NCDRC: Insurer Cannot Reject Claim For Leaving Column Blank In Proposal Form

The National Consumer Disputes Redressal Commission (NCDRC) has ruled that simply leaving a column unanswered in an insurance proposal form cannot be treated as a false declaration, according to a recent report by Bar and Bench. On that basis, an insurer has no grounds to turn down a claim.

The case before the Commission involved Chhoti Devi, now deceased, whose family contested Bharti AXA Life Insurance’s refusal to honour a policy. The bench, comprising Dr. Inderjit Singh and Dr. Sudhir Kumar Jain, delivered the order.

Family Challenges Insurer’s Rejection

The facts of the matter trace back to December 12, 2015, when Devi’s son purchased a life insurance cover of Rs 25 lakh, with a premium fixed at Rs 10,900 annually. Unfortunately, in January 2017, a little over a year later, he died following a heart attack. When his mother filed a claim, the insurer repudiated it, stating that the insured had concealed information about his other life insurance policies.

The family countered this charge. They explained that the proposal form was not filled out personally by the insured, but by a company agent, in English. The section that asked about existing policies had been left blank—not deliberately avoided. Their counsel further stressed that Bharti AXA had already issued three separate policies in the name of the insured. This meant the company was fully aware of those details at the time of granting the new policy.

NCDRC Holds Insurer Accountable

After examining the evidence, the NCDRC sided with the family. The Commission observed that if such details were considered vital, the insurer should have ensured that all fields in the proposal form were properly filled before issuing the cover. The order noted that the form had been type-filled, “in all probability by the company’s own official or agent,” and therefore the responsibility to complete every section rested with the insurer. Leaving a column unfilled, the bench concluded, does not amount to misrepresentation or concealment.

In setting aside the earlier ruling of the State Consumer Disputes Redressal Commission (SCDRC), which had upheld Bharti AXA’s rejection, the NCDRC underlined that there was no intention on the part of the policyholder to suppress material facts. The lapse, in fact, lay with the insurer.

As a consequence, Bharti AXA has been directed to release the assured sum of Rs 25 lakh to Devi’s legal heirs within 45 days. The company must also pay interest at nine per cent per annum, calculated from the date of filing the claim until the date of payment.

Advocates Ankit Acharya and Ritu Chaudhary appeared for the petitioner’s family, while Bharti AXA was represented by Advocate Aakash Vashishta.

The decision reinforces a key consumer protection principle: policyholders cannot be penalised for gaps created by insurers or their representatives in proposal forms.