The medical certificate on page 82 of the paper book issued by Dr. Manmohan of ESI Hospital Parvanu shows that she was advised rest from 18.12.2012 to 31.12.2012 and even at that time she was suffering from RDH and type 2 diabetes mellitus. The medical certificate on page 83 of the paper book issued by Rogi Kalyan Samiti also advised her leave from 28.11.2012 to 03.12.2012.
8. The details of the leave taken by Smt. Raj Kumari are given in the document available on page 84 of the paper book which forms annexure OP-5 and this shows that she had taken commuted leave seven times between 06.09.2010 to 31.12.2012.
9. As noted earlier annexure OP-4 and OP-5 were not disputed in the rejoinder filed by the complainant. Therefore, it was not necessary for the petitioner Corporation to prove the said documents by summoning their author or someone conversant with the hand-writing and signatures of the author of these documents. These are the documents which the respondent/complainant himself had submitted to the petitioner Corporation. Therefore, I see no reason to disbelieve the documents which form part of annexures OP-4 and OP-5 to the written version of the Corporation.
10. In para 8 of the written version it was specifically alleged by the Corporation that the deceased was a known case of RHD since September, 2010 which was cause of her death and which occurred due to high blood pressure and diabetes she was suffering from. In para 8 of the rejoinder the complainant/respondent stated that the death of Smt. Raj Kumari was caused due to multiple organ failure. It was not specifically denied that she was suffering from RHD and diabetes mellitus. Therefore, the afore-said averment made in paragraph 8 of the written version stands admitted having not been specifically denied in paragraph 8 of the rejoinder.
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Even with respect to medical certificate referred hereinabove it was stated in paragraph 9 of the rejoinder that even the certificate issued by Rogi Kalyan Samiti from 13.09.2010 to 03.12.2012 certified that she was fit to join duty. The complainant thus is not disputing the issuance of the certificates by Rogi Kalyan Samiti during the period from 13.09.2010 to 03.12.2012. The Complainant took the stand that the deceased was found fit to joint duty. Even in paragraph 13 of the rejoinder the complainant did not claim that no leave at all on medical ground had been taken by the deceased for the period from 13.09.2010 to 03.12.2012, though he has alleged that annexure OP-5-A did not reflect the medical leave prior to obtaining the policy. Nowhere the complainant alleged that the deceased had not taken any commuted leave on medical ground within five years before submitting the proposal to the Corporation.
11. It is thus evident from the documents particularly annexure OP-4 and OP-5 that the deceased was suffering from RHD and diabetes mellitus since prior to submitting the proposal form and the afore-said ailments were concealed in the proposal form. Though she had taken leave on medical grounds several times within five years prior to submitting the proposal the said leaves were also concealed by her in the proposal form. The deceased, therefore, not only gave false answers to the questions, she also concealed material information with respect to the state of her health which obviously influenced the decision of the insurer to accept her proposal or not.
12. The Ld. counsel for the complainant submitted that the insured was duly examined by the doctor on the panel of the Corporation and was found fit and fine. This, however, would not be material since it may not be possible for the doctor to detect all the ailments on the basis of the clinical examinations and the tests conducted at that time. It is the bounden duty of the insured to disclose the relevant information with respect to the state of her health and truthfully answer the question he/she is required to answer in the proposal form.
13. This issue recently came up for the consideration of the Hon'ble Supreme Court in LIC of India Vs. Manish Gupta - Civil Appeal No.3944 of 2019, decided on 15.04.2019, where the proposal form required a disclosure as to whether the proposer had suffered from Cardiovascular disease, he responded in negative to the said question. The complainant underwent a surgery, submitted a claim which was repudiated on the ground that he was suffering from a pre-existing illness. Upholding the repudiation of the claim, the Hon'ble Supreme Court inter alia held as under:-
"A contract of insurance involves utmost good faith. In Satwant Kaur Sandhu Vs. New India Assurance Company Ltd., this Court has held thus:
"...Thus, it needs little emphasis that when an information on a specific aspect is asked for in the proposal form, an assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge. It is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not. Of course, obligation to disclose extends only to facts which are known to the applicant and not to what he ought to have known. The obligation to disclose necessarily depends upon the knowledge one possesses. His opinion of the materiality of that knowledge is of
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no moment." ……….The documentary material indicates that there was a clear failure on the part of the respondent to disclose that he had suffered from rheumatic heart disease since childhood. The ground for repudiation was in terms of the exclusions contained in the policy. The failure of the insured to disclose the past history of cardiovascular disease was a valid ground for repudiation." In Reliance Life Insurance Co. Ltd. & Anr. Vs. Rekhaben Nareshbhai Rathod II (2019) CPJ 53(SC) , the Hon'ble Supreme Court interalia observed as under:-
"26. …………..It is standard practice for the insurer to set out in the application a series of specific questions regarding the applicant's health history and other matters relevant to insurability. The object of the proposal form is to gather information about a potential client, allowing the insurer to get all information which is material to the insurer to know in order to assess the risk and fix the premium for each potential client. Proposal forms are a significant part of the disclosure procedure and warrant accuracy of statements. Utmost care must be exercised in filling the proposal form. In a proposal form the applicant declares that she/he warrants truth. The contractual duty so imposed is such that any suppression, untruth or inaccuracy in the statement in the proposal form will be considered as a breach of the duty of good faith and will render the policy voidable by the insurer. The system of adequate disclosure helps buyers and sellers of insurance policies to meet at a common point and narrow down the gap of information asymmetries. This allows the parties to serve their interests better and understand the true extent of the contractual agreement.
The finding of a material misrepresentation or concealment in insurance has a significant effect upon both the insured and the insurer in the event of a dispute. The fact it would influence the decision of a prudent insurer in deciding as to whether or not to accept a risk is a material fact. As this Court held in Satwant Kaur (supra) "there is a clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance". Each representation or statement may be material to the risk. The insurance company may still offer insurance protection on altered terms.
29. We are not impressed with the submission that the proposer was unaware of the contents of the form that he was required to fill up or that in assigning such a response to a third party, he was absolved of the consequence of appending his signatures to the proposal. The proposer duly appended his signature to the proposal form and the grant of the insurance cover was on the basis of the statements contained in the proposal form. ………….."
14. It is submitted by the complainant that the proposal was filled up by the agent and the
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insured was not aware of its contents. Such an argument has already been negated by the Hon'ble Supreme Court in Reliance Life Insurance Co. Ltd. & Anr. Vs. Rekhaben Nareshbhai Rathod II (2019) CPJ 53(SC) and the following view was taken:-
"31. Finally, the argument of the respondent that the signatures of the assured on the form were taken without explaining the details cannot be accepted. A similar argument was correctly rejected in a decision of a Division Bench of the Mysore High Court in 'VK Srinivasa Setty v Messers Premier Life and General Insurance Co Ltd., AIR 1958 Mys 53', where it was held:
"Now it is clear that a person who affixes his signature to a proposal which contains a statement which is not true, cannot ordinarily escape from the consequence arising therefrom by pleading that he chose to sign the proposal containing such statement without either reading or understanding it. That is because, in filling up the proposal form, the agent normally, ceases to act as agent of the insurer but becomes the agent of the insured and no agent can be assumed to have authority from the insurer to write the answers in the proposal form. If an agent nevertheless does that, he becomes merely the amanuensis of the insured, and his knowledge of the untruth or inaccuracy of any statement contained in the form of proposal does not become the knowledge of the insurer. Further, apart from any question of imputed knowledge, the insured by signing that proposal adopts those answers and makes them his own and that would clearly be so, whether the insured signed the proposal without reading or understanding it, it being irrelevant to consider how the inaccuracy arose if he has contracted, as the plaintiff has done in this case that his written answers shall be accurate."
15. Neither the agent was impleaded as party to the complaint nor was he examined as a witness to prove that the proposal was filled up by him without instruction from the insured and was not read over and explained by him to her.
15. For the reasons stated hereinabove I have no hesitation in holding that the repudiation of the claim was justified. The impugned order, therefore, cannot be sustained and is set aside. The Complaint is, therefore, dismissed with no orders as to costs.
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V.K. JAIN
PRESIDING MEMBER
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