Chandigarh

DF-II

CC/396/2017

Smt. Mamta Kumari - Complainant(s)

Versus

Bharti AXA Life Insurance Company Limited - Opp.Party(s)

Amit Sharma Adv.

15 Feb 2018

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II

U.T. CHANDIGARH

 

Consumer Complaint No.	:	396/2017
Date of Institution	:	04.05.2017
Date of Decision	:	15/02/2018

 

                                       

                                               

Smt.Mamta Kumari w/o Late Sh.Rajesh Kumar r/o House No.2511, Sector 66, SAS Nagar, Mohali Punjab-160062.

                                ...  Complainant.

Versus

1.     Bharti AXA Life Insurance Co. Ltd., through its Chief Executive having its Registered Office: Unit 601-602, 6^th Floor, Raheja Titanium, Off Western Express Highway, Goregoan(E), Mumbai-40063.

 

2.     Bharti AXA Life Insurance Co. Ltd., through its Branch Manager, SCO 208-209, 2^nd Floor, Sector 34-A, Chandigarh -160022.

 

3.     PNB Housing Finance Ltd., through its Branch Manager, SCO 323-324, First Floor, Sector 35-B, Chandigarh-160008.

…. Opposite Parties.

 

BEFORE:  SHRI RAJAN DEWAN, PRESIDENT

SMT.PRITI MALHOTRA, MEMBER

SHRI RAVINDER SINGH, MEMBER

 

Argued by: Sh.Amit Sharma, Adv. for the complainant

                   Sh.Gaurav Bhardwaj, Adv. for OPs No.1 and 2.

                   Sh.Mahinder Singh, Adv. for OP No.3.

 

PER RAJAN DEWAN, PRESIDENT

1.         In brief,  the facts of the case are that the complainant and her husband namely Sh.Rajesh Kumar jointly applied for a non-housing loan of Rs.16 lacs vide joint application dated 29.12.2014 against the security of House No.2511, LIG Flats, Sector 66, Mohali and the said loan was to be repaid in 180 EMIs.  On the assurances of officials of OPs No.1 and 2, they also purchased an insurance cover in order to secure their loan amount and their life by paying Rs.70,922/-. The insurance premium amount was also financed by the Bank and as such the Bank had financed a sum of Rs.16,70,922/-.   Subsequently, OPs No.1 and 2 issued a certificate of insurance-cum-insurance policy dated 16.01.2015 and intimated the complainant vide letter dated 22.01.2015. As per the policy, the life of the deceased Rajesh Kumar was stated to be assured against a loan reference No.PCHD6700004408. The coverage amount for group accidental death benefit rider of Rs.16 lacs was given for coverage span of 60 months.  It has been asserted that as per the premium paid by the complainant and her husband, the loan of Rs.16 lacs was secured and was further given accidental death benefit rider.  According to the complainant, they had been paying the installments of loan well on time without any default.  However, in the month of March, 2016, her husband (LA) suffered acute stomach pain and other health disorder and, therefore, he visited to PGIMER, Chandigarh and was getting treatment from March, 2016 to July, 2016 after being diagnosed for kidney disorder.  Despite above all, on 12.08.2016 Sh.Rajesh Kumar became unconscious at home and therefore, he was taken to Ivy Hospital, Mohali but he died due to cardiac arrest on 13.08.2016.  Subsequently, she informed the bank regarding the death of her husband who took up the issue of death claim with the insurance company. It has further been averred that she supplied all the requisite documents for processing the claim but the same was repudiated vide letter dated 27.09.2016 on the ground that the LA was a known case of Diabetes Mellitus since 7 years with hypertension since 3 years and was under the treatment for the same.  It has further been averred that no passing reference was made by Insurance Company with respect to any previous history of medical treatment for any disease inasmuch as the repudiation of death claim of the LA was based on no record as such the repudiation is unjustified and illegal. Alleging that the aforesaid acts amount to deficiency in service and unfair trade practice on the part of the Opposite Parties, the complainant has filed the instant complaint.
2.         In their written statement,  OPs No.1 and 2 i.e. Insurance Company has pleaded that based on the self filled questionnaire (SQF) from the LA for being enrolled Loan Secure Group Policy and considering it to be correct, the company enrolled him as member of the Group Policy No.10000067 vide member ID No.PCHD6700004408.  It has further been pleaded that the insurance is a contract of utmost good faith and that the LA /Proposer being a party to the contract is bound to disclose all the material facts known to him at the time of proposal.  It has further been pleaded that being an early claim, the same was investigated and during investigation, it came to light that the LA was a known case of diabetes mellitus since 7 years with hypertension since 3 years and was under the treatment of the same and the said ailments were before the enrollment of the LA.  It has further been pleaded that the LA had concealed all these material facts in the SQF and as such the claim was rightly repudiated vide letter dated 27.09.2016(Annexure R-4). The remaining allegations have been denied, being false. Pleading that there is no deficiency in service on their part, a prayer for dismissal of the complaint has been made.
3.         In its separate written statement, OP No.3 has admitted the factual matrix of the case with regard to the availing of the loan of Rs.16 lacs on the floating rate of interest. It has further been pleaded that the allegations made in the complaint relates to OP No.1 and 2 and hence needs no reply from the bank.  Pleading that there is no deficiency in service on its part, a prayer for dismissal of the complaint has been made.
4.         We have heard the Counsel for the parties and gone through the documentary evidence on record.
5.         After giving our thoughtful consideration to the rival contentions of the parties and going through the documentary evidence on record, we are of the considered that the complaint is liable to be accepted for the reasons stated hereinafter.  The claim was repudiated vide letter dated 27.09.2016 by the insurance company on the ground that LA (Sh.Rajesh Kumar) was a known case of diabetes mellitus since 7 years with hypertension of 3 years but to prove the same, OPs No.1 and 2 have not been able to place on record any cogent and reliable documentary evidence with regard to his previous history of treatment to prove that prior to the date of taking the Insurance Policy, the LA was suffering from the diabetes mellitus and hypertension and was getting treatment and that fact was in his knowledge and he had intentionally concealed the same.  In the present case, except the death summary issued by the Ivy Hospital, Mohali and out-patient card issued by the PGIMER, Chandigarh, the insurance company has not been able to lead any convincing evidence to prove that the complainant was suffering from diabetes mellitus and hypertension prior to taking the Insurance Policy in question and he was getting treatment for the same from any hospital.  Even otherwise there is no proof on record as to who disclose to the treating doctor about diabetes mellitus for the last 7 years and hypertension for the last 3 years being suffered by the LA.   In the instant case, the complainant became unconscious when he was rushed to the Ivy Hospital, so he was not in a position to disclose about his previous illness.  Even the affidavit of the treating doctor who recorded the past history of the LA has not been adduced on record. So merely on the basis of the past history mentioned in the discharge summary/out patient card, it cannot be said that the complainant was suffering from the diabetes mellitus and hypertension prior to obtaining the Insurance Policy. 
6.   In United India Insurance Co. Ltd. & Anr. Vs. S.K. Gandhi, 2015 (2) CLT 71 (NC), the insurance company had not placed on record either the discharge summary of the complainant or any medical document signed by the doctors who treated him in Kailash Hospital, to show that the complainant, when he was admitted to the said hospital, had himself stated that he was suffering from hypertension from last 8-9 years. In that case it was held that it is quite possible that the complainant, despite suffering from hypertension was not actually aware of the same and he cannot be accused of misstatement or concealment. Onus was upon the insurance company to prove that he had made a misrepresentation while obtaining the insurance policy and since the insurance company failed, it was held that it was liable to pay to the complainant to the extent of sum insured by it. In Satish Chander Madan Vs. M/s Bajaj Allianz General Insurance Co. Ltd., 2016 (1) CPJ 613 (NC) it was held that hypertension is a common ailment and it can be controlled by medication and it is not necessary that person suffering from hypertension would always suffer a heart attack.  It was further held that treatment for heart problem cannot be termed as claim in respect of pre-existing disease and the insurance company was held liable. Reliance can also be placed on a Division Bench judgment of Hon’ble Punjab and Haryana High Court in CWP No.9738 of 2008-Life Insurance Corporation of India Vs. Permanent Lok Adalat & Anr. decided on 17.10.2008, wherein it was held that the duty to disclose is limited to the facts within the knowledge of the assured, a mistaken statement about a material fact made honestly, that is, with belief in its truth, will not affect the validity of the contract.  Reliance was also placed upon a decision of Division Bench of Hon’ble Madras High Court in All India General Insurance Co. Ltd. & Anr. Vs. S.P. Maheshwari, AIR 1960 Madras 484 wherein it was found that the answers to the questions are representations and a false representation will not operate to vitiate the contract or avoid the policy unless the fact is actually, material or clearly intended to be made material by the agreement between the parties.  The insurer can avoid the policy only by proving that the statement is false or fraudulent or that it was false and material to the risk.  It was further observed as under :-

“In the present case, there is no proof of the insured having been suffering from hypertension for a period of 10 years and assuming it to be so, hypertension is a disease which can escape attention of a person and is required to be diagnosed by experts.”

7.         In  P. Vankat Naidu Vs. Life Insurance Corporation of India and Anr. 2011(4) CLT Supreme Court 494= IV (2011) CPJ 6 (SC), it was held that it was for the Opposite Parties, who had come out with the case, that the insured did not disclose the correct facts, relating to his/her illness, to produce cogent evidence, to prove the allegation. In Tarlok Chand Khanna Vs. United India Insurance Co. Ltd., I (2012) CPJ 84 (NC), it was held by the National Commission that as per the settled law, the onus to prove that the Insured was suffering from preexisting disease was on the Insurer, which, in the instant case, OPs No.1 and 2 failed to discharge. Further in Birla Sun Life Insurance Co. Ltd. Vs. Charakapu Chinna Rao, I (2012) CPJ 557 (NC), it was held by the National Commission that having used specific grounds, for repudiation of claim, it was necessary for the Insurer to produce supporting evidence.
8.         Keeping in view the ratio of the law laid down in the aforesaid judgments and the facts and circumstances of the present case, we are of the considered view that the insurance company has not been able to place on record the previous hospital record to show that the LA was ever diagnosed or visited any hospital/ clinic/ doctor with the aforementioned diseases/ ailments and was on regular medication. It seems that the insurance companies (like OPs No.1 and 2), with a view to deny even the rightful insurance claims of the persons (like the complainant), are taking a customary stand that the patient/claimant was suffering from some pre-existing disease. However such a stand, sans any cogent proof of the previous disease, is totally unethical and should be shunned with heavy hands. In such scenario, the repudiation of the claim done by the insurance company is held to be unjustified and amounts to deficiency in service on its part.
9.         In view of the above discussion, the present complaint deserves to be partly allowed and the same is accordingly allowed. OPs No.1 and 2 are directed as under ;-

1. To pay/settle the loan account of the LA maintained with OP No.3-PNB Housing Finance Ltd.  as per the terms and conditions of the Insurance Policy.
2. To pay Rs.25,000/- as compensation for mental agony and physical harassment to the complainant.
3. To pay Rs.7,500/- as litigation expenses.

This order be complied with by OPs No.1 and 2, within 45 days from the date of receipt of its certified copy, failing which the amount at Sr.No.(ii) shall carry interest @9% per annum from the date of institution of the complaint till its actual payment besides compliance of directions as mentioned at Sr.No.(i) and (iii) above.

10.          OP No.3 is also directed to issue No Dues Certificate in respect of the loan in question to the complainant forthwith after settlement of the loan account by OPs No.1 and 2.
11.         Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

15/02/2018

Sd/-

(RAJAN DEWAN)

PRESIDENT

 

Sd/-

(PRITI MALHOTRA)

MEMBER

 

Sd/-

(RAVINDER SINGH)

MEMBER