Chandigarh

DF-I

CC/354/2023

SEETA RANI - Complainant(s)

Versus

AGEAS FEDERAL LIFE INSAURANCE COMPANY LIMITED FORMERLY KNOWN AS IDBI FEDERAL LIFE INSURANCE CO.LTD - Opp.Party(s)

TEJINDER KATARIA

31 Jul 2024

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-I,

U.T. CHANDIGARH

 

                    

Consumer Complaint No.	:	CC/354/2023
Date of Institution	:	21/7/2023
Date of Decision	:	31/7/2024

 

SEETA RANI aged around 34 Years w/o Late Satnam Singh R/o

House No. 3102, Sector 40D, PO Sector 36, VTC, Chandigarh-160036.

Complainant.

VERSUS

 

1. Ageas Federal Life Insurance Company Limited (Formerly Known as IDBI Federal Life Insurance Co.Ltd) 22nd Floor, A Wing, Marathon Futures, N M Joshi Marg, Lower Parel (East) Mumbai-400013 through its Managing Director CEO

 

2 Ageas Federal Life Insurance Company Limited (Formerly Known as IDBI Federal Life Insurance Co.Ltd) having one of its branch office at SCO-118-119, Ground Floor, Sector-8C, Madhya Marg, Near State Bank of India, Chandigarh 160009 through its Branch Manager

 

Opposite parties.

    

CORAM :	PAWANJIT SINGH	PRESIDENT
	SURJEET KAUR SURESH KUMAR SARDANA	MEMBER MEMBER

                       

ARGUED BY	:	Tejinder Kataria, Advocate for the complainant.
	:	Sh. Pardeep Sharma, Advocate for OPs.

Per surjeet kaur, Member

     Briefly stated, the OPs’ insurance company were earlier  known as IDBI Federal Life Insurance Co. Ltd. but later on changed its name AGeas Federal Life Insurance Company Ltd.  The  late husband of the complainant on the allurement of the agents of the OPs purchased a life insurance policy from the OPs after paying Rs.25,000/- as premium  and accordingly the OPs issued policy  under IDBI Federal Life Insurance Guranteed Income Plan 28.1.2021.  the sum insured under the policy was Rs.3,87,325/-  having 15 policy term. At the time of purchase of the policy it was assured to the life insured that his life is secured from the date of inception of the policy and if anything happen to the insured during the continuation of policy then his nominee will be entitled for the insurance amount. Unfortunately during the currency of the policy the life insured died on 21.6.2021 and the same was intimated to the OP insurance company in time. It is alleged that despite submitting all the relevant document with the claim the OPs vide  letter dated 2.11.2021  repudiated the claim of the complainant on the  illegal and flimsy ground.  It is averred that the factum of death and reason which caused the death was very much in the knowledge of the OPs but with a malafide intention the OPs repudiated the claim of the OPs. I is also alleged that the investigator appointed by the OPs demanded money for passing the claim of the complainant but the complainant showed inability to pay any amount to the investigator and the said investigator threatened the complainant that she will not get any claim without his report. Alleging the aforesaid act of Opposite Parties deficiency in service and unfair trade practice on their part, this complaint has been filed.

2. The Opposite Parties in their reply while admitting the factual matrix of the case state that the answering OPs have received an early death claim after 4 months and 24 days from the inception of the policy in question. Being an early claim the documents submitted by the complainant was duly examined by the answering OPs and after assessing the death claim it is found that the DLA had applied for insurance cover with Canara HSBC OBC ifs race company limited with insured amount of Rs. 45,00,000-  but this fact was not disclosed by the DLA while taking the policy in question. The contract of insurance must be based on the utmost good faith and in this way the DLA was under obligation to disclose the above said facts about the previous policy and this information was material information and in this way the DLA has suppressed the crucial information and DLA willfully not disclosed the above said information at the time of the member enrolment form and this amounts to malafide intention on the part of the DLA and this act and conduct of the DLA amounts to fraud as defined under section 45 of the insurance act, 1938 as amended up to date, therefore, the present complaint of the complainant is liable to be dismissed on this score alone. All other allegations made in the complaint has been denied being wrong.
3. No rejoinder filed.
4. Contesting parties led evidence by way of affidavits and documents.
5. We have heard the learned counsel for the contesting parties and gone through the record of the case.
6. The grouse of the complainant through the present complaint is that despite of her late husband covered under the insurance policy in question the OPs have arbitrarily repudiated the death claim. As per the complainant the factum of death and reasons which caused the death of the DLA were very much in the knowledge of the officials of the OPs but due to malafide motive the OPs wrongly and arbitrarily repudiated the claim of the complainant and deprived the complainant from her rightful claim.
7. The stand taken by the OPs is that the  DLA has concealed the material fact from them regarding his application for insurance cover with  Canara HSBC OBC Life Insurance company  Ltd. with insured amount of Rs.45.00 lakhs. This very fact of refusal by Canara HSBC OB L.I.C.  was not disclosed by DLA while taking the policy in question from them. Hence, the repudiation of claim is as per terms and conditions  of the policy.
8. After going through the documents on record it is abundantly clear that the DLA paid the premium amount of Rs.25,000/-  for the  policy in question. As per policy document Annexure C-3, the death sum assured to the tune of Rs.3,87,325/- has been claimed by the complainant but the said claim was repudiated by the OPs vide Annexure C-5 on the ground  that the Life Assured had applied for policy with other insurance company for sum assured of Rs.45.00 lakhs  which got rejected  prior to applying for the policy in question with the OPs. The said information was available with the DLA  yet the same was not disclosed at the time of proposal with a intent to induce the OP company to accept the proposal. Hence in view of Section 45 of the Insurance Act 1938 the claim of the complainant has been repudiated.
9. In our opinion  once the OPs had already received the premium  amount from the DLA for the policy in question, it was the  bounden duty of the OPs to verify each and every material fact of the DLA prior to receiving the huge premium amount but they did not  do so. However,  at the time of settling the claim the OPs has started making hue and cry that the DLA has suppressed material fact. The act of OPs for non-honouring the terms and conditions of their own policy in allowing the death claim to the widow of the DLA after receiving the payable premium from the DLA itself proves deficiency in service on their part.
10. The Hon’ble State Commission Punjab in Manika Vs. Life Insurance and anr. decided on 3.1.2017  held as under:-

“Therefore, even if the previous policy was not referred in the proposal form, in case the insured was not subject to medical examination, it would not prejudice the case of the Ops in any manner because in that situation, he would not have been subject to any medical examination. Therefore, the claim of the party First Appeal No. 1273 of 2015 10 cannot be repudiated merely on the ground that previous policy was not disclosed as the case of the Ops was not prejudiced by not disclosing the previous policy. It relates only to medical examination. In case the insurerd was not subject to medical examination even if the previous policy would have been disclosed then it would not have prejudiced the case of the Ops in any manner. Therefore, the claim was wrongly repudiated by the Ops and similarly, the complaint was wrongly dismissed by the District Forum without appreciating how the case of the Ops was prejudiced in case the previous policy was not disclosed by the insured to Ops. Therefore, the order passed by the District Forum is not legally sustainable and is liable to be set-aside.”

 

11. The Hon’ble Hon’ble State Commission Punjab in case titled as Branch Manager Bajaj Allianz Life Insurance Co. Ltd. and Ors. vs. Ninder Kaur held as under:-

“ The next submission put forth by the Insurance Company that the insured has not disclosed the fact in the proposal form that he has already taken any other insurance at the time of taking this insurance policy. This is not a case of ‘No Claim Bonus’, where the quantum of premium would be affected causing loss of the insurance company. A person can purchase more than one insurance policy by paying the premium and there is no legal effect on his right to do so. What is prejudice to the insurance company if First Appeal No 365 of 2018 12 he has not disclosed the fact of the previous policy in his proposal form to the insurance company in this case. We also do not find it a sufficient ground to reject this claim of the complainant with regard to income of the DLA which has to be accepted as contract as entered in the contract of insurance between the parties. The Insurance Company should have been wise enough to look into this fact before accepting the contract of insurance between the parties. Now the insurance company is estopped contending to the contrary.”

12.  Further Hon’ble Apex Court in the case “Dharmendra Goel Vs. Oriental Insurance Co. Ltd.”, III (2008) CPJ 63 (SC), has held as under:-

 “Insurance Company being in a dominant position, often acts in an unreasonable manner 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.”

13. 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 held as under:-

 “It seems 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 FA No.590 of 2019 10 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.”

14.  The principle of law laid down in the aforesaid cases is squarely applicable to the facts and circumstances of the instant case. Even otherwise the OPs have also failed to prove on record that the alleged concealment of submission of the Proposal Forms, which were rejected/declined, had any direct bearing on the risk undertaken by them. It is also not the case of the OPs that the DLA had died due to any pre-existing disease, which was not disclosed while taking the present policy.
15. In view of the above discussion, the present consumer complaint succeeds and the same is accordingly allowed. OPs are directed as under:-

 

1. to pay claim amount of ₹3,87,325/- to the complainant alongwith interest @ 9% per annum (simple) from the date of repudiation of the claim onwards
2. to pay ₹20,000/- to the complainant as compensation for causing mental agony and harassment;
3. to pay ₹10,000/- to the complainant as costs of litigation.

 

16. This order be complied with by the OPs jointly and severally within a period of 45 days from the date of receipt of certified copy thereof, failing which the amount(s) mentioned at Sr.No.(i) & (ii) above shall carry penal interest @ 12% per annum (simple) from the date of expiry of said period of 45 days, instead of 9% [mentioned at Sr.No.(i)], till realisation, over and above payment of ligation expenses.
17. Pending miscellaneous application(s), if any, also stands disposed off.
18.      Certified copies of this order be sent to the parties free of charge. The file be consigned.

			sd/- [Pawanjit Singh]
			President
			Sd/-
			[Surjeet Kaur] Member   Sd/-
31/7/2024			[Suresh Kumar Sardana]
mp			Member