Non Disclosure Of Pre-Existing Illness In MediClaim Proposal Form A Valid Ground For Repudiation

In CIVIL APPEAL NO.3944 OF 2019,  LIFE INSURANCE CORPORATION OF INDIA vs MANISH GUPTA, the claim of the insured after Mitral Valve Replacement surgery was repudiated by the appellant on the ground that the respondent was suffering from a pre-existing illness. In the proposal form the insured had under disclosure of health details and medical information under the column of 'past history', among  which “cardiovascular disease e.g.: Palpitations, heart attack, stroke, chest pain” was included, had replied in the negative. The District Forum held in favour of the respondent. The NCDRC, while affirming the SCDRC, held that though the treating doctor had recorded, under the column of 'past history', that this was a known case of rheumatic heart disease since childhood, the notes did not indicate that it had been recorded on the basis of the information furnished by the patient.

The insurer argued before the Supreme Court that the Health-plus policy falls in the NMG category where the insured is not subjected to a medical examination before the issuance of the policy. Hence, it is a solemn obligation of the proposer to truthfully fill out the details required by the insurer in the proposal form on the basis of which the insurer takes a decision in regard to the issuance of the policy. Hence, it was urged that the onus was on the insured to provide material particulars of his health since no medical examination was mandated. In the present case, it has been submitted that, ex facie, there was a breach on the part of the insured in suppressing information pertaining to the fact that he had been suffering from rheumatic heart disease since childhood. Hence, on this ground, the repudiation was sought to be justified. The insured on the other hand stated that the 'past history' recorded by the doctor was not based on any information provided by the insured, therefore he cannot be faulted for any noting which has been made by the doctor in the course of treatment.

The Supreme Court observed that the insured had clearly stated in the form that he was not suffering from any disease while the past history has been adverted to as a “known case of rheumatic heart disease since childhood”. Apart from the fact that this information would be recorded on the basis of information divulged by the patient, this aspect of the recording of the past history by Fortis Hospital was never in dispute and also  the treatment record indicates that the respondent was operated for MVR. The nature of the diagnosis has been reflected as rheumatic heart disease. The hospital treatment form is along the same lines.

Based on the above findings, the Supreme Court decided that there was a clear failure on the part of the respondent to disclose that he had suffered from rheumatic heart disease since childhood and that the failure of the insured to disclose the past history of cardiovascular disease was a valid ground for repudiation.