Anoop Kumar Mendiratta, Member

1. Present Revision Petition has been preferred by the Petitioner/Complainant aggrieved against the order dated 20.03.2018 passed by the learned State Commission, Delhi in First Appeal No.334 of 2013 whereby the Appeal preferred on behalf of Life Insurance Corporation of India was allowed. Consequently, the order passed by the learned District Forum allowing the Complaint and directing the Opposite Party/Respondent for settling the claim with the nominee and payment of ₹2 Lakhs within a period of 30 days, failing which to pay interest @ 9% p.a. for any period of delay was set aside. Petitioner and the Respondent are hereinafter referred to as the "Complainant" and "Opposite Party" respectively, for convenience.

2. The undisputed facts of the case are that late Head Constable Charan Singh had obtained a life insurance policy from the Opposite Party during his lifetime with cover of ₹2 Lakhs and nominated his wife (Complainant) as nominee. On account of death of Charan Singh/Deceased Life Assured (DLA) on 28.11.2007 due to heart attack, Complainant lodged a claim with the Opposite Party. The claim was repudiated by the Opposite Party on the ground that the deceased life assured (DLA) was diagnosed suffering from Diabetes Mellitus since 19.11.2003 with M. Boil with cellulites, before he applied for the above policy. Further, the DLA had consulted a Doctor and undertaken treatment from the Hospital with medical leave on different dates. The DLA is alleged to have suppressed and wrongly given answers in the proposal form though he had personal knowledge of the medical ailments. Aggrieved against the repudiation of claim, Complainant preferred an application before the Ombudsman, which was rejected.

3. In the aforesaid background, complaint was preferred by the Complainant before the District Forum alleging deficiency in service on the part of the Opposite Party. Learned District Forum vide order dated 11.02.2013 allowed the complaint and directed the Opposite Party No.1 to settle the insurance claim in question and pay ₹2 Lakhs to the nominee, within a period of 30 days of the receipt of the order, failing which to pay interest @ 9% p.a. for the period of delay.

4. Learned District Forum relied upon the decision of the State Commission in Appeal No.482 of 2005 Sh. Pushpender Kumar Garg vs. National Insurance Company Limited decided on 01.08.2008, wherein it was observed that the claim of the insured should not be or cannot be repudiated by taking a clue or remote reference to any so- called disease from the discharge summary of the insured by invoking the exclusion clause or non-disclosure of pre-existing disease, unless the insured had concealed his hospitalization or operation undertaken in the reasonable near proximity. It was further observed that day-to-day history of several years of some or the other physical problem one may face occasionally, without having landed for hospitalization or operation for the disease cannot be used for repudiating the claim. Reliance was also placed upon the decision of this Commission in LIC vs. Chandra Kanta Lohande, II (2009) CPJ 300 (NC) wherein it was held that in today‟s world, many people face problems of diabetes, blood pressure, acidity, indigestion, back pain and headache and non-disclosure of such minor diseases is not fatal for claims submitted by the insured.

5. The order passed by the learned District Forum was assailed on behalf of Insurance Company/Opposite Party by way of First Appeal No.334 of 2013. Learned State Commission set aside the order passed by the learned District Forum observing that the learned District Forum failed to consider that the deceased was suffering from Diabetes Mellitus since 19.11.2003, with M. Boil with cellulites on back, for which he consulted a Doctor and also undertook treatment with medical leave for different periods. The aforesaid facts as well as taking of medical leave were further stated to have been concealed in response to specific questions in the proposal form. Learned State Commission noticing that the contract of insurance is a contract of Uberrimae Fidei requiring every material fact to be disclosed, observed that DLA had concealed his health condition in the proposal form and as such Opposite Party was justified in repudiating the claim of the insurance.

6. Learned Counsel for the Petitioner/Complainant submits that long history of several years during which one may suffer from a lifestyle disease or the other cannot be termed as a „disease‟ which can be fatal to the claim of the insured in case of non-disclosure. He further urged that after obtaining the policy, no earned leave or medical leave had been availed by DLA from 28.03.2006 to 28.11.2007 which established that the DLA was leading a healthy life. Reliance was further placed upon Sulbha Prakash M otegaonkar vs. Life Insurance Corporation of India, (2021) 13 SCC 561 decided on 05.10.2015 wherein Hon‟ble Apex Court held that non-disclosure of non-life threatening disease which had nothing to do with the death of the insured could not be used as ground to repudiate the claim of the DLA. Reference was also made to Life Insurance Corporation of India (LIC) vs. Chandra Kanta Lohande, II (2009) CPJ 300 (NC) along with Neelam Chopra vs. Life Insurance Corporation of India & Ors. IV (2018) CPJ 321 (NC).

7. On the other hand, order passed by the learned State Commission is supported by learned Counsel for LIC/Opposite Party. He reiterated the contentions raised before the Ld. State Commission and urged that the Deceased Life Assured (DLA) had suppressed material facts at the time of filling the proposal form by denying consultation with medical practitioner, hospitalization, availing of leave on medical grounds during last five years as well as the factum of suffering from Diabetes Mellitus as referred in Question No.11 (a) to 11 (i) of the proposal form. He further emphasized that the documents collected by the Insurance Company from the office of the deceased reflect that the DLA was suffering from Diabetes Mellitus since 19.11.2003 with M. Boil with cellulites. He further urged that the contract of insurance is a contract of Uberrimae Fidei (i.e. contract of utmost good faith) and the complainant could not be permitted to take benefit of concealment of medical history. Reliance was further placed upon Life Insurance Corporation vs. Sunita & Ors. SLP No.15354 of 2002 and E. Sashi Kala vs. Branch M anager, Life Insurance Corporation of India (2025) SCC Online NCDRC 48.

8. We have given considered thought to the contentions raised and perused the record carefully. There is no dispute on the proposition of law that contract of insurance is a contract of Uberrimae Fidei, i.e. contract of utmost good faith and the proposer is bound to disclose material facts wilfully in order to enable the insurer to exercise his discretion to enter into the contract of insurance or otherwise. What constitutes a material suppression for the purpose of contract of insurance may be seen in the light of observations of Hon‟ble Apex Court in M anmohan Nanda vs. United India Assurance Company Limited and Another, (2022) 4 SCC 582 in paras 36 to 39 and 43 :-

                          "36. The duty of the insured to observe utmost good faith is enforced by requiring him to respond to a proposal form which is so framed to seek all relevant information to be incorporated in the policy and to make it the basis of a contract. The contractual duty so imposed is that any suppression or falsity in the statements in the proposal form would result in a breach of duty of good faith and would render the policy voidable and consequently repudiate it at the instance of the insurer.

                          37. In relation to the duty of disclosure on the insured, any fact which would influence the judgment of a prudent insurer and not a particular insurer is a material fact. The test is, whether, the circumstances in question would influence the prudent insurer and not whether it might influence him vide Reynolds v. Phoenix Assurance Co. Ltd. [Reynolds v. Phoenix Assurance Co. Ltd., (1978) 2 Lloyd's Rep 440] Hence the test is to be of a prudent insurer while issuing a policy of insurance.

                          38. The basic test hinges on whether the mind of a prudent insurer would be affected, either in deciding whether to take the risk at all or in fixing the premium, by knowledge of a particular fact if it had been disclosed. Therefore, the fact must be one affecting the risk. If it has no bearing on the risk it need not be disclosed and if it would do no more than cause insurers to make inquiries delaying issue of the insurance, it is not material if the result of the inquiries would have no effect on a prudent insurer.

                          39. Whether a fact is material will depend on the circumstances, as proved by evidence, of the particular case. It is for the court to rule as a matter of law, whether, a particular fact is capable of being material and to give directions as to the test to be applied. Rules of universal application are not therefore to be expected, but the propositions set out in the following paragraphs are well established:

                          39.1. Any fact is material which leads to the inference, in the circumstances of the particular case, that the subject-matter of insurance is not an ordinary risk, but is exceptionally liable to be affected by the peril insured against. This is referred to as the "physical hazard".

                          39.2. Any fact is material which leads to the inference that the particular proposer is a person, or one of a class of persons, whose proposal for insurance ought to be subjected at all or accepted at a normal rate. This is usually referred to as the "moral hazard". 39.3. The materiality of a particular fact is determined by the circumstances of each case and is a question of fact. xxxxxxxx xxx

                          43. The basic rules to be observed in making a proposal for insurance may be summarised as follows:

                          43.1. A fair and reasonable construction must be put upon the language of the question which is asked, and the answer given will be similarly construed. This involves close attention to the language used in either case, as the question may be so framed that an unqualified answer amounts to an assertion by the proposer that he has knowledge of the facts and that the knowledge is being imparted. However, provided these canons are observed, accuracy in all matters of substance will suffice and misstatements or omissions in trifling and insubstantial respects will be ignored.

                          43.2. Carelessness is no excuse, unless the error is so obvious that no one could be regarded as misled. If the proposer puts "no" when he means "yes" it will not avail him to say it was a slip of the pen; the answer is plainly the reverse of the truth.

                          43.3. An answer which is literally accurate, so far as it extends, will not suffice if it is misleading by reason of what is not stated. It may be quite accurate for the proposer to state that he has made a claim previously on an insurance company, but the answer is untrue if in fact he has made more than one.

                          43.4. Where the space for an answer is left blank, leaving the question unanswered, the reasonable inference may be that there is nothing to enter as an answer. If in fact there is something to enter as an answer, the insurers are misled in that their reasonable inference is belied. It will then be a matter of construction whether this is a mere non-disclosure, the proposer having made no positive statement at all, or whether in substance he is to be regarded as having asserted that there is in fact nothing to state.

                          43.5. Where an answer is unsatisfactory, as being on the face of it incomplete or inconsistent the insurers may, as reasonable men, be regarded as put on inquiry, so that if they issue a policy without any further enquiry they are assumed to have waived any further information. However, having regard to the inference mentioned in Head 43.4 above, the mere leaving of a blank space will not normally be regarded as sufficient to put the insurers on inquiry.

                          43.6. A proposer may find it convenient to bracket together two or more questions and give a composite answer. There is no objection to his doing so, provided the insurers are given adequate and accurate information on all points covered by the questions. 43.7. Any answer given, however accurate and honest at the time it was written down, must be corrected if, up to the time of acceptance of the proposal, any event or circumstance supervenes to make it inaccurate or misleading.

                          [Source : Halsbury's Laws of England, 4th Edn., Para 375, Vol. 25 : Insurance]"

9. Reference may further be made to Sulbha Prakash M otegaoneker & Ors. vs. Life Insurance Corporation of India, (2021) 13 SCC 561 wherein repudiation of claim by the Insurance Company, on account of non-disclosure of certain diseases, which were neither life-threatening diseases, nor could or did cause the death of the insured, was held to be unjustified. Hon'ble Apex Court held that since the death of the insured was due to myocardial infraction, the non- disclosure of 'lumbar spondylitis' suffered by the deceased policy-holder would not disentitle the deceased from getting his life insured and as such the repudiation of claim was incorrect. It was further observed that the non-disclosure to be material itself, should have a clear nexus to the risk assumed by the insured or the cause of death.

10. Reference may further be made to Bajaj Allianz General Insurance Co. Ltd. vs. Avtar Singh M ann, First Appeal No.477 of 2020 decided on 17.08.2020 decided by Ld. Single Member of this Commission, wherein complainant had obtained an Overseas Travel Insurance Policy. During his stay in Canada, complainant suffered a stroke for which he was treated at hospital. However, the claim was rejected by the Insurance Company on the ground that the policy-holder had been suffering from diabetes and hypertension and had concealed these facts while obtaining the policy. After noticing the judgement passed in P. Vankat Naidu vs. Life Insurance Corporation of India & Anr., IV (2011) CPJ 6 (SC) 6 and Satish Chander M adan vs. Bajaj Allianz General Insurance Co. Ltd., I (2016) CPJ 613 (NC) as relied by the State Commission, it was observed by National Commission that the diseases for which complainant got admitted in Canada had no relation with hypertension or diabetes, and the attending doctor in Canada was not sure that present condition of insured having suffered brain haemorrhage was due to hypertension. Also the insurer had failed to produce any evidence on record to prove that the diseases for which insured was admitted in hospital in Canada had any bearing on the diseases which the appellant alleged to conceal while taking the policy. It was further noticed that the insured had been medically examined by authorized doctor of the appellant before the policy was issued. As such the repudiation by the Insurance Company was held to be unjustified.

11. Reliance may also be placed upon Reliance Nippon Life Insurance Company Ltd. vs. Nirmala Devi, Civil Appeal No.6572 of 2023 decided by Hon'ble Apex Court 13 th October, 2023. In the aforesaid case, the insured did not die due to any illness or ailment but due to head injury sustained in a road traffic accident on 27.10.2015. The Insurance Company repudiated the claim relying upon response to column No.27 wherein the insured had answered in negative to the query as under :

                          "Are you currently taking any medication or drugs, other than minor conditions, (e.g. colds and flu), either prescribed or not prescribed by a doctor, or have you suffered from any illness, disorder, disability or injury during the past 5 years which has required any form of medical or specialized examination (including chest x-rays, gynecological investigations, pap smear, or blood consultation, hospitalization or surgery"

                          Hon‟ble Apex Court did not agree with the submission made on behalf of the counsel for the Insurance Company that there was suppression of material fact by the insured and observed that the contention would have been of significance, if the insured died owing to an ailment caused due to the injury suffered by insured in the earlier road traffic accident in 2014. The insured admittedly died as a result of head injury sustained in road traffic accident occurring on 27.10.2015 while he was driving his two-wheeler. Accordingly, Hon‟ble Apex Court held that earlier head injuries sustained by the insured which had not been categorically disclosed, had no bearing on the repudiation of the policy. The Appeal was accordingly dismissed.

12. Reverting back to the facts of the case, there is no dispute as to the fact that the claim has been repudiated by the Insurance Company in view of the fact that the answer to the questions in para 11 (a) and 11 (i) were answered in negative by the Complainant whereby he failed to disclose regarding availing of medical leave or suffering from any of the diseases referred to in the questionnaire (proposal form). However, it is pertinent to notice that the deceased was young and aged below 45 years at the time of availing the policy. There is no dispute as to the fact that the Deceased Life Assured (DLA) had expired due to chest pain in terms of Certificate issued on 18.09.2008 by Indravati Nursing Home. The documents which have been relied upon by the Insurance Company relate to the medical leave obtained by the DLA from 29.11.2003 to 04.01.2004 for 37 days and from 14.09.2004 to 23.09.2004 for 10 days medical rest, which is about more than two years prior to the filling up the proposal form on 28.03.2006. In the enclosing application dated 21.09.2004, seeking leave from 14.09.2004 to 20.09.2004, DLA sought the leave since he severely suffered from fever and enclosed Medical Certificate obtained from PHC Alipur. The said Medical Certificate is not supported by any prescription but the DLA was stated to be suffering from Diabetes Mellitus with c (Lower Respiratory Tract Infections). There is no indication in the said Medical Certificate in case any medicines were prescribed for Diabetes Mellitus to form an opinion if DLA had been suffering from the said lifestyle disease. The Opposite Party has further relied upon the medical leave availed by the DLA for the period of 10 days from 29.11.2003 to 08.12.2003. The application dated 29.11.2003 which had been submitted by the DLA merely mentions the fact that a boil had been coming on the back of the applicant due to which he had been advised medical rest. The prescription slip issued by Allopathic MCD Dispensary mentions the description as Diabetes Mellitus c with M. Boil with cellulites back. However, what is crucial to be noticed is that the DLA had been merely prescribed with tablet „Alnim‟ for 5 days and capsule Lactoallium for 5 days. There does not appear to be any prescription of medicine for treatment of Diabetes Mellitus on the face of record, which could indicate that DLA was advised any treatment for Diabetes Mellitus. Tablet Alnim which is a combination of paracetamol and nemosulide is used for short term relief of pain and fever, possibly for treating the symptoms arising out of cellulitis. It may be beneficially observed that cellulitis is a bacterial infection of deep skin layers and under lying tissue causing swelling and pain. The aforesaid factual position clearly reveals that there is no cogent evidence on record to corroborate if the DLA had undertaken any long term treatment for Diabetes Mellitus in specific.

13. On the basis of the medical documents relied upon by the Insurance Company, it cannot be concluded if the deceased had been suffering from diabetes mellitus, since no medicines were prescribed to the DLA in the prescriptions relied by Insurance Company. Merely mentioning of diabetes mellitus in the diagnosis without prescription of any medicines does not prove that the DLA was suffering from diabetes mellitus as the medicines only appear to have been prescribed for mere treatment of cellulitis. Also, it cannot be ignored that the application had been forwarded for leave by DLA since he was suffering from fever for the period 14.09.2004 to 20.09.2004. There is nothing to support in case any medical reimbursements were obtained for the medicines for diabetes by the DLA. Mere suppression of the fact that deceased had availed medical leave during the routine course on account of suffering from fever or bacterial infection does not justify the repudiation of claim by the Insurance Company that too for leave availed about two years prior to availing of insurance policy. It is also undisputed that DLA expired due to sudden cardiac failure and there is nothing on record to reflect if he had been hospitalized or otherwise taking some medical treatment prior to his death. The observations of Hon‟ble Apex Court in Sulbha Prakash M otegaonkar and Others vs. LIC (supra), that where the alleged ailment is not life threatening and has no bearing on the cause of death, cannot be overlooked. Non-disclosure to be material must have a clear nexus to the risk assumed by the insurer or cause of death which is clearly lacking in the present case. Merely because information regarding availing of medical leave in routine fever or cellulitis was not disclosed by DLA, the same cannot justify repudiation of claim.

For the foregoing reasons, we are unable to concur with the findings of the learned State Commission. The Order passed by the learned State Commission is accordingly set aside. Opposite party is accordingly directed to pay the insurance claim to the complainant as a nominee within a period of four weeks of this Order along with interest @ 6% per annum from the date the amount became due till realization.

Revision Petition is accordingly allowed. Pending applications, if any, also stand disposed of. No order as to costs. A copy of this Order be provided to both the parties by the Registry.