NEW INDIA ASSURANCE CO. LTD. versus SATPAL SINGH MUCHAL

Citation: [2009] 4 S.C.R. 415 · Decided: 16-03-2009 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Appeal(s) allowed

Judgment (excerpt)

[2009] 4 S.C.R. 415 
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NEW INDIA ASSURANCE CO. LTD. 
A 
V. 
SATPAL SINGH MUCHAL 
Civil Appeal No. 1616 of 2009 
MARCH 16, 2009 
B 
[DR. ARIJIT PASAYAT AND ASOK KUMAR GANGULY, 
1 
JJ.] 
Consumer Protection Act, 1986 - Medic/aim policy -
Concealment of fact of pre-existing disease at the time of taking 
insurance policy - Termination of policy - Refund of pro rata c 
premium - Insured seeking renewal of policy and payment of 
medic/aim amount - Forums below directing revalidation of 
policy and to consider claim of insured - On appeal, held: 
Forums below did not consider effect of the clause in policy 
.,. 
that company could cancel policy any time by notice and in 
D 
that case would refund pro rata premium for unexpired period 
of insurance as also admission by insured as regard suffering 
of ailment during pendency of policy - Hence, matter remitted 
to District Forum to consider the matter afresh. 
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 1616 
E 
of 2009 
f 
From the Judgement and Order dated 11.05.2006 of the 
National Consumer Disputes Redressal Commission, New 
Delhi. 
F 
A.K. Raina, Anil Kumar Jha, for the Appellant. 
Satish Kumar, Ashwani Bhardwaj, for the Respondent. 
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The Judgement of the Court was delivered by 
G 
DR. ARIJIT PASAYAT, J. 
1. Leave granted. 
2. Challenge in this appeal is to the order passed by the 
415 
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416 
SUPREME COURT REPORTS 
[2009] 4 S.C.R. 
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A National Consumer Disputes Redressal Commission 
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(hereinafter referred to as the 'National Commission') 
dismissing the revision petition filed by the appellant. Order 
passed by the State Commission, Madhya Pradesh was under 
challenge before the National Commission. The State Consumer 
B Disputes Redressal Commission (hereinafter referred to as the 
'State Commission') had dismissed the appeal filed by the 
insurer against the order passed by the District Consumer 
Redressal Forum, Indore (in short the 'District Forum'). 
3. Background facts as projected by the appellant are as 
c follows: 
Respondent took a Medi-claim policy in the month of 
January, 1999. The policy was renewed lastly on 22.1.2002 for 
a period of one year i.e. till 21.1.2003. Respondent was suffering 
D from kidney trouble and intimated the same to the Divisional 
office of the appellant No.1-company. On receiving the intimation 
that the respondent was suffering from kidney trouble, insurer 
terminated the policy by letter dated 18.6.2003 with effect from 
17.2.2002 by placing reliance on clause 5.9. of the policy. 
E 
Respondent issued notice to the appellant calling upon them to 
treat the policy of insurance as subsisting and to bear the 
expenses of the treatment of the respondent. Another notice 
was issued on 2.7.2002 calling upon the appellant to pay the " 
claim of the respondent. Appellant replied to the notice. Again 
respondent issued notice to the appellant stating that he was 
F suffering from kidney trouble for about last two years. The 
appellant was of the view that there was concealment of the fact 
of the pre existing disease at the time of taking the policy of the 
insurance. It was clear that the insurance cover was taken by 
concealment of material facts and, therefore, the insurance policy 
G was terminated and the respondent was intimated. The 
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respondent was refunded pro rata premium of Rs.2782/- by 
cheque dated 6.8.2002. Respondent submitted an application 
for renewal of the policy. The respondent was intimated by letter 
dated 11.3.2003 that because of pre-existing disease and 
H adverse claim ratio, the policy of insurance has been cancelled 
NEW INDIA ASSURANCE CO. LTD. V 
417 
SATPAL SINGH MUCHAL [DR. ARIJIT PASAYAT, J.] 
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and therefore the request of renewal cannot be considered. 
A 
Respondent filed a complaint before the District Forum. Stand 
of the appellant before the District Forum. was that every policy 
whether it is a renewal or a fresh one is purely based on a 
contract. Since the respondent was suffering from kidney trouble 
even prior to the taking of the first policy, there was concealment· B 
of material particulars. In four years the respondent had been 
paid as claimed amount of Rs.95,925/- as against the premium 
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of Rs.17, 182/- and even in the year 2003-04 a sum of Rs.49,894/ 
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- was paid which indicated adverse claim experience and as 
such in terms of clause 5.9 of the policy, the same had been c 
rightly cancelled. The District Forum directed revalidation of the 

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