Page 15 - Suri’s - NCDRC ON LIFE INSURANCE 2017 V1.3

Suri’s - NCDRC ON LIFE INSURANCE 2017 15

8. It is seen from the repudiation letter dated 08.02.2014 issued by the Respon-
dent to the Petitioner, vide which the Respondent repudiated the insurance claim of
the Petitioner that it was repudiated on the following grounds;
―The reference to your claim under the above policy on the life of your de-
ceased son, we have to inform you that we have decided to repudiate all liabilities
under the policy on account of the deceased having withheld correct information
regarding her health at the time of effecting the assurance with us.
As per 3816 from Ganga Ram Hospital, Deceased Life Assured was suffering
from Thalassemia since childhood and this information was concealed at the time
of proposal. He did not, however, disclose this fact in her Proposal Form/Personal
Statement.
It is, therefore, evident that he had made deliberate incorrect statements and
withheld correct information from us regarding his health at the time of effecting
assurance and hence in terms of the policy contact and the declaration contained
in in the forms, of proposal for assurance, we hereby repudiate the above claim
and accordingly we are not liable for any payment under the above policy and all
moneys that have been paid in consequence thereof belong to us.
For your information we are enclosing herewith the copy of proposal-form re-
ferred to above. We also enclose herewith our leaflet styled ―Why a life insurance
claim is repudiated‖ which is self-explanatory.”
9. The Complainant in his Complaint has not denied the finding of the Respon-
dent that late Sh. Sachin Chhabra was suffering from Thalassemia since childhood.
He has merely contended that death of the deceased was not due to Thalassemia. It
has been correctly observed by the State Commission in their impugned order that
non-disclosure of material facts by the deceased-insured, late Sh. Sachin Chhabra
regarding his health at the time filling up the proposal form renders the „Insurance
Contract void‟ .
10. On this point, the Supreme Court in Satwant Kaur Sandhu Vs. New India
Assurance Co. Ltd, IV (2009) CPJ 8(SC), in Paras 12,13,17 and 18 has observed;
―12.. ……… Nonetheless, it is a contract of insurance falling in the category
of contract ‗uberrimae fidei‘, meaning, ‗a contract of utmost good faith, on the
part of the assured‘. Thus, it needs little emphasis that when an information on a
specific aspect is asked for in the proposal form, an assured is under a solemn ob-
ligation to make a true and full disclosure of the information on the subject which
is within his knowledge.It is not for the proposer to determine whether the infor-
mation sought for is material for the purpose of the policy or not. Of course, obli-
gation to disclose extends only to facts which are known to the applicant and not
to what he ought to have known. The obligation to disclose necessarily depends
upon the knowledge one possesses. His opinion of the materiality of that knowl-
edge is of no moment (See: Joel Vs. Law Union & Crown Ins.Co.[1908] 2 K.B.
863).

13. In United India Insurance Co. Ltd. Vs. M.K.J. Corporation, III (1996) CPJ
8 (SC) =(1996)6 SCC 428, this Court has observed that it is a fundamental princi-
ple of insurance law that utmost faith must be observed by the contracting parties.
Good faith forbids either party from non-disclosure of the facts which the party

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