SUNITA RANI vs Life Insurance Corporation of India

THE husband of the petitioner Sunita Rani had taken Insurance Policy for Rs. 2,00,000 and her husband expired due to heart attack during the currency of the policy. The claim put up by the petitioner was repudiated by the OP on the ground that the insured was suffering from Tuberculosis which fact was concealed at the time of giving declaration in the proposal form. The District Forum had directed the OP to pay the policy amount with interest and cost. This order was challenged by the OP before the State Commission.

THE State Commission considered the matter threadbare and took into account all the relevant material and held that the husband of the complainant had suppressed the fact that he was suffering from serious disease like Tuberculosis and the said fact being material had gone to the root of the contract of insurance which is a contract of ubberimae fidei.

LEARNED Counsel for the petitioner urged before us that the judgment in the matter of Satwant Kaur Sandhu v. New India Assurance Company Ltd., IV (2009) CPJ 8 (SC)=VI (2009) SLT 338, upon which the State Commission has placed reliance cannot be applied in the facts and circumstances of the case since the said judgment is in relation to a medi-claim policy. It has been further urged that the certificates have not been proved by filing any affidavit, nor it has been established that the petitioner was suffering from Tuberculosis.

THE State Commission held that the appellant had produced evidence to prove that the insured was suffering from Tuberculosis at the time of obtaining policy with the help of Ex. R-4, Ex. R-3 and Register Ex. R-5 that the husband of the petitioner had taken treatment for Tuberculosis. The extracts from the said exhibits have been recorded in the impugned order of the State Commission. Ex.R-5 is the photocopy of the Register to prove that the insured had taken treatment in the Goodwill Hospital, Bathinda. Ex. R-3 shows that the insured had taken treatment for Tuberculosis from Civil Hospital, Bathinda. The production of the said certificate was considered sufficient in view of the observation of the Apex Court in Satwant Kaur Sandhu v. New India Assurance Company Ltd. (supra), wherein it has been laid down that reliance can be placed on the certificate obtained by the respondent from the hospital where the insured was treated. The certificate of treatment from the Government Hospital is issued in discharge of official duty and does not require further proof or any affidavit to prove the same. We do not find any merit in the submission made by the learned Counsel for the petitioner that the principles laid down by the Apex Court cannot be applied to the case under consideration. The State Commission has very rightly held that although the Supreme Court was dealing with medi-claim policy, but the principle of law was upheld that even the certificate of hospital treatment given by a hospital is the valid piece of evidence. In our opinion, there is overwhelming evidence to prove that the husband of the petitioner had given false declaration regarding his health and had suppressed the fact of his illness of Tuberculosis at the time of giving declaration regarding his health which is important and relevant fact which has material bearing in the matter and would have certainly affected the decision of the Insurance Company if the said has been disclosed. The Apex Court has dealt with the issue of false declarations as to the state of health in the proposal form, which is the basis for the contract of utmost faith (uberrimae fidei). It has been held that assured is under a solemn obligation to make a true and full disclosure of information within his knowledge. The Apex Court has referred to Mac Gillivray on Insurance Law and observations of Lord Mansfield on this aspect. The Apex Court had in detail dealt with the concept of material fact with reference to Regulation 2(1)(d) of Insurance Regulatory and Development Authority (Protection of Policy Holder''s Interests) Regulations, 2002 as also the view expressed by Pollock and Mulla. The Apex Court has laid down as under: "Thus, the Regulation also defines the word ''material'' to mean and include all ''important'', ''essential'' and ''relevant'' information in the context of guiding the insurer to decide whether to undertake the risk or not. The upshot of the entire discussion is that in a contract of insurance, any fact which would influence the mind of a prudent insurer in deciding whether to accept or not to accept the risk is a ''material fact''. If the proposer has knowledge of such fact, he is obliged to disclose it particularly while answering questions in the proposal form. Needless to emphasise that any inaccurate answer will entitle the insurer to repudiate his 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. Answers given by the proposer to the two questions were "sound health" and "nil" respectively. It would be beyond anybody''s 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 medi-claim 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 1.6.1990 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."

The principles laid down by the Apex Court are applicable with equal force to the matter under consideration.

IN view of the above, while endorsing the reasoning and order of the State Commission, we do not find any merit in this revision and the revision petition is hereby dismissed with no order as to cost. Revision Petition dismissed.