PER:

Charanjit Singh, President

1        The complainant has filed the present complaint by invoking the provisions of Consumer Protection Act under Section 34, 35 and 36 against the opposite parties on the allegations that the husband of the complainant namely Bhagwan Singh took loan amount of Rs. 5,55,706/- from the branch office of opposite party No. 2 on 30.1.2021 and its loan Number is 733760 and loan tenure was fixed 120 months and loan period started from 31.1.2021 to 30.1.2031. At the time of getting the said loan amount, the opposite party No. 2 told to the complainant to get insurance policy and understand the whole policy plan to the husband of complainant and under the allurement of opposite party No. 2, the husband of complainant has taken insurance of Pramerica Life Insurance and at that time Bhagwan Singh deposited Rs. 51,016/- to the opposite parties No. 2 and 3. The husband of the complainant namely Bhagwan Singh has taken insurance plan from the opposite parties No. 2 and 3 on 31.1.2021 for a sum of Rs. 5,55,705/- vide policy No. GCO00038 at their branch office i.e. opposite parties No. 2 and 3 on the basis of annual premium installment at the rate of Rs. 8,884/- per month and the husband of the complainant has paid Rs. 51,016/- to the opposite parties No. 2 and 3 and also paid his premium of Rs. 8,884/- for four months and the first coverage plan commencing period was started from 31.1.2021 to 30.1.2031. The premium of insurance is being paid by the husband of the complainant to the opposite party. On 2.4.2021 suddenly the husband of complainant namely Bhagwan Singh suffered from illness and then the complainant and her other family members arranged a vehicle and admitted his husband at Ohri Hospital Amritsar but there, his condition was very critical, hence on 3.4.2021 he referred at Gulab Devi Hospital, Jalandhar in emergency condition and concerned doctor has advised to the complainant for admission in Hospital for medical treatment and husband of the complainant was got admitted on 3.4.2021 to 14.4.2021 and concerned doctor conducted his medical treatment, medical test etc. from the various lab and diagnostics centers. During the treatment, the husband of the complainant namely Bhagwan Singh has since died on 14.4.2021. The complainant alongwith respectable persons approached to the opposite party no. 12 at their branch office and also provided them the original copies of treatment of husband of complainant, medical bills and the complainant lodged his claim to the opposite party No. 2 and the said claim alongwith record was forwarded to opposite party No. 3 for settling the claim of husband of complainant. After that the complainant has approached to the opposite party No. 2 so many times but every times he linger on the matter from one pretext to another opposite party No. 2 not accepted the claim and have not paid the full claim amount to the complainant. The complainant is entitled to Rs. 5,36,131/- insurance claim as well as Rs. 3,50,000/- medical treatment expenditure. On 1.10.2021, the respondent No. 3 refused to pay the insurance claim to the complainant with the reason that the husband of the complainant was already suffering from Diabetes and High Blood Pressure and due to that reason the insurance company / opposite party No. 3 flatly refused to provide insurance claim to the complainant through letter produce UIN: 14ONO39V02 dated 1.10.2021 issued by the office of opposite party No. 3 to the complainant whereas before taking the insurance, the health of husband of complainant was very well. The complainant prayed that the opposite parties may be directed to pay damage and compensation to the tune of Rs. 50,000/- alongwith insurance claim amount of Rs. 5,36,131/-  alongwith medical treatment amount of Rs. 3,50,000/- may kindly be awarded in favour of complainant  for unnecessary harassment, inconvenience, agony and mental tension suffered by the complainant at the hands of the opposite party. Alongwith the main complaint, the complainant has placed on record Adhar Card of complainant Ex. C-1, his affidavit Ex. C-2, copy of death certificate of Bhagwant Singh Ex. C-3, Copy of possession notice Ex. C-4, Copy of letter dated 1.10.2021 issued by Pramerica Life Insurance Ex. C-5, Copy of certificate of insurance Ex. C-6, Copy of medical records of Bhagwant Singh Ex. C7 to C-31.

2        Notice of this complaint was sent to the opposite parties and opposite party No. 3 appeared through counsel and filed written version by interalia pleadings that the instant complaint is false, malicious and incorrect and is nothing but an abuse of the process of law and it is an attempt to waste the precious time of this Commission, as the same has been filed by the complainant just to avail undue advantage. The complaint is thus liable to be dismissed under Consumer Protection Act, 2019. The above complaint is neither maintainable in law nor on facts and the same is liable to be dismissed in limine. The complainant has not approached this Commission with clean hands. Thus, the present complaint should be dismissed forthwith on the grounds of being malafide, baseless and lacking a bona fide cause of action. The Opposite Party No. 3 at the very beginning states that there has been no negligence or deficiency in services whatsoever, on part of the Answering Opposite Party in dealing with the concerned Policy, thus, the present Complaint is liable to be dismissed by this Commission on this ground alone. The Complainant is trying to deceive and mislead the Ld. Commission by stating wrong facts and statements based on her whims and fancies which in reality does not hold true. The present complaint is not maintainable as the contract of insurance is based on the foundation of utmost good faith i.e. Principle of Uberrima fides. The deceased had to maintain and observe complete good faith in entering into an insurance contract with the Insurer. The deceased was under solemn obligation to make full, complete, true and correct disclosure of the material facts which may be relevant for the Insurer to take into account while deciding whether the proposal should be accepted. If the Life Assured/Proposer failed to disclose the true and correct material facts to the Insurer then the policy obtained stands vitiated and the complainant/Member or any person claiming under it is not entitled for any benefits under the said policy. In the present case, it was revealed that the deceased Late Bhagwan Singh was suffering from Diabetes and Hypertension prior to submitting the Application Form which was not disclosed in the Application form. This very fact of the concealment/ misstatement debarred the answering Opposite Party to underwrite the Policy correctly. Thus the present complaint deserves to be dismissed on this ground alone. Financial underwriting norms of insurance company are important to determine to undertake the risk, hence it goes to root of underwriting the risk and issuance of policies, thus materially affects the decision of the insurance company to either accept or reject the applications. Accordingly, the questions are asked in the application form as to many criteria, accordingly the question in Proposal form as to the past medical history is crucial and material information to take the decision to underwrite the risk. In the present matter, the Insured deliberately mislead answering Opposite Party to accept the proposal by concealing the material information and furnishing false information while filling up the Application Form, which were very essential for the risk involved. The Answering Opposite Party relied on and believed that the information given by the Life Insured in the Application Form were true and correct in all aspects. However, Deceased Life Insured had not disclosed the full, complete and correct facts regarding his medical history. Had the Life Insured disclosed his true and correct health, the Answering Opposite Party would have not issued the policy to the Life Insured. Undoubtedly this is a suppression of material fact. The Complaint has been filed with ulterior motive and malafide intention to cause harassment and prejudice to the answering Opposite Party, which is a Company of long standing and high repute and to extract money without just cause or valid reason. This Commission has no jurisdiction to entertain the present complaint. Since the policy was obtained by concealing past medical history; the insurance contract, which culminated into the insurance cover forming subject matter of the complaint, is invalid, void, inoperative and unenforceable. Therefore, the present complaint is liable to be dismissed. It is well settled law that, in a group policy, the contract is between the Master Policy Holder and the Insurer. Based on the data provided by the Master Policyholder to the Insurer, the policy is issued by the Insurer and the Member is covered under the same. Hence member is liable to abide by the terms and conditions accompanying the Certificate of Insurance. In the present case Aadhar Housing Finance Limited was the Master Policy Holder and had entered into policy contract with Answering Opposite Party for Group scheme namely "DHFL Pramerica Group Credit Life +". The Answering Opposite Party received a duly filled and signed Proposal Form for issuance of policy along with KYC documents and premium amount from Master Policy Holder i.e. Aadhar Housing Finance Limited. From the bare perusal of the proposal form received by the Answering Opposite Party, it appears that Late Bhagwan Singh (hereinafter referred to as 'DLI') had understood and signed declaration stating therein that he had made complete, true and accurate disclosure of all the facts and circumstances as may be relevant for the acceptability of the risk and had not be withheld any information as may be relevant for the acceptability of proposal. The said extract of the Declaration undertaken by the DLI is as given below;

“I hereby declare that the information provided in this form or otherwise is true to the best of my knowledge and that I have not withheld any material information that may influence the assessment for acceptance of this application. I agree that this form will constitute part of my application for insurance(s) and that failure to disclose any material fact known to me may invalidate my insurance. I understand that in case of fraud or misrepresentation by me, the policy shall be cancelled immediately by paying surrender value, if any subject to the same being established by the Company in accordance with Section 45 of the Insurance Act, 1938......". It is humbly submitted as per Application Form/Proposal form, under Medical Questionnaire, DLI had to declare under Clause 1 (G & H) whether he was suffering from Diabetes and Hypertension. The DLI had ticked "NO" for the said question.  Based on the information provided and declaration made in the Proposal Form and on receipt of premium under the said Proposal Form, the company had issued Certificate of Insurance (COI) in favor of the Insured. The details of Certificate of Insurance (COI) are as below:-

Upon the issuance of the aforesaid Policy Documents, the DLI did not approach with any issue or grievance pertaining to the terms and conditions of the Policy Document or with respect to details as mentioned in the Proposal Form during the Free look Cancellation Period, which directly infers that he was satisfied with the Terms and Conditions of the Policy documents. The Answering Opposite Party received a death claim intimation along with the death certificate and other requisite documents stating that the DLI had expired on 14.04.2021. Upon receipt of the above claim intimation; the same was investigated as per clause 14(2) of the Insurance Regulatory and Development Authority (Protection of Policyholders Interest) Regulation, 2017 and it was revealed that late Sh. Bhagwan Singh was suffering from Diabetes and Hypertension prior to the date of application and this vital information was not disclosed in the said application form. The nominee in her statement has confirmed that the Life Assured was having diabetes and hypertension. The relevant extract of the statement of the nominee is as under

"I, Manjit Kaur w/o Late Mr. Bhagwan Singh (LA) am the permanent resident of Village- Gharyala, District- Taran Taran (Punjab). I am a housewife. LA was a businessman and agriculturist. LA used to work of tubewell boring and cultivation. Annual income of LA was near around Rs. 2, 50,000/-. LA was not suffering from any chronic illness. LA was suffering from Diabetes from last 4 to 5 years and he used to take medicine regularly. At the funeral, we burned medical papers and test reports related to LA's diabetes treatment

The Life Assured was suffering from Diabetes from last 4 to 5 years and he used to take medicine regularly from Bhullar Medical Store. The investigator visited the chemists shop to search and collect any illness or medication record on the name of LA. Authority of the Chemist shop (Mr. Sewa Singh Local Doctor) confirmed that he knows LA very well and LA was suffering from Hypertension and Diabetes and was on regular treatment for past 5 years. He was taking medicine from this medical store.  From the aforementioned medical documents that Deceased Life Assured was suffering from Diabetes and Hypertension prior to issuance of the subject policy. This medical adversities and conditions were not disclosed by the Deceased Life Assured. He intentionally chose to suppress these material facts from the Answering Opposite Party. Since the Claim investigation conducted by the Opposite Party revealed the aforementioned discrepancies; the Answering Opposite Party repudiated the Claim on the ground of concealment of material facts and refunded the premium of Rs. 51,016/- paid under the policy to Aadhar Housing Finance Limited being the Master policy holder, and the same was duly communicated, with reasons, to the Complainant as vide letter dated 01.10.2021.  Under section 45 of Insurance Act, 1938, THE INSURANCE LAWS (AMENDMENT) ACT, 2015 the Insurance Company can challenge the policy on the ground of concealment of material fact by the Insured within three years from the date of commencement of the policy. The subject policy was issued on 31.01.2021 and the Life Assured died on 16.09.2020 i.e. within 4 months from the date of commencement of the subject policy. Thus the answering Opposite Party has rightly, legally and in accordance with the terms and conditions of the policy rejected the Claim on the ground of intentional non-disclosure of material facts by the Deceased Life Assured. The relevant extract of Section 45 (2) of the Insurance (Amendment) Act, 2015 has been reproduced below for ready reference-

"A policy of life insurance may be called in question at any time within three years from the date of issuance of the policy or the date of commencement of risk or the date of revival of the policy or the date of the rider to the policy, whichever is later, on the ground of fraud: Provided that the insurer shall have to communicate in writing to the insured or the legal representatives or nominees or assignees of the insured the grounds and materials on which such decision is based."

Had the correct physical conditions of DLA would have been disclosed, the Answering Opposite Party would have never issued the policy to the complainant. Thus the said disclosure was an important and material fact which the DLI was bound to disclose at the time of filling the proposal form. As per Section 4(8) of the Insurance Regulatory And Development Authority of India (Protection of Policyholder's Interests Regulations, 2017), Proposal form means a form to be filled in by the proposer for insurance by furnishing all material information as required by the insurer in respect of a risk, in order to enable the insurer to decide whether to accept or decline the proposal for the policy, to undertake the risk and in the event of acceptance of the risk to determine the rates, terms and conditions of a cover to be granted. Section 19(4) of the aforesaid Regulation further clearly states that the Policyholder shall furnish all information that is sought from him by the insurer and also any other information which the insurer considers as having a bearing on the risk to enable the latter to assess properly the risk sought to be covered by a policy. It is evident that the Regulation also imposes a duty upon the Policyholder to disclose all the material facts to the insurer to enable them to assess the risk to be undertaken. A contract of insurance is affected on the basis of doctrine of Uberrimae Fidei and therefore the answering Opposite Party issued the Policy on the basis of the facts stated in the proposal form. Since the material facts were not disclosed in the proposal form, the Claim was rejected as per the terms of the policy. The opposite party No. 3 has denied the other contents of the complaint and prayed for dismissal of the same. Alongwith the written version, the opposite party No. 3 has placed on record affidavit of Mritunjay Singh Senior Manager Ex. OP3/A,  Copy of welcome letter Ex. OP3/1,  Copy of Life Insurance Ex. OP3/2, Copy of Group Insurance Claim Form Ex. OP3/3, copies of medical record of Gulab Devi Hospital Jalandhar Ex. OP3/4, Nominee Statement Ex. OP3/5, Bhullar Medial Store certificate Ex. OP3/6, Copy of Repudiation letter dated 1.10.2021 Ex. OP3/7, Final Investigation Report Ex. OP3/8

3        Notice of this complaint was sent to the opposite parties No. 1 and 2 but no one appeared on behalf of opposite parties No. 1 and 2 & consequently, the opposite parties No. 1 and 2 were proceeded against exparte.

4        The complainant has filed rejoinder to the written version filed by the opposite party No. 3 and denied all the pleas taken in the written version and reiterated the stand as taken in the complaint.

5        We have heard the Ld. counsel for the complainant and opposite party No. 3 and have carefully gone through the record placed on the file.

6        In the present case, insurance is not disputed and in the present case it is also not disputed that the Bhagwan Singh remained admitted in the hospital and he died on 14.4.2021. The opposite party No. 3 has repudiated the claim of the complainant vide repudiation letter dated 1.10.2021 Ex. OP3/7 and operative Para of the repudiation letter is as follows:-

“…With reference to your claim under the above policy on the life of the above mentioned deceased, we have to inform you that all liability under the policy has been repudiated by us. We have legally sustainable evidence to prove that “Mr. Bhagwan Singh” suffered from Diabetes, Hypertension prior to the proposal date…..”

Bhagwan Singh was insured from the opposite party No. 3 and it was started from 31.1.2021 to 30.1.2031. Unfortunately, on 2.4.2021 suddenly Bhagwan Singh suffered from illness and then the complainant and her other family members arranged a vehicle and admitted Bhagwan Singh at Ohri Hospital Amritsar but there, his condition was very critical, hence on 3.4.2021 Bhagwan Singh was referred at Gulab Devi Hospital, Jalandhar in emergency condition and concerned doctor has advised to the complainant for admission in Hospital for medical treatment and husband of the complainant was admitted on 3.4.2021 to 14.4.2021 and concerned doctor conducted his medical treatment, medical test etc. from the various lab and diagnostics centers. During the treatment, the husband of the complainant namely Bhagwan Singh died on 14.4.2021. The opposite party has denied the claim of the complainant firstly on the ground that it was found that late Mr. Bhagwan Singh suffered from Diabetes, Hypertension prior to the date of application and this information was not disclosed in the said application. The complainant has placed on record certificate of insurance Ex. C-6 in which the date of birth has been written as 16.4.1967 and at the time of taking the policy in the year 31.1.2021 said Bhagwan Singh was aged about 54 years and it is the duty of the insurance company to conduct the medical examination of DLA who was above 45 years of age and what prevented the opposite party No. 3 to conduct the detail medical examination before the inception of policy.   Reliance in this connection has been placed upon Bajaj Allianz Life Insu.Co.Ltd. & Ors Vs. Raj Kumar III(2014) CPJ 221 (NC) wherein it was held that usually the authorized doctor of the Insurance Company examines the insured to assess the fitness and after complete satisfaction, the policy is issued. Thus the repudiation of the claim on the ground of pre existing disease was held to be invalid.

7        The other point taken by the opposite party No. 3 is that Mr. Bhagwan Singh” suffered from Diabetes, Hypertension prior to the proposal date and the complainant has concealed this fact from the opposite party No. 3 at the time of obtaining the policy. The diabetes and hypertension are not a material disease, therefore, non disclosure thereof is not a concealment. We draw support from Life Insurance Corporation of India Vs. Sushma Sharma from II (2008) CPJ 213 wherein Hon'ble State Commission has held as under:-

“So far as hypertension and diabetes is concerned, no doubt, it is a disease but it is not a material disease. In these days of fast life, majority of the people suffer 14 from hypertension. It may be only the labour class who work manually and take the food without caring for its calories that they do not suffer from hypertension or diabetes. Out of the literate and educated people particularly who have the white collar jobs, majority of them suffer from hypertension or diabetes or both. If the Life Insurance Companies are so sensitive that they consider hypertension and diabetes as material diseases then they should wind up their business and stop accepting premium. If these diseases had been material Nand Lal insured would not have survived for 10 years after he started suffering from these medical problems. Like hypertension ,diabetes has also infected a majority of the Indian population but the people who suffer from diabetes and continue managing it under the medical advice, they survive for number of years and none of these diseases is fatal and as discussed above, if these diseases had been material deceased Nand Lal insured would not have survived for 10 years.”.

We further draw support from Life Insurance Corporation of India Vs. Sudha Jain II (2007) CPJ 452 wherein Hon'ble Delhi State Consumer Disputes Redressal Commission, New Delhi has held that maladies like diabetes, hypertensions being normal wear and tear of life, cannot be termed as concealment of pre-existing disease.  Moreover, the opposite party No. 3 has failed to establish the nexus between the cause of death diabetes and hypertension.

8        Not only this, the Opposite Party No. 3 could not examine any medical practitioner/ doctor who has treated the life assured for diabetes nor the Opposite Party has filed any affidavit of any doctor who has medically treated the life assured for the disease prior to taking of the policy. It has been held by the Hon'ble National Commission in case New India Assurance Co.Ltd & Anr Vs. Murari Lal Bhusri 2011(III) CPJ 198 (NC) that where the Insurance company failed to produce any evidence to show that respondent was aware of any pre-existing disease at the time when insurance policy was taken, opposite party was not justified in repudiating the claim of the complainant on the ground of pre-existing disease. It has been held by the Hon'ble Supreme Court of India in case P.Vankat Naidu Vs. Life Insurance Corporation of India & Anr 2011(3) CPC 350 that where no cogent evidence was produced by the respondent to prove that insured/deceased had concealed any fact about his illness or hospitalization, it was held that no material fact was suppressed by the deceased in this respect. It has been held by the Hon'ble State Commission of Punjab in case Life Insurance Corporation of India Vs. Miss Veenu Babbar and another 2000(1) CLT 619 that repudiation on the basis of history recorded in the hospital records is illegal and arbitrary and the same could not be treated as substantive material to base any decision. Same view has been taken by the Hon'ble National Commission in case Life Insurance Corporation of India & Ors. Vs. Kunari Devi IV(2008) CPJ 89 (NC) that where no document has been produced in support of allegation of suppression of disease at the time of taking policy or revival of policy, history recorded in hospital's bed ticket, not to be treated as evidence as doctor, recording history not examined, suppression of disease not proved, insurer was held liable under the policy. It has further been held by the Hon'ble National Commission in case Sahara India Life Insurance Co. Ltd. & Anr Vs. Hansaben Deeepak Kumar Pandya IV(2012) CPJ 13(NC) that where the opposite party insurance company has failed to produce on record any evidence to show that deceased insured ever consulted doctor for taking treatment of heart disease, the repudiation of the claim on the ground of suppression of material fact is totally illegal. It has been held by Hon’ble State Consumer Disputes Redressal Commission, Chandigarh in case titled as Ashwani Gupta & Ors. Vs. United India Insurance Company Limited 2009(1) CPC page 561 that where the claim of the complainant has been repudiated on the ground that the assured had pre-existing disease of diabetes mellitus which was not disclosed- apparently, burden to prove lies upon the insurer- If assured was suffering from pre-existing disease why insurer had not checked it at the time when proposal form was accepted by its staff-Respondent has failed to fulfill this requirement before repudiating the claim and the appellant was held entitled to claim alongwith interest @ 9%. In the present case, the Opposite Party has simply relied upon the history of the life assured recorded at the time of his admission in the hospital

9        In the present case, the opposite party No. 3 has denied the claim of the complainant on the ground that upon receipt of the above claim intimation; the same was investigated as per clause 14(2) of the Insurance Regulatory and Development Authority (Protection of Policyholders Interest) Regulation, 2017 and it was revealed that late Sh. Bhagwan Singh was suffering from Diabetes and Hypertension prior to the date of application. The case of the opposite party No. 3 depends upon the Final investigation report Ex. OP3/8 which has been conducted by Third Eye Investigations Pvt. Ltd. But the opposite party No. 3 has failed to place on record affidavit of investigator on the record to prove its case. In the absence of affidavit of investigator no evidentiary value can be made on the report submitted by the investigator. Reliance in this connection has been placed upon Manikant Vs. New India Assurance Co.Ltd. 1(2012) CPJ 88 (NC) of the Hon’ble National Commission wherein it has been held that the surveyor did not appear in court and subject himself to cross examination nor was any affidavit filed by him to prove his report . Producing a document in court does not by itself constitute proving the document. It has to be backed by credible evidence. In the instant case, no evidence was led to prove the report of investigator as such in the absence of same report of investigator has little evidentiary value.  Therefore, the report Ex. OP3/8 cannot be accepted.

10      In such a situation the repudiation made by the Opposite Party No. 3 regarding the genuine claim of the complainant appears to have been made without application of mind. It is usual with the insurance company to show all types of green pesters to the customer at the time of selling insurance policies, and when it comes to payment of the insurance claim, they invent all sort of excuses to deny the claim. In the facts of this case, ratio of the decision of Hon’ble Apex Court in case of Dharmendra Goel Vs. Oriental Insurance Co. Ltd., III (2008) CPJ 63 (SC) is fully attracted, wherein it was held that, Insurance Company being in a dominant position, often acts in an unreasonable manner and after having accepted the value of a particular insured goods, disowns that very figure on one pretext or the other, when they are called upon to pay compensation. This, take it or leave it, attitude is clearly unwarranted not only as being bad in law, but ethically indefensible. It is generally seen that the insurance companies are only interested in earning the premiums and find ways and means to decline claims. In similar set of facts the Hon’ble Punjab & Haryana High Court in case titled as New India Assurance Company Limited Vs. Smt.Usha Yadav & Others 2008(3) RCR (Civil) Page 111 went on to hold as under:-

 “It seams that the insurance companies are only interested in earning the premiums and find ways and means to decline claims. All conditions which generally are hidden, need to be simplified so that these are easily understood by a person at the time of buying any policy. The Insurance Companies in such cases rely upon clauses of the agreement, which a person is generally made to sign on dotted lines at the time of obtaining policy. Insurance Company also directed to pay costs of Rs.5000/- for luxury litigation, being rich.

11      In light of the above discussion, the complaint succeeds and the same is hereby allowed with costs in favour of the complainant and against the Opposite Party No. 3. The opposite Party No. 3 is directed to make the payment of Rs. 5,55,705/- (i.e. Coverage sum assured) to the complainant. The complainant has been harassed by the opposite party No. 3 unnecessarily for a long time. The complainant is also entitled to Rs.20,000/- as compensation on account of harassment and mental agony and Rs 11,000/-  as litigation expenses. Opposite Party No. 3 is directed to comply with the order within one month from the date of receipt of copy of the order, failing which the complainant is entitled to interest @ 9% per annum, on the awarded amount, from the date of complaint till its realisation.  The present complaint is dismissed against the opposite parties No. 1 and 2. Copy of order be supplied to the parties free of costs as per rules. File be consigned to record room. Case could not be disposed of within the stipulated period due to heavy pendency of the cases in this Commission.

Announced in Open Commission

28.07.2023