MOOT PROPOSITION LLB III SEMESTER

TEAM CODE: 121

IN THE HON`BLE SUPREME COURT OF

INDIA

CIVIL APPELLATE JURISDICTION

Case number: 1234 of 2024

IN THE MATTER OF:

Branch Manager, XYZ Insurance Company Ltd. And others

APPLELLANT
Versus

Balram’s Mother
REASPONDENT

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TABLE OF CONTENTS

List of Abbreviations…………………………………………3
Index of Authorities……………………………….…….……4
Table of cases……..………………………………….……….4
Books……………………………………………………….…4
Lexicons……………..………………………………….….….4
Web Sources………………………….…………………….…4
Statues……………………….………………………………...4
Statements of Jurisdiction……………………………………..6
Statement of Facts…………………………..…………………7
Issues Raised………..…………………………………………9
Summary of Arguments……….………………..…………….10
Arguments Advanced…………………………………………12

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List of Abbreviations
PARTIES:
1. Appellant: Insurance Company(IC)
2. Respondent: Balram’s Mother (BM)
COUERTS:
1. SC: Supreme Court of India
2. NCDRC: National Consumer Disputes Redressal Commission
3. SCDRC: State Consumer Disputes Redressal Commission
4. DCDRF: District Consumer Disputes Redressal Forum
DOCUMENTS:
1. Poil : Proposal of Insurance
2. Pol: Policy of Insurance
3. IR: Investigation Report
4. MC: Medical Certificate
Miscellaneous:
1. CMC: Charitable Hospital Chandigarh
2. Hep C: Hepatitis C
3. A : Article 136 of the Constitution of India (Allowing Special Leave
Appeal to the Supreme Court)

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Index of Authorities
Case laws:
1. Life Insurance Corporation of India vs. Anutadha (2005) 7 SCC 636
2. United India Insurance Co. Ltd. vs. M.K. Jaiswal (2003) 7 SCC 730
3. New India Assurance Co. Lad. vs. Kumum Chand (2005) 10 SCC 726
4. ICICI Lombard General Insurance Co. Ltd. vv. Ajay Kumar (2019) 15
SCC
5. National Insurance Co. Lad. vs. Sme. Prabhavati Devi (2007) 10 SCC
230
6. Oriental Insurance Co. Lad vs. Smt. Surinder Kaur (2005) 10 SCC
585
7. Life Insurance Corporation of India vs. Smt. Asha Goel (2001) 6
SC287
8. United India Insurance Co. Ltd. M.K. Jaiswal (2003) 7 SCC 730
9.LIC vs. Sun. Rajeshwari (2011) 12 SCC 7941. National Consumer
Disputes Redressal Commission vs. Alukkas Jeweler (2017) 16 SCC
651
10. United India Insurance Co. Ltd. M.K. Jaiswal (2003) 7 SCC 730

Books
1. Avtar Singh, Law of Insurance
2. M.N. Srinivasan, Principle of Insurance Law

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STATUTES
1. Insurance act 1938 (Section 45)

2. Consumer Protection Act.1986

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Statement of Jurisdiction

The Petitioner respectfully submits that this Hon’ble Court has

jurisdictioin to entertain and decide the present Special Leave Petition
under Article 136 of the Constitution of India.
136. Special leave to appeal by the Supreme Court

(1) Not with standing anything in this Chapter, the Supreme Court may, in its
discretion, grant special leave to appeal from any judgment, decree, determination,
sentence or order in any cause or matter passed or made by any court or tribunal in
the territory of India.

(2) Nothing in clause (1) shall apply to any judgment, determination, sentence or
order passed or made by any court or tribunal constituted by or under any law
relating to the Armed Forces.

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STATEMENT OF FACT

>A proposal for obtaining an insurance policy was submitted by Mr.

Balram (since deceased) to the Appellant on 05.08.2014. The proposal
named the Respondent, who is the mother of the deceased, as the
nominee.
>The proposal form contained detailed questions about the health and
medical history of the proposer, including a specific requirement to
disclose any ailment, hospitalization, or treatment that had been
undergone by the proposer.
>In response to Column 11, which required a declaration of good health,
the proposer answered all queries in the negative, indicating that he had
not undergone any medical treatment, hospitalization, and was not
suffering from any ailment or disease.
>The proposer similarly answered in the negative to Item 11(c)
concerning whether he had any diseases or disorders of the respiratory
system or any other ailment listed, including frequent nosebleeds, fever,
and dyspnoea.
>Acting on the proposer’s declaration, the Appellant issued a life
insurance policy on 12.08.2014, insuring the life of the proposer for Rs.
8.50 lakhs payable on maturity, with a death benefit of Rs. 17 lakhs.
>The proposer, unfortunately, passed away on 12.09.2014, just one
month and seven days after the issuance of the policy. The Respondent
lodged a claim with the Appellant, which prompted an independent
investigation.

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> The investigation revealed, through hospital treatment records and a

medical certificate from Charitable Hospital Chandigarh (CMC), that the
deceased had been suffering from Hepatitis C, and was undergoing
treatment for stomach ailments and vomiting of blood, which were
proximate causes to his death.
>The Appellant repudiated the claim on 12.05.2015 due to the non-
disclosure of material facts by the deceased proposer.
> The Respondent filed a consumer complaint before the District
Consumer Disputes Redressal Forum, which was allowed. The decision
was upheld by the State Consumer Disputes Redressal Commission
(SCDRC) and the National Consumer Disputes Redressal Commission
(NCDRC).
>The NCDRC held that the death had occurred due to natural causes,
and there was no reasonable nexus between the cause of death and the
non-disclosure of the disease.
> The Appellant now seeks to challenge the order of the NCDRC before
this Hon'ble Court under Article 136 of the Constitution of India.

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ISSUES BEFORE THE COURT

1. Whether the non-disclosure of Hepatitis C by the proposer, Balram,

constitutes a material fact that would affect the insurer's decision to issue
the policy?

2. Whether the NCDRC erred in distinguishing between "disease" and

"illness" and holding that the death occurred due to natural causes?

3. Whether there is a reasonable nexus between the cause of death and

the non-disclosure of Hepatitis C?

4. Whether the insurer's repudiation of the claim is justified due to non-

disclosure of material facts?

5. Whether the NCDRC's order directing the insurer to pay the death
claim is sustainable in law?

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SUMMARY OF ARGUMENTS

1. Non -discloser of Material Facts

The doctrine of "uberrima fides" or utmost good faith applies to all
insurance contracts. The proposer has a duty to disclose all material
facts that would influence the judgment of the insurer in deciding
whether to accept the risk and on what terms. The non-disclosure of
the fact that the proposer was suffering from Hepatitis C is a clear
violation of this principle.

2. Distinction between “ Dissease” and “ Illness”

The NCDRC’ s distinction between “disease” and “illness” is
artificial and unsustainable. Hepatitis C is a serious disease ,not
merely an “illness”.
The insurer's investigation revealed that Balram had been suffering
from a stomach ailment and vomiting blood, which is consistent with
Hepatitis C symptoms.

3: Reasonable Nexus
There is a clear nexus between the non-disclosure of Hepatitis C and
the cause of death. Hepatitis C can lead to liver failure, which can be
fatal. The insurer's investigation established that Balram had been
undergoing treatment for Hepatitis C, which he failed to disclose.
The non- disclosure of Hepatitis C deprived the insurer of the

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opportunity to assess the risk accurately and adjust the premium

accordingly.

4: Justification of Repudiation
The insurer's repudiation of the claim is justified due to non-
disclosure of material facts. Section 45 of the Insurance Act, 1938,
entitles the insurer to repudiate the claim in such cases. The
proposer's failure to disclose Hepatitis C constitutes a breach of
utmost good faith, which is essential in insurance contracts.

5: Sustainability of NCDRC's Order

The NCDRC's order directing the insurer to pay the death claim is
unsustainable in law. The order ignores the material non-disclosure and
the insurer's right to repudiate the claim. The order also fails to consider
the serious consequences of Hepatitis C and its impact on the insurer's

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ARGUMENT ADVANCED

1: Non-Disclosure of Material Fact

The proposal explicitly required disclosure of medical history and
ailments, and Column 11 required a declaration of good health, which
Balram answered in the negative.
Hepatitis C is a serious medical condition that increases the risk of liver
disease, liver cancer, and other complications, making it a material fact
for insurance purposes.
Life Insurance Corporation of India vs. Anuradha the court Held that
non-disclosure of material facts entitles the insurer to repudiate the
claim.
United India Insurance Co. Ltd. vs. M.K. Jaiswal the court Established
that the insurer has the right to investigate and verify facts, and non-
disclosure can lead to repudiation.
New India Assurance Co. Ltd. vs. Kusum Chand the court Held that
false declarations or concealment of material facts voids the policy..
ICICI Lombard General Insurance Co. Ltd. vs. Ajay Kumar the court
Held that non-disclosure of material facts, including pre-existing
diseases, entitles the insurer to repudiate the claim.

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2: Distinction between "Disease" and "Illness"

Hepatitis C is a chronic disease, not merely an illness. The NCDRC"s
finding of "natural causes" is incorrect, as Hepatitis C can lead to liver
failure.
National Insurance Co. Ltd. vs. Smt. Prabhavati the court Held that the
term "disease" includes any disorder or disability that affects the
insured's health.

Oriental Insurance Co. Ltd. vs. Smt. Surinder Kaur the court Established
that the insurer's liability extends to diseases, not merely illnesses.

3: Reasonable Nexus
There is a clear nexus between non-disclosure of Hepatitis C and the
cause of death. Hepatitis C can lead to liver failure, which can be fatal.
Investigation reports establish Balram's treatment for Hepatitis C.
Life Insurance Corporation of India vs. Smt. Asha the court Held that
there must be a reasonable nexus between the non-disclosure and the
cause of death.
United India Insurance Co. Ltd. vs. M.K. Jaiswal the court Established
that the insurer's investigation must establish a nexus between non-
disclosure and the cause of death.

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4: Justification of Repudiation
The insurer's repudiation is justified due to non-disclosure of material
facts. Section 45 of the Insurance Act, 1938, entitles the insurer to
repudiate. Non-disclosure constitutes a breach of utmost good faith.
Life Insurance Corporation of India vs. Smt. Asha Goel the court Held
that there must be a reasonable nexus between the non-disclosure and
the cause of death.
United India Insurance Co. Ltd. vs. M.K. Jaiswal the court Established
that the insurer's investigation must establish a nexus between non-
disclosure and the cause of death.

5: Sustainability of NCDRC's Order

The NCDRC's order is unsustainable in law. The order ignores material
non-disclosure and the insurer's right to repudiate. The order fails to
consider the serious consequences of Hepatitis C.
Section 45 of the Insurance Act, 1938: Entitles the insurer to repudiate
the claim due to non-disclosure of material facts.
Indian Contract Act, 1872 (Sections 15, 17): Establishes the principle of
utmost good faith in insurance contracts.
LIC vs. Smt. Rajeshwari the court Held that repudiation of claim due to
non-disclosure is justified

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PRAYER FOR RELIEF

1. Allow the appeal and set aside the impugned order dated passed by
the National Consumer Disputes Redressal Commission (NCDRC),
directing the appellants to pay the death claim despite non- disclosure of
material facts.

2. Direct the respondent to pay the costs of the appeal, which the
appellants have incurred in prosecuting this matter.

3. Declare that the respondent's failure to disclose material facts

disentitles them to the claim.

4. Pass such other orders as this Hon'ble Court may deem fit and proper
in the circumstances of the case, including:

a. Dismissing the respondent's claim with costs.

b. Granting such other relief as this Hon'ble Court may deem just and
equitable.
Pass any such further orders directions as this Honorable court may
deem fit and proper in the interest of justice, equity and good
conscience.

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AND FOR THIS ACT OF KINDNESS THE APPELLANT AS IN

DUTY BOUND SHALL EVER PRAY.

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