Non Disclosure Of Pre-Existing Illness In MediClaim Proposal Form A Valid Ground For Repudiation: SC [Read Judgment]

Manish Gupta obtained a Mediclaim policy from the LIC. The proposal form had required a disclosure of health details and medical information. He had answered the query in the form whether the proposer had suffered from "cardiovascular disease e.g.: Palpitations, heart attack, stroke, chest pain" in the negative.

Later, he submitted a claim after he underwent a Mitral Valve Replacement surgery. The claim was repudiated by LIC on the ground that he was suffering from a preexisting illness (which it found from the note by the Doctor)

National Consumer Commission (NCDRC), affirmed the orders of State Consumer Commission and District Forum (which allowed his complaint), observing that the notes of the doctor did not indicate that it had been recorded on the basis of the information furnished by the patient. However, in the appeal filed by LIC, the bench comprising Justice DY Chandrachud and Justice Hemant Gupta observed:

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. 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.

The court noted that non-disclosure of any health event is specifically set out as a ground for excluding the liability of the insurer. Allowing the appeal, the bench observed:

"The documentary material indicates that there was a clear failure on the part of the respondent to disclose that he had suffered from rheumatic heart disease since childhood. The ground for repudiation was in terms of the exclusions contained in the policy. The failure of the insured to disclose the past history of cardiovascular disease was a valid ground for repudiation."

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