PRESIDENT DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, SAMBALPUR

                                                                  CONSUMER COMPLAINT NO. 72/2022

Present-Dr. Ramakanta Satapathy, President,

  Sri. Sadananda Tripathy, Member,

Mst. Mathura Aind,

W/O- Late Siblal Aind,

R/O- Hanuman Colony, Sakhipada, Sambalpur

Ps-Dhanupali, Tahl/Dist-Sambalpur-768001.                         ...………..Complainant

Versus

1. Aditya Birla Capital

Regd. Office:- One World Center Town-1,

16^th floor Jupiter Mill Compound, 841,

Senapati Bapat Marg,

Elphinstone Road, Mumbai-400013.

2. The Branch Manager, Ujjivan Small Finance Bank,

At/Po/Ps-Ainthapali, Dist-Sambalpur-768004.

Registered Office- Grape garden, No.27,

3^rd A Cross, 18^th Main, 6^th Block, Koramangala,

Bengaluru, Karnataka-560095.                                     …………...Opp.Parties

Counsels:-

1. For the Complainant         :- Sri. H.N. Sarangi & Associates
2. For the O.P. No.1                           :- None
3. For the O.P. No.2                           :- Sri. R. Panigrahi & Associates

Date of Filing:26.09.2022,Date of Hearing :13.02.2024,Date of Judgement : 22.04.2024

  Presented by Dr. Ramakanta Satapathy, PRESIDENT

1. The Complainant filed the complaint alleging deficiency in service of the O.Ps. The case of the Complainant is that Late Siblal Aind died on 24.06.2021 due to Cardiac aust in VIMSAR, Burla after one hour of admission. The deceased was owner of the properly situated at mouza-Sambalpur Town Unit No.5, Sakhi-Gopinath M.S. Khata No. 644/979 plot No.769/4070-AC 0.065 decs and Plot No. 1071/4072 Ac 0.015 decs Total Ac 0.080decs. The deceased availed a loan from O.P. No.2 vide application No. 33430000576 and Home self-construction loan was granted vide sanction letter dated 19.01.2021. The deceased was primary applicant and the wife co-applicant, wife co-applicant. Rs. 15.00 lakhs was sanctioned and EMI fixed Rs. 18,235/- with 11.75% interest for the initial 3 years with monthly rest and 168 installments fixed. Life Insurance premium (Single Premium) fixed at Rs. 1,27,847.10 only, login fees collected Rs. 3953 and C.L.A. A.D.U.M. charges Rs. 13,275/-.

Vide letter dated 08.02.2021 Rs. 15.00 lakhs sanctioned and was to be disbursed to A/C No. 350421012000002 of the O.P. No.2. The deceased availed Rs. 8,25,000/- only out of Rs. 15.00 lakhs. Husband of the Complainant died due to heart attack and due to non-sanction of residual loan the house is incomplete.

The loan is protected by policy No. 600077. The deceased paid the premium of Rs. 1,27,847.10P and policy is issued by O.P. No.1. The Complainant is the nominee and SA-Rs. 15.00 lakhs for 14 years commencing from 30.01.2021 to 30.01.2035. The EMIs were also paid regularly till death of Sibal Aind.

Knowing the death of the principal borrower also the O.P. no.2 bullying, cornicing, intimidating and on 10.02.2021 demanded Rs. 9,01,852.86P.

Claim was made before O.P. no.1 but it was repudiated on 14.03.2022. Being aggrieved complaint was filed.

2. The O.P. No.1 insurer in reply submitted that the Complaint is related to death claim arising out of group asset assure policy taken by the Group policy holder for providing coverage to its members insured. The O.P. no.2 is the Group policy holder. Sibal Aind availed home loan of Rs. 15.00 lakhs on 19.01.2021.

The insurer has rightly repudiated the claim on 14.03.2022 for concealment of material facts and non-disclosure of material information. The Deceased Life Assured(DLA) was suffering from diabetes, hypertension and peripheral neuropathy prior to issuance of the insurance cover. The DLA declared himself good health (DOCH) on 20.01.2021.

After receipt of claim application an investigation conducted and the DLA dies due to cardiac arrest due to diabetes, hypertension and peripheral Neuropathy. The consent obtained from O.P. is not free consent and contract of insurance is voidable. The DLA not disclosed the past medical history. The DLA violated the good faith principal and there is no deficiency in service of the insurer. The proposal form is to be filled by the proposor as per Regulation 4(8) of the IRDAI Regulatio, 2017. The Complainant approached the Commission with clean hand.

The details of policy is as follows:

          Group Policy No. 600077

          Policy holder: Ujjivan Small Finance Bank-Home loan

          Member      :Sibal Aind

          Policy issue date:30.01.2021

          Total Claim Amount: Rs. 15.00 lakhs

          Premium Payment mode:Single Premium

          Risk Commercement Date:30.01.2021

          Name of Nominee:         Mathura Aind

          The insurer received the claim intimation on 10.09.2021. Investigated and got medical prescription of Dr. A.K. Mishra which reveals the DLA was having pre-existing disease. This Commission has no jurisdiction to entertain the complaint.

3. The O.P. no.2 in reply submitted that it is a schedule Bank and a banking company. The Case is not maintainable as proceeding u/s 13(2) of the SARFAESI Act, 2002 has been initiated. The borrower husband of the Complainant availed home loan, executed loan agreement. Sec 34 of the SARFAESI Act, 2002 bars the jurisdiction of Civil Court. The Bank is not liable for insurance claim. The Complaint is not maintainable against the answering O.P.
4. The Complaint filed the following documents:

1. Loan Sanction Intimation dated 08.02.2021.
2. Loan details and terms and conditions of loan.
3. Documents submitted for creation of mortage of 20.01.2021.
4. Loan Agreement dated 20.01.2021.
5. Memorandum of Mortgage and deposit of title deed 20.01.2021.
6. Undertaking to create mortgage dated 20.01.2021.
7. Delivery letter of promisory note dated 20.01.2021.
8. Promisory note dated 19.01.2021.
9. Loan A/C Statement.
10. Notice u/s 13(20 of the SARFAESI Act dated 11.02.2022.
11. Demand notice dated 07.11.2021.
12. Life Insurance policy Information sheet.
13. Letter dated 14.03.2022 of the insurer.
14. Death Certificate of insured Shiblal Aind.

The O.P No.1 insurer submitted.

1. Credit account Statement of Financier and DOCH.
2. Claim form details & Death Certificate
3. Prescription dated 18.11.2019 of Dr. A.K. Mishra.
4. Diagnostic reports dated 20.07.2019, 04.11.2019, 13.08.2020, 09.02.2021, 21.11.2019.
5. Investigation Report in claim No. 015831024 by Corporate Rsk Solution(p) Ltd. dated 18.02.2022.
6. Repudiation letter.

The Financing Bank O.P. No.2 submitted.

A/2) Loan Agreement dated 20.01.2021.

B/2) Memorandum of Mortgage and title deeds dated 20.01.2021.

C/3) Undertaking to create Mortgage dated 20.01.2021.

D/4) Take delivery letter for D.P. note 20.01.2021.

E/4) Promissory note of 19.01.2021.

5. After perusal of the documents and version filed by the partied and following issues are framed:

ISSUES

1. Whether the repudiation of the claim made by O.P. No.1 is proper on the point of non-disclosure of pre-existing disease?
2. What relief the Complainant is entitled to get?

Issue No. 1 Whether the repudiation of the claim made by O.P. No.1 is proper on the point of non-disclosure of pre-existing disease?

It is the admitted case of the parties that the D.L.A. Shibalal Aind availed a housing loan amounting to Rs. 15.00 lakhs mortgaging land of mouza-Sakhigopinath, Sambalpur Town Unit No.5 with the O.P. No.2 for a period of 15 years and the O.P. No.2 disbursed  Rs. 8.25,000/-. At the time of granting loan, the loan was secured by policy No. 600077 issued in favour of DLA wherein the O.P. no.2 became the Master policy holder. The O.P. No.1 also admitted that an amount of Rs. 1,27,847.10 single premium has been paid by D.L.A. The certificate os insurance was issued on 30.01.2021. The risk commenced from 30.01.2021 and the present complaint is the nominee.

The insured died on 24.06.2021 in VISMSAR, Burla due to cardiac arrest. The O.P. no.1 insurer was informed and claim was repudiated on 14.03.2022, on the ground that at the time of making the proposal the DLA suppressed concealed maretial facts and not-disclosed the material facts that he was suffering from diabetes, hypertension and peripheral neuropathy. The DLA declared himself good health (DOCH) on 20.01.2021. The DLA violated the ‘good faith’ principle. The insurer has rightly repudiated the claim. The O.P. No.1 cited a number of decisions relating to binding effect of insurance contract and nothing to be added or subtracted by giving a different meaning. The Exclusion clause is strictly be constructed. Further burden of proving deficiency in service lies on the complainant. The insurer after disclosure of the materials facts can take a decision that whether policy agreement can be made or not. The assured is asked to make a true and full disclosure of the information on the subject which is within his knowledge and it is his obligation. The medical prescription clearly shows that the assured was suffering from diabetes, hypertension and peripheral neuropathy which is the cause of death.

The Complainant cited Subha Praksh Motegaonkar VS L.I.C. of India, Civil Appeal No. 8245/2015 wherein hon’ble Supreme Court held that the ailment which the DLA was suffering from was not a life threatening disease which could or did cause the death of insured. The O.P. No.1 not submitted a single document to prove that due to diabetes, hypertension and neuropathy the DLA died. In the other hand the Complainant submitted that the DLA died due to cardic arrest and O.P. No.1 has not denied to it. The O.P. No.1 submitted the investigation report of corporate Risk solutions(p) ltd. dated 18.02.2022. In the said report statement of witness and submitted which not confirm for decision to be taken fore repudiation of a death claim.

The Complainant filed Neelam Chopra Vs L.I.C. of India case decided on 08.10.2018 wherein the National Commission allowed the Revision on the ground that insurer could not establish from which dated the DLA was suffering from the disease. In the present case the O.P. no.1 filed medical prescription dated 18.11.2019, 20.07.2019 and patholab reports dated 25.09.2019 and 09.02.2021. It does not disclose the suffering of DLA for a long period.

The O.P. no.1 while accepting the proposal used the printed form which speaks about all the diseases and medical report should be attached while accepting the proposal. The second point of consideration is that when the insurance premium was received, it was the duty of insurer to immediately investigate regarding health condition but not done so. To promote business the insurer accepted the proposal and thereafter can not take the plea that no free consent is given.

Insurance policy is a beneficial Welfare Social Security measure generally opted for future security if an insured and after receipt of death claim immediate steps of settlement/non-settlement should be intimated to the beneficiaries. The D.L.A. died on 24.06.2021 and Investigation reported on 18.02.2022 and policy claim was repudiated on 14.03.2022. The insurer not explained why such delay was made.

In the aforesaid circumstances the repudiation made by O.P. no.1 dated 14.03.2022 is not proper. The insured not applied its mind and while accepting insurance proposal non-examination of health condition of DLA amounts to deficiency in service which gave rise the cause of action.

The issue is answered in favour of the Complainant.

Issue No.2:- What relief the Complainant is entitled to get?

From the Supra discussion it is clear that as a nominee the complaint is entitled for the relief and the claim amount to be deposited with the master policy holder.

Accordingly, it is ordered:

ORDER

The complaint is allowed partly on contest against the O.P. No.1 and dismissed against O.P. No.2. The O.P. NO.1 is directed to pay Rs. 15.00 lakhs to O.P. no.2 within one month of this order. After adjustment of outstanding loan amount the O.P. no.2 shall refund the balance to the Complainant. In case of non-payment the amount will carry 11.75%  interest from 24.06.2021 till realisation. The O.P. No.1 shall pay litigation cost of Rs. 20,000/-.

No other cost and compensation.

Order pronounced in the open court on 22^nd day of April 2024.

Supply free copies to the parties.