The Punjab and Haryana High Court has affirmed that deliberate non-disclosure of a pre-existing cardiac condition in a life insurance proposal form constitutes material concealment, justifying repudiation of a claim even when the insured was unaware of the full medical diagnosis at the time of application.
Background & Facts
The Dispute
The petitioner, Suman Gupta, sought to enforce a life insurance claim under a policy issued by Birla Sun Life Insurance Company Limited to her husband, Suresh Kumar. The policy was issued on 27.09.2017 with a sum insured of ₹5,53,000 and an annual premium of ₹49,311. The insured passed away on 28.12.2017, just three months after policy issuance. The insurer repudiated the claim on 31.03.2018, citing concealment of material medical history. The petitioner approached the Permanent Lok Adalat (Public Utility Services), Bhiwani, which upheld the repudiation in its order dated 19.08.2025. The petitioner then filed a writ petition under Articles 226 and 227 of the Constitution.
Key Facts
- The insured, Suresh Kumar, died on 28.12.2017 due to cardiac arrest.
- The insurer’s investigation, based on medical records from Maharaja Agrasen Hospital, revealed that the insured had been diagnosed with:
- Coronary Artery Disease (CAD)
- Coronary Artery Bypass Grafting (CABG) performed four years prior to policy issuance
- Type 2 Diabetes Mellitus
- Cerebrovascular Accident (CVA) with acute infarct in periventricular region and right ICA thrombosis, admitted on 26.11.2017
- The medical report dated 27.12.2017 from Maharaja Agrasen Hospital explicitly noted the insured was a "known case" of the above conditions.
- In the insurance proposal form and Medical Examiner’s Report (MER) dated 23.09.2017, the insured answered "No" to specific questions regarding:
- Surgical operations or investigations in the past five years
- History of chest pain, heart attack, stroke, or other heart disorders
- Any other illness, surgery, or injury
- The insurer’s repudiation letter (Ex.P-1) dated 31.03.2018 cited these false replies as grounds for denial.
- The Permanent Lok Adalat accepted the insurer’s findings and rejected the claim on grounds of material concealment.
Procedural History
- 27.09.2017: Life insurance policy issued by Birla Sun Life Insurance Company Limited
- 26.11.2017: Insured admitted to Maharaja Agrasen Hospital with stroke symptoms
- 27.12.2017: Death summary issued by hospital confirming pre-existing CAD and CABG
- 28.12.2017: Insured passed away
- 31.03.2018: Insurer issued repudiation letter
- 19.08.2025: Permanent Lok Adalat (PLA) rejected claim, holding concealment of material facts
- 13.03.2026: Writ petition dismissed by Punjab and Haryana High Court
Relief Sought
The petitioner sought quashing of the PLA’s order dated 19.08.2025 and direction to the insurer to pay the sum insured of ₹5,53,000 with interest.
The Legal Issue
The central question was whether non-disclosure of a pre-existing cardiac condition in an insurance proposal form, even if the insured was unaware of its full clinical significance, constitutes material concealment sufficient to vitiate the contract and justify repudiation of claim.
Arguments Presented
For the Petitioner
Counsel argued that the insured was not aware of the severity of his condition prior to his admission on 26.11.2017, and therefore could not have intentionally concealed it. The medical diagnosis was only confirmed post-admission, and the insured had no opportunity to disclose what he did not know. Reliance was placed on the principle that mere non-disclosure without fraudulent intent cannot invalidate a policy.
For the Respondent
The insurer contended that the proposal form contained specific, unambiguous questions about prior illnesses and surgeries. The insured’s negative replies, despite clear medical evidence of CABG and CAD four years prior, amounted to a deliberate misrepresentation. The insurer relied on Section 45 of the Insurance Act, 1938, which permits repudiation within three years for misrepresentation, and argued that the timing of death (within three months) reinforced the materiality of the concealment.
The Court's Analysis
The Court examined the insurer’s investigation report and the hospital’s death summary, which unequivocally established that the insured had undergone CABG four years before the policy issuance. The Court noted that the proposal form and Medical Examiner’s Report contained direct, explicit questions about heart disease, surgeries, and prior illnesses. The insured’s responses were categorical and negative.
"However, our investigation findings have established that the Life Assured was suffering from Coronary Artery Disease and had undergone Coronary Artery Bypass Grafting for the same prior to application for the insurance. Hence, we are satisfied that the aforesaid replies in the Proposal... are false."
The Court held that the insured’s failure to disclose a major cardiac condition, even if he was unaware of its clinical label, was not excusable. The law does not require the insured to possess medical expertise; it requires honesty in answering specific questions. The fact that the condition was diagnosed by a hospital on 27.12.2017 does not negate the existence of the condition prior to policy issuance. The Court emphasized that materiality is determined by the nature of the condition and its impact on risk assessment, not by the insured’s subjective awareness.
The Court further noted that the insurer’s repudiation fell within the three-year window under Section 45 of the Insurance Act, 1938, and that the PLA had correctly appreciated the documentary evidence. The Court found no error in the PLA’s conclusion that the concealment was material and affected the insurer’s risk evaluation.
The Verdict
The petition was dismissed. The Court upheld the Permanent Lok Adalat’s order dated 19.08.2025, affirming the insurer’s right to repudiate the claim. The sum insured of ₹5,53,000 was not payable. The Court found no legal or factual infirmity in the PLA’s findings and declined to interfere under Articles 226/227.
What This Means For Similar Cases
Material Concealment Does Not Require Fraudulent Intent
- Practitioners must advise clients that even innocent non-disclosure of a pre-existing condition can void a policy if the condition is material and the questions in the proposal form are specific
- The burden is on the insured to disclose all conditions, regardless of whether they were formally diagnosed
- Medical ignorance is not a defense under insurance law when the questions are clear and unambiguous
Proposal Forms Are Binding Legal Documents
- Insurance proposals are not mere formalities - they are contractual disclosures
- Any negative response to a specific question about prior illness, surgery, or treatment must be truthful
- Insurers are entitled to rely on these responses to assess risk
- Courts will not second-guess repudiation if the insurer can prove the existence of the condition prior to policy issuance
Timing of Death Reinforces Materiality
- Death occurring within months of policy issuance triggers heightened scrutiny
- Courts view such timing as indicative of a pre-existing condition that was deliberately concealed
- Insurers are not required to prove fraudulent intent - only that the non-disclosure was material and affected underwriting
