Leaving Columns Blank In Proposal Form Does Not Amount To False Representation: NCDRC Holds Bharti AXA Life Insurance Liable For Wrongful Repudiation Of Insurance Claim

Brief facts:

An insurance policy was taken by one Mr. Padam Soni ('insured') from Bharti AXA Life Insurance Co. Ltd. ('insurer') through its advisor for a sum insured of Rs. 25 lakhs. The policy was valid from 28.12.2015 to 28.12.2035 and a premium of Rs. 10,900 was also paid. The insured person died on 17.01.2017 from a heart attack. Smt. Choti Devi, the mother of the insured deceased, filed a claim before the insurer company.

The insurer repudiated the claim by way of a letter dated 08.06.2017 on the ground that the insurer failed to disclose his existing policies and left the column relating to existing policies blank in the proposal form which amounted to misrepresentation. Hence, a complaint was filed by the mother ('complainant') of the deceased insured person before the Rajasthan State Commission praying for appropriate compensation.

The state commission dismissed the complaint of the complainant by way of order dated 26.03.2021. aggrieved by the order, the complainant filed an appeal before the National Consumer Disputes Redressal Commission (NCDRC).

Since the complainant expired during the pendency of the complaint, she was represented through her Legal Representatives (LRs).

Submissions of the Complainant:

It was submitted that no false answers were given to the question regarding existing policies and the paragraph seeking details of the existing insurance policies was left blank in the proposal form. The complainant argued that leaving the columns blank is not the same as giving a false reply. It was further submitted that had this information been material, the insurer company ought to have insisted on getting such information filled in the proposal form.

Submissions of the insurer company:

The insurer submitted that the facts were not truthfully and correctly declared by the insurer and hence there is no cause of action to file the complaint. It was further submitted that the claim has been rightly repudiated since the policy was obtained on the basis of mis-statements. The company argued that the complainant had knowledge from the start that the insured deceased had various insurance policies but concealed and distorted material facts to mislead the commission.

Observations of the commission:

The commission examined the proposal form and agreed with the complainant that leaving a column blank in the proposal form does not amount to giving a false answer. It was observed that there was no willful intention on the insured deceased's part to conceal or suppress any material information by leaving the column blank. It was further observed that the form appears to have been filled by an agent of the insurer company who ought to have filled all the columns.

Reliance was placed on the decision of the Supreme Court in Lakshmi Chand vs Reliance General Insurance (2016) wherein it was held that an insurance company, to avoid its liability, must establish a fundamental breach of policy which brings the contract to an end.

Further reliance was placed on the decision of the Supreme Court in Canara Bank vs United India Insurance Co. Ltd. & Ors. (2020) wherein it was held that insurance policies must be read holistically to give effect to the expectations of all parties.

Thus, it was held that the action of the insurer company in repudiating the claim of the complainant was not justified. Hence, the complaint was allowed and the order of the State Commission was set aside.

The insurer company was directed to pay the eligible sum assured to the complainant within 45 days from date of the order.

Case Title: Chhoti Devi (deceased) vs Bharti AXA Life Insurance

Case Number: First Appeal 722/ 2021

Date of Decision: 11.08.2025

Click Here To Read/Download Order