BEFORE THE CONSUMER DISPUTES REDRESSAL COMMISSION, RAJASTHAN, JAIPUR


APPEAL NO: 2079/2005


United India Insurance Co. Ltd.

through Regional Manager,

Bahara Chambers, Tonk Road,

Jaipur.

Opposite party- appellant

Vs.


Sh. Narendra Kumar s/o Sh.Kalyan Malji

r/o 65-66, Kabir Colony,

Chittorgarh.

Complainant-respondent


Date of judgment 16.7.09


Before:


Mr.Justice Sunil Kumar Garg- President

Mrs.Vimla Sethia-Member


Mr. Kapil Totla counsel for the appellants

Mr.Manish Mathur counsel for the respondent


JUDGMENT


BY THE STATE COMMISSION ( PER HON. MR.JUSTICE SUNIL KUMAR GARG, PRESIDENT )

2


This appeal has been filed by the appellant Insurance Co. against order dated 28.10.05 passed by the District Forum, Chittorgarh in complaint no. 32/2005 by which the complaint of the complainant respondent was allowed in the manner that the appellants were directed to pay a sum of Rs.1,81,882/-, the sum incurred in the treatment by the complainant respondent within two months and further to pay a sum of Rs.5000/- as compensation for mental agony and costs of litigation.


2. It arises in the following circumstances-


That the complainant respondent had filed a complaint against the appellants before the District Forum, Chittorgarh on 6.1.05 inter alia stating that he had taken a medi claim policy bearing no.140201/48/03/00313 from the appellants for the period 9.6.03 to 8.6.04 for a sum of Rs. 2 lacs. It was further stated in the complaint that on 22.2.04 the condition of the deceased became deteriorated suddenly and thereafter he had consulted Dr. Anish Jain of Chittorgarh who had referred him for further treatment to Escort Heart Institute and Research Centre, New Delhi and he he was admitted in the Escort Heart Institute, New Delhi on 9.3.04 and was discharged on 13.3.04 and operation of Angioplast was conducted and in getting the treatment he had spent a sum of Rs. 2,02,321/- and a claim was preferred by the complainant for claiming that amount and he had also submitted the bills before the office of the appellants but the claim of

3


the complainant respondent was repudiated by the appellants through letter dated 10.11.04 on the ground that the complainant was a patient of hypertension for the last ten years and since this fact was not disclosed by him in the declaration form at the time of taking the medi claim policy, therefore, it was a case of suppression of material facts regarding health on the part of the complainant and thereafter the present complaint was filed by the complainant respondent.


A reply was filed by the appellants Insurance Co. before the District Forum, Chittorgarh on 29.3.05 and in the reply they have taken the same pleas which were taken by them in the repudiation letter dated 10.11.04. It was further stated in the reply that the complainant respondent had kept the appellants Insurance Co. in dark and had suppressed the disease of hypertension and from the record of the Escort Heart Institute, New Delhi the case of the complainant respondent was got examined by Paramount Health Services Pvt. Ltd. and had submitted a report dated 31.10.04 in the following manner:-


" The patient was hospitalized on 8.3.04 for the treatment of hypertension and coronary artery disease. The date of inception of policy 9.8.03. The indoor case papers seen at Escorts Heart Institute, New Delhi clearly mention that the patient had hypertension for the last ten years. The

4


insured has declared in the proposal form at the inception of policy that he does not have hypertension. Hypertension is the major cause of coronary artery disese. It is a willful suppression of the material fact. Therefore, this case can be repudiated. ( refuse to pay)."


It was further stated in the reply that from the report of Paramount Health Services Pvt. Ltd. it is well established that prior to taking the medi claim policy, the complainant was a patient of hypertension and since this fact was not disclosed by the deceased in the declaration form at the time of taking the policy, therefore, claim was rightly repudiated by the appellants through letter dated 10.11.04 and it was prayed that complaint be dismissed.


After hearing the parties, the District Forum, Chittorgarh through impugned order dated 28.10.05 had allowed the complaint of the complainant respondent inter alia holding that-


(i) That there is nothing on record to prove the fact that prior to taking the medi claim policy the complainant respondent had taken the treatment from any hospital for the disease of hypertension and simply because it was mentioned in the report of Paramount Health Services Pvt. Ltd. that the complainant was a patient of hypertension for the 5


last ten years , this fact could not be found established and further no record of the Escort Heart Institute, New Delhi had been produced and in absence of that, the fact that the complainant was a patient of hypertention prior to taking the policy could not be found established.


(ii) That repudiation of claim of the complainant respondent by the appellant was not justified and it amounted to deficiency in service on the part of the appellant and since the bills were for a sum of Rs. 1,81,882/-, therefore, this amount was ordered to be paid by the appellants to the complainant respondent.


Aggrieved from the said order dated 28.10.05 passed by the District Forum, Chittorgarh the appellant Insurance Company has preferred this appeal.


3. In this appeal, the main contention of the learned counsel for the appellant is that since from the report of Paramount Health Services Pvt. Ltd. dated 31.10.04, it is well established that the complainant was a patient of hypertension for the last ten years and since these facts were not mentioned by the complainant in the declaration form while taking the policy on 9.6.03 , therefore, it was a case of suppression of material facts regarding health on the part of the complainant and since as per terms and conditions of the policy , if at the time of taking the policy the disease of hypertension was found as pre-existing

6


disease, the claim was not payable and the learned District Forum had committed serious error and illegality in decreeing the claim of the complainant respondent and the findings of the District Forum are wholly erroneous, illegal and perverse one and the same could not be sustained and liable to be quashed and set aside and this appeal deserves to be allowed.


4. On the other hand, the learned counsel appearing for the respondent has supported the impugned order of the District Forum.


5. We have heard the learned counsel appearing for the appellant as well as for the respondent and gone through the entire materials available on record.


6. There is no dispute on the point that the complainant had taken a medi claim policy bearing no.140201/48/03/00313 from the appellants for the period 9.6.03 to 8.6.04 for a sum of Rs. 2 lacs.


7. There is no dispute on the point that the complainant was admitted in the Escort Heart Institute, New Delhi for the period 9.3.04 to 13.3.04 and operation of Angioplast was done in that hospital.


8. There is also no dispute on the point that except a bill dated 13.3.04, no other record of Escort Heart Institute, New Delhi or bed head ticket of the hospital had been produced.


9. There is no dispute on the point that the claim of the

7


complainant respondent was repudiated by the appellants Insurance Co. through letter dated 10.11.04 on the grounds mentioned therein as stated above.


10. There is no dispute on the point that the appellant Insurance Co. has placed reliance on the report of Paramount Health Services Pvt. Ltd. dated 31.10.04, as quoted above in page 3 and 4 of this judgment.


11. Thus, in the facts and circumstances just narrated above, the question for consideration is whether repudiation of claim of complainant respondent by the appellants was justified or not or whether the findings of the District Forum decreeing the claim could be sustained or not.


12. It may be stated here that so far as the report of Paramount Health Services Pvt. Ltd. dated 31.10.04 is concerned, in our considered opinion the District Forum had rightly placed no reliance on that report as in that report it was mentioned that from seeing the record of the Escort Heart Institute, New Delhi the disease of hypertension might be ten years old but since in absence of any record of the hospital that prior to taking the policy in question the complainant was admitted in any hospital for taking the treatment for the disease of hypertension, this fact could not be found established.


13. It may be stated here that it is the fundamental principle of insurance law that utmost good faith must be observed by the contracting parties and good faith forbids either party from non-disclosure of the facts which the parties known. The insured has a

8


duty to disclose and similarly it is the duty of the insurance company and its agents to disclose all material facts in their knowledge since obligation of good faith applies to both equally and in this respect, the decision of the Hon'ble Supreme Court in M/s.Modern Insulators Ltd. Vs. Oriental Insurance Co. (AIR 2000 SC 1014) may be referred to.


14. The onus probandi, in cases of fraudulent suppression of material facts rests heavily on party alleging fraud namely the insurer. Furthermore, mere concealment of some facts will not amount to concealment of some facts will not amount to concealment of material facts .


15. Suppression of fact must be a conscious operation of the giver of the answer which he knowingly did not disclose.


16. The Hon'ble National Commission in National Insurance Co. Ltd. Vs. Bipul Kunda (2005 CTJ 377 (CP) (NCDRC) ) has held that for repudiating a claim of an insured, it is for the insurer to show that a sttement on a fact, which was material for the policy, had been suppressed by the insured and that statement was fraudulently made by him/her with the knowledge of the falsity of that statement.


17. In the present case the bed head ticket of the Escort Heart Institute, New Delhi had not been produced and simply because in the report of Paramount Health Services Pvt. Ltd. dated 31.10.04 it was stated that the complainant was a patient of hypertension for the last ten years, that would not be a sufficient to prove the fact that at the time of taking the policy in question he was a patient of hypertention .

9


18. In our considered opinion, since there is no documentry proof or evidence available on record to show that the complainant was admitted in any hospital or consulted any medical man for treatment of disease of hypertension prior to taking the medi claim policy on 9.6.03 , therefore, it cannot be said that the complainant was guilty of suppression of material facts about health. No doubt in the report of Paramount Health Services Pvt. Ltd. dated 31.10.04 it was written that the complainant was a patient of hypertension for the last ten years but to corroborate and prove this fact no cogent and reliable documentary proof or evidence or material has been produced by the appellants showing that the complainant had earlier taken treatment of hypertension in any hospital. The appellant had failed to produce any document or paper to show that the complainant had taken treatment of hypertension prior to taking the medi claim policy on 4.6.04 and, therefore, it cannot be said that it was a case of suppression of material facts regarding health on the part of the complainant.


19. Apart from this, it may be stated here that the disease hypertension, which means tension or tonus that is greater than normal, a condition in which the patient has a higher blood pressure than that judged to be normal, cannot be treated as a disease in the same manner as the diseases such as kidney, heart and brain, which directly affect the life span of a person and apart from this, hypertension is not a permanent disease and it some times increases and sometimes it reduces and thus, non mentioning of such type of disease in the declartion form would not amount to mis-statement in real sense. From this point of view also, repudiation of claim of the complainant respondent by the appellants was not justified.

10


20. Thus, non-mentioning of the disease Hypertension in the declartion form by the complainant does not amount to suppression or concealment of material fact or mis-statement in real sense and, therefore, the appellants were not justified in repudiating the claim of the complainant respondent on the ground of suppression of materil facts regarding health and the District Forum was right in decreeing the claim of the complainant respondent.


21. For the reasons stated above, no illegality or irregularity has been committed by the District Forum in decreeing the claim of the complainant respondent. The findings of the District Forum decreeing the claim are based on correct appreciation of entire materials available on record and they do not suffer from any basic infirmity, illegality and perversity and hence, no interference is called for with the same and this appeal deserves to be dismissed.


Accordingly, the appeal filed by the appellants Insurance Co. is dismissed.



(Vimla Sethia ) (Justice Sunil Kumar Garg )

Member PresidentBEFORE THE CONSUMER DISPUTES REDRESSAL COMMISSION, RAJASTHAN, JAIPUR


APPEAL NO: 2079/2005


United India Insurance Co. Ltd.

through Regional Manager,

Bahara Chambers, Tonk Road,

Jaipur.

Opposite party- appellant

Vs.


Sh. Narendra Kumar s/o Sh.Kalyan Malji

r/o 65-66, Kabir Colony,

Chittorgarh.

Complainant-respondent


Date of judgment 16.7.09


Before:


Mr.Justice Sunil Kumar Garg- President

Mrs.Vimla Sethia-Member


Mr. Kapil Totla counsel for the appellants

Mr.Manish Mathur counsel for the respondent


JUDGMENT


BY THE STATE COMMISSION ( PER HON. MR.JUSTICE SUNIL KUMAR GARG, PRESIDENT )

2


This appeal has been filed by the appellant Insurance Co. against order dated 28.10.05 passed by the District Forum, Chittorgarh in complaint no. 32/2005 by which the complaint of the complainant respondent was allowed in the manner that the appellants were directed to pay a sum of Rs.1,81,882/-, the sum incurred in the treatment by the complainant respondent within two months and further to pay a sum of Rs.5000/- as compensation for mental agony and costs of litigation.


2. It arises in the following circumstances-


That the complainant respondent had filed a complaint against the appellants before the District Forum, Chittorgarh on 6.1.05 inter alia stating that he had taken a medi claim policy bearing no.140201/48/03/00313 from the appellants for the period 9.6.03 to 8.6.04 for a sum of Rs. 2 lacs. It was further stated in the complaint that on 22.2.04 the condition of the deceased became deteriorated suddenly and thereafter he had consulted Dr. Anish Jain of Chittorgarh who had referred him for further treatment to Escort Heart Institute and Research Centre, New Delhi and he he was admitted in the Escort Heart Institute, New Delhi on 9.3.04 and was discharged on 13.3.04 and operation of Angioplast was conducted and in getting the treatment he had spent a sum of Rs. 2,02,321/- and a claim was preferred by the complainant for claiming that amount and he had also submitted the bills before the office of the appellants but the claim of

3


the complainant respondent was repudiated by the appellants through letter dated 10.11.04 on the ground that the complainant was a patient of hypertension for the last ten years and since this fact was not disclosed by him in the declaration form at the time of taking the medi claim policy, therefore, it was a case of suppression of material facts regarding health on the part of the complainant and thereafter the present complaint was filed by the complainant respondent.


A reply was filed by the appellants Insurance Co. before the District Forum, Chittorgarh on 29.3.05 and in the reply they have taken the same pleas which were taken by them in the repudiation letter dated 10.11.04. It was further stated in the reply that the complainant respondent had kept the appellants Insurance Co. in dark and had suppressed the disease of hypertension and from the record of the Escort Heart Institute, New Delhi the case of the complainant respondent was got examined by Paramount Health Services Pvt. Ltd. and had submitted a report dated 31.10.04 in the following manner:-


" The patient was hospitalized on 8.3.04 for the treatment of hypertension and coronary artery disease. The date of inception of policy 9.8.03. The indoor case papers seen at Escorts Heart Institute, New Delhi clearly mention that the patient had hypertension for the last ten years. The

4


insured has declared in the proposal form at the inception of policy that he does not have hypertension. Hypertension is the major cause of coronary artery disese. It is a willful suppression of the material fact. Therefore, this case can be repudiated. ( refuse to pay)."


It was further stated in the reply that from the report of Paramount Health Services Pvt. Ltd. it is well established that prior to taking the medi claim policy, the complainant was a patient of hypertension and since this fact was not disclosed by the deceased in the declaration form at the time of taking the policy, therefore, claim was rightly repudiated by the appellants through letter dated 10.11.04 and it was prayed that complaint be dismissed.


After hearing the parties, the District Forum, Chittorgarh through impugned order dated 28.10.05 had allowed the complaint of the complainant respondent inter alia holding that-


(i) That there is nothing on record to prove the fact that prior to taking the medi claim policy the complainant respondent had taken the treatment from any hospital for the disease of hypertension and simply because it was mentioned in the report of Paramount Health Services Pvt. Ltd. that the complainant was a patient of hypertension for the 5


last ten years , this fact could not be found established and further no record of the Escort Heart Institute, New Delhi had been produced and in absence of that, the fact that the complainant was a patient of hypertention prior to taking the policy could not be found established.


(ii) That repudiation of claim of the complainant respondent by the appellant was not justified and it amounted to deficiency in service on the part of the appellant and since the bills were for a sum of Rs. 1,81,882/-, therefore, this amount was ordered to be paid by the appellants to the complainant respondent.


Aggrieved from the said order dated 28.10.05 passed by the District Forum, Chittorgarh the appellant Insurance Company has preferred this appeal.


3. In this appeal, the main contention of the learned counsel for the appellant is that since from the report of Paramount Health Services Pvt. Ltd. dated 31.10.04, it is well established that the complainant was a patient of hypertension for the last ten years and since these facts were not mentioned by the complainant in the declaration form while taking the policy on 9.6.03 , therefore, it was a case of suppression of material facts regarding health on the part of the complainant and since as per terms and conditions of the policy , if at the time of taking the policy the disease of hypertension was found as pre-existing

6


disease, the claim was not payable and the learned District Forum had committed serious error and illegality in decreeing the claim of the complainant respondent and the findings of the District Forum are wholly erroneous, illegal and perverse one and the same could not be sustained and liable to be quashed and set aside and this appeal deserves to be allowed.


4. On the other hand, the learned counsel appearing for the respondent has supported the impugned order of the District Forum.


5. We have heard the learned counsel appearing for the appellant as well as for the respondent and gone through the entire materials available on record.


6. There is no dispute on the point that the complainant had taken a medi claim policy bearing no.140201/48/03/00313 from the appellants for the period 9.6.03 to 8.6.04 for a sum of Rs. 2 lacs.


7. There is no dispute on the point that the complainant was admitted in the Escort Heart Institute, New Delhi for the period 9.3.04 to 13.3.04 and operation of Angioplast was done in that hospital.


8. There is also no dispute on the point that except a bill dated 13.3.04, no other record of Escort Heart Institute, New Delhi or bed head ticket of the hospital had been produced.


9. There is no dispute on the point that the claim of the

7


complainant respondent was repudiated by the appellants Insurance Co. through letter dated 10.11.04 on the grounds mentioned therein as stated above.


10. There is no dispute on the point that the appellant Insurance Co. has placed reliance on the report of Paramount Health Services Pvt. Ltd. dated 31.10.04, as quoted above in page 3 and 4 of this judgment.


11. Thus, in the facts and circumstances just narrated above, the question for consideration is whether repudiation of claim of complainant respondent by the appellants was justified or not or whether the findings of the District Forum decreeing the claim could be sustained or not.


12. It may be stated here that so far as the report of Paramount Health Services Pvt. Ltd. dated 31.10.04 is concerned, in our considered opinion the District Forum had rightly placed no reliance on that report as in that report it was mentioned that from seeing the record of the Escort Heart Institute, New Delhi the disease of hypertension might be ten years old but since in absence of any record of the hospital that prior to taking the policy in question the complainant was admitted in any hospital for taking the treatment for the disease of hypertension, this fact could not be found established.


13. It may be stated here that it is the fundamental principle of insurance law that utmost good faith must be observed by the contracting parties and good faith forbids either party from non-disclosure of the facts which the parties known. The insured has a

8


duty to disclose and similarly it is the duty of the insurance company and its agents to disclose all material facts in their knowledge since obligation of good faith applies to both equally and in this respect, the decision of the Hon'ble Supreme Court in M/s.Modern Insulators Ltd. Vs. Oriental Insurance Co. (AIR 2000 SC 1014) may be referred to.


14. The onus probandi, in cases of fraudulent suppression of material facts rests heavily on party alleging fraud namely the insurer. Furthermore, mere concealment of some facts will not amount to concealment of some facts will not amount to concealment of material facts .


15. Suppression of fact must be a conscious operation of the giver of the answer which he knowingly did not disclose.


16. The Hon'ble National Commission in National Insurance Co. Ltd. Vs. Bipul Kunda (2005 CTJ 377 (CP) (NCDRC) ) has held that for repudiating a claim of an insured, it is for the insurer to show that a sttement on a fact, which was material for the policy, had been suppressed by the insured and that statement was fraudulently made by him/her with the knowledge of the falsity of that statement.


17. In the present case the bed head ticket of the Escort Heart Institute, New Delhi had not been produced and simply because in the report of Paramount Health Services Pvt. Ltd. dated 31.10.04 it was stated that the complainant was a patient of hypertension for the last ten years, that would not be a sufficient to prove the fact that at the time of taking the policy in question he was a patient of hypertention .

9


18. In our considered opinion, since there is no documentry proof or evidence available on record to show that the complainant was admitted in any hospital or consulted any medical man for treatment of disease of hypertension prior to taking the medi claim policy on 9.6.03 , therefore, it cannot be said that the complainant was guilty of suppression of material facts about health. No doubt in the report of Paramount Health Services Pvt. Ltd. dated 31.10.04 it was written that the complainant was a patient of hypertension for the last ten years but to corroborate and prove this fact no cogent and reliable documentary proof or evidence or material has been produced by the appellants showing that the complainant had earlier taken treatment of hypertension in any hospital. The appellant had failed to produce any document or paper to show that the complainant had taken treatment of hypertension prior to taking the medi claim policy on 4.6.04 and, therefore, it cannot be said that it was a case of suppression of material facts regarding health on the part of the complainant.


19. Apart from this, it may be stated here that the disease hypertension, which means tension or tonus that is greater than normal, a condition in which the patient has a higher blood pressure than that judged to be normal, cannot be treated as a disease in the same manner as the diseases such as kidney, heart and brain, which directly affect the life span of a person and apart from this, hypertension is not a permanent disease and it some times increases and sometimes it reduces and thus, non mentioning of such type of disease in the declartion form would not amount to mis-statement in real sense. From this point of view also, repudiation of claim of the complainant respondent by the appellants was not justified.

10


20. Thus, non-mentioning of the disease Hypertension in the declartion form by the complainant does not amount to suppression or concealment of material fact or mis-statement in real sense and, therefore, the appellants were not justified in repudiating the claim of the complainant respondent on the ground of suppression of materil facts regarding health and the District Forum was right in decreeing the claim of the complainant respondent.


21. For the reasons stated above, no illegality or irregularity has been committed by the District Forum in decreeing the claim of the complainant respondent. The findings of the District Forum decreeing the claim are based on correct appreciation of entire materials available on record and they do not suffer from any basic infirmity, illegality and perversity and hence, no interference is called for with the same and this appeal deserves to be dismissed.


Accordingly, the appeal filed by the appellants Insurance Co. is dismissed.



(Vimla Sethia ) (Justice Sunil Kumar Garg )

Member President