Branch Manager, Bajaj Allianz Insurance Company Ltd. & Ors. Vs Dalbir Kour,decided on October 09, 2020 observed that a Proposer who seeks to obtain a Policy of Life Insurance is duty bound to disclose all material facts having bearing upon the issue as to:
Whether the Insurer would consider it appropriate to assume the risk which is proposed?
FACTS OF CASE:
1. Facts leading to filing of Consumer ClaimOn 05 August, 2014 a proposal for obtaining a Policy of Insurance was submitted to the appellants by Kulwant Singh. The Proposal Form indicated the name of the mother of the Proposer, who is the respondent to these proceedings as the nominee. The Proposal Form contained questions pertaining to the health and medical history of the Proposer and required a specific disclosure on Whether any ailment, hospitalization or treatment had been undergone by the Proposer?
2. Column 22 required a declaration of good health.
i) The proposer answered the queries in the- negative, indicating thereby that he had not undergone any medical treatment or hospitalization and was not suffering from any ailment or disease.
ii) The declaration under Item 22 (c) of the Proposal Form was in regard to:Whether any diseases or disorders of the respiratory system such as but not limited to blood in sputum, tuberculosis, asthma, infected respiratory disease or any respiratory system disease including frequent nose bleeding, fever and dyspnoea were involved?- This query was also responded to in the negative.
3. Acting on the basis of the proposal submitted by the proposer, a Policy of Insurance was issued by the appellants on August 12, 2014. Under the Policy, the life of the proposer was insured for a sum of Rs. 8. 50 lakhs payable on maturity with the death benefit of Rs. 17 lakhs.
4. On September 12, 2014, Kulwant Singh died, following which a Claim was lodged on the Insurer. The death occurred within a period of one month and seven days from the issuance of the Policy.
5. The Claim was the subject matter of an independent investigation, during the course of which, the hospital treatment records and medical certificate issued by Baba Budha Ji Charitable Hospital, Bir Sahib, Village Thatha (Tarntaran) were obtained.
6. The records revealed, according to the Insurer, that the deceased has been suffering from Hepatitis C.
7. The investigation reports indicate that proximate to the death, the deceased had been suffering from a stomach ailment and from vomiting of blood, as a result of which he had been availing of the treatment at the above hospital.
8. The Claim was repudiated on May 12, 2015 on account of the non- disclosure of material facts.
9. The Respondent instituted a Consumer Complaint before the District Consumer Disputes Redressal Forum, which allowed the Complaint and directed the appellants to pay the full death claim together with interest.
10. The first appeal was rejected by the State Consumer Disputes Redressal Commission and the revision before the National Consumer Disputes Redressal Commission has also been dismissed.
11. The NCDRC relied on the decision of Supreme Court in Sulbha Prakash Motegaonkar& Ors Vs Life Insurance Corporation of lndia (Civil Appeal No 8245/2015 decided on 5.10.2015).
According to the NCDRC, a disease has to be distinguished from a mere illness.It held that the death had occurred due to natural causes and there was no reasonable nexus between the cause of death and non-disclosure of disease.Consequently, while affirming the Judgment of the SCDRC, the NCDRC imposed costs of Rs. 2 lakhs on the appellants, of which, an amount of Rs. 1 lakh was to be paid to the Complainant and Rs. 1 lakh was to be deposited with the Consumer Legal Aid Account of the District Forum.
12. SUPREME COURT in the ultimate analysis held as under:
The medical records which have been obtained during the course of the investigation clearly indicate that the deceased was suffering from a serious pre-existing medical condition which was not disclosed to the insurer.
In fact, the deceased was hospitalized to undergo treatment for such condition in proximity to the date of his death, which was also not disclosed in spite of the specific queries relating to any ailment, hospitalization or treatment undergone by the proposer in Column 22 of the policy proposal form.
We are, therefore, of the view that the judgment of the NCDRC in the present case does not lay down the correct principle of law and would have to be set aside. We order accordingly.