The National Consumer Disputes Redressal Commission allowed a revision petition filed by Tata AIG Life Insurance Co. Ltd., setting aside the orders of the Rajasthan State Commission and the Sri Ganganagar District Forum, and held that the insurer was justified in repudiating the claim due to the insured’s non-disclosure of a pre-existing cardiac condition and prior cardiac resynchronisation therapy, thereby dismissing the consumer complaint for Rs.9,40,000.
Background & Facts
The Dispute
The dispute arose from a life insurance policy issued by Tata AIG Life Insurance Co. Ltd. (the opposite party/insurer) to Late Shri Rajinder Kumar, the husband of complainant No.1, Smt. Sulochna Devi. The insured died on 05.04.2012, and the nominees claimed the full sum assured of Rs.9,40,000. The insurer repudiated the claim, alleging that the insured had concealed material facts regarding his health, specifically a pre-existing dilated cardiomyopathy, severe left ventricular dysfunction and prior cardiac resynchronisation therapy undertaken in 2008, when answering the health-related questions in the proposal form dated 30.09.2011.
Key Facts
- The insured submitted the proposal form on 30.09.2011 and deposited the first premium of Rs.10,569 (inclusive of tax) on 30.10.2011.
- Subsequent premiums of Rs.10,000 each were paid on 21.01.2012 and 05.04.2012.
- After obtaining the policy, the insured and his family resided at Sri Ganganagar.
- On 02.04.2012 the insured fell ill, was admitted to Fortis Escorts Hospital, Jaipur on 03.04.2012, and died naturally on 05.04.2012.
- A death summary issued by the hospital recorded that the insured was a known case of dilated cardiomyopathy (DCMP) with severe left ventricular dysfunction, had undergone cardiac resynchronisation therapy (CRT) in 2008, and died of heart failure and renal failure.
- The nominees submitted a claim on 03.01.2013 along with required documents.
- The insurer sanctioned only Rs.92,297 and dispatched a cheque for that amount on 01.07.2013 to the insured’s earlier address.
- Aggrieved, the nominees filed a consumer complaint before the District Consumer Disputes Redressal Forum, Sri Ganganagar (Complaint No.318 of 2013) seeking the total insurance benefit of Rs.9,40,000 together with interest, compensation and litigation costs.
- The District Forum, by order dated 12.02.2014, allowed the complaint, directed the insurer to pay Rs.4,40,000 as insurance amount, simple interest at 9% from 05.07.2012 until payment, payment of the death benefit and other benefits within a month, and Rs.5,000 towards litigation costs, to be complied within one month.
- The insurer filed an appeal before the Rajasthan State Consumer Disputes Redressal Commission, which, by order dated 25.10.2017, dismissed the appeal and upheld the District Forum’s order.
- Aggrieved by the State Commission’s order, the insurer filed the present revision petition before the National Commission under Section 21(b) of the Consumer Protection Act, 1986.
Procedural History
- 30.09.2011: Proposal form submitted and policy obtained.
- 30.10.2011: First premium of Rs.10,569 deposited.
- 21.01.2012: Second premium of Rs.10,000 deposited.
- 05.04.2012: Third premium of Rs.10,000 deposited; insured died same day.
- 03.01.2013: Claim submitted to insurer.
- 01.07.2013: Insurer dispatched cheque for Rs.92,297.
- 12.02.2014: District Forum order allowing complaint and granting relief.
- 25.10.2017: State Commission order dismissing appeal and upholding District Forum order.
- 02.09.2026: Judgment reserved.
- 12.10.2026: Judgment pronounced.
Relief Sought
The insurer prayed that the order dated 25.10.2017 passed by the State Commission in First Appeal No.504/2014 be set aside, and that any other orders deemed fit and proper in the interest of justice be passed, effectively seeking dismissal of the consumer complaint.
The Legal Issue
The central question was whether the insurer had established non-disclosure of a material fact relating to the insured’s health - namely, a pre-existing dilated cardiomyopathy, severe left ventricular dysfunction and prior cardiac resynchronisation therapy - in response to the health-related questions in the proposal form dated 30.09.2011, and whether such non-disclosure justified repudiation of the claim under the doctrine of uberrima fides and Section 45 of the Insurance Act, 1938, read with Section 21(b) of the Consumer Protection Act, 1986.
Arguments Presented
For the Appellant/Petitioner
The insurer contended that the death summary and hospital records conclusively proved that the insured had suffered from DCMP, severe LV dysfunction and had undergone CRT in 2008, all of which pre-dated the proposal form. It argued that the insured’s negative answers to questions Nos.5, 6 and 9C of the proposal form regarding prior heart disease, cardiac treatment and hospitalisation were false and constituted suppression of material facts. The insurer relied on the principle that in contracts of insurance uberrima fides applies, placing the burden of proving non-disclosure on the insurer once cogent documentary evidence is produced. It cited Mahaveer Sharma v. Exide Life Insurance Company Limited & Anr., (2025) to assert that non-disclosure of a pre-existing cardiac condition is material to the risk assessment. The insurer further argued that the State Commission and District Forum had erred by ignoring the Death Summary and by requiring proof of the exact date of onset of the disease, which is not required when the documentary evidence shows a significant pre-existing condition.
For the Respondent/Complainants
The complainants maintained that the insurer had not produced any independent medical evidence to establish that the insured suffered from a pre-existing heart condition prior to the proposal form. They argued that the Death Summary, by itself, did not establish the timing of the disease relative to the proposal and that the Face Sheet only showed admission to cardiology on 03.04.2012, without any history of prior illness. They relied on the District Forum’s finding that, in the absence of evidence regarding the precise date of onset, the condition could not be said to pre-date the proposal. The complainants also contended that the insurer had not rebutted the presumption of good faith and that the burden of proving suppression remained on the insurer, which had not been discharged.
The Court's Analysis
The Court began by noting that insurance contracts are contracts uberrima fides, imposing a duty on the proposer to make a full and true disclosure of all material facts within his knowledge, particularly where specific questions relating to health and medical history are posed in the proposal form. It held that the materiality of a fact depends on the nature of the risk sought to be covered and the information sought by the insurer. The Court referred to the decisions in Satwant Kaur Sandhu (supra) and Mahakali Sujatha (supra) to illustrate that non-disclosure of diabetes and chronic renal failure had been held material in mediclaim policies.
The Court then examined the Death Summary dated 05.04.2012, which recorded that the insured was a known case of DCMP with severe LV dysfunction, had undergone CRT in 2008, and died of heart failure and renal failure. It observed that the reference to CRT in 2008 assumed considerable significance because the proposal form was submitted on 30.09.2011, nearly three years thereafter. The Court found that the Death Summary, together with the In-Patient History and Physical Record and Face Sheet dated 03.04.2012, had not been rebutted by the complainants. Consequently, the material fact of a significant pre-existing cardiac condition and prior CRT stood established on the record.
The Court held that once the insurer produces cogent documentary evidence showing that a specific answer in the proposal form was contrary to the known medical history of the proposer, the question must be examined on the basis of the entire evidence and not by requiring proof of the precise date of onset of the disease in every case. It noted that the absence of a separate medical record establishing the exact date of diagnosis does not detract from the specific reference to CRT in 2008 and the resultant evidence of a significant pre-existing cardiac condition.
The Court criticised the State Commission and District Forum for failing to appreciate the documentary evidence on record and for proceeding on the basis that there was no evidence of any pre-existing disease or concealment. It held that the concurrent finding that the insurer had failed to establish any pre-existing cardiac condition was based on an erroneous appreciation of the evidence and could not be sustained. In view of the material non-disclosure, the repudiation of the claim by the insurer could not be held to constitute deficiency in service.
Finally, the Court noted that the jurisdiction of the National Commission under Section 21(b) of the Act, 1986 is revisional and not an appellate jurisdiction for re-appreciation of every piece of evidence; however, interference is justified where the fora below have failed to consider a material document or have arrived at a contrary finding.
The Verdict
The National Consumer Disputes Redressal Commission allowed the revision petition filed by Tata AIG Life Insurance Co. Ltd. It set aside the order dated 25.10.2017 passed by the Rajasthan State Consumer Disputes Redressal Commission in First Appeal No.504/2014 and the order dated 12.02.2014 passed by the Sri Ganganagar District Forum in Consumer Complaint No.318/2013. Consequently, the consumer complaint seeking Rs.9,40,000 was dismissed. The Commission further ordered that no costs would be awarded to either party.
What This Means For Similar Cases
Duty of Disclosure in Insurance Contracts Is Strict
Practitioners must note that any proposal form containing specific health-related questions imposes an obligation on the applicant to disclose all known medical conditions, including past treatments such as cardiac resynchronisation therapy. Failure to do so permits the insurer to repudiate the claim on grounds of non-disclosure of a material fact, even if the condition is asymptomatic at the time of proposal.
Burden of Proof Lies on the Insurer
Once the insurer produces cogent documentary evidence - such as a death summary, hospital records or investigative reports - showing that a particular answer in the proposal form was false, the burden shifts to the insurer to establish non-disclosure. The insurer need not prove the exact date of onset of the disease; the existence of a significant pre-existing condition sufficiently preceding the proposal is sufficient.
Documentary Evidence Prevails Over Oral Assertions
The judgment underscores that oral testimony or bare assertions cannot outweigh contemporaneous medical records. Courts will rely on objective documents like death summaries, in-patient histories and face sheets to determine the timing and nature of illnesses, and will not uphold findings that ignore such evidence.
