M.OBAIDUR RAHMAN vs NATIONAL INSURANCE CO. LTD.

This Revision Petition, under Section 21(b) of the Consumer Protection Act, 1986, (for short, the "Act") has been filed by the Complainant challenging the order, dated 20.10.2009, passed by the Tamil Nadu State Consumer Disputes Redressal Commission at Chennai (for short "the State Commission") in A.P. No. 221 of 2004. By the impugned order, the State Commission, while accepting the plea of the Respondent Insurance Company to the effect that at the time of submitting proposal for Mediclaim Policy, the Complainant had suppressed the facts relating to a pre-existing disease and its treatment and there was no deficiency in service on the part of the Insurance Company in repudiating the claim preferred under the Policy, has overturned the order, dated 05.12.2003, passed by the District Consumer Disputes Redressal Forum, Chennai North (for short "the District Forum") in Complaint No.83 of 2002 and dismissed the Complaint. In turn, the District Forum, while allowing the Complaint, had directed the Insurance Company to pay to the

Complainant a sum of 2,07,461/- towards reimbursement of the medical bills along with 10,000/- as compensation for mental and financial strain and 1000/- as litigation expenses.

The material facts giving rise to the present Revision Petition, as culled out from the Complaint, are: that the Complainant took a Mediclaim Insurance Policy by paying a sum of 12,432/- as premium. The policy was valid from 07.09.2000 to 06.09.2001 and covered the Complainant, his wife and four children. While the insured amount in respect of the Complainant and his wife was 3,00,000/- each, in respect of his four children, it was 1,50,000/- each. During the validity period of the policy, the Complainant was admitted in the Apollo Hospital, Chennai on 22.06.2001 and was discharged on 25.06.2001 with the diagnosis: Coronary Artery disease (two vessel disease); old Inferior Wall Myocardial Infarction (IWMI), Angina Pectoris, systemic hypertension etc. He was again admitted in Apollo Hospital on 29.06.2001 and underwent cardiopulmonary Bypass on 02.07.2001 and was discharged on 10.07.2001. For the said treatments, he incurred medical expenses amounting to 30,316.44 and 1,77,414.75. On 26.06.2001 and 19.07.2001, the Complainant lodged two claims with the Insurance Company for reimbursement of the afore-stated sums. However, the Insurance Company, vide its letters dated 13.07.2001 and 23.08.2001 intimated the Complainant that the claims were not payable since the disease mentioned in the Discharge Summary was pre-existing one. According to the Insurance Company, from the hospital record, primarily, the Discharge Summary furnished by the Complainant in support of his claims, it was evident that the claims were related to the treatment of "pre-existing disease/ailment", but this fact was not disclosed by the Complainant at the time of taking the policy in question and therefore, the claims, being excluded under the policy in question, were not payable.

Being aggrieved, the Complainant filed complaint in the District Forum. Contesting the allegation of suppression of pre-existing disease, it was pleaded that he had taken the policy in question in September, 2000 and as per the Discharge Summary, issued by the Apollo Hospital, dated 25.06.2001, Coronary Artery Disease and old Inferior Wall Myocardial Infarction (IWMI), for which he was advised to undergo CABG surgery on 02.07.2001, was detected much after his obtaining the policy. Inter-alia , contending that the Insurance Company has rejected the claims, without application of mind, he prayed for a direction to the Insurance Company to pay: (i) 2,07,461/- towards medical expenses; (ii) 1,00,000/- as compensation for deficiency in service; (iii) 1,00,000/- as damages for the resultant mental agony and pain; and (iv) costs of the Complaint.

Upon consideration of the evidence adduced by both the parties and bearing in mind the averments made in the Discharge Summary (Ex.A4), to the effect that "this patient a recently detected hypertensive, non-diabetic with coronary artery disease old IWMI (retrogradely diagnosed) presented with recent onset of chest pain not associated with physical activity, relieved by S/L Isordil. He was evaluated by tread mill test and found to be borderline.", the District Forum observed that no evidence, documentary or otherwise, was adduced by the Insurance Company to prove that the Complainant''s disease was pre-existing. Accordingly, while holding that non-consideration of the claims by the Insurance Company was gross deficiency in service on its part, the District Forum allowed the Complaint and issued the afore-stated directions to the Insurance Company.

Aggrieved, the Insurance Company preferred Appeal before the State Commission. On re-appraisal of the entire material placed before it, including the Discharge Summary; affidavit filed by one Dr. K. Sriram, stated to be a Medical Expert, on behalf of the Insurance Company and the fact that as against the expert evidence, the Complainant had neither led any evidence nor

filed affidavit of an Expert to contradict the evidence led by the Insurance Company and the absence of any material or pleading by the Complainant to the effect that he was not suffering from the stated pre-existing disease, the State Commission has drawn the conclusion that the disease, for which the Complainant was treated, must have been in existence at the time of taking the policy. Accordingly, it has held that the Complainant did suppress the pre-existing disease and therefore, the Insurance Company could not be faulted for repudiating the claims. Hence, the present Revision Petition.

The short question for consideration is as to whether or not there was suppression of any "material fact" by the Complainant, having material bearing on the repudiation of his claims by the Insurance Company?

Before adverting to the facts of the case, it would be profitable to take note of the judicial precedents on the point. In Satwant Kaur Sandhu vs. New India Assurance Company Ltd. (2009) 8 SCC 316, it has been observed by the Hon''ble Supreme Court that the expression "material fact" is to be understood in general terms to mean as any fact which would influence the judgment of a prudent Insurer, in deciding whether to accept the risk or not. If the proposer has knowledge of such fact, he is obliged to disclose it, particularly while answering questions in the proposal form. Any inaccurate answer will entitle the Insurer to repudiate its liability because there is clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance, which is based on the principle of utmost faith - uberrima fides . 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 the contrary. It has also been emphasized that it is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not.

Bearing in mind the afore-noted principle, governing a contract of insurance, we advert to the facts at hand. The relevant question in the proposal form, on which strong reliance is placed by the Insurance Company, and, which was required to be replied to by the Complainant, was: "13. Have you ever suffered from any of the diseases/illness? If yes, give details

XXX XXX XXX

(c) high blood pressure, heart diseases , including ischaemic heart disease , other circulatory disorder etc. (rheumatic fever) XXX XXX XXX"

Admittedly, the question was answered in the negative by the Complainant although he had heart disease (IWMI) much prior to the filling of the proposal form. Undoubtedly, this was a "material fact" and being within the knowledge of the Complainant only, he was obliged to ensure correct disclosure of the same in the proposal form issued to him for the purpose of obtaining the policy in question. In our view, the District Forum had erred in holding that there was no suppression of material fact on the part of the Complainant. We feel that while arriving at the said finding, the District Forum was influenced by the Discharge Summary and the fact that no evidence, documentary or otherwise, had been filed by the Insurance Company to show that the Complainant had pre-existing disease. In order to unveil the controversy as to whether or not there was any suppression of material fact relating to the Coronary Artery Disease, the State Commission has taken into consideration the affidavit filed by the Medical Expert i.e. Dr. K. Sriram, Medical Director, Unique Home Healthcare Ltd., Apollo Specialty Hospital. In his evidence, Dr. Sriram has clearly stated that the disease with which the Complainant was suffering, would have started at least 4 or 5 years prior to his admission in the Hospital on 22.06.2001; there was high risk factor of hypertension, involving tremendous risk of Myocardial Infarction and it was impossible that old Myocardial Infarction will go unnoticed in a 50 years old non-diabetic man.

In our opinion, the State Commission, for the reasons recorded in the impugned order, was justified in arriving at the finding that the Complainant had suppressed the pre-existing disease, for which he was treated and, consequently, no fault could be found in repudiation of the claims by the Insurance Company. It is also pertinent to note that even the Cardiac Stress Analysis Report dated 12.06.2001, shows the remarks "Post MI 1992" and "BP Response : Hypersensitive". The said Treadmill Test Stress Report clearly indicates that the Complainant suffered with Myocardial Infarction in the year 1992 and was hypersensitive too. Therefore, the answer given by the Complainant in the proposal form was untrue to his knowledge. We are in complete agreement with the State Commission that the Complainant had pre-existing disease which was a "material fact" in regard to his health but he had suppressed it at the time of taking the mediclaim policy in question, and thus, breached the terms and conditions of the policy in question. In our opinion, the impugned order does not suffer from any jurisdictional error, warranting our interference in the revisonal jurisdiction.

Resultantly, the Revision Petition is dismissed with no order as to costs.