Punjab

Ludhiana

CC/20/34

Luxmi Singla - Complainant(s)

Versus

Bajaj Allianz life Insurance Co.Ltd - Opp.Party(s)

A.B.Sharma Adv.

19 Sep 2023

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, LUDHIANA.

                                                Complaint No:34 dated 23.01.2020.                                                 Date of decision: 19.09.2023.

 

Luxmi Singla aged about 45 years W/o. Late Rajesh Kumar Singla, R/o. H. No.6616, St. No.1, Tarsem Colony, Haibowal Kalan, Jassian Road, Ludhiana.                                                                                    ..…Complainant

                                                Versus

Bajaj Allianz Life Insurance Company Ltd., 6^th Floor, SCO No.10-11, Feroze Gandhi Market, Ludhiana, through its Branch Manager.                                                                                                                          …..Opposite party 

Complaint Under section 12 of the Consumer Protection Act, 1986.

QUORUM:

SH. SANJEEV BATRA, PRESIDENT

SH. JASWINDER SINGH, MEMBER

MS. MONIKA BHAGAT, MEMBER

 

COUNSEL FOR THE PARTIES:

For complainant             :         Sh. A.B. Sharma, Advocate.

For OP                           :         Sh. Amit Sood, Advocate.

 

ORDER

PER SANJEEV BATRA, PRESIDENT

1.                Shorn of unnecessary details, the facts of the case are that husband of the complainant ate Sh. Rajesh Kumar Singla obtained loan against property from Capri Global Capital Limited, Ludhiana who at that time had collaboration with the opposite party insurance company, issued life insurance policy of Bajaj Allianz in the name of Rajesh Kumar Singla under master policy No. 0314714778 having member policy No.0334455303. Under this policy the commencement of risk started from 16.05.2017 for a sum assured of Rs.9,00,000/-. The complainant stated that she was nominee of Rajesh Kumar Singla in this policy and the premium was paid by her husband to the opposite party. Rajesh Kumar Singla was physically fit and was not suffering from any physical/heath problem. However, on 10.04.2018, Rajesh Kumar Singla suffered cardiac arrest and was taken to AIMC Bassi Hospital, Ludhiana where he expired on 13.04.2018. The complainant lodged insurance claim with opposite party but they repudiated the death claim vide letter dated 10.07.2018. Even the review filed by the complainant was also declined by the opposite party vide letter dated 04.12.2018 alleging that the deceased Rajesh Kumar Singla was suffering from Chronic Renal Disease for the last 4-5 years.  However, Rajesh Kumar Singla was not suffering from any such problem nor taking any treatment and the opposite party wrongly repudiated the claim on the basis of clinical summary. The doctor of AIMC Bassi Hospital has given only his indicative opinion and there is no absolute evidence regarding pre-existing disease of husband of the complainant. The cause of death is cardiac arrest and not renal failure. According to the complainant, the opposite party has wrongly repudiated her claim and she is entitled for full death claim benefits of insurance policy with regard to sum assured of Rs.9,00,000/-. The act of the opposite party amounts to deficiency in service and malpractice due to which the complainant suffered mental pain and harassment for which she is entitled to compensation. In the end, the complainant has prayed for issuing direction to the opposite party to pay the amount of Rs.9,00,000/- along with compensation of Rs.50,000/- and litigation expenses of Rs.25,000/-.   

2.                Upon notice, the opposite party appeared and filed written statement and by taking preliminary objections, assailed the complaint on the ground of maintainability of the complaint; lack of limitation; lack of jurisdiction; concealment of facts; lack of cause of action; the complainant is estopped by his act and conduct etc. The opposite party stated that the policy holder Sh. Rajesh Kumar Singla submitted his duly signed proposal form after fully understanding and deliberating upon the terms and conditions of the policy, which are in strict adherence to norms set by IRDA and were duly communicated to the policy holder.

                   On merits, the opposite party reiterated the facts mentioned in the preliminary objections. The opposite party averred that the policy holder purchased the life insurance policy by submitting duly signed proposal form. However, the policy holder was not physically fit at the time of signing the proposal form and had not disclosed his health problem in the proposal form. The policy holder was a known case of Chronic Renal Failure since 4-5 years which he concealed this fact just to obtain insurance policy. As such, the insurance claim lodged by the complainant was repudiated vide letter dated 10.07.2018 and further the review was declined vide letter dated 04.12.2018 with plea that Rajesh Kumar Singla was suffering from Chronic Renal Failure for the last 4-5 years. The opposite party further stated that the claim of the complainant was rightly repudiated as per terms and conditions of the policy. The opposite party has denied that there is any deficiency of service and has also prayed for dismissal of the complaint.        

3.                In support of her claim, the complainant tendered her affidavit Ex. CA in which she reiterated the allegations and the claim of compensation as stated in the complaint. The complainant also tendered documents Ex. C1 is the copy of insurance policy documents, Ex. C2 is the copy of sanction letter, Ex. C3 is the copy of proposal form, Ex. C4 is the copy of clinical summary, Ex. C5 is the copy of death summary, Ex. C6 is the copy of death certificate of Rajesh Singla, Ex. C7 is the copy of repudiation letter dated 10.07.2018, Ex. C8 is the copy of repudiation letter dated 04.12.2018 and closed the evidence.

4.                On the other hand, counsel for the opposite parties tendered affidavit Ex. RA of Sh. Amit Khanna, Manager Legal of the opposite party along with documents Ex. R1 is the copy of proposal form, Ex. R2 is the copy of certificate of insurance, Ex. R3 is the copy of cheque of Rs.39,042/- dated 03.05.2017, Ex. R4 is the copy of premium calculator, Ex. R5 is the copy of declaration of settlement, Ex. R6 is the copy of Pan card of Rajesh Kumar Singla, Ex. R7 is the copy of intimation of death, Ex. R8 is the copy of bank passbook of the complainant, Ex. R9 is the copy of declaration of settlement of claim dated 28.05.2018, Ex. R10 is the copy of investigation report, Ex. R11 is the copy of Aadhar verification document, Ex. R12 is the copy of death certificate of Rajesh Kumar Singla, Ex. R13 is the copy of treatment record of AIMC Bassi Hospital, Ludhiana, Ex. R14 is the copy of neighbor statement, Ex. R15 is the copy of certificate of insurance, Ex. R16 is the copy of credit account statement, Ex. R17 is the copy of rejection letter dated 10.07.2018 and closed the evidence.

5.                We have heard the arguments of the counsel for the parties and also gone through the complaint, affidavit and annexed documents and written reply along with affidavit and documents produced on record by both the parties.

6.                 One Rajesh Kumar Singla (now deceased) husband of the complainant, took MSME Term Loan of Rs.9,39,042/- against property from Capri Global Capital Limited, Ludhiana vide sanction letter dated 29.04.2017 Ex. C2. The said finance company being Master Policy Holder sent an Enrolment Form to the opposite party in order to enroll the deceased as a member under Group Insurance Scheme namely Group Credit Protection Plus. Thereafter, a certificate of insurance Ex. C1 was issued and a sum of Rs.9,00,000/- was insured against a single premium of Rs.33,950/- and the term of the policy was for 7 years commencing from 16.05.2017. Unfortunately, during the subsistence of the policy on 10.04.2018, Rajesh Kumar Singla suffered cardiac arrest and he was hospitalized at AIMS Bassi Hospital, Ludhiana where he breathed his last on 13.04.2018. As per certificate and death summary dated 13.04.2018, he died due to cardiac arrest. The complainant being wife and nominee in the policy preferred a claim before the opposite parties which was processed and got investigated by the opposite parties. One Deepak, on behalf of Prefecture conducted investigation in 7 days and submitted his report Ex. R10. He made the following observations:-

1.       We have been able to extract medical documents issued by AIMC Hospital, Bassi, Ludhiana, Punjab Confirming LA had history of CRF – Chronic Renal Failure from last 4-5 years which is apparently prior to the policy issuance.

2.       Hence, LA was kidney patient prior to the issuance of the subject policy. These medical documents are dated post the issuance of the subject policy, however, first hand evidence or the diagnose Date to establish LA’s ailment (CRF/Kidney ailment) could not be established.

3.       It is a clear/deliberate act of concealment of Kidney ailment on LA’s part at the time of application of the subject policy. Hence the claim should be repudiated basis medical non-disclosure.

7.                After receipt of the investigation report Ex. R10, the opposite parties repudiated the claim vide repudiation letter dated 10.07.2018 Ex. C7 = Ex. R17, which reads as under:-

“We would like to inform you that the company had covered the risk for the above said policy on the basis of the facts mentioned in the proposal form. However, on receiving the death claim intimation for the policy, various investigations done, the various medical records received reveal certain facts, which were known to deceased life assured but were not disclosed to us. Hence the death claim under the above mentioned policy has been declined for the following reason/s:-

“Known case of (Chronic Renal Failure) since 4 to 5 years. This fact was deliberately and fraudulently suppressed in the proposal form dated 16.05.2017, with an intention to deceive the insurer and induce the insurer to issue the Policy, resulting into Fraud (active concealment of a fact by the insured having knowledge or belief of the fact)”

8.                Now the point of determination arises whether the opposite parties were justified in repudiating the claim or not.

9.                No separate proposal form duly signed and authenticated by the deceased was produced. Rather an application form for enrolment of member in Group Credit Protection Plus was referred to wherein the answer to certain questions qua health conditions of the deceased have been shown to be stated in negative by the deceased. The person who filled this form was not examined by the opposite parties particularly when this insurance policy  appeared to have been thrusted upon the deceased when he applied for loan against property. The said application form Ex. R1 bears the date 16.05.2017 whereas loan sanction letter dated 31.04.2017 already carries recital with regard to the insurance policy and the payment. Further the opposite parties have not mentioned the term and condition of the policy which was invoked by the opposite parties to deny the claim of the complainant. The contents of the repudiation letter as well as the written version and the affidavit are general in nature.

10.              During the course of arguments, this Commission specifically made a query to the opposite parties by referring to a clause titled as “Non-disclosure or fraud” in the policy certificate of insurance Ex. C1, which reads as under:-

                   “NON-DISCLOSURE & FRAUD:-

In case of fraud or mis-representation by a Member, the Life Insurance Cover with respect to that Member, subject to fraud or misrepresentation being established in accordance with Section 45 of the Insurance Act, 1938, shall be terminated immediately by returning of 80% of the Premiums received with respect to that Member or the surrender value (with respect to that Member) as on the date of termination, whichever is higher.”

11.              The opposite parties were directed to furnish clarification with regard to the refund of the premium amount, if any, on the termination of the policy but the representative of the opposite parties were casual in responding to the specific query of this Commission and failed to satisfy this Commission with regard to the payment, if any, made to the complainant. Perusal of recommendations made by the investigator in Ex. R10 clearly shows that he admitted that deceased was kidney patient prior to the issuance of the policy but the medical documents are dated post to issuance of policy and first hand evidence or diagnose date to establish LA’s ailment (CRF/Kidney Ailment) could not be established. So the investigator deputed by the opposite party could not establish the date of kidney ailment. Even otherwise, no medical record of any hospital was produced during the proceedings of the complaint. In these given facts and circumstances, this Commission is of the opinion that the repudiation of the claim of the complainant vide letter dated 10.07.2018 is not justified and it would be just and appropriate if the opposite parties are directed to settle and reimburse the claim of the complainant as per terms and conditions of the police along with composite compensation of Rs.10,000/-.

12.              As a result of above discussion, the complaint is allowed with direction to the opposite parties to settle and reimburse the claim of the complainant as per terms and conditions of the policy within period of 30 days from the date of receipt of copy of the order failing which the opposite parties shall pay interest @8% per annum on the settled amount to the complainant from the date of order till its actual payment. The opposite parties shall further pay a composite cost of Rs.10,000/- (Rupees Ten Thousand only) to the complainant. Payment of costs shall be made within a period of 30 days from the date of the receipt of the copy of this order. Copies of order be supplied to parties free of costs as per rules. File be indexed and consigned to record room.         

13.              Due to huge pendency of cases, the complaint could not be decided within statutory period.

 

(Monika Bhagat)          (Jaswinder Singh)             (Sanjeev Batra)

Member                         Member                              President        

 

Announced in Open Commission.

Dated:19.09.2023.

Gobind Ram.