SMT. RAVI SUSHA: PRESIDENT

            Complainant filed this complaint U/s 35 of Consumer Protection Act 2019, seeking to get an order directing opposite parties to pay the entire sum assured amount with associated loan account No.1807675100001335.  Also to direct opposite parties to refund premium paid amount Rs.1,63,098.66.           

             The complaint filed by the complainant is that complainant’s son Late Mr. Kausal B Nambiar had taken loan from IDBI bank Payyannur Branch Kannur District, Kerala.  Loan amount Rs.68,42,600/- with loan interest rate 8.9%. As per the instigation of IDBI Bank Mr. Kausal B Nambiar has taken a Insurance policy from OP No.2.  Total sum assured Rs.70,03,337/- against the loan account No.1807675100001335 with effect from 23^rd September 2020 and cover expiry date 22^nd September 2032.  Master policy holder IDBI bank Ltd. Insured Member Mr. Kausal B Nambiar, Death sum assured Rs.7001986, cover term 12 years, Premium payment term single.  Total premium paid 1,63,0989.66, complainant is the nominee.  Insured member expired on 17/07/2021 due to cardiac arrest.  Copy of death summary issued by Aster Mims Kannur.  Complainant applied for getting insurance benefit.  A letter dated 24^th December 2021 received by complainant from OP 1 to requirement of documents for processing the claim of Mr. Kusal B Nambiar.  Same day another letter from Ageas federal insurance company addressed to my daughter in law Srerekha regarding requirement of documents for processing the claim of  Mr. Mr. Kausal B Nambiar against policy No.4000447041, 4000219669 and 4000190227 for outstanding loan schedule as on date of death.  Insurance authority collected documents from house by relatives.  On 19^th Feb 2022 again received letter from OP NO.1 repudiation of death claim of late Mr. Kausal B Nambiar under policy No.4001404670.  It is stating that Medical records of Sreechand Specialty Hospital Kannur confirm that life assured was diagnosed Cirrhosis liver and portal hyper tension is prior to insurance to this policy.  Medical records of Dhanalakshmi Hospitals, Kannur also confirm that life assure was suffering from Chronic Liver disease and Hypertension prior to issuance of policy.  Complainant entirely denying all the findings of OP No.2 to declined death claim.  It is submitted that in the customer declaration  form dated 19/09/2021 question (s) in part V and Vi complainant’s son answered correct in the knowledge and believes, because at that time he was in good health conditions.  Complainant states that insured has no ailment prior to this insurance policy,.  Also insurance company must carried out medical investigation of the insured before issuing of policy or certificate of insurance.  Medical expenses also collected from insured person with premium.  As per Certificate Of Insurance OP 1 is liable for repayment of balance loan amount as early and release documents from OP No.2. OPs show unfair trade practice and deficiency in service against policy terms and conditions.  Hence this complaint.

            The contention of the complainant were denied by the opposite parties.

            OP No.1 Insurance Company has stated that the complainant had applied for an insurance policy (ie. IDBI Federal Life Insurance Group Loan Secure Plan) vide application No.124427083 dated 19/09/2020.  That based on the said information provided in the proposal form and as per the underwriting norms of the company, the 1^st OP issued the policy bearing No.4001404670 dated 23/09/2020  to the insured person ie. Mr. Kausal B Nambiar.  The policy applied is a non-medical case, where in as per the IRDAI guidelines and product features basis the profile of Life Assured, it is not mandatory for the insurance company to conduct the medicals of Life assured before issuance of policy.  As such in the policy in question, no medicals were conducted.  The policy document was dispatched to the complainant by speed post on 26/09/2020.  Thereafter, on 05/10/2021 the company has received a death claim form from the complainant intimating the death of the life assured on 17/07/2021.  The death of the Life Assured caused within 9 months and 24 days from the issuance of policy in question.  The reason for his death was ‘Decompensate Chronic Liver Disease’ and the immediate cause is cardiac arrest.  After the receipt of death intimation from the complainant vide the above mentioned death claim the 1^st OP has issued a letter dated 24/12/2021, requesting for 1) medical documents indoor case papers related any ailment prior to the death, 2) all past medical records of  life assured and 3) Employer certificate.  Since the death of DLA was within three year from the issuance of the policy, the claim falls under the category of early claims and hence, the OP carefully evaluated the claim and conducted an independent investigation to ascertain the genuineness of the claim.  A letter of Dhanalakshmi hospital dated 07/08/2021 states that the Life assured was suffering from Decompensate CLD, Cirrhosis with portal Hyper tension and being worked  up for liver transplantation.  These facts were not disclosed at the stage of proposal for policy.  Had this information were disclosed by the Life Assured at the time of availing the policy the company would have definitely declined to the said proposal Non-disclosure of such material facts fully and truthfully had impacted and impaired the 1^st OP’s decision.  A contract of Insurance is a contract based on “utmost good faith” and as such the insured is under an obligation disclosed all material particulars without any concealment and suppression.  It is only in the month of September 2020, the DLA was diagnosed as a case of ‘Chronic Liver disease’ and immediately after the said knowledge, he has again applied for one more insurance policy with 1^st  OP with Death Sum Assured of Rs.70,01,986.  The 1^st OP was unaware of the developed adverse medical condition of Life Assured, and in absence of disclosure by DLA of any adverse medical condition, issued the policy in question bearing policy NO.4001404670, dated 23/09/2020.  While, applying for the policy in question, the DLA has intentionally withheld the true material information about ‘Decompensate Chronic Liver Disease’.  There has been no negligence or deficiency in services whatsoever, on the part of the 1^st OP in dealing with the concerned policy, thus, the present complaint is liable to   be dismissed.

            OP No.2 is the bank, master policy holder, filed their version stating that the complainant’s son the deceased Kausal B Nambiar had availed a loan of Rs.70,00,000/- with loan interest at the rate of 8.9% against loan account NO.1807675100001335 on 19/09/2020.  The master policy holder is the respondent IDBI Bank Ltd. and the insured member was Mr. Kausal B Nambiar and the death sum assured was Rs.7001986.05 which cover for a term of 12 years till 22/09/2032 under the premium plan named IDBI Federal life insurance group loan secure plan with OP No.1.  The single term premium of Rs.1,63,098.66 was paid on 23/09/2020.  It is also admitted that the complainant is the nominee and the insured died on 17/07/2021.  It is submitted that the OP No.2  is not privy to any of the agreements (insurance policy) issued.  There are also no agreement or arrangement or transaction between the OP2 and insured.   As regarding bio data provided to the insurer including the health declaration dated 19/09/2020 the same was furnished by the insured and on satisfaction of the enquiry the policy was issued by OP NO.1. It is submitted that OP2 does not know the exact reason of death and the health condition of the insured during the relevant period of policy and the subsequent details furnished by the nominees and  the other legal heirs t the OP No.1, the insurer.  Therefore, prayed that OP2 is to be exonerating from the liability.

            At the evidence stage, complainant has filed her chief affidavit and documents.  She was examined as Pw1 and the documents were marked as Ext.A1 to A27.  She was subjected to cross-examination for the opposite parties 1 and 2.  On the side of OPs, no oral evidence was adduced.  Both OPs submitted documents.  1^st OPs documents were marked as Ext.B1 to B12.  After that the learned counsels of parties made arguments and filed written argument note also.

            The learned counsel of OP No.1 stated that based on the information provided into the proposal form given by the insured, OP No.1 issued the disputed policy dated 23/09/2020 to the Insured person Mr. Kousal B Nambiar.  Further submitted that since the death of the Insured was within three years (death was on 17/07/2021), the claim falls under the category of early claims and hence the OP carefully evaluated the claim and conducted an independent investigation to ascertain the genuines of the claim. It is submitted that on investigation, it was observed that he was suffering from stomach pain in July 2020 and was on medication, Later in September 2020 he was diagnosed as a case of Chronic Liver Disease,  Since then he was on regular medical attention from Dhanalakshmi Hospital, Kannur.  His ultrasonogram report dated 21/07/2020 states Cirrhosis of Liver, Mild Spenomegaly, Moderate Ascites, Perishplenic collaterals and Portal Hyper Tension.  His Oesophago-Gastro-Duodenoscopy copy dated 08/09/2020 mentioned indication of CLD with Grade III, II Esophageal Varicies, Mild PHG, EVL done, Six Bands deployed.  The discharge summary of Dhanalakshmi Hospital dated 06/03/2021 to 09/03/2021 states that the Life Assured was known hypertensive, on treatment since 10 years and diagnosed of decompensate CLD, Cirrhosis, Portal HTN-S/PEVL Therapeutic Ascetic fluid tapping done. A letter of Dhanalakshmi hospital dated 07/08/2021 states that the Life assured was suffering from Decompensate CLD, Cirrhosis with portal Hyper tension and being worked  up for liver transplantation.

            It is submitted that these facts were not disclosed at the stage of proposal for the policy and on the basis of these findings; OP No.1 has rightfully repudiated the said death claim of the complainant and informed the same to the complainant vide its repudiation letter dated 19/02/2022.

            The medical evidence is the medical record from Sreechand specialty Hospital Kannur and Dhanalakshmi Hospital Kannur.  On a careful perusal of documents and note, that on 21/07/2020 for general weakness he went to Sreechand Hospital, on 24/02/2021, consulted Gastro entologist Dr. Kavitha at her clinic, on 06/03/2021, again consulted Dr. Kavita and admitted in the hospital, Dhanalakshmi for CLD and discharged on 09/03/2021.  In the said medical record, there is an endorsement that Diagnosed.  CLD since 8 months and HP since 10 Years.  After that on 16/06/2021 and on 21/06/2021 he availed treatment.  On 17/07/2021, the Life Assured died.  In death Summary, issued from Aster Mims shows cause of death as Decompensate CLD, Diagnosis- Pre-Hospital Cardiac Arrest.

            Here, complainant denied the endorsement in the Medical record of Dhanalakshmi Hospital dated 06/03/2021 that the patient a diagnosed CLD, Cirrhosis, portal HTN, on treatment since 8 months.

            It is contended on behalf of the Insurance company that the death of the life assured caused within 9 months and 24 months from the issuance of policy in question ie. Within 3 year, the claim of complainant falls under the category of early claims and hence OP carefully evaluated  the claim.

            It is an admitted fact that the disputed policy was issued on 23/09/2020 and Expiry date 22/09/2023.  The policy document is submitted by the complainant and marked as Ext.A2.  On perusal of Ext.A2, it can be seen that along with policy certificate Insurance Company issued a letter to the Life Assured dated 23/09/2020 in which it is stated that “This cover has been issued on the basis of the medical statement, habits and lifestyle details confirmed by you in the member enrolment form/Declaration of good health and the reports of your medical tests undertaken for the cover, as applicable.”

            It is admitted fact that premium mode is single and Insurance company received premium Rs. 1,38,219.2+ Premium for good and service tax Rs.24,879.46 ie total Rs.1,63,098.66 from the Life Assured Kausal B Nambiar.

            In a Judgment in Life Insurance corporation of India v Sign Yadav IV(2011)cpj130.  The Hon’ble State Consumer Disputes Redressal Commission Jaipur, held that Accepting the Premium and entering into agreement, Insurance company cannot wriggle out of liability merely by saying that the contract was made by misrepresentation and concealment.  Insurance policies should not be issued and repudiated in such casual and mechanical manner.

            It is also observed by the Appellate commission that with the fast growing business competition among the Insurance companies unhealthy practices develop to get minimum benefits and profits.  The banks are also becoming part of the same trend where insurance policies are automatically attached to the bank account as an incentive to the customer.

            In the instant case also IDBI Bank from where Life Assured had taken a loan of Rs.6842600 with loan interest rate 8.9% and while taking the said loan, due to the interference of bank, the complainant’s son had taken Insurance from IDBI Federal Life Insurance.  Group loan secure plan in which Master policy holder is IDBI bank.  IDBI Federal Life insurance company Ltd.’ has changed its name w.e.f. 21^st January 2021 to ‘Ageas Federal Life Insurance Company Ltd.’

            As per the observation of Appellate Commission in the above stated case, here also after receiving a huge amount Rs.163,98.66 from the Life Assured as premium after verifying the Medical reports of the Insured, repudiating the claim, by saying Suppression of Pre-existing disease in a casual manner is not a fair practice.

            Here the point to be considered whether OP No.1 had proved the presence of pre-existing disease of the Life Assured undoubtedly and whether Insurance company was justified in repudiating the claim on the basis of suppression of material facts?

            Complainants submission is that her son Life Assured had not concealed any illness or disease as alleged by 1^st OP.  It is submitted that complainant’s son Kausal B Nambiar was under treatment for liver disease prior to the policy is not correct.  Complainant denied the statement of diagnosis CLD Prior to the date of issuance of policy in Medical records.

            We have given thoughtful consideration to the rival contention.  We have carefully gone through the documents available before us.  OP1 produced photocopies of Medical records issued from Sreechand Hospital, Dhanalakshmi Hospital and Aster Mims Hospital attached with investigation report (Ext.B11 series).  It is seen that in P.30 patient was admitted in Dhanalakshmi Hospital, on 06/03/2021 and discharged on 09/03/2021.  In the discharge summary not signed by Medical officer, stated that Diagnosis Decompensate CLD, Cirrhosis, Portal HTN, Therapeutic Ascetic fluid Tappin Done; on treatment since 8 months now admitted with increased abdominal distension with ascites and A Pedal edema.   No abdominal pain or vomiting.  H/o Acute Gastro enteritis, treated 1 week ago.  He is a known hypertensive on treatment since 10 years.

            In P.31 Dr. Kavitha MD, DM (Gastro) issued a certificate “this is to inform you that Mr.Kausal B Nambiar, 47 years, resident  of Kusumam, Kappad (PO), Kannur -670006 is a diagnosed case of Decompensate chronic Liver Disease, Cirrhosis with portal Hypertension (NASH related ) with Refractory Ascites requiring recurrent Ascitic fluid Paracentesis.  He was being worked up for Liver transplantation.  He expired on 17/07/2021 due to cardiac arrest.

            In which it is mentioned that the Life Assured expired due to cardiac arrest.

            In Page No.32 Ultra sound scan Abdomen dated 21/07/2020, impression shows Cirrhosis of liver.

            We have considered these Medical records goes to show that he was admitted in Gastroenterology Department from 06/03/2021 to 09/03/2021.  In the certificate issued by Dr. Kvaitha , gastrologist, it has been shown as death due to cardiac arrest.  In the Death Summary (P.33) issued from Aster Mims Hospital Kannur, it has been mentioned that cause of death Decompensate CLD. Diagnosis: Pre Hospital Cardiac Arrest.

            These two certificates indicate two different opinions.  Though these two certificate indicate that the Life Assured was a diagnosed case of Decompensate.  Chronic liver Disease, these certificate do not indicate that he was admitted in Hospital and treated for Liver disease.  Even USG report goes to show that the patient had Cirrhosis of liver, no evidence shows that he was treated as impatient for liver cirrhosis.  In such a situation OP1 ought to have summoned the originals of Medical records from the concerned Hospital and examine the treated doctor.  The learned counsel of OP No.1 vehemently argued that the burden of proof to examine the treated doctors shifted to complainant.  This submission cannot be accepted.  Because, we feel that only on the past history as stated in the Medical records, the claim was repudiated.  The certificates do not indicate that patient suffering from diseases for long time.

            The insurance company should have taken steps to produce the original treatment records from the concerned hospital and examine the treated doctor and proved undoubtedly that he patient (Life Assured) had been suffering from CLD and diagnosed the disease by a competent Medical practitioner, prior to the issuance of policy in dispute.  In 2020 (I) KLJ 71 Star Health and allied Insurance Company Ltd. Vs. VP Stheesh Menon. The Hon’ble High court of Kerala in a judgment in Star Health and Allied Insurance Company Ltd vs. V.P.Santhosh Menon 2020(1)KLJ 71 “ Redressal of Public Grievances Rules ,1998-Rules 14(2)- Rejection of medical insurance claim for the reason that insure contracted disease within 30 days of commencement of policy- A disease can be said to be contracted for the purpose of insurance claim, only when after diagnosis it is clinically found that the patient is suffering from the disease.  The symptoms related to the disease may be in existence for long periods prior to the diagnosis and the symptoms may be  within the knowledge of  the patient.  For the  purpose of an insurance claim, a disease can be said to be contracted only when it is diagnosed by a competent physicians and confirmed”

            The learned counsel of complainant submitted that as they objected the investigation report, the contentions of the document has to be proved by examining any of the authorized person of those agency.  The learned counsel submitted two judgment of Hon’ble High court of Kerala. KT 2013 Vol 1 page 293.  The OP ought to have examined the concerned person who had filed the Ext.B10 document (Annexure G (Colly)  as mentioned in the written version of OP) Moreover as per the decision reported in 1999 KHC 1091, if the OP is not adducing any oral evidence in tune with their document and the  complainant  is not getting an opportunity to confront the contents of the documents, and in that circumstances there is no evidentiary value for those documents.   This fact has been upheld by the above decision.

            Hence as stated in the judgments mentioned above, accepting the premium and intending into agreement, Insurance company cannot wriggle out of liability merely by  saying the contract was made by misrepresentation and concealment.  Insurance policies should not be issued and repudiated in such a casual and mechanical manner.  The Appellate commission found that it is further exploitation of customer and more or less fraud on public.

            In the instant case, though in Ext.A2 Insurance certificate OP No.1 company issued a letter specifically stated that this cover has been issued on the basis of the medical statement, habits, and lifestyle details confirmed by you in the member enrolment from Declaration of good health and the reports, of our medical tests undertaken of the cover, as applicable”, OP No.1 could not repudiate the claim on the basis of investigation report and past history statement. Before issuing these type of policies of high insured amount, after receiving huge amount as premium from the customers, the OP company should have taken medical examination and past history of them.

            The learned counsel of OP No.1 has submitted a number of citations of appellate commission.  But in this case our view is that as the life assured amount is very high, OP company ought to have examined the insured medically and check his past history before issuing policy.

            Hence from the facts and circumstances of this case, complainant is entitled to get relief from the Insurance Company OP No.1.  As far as OP No.2 bank is concerned, though Bank (OP No.2) insisted the Life Assured to take policy and became Master policy holder, we can see that there is no deficiency in service on the part of OP No.2.  They had complied their part by sending the documents and premium amount of complainant’s son to the insurance company without any delay.

            In the result complaint is allowed in part. Opposite party No.1 is directed to pay the entire Death Sum assured amount Rs. 70,01,986/- to the complainant and opposite party No.2.  Opposite party No.1 shall pay the existing due amount as per the loan statement pertaining to the loan amount of Rs.68,42,600/- taken by the loanee  Mr. Kausal B Nambiar against loan account No.1807675100001335 on 23/09/2020 to opposite party No.2.  The balance amount shall be paid by opposite party No.1 to the complainant (co-borrower). Opposite party No.1 is also directed to pay Rs.1,00,000/- towards compensation and Rs.10,000/- towards cost of the proceedings of this case to the complainant.    Opposite party No.1 shall comply the order within one month from the date of receipt of the certified copy of this order.  Failing which the awarded amount Rs.70,03,333+1,00,000 will carry interest @4% per annum from the date to order till realization.  Complainant can execute the order as per provision in Consumer Protection Act 2019.

Exts.

A1-Premium receipt

A2-Insurance certificate along with terms and conditions

A3-Death certificated issued by Aster Mims Hospital

A4- Death certificate issued by Gramapanchayat

A5- Letter received from OP1 dated 24/12/2021

A6- Letter send by OP1 to wife of deceased

A7- Letter send by OP1 to the complainant

A8- Letter send by OP1 to deceased wife dated 09/03/2022

A9- Letter send by complainant to OP1dated 09/03/2022

A10-Postal receipt

A11- Copy of Letter issued to OP2

A12-Postal receipt

A13-Acknowledgment card dated 10/03/2022

A14-Letter issued by OP1 to complainant

A15-Copy of letter issued by Complainant to OP

A16-Letter issued by OP2 to the complainant dated 30/04/2022

A17-Letter issued by complainant to OP1

A18-Letter issued by complainant to OP2

A19-Computer copy of track consignment

A20-Postal receipt dated 20/04/2022

A21-Employee certificate of deceased

A22-Account statement from OP2

A23-Loan account statement of deceased

A24-Copy of customer declaration

A25-Loan account statement of deceased

A26-Letter issued by IDBI Bank to the complainant

A27-Copy of employee certificate

B1&B2- Proposal form

B3-Enrollment form

B4-Customer declaration form

B5-Copy of loan application

B6-Copy of loan agreement

B7-Statement of account of the loan account for the period of 17/09/2020 to 10/08/2022

B8- Statement of account of the loan account for the period of 17/09/2020 to 10/08/2022

B9- Statement of account of the loan account for the period of 07/10/2009 to 18/01/2022

B10- Statement of account of the loan account for the period of 29/07/2020 to 31/03/2023

B11(series)- Medical Report of Deceased (40 Pages)

B12-Letter of repudiation for death claim dated 19/02/2022

Pw1-Suma B N- Complainant

     Sd/                                                                                   Sd/                                                    Sd/

PRESIDENT                                                                 MEMBER                                            MEMBER

Ravi Susha                                                               Molykutty Mathew                                     Sajeesh K.P

(mnp)

                                               /Forwarded by order/

                                               Assistant Registrar