The effect of concealment of fact in consumer law

 

The effect of Concealment of facts by complainant in consumer law

 

Meena Devi widow of Sh. Barthy Ram v. The Director General/

Additional Director General

 

Facts: The Shishpal purchased a postal insurance from the respondents for

Rs. 2,00,000/-. The insurance was to mature on 29.05.2024, unfortunately.

Shishpal died on 19.04.2009. The Complainant being the mother and the

nominee of the deceased submitted insurance claim. The Respondents/

Opposite Parties repudiated the claim on the ground of concealment of

material information regarding medical condition and paid a sum of Rs.

23,750/- to the Petitioner. Challenging the repudiation of the insurance claim,

the Petitioner filed consumer complaint in District Consumer Forum

Fathegarh. District Forum held that the Complainant with cost of Rs.1000/-

and direct the OP who are jointly and severely liable to release the remaining insured amount of the life assured to the tune of Rs. 1,76,250/- in favour of the Complainant along with interest @ 9% per annum from the date of repudiation i.e. 19.03.2010 till actual payment Being aggrieved of the order of the District Forum, Respondents/Opposite Parties preferred an appeal and the State Commission on consideration of material on record accepted the appeal, set aside the order of the District Forum and dismissed the complaint by observing thus: The contract of insurance is based on the

doctrine of ‘uberrima fides’ i.e. utmost good faith. The life assured while

obtaining the insurance policy is under obligation to disclose several material

aspect with respect to his/her life. Reference be made to the judgment of

the Supreme Court in the case of P.C. Chacko & Anr. v. Chairman, LIC of

India (2008)1 SCC 321, and Judgment of the Commission in the matter of

Crown Consultants Pvt. Ltd v. Oriental Insurance Company Ltd. III (2011) CPJ

The legal position of controversy which requires consideration in

the revision petition is whether the Petitioner concealed material information

about his health and obtained the insurance policy by misrepresentation.

The Commission found that medical category of the assured Shishpal was

downgraded with the diagnosis ‘Acute Stress Reaction’ (which was later on

upgraded to Shape-1 on 27.06.2007). The Respondents has failed to produce any evidence on medical literature to show that ‘Acute Stress Reaction’ is a serious disease and it is also not clear what is meant by ‘Acute Stress Reaction’ further, it was noticed that information given in the letter it appears that the deceased was upgraded to medical category Shape-1 which means that Acute Stress Reaction is of temporary nature and not a serious life threatening disease. The commission viewed that the State Commission has committed a grave error in holding that deceased assured obtained the insurance policy by concealment of misrepresentation of material facts, thus the impugned order of the State Commission reversing the order of the District Forum cannot be sustained.

Decision: The Commission allowed the revision petition, set aside the

impugned order and restore the order of the State Commission.