IN THE STATE COMMISSION: DELHI

(Constituted under section 9 of the Consumer Protection Act, 1986)

Date of Hearing:18.02.2021 

Date of Decision:26.02.2021

Complaint No.995/2019

IN THE MATTER OF

MRS. RENU SINGLA

W/o Late Sh. Hans Raj Aggarwal

R/o H. No. 72 and 73, 2^nd Floor, Block-G,

Pocket-21, Sector-7,

•                                                              ….Complainant  

VERSUS

BAJAJ ALLIANZ LIFE INSURANCE COMPANY LIMITED

Through its Director/G.M. Manager

302, SG shopping mall, plot no. 08,

DC Chowk Market, Sector-9,

Rohini, North West Delhi-110085

BAJAJ ALLIANZ LIFE INSURANCE COMPANY LIMITED

Through its Director/G.M. Manager

REGISTERED OFFICE, GE PLAZA,

Airport Road, Yerawada, Pune

Maharashtra-411006

INDIA INFOLINE HOUSING FINANCE LIMITED

Through its Manager

E2/24, 1^st Floor, Near Car Market,

Sector-7, Rohini-85                                                ....Opposite Parties

HON’BLE  SH. ANIL SRIVASTAVA, MEMBER 

1.   Whether reporters of local newspaper be allowed to see the judgment?  Yes     

 2.   To be referred to the reporter or not?                                                         Yes

Present:       Sh. Gunjan Kathpalia, Counsel for the complainant

                   Sh. Vidya counsel for the OP-1 and 2

                   None for OP-3. They are ex-parte

          ANIL SRIVASTAVA, MEMBER

JUDGEMENT

1.           The claim preferred by Smt. Renu Singla, resident of Delhi, on the death of her husband, having been rejected by the Bajaj Allianz Life Insurance Company, on the ground of concealing of pre-existing disease, a complaint has been filed before this Commission under Section 17 of the Consumer Protection Act 1986, the Act. Smt. Renu Singla and the Bajaj Allianz Life Insurance Company Limited would hereinafter be referred to as complainant and OPs respectively. The prayer made in the complaint are as under:-

It is, therefore, most humbly prayed that the present complaint of the complainant may kindly be allowed and OP-1 and 2 may kindly be directed to pass the claim of the complainant as per the certificate of the insurance policies issued and pay the loss amount/claim amount/loan amount till date of payment to the claimant.

It is further prayed in the facts and circumstances of the case that this Hon’ble Commission may kindly be pleased to direct the Op-3 to keep the loan account sine-die closed without payment of any interest thereupon until the present petition is finally disposed off in the interest of justice.

It is also prayed to pass/award @ 18% interest on the claimed amount to the complainant from the date of filing of the claim and also from the date of filing of the present complaint till realisation.

The complainant may kindly also be compensated for the sufferings and the harassment caused by the OPs well as the litigation charges.

That any other relief or relief’s which this Hon’ble Commission deem fit and proper may kindly be passed in favour of the complainant and against the OPs.

2.           Facts of the case necessary for the adjudication of the complaint are these.
3.           The complainant’s husband since deceased late Sh. Hans Raj Aggarwal had applied for Home Loan for purchasing two properties i.e. H. No. 72 and 73, 2^nd Floor, Block G, Pocket-21, Sector-7, Rohini, Delhi each for Rs. 16,94,698/- with the IIFL Rohini, Branch which loans amounting to Rs. 33,89,396/- were approved and disbursed to the complainant’s husband Late. Sh. Hans Raj Aggarwal. The loan amount of Rs. 33,89,396/- on the advice of OP-3 was insured and accordingly was enrolled as a member under the group insurance scheme namely group credit protection plus administered by India Infoline Housing Finance Limited under Group Credit Protection Plus issued by Bajaj Allianz Life Insurance Company Limited i.e. OP-3 bearing master policy no. 0346254414 with membership nos. 0348078704 and 0348078247. As per the certificate of insurance the risk was from 25/07/2018 and the single premium was Rs. 94698/- for each of the policy which was paid by the complainant. The benefit payable on death was as per the certificate of insurance for level cover or schedule of insurance attached. The term of policy is five years and the nominee was wife of the deceased i.e. complainant. Unfortunately Sh. Hans Raj Aggarwal, the insured, expired on 12.12.2018 the intimation of which was conveyed to the OP and simultaneously the claim was submitted.
4.           The OP-1 and 2 however repudiated the claim on 20.05.2019 observing as under:-

“We regret to inform that claim has been repudiated.”

It may be brought to your notice that the company had covered the risk for the mentioned policy solely on the basis of facts mentioned in the proposal form. However, upon receiving the claim intimation for the above said policy, the various investigations and various medical certificates confirmed that the deceased life assured was known chronic alcoholic and chronic liver disease was prior to proposal. Ws known to the life assured prior to making the proposal for insurance and the same was deliberately concealed during the proposal of the insurance. Had this fact made known we would not have accepted the proposal and issued the above said policy.

Hence the claim review committee has come to a conclusion that the earlier decision of the company as communicated to you as repudiation of your claim for death benefit is confirmed for non-disclosure of material fact unknown to life assured and was deliberately and wilfully concealed in the proposal for insurance.

5.           The complainant has strongly pointed out that the deceased never concealed anything from the OPs. At the time of the granting of loan the deceased was asked to take the insurance policy. The OP-1 and 2 got deceased medically tested and after satisfaction only the loan amount was insured. The insured had acted solely as per the advice of the executives of the Ops.
6.           The insured had visited the Ganga Ram Hospital for the first time on 17.09.2018 having the complaint of decreased appetite and general weakness and consulted Dr. (Prof.) Mandhir Kumar who advised certain tests. After the tests the deceased was admitted in the hospital on 19.09.2018 and was discharged on 03.10.2018. The deceased was thereafter admitted in Institute of Liver and Billary Sciences on 14.11.2018 and was discharged on 08.12.2018. However the insured unfortunately expired on 12.12.2018. But in the process there was no concealment. Infact before 18-19 September, 2018 the insured himself was not aware of the ailment. Policy was obtained in the month of July, 2018 much before he developed the ailment. The complainant has further alleged that there is no medical document to show that the deceased was suffering from the decease before 18.09.2018 or at the time of making the proposal for the insurance policy. The action of the OP-1 and 2 repudiating their claim was without any basis. Infact, the complainant has further alleged that the claim of the OPs is illegal, arbitrary, unwarranted and also without any just and reasonable reason. The OPs are consequently deficient in nature as they have failed to approve the claim, causing a lot of torture, harassment (mental as well as physical) to the complainant.
7.           OPs were noticed and in response thereto OP-1 and 2 have filed the written statements resisting the complaint both on technical ground and on merit stating that the 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 just to avail undue advantage. The complaint is infact liable to be dismissed under Section 26 of the Consumer Protection Act, 1986. Secondly, the cardinal principle of contract of life insurance is Uberrama Fides i.e. the principle of utmost good faith. The doctrine of Good Faith, requires the proposer to make a complete and truthful disclosure of the material facts pertaining to his/her health and other history as the proposer knows the internal facts very well which he/she is bound to disclose as per the spirit, peculiar and paradoxical nature of the life insurance contract. The only means by which the insurance company for making assessment of risk, is processing the proposal form or even processing of claim is by way of disclosure by proposer and/or by the claimant of all information required by the insurance company without suppression of any fact. The insurance company has right to know the facts about the proposer at the proposal stage and even anytime thereafter. There has to be direct response to the questions asked for in the proposal form. It is clear that while submitting proposal form the LA had intentionally concealed the material fact about his existing ailment of Chronic Alcoholic and Chronic Liver Disease. The OP came to know about the fraud act of the LA after the claim form was submitted. If the LA had given true facts in the proposal form, the OPs would not have entered into the contract with complainant. This false declaration has vitiated the contract of life insurance. The above said facts prove beyond doubt that the complainant had concealed and suppressed the material facts with an intention to commit fraud with the OP and to cheat the OP and thus the same is in violation of the life insurance contract and makes the contract void ab-initio. As per the documents submitted by the LA at the time of purchase of policy, it is manifestly clear that the claim submitted by the complainant does not stand on the pillar of truth hence falling outside the coverage of the contract and hence the claim on this policy was repudiated by the OP. Thirdly, the life assured reportedly expired on 12.12.2018 i.e. within five months of acceptance of risk under the policies on 25.07.2018 giving rise to an Early Death Claim, which itself is a strong ground to raise reasonable doubt over the correctness of the material representations made in the proposal forms. It has been held by Hon’ble National Commission Disputes Redressal Commission in State of Punjab and anr. V. Smt. Asha rani, III (2003) CPJ 172 (NC), Hon’ble NCDRC in LIC of India and anr. versus Balbir Kaur I (2009) CPJ 212 (NC), that the very fact of early claim is a good corroborative evidence to prove misrepresentation, material non-disclosure or contemplation of death. The fact that the deceased was suffering from Chronic Alcoholic and Chronic Liver Disease are sufficient to believe that he deliberately and fraudulently purchased two back to back policies sensing his early death just to derive illegal financial gains. The complaint as such is liable to be dismissed. 
8.           The complainant has also filed rejoinder thereafter rebutting the contentions averments contained in the complaint. Both sides have filed their evidence by way of affidavit in support of their pleadings. Their written arguments are also on record.
9.           OP-3, namely, India Infoline Housing Finance Ltd., to whom the notices stood served but they not having appeared despite service have been ordered to be proceeded ex-parte vide proceedings recorded on 27.02.2020.
10.  The complaint was listed before this Commission for final hearing on 18.02.2021 when the counsel for both sides appeared and advanced their arguments, the complainant for the approval of the claim consequent upon the death of the insured and the OPs for the rejection of the complaint, the policy having been obtained concealing the material fact of the pre-existing disease.
11. Short question for adjudication in this complaint is whether the repudiation of the claim was justified keeping in view the alleged concealment of the material fact regarding pre-existing disease or in the alternate the claim preferred is payable as emphasized by the ld. Counsel for the complainant, the policy having been issued only after the medical examination of the insured.
12. Issue in the given case hinges on the point whether the claim can be repudiated on the ground of undeclared pre-existing disease. I have read and re-read the records of the case. I have given a careful consideration to the subject matter.
13. Insurance documents are invariably on standard form contracts and usually the insured person signs on the dotted line. It would be extremely tenuous to expect a layman to read each and every clause of an insurance document before signing it. On most occasions, a person who intends to obtain insurance has no choice to say NO to a clause in an insurance policy. Medical insurance is primarily obtained for the purpose of unforeseen medical conditions which may affect a person and so long as there has been no fraud, concealment or suppression, at the time of obtaining insurance, policies ought to be honoured. It is usual to see claimants running from pillar to post in order to get medical reimbursement from insurance companies. This case is no different. The insurance policy issued to the complainant was only after medical examination. This obviously means that the exclusion clause was applied by the Insurance Company mechanically and not on the basis of a specific test. Such application of exclusion lacks the foundation itself and is untenable.
14.  On the concept, meaning and import of word disease, pre-existing disease in reference to medical insurance policy, this commission has drawn following ten conclusions in a highly extensive, dissecting manner in their decision in the matter of Pradeep Kumar Garg versus National Insurance Co. Ltd., FA-482/2005 decided on 01.08.2008. These are as under:-

1. Disease means a serious derangement of health or chronic deep-seated disease frequently one that is ultimately fatal for which an insured must have been hospitalized or operated upon in the near proximity of obtaining the mediclaim policy.
2. Such a disease should not only be existing at the time of taking the policy but also should have existed in the near proximity. If the insured had been hospitalized or operated upon for the said disease in the near past, say, six months or a year he is supposed to disclose the said fact to rule out the failure of his claim on the ground of concealment of information as to pre-existing disease.
3. Malaise of hypertension, diabetes, occasional pain, cold, headache, arthritis and the like in the body are normal wear and tear of modern day life which is full of tension at the place of work, in or out of the house and are controllable on day to day basis by standard medication and cannot be used as concealment of pre-existing disease for repudiation of the insurance claim unless an insured in the near proximity of taking of the policy is hospitalized or operated upon for the treatment of these diseases or any other disease.
4. If insured had been even otherwise living normal and healthy life and attending to his duties and daily chores like any other person and is not declared as a diseased person as referred above he cannot be held guilty for concealment of any disease, the medical terminology of which is even not known to an educated person unless he is hospitalized and operated upon for a particular disease in the near proximity of date of insurance policy say few days or months.
5. Disease that can be easily detected by subjecting the insured to basic tests like blood tests, ECG etc. the insured is not supposed to disclose such disease because of otherwise leading a normal and healthy life and cannot be branded as diseased person.
6. Insurance company cannot take advantage of its act of omission and commission as it is under obligation to ensure before issuing medi-claim policy whether a person is fit to be insured or not. It appears that insurance companies don’t discharge this obligation as half of the population is suffering from such malaises and they would be left with no or very little business.

Thus any attempt on the part of the insurer to repudiate the claim for such non-disclosure is not permissible, nor is exclusion clause invokable.

7. Claim of any insured should not be cannot be repudiated by taking a clue or remote reference to any so called disease from the discharge summary of the insured had concealed his hospitalisation or operation for the said disease undertaken in the reasonable near proximity as referred above.
8. Day to day history or history of several years of some or the other physical problem one may face occasionally without having landed for hospitalisation or operation for the disease cannot be used for repudiating the claim. For instance an insured had suffered from a particular disease for which he was hospitalised or operated upon 5, 10 to 20 years ago and since then had been living healthy and normal life cannot be accused of concealment of pre-existing disease while taking mediclaim policy as after being cured of the disease, he does not suffer from any disease much less the pre-existing disease while taking mediclaim policy as after being cured of the disease, he does not suffer from any disease much less the pre-existing disease.
9. For instance to pay that insured has concealed the fact that he was having pain in the chest off and on for years but has never diagnosed or operated upon for heart disease but suddenly lands up in the hospital for the said purpose and therefore is disentitled for claim bares dubious design of the insurer to defeat the rightful claim of the insured on flimsy ground. Instances are not rare where people suffer a massive attack without having even been hospitalised or operated upon at any age say for 20 years or so.
10. Non-instance of hospitalisation/or operation for disease that too in the reasonable proximity of the date of mediclaim policy is the only ground on which insured claim can be repudiated and on no other ground.

15. This Commission has taken a view in that case that unless and until a person is hospitalised or undergoes operation for a particular disease in the near proximity of obtaining insurance policy or any disease for which he has never been hospitalised or undergone operation is not a pre-existing disease. If a person conceals the factum of his hospitalisation of a particular disease or operation undergone by him in the near proximity of obtaining the insurance policy, only then it can be termed a concealment of factum of disease and doctrine of good faith under Section 45 of the Insurance Act can then alone be pressed in by Insurance company and not otherwise. Doctrine of good faith is two way traffic and not a one way traffic. If the Insurance Company take benefit of doctrine of good faith then they have to accept whatever the insured declares and should not subject the insured to medical test and get certificate from the doctor on the panel that the insured possesses sound and good health and is entitled to mediclaim insurance policy. Such a certificate will be meaningless and of no relevance as to the state of health of a person.
16. The issue of pre-existing disease has been dealt with by the Hon’ble NCDRC in the matter of Tarlok Chand Khanna vs. United India Insurance Co. Ltd. RP-686/2007 decided on 16.08.2001 holding as under:

Infact, the onus to prove that she had a pre-existing disease was on the respondent who failed to file any expert medical or credible evidence in support of its case. Further, the deceased had been taking he mediclaim insurance policy from the respondent right from 1996 and she had also as per the practice, been examined by the doctor of the respondent/insurance company who has nowhere recorded that she had any medical problem relating to the knees.

17. The Hon’ble NCDRC is yet another judgement in National Insurance co. Ltd. vs. Rai Narain-2008 NCT 559 (NC)- the Hon’ble NCDRC held as under:

Most of the people are totally unaware of the symptoms of the disease that they suffer and hence they cannot be made liable to suffer because the Insurance Company relies on their clause 4.1 of the policy in a mala-fide manner to repudiate all the claims. No claim is payable under the medi-claim policy as every human being is born to die and diseases are perhaps pre-existing in the system totally unknown to him which he is genuinely unaware of them. Hindsight everyone relies much later that he should have known from some symptom. If this is so every person should do medical studies and further not take any insurance policy.

18. The Hon’ble NCDRC in the matter of Praveen Damani versus Oriental Insurance Company Ltd. as reported in IV [2006] CPJ 189 (NC) has held as under:

“....If this interpretation is upheld, the Insurance Company is not liable to pay any claim, whatsoever, because every person suffers from symptoms of any disease without the knowledge of the same. This policy is not a policy at all, as it is just a contract entered only for the purpose of accepting the premium without the bonafide intention of giving any benefit to the insured under the garb of pre-existing disease. Most of the people are totally unaware of the symptoms of the disease that they suffer and hence they cannot be made liable to suffer because the Insurance Company relies on their clause 4.1 of the policy in a malafide manner to repudiate all the claims. No claim is payable under the mediclaim policy as every human being is born to die and diseases are perhaps pre-existing in the system totally unknown to him which he is genuinely unaware of them. Hindsight everyone relies much alter than he would have known from some symptom. If this is so every person should do medical studies and further not take any insurance policy. Even on the facts on record, there is no material to show that the petitioner had any symptoms like chest pain etc. prior to 11.08.2000.”

19. The Hon’ble NCDRC in the matter of Life Insurance Corporation of India versus Gurvinder Kaur as reported in III [2012] CPJ 597 (NC) is pleased to hold as under:

The State Commission held that the report of the handwriting expert was not reliable. In exercise of powers vested in it under Section 73 of the Indian Evidence Act, the State Commission itself compared the signatures on the proposal form, medical examiners confidential reports, the ECG form and came to the conclusion that the signatures on the three documents are of one and the same person. Contention of the learned counsel for the petitioner that the opinion given by the handwriting expert was binding on the State Commission and the State Commission could not evaluate the evidence itself cannot be accepted. The opinion given by an expert is a piece of evidence which could be evaluated by the Court. It is for the Court to accept or not to accept the opinion of the expert. Opinion of the expert is not binding. It has been held in innumerable cases by the Supreme Court of India that the opinion of the expert is not binding. The State Commission is well within its right to accept or not to accept the evidence given by the handwriting expert. In view of Section 73 of the Indian Evidence Act the Commission itself could compare the admitted and the disputed signatures.

20. The fact that the onus to prove that insured was suffering from pre-existing disease is on the Insurance Company is fortified by the orders of the Hon’ble NCDRC in the matter of LIC of India versus Priya Sharma and ors as reported in IV [2012] CPJ 646 (NC). Secondly, if the policy was issued by the insurance company without proper verification, they cannot be liable to repudiate the claim at the later stage, as per the view held by the Hon’ble NCDRC in the matter of Oriental Insurance Co. Ltd. versus Dipender Kaur as reported in I [2016] CPJ 603 (NC).
21. The ld. Counsel for OP has also argued that this case is a case of insurance fraud inasmuch as the policy holder had passed away soonafter obtaining the policy. However in the absence of any cogent or tangible evidence to this effect, this argument cannot sustain.
22. In view of the discussion done and the legal position as settled I am of the considered view that the repudiation done by the Insurance Company on the ground of pre-existing disease cannot sustain. Having regard to this the inevitable conclusion is that, the complaint deserves to be accepted and the grounds taken by the OPs since not sustainable are sequentially rejected. The core question that remains to be answered is as to how the complainant can be compensated for the harassment caused to him at the hands of the OPs.
23. After analyzing the legal position I am of the view that the ends of justice would be met if a direction is issued to the OPs to allow the claim preferred within a period of two months from the date of receipt of certified copy of the order with simple interest at the rate of 6% from the date the claim was payable.
24. Ordered accordingly leaving the parties to bear the cost.
25. A copy of this order be forwarded to the parties to the case free of cost as is statutorily required. File be consigned to records.

(ANIL SRIVASTAVA)

MEMBER

PRONOUNCED ON

26.02.2021

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