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Maha Kali Sujatha vs The Branch Manager, Future Generali India Life Insurance Company Limited & Anr.

Not available · 2024 INSC 296Decided 10 Apr 2024
Not available
Mrs. Justice B.V. Nagarathna · Justice Augustine George Masih

Background

A woman's father took two life insurance policies with Future Generali; she was the nominee. After he died in a train accident, the insurer repudiated her claim, alleging he had suppressed the fact that he already held several other life insurance policies from other companies when he applied. The District Consumer Forum and the State Consumer Commission both ruled in the daughter's favour, finding no evidence of suppression, but the National Consumer Disputes Redressal Commission (NCDRC) reversed this and upheld the repudiation, relying on an earlier Supreme Court decision (Rekhaben) and the insurer's own affidavit listing fifteen alleged prior policies.

Decision Breakdown

The Supreme Court held that under Section 45 of the Insurance Act, 1938, once a policy has run beyond the statutory period, the burden falls squarely on the insurer to prove (with real corroborating evidence, not bare assertions) that the insured fraudulently suppressed a material fact. Here the insurer's list of "other policies" was incomplete, inconsistent (mismatched dates of birth), unsupported by any authenticated policy documents or witness testimony, and the NCDRC wrongly shifted the burden onto the complainant to disprove it. The Court also found the actual disclosure questions in the proposal form themselves ambiguous, and applied the contra proferentem rule (ambiguity in an insurer-drafted form is read against the insurer) to hold there was no clear suppression in any event. The NCDRC's order was set aside, and the insurer was directed to pay the full claim amount under both policies (Rs. 7,50,000 and Rs. 9,60,000) with 7% interest from the date of the complaint.

Lesson Learnt

An insurance company cannot deny a claim merely by alleging that the insured hid other policies. It must prove suppression with solid, corroborated evidence, and any ambiguity in its own proposal form is read in favour of the policyholder, not the insurer.

Official source (sci.gov.in)View Judgment (PDF)

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