MANMOHAN NANDA versus UNITED INDIA ASSURANCE CO. LTD. & ANR

Citation: [2021] 11 S.C.R. 1138 · Decided: 06-12-2021 · Supreme Court of India · Bench: D.Y. CHANDRACHUD · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · cites 5 · see the full citation network in Lexace

Judgment (excerpt)

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SUPREME COURT REPORTS
[2021] 11 S.C.R.
[2021] 11 S.C.R. 1138
1138
MANMOHAN NANDA
v.
UNITED INDIA ASSURANCE CO. LTD. & ANR
(Civil Appeal No. 8386/2015)
DECEMBER 6, 2021
[DR. DHANANJAYA Y CHANDRACHUD AND
B. V. NAGARATHNA, JJ.]
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 admittted 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
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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 

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