Before the District Consumer Dispute Redressal Commission [Central District] - VIII, 5th Floor Maharana Pratap ISBT Building, Kashmere Gate, Delhi
Complaint Case No.127/30.03.2016
Mr. Ashok Kumar s/o Shri Ram Gopal,
R/o Flat No. 99, Gali No.8, East Guru Angad Nagar,
Laxmi Nagar, Delhi …Complainant
Versus
OP1- Birla Sun Life Insurance Company Limited
(through its authorized signatory)
6th Floor, Aggarwal Corporate Tower, Rajendra Place,
New Delhi-110008
OP2- Branch Manager-.
Birla Sun Life Insurance Company Limited
(through its authorized signatory)
6th Floor, Aggarwal Corporate Tower, Rajendra Place,
New Delhi-110008
OP3- Chief Operating Officer,
Birla Sun Life Insurance Company Limited
G-Corp Tech Park, 5th & 6th Floor, Kasar Vadavali,
Near Hypercity Mall, Ghodbunder Road,
Thane ( w)-400601 ...Opposite Parties
Date of filing: 30.03.2016
Coram: Date of Order: 10.06.2024
Shri Inder Jeet Singh, President
Ms Rashmi Bansal, Member -Female
ORDER
Inder Jeet Singh, President
1.1. (Introduction to case of parties) - The complainant has grievances of deficiency of services against OPs that despite risk covered under life insurance policy of his son, the OPs failed to settled the valid claim after death of complainant's son/ Insured. That is why complaint is filed for sum assured, compensation, costs etc.
1.2. However, it is opposed by the OPs that neither there is deficiency of services nor any amount is payable, since it was complainant, who actually concealed the previous ailment of assured existing prior to application for insurance policy, therefore, claim was not tenable under the terms of policy. The parties are bound by terms of contract. The OPs are not liable for any amount.
2.1. (Case of complainant) -The complainant took life insurance policy no. 005400758 in the name of and for the benefit of his son Master Saransh Prajapati (born on 17.06.2010; hereinafter referred assured/insured) for sum insured of Rs. 10 lakhs, with guarantee survival benefit of Rs. 15,13,000/- w.e.f. 28.02.2012 having maturity date of 28.02.2111 (hereinafter referred as insurance policy/or life insurance policy) from OP1/Birla Sun Life Insurance Co. Ltd. [the other OP2 is its Branch Manager and OP3 is Chief Operating Officer].
2.2. On 05.09.2012 the assured suffered illness, he approached Dr. Raman Arora, MBBS MD (Pediatrics), who prescribed some tests, after those tests it was diagnosed pneumonia on 10.09.2012, which was for short term and assured was admitted in Makar Medical Centre from 13..09.2012 to 01.10.2012.
However, the assured complained of pain, he was again admitted but in Max Hospital on 07.10.2012 till 05.11.2012. His condition was not improved, therefore, he was further admitted in Ram Manohar Lohia Hospital on 07.11.2012 and he died on 20.12.2012.
2.3. The complainant filed claim under the life insurance policy but the OPs repudiated the liability on false presumptions by stating that the OPs had their investigation, which establishes that the assured was suffering from lower respiratory tract infection prior to the application for policy. Whereas, there was no knowledge or ailment prior to the tests, which diagnosed during 05.09.2012 under the advices of Dr. Raman Arora MBBS MD of Makar Hospital, New Delhi. The application for insurance was submitted long-back on 20.02.2012 and the said ailment had surfaced and discovered during 05.09.2012, therefore, the allegations of OPs are false and wrong. The complainant wrote letter for reconsideration by OPs and it was responded by reply dated 25.04.2015 that the same was reconsidered and evaluated. Again on 29.06.2015 the complainant received letter from the OPs reconfirming the earlier decision of repudiation of the claim stating that “we wish to inform you that your representation was tabled before our Grievance Redressal Committee which consists of leadership members and is chaired by an independent official. After careful scrutiny the committee did not find any basis to revise our decision to repudiate our liability as we hold indisputable proof establishment that you have suppressed material facts pertaining to health of the life assured as mentioned in our earlier letter 27th August 2013. Hence there has been breach of the basic principles of life Insurance which is of utmost good faith.”
In fact, the OPs from the very beginning have no intentions to refund the claim and under mala-fide, the claim was repudiated; then complainant sent legal notice dated 08.12.2015 to the OPs asking for sum insured amount and interest, however, it was refused by letter dated 04.01.2016. Whereas, the policy was issued after receipt of huge premium amount of Rs. 37,630.74p per annum under the assurance that the risk will be entertained and claim will be reimbursed. The complainant has been harassed and there is deficiency of services, for which complainant is entitled for sum insured of Rs.10 lakhs, compensation of Rs 1 lakh and interest of Rs. 3,60,000/-. The OPs are liable to pay amount of Rs.14,60,000/- besides interests at the rate of 18%pa, cost of 35,000/- and other appropriate claims.
2.4 The complaint is accompanied with copies - of birth certificate of assured, application form, insurance policy, first premium receipt, medical papers, death certificate, copies of letters dated 27.08.2013, 30.04.2015, 29.06.2015, legal notice, its reply besides authorization letter dated 29.03.2013 in favour of OPs for appropriate authority..
3.1 (Case of OPs)-The OPs do not dispute the insurance policy issued in the name of assured, the premium paid and the sum assured.
3.2. However, the OPs opposed the allegations of the complaint against OPs, on the point of territorial jurisdiction (that as per insurance contract, the place of registered office of insurance company at Mumbai determines the territorial jurisdiction of the Commission). There are no merits in the complaint as the complainant has concealed material information in the application form ( of 20.02.2012). When the claim form was submitted on 02.03.2013 by the complainant, under the policy, the OPs immediately appointed an investigator to investigate the matter in respect of death of life assured. During the investigation, it was revealed that the assured had been suffering from lower respiratory tract infection prior to signing the application form, which was prior to commencement of policy, for which he had undergone treatment. Medical record dated 04.10.2012 were procured from Max Health Care Super Specialty Hospital, Patpatganj, Delhi, which revealed that assured had history of lower respiratory tract infection one year back, which is prior to issuance of policy. The affidavit to this effect is furnished by appointed investigator (being filed with the written statement). This material information was concealed by the complainant. (the written statement reproduces a few clauses from that application, especially paragraph 10 & 13 that the complainant has answered them in 'negative' about the medical history, life style and medical detail of proposer and declaration regarding minor).
The insurance contract is based on utmost good faith and parties are bound by the terms and conditions of the policy [reliance is placed on Suraj Mal Ram Niwas Oil Mills (P) Ltd. Vs. United India Insurance Co. Ltd. [(2010) 10 SCC 567 and Reliance Life Insurance Co. Ltd. Vs. Madhavacharya (RP No. 211/2009)]. Since the complainant has concealed the material information and the claim was properly declined under the terms and conditions of policy, therefore, the complaint is liable to be dismissed; no claim is made out.
3.3. The written statement is accompanied with copies of - application form, policy, affidavit dated 18.06.2013 of investigator M/s Mack Insurance Auxiliary Services Pvt. Ltd acting on behalf of Birla Sun Life Insurance Company.
4. (Replication of complainant) –The complainant filed detailed replication, it denies all allegations of the written statement and complainant reaffirms the complaint as correct. The complainant denies OPs’ plea of want of territorial jurisdiction of this Commission to entertain and adjudicate the complaint since the cause of action had taken place in Delhi, the episode of death of child have also took place in Delhi vis-à-vis the complainant was not provided the knowledge as alleged plea of the OPs in respect of said jurisdiction.
It is emphasized that there is no documentary record filed by the OPs to support its plea that the ailment diagnosed was prior to the application for insurance policy or it was it was not disclosed. The OPs have misrepresented the facts to mislead the Commission. The assured was diagnosed of lower respiratory tract infection first time in September 2012 that too after prescribed medical tests. The medical record filed do not decipher depict that ailment was known or diagnosed prior to the application for insurance policy, therefore, the plea in written statement is false and without any substance. The OPs have taken false stand to deny its obligations under the policy. The complainant is entitled for claim and other relief claimed.
5.1. (Evidence)- In order to prove the case, the complainant Sh. Ashok Kumar led his evidence by detailed affidavit with the support of documents filed with the complaint.
5.2. The OPs also led evidence by way of affidavit of Ms. Aakriti Manocha, Deputy Manager-Legal, with the support of documents filed with the written statement; the affidavit is replica of the written statement. The OPs also produced affidavit dated 18.06.2013 of investigator M/s Mack Insurance Auxiliary Services Pvt. Ltd as supporting evidence.
6.1 (Final hearing)- The parties were given opportunity to file written arguments, then both the sides filed their respective written arguments.
6.2. The parties were also give opportunity to make oral submissions. Sh. Rohini Kumar, Advocate for complainant and Sh. S. K. Bhatti, Advocate, (associate of Sh. Vikas, Advocate) for OPs made the oral submissions.
7.1 (Findings)- The contentions of both the sides are considered keeping in view the material on record, the provisions of law and cases referred. It does not require for reproducing them again, since the same will be considered appropriately.
7.2.1. There are rival plea, as on the one side OPs claim that as per insurance policy the place of registered office would be the place of jurisdiction. But is opposed by the complainant that the present District Forum/Commission of Delhi has territorial jurisdiction on the basis of cause of action, death of insured in Delhi etc,
7.2.2. The rival plea is assessed. This complaint is under the Consumer Protection Act, 1986. The Act 1986 is a special piece of legislation. The stand of OPs is that there is civil contract between the parties and the jurisdiction would be determined on the basis of agreed place and registered office of OP1 in the insurance contract.
However, this stand is not acceptable for the reasons (i) firstly, it is not a complaint arising from pure civil dispute from the insurance contract but also there are is also consumer dispute, (ii) the aspect of whether or not there deficiency of services and whether or not the complainant is entitled for compensation in lieu of harassment and agony are also consumer dispute, to be determined under the Act, 1986, (iii) the Consumer For a/Commission is a creation of statue and section 11 of the Act, 1986 pertains to jurisdiction of the District Forum; it lays down the pecuniary as well as territorial jurisdiction to be invoked and (iv) the jurisdictions invested to the Fora (whether pecuniary or territorial) by special statute cannot be ousted by the contract of the parties. Since the Office/Branch Office of OPs is Rajender Nagar, Delhi, it is within the notified area of jurisdiction of this Fora/Commission, therefore, the complaint was filed complaint before competent For a. This contention is disposed off.
8.1. The other issue pertains rival plea of repudiation of claim and deficiency of services on the part of OPs. Since the OPs claims that there was pre-existing disease prior to application for insurance policy and it was concealed but on the other side, not only it is denied but reliance is placed on medical record that ailment was diagnosed first time in September 2012.
In order to deal with this situation, it is appropriate to refer case "Jagdish Vs LIC of India [FA no.1055/2003 dod 17.12.2007, decided by Hon'ble State Commission]", in which circumstances and parameters of pre-existing disease were laid down in detail, its paragraph 10 is reproduced -
"Para 10 -Our conclusions on the meaning and import of words disease, pre-existing disease for the purpose of medi-claim insurance policy, as under:
(i) 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 medi-claim policy,
(ii) 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,
(iii) 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 and 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,
(iv) 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,
(v) Disease that can be easily detected by subjecting the insured to basic tests like
blood test, 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,
(vi) Insurance company cannot take advantage of its acts 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 do not discharge this obligation as half of 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 invoke-able,
(vii) Claim of any insured should not be and cannot be repudiated by taking a clue or remote reference to any so-called disease from the discharge summary of the insured by invoking the exclusion clause or non-disclosure of pre-existing disease unless the insured had concealed his hospitalization or operation for the said disease undertaken in the reasonable near proximity as referred above,
(viii) Day to day history or history of several years of some or the other physical problem one may face occasionally without having landed for hospitalization 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 medi-claim policy as after being cured of the disease, he does not suffer from any disease much less the pre-existing disease,
(ix) For instance, to say that insured has concealed the fact that he was having pain in the chest off and on for years but has never been 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,
(x) Non-disclosure of hospitalization/or operation for disease that too in the
reasonable proximity of the date of medi-claim policy is the only ground on which insured claim can be repudiated and on no other ground.
8.3. Now in view of preliminary observation regarding case law, the same are to be tested on facts of the case. By taking into stock of all events the following conclusions are drawn :-
(i) There is no dispute about the insurance policy issued in the name of insured, its tenure, sum insured, benefits assured and premium paid besides prescribed application form of 20.02.2012 furnished for insurance policy.
(ii) There is also no dispute that insured was medically treated during the currency of insurance policy but insured died and thereafter claim was lodged. The death certificate and other record have also been proved by the complainant.
(iii) The OPs has pleaded that medical record of 04.10.2012 were procured from Max Health Care Super Specialty Hospital, Patpatganj, Delhi, which revealed that assured had history of lower respiratory tract infection one year back, which is prior to issuance of policy. This record is at page no. 109 onward of paper book of OPs but it does not carry any fact or history that insured was suffering from the said ailment one year prior to the application dated 20.12.2012.
But the discharge summary issued by Max Hospital/Max Health Care at page no. 104-106 & 107-109 r/w addendum at page no. 36 of paper book of OP that insured was admitted in the hospital on 13.09.2012 and discharged on 01.10.2012, carrying history of complaint of fever for the last one month and breathing difficulty for two days and insured was diagnosed with left lower lobe necrotizing pneumonia with pyopneumothorax with bronchopulmonary fistula with multiple cerebral infarct ? Septic with cerebritis and neurological sequalae. The discharge summary further contends the course of hospital
There is nothing in the discharge summary that the insured was suffering from ailment from one year prior to his treatment on that occasion nor any other fact that he was suffering from ailment one year prior to the application form. To say, the OPs have wrongly pleaded and stated, besides stood by those facts, which are contrary to record. The plea of OPs is not getting corroboration from the medical record.
(iv) The OPs also produces affidavit dated 18.06.2013 of investigator M/s Mack Insurance Auxiliary Services Pvt. Ltd as supporting evidence. This affidavit by OPs is not evidence but abuse of process of law because (a) the affidavit filed is not of a natural person but of an entity by its name of entity; (b) the name of deponent, age, designation, competency etc. are not mentioned in the affidavit dated 18.06.2013 and just putting seal of OP1 would not make it a valid affidavit, (c) the affidavit is to be either on oath or on solemn affirmation as the Oath Act 1969 of a natural person taking oath, but affidavit dated 18.06.2013 of investigating agency is of an artificial person, how an artificial person could take oath? It is well known to OP1 is a professional insurance Company despite it such affidavit was filed, (d) the affidavit does not mention iota of fact that insured had ailment prior to application dated 20.02.2012 nor any fact of investigation or medial record dated 04.10.2012 that insured was suffering from such ailment a year back from the date of application and (e) affidavit itself is not an evidence nor it can create a fact to be evidence.
(v) the record proved by the complainant is crystal clear that when insurance policy was applied on 20.02.2012, neither it was a known case of pneumonia nor it was diagnosed; it was diagnosed in September 2012, therefore, there was no reason for the complainant to mention any ailment in application dated 20.02.2012.
(vi) Then onus on the OPs to prove that insured was suffering from lower respiratory tract infection prior to signing the application form dated 20.02.2012, however, OPs failed to prove it and discharge this onus vis a vis the complainant has succeeded to prove that the
complainant has not made wrong declaration or concealed any fact of ailment in the application form dated 20.2.2012, which was prior to issue of insurance policy.
(vii) The aforementioned conclusion are establishing the case of complainant that it was a valid insurance claim but claim was repudiated under presumptions and self-styled non-existent reasons. The motives of OPs appear to avoid payment of valid claim liability under the insurance contract, which is unfair on the part of OPs besides deficiency of services.
(viii) By applying the ratio of Jagdish Vs LIC of India case (supra), the case does not fall within the purview of pre-existing disease.
8.4. In view of sub-paragraph 8.3 above, the circumstances are establishing the case of complainant and the complainant is held entitled for sum insured amount of Rs.10 lakhs, it is allowed in favour of complainant and against OPs.
8.5. The complainant has also claimed interest at the rate of 18%pa, which is opposed by the OPs.
Since the complainant was declined sum insured amount and he had to resort to filing of complaint because of want of payment of amount. He was deprived of eligible amount (that too legal notice was served in advance). It is appropriate to award reasonable interest, therefore, interest @ 5% per annum is allowed [on sum insured of Rs. 10 lakh] from the date of complaint till realisation of amount in favour of complaint and against OPs.
8.6. The complainant claims compensation of Rs. 1,00,000/- on account of harassment and agony. It is apparent that OPs have not settled the valid claim but repudiated it, that too without any substance and base but on self created affidavit of an entity/institution. The circumstances are suggesting deficiency of services and unfair trade practice trade practice, that complainant deserves compensation, in lieu of harassment, inconvenience, agony which ought to be reasonable to the situation; therefore, compensation of Rs.25.000/- is awarded in favour of complainant and against OPs.
8.7. The complainant also claims cost of Rs. 50,000/- besides other appropriate relief. Since, complainant has to file the complaint to seek reimbursement of valid claim after exhausting all efforts including legal notice, had it been settled and paid, he was not requiring to file complaint. Hence, costs of litigation of Rs.15,000/- is allowed in favour of complaint and OPs.
8.8 The complainant also claims other appropriate relief against OPs under the circumstances of this case. Could it be a case for punitive damages?. It is a fit case to award punitive damages?
Firstly, what is punitive damages and what is its purpose? The punitive damages (exemplary damages) are assessed and awarded in order to pinch respondent for outrageous/intolerant behaviour and/or to refrain it or to deter others from engaging in conduct similar to that which formed basis of law suit. The punitive damages are also imposed to reform the defaulting party as well as to deter other from indulging in such wrongs. Punitive damages are generally given in civil action, however, there is also provision in section 14(1)(d) the Consumer Protection Act, 1986 for punitive damages. The punitive damages are not fine or penalty as fine is imposed in criminal trials.
It needs to refer the evidence of parties on record. The complainant had informed the OPs hospitalization of his son/insured and claim was lodged with medical records/papers. The claim was declined as if the complainant had not made declaration of ailment of his son or ailment was existing an year before the application/proposal form of 20.2.2012 vis a vis investigator was appointed. But no record of investigation was filed by OPs nor proved it nor any material in medical record of 4.10.2012 to be showing such ailment of one year prior to application form. Whereas the record proved by the complainant is showing that the insured was diagnosed (of lower respiratory tract infection) first time in the month of September 2012 and it was neither such known case nor diagnosed so at the time application form dated 20.02.2012.
Thus, the circumstances surfaced are speaking to what extent the complainant was dealt with by the OPs to decline the valid claim. In fact, the OPs with-held and concealed the report of investigator but filed an un-acceptable affidavit, which is not evidence, to avoid legal obligation towards the complainant. It is a clear case of avoiding the obligations under contract and harassing the deserving claimant. The circumstances are convincing that OPs are required to be dealt in manner so that they may not repeat it again. Thus, it is fit case of punitive damages and punitive damages can be awarded. It is quantified as Rs.25,000/- (being meager amount and believing it to be first case) in favour of complainant and against OPs, keeping in view all circumstances, so that OPs remained cautioned and not to repeat this kind of practices.
9. Accordingly, the complaint is allowed in favour of complainant and against the OPs to pay sum assured amount of Rs.10 lakhs along-with simple interest @ 5%pa from the date of complaint till realization of amount; compensation of Rs.25,000/- & costs of Rs.15,000/- besides punitive damages of Rs.25,000/- to the complainant. The OPs will pay the amount within 45 days from date of this order, failing which the OPs will be liable to pay enhanced interest at the rate of 7% per annum on amount of Rs.10 Lakhs. The OPs will be at liberty to deposit the amount in the Registry of this Commission by way of valid instrument in the name of the complainant.
10. Announced on this 10th day of June 2024 [ज्येष्ठ 20, साका 1946]. Copy of this Order be sent/provided forthwith to the parties free of cost as per rules for compliances, besides to upload on the website of this Commission.
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