DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II
Udyog Sadan, C-22 & 23, Qutub Institutional Area
(Behind Qutub Hotel), New Delhi-110016.
Case No.830/2009
Mrs. Niti Rana
J-1913, Chittaranjan Park,
New Delhi-110019. ….Complainant
Versus
Canara HSBC Oriental Bank of Commerce
Life Insurance Company Limited
Unit No.10, 10B, Southern Park,
D2, Saket District Centre,
New Delhi-110017
Also at:
Central Plaza, 5th Floor, Tower-B
Sector-53, Golf Course Road
Gurgaon-122002 ……Opposite Party
Date of Institution : 18.11.09 Date of Order : 07.05.16
Coram:
Sh. N.K. Goel, President
Ms. Naina Bakshi, Member
O R D E R
The Complainant has filed the complaint for receiving the death insurance claim of her husband Late Sh. Amar Rana under policy No. 0000181520. Mr. Rana obtained insurance policy “Canara HSBC Life Unit Linked Whole Life Plan” from the OP in August, 2008 for an amount of sum assured of Rs.10 lakh. Mr. Rana passed away on 05.10.2008 while he was on visit to the USA. Death certificate dated September 10,2008 (sic) has been issued by the Health Officer and Local Registrar, State of California, United States wherein the cause of death is clearly stated to be on account of acute myocardial infarct, acute coronary artery thrombosis and atherosclerotic coronary artery disease. The complainant vide her letter dated 11.5.2009 and also telephonically on various occasions had informed the OP and submitted the documents with the OP. The OP assured her for receiving the claim. She received a letter dated 29.05.2009 from the OP whereby the OP repudiated the claim on the ground that Mr. Rana was suffering from diabetes and was on medication in October, 2006 and also that late Mr. Rana had applied for a life insurance policy with TATA AIG Life Insurance Co. in December, 2006 which was postponed. The complainant pursued the matter with the OP including writing letters. Ultimately, the OP replied vide letter dated 13.07.2009 once again dismissing the claim. It is pleaded as follows:
“The repudiation of the claim of Complainant is patently illegal, arbitrary and whimsical. Such baseless repudiation of the claim of Complainant is not becoming of the altruist objective of the insurance providers like the Respondent, when the eventual beneficiary like the Complainant, is turned away on arbitrary and baseless grounds, such as taken by the Respondent in its letter of May 29, 2009 and July 13, 2009. Such illegal act on the part of the Respondent is clearly an act of unfair trade practice inter alia and amounts to deficiency in services, misrepresentation and false promise which is to be restrained forthwith and is against the consumer protection laws.”
Hence, the action of the OP is illegal and arbitrary and on baseless ground. As per the death certificate, Mr. Rana did not die due to diabetics. The OP further promised that in the event of any unfortunate death of the policyholder the total minimum sum assured of Rs.10 lacs and the high fund value shall be paid to the Complainant and maximum death benefit would be upto Rs.2,27,94,683/-. Reliance has been placed on Clause 2.1.1. of the terms and conditions governing the policy in question which reads as under:
2.1.1. subject to the Policy in force, if the death of the Life Assured occurs on or after the Risk commencement Date but before the Maturity Date, the Company shall pay the higher of the Fund Value and the Sum Assured.”
The Complainant has stated that OP while repudiating the claim sent a cheque of Rs.83,183.78 to the Complainant but she did not accept the cheque and returned it to the OP. Hence, pleading deficiency in service and unfair trade practice on the part of OP, the complaint has been filed with the following prayers:-
- Direct the OP to pay a sum of Rs.10 lakh and the fund value in favour of the Complainant.
- Direct the OP to pay interest @ 18% on the sum due and payable to the Complainant from the date of submission of claim till the actual payment of the claim of the Complainant.
- Direct the OP to pay a sum of Rs.1 lac towards the mental harassment and agony caused to the Complainant.
- Direct the OP to pay the cost of the litigation.
OP in the written statement has stated that the said insurance policy was obtained by the deceased Mr. Amar Rana for a sum assured of Rs.10 lacs. Date of commencement of the policy and also about the cause of death are not denied. Mr. Rana had applied for Life Insurance Policy with TATA AIG Life Insurance Co. Ltd. On investigation in respect of death claim of the deceased, it was established that late Sh. Amar Rana was suffering from diabetes prior to his proposing for insurance claim with the OP. The TATA AIG Life Insurance Company had confirmed in writing that the deceased assured had applied for a Unit Linked Insurance Policy with them on 05.12.2006 wherein the deceased had declared during the medical examination that he was suffering from type-II diabetes mellitus on oral hypoglycemic agents and insulin and atorvastatin which is a cholesterol reducing agent. It is stated that the complainant in her letter dated 11.03.2009 specifically mentioned and admitted that late Mr. Rana was a diabetic for the last 15 years and was on medication. In the death certificate dated 10.09.08 issued by the Health Officer and Local Registrar, State of California the cause of death was mentioned as death due to acute coronary due to underlying cause as artery thrombosis, atherosclerotic coronary artery disease further mentioned as “Old myocardial infarcts (two) hypertrophic cardiomoyopathy, bilateral pulmonary emphysema insulin dependent diabetes mellitus (by history).” OP has stated that they have taken opinion from Dr. Jitendra Fotedar in this regard. As the deceased had concealed the material information regarding his health while making the proposal form for insurance, as such as per clause 18.7 the OP is not liable for payment of any benefit under the policy. The OP has prayed for dismissal of the complaint.
Complainant has filed rejoinder to the written statement of OP wherein she has inter alia stated as under:
“It is submitted that there was no intention on the part of the Complainant or her deceased husband Mr. Amar Rana to hide any information from the Respondent either while claiming the insurance amount or purchasing the impugned policy from the Respondent. The complainant in her claim has provided all the factual information including the proposal to purchase the insurance from TATA AIG and admitting the fact that Mr. Rana was suffering from diabetes for the last 15 years. However, it is submitted that either the letter of TATA AIG stating that Mr. Amar Rana had undergone medical check-up evidence any medical records which states that Mr. Amar Rana was required to consult or undergone any medical treatment or required to be admitted in a hospital for any treatment whatsoever and whether Mr. Amar Rana was intended to purchase any medical oriented policy or non-medical oriented policy. It is further submitted that a person who has diabetes and/or cholesterol related problems live for many years which are not a kind of a disease such as cancer or other serious medical problems so that he or she is aware of their death time. In addition, it is further submitted that the Respondent had not taken any steps to conduct any medical check before or after granting the impugned policy knowing fully that the impugned policy is a non-medical oriented policy. It is not out of place to reiterate that it is highly unlikely that a person who continues to be a policy holder under the impugned policy even attaining the age of 99 years would not have any sort of minor health problems such as diabetics or cholesterol. It is further submitted that the opinion of Dr. Jitendra Fotedar dated 16.3.2009 has no bearing in the present case in as much as the said doctor certifying the characteristics of diabetes. In fact the death certificate provided by the State of California does not categorically state that diabetes is the direct cause of death of Mr. Amar Rana and as per the death certificate the cause of death is due to “(a) acute myocardial infarct; (b) acute coronary artery thrombosis and (c) atherosclerotic coronary artery disease and for none of these diseases Mr. Amar Rana was not taking any medicine or treatment which would have been material relevant and as a matter of fact and as per the medical standards the survival rate of people with the aforesaid disease are over 90% especially in the United States where the death of Mr. Amar Rana had occurred. It is clearly evident from the cause of the death certified by the State of California that Mr. Rana’s death is caused suddenly and was not admitted in a hospital with any prior preparation to get admission in the hospital for the purpose of gaining any insurance benefits or other.”
Complainant has filed her own affidavit in evidence while affidavit of Sh. Anoop Singh, Asst. Vice President- Legal & Compliance has been filed in evidence on behalf of the OP.
Written arguments have been filed on behalf of the parties.
We have heard the arguments on behalf of the Complainant and have also gone through the file very carefully.
It is not disputed that the husband of the Complainant had obtained a “Canara HSBC Life Unit Linked Whole Life Plan” from the OP for a sum assured of Rs.10 lacs. The date of commencement of the policy and the cause of death are also not in dispute. From the pleadings of the parties and the documents filed on the record it stands proved on the record that at the time of taking policy in question Late Sh. Amar Rana was suffering from the diabetes but he did not disclose this fact in the proposal from; that the policy in question was taken in August 2008 and he died in USA on 5.10.08 on account of acute myocardial infarct, acute coronary artery thrombosis and atherosclerotic coronary artery disease and that he was also taking insulin and was dependent on the same; after his death, the complainant being his wife lodged her claim with the OP and the OP repudiated it on the ground that the deceased was suffering from diabetes and he had suppressed this fact in the proposal form. Even then, in order to prove that at the time of taking the policy in question the deceased was suffering from diabetes, the OP has filed many documents.
The OP has placed on record a copy of letter dated 25.03.2009 issued by the TATA AIG to the OP whereby the former informed the latter that the Complainant’s husband had applied for Unit Linked Policy U100468160 on 05.12.06; they conducted Mr. Rana’s medical and after medical examination conducted on 27.10.06 it was found that he was suffering from type-II diabetes mellitus (duration not mentioned) and the oral hypoglycemic agents and insulin and the case was postponed (copy Ex. R-1). The OP vide letter dated 29.05.2009 regarding death claim of late Sh. Amar Rana under the policy in question informed the Complainant that during the claim evaluation they found that life assured was a known case of Diabetes Millitus since 15 years and was on Tab. Biogmet -SR and Inj. Mixtard insulin in October, 2006 and the claimant had concealed the critical information from the OP and the claim is not payable on account of “material medical non- disclosure” on the part of life assured and they forwarded cheque No.931416 dated 27.05.2009 for an amount of Rs.83,183.78 towards payment of fund value under the policy as on March, 12 2009. Complainant was informed that in case the Complainant is not satisfied, she can file a case before the Insurance Ombudsman (we mark the document as Annexure-A for the purpose of identification). The Complainant sent a legal notice dated 2.06.2009 to the OP (we mark the document as Annexure-B for the purpose of identification). The OP vide letter dated 13.07.09 replied to the notice (we mark the document as Annexure-C for the purpose of identification) wherein OP stated that at the time of declaration the deceased had concealed the fact regarding his illness. However, considering the fact that the policy was unit linked insurance policy and as a gesture of goodwill they had refunded the fund value under the policy as on date of the death of the life insured and the cheque of Rs.83183.78 was returned by the Complainant and the same is with them and they are ready to resend the same to the Complainant. The OP has filed an expert opinion of Dr. Jitendar Fotedar (copy annexure D) wherein the doctor opined that the 55 years old male had expired on 05.10.08 due to sudden cardiac death due to silent acute MI.
It is evident from the record that the Complainant had returned the cheque of Rs.83,183.78 to the OP as the Complainant was not satisfied with the amount paid by the OP as the Complainant’s husband had paid an amount of Rs.2 lacs as insurance premium and the sum assured under the policy was Rs.10 lacs.
While repudiating the claim of the complainant OP relied upon clause 18.7 of the terms and conditions governing the policy in question. However, it is a matter of great sorrow and concern that the OP has not chosen to file a copy of terms and conditions governing the policy in question. However, on the other hand, it is the complainant who has filed a copy of the same. We mark the same as mark “AA” for the purposes of identification. Clause 18.7 of the said policy reads as under:
“18.7 – Forfeiture: In issuing this Policy, the Company has relied on the accuracy and completeness of information provided by the Proposer/Life Assured and any other declarations or statements made or as may be made hereafter by the Policyholder/Life Assured in the proposal form. Subject to the provisions of the applicable Regulations including Section 45 of the Act, in the event any such information, declaration or statement is found to be false or incorrect or any material information is found to be withheld or misrepresented, the Policy shall become null and void from commencement, and the Company shall cease to be liable for payment of any Benefits under this Policy.”
Therefore, in order to attract the penal like provisions contained in clause 18.7, the OP must show to the satisfaction of the Forum that while submitting the proposal form for taking the policy in question, the Policyholder/Life Assured had suppressed the material facts from the OP. Unless and until this fact is proved, clause 18.7 cannot be made applicable.
In the present case, the OP has filed a copy of the proposal form executed by the Life Assured (deceased husband of the complainant) as Ex. R-5. The same seems to have been signed by the late husband of the complainant and received in the office of the OP. In the column relating to “personal health details of life to be assured”, the deceased husband of the complainant did not disclose any of his ailments with which he was suffering on the date of filing the proposal form. It was for him to disclose the real condition of his health to the OP. To our astonishment while giving information vide clause VIII at page 6 of the proposal form he opted “No” for giving information regarding disease relating to any gland related disorder like diabetes, thyroid etc. It clearly means that while filing in the proposal form, the deceased husband of the complainant had intentionally suppressed from the OP that he was suffering from diabetes mellitus and was inter-alia taking insulin. Thus, the repudiation of the claim with regard to payment of Rs. 10 Lacs as policy amount to the complainant was totally legal.
The OP assessed the fund value under the policy in question as on 12.3.09 to be Rs. 83,183.78p in which we do not find any illegality.
In view of the above discussion, we do not find any deficiency in service on the part of the OP while repudiating the claim of the complainant. Therefore, we dismiss the complaint with no order as to costs. However, the complainant shall be entitled to receive an amount of Rs. 83,183.78p from the OP towards payment of fund value under policy in question as on 12.3.09. It is needless to say that the OP shall pay this amount to the complainant without any delay.
Let a copy of this order be sent to the parties as per regulation 21 of the Consumer Protection Regulations. Thereafter file be consigned to record room.
Announced on 07.05.16.
(NAINA BAKSHI) (N.K. GOEL) MEMBER PRESIDENT
Case No. 830/09
7.5.2016
Present – None.
Vide our separate order of even date pronounced, the complaint is dismissed. Let the file be consigned to record room.
(Naina Bakshi) (N. K. Goel)
Member President
