NDLI: Manmohan Nanda Vs. United India Assurance Co. Ltd. & Anr

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Consumer Protection Act 1986 – s.21
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Consumer Protection Act, 1986 (68 of 1986)
Case(s) Referred	Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3 Referred Case 4
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Allowed
Headnote	Consumer Protection Act, 1986 – s.21 – Insurance – Repudiation of claim on ground of suppression or non-disclosure of material facts – Appellant intended to travel to the USA – Appellant was issued a overseas mediclaim business and holiday policy – The appellant was medically examined at the instance of respondent No. 1 insurance company prior to the consideration of his request for issuance of a mediclaim policy – The medical report categorically noted that the appellant had diabetes-type II (mellitus- II) – No other adverse medical condition was found – In the medical exam report, specific queries were sought as to whether any abnormalities were observed in the electrocardiogram test of the appellant and any possible illness or disease for which the appellant may require medical treatment in the ensuing trip to the USA – To both these queries, the doctor who examined the appellant had answered “normal” and “no” respectively – The insurer thereafter accepted the proposal form – Thereafter, the appellant boarded a flight to USA, on exiting the airport, appellant felt weak and started sweating – He was admitted at a medical centre – Three stents were inserted to remove blockage from his heart vessels – Appellant claimed benefit under the mediclaim policy – However, appellant received a letter from respondent stating that his claim had been repudiated as the appellant had a history of hyperlipidaemia and diabetes and the policy did not cover pre-existing conditions and complications arising therefrom – Aggrieved, the appellant filed a complaint u/s.21(9) of the 1986 Act – The Commission held that concealment or non-disclosure of material facts regarding pre- existing heart ailment was a valid ground for repudiation of the insurance claim by the respondent-insurer – On appeal, held: Appellant had in the proposal form disclosed that he was suffering from diabetes mellitus-II and for which the medical test reports were submitted along with the proposal form which were considered by the insurance company before the policy was issued to the appellant – In fact, the appellant stated in his representation against the repudiation of the policy that he was taking lipid-lowering medicines not because he was suffering from hyperlipidaemia but as it was customary to take such medication for prevention of cardio-vascular complications in diabetics – He also stated that he had informed the physician-doctor, who examined him prior to obtaining the policy, of the medicines he was taking – Therefore, the insurance company was well aware of the fact that the insured was a diabetic and was taking all necessary medication for preventing further complications and controlling the disease – Hence, there was no suppression of any material fact by the appellant to the insurer – The repudiation of the policy by the respondent insurance company was illegal and not in accordance with law – Consequently, the appellant entitled to be indemnified under the policy. Insurance – Mediclaim Policy – After assessment of medical condition – Held: The insurer must be able to assess the likely risks that may arise from the status of health and existing disease, if any, disclosed by the insured in the proposal form before issuing the insurance policy – Once the policy has been issued after assessing the medical condition of the insured, the insurer cannot repudiate the claim by citing an existing medical condition which was disclosed by the insured in the proposal form, which condition has led to a particular risk in respect of which the claim has been made by the insured. Insurance – Mediclaim Policy – Object of – Held: The object of seeking a mediclaim policy is to seek indemnification in respect of a sudden illness or sickness which is not expected or imminent and which may occur overseas – If the insured suffers a sudden sickness or ailment which is not expressly excluded under the policy, a duty is cast on the insurer to indemnify the appellant for the expenses incurred thereunder. Doctrine/Principle – Principle of ‘uberima fides’ between insurer and insured – Held: The insured has a duty to disclose all material facts, the insurer must also inform the insured about the terms and conditions of the policy that is going to be issued to him and must strictly conform to the statements in the proposal form or prospectus, or those made through his agents – Thus, the principle of utmost good faith imposes meaningful reciprocal duties owed by the insured to the insurer and vice versa – This inherent duty ofdisclosure was a common law duty of good faith originally founded in equity but has later been statutorily recognised – It is also open to the parties entering into a contract to extend the duty or restrict it by the terms of the contract.Insurance – Mediclaim Policy – Contra Proferentem Rule –Appellant claimed insurance under a mediclaim policy –Respondents contended that as per the terms and conditions of thepolicy “all the complications arising out of pre-existing condition is not payable” – Claim was repudiated – Held: Respondents werenot right in stating that as per the terms and conditions of the policy“all the complications arising out of pre-existing condition is not payable” – Acute myocardial infraction can occur in a person who has no history of diabetes mellitus-II – One of the risk factors for the aforesaid cardiac episode is diabetes mellitus-II – The fact that the appellant had diabetes mellitus-II was made known to the insurance company – The aforesaid clause has to be read against the respondent insurer by applying the contra proferentem rule against it – Otherwise, the very contract of insurance would become meaningless in the instant case – Hence, the respondent-insurance company was not right in repudiating the policy in question.Words and Phrases – “Material Fact” in insurance policy –Held: What constitutes a material fact would depend upon the nature of the insurance policy to be taken, the risk to be covered, as well as the queries that are raised in the proposal form – If specific queries are made in a proposal form then it is expected that specific answers are given by the insured who is bound by the duty to disclose all material facts.
Judge	Hon'ble Ms. Justice B.V. Nagarathna
Neutral Citation	2021 INSC 826
Petitioner	Manmohan Nanda
Respondent	United India Assurance Co. Ltd. & Anr
SCR	[2021] 11 S.C.R. 1138
Judgement Date	2021-12-06
Case Number	8386

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