Insurer's repudiation of mediclaim policy upheld due to non-disclosure of chronic diabetes and renal failure in proposal form

SC upheld insurer's repudiation of mediclaim policy claim due to non-disclosure of chronic diabetes and renal failure in proposal form. Deceased had stated in claim form that he suffered from chronic renal failure and diabetic nephropathy within three weeks of taking policy, indicating pre-existing conditions. Court found clear suppression of material facts regarding insured's health status was palpably untrue to his knowledge. Hospital certificate confirming medical history supported insurer's position. Appeal dismissed as claim was fraudulent with no order as to costs.

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Issues Involved:
1. Deficiency in service by the Insurance Company.
2. Suppression of material facts by the insured.
3. Applicability of Section 45 of the Insurance Act, 1938.
4. Validity of the National Commission's order.

Summary:

1. Deficiency in Service by the Insurance Company:
The appellant claimed compensation for deficiency in service by the respondent - Insurance Company for not processing her claim u/s a mediclaim policy. The District Forum initially found the Insurance Company guilty of deficiency in service due to inordinate delay in deciding the claim and directed the respondent to pay the claimed amount with interest and litigation costs. However, the State Commission overturned this decision, stating that there was no deficiency in service as the repudiation of the claim was based on material facts.

2. Suppression of Material Facts by the Insured:
The core issue was whether the insured's non-disclosure of his chronic Diabetes and Renal failure at the time of taking out the mediclaim policy constituted suppression of material facts. The Supreme Court held that the insured was under a solemn obligation to make a true and full disclosure of his health condition. The insured's statement in the proposal form that he was in "Sound Health" was found to be palpably untrue. The Court concluded that there was clear suppression of material facts, justifying the Insurance Company's repudiation of the claim.

3. Applicability of Section 45 of the Insurance Act, 1938:
The Court clarified that Section 45 of the Insurance Act, 1938, which restricts the right of the insurer to call in question a life insurance policy on the ground of mis-statement after a particular period, does not apply to mediclaim policies. A mediclaim policy is a non-life insurance policy meant to cover certain expenses related to injury, accidents, or hospitalizations and falls under the category of contract uberrimae fidei (utmost good faith).

4. Validity of the National Commission's Order:
The appellant contended that the National Commission erred in upholding the State Commission's order on the premise of "concurrent finding of fact" when both the Forums had arrived at different findings. The Supreme Court acknowledged the error but found that the claim was fraudulent based on its independent examination of the material on record. Therefore, it dismissed the appeal, stating that no useful purpose would be served by remitting the matter to the National Commission for fresh adjudication on merits.

Conclusion:
The Supreme Court dismissed the appeal, affirming that the insured's non-disclosure of his health condition constituted suppression of material facts, thereby justifying the Insurance Company's repudiation of the claim. The Court also clarified that Section 45 of the Insurance Act, 1938, does not apply to mediclaim policies.

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