9911796707
TMI Blog2025 (3) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... acts, wherein the non-disclosure of certain medical conditions was held to be material in the context of a Mediclaim policy. In Rekhaben Nareshbhai Rathod [2019 (4) TMI 1454 - SUPREME COURT], the repudiation of the policy by the insurer was within a period of two years from the commencement of the insurance cover on the ground of nondisclosure of a material fact and suppressing/non-disclosing a pre-existing life insurance. In the said case, the expression "material", in the context of insurance policy, was defined as any contingency or event that may have an impact upon the risk appetite or willingness of the insurer to provide insurance cover. In the facts of this case the respondent-insurer decided to issue a policy to the father of the appellant herein even though it was aware that there was another policy for a higher sum assured which was taken by the insured from Aviva. Thus, the insurer was also aware of the fact that the insured had capability and capacity to pay the premium for the policy obtained from Aviva and was confident that the insured had the capacity to pay the premium in respect of the policy which was issued to the insured by the respondent-insurer for a sum l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd were in force at the time the insurance cover was sought. 4. The appellant being aggrieved by the order of the State Commission preferred an appeal before the National Commission, but the National Commission dismissed the appeal placing reliance on the judgment delivered by this Court in the case of Reliance Life Insurance Co. Ltd. & Anr. v. Rekhaben Nareshbhai Rathod, (2019) 6 Supreme Court Cases 175 and Satwant Kaur Sandhu v. New India Assurance Co. Ltd., (2009) 8 SCC 316. 5. Learned counsel for the appellant has vehemently argued before this Court that the orders passed by the State Commission as well as the National Commission deserve to be set aside as there was no material suppression on the part of his father while obtaining a life insurance policy from the respondent company. It is further argued that it was not a policy relating to any Mediclaim nor any material fact regarding health was suppressed, however, inadvertently, the policies issued by Life Insurance Corporation of India were not mentioned under clause 54 which is a mere omission as his father has mentioned about another policy issued by Aviva in clause 54. It has also been argued that the format of the appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ultaneously applied for any life, health insurance cover with us or any other life, health insurance company which is still under consideration? 54. Please provide details of existing insurance cover on your life in the below table. If you do not have any existing insurance on your life, please mention 'NIL' in Sum Assured column below. Please include any Keyman Insurance, Partnership Insurance & Employer Employee Insurance cover as well. If answer to question 52 to 55 is YES, then please provide the complete details in the below mentioned table : Policy/Proposal/ Application No. Year of Issue/ Submission Company Name Sum Assured No. 89478 02/01/2014 AVIVA 400000 Decision (Standard, other than standard terms Status (In Force, Lapsed, Surrendered, Paid up, Applied for Type of Policy (Life, Health, Accident) Standard Force Life 8. Clause 54 provides for details of the existing policies and the father of the appellant has certainly mentioned one policy issued by Aviva which is again a life insurance policy. It is also true that the father of appellant at the relevant point of time was also insured by Life Insurance Corporation of India an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to disclose all material facts, the insurer must also inform the insured about the terms and conditions of the policy that is going to be issued to him and must strictly conform to the statements in the proposal form or prospectus, or those made through his agents. Thus, the principle of utmost good faith imposes meaningful reciprocal duties owed by the insured to the insurer and vice versa. This inherent duty of disclosure was a common law duty of good faith originally founded in equity but has later been statutorily recognised as noted above. It is also open to the parties entering into a contract to extend the duty or restrict it by the terms of the contract. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther 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 rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h may weigh with a prudent insurer in assuming the risk proposed. These facts are considered material to the contract of insurance, and its non-disclosure may result in the repudiation of the claim. The materiality of a certain fact is to be determined on a case-to-case basis. The aforementioned judgements illustrate instances of material facts, wherein the non-disclosure of certain medical conditions was held to be material in the context of a Mediclaim policy. 13. We are cognisant and conscious of this Court's judgement in Rekhaben Nareshbhai Rathod (supra), whereby the insurer was held to be entitled to repudiate the insurance claim on account of a complete failure to disclose previous insurance policies availed by the applicant. The primary consideration that weighed with this Court was that this information could potentially allow the insurer to question as to why the insured had in such a short span of time obtained two different life insurance policies. 14. In Rekhaben Nareshbhai Rathod (supra), the repudiation of the policy by the insurer was within a period of two years from the commencement of the insurance cover on the ground of nondisclosure of a material fact and sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16. In Mahakali Sujatha (supra), this Court observed that if a claim was repudiated on the ground that the policy holder has suppressed material facts in his application form with respect to existing life insurance policies from other insurers, the burden is on the insurer to prove the allegation of non-disclosure of the material fact and that the non-disclosure was fraudulent. Further, the burden of proving the fact, which excludes the liability of the insured to pay compensation lies on the insured alone and no one else. 17. Applying the aforesaid judgments to the facts of the case, it is noted that the insured had made a substantial disclosure inasmuch as he had disclosed that he had obtained another policy from a private insurer-Aviva for an assured sum of Rs. 4 lakhs (which is actually Rs.40 lakh) which was in force. Further the queries under Clauses 52 and 53 were with regard to the policies from other insurers "under consideration" and under clause 54 details of "existing insurance cover" had to be mentioned. Evidently, the details of only one insurance cover was mentioned and not about others which were produced by the insurer before the State Commission as Exhibit A-4 to ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
