State Consumer Disputes Redressal Commission, Telangana: Justice MSK Jaiswal (President) and Meena Ramanathan (Member) upheld the District Commission’s Order observing the consequence of suppressing the material fact while taking an insurance policy.
If the insurer can show that prior to the date of declaration of being healthy, the insured was suffering with ailment which was within her knowledge but was suppressed, then the insurance company is well within its right to repudiate the claim on the ground of suppression veri.
Complainant had submitted that his wife has obtained new money back policy from the OPs with a duration of 20 years for an assured sum of Rs 10,00,000. At the time of accepting the policy, the OPs carried out mandatory medical tests on the proponent and issued the policy in question.
While the policy was in force, the holder died due to cardiorespiratory arrest.
Being the nominee, complainant made the claim with the OPs and to the utter shock and surprise, the OPs repudiated the claim on the ground that the deceased life assured was suffering from lung cancer and took treatment prior to obtaining the policy, hence the claim was repudiated.
Complainant prayed to direct the OPs to pay the amount.
It was stated that OPs investigated the matter, and it was revealed that the deceased life assured suppressed the material fact relating to her health condition giving incorrect answers in the proposal form.
Analysis, Law and Decision
Bench noted that OPs submission was that the insured was suffering from serious ailment viz., lung cancer and suppressed the said fact.
Commission reiterated the legal position that if the insured is found to have suppressed the information which was material for the insurer to decide about the issuance of the policy is made out, the insurance company cannot be made liable to indemnify the insured on the ground that contractual obligations between insured and insurer are based purely on good faith and if insured has knowingly failed to reveal the information which was within her exclusive knowledge, the insurer could not be said to be liable to indemnify the insured.
In the present case, the insurance company contended that even before taking the policy, the insured was suffering from a serious ailment and was undergoing treatment and evidence was placed on record with regard to the said contention.
Coram held that perusal of the crucial documents on record leaves no room for doubt that the insured was aware that she was suffering from a serious ailment for more than 6 months prior to taking the insurance policy and suppressing all those facts, she took the policy.
Therefore, District Commission’s Order holding that complainant was not entitled to any relief was upheld and the complaint was dismissed.[K.N. Vidyakarji v. Life Insurance Corporation of India, FA No. 402 of 2020, decided on 15-06-2021]
Advocates before the Commission:
Counsel for the Appellant: Karakot Nagekar Sai Kumar
Counsel for the Respondents: KRL Sarma