The State Consumer Disputes Redressal Commission, West Bengal dismissed an appeal by HDFC Life Insurance Company affirming the district commission’s order that repudiation of a life insurance claim on grounds of alleged non-disclosure of diabetes and hypertension was not proved. The judgment reinforces the insurer’s burden to establish material suppression under Section 45 of the Insurance Act, 1938 and clarifies that mere allegations or unauthenticated documents cannot sustain repudiation.
Background & Facts
The Dispute
The respondent, Begum Sakila Akhtar, widow and nominee of the deceased insured, lodged a claim for the death benefit under HDFC Life’s policy “HDFC SL ProGrowth Flexi” (Policy No.19791792) after her husband’s death on 06.12.2018. The appellant-insurer repudiated the claim, alleging that the insured had failed to disclose diabetes mellitus and hypertension since 2014 and had not paid the second annual premium. The respondent contended that there was no fraudulent concealment, that the medical records were unproved, and that the alleged ailments had no causal connection with the death. The dispute centred on whether the insurer had established material non-disclosure to justify repudiation under the policy and Section 45 of the Insurance Act, 1938.
Key Facts
- The policy was obtained on 22.11.2017 with an annual premium of Rs.99,999/- and a stated insurance benefit of Rs.6,99,993/-.
- The insured died on 06.12.2018, a little over one year after policy commencement.
- The respondent lodged a claim thereafter; the appellant paid only Rs.75,807.46 on 01.02.2019, described as the amount otherwise payable under the policy, and repudiated the principal insurance claim.
- The appellant’s repudiation was founded on the allegation that, at the time of proposal, the insured had suffered from diabetes mellitus and hypertension since 2014 and was under medication, and that the second annual premium had not been paid.
- The Learned District Commission allowed the complaint (CC/246/2019) and, by order dated 07.04.2021, directed the appellant to pay Rs.5,99,993/- towards the insurance claim, together with compensation of Rs.5,000/- and litigation cost of Rs.2,000/-, with interest at 7% per annum from the date of filing of the complaint until realization.
- The appellant filed First Appeal No. SC/19/A/93/2021, which was delayed by 154 days; the delay was condoned by order dated 16.02.2023.
- The final hearing was held on 07.09.2026 and the judgment was delivered on 30.09.2026.
Procedural History
- 22.11.2017: Policy HDFC SL ProGrowth Flexi (Policy No.19791792) issued.
- 06.12.2018: Death of the insured.
- 01.02.2019: Appellant paid Rs.75,807.46 to the respondent.
- 07.04.2021: Learned District Commission, Purba Medinipur, passed order in CC/246/2019 allowing claim and directing payment of Rs.5,99,993/- plus Rs.5,000/- compensation, Rs.2,000/- litigation cost and interest at 7% p.a. from date of filing of complaint.
- 16.02.2023: Order condoning delay of 154 days in filing the first appeal and admitting the appeal for consideration on merits.
- 07.09.2026: Final hearing before the State Commission.
- 30.09.2026: Judgment delivered dismissing the appeal and affirming the district commission’s order.
Relief Sought
The appellant sought to set aside the district commission’s order dated 07.04.2021, to avoid payment of the insurance claim, compensation, litigation costs and interest, and to have the appeal allowed on merits.
The Legal Issue
The central question was whether the appellant-insurer had proved that the insured knowingly suppressed a material fact (diabetes mellitus and hypertension) or made a fraudulent misstatement in the proposal form, whether the proposal form and alleged medical prescriptions constituted legally reliable evidence, and whether repudiation of the insurance claim was justified under the policy and Section 45 of the Insurance Act, 1938.
Arguments Presented
For the Appellant/Petitioner
The appellant relied on the doctrine of utmost good faith in insurance contracts, asserting that the proposer is obliged to disclose every material fact influencing the insurer’s risk assessment. It contended that the insured had answered the proposal form negatively despite allegedly suffering from diabetes and hypertension since 2014 and being under medication, and that non-disclosure would have altered the underwriting decision. The appellant further argued that the policy was questioned within the period permissible under Section 45 of the Insurance Act, 1938, and relied on photocopies of prescriptions and medical documents allegedly collected during investigation to substantiate the allegation of material non-disclosure, citing authorities such as Reliance Life Insurance Co. Ltd. v. Rekhaben Nareshbhai Rathod and United India Insurance Co. Ltd. v. M.K.J. Corporation.
For the Respondent/State
The respondent submitted that the appellant had not filed a proper affidavit of evidence before the District Commission and that the written version could not be treated as evidence without such support. It argued that the alleged prescriptions were mere photocopies, unattested by the prescribing doctors or custodians of medical records, and that no investigator or competent witness was produced to establish their source or connection with the insured. The respondent also disputed the proposal form, asserting that it was not proved before the District Commission and did not bear the insured’s signature, and maintained that the appellant had not shown that the insured knew of the alleged ailments, gave false answers, or that the ailments had any causal link to the death, relying on precedents such as Nirmalaben J. Sheth v. New India Assurance Co. Ltd. and Harjeet Kaur v. National Insurance Co. Ltd.
The Court's Analysis
The Commission observed that contracts of insurance are founded on utmost good faith, requiring the proposer to truthfully answer material questions. It held that diabetes and hypertension cannot be deemed immaterial in every case merely because they are common ailments; their materiality depends on the nature, duration, severity and the questions in the proposal form. The Court emphasized that an insurer seeking to avoid a policy must first prove the essential factual foundation of its defence: that the relevant question was put to the proposer, that the answer attributed was false, that the proposer knew the true facts and that the withheld fact was material to risk assessment. Mere allegation of suppression is not proof of suppression.
"Nevertheless, the insurer seeking to avoid a policy must first prove the essential factual foundation of its defence. It must establish that the relevant question was put to the proposer, that the answer attributed to the proposer was false, that the proposer knew the true facts and that the fact withheld was material to assessment of the risk. Mere allegation of suppression is not proof of suppression."
The Court found that the proposal form was seriously disputed; the appellant had not demonstrated that the document was executed by the insured or that the answers recorded were furnished or adopted by him. An unsigned or unauthenticated proposal form cannot, by itself, establish that the deceased personally supplied the answers appearing therein. Likewise, the medical prescriptions were photocopies unsupported by evidence of the doctors who issued them, the medical establishment, the custodian of original records or the investigator who allegedly collected them. Consequently, neither their source and authenticity nor their connection with the insured had been satisfactorily established.
The Commission further noted that consumer proceedings, while summary in nature, do not eliminate the requirement of proof; disputed documents cannot be assigned substantive evidentiary value unless their genuineness and relevance are established by reasonably reliable means. Relying on precedents such as J.J. Merchant v. Shrinath Chaturvedi and Mahakali Sujatha v. Future Generali India Life Insurance Co. Ltd., the Court held that the burden lies on the insurer to establish suppression of a material fact and that the insurer cannot discharge that burden by producing unauthenticated summaries, tabulations or unproved medical papers.
Applying these principles, the Court concluded that the appellant had failed to prove that the insured knowingly supplied any false answer or deliberately concealed a material medical fact. Accordingly, points (i) and (ii) were answered against the appellant. The repudiation was also found not justified under Section 45 because the insurer had not proved the grounds for repudiation, and the three-year period under the provision merely enables investigation, not a licence to repudiate on suspicion. Point (iii) was therefore answered against the appellant. Finding no perversity, jurisdictional error or material irregularity warranting appellate interference, the Court answered point (iv) in the negative and dismissed the appeal.
The Verdict
The appeal was dismissed; the judgment and final order dated 07.04.2021 passed by the Learned District Consumer Disputes Redressal Commission, Purba Medinipur, in CC/246/2019 were affirmed. The appellant-insurer is directed to pay the respondent the sum of Rs.5,99,993/- towards the insurance claim, together with compensation of Rs.5,000/- and litigation cost of Rs.2,000/-, with interest at the rate of 7% per annum from the date of filing of the complaint until realization, within 45 days from the date of this order if not already complied with. The Court held that the insurer failed to prove material non-disclosure of diabetes and hypertension, that unauthenticated photocopies lack evidentiary value and that Section 45 of the Insurance Act, 1938 does not permit repudiation on suspicion. No separate order as to costs was passed.
What This Means For Similar Cases
Burden of Proof Lies on the Insurer
Practitioners must remember that in insurance repudiation disputes the insurer bears the burden to prove material non-disclosure. Mere allegations or suspicions are insufficient; the insurer must establish that the relevant question was asked, the answer was false, the proposer knew the true facts and the withheld fact was material to risk assessment.
Documentary Evidence Must Be Authenticated
Unauthenticated photocopies of proposal forms, medical prescriptions or other documents cannot be relied upon as substantive evidence. To attain evidentiary value, such documents must be proved genuine through affidavits, testimony of competent officers, original documents or duly authenticated copies bearing the insured’s signature or other verifiable acknowledgment.
Section 45 Does Not Permit Repudiation on Suspicion
The three-year period under Section 45 of the Insurance Act, 1938 enables the insurer to investigate a policy after the insured’s death, but it does not relieve the insurer of its obligation to prove the grounds for repudiation. Repudiation based solely on unproved allegations or unsupported documents is not sustainable under the law.
