Decided on August 09,2010



- (1.) BEING aggrieved by and dissatisfied with the order passed by Consumer Disputes Redressal Forum, Vadodara in Consumer Case No. 355 of 2004 on 28.4.2009, the appellants i.e. the original opponents have preferred this appeal on the grounds as stated in the appeal memo. The appellants are original opponents and the respondents are original complainants and they are referred as such they are referred to in their original nomenclature for the sake of convenience.
(2.) THE short facts of the case are that the complainants had been insured by the opponents in the year 2000 and their policy had been regularly renewed thereafter. During the subsistence of the policy, complainant's wife (i.e. insured for short) had sudden chest pain. She had gone to Dr. Tripathi, who had referred her to Dr. Virendra Chauhan. Thereafter, the insured was admitted in U.N. Institute of Cardiology, Ahmedabad on 6.6.2002 and she was discharged on 13.6.2002 after some medical tests. Then, thereafter insured was admitted in Krishna Institute (Heart) Yogeshwar Health Care Ltd., where she was operated upon for heart valve. The complainant had preferred medical claim but the same was repudiated on the basis of exclusion Clause No. 4.1 of the policy learned Forum came to conclusion that the opponents - insurers have failed to prove that the insured had been suffering from the pre -existing disease and, therefore, the exclusion clause No. 4.1 was not applicable. It is the say of the appellants that learned Forum has erred in holding that the burden of proving pre -existing disease was on the insurer and that the Forum ought to have concluded on facts that the exclusion Clause No. 4.1 was applicable.
(3.) AS far as legal position is concerned Section 17(2) of the Contract Act defines fraud which means and includes the active concealment of a fact by one having knowledge or belief of the fact. Active concealment as per this provision will mean only deliberate concealment of the fact which should be false to the knowledge of the person concealing the fact. In other words when a person knows and wilfully concealing the same, he can be said to have committed fraud by active concealment But if a person on whom fraud is committed is in a position to discover the truth by due diligence, in that case, there cannot be any case of fraud. The burden of proving fraud is only on the party who alleges or pleads fraud. A conclusion of fraud cannot be based on mere speculation or surmises. There will be some positive material on record to draw a conclusion of fraud For repudiating an insurance claim, it is not sufficient for insurer to say that the statement made by the insured regarding his health in proposal for insurance was inaccurate or false. It is required to be established that the statement was on a material matter or suppressed facts which was material to disclose and that it was made fraudulently. Following aspects are to be established by insurer to prove or bring home the fraud by active concealment: (i) that the statement was on a material matter or suppressed facts which was material to disclose and; (ii) that the policy holder knew at the time of making the statement that it was false or that it suppressed the facts which it was material to disclose. In the case of fraudulent suppression of material facts, onus probandi rests heavily on the party alleging fraud. The exclusion clause for not disclosing material facts or pre -existing disease is based on principal of active concealment as contemplated by Section 17(2) of the Contract Act.;

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