Sri Partha Kumar Basu, Member

The case is at the instance of a consumer dispute which is filed by the complainant U/s 35 of the Consumer Protection Act, 2019 by Smt. Tara Naskar W/o. Late Sudeb Naskar and Sagar Naskar S/o. Late Sudeb Naskar both residing at 3 Sachindra Pally, Rajpur Sonarpur, Panchpota, Kolkata – 700 152.  In the complaint petition the Aadhaar Housing Finance Limited (formerly DHFL Vaishya Housing Finance Ltd.) a Company under the Company’s Act 1956 is arrayed as OP1 having registered office at 2^nd Floor, Tower No.3, JVT Towers, 8A, Main Road, S. P. Nagar, Bengaluru, Karnataka, Pin – 560 027 and having office in West Bengal at Krishna Enclave, 3^rd Floor, Premises No.201, BhajanLal Lohia Lane, Near A C Market, Howrah, West Bengal, Pin – 711 101. The Insurance Company namely M/s. Pramerica Life Insurance Ltd. (formerly DHFL Pramerica Life Insurance Company Ltd.) incorporated under the Company’s Act, 1956 having registered office and communication address at Cyber City, Tower B, Building No.9, 4^th Floor, DLFS City, Phae-3, Gurgaon, Haryana, Pin – 122 002 is arrayed as OP -2.

The fact of the complaint as averred by the complaint in a capsulated form is that one Late Sudeb Naskar S/o. Late Nilmoni Naskar along with his wife Smt. Tara Naskar being complainant no.1 herein and his mother Smt. Bina Naskar made an application as co-applicants for a loan of Rs.10,00,000/- by mortgaging his two no. of landed properties under Sonarpur Police Station, District – South 24 Pgs, West Bengal by depositing the original title deeds which were accepted by the OP -1 Finance Company vide letter dated 17.05.2018 communicating sanction of the said loan to those applicants as per terms and conditions as mentioned therein. During extending the loan, the OP-1 insurer insisted the borrowers not only for mortgaging the said immovable properties but also for taking 5 no. of insurance policies, premiums of which were paid on one time basis for an amount of Rs.52,129/-, Rs.9,381/-, Rs.11,733/-, Rs.3,186 and Rs.12,750/-. Those various insurance policies were taken by the applicants namely Sudeb Naskar, Tara Naskar and Bina Naskar as a guarantee towards the OP-1 Insurance Company so that the said loan remains secured in the event of death of Sudeb Naskar as the first and principal borrower when neither the mortgaged property be taken over by the OP-1 nor the co-applicants be required to make any further payment, so long the insurance policies are valid. Accordingly, the loan was disbursed and premiums paid for a total amount of Rs.89,179/-.The documentations of the loan formalities were completed by the pen of the agents of the finance company and the insured Sudeb Naskar only endorsed his signature and handed over the original title deeds of those properties along with the original policy certificates of 5 nos. which are still lying with OP-1 Insurance Company as security. It is the point of the complainants that from the above facts and circumstances it appeared to the insured Sudeb Naskar and given to understand by the OP-1 to him that the said insurance policies were not only for his own life coverage but also for the life coverage of his family members in case of any accidental hazard or any critical illness. Sri Sudeb Naskar diligently paid every instalment toOP-1 as repayment of loan and paid up all the premiums of the said 5 insurance policies, during his life time. However, Sri Sudeb Naskar who died prematurely on 10.02.2020 was neither a heart patient nor a diabetic nor had any illness as per the medical reports and death certificate. Neither the Finance Company OP-1 nor the Insurance Company OP -2 did conduct any medical examination of him being an insured person. The Insurance application forms were filled up by the field workers of the insurance company as a general practice in the trade of insurance business which is an unfair trade practices. Those apart, the Insurance Company has given to understand that any accident, critical illness or fatality stands covered by the said insurance products that he purchased and there was no need to appear in a medical examination or filling up the forms by himself.  In this way, the OP Finance Company having a nexus with the OP-2 Life Insurance Company resorted to cheating of their  bonafide customers and to Sri Sudeb Naskar (since deceased) by making false representation, illusory promises and fraudulence in general to his nominees, heirs and successors towards sufferance.  As a result, the widow Tara Naskar, Complainant no.1 as a nominee of those 5 Insurance Policies along with her son Sri Sagar Naskar, Complainant no.2, are suffering at the hands of the OP-1 for refusal of the claim of assured sum of Rs.10,89,179/- upon the death of Sudeb Naskar who died intestate leaving behind only those two heirs and successors, since the mother of Sudeb Naskar i.e. Bina Naskar has since died intestate on 28.12.2018 and the father of Sudeb Naskar i.e. Nilmoni Naskar died even earlier on 22.08.2010.The point of the Complainants no.1 & 2 therefore is that when Tara Naskar, after the death of Sudeb Naskar who died intestate, as her widow and nominee is the legitimate claimant of Rs.10,89,179/- only for herself as well as for and on behalf of her son Sri Sagar Naskar for the insurance policy namely Aadhaar Shila, the OP-2 Insurance Company repudiated the claim by rejecting unlawfully, as per notice sent to Tara Naskar dated 25.05.2020 with a wrongful reason that at the time of insurance his life was insured under Plan A when the insurer Sudeb Naskar suppressed that he was diabetic and had been suffering from high blood pressure, which is without any basis and devoid of any such clause in the letter dated 25.05.2020 and repudiated the legitimate claim of the complainants. Therefore a legal notice dated 09.09.2021 was served by the complainants for withdrawal of the repudiation notice and for crediting the sum assured for Rs.10,89,179/- along with closure of loan account of Sudeb Naskar, since deceased, vide account no.214405 dated 10.05.2018.It was also contended in the said legal notice to release the mortgaged property held back by the OP-1 Finance Company after securing liquidation of the said loan. But the OP-1 responded to the grievances of the said legal notice by a reply dated 05.10.2021 denying the legitimate claim of the complainant.It was also pointed out by the complainants that with the strength of the same medical papers and the death certificate of the deceased, another financial services company namely HDB Financial Services Ltd. Ahmadabad -380 009 entered into a similar transaction of secured loan where the claims of the complainant were accepted and payments were made in full. Hence the complainants prayed for punitive actions against the OPs for deficiency of service and unfair trade practices u/s 2 (47) of the Consumer Protection Act, 2019 The complainants further prayed in the instant case for payment of the sum assured of Rs.10,89,179/- of the insurance policy along with compensation of Rs.10,00,000/-, Rs.5,00,000/- and Rs.2,00,000/- for unnecessary delay in the process for rejecting the claim, mental agony and harassment and for not bothering to return the original title deeds of those two properties. 

In support, the complaints exhibited Annexure ‘A’ to ‘P’ vide running page no 13 to page 100 with complaint petition filed on 30.11.2021.

The complainants therefore have made prayer before the Commission for ;-

A) Directing the OPs for payment of the sum assured by closure of the loan account of Sudeb Naskar under account no.214405dated 10.05.2018.

B) To return the original title deeds of the two mortgaged properties of Sudeb Naskar to the complainants being legal heirs.

C) Direct the OPs to pay a sum of Rs. 10,00,000/- and Rs.5,00,000/- and Rs.2,00,000/- as litigation cost. 

On the other hand, the OP -1 in their W/V, BNA and arguments contended that the complaints do not fall within the ambit of consumer dispute under the C P Act as there is neither any unfair trade practice nor deficiency in services. The OP-1 claims that there is no cause of action of the dispute. The OP-1 precisely submitted that the complainant obtained financial facility for which collateral securities were taken from Sri Sudeb naskar who is the husband of Complainant No.1. and it is the complainant who decided to obtain insurance policies against the life of the said Sri Sudeb Naskar to cover the life of the insured i.e. Sudeb Naskar and some other general insurance policies for accident coverage, Mediclaim and protection of properties. The premium of Rs.89,179/- for those 5 insurance policies were paid by the complainant / her husband. The loanee deposited the original insurance policies with the OP-1 Finance Company after paying premium to OP-2 Life Insurance Company and upon being satisfied about fulfilment of security obligations of the Complainant, Rs.10,00,000/- was paid as loan by the OP-1 finance company. Sri Sudeb Naskar died on 22.08.2020 due to heart attack which the OP-1 claimed having known from the legal notice dated 09.09.2021. Accordingly, the same was replied by the Advocate of the OP-1 vide reply dated 05.10.2021 wherein it was unambiguously stated that the complainants took insurance policies voluntarily from the OP-2 Insurance Company and they are bound by all the terms and conditions of the said Insurance Company as per IRDA guidelines. However the OP-2 Insurance Company repudiated the claim on the ground of suppression of facts for which OP1 Company has nothing to do with the settlement of death claim of the complainant, filed before OP-2 which is not falling under the scope of the Finance Company. The OP-1 stated that the complainant failed to repay loan as per loan agreement for a sum of Rs.15,96,933.92 /-  which is remaining due as on 09.043.2022. As such the loanee cannot be relieved from their loan liability till full repayment. In their written version and evidence, the OP-2 Insurance Company adverted stating that they are in receipt of the one time Insurance Premium of Rs.52,128/- in respect of  the Life Insurance Premium for “Aadhaar Silla (DHFL Pramerica Group Credit Life+)” insurance policy for the period 10.05.2018 to 09.05.2028 bearing certificate no:GC000003800MC700 which was issued in the name of Sri Sudeb Naskar. The OP-2 also stated that due to death of the insured on 10.02.2020, the processing of insurance claim and investigation was conducted. As a result of the investigation it could be ascertained that the insured was suffering from diabetes and blood pressure related issues who was getting treated by various medical practitioners prior to submission of proposal form. This material fact was concealed by the policy holder while submitting proposal form and the OP-2 exhibited Exhibit no.4 along with other exhibits numbering OP Exibit.no.1, OP Exhibit no.2, OP Exhibit no.3, OP Exhibit no.5, OP Exhibit no.6, OP Exhibit no.7 and OP Exhibit no 8 in support of the same.  Accordingly the claim of the insured was repudiated by OP-2 vide letter dated 25.05.2020 (OP Exhibit. no.5). In their evidence the OP-2 confirmed the material facts about the 5 insurance policies with respective details, without opposing any other point. Hence the ground of rejection as stated by the OP-2 was the medical history of the insured at the time of submission of the insurance application form who was allegedly under regular treatment by local physicians for the ailment of diabetes and blood pressure.

The case was contested by OP–1 and OP-2 who filed W/V separately. OP-2 did not avail the scope to file questionnaire. BNAs were filed by both the parties. Both sides advanced their arguments during final hearing on 14.09.2023 which were heard in full.

It is observed that the deceased Sudeb Naskar purchased 5 no of insurance products from the OP2 insurance company against an onetime payment of premium for Rs. 89,179/-. Hence the complainants herein, being the legal heirs of the deceased insured being the beneficiaries of those insurance products are the consumers as defined in the Consumer Protection Act.

It is observed that the complainants’ insurance claim was repudiated by the OP2 as per the terms and conditions of the insurance policy. There is no quarrel between the contesting parties about the factual content of the case. The only dispute is centering around the rejection of payment of the Sum Assured of the life insurance claim, repudiation of which was challenged by the complainant. It is to be seen as to whether the said rejection is legally valid or not ?

From the application form of Life Insurance namely DHFL Pramerica Group Credit Life Plus Aadhaar Shila (OP Exh.-2)for the Policy no:GC000002 of Sudeb Naskar, it appears that the coverage was for a sum assured of Rs.10,89,179/- with a single premium of Rs.52,129/- on ‘Single Life’ basis. It is also mentioned in the said pre-formatted application format of the OP-2 Insurer that they have kept a provision of declaration of loan, that too, filled up in a neatly typed format with mention of Loan Account no 214405 for a loan amount of Rs.10,89,179/-. It was further observed that under the heading of Medical History of the Life assured and under Sl. no.1(g) and 1(h) under Sub heading -Diabetes and High blood pressure – the respective columns are ticked as ‘No’ against a given choice of ‘Yes /No’, which are signed by the insured. Further in the proposal verification form (OP Exh.no.5) dated 12.03.2020in the page no.24 and 25,thepathology test reports dated 02.03.2020, in page no.26, 27, 29 to 38, the Blood Sugar Level (both Post Prandial and Fasting) are mentioned and beyond limit marginally. Therefore, it becomes evident that all the pathological reports dated 02.03.2020 were in the knowledge of the insurer who accepted the insurance application form dated 12.03.2020 which is at a subsequent date and the insurance certificate was issued for a subsequent period from 10.05.2018 to 09.05.2028 in favour of the insured at the time of creation of the Life Insurance Policy. As such the claim of the OP-2 about having lack of knowledge about pre-existing disease, if any at all, on account of diabetes and blood sugar, as depicted as a ground of refusal and repudiation, does not hold good at all.  But the insurance company OP2 repudiated the claim as per their letter dated 25.05.2020 with following reason :-

“ It was found that late Mr. Sudeb Naskar was suffering from Diabetes and Blood Pressure, prior to the date of application and this information was not disclosed in the said application”

Further, from the pre-filled format of application of the said life insurance policy exhibited by the OP2 themselves, it is found that there is no existence of witness who subscribed his/her signature. The application format are also neatly typed in the answering portions at many places and not hand written leading to a possibility as not filled up by the insured. During advancements of their arguments, the OP1 Insurance company AAdaar Housing Finance Limited (formerly DHFL Vaishya Housing Finance Ltd.) and OP2 Insurance company M/s Pramerica Life Insurance Ltd. (formerly DHFL Pramerica Life Insurance Company Ltd.) claimed having no relationship whatsoever amongst themselves being incorporated separately as per companies act 1956 thereby trying to depict that OP1 is not an interested party regarding the insurance claim lying before OP2. If that is the case, then there is no cogent reason available or even a single whisper as to why OP2 Insurance company has kept a provision of ‘declaration of loan’ at item no (3) in the application for Life Insurance, with all details of loan that was to be taken from a OP1 finance company, specially when the loan disbursed in the instant case was already fully secured with mortgage of other immovable properties. 

From the sequel of documents, it is therefore apparent that the complainants’ husband / father was a life insurance policy holder of the insurance company. The OP2 repudiated the insurance claim stating that the complainant is guilty of suppression of fact. But in the insurance claim submitted by the complainants, the records cannot be viewed as anomalous to lead to a conclusion as ‘suppression of material fact’ since the OP-2 insurance company issued insurance policy with full knowledge about the medical history of the insured.

Further, considering the other aspects of the case in hand, it can be seen that in the repudiation letter of OP2, it was for the OP2 to prove that the complainant violated any insurance condition or concealed or suppressed anything intentionally. Neither any other restrictive condition was put to the insured at the time of issuing issuance policy or at any other point of time, as listed in the policy terms and conditions, which can debar the insured to prefer claim. Even an iota of doubt was not there in the mind of the Insurance company at the time of issuing the policy and only on the basis of wild presumption, the claim of the complainant has been rejected on a flimsy ground.

In the present case, the opposite parties have repudiated the genuine claim of the complainant on the basis of unfounded assumption. Following are the references of the Apex Courts in similar set of circumstances which lends support to the contentions in favour of the complainants for the case in hand :-

1. Hon'ble Supreme Court in case P. Vankat Naidu Vs. Life Insurance Corporation of India & Anr. IV (2011) CPJ 6 (SC) 6 held in Paras No.6 & 7 as follows:

"6. We have heard learned counsel for the parties and carefully perused the record. In our view, the finding recorded by the District Forum and the State Commission that the respondents had failed to prove that the deceased has suppressed information relating to his illness was based on correct appreciation of the oral and documentary evidence produced by the parties and the National Commission committed serious illegality by upsetting the said findings on a wholly unfounded assumption that the deceased has suppressed information relating to hospitalization and treatment.

7). Since the respondents had come out with the case that the deceased did not disclose correct facts relating to his illness, it was for them to produce cogent evidence to prove the allegation. However, as found by the District Forum and the State Commission, the respondents did not produce any tangible evidence to prove that the deceased had withheld information about his hospitalization and treatment. Therefore, the National Commission was not justified in interfering with the concurrent finding recorded by the District Forum and the State Commission by making a wild guesswork that the deceased had suppressed the facts relating to his illness."

(B) Further, in the case of "New India Assurance Company Limited Vs Smt. Usha Yadav & Ors.", 2008(3)RCR(Civil)-111(P&H), Hon'ble Punjab & Haryana High Court held as under:-

"6....It seems that the Insurance Companies are only interested in earning the premiums, which are rather too stiff now a days, but are not keen and are found to be evasive to discharge their liability. In large number of cases, the Insurance Companies make the effected people to fight for getting their genuine claims. The insurance Companies in such cases rely upon clauses of the agreements, which a person is generally made to sign on dotted lines at the time of obtaining policy. This is, thus, pressed into service to either repudiate the claim or to reject the same. The Insurance Companies normally build their case on such clauses of the policy, but would adopt methods which would not be governed by the strict conditions contained in the policy."

[C] In similar set of circumstances, the Hon'ble National Commission in First Appeal No.477 of 2020 (Bajaj Allianz General Insurance Co. Ltd. v. Avtar Singh Mann), decided vide order dated 17.08.2020, has upheld the decision of this Commission by dismissing the appeal filed by the Insurance Company in limine. In that case, the complainant had taken an Insurance Policy from the Insurance Company. During the validity period of that policy, the complainant suffered ailments and was hospitalized. The repudiation of the claim on the grounds of suppression of facts held by this Commission, to be wrong and illegal. The view taken by this Commission has been affirmed by the Hon'ble National Commission.

(D) In case New India Assurance Company Limited Versus Smt. Usha Yadav & others 2008(3) R.C.R. (Civil) 111, the Hon'ble Punjab & Haryana High Court expressed its anguish and observed as follows:-

"It seems that the Insurance Companies are only interested in earning the premiums, which are rather too stiff now a days, but are not keen and are found to be evasive to discharge their liability. In large number of cases, the Insurance Companies make the effected people to fight for getting their genuine claims. The insurance Companies in such cases rely upon clauses of the agreements, which a person is generally made to sign on dotted lines at the time of obtaining policy. This is, thus, pressed into service to either repudiate the claim or to reject the same. The Insurance Companies normally build their case on such clauses of the policy, but would adopt methods which would not be governed by the strict conditions contained in the policy."

(D)   In the matter of Civil APPEAL 8386 of 2015 the Division bench of the Hon’ble Apex Court of Dr. D.Y. Chandrachud & Sri B.V. Nagarthna vide order dated 06.12. 2021 held that :-

“69. The object of seeking a mediclaim policy is to seek  indemnification in respect of a sudden illness or sickness which is not expected or imminent and which may occur overseas. If the insured suffers a sudden sickness or ailment which is not expressly excluded under the policy, a duty is cast on the insurer to indemnify the appellant for the expenses incurred thereunder. 

70. Hence in the instant case, the repudiation of the policy by the respondent insurance company was illegal and not in accordance with law. Consequently, the appellant is entitled to be indemnified under the policy. In view of the aforesaid discussion, we hold that the Commission was not right in dismissing the complaint filed by the appellant herein.”  

In view of the facts as mentioned above and on perusal of findings recorded, we are convinced with the arguments raised by learned counsel for the complainants that those findings are well reasoned and are based on proper appreciation of evidence available on record. The case of opposite party failed to bring it on record that the insured was instrumental in suppressing any material fact about the medical records of the deceased insured. The claim of the complainants was wrongly and illegally repudiated. Ground of Repudiation of insurance claim by the Insurance provider / opposite party is not justified. The stand taken by the Insurance company is far fetched and is therefore, liable to be rejected.  So the OP 1 and OP 2 have failed in providing proper services and mitigate the financial burden of the complainants.

There is no merit in those contentions of the Insurance Company and it is crystal clear that the allegations are not substantiated at all.  In the result, the complaint case succeeds. 

Fees Paid is correct.