BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, AMBALA.

Sunita Arora wife of Sh. Vikasdeep Arora, r/o House No. 208-A, Jaggi Colony, Phase-2, Ambala City (since deceased) is being represented through legal heirs:

1. Vikasdeep Arora (Husband) age 47 yrs.

2. Sheweta (daughter) aged 23 yrs.

3. Varun (son) (Age 17 yrs.) minor is being represented through legal guardian father Vikasdeep Arora.

All residents of House no.208-A, Jaggi Colony, Phase-2, Ambala City.

.……. Complainants

Versus

1. Cholamandalam MS General Insurance Co. Ltd. 2nd floor, Dare House, 2 NSC Bose Road, Chennai 600 001 through its Director/Chairman/Manager.
2. Pira Mal Capital Housing Finance Ltd. SCO No. 811- 812, Second Floor, Sec. 22-C, Chandigarh. Formally known as Dewan Housing Finance Corporation Limited.

….…. Opposite Parties.

 Before:        Smt. Neena Sandhu, President.

                               Smt. Ruby Sharma, Member,

            Shri Vinod Kumar Sharma, Member.           

Present:        Shri B.S.Jaspal, Advocate, counsel for the complainants

                     Shri R.K.Vig, Advocate, counsel for the OP No.1.

                     Shri Harshit Kapoor, Advocate, counsel for the OP No.2.  

Order:        Smt. Neena Sandhu, President.

                   Complainants have filed this complaint under Section 35 of the Consumer Protection Act, 2019 (hereinafter referred to as ‘the Act’) against the Opposite Parties (hereinafter referred to as ‘OPs’) praying for issuance of following directions to them:-

1. To adjust Rs.35,00,000/- along with interest @ 18% P.A. from the date of death, till its realization in the loan account of Sunita Arora and pay the excess amount, if any to the complainants.
2. To pay Rs.1,00,000/- as compensation for harassment and mental agony;
3. To pay cost of litigation of Rs. 33,000/-.

2.             Brief facts of this case are that Sunita Arora now deceased (in short the insured) had taken loan for purchase of house from OP No.2 vide loan agreement no.13500006661. As per the directions of the OP No.2, she was insured for Rs.35,00,000/- vide Group personal accidental insurance policy bearing no.2860/00112838/0327/000/04 and the same was valid from 31.3.2020 to 30.3.2021. OP No.2 had charged Rs.1400/- as premium, Rs.203/- as service tax from the insured against the said policy. The terms and conditions were mentioned on the back side of the policy. On 20.8.2020, the insured died in railway accident and DDE no 28 was registered at police station GRP, Ambala Cantt on 20.8.2020. Claim was lodged with the OPs along with all the relevant documents but the same was rejected vide letter dated 6.1.2021 on the false and frivolous grounds. At the time of giving the policy, it was assured by the OPs  that all the risks are covered in the policy including accidents and it was also insured that the OPs will provided all the assistance in case of any unfortunate incident. The legal heirs of the complainants have requested so many times to the OPs to settle the claim but inspite of that they had failed to resolve the issue. Hence, the present complaint.
3.           Upon notice, OP No.1 appeared and filed written version and raised preliminary objections with regard to maintainability and jurisdiction etc. On merits, it has been stated that  upon the filing of claim No. 2860001288, OP No.1 got the  matter investigated from the surveyor & rejected the claim of the complainants on the following grounds mentioned as under:-

“Ground of rejection or reason for closure:

The cause of death is due to railway trespassing which is an illegal act & suicide cannot be rules out. The Policy is only for Group Personal Accident Insurance Policy.

Relevant Terms and conditions Part II (exclusions) Clause 7:-

This Policy does not provide benefits for any death, disability, expense or loss incurred in result of any injury attributable directly or indirectly to the following:

"7) any loss of which a contributing cause was the insured's actual or attempted commission of, or willful participation in, an illegal act or any violation or attempted violation of the law or resistance to arrest".

From the bare perusal of the complaint it is clear that the claim was lodged by the complainants & after carefully perusing the claim documents, investigator report & other relevant documents it was found that death of insured Smt. Sunita Arora is claimed to be due to Railway Accident. Furthermore documentary evidence like Police report, PMR & cremation register reports, proved the cause of death due to Railway Accident. Further copy of cremation register established the cause of death as "RAILWAY ACCIDENT".  DDE No. 28 dated 20.08.2020 was registered & as per opinion of SHO also confirmed that the cause of death in this case is due to Railway Accident. None to be blamed. Medical Officer also gave the same opinion that the cause of death in this case is due to injuries sustained most probably in Railway Track Accident. Death of insured due to accidental injuries could not be established from available documents & death due to Railway Accident is not covered under the Policy; and thus the claim was repudiated vide letter dated 06.01.2021.The loss suffered was not covered under the terms and condition of the Policy. Rest of the averments of the complainants were denied by OP No.1 and prayed for dismissal of the present complaint with heavy costs.

4.           Upon notice, OP No.2 appeared and filed written version wherein it was stated that since November 2021 there is a change in the official name of the Company and w.e.f. 03/11/2021 it is known as "Piramal Capital & Housing Finance Limited". OP No.2 is a company incorporated under the provisions of the Companies Act 1956 regulated by Reserve Bank of India ("RBI"). Being the regulator of DHFL, owing to governance concern, RBI superseded the Board of Directors of DHFL on 20th November 2019 and appointed the Administrator to manage the affairs of the Company. On 29.1.2019 RBI filed a Company Petition bearing No. CP(IB)-4258/MB/2019 ("Petition") before the Hon'ble National Company Law Tribunal, Mumbai ("NCLT") under the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Provider and Application to Adjudicating Authority) Rules 2019 ("FSP Rules"), inter alia, to initiate Corporate Insolvency Resolution Process ("CIRP") against under the Insolvency and Bankruptcy Code 2016 ("the Code"). Accordingly, NCLT vide order dated 03.12.2019 commenced Corporate Insolvency Resolution Process ("CIRP") against DHFL and declared moratorium under Section 14 of the Insolvency & Bankruptcy Code, 2016 ('Code') on DHFL, effective from the date of filing of the Petition, i.e. 29.11.2019. Consequently under Section 14 of the IBC, the institution or continuation of pending suits or any proceedings against the Corporate Debtor DHFL, including execution of any judgement, decree or order in any court of law, tribunal, arbitration panel or any other authority is prohibited. Pursuant to the Order dated 03.12.2019 passed by the NCLT, in compliance with the direction passed by the NCLT, a public announcement was published in the Newspaper across India and thereby claims were invited against DHFL, in terms of the provisions of the IBC. Once the complainants came to know about the ongoing CIRP against the DHFL and post public advertisement by the Administrator of the DHFL, it was their utmost responsibility to withdraw the claim from the present Commission and file claim before the appropriate authority i.e. before Administrator or before the NCLT, Mumbai as per the provisions of the Code. During the course of CIRP, bids were submitted by various prospective resolution applicants and the Committee of Creditors ("CoC") of the DHFL constituted under the provisions of the Code selected and approved the resolution plan submitted by Piramal Capital and Housing Finance Limited ("the Successful Resolution Applicant"). After obtaining NOC form the RBI, the said resolution plan was submitted to the NCLT seeking its approval under Section 31 of the Code. Subsequently, the NCLT vide its order dated 07.06.2021 has approved the Resolution Plan submitted by the Successful Resolution Applicant.  Thereafter, an appeal was filed by the Successful Resolution Applicant before the Hon'ble National Company Law Appellate Tribunal ("NCLAT") seeking clarification of the order dated 07.06.2021 passed by the NCLT in terms of waiver of any obligations/liabilities of the DHFL. The Hon'ble NCLAT has clarified that all the dues shall stand extinguished for the period prior to the date the NCLT granted approval of the Resolution Plan under S. 31 of the Code. Thus, the present Complaint could not have been filed by the complainants against OP No.2 during the moratorium period.

The insured has taken the total amount of Loan Rs.38,37,475/- including insurance premium amount Rs.3,37,475/- which are bifurcated as Rs. 37,189/- + Rs. 8,015/- Rs. 14,224/- to Chola Ms. General Insurance Co. Ltd vide three cheques. Further Rs.2,78,047/- in shape of cheque in favour of DHFL Primerica Life Insurance Co. The OP No.2 has already processed the claim and the same was settled in the customer account, for an amount of Rs.36,02,663/- on 27th February 2021, as per customer track record on 31 March 2021. The Principal amount is "Zero" in the system, but the pending EMI and other dues are still pending in the said account. As it is the duty on part of the Legal heirs to either immediately inform OP No.2 about the death and/or keep paying the pending EMI, till the claim is settled. The death of the deceased took place in the month of August 2020 and the OPs were not informed until February 2021. Therefore as per terms and conditions the account was NPA and appropriate charges, penal charges and interest up to date has been levied in the account which the complainants are duty bound to pay. Before the death of the deceased, she was in arrears of some EMI which were not paid and the complainants are bound to pay the said amount along with interest up to date. It is submitted that as per the statement of account EMI overdue is Rs. 5,09,407/- and Penal Interest on EMI is Rs. 80,438/- and collection legal charges is Rs.160/-. OP No.2 has processed the claim of only DHFL Primerica life insurance and all other claims processed by the customer with any other insurance company is a separate matter with the customer and such respective insurance company for which OP No.2 is not liable or responsible. OP No.2 has no knowledge of any such rejection letter of OP No.1. Rest of the averments of the complainants were denied by OP No.2 and prayed for dismissal of the present complaint with heavy and special costs.

5.           Learned counsel for the complainants tendered affidavit of the complainant No.1 as Annexure C-A alongwith documents as Annexure C-1 to C-6 and closed the evidence on behalf of the complainants. On the other hand, learned counsel for OP No.1 tendered affidavit of Sujeet Kumar Sahu, Authorized Signatory, # Chola MS General Insurance Company Limited, Plot No.39, 2^nd Floor, Samyak Tower Pusa Road, Karol Bagh, New Delhi as Annexure OP-1/A and affidavit of Dr.Gurpreet Singh, aged 41 years, JD Health Care Services, 843, Sector-11, Garden Colony, Kharar, District Mohali as Annexure OP1/B alongwith documents as Annexure OP-1/1 to OP-1/20 and closed the evidence on behalf of the OP No.1. Learned counsel for the OP No.2 tendered affidavit of Vikas Kala on behalf of OP No.2 i.e. Piramal Capital and Housing Finance Limited as Annexure RA alongwith documents as Annexure R-1 to R-4 and closed the evidence on behalf of the OP No.2.
6.           We have heard the learned counsel for the complainants and learned counsel for the OPs and have also carefully gone through the case file.
7.           Learned counsel for the complainants submitted that by repudiating the genuine claim filed by the complainants on the bald ground that cause of death  of the insured was due to railway trespassing which is an illegal  act and suicide cannot be ruled out, OP No.1 is deficient in providing service.
8.           On the contrary, the learned counsel for the OP No.1 while reiterating the objections taken in the written version submitted that the claim of complainants was rightly repudiated because as per clause 7 of the policy in question,  any loss of any loss of which a contributing cause was the Insured's actual or attempted commission of, or willful participation in, an illegal act or any violation or attempted violation of the law or resistance to arrest and the probability of suicide cannot be ruled out.
9.           The moot question which falls for consideration is, as to whether, the claim filed by the complainants was rightly repudiated by the OPs or not. It may be stated here that we have gone through the repudiation letter 06.01.2021, Annexure C-3 and found that the claim of the complainants was repudiated on the ground that since the cause of the death of insured is due to railway trespassing which is an illegal act and suicide cannot be ruled out and therefore the claim of the complainants fell under Part II, Exclusion Clause No.7 of the policy in question. Relevant portion of Annexure C-3 is reproduced hereunder:-

“….This has reference to the claim preferred by you towards the unfortunate death of (Late) Mrs. Sunita Arora on 20-08-2020 who was covered under the above Group Personal Accident Policy issued to M/s. Dewan Housing Finance Corporation Limited.

The cause of death is due to railway trespassing which is an illegal act and suicide cannot be ruled out.

We wish to highlight the fact that crossing a railway track is trespassing and is a punishable offence under the Indian Railways Act, 1989. This act of the deceased was in violation of the law which unfortunately attracts the provisions of policy exclusion no.7 of our policy, which is reproduced as below:

"Part II (Exclusions) Clause 7

This policy does not provide benefits for any death, disability, expense or loss incurred in result of any Injury attributable directly or indirectly to the following:

"7) any loss of which a contributing cause was the Insured's actual or attempted commission of, or willful participation in, an illegal act or any violation or attempted violation of the law or resistance to arrest; "

Though the event is an accident, the cause and an event leading to the accident are excluded under the policy and owing to the reasons mentioned above the claim falls outside the scope of cover. In view of the above mentioned facts, we regret our inability to entertain the claim as per the policy terms and conditions….”

10.           It may be stated here that the stand of the OP No.1 is that the insured had committed suicide and by trespassing the railway track she had contributed the loss willfully and also attempted violation of law. To corroborate this fact OP No.1 has relied upon the surveyor report Annexure OP-1/1, wherein, it has been mentioned by the surveyor that three persons in the neighborhood confirmed that insured herself has committed suicide underneath the train. However, neither the name of the said witnesses has been disclosed by the surveyor nor their statements have been recorded alongwith cogent and convincing evidence. Therefore, such an opinion of the surveyor, without any evidence has no value in the eyes of law.

11.           It is important to mention here that we have carefully gone through the photographs, Annexure OP-1/5 to OP-1/10 and found that it was not a railway platform, where the insured had died but it was a railway track/line going through the city/village area and there was no under-bridge or over-bridge wherefrom the passerby can cross the railway track. When a railway line is going through the city/village area, having no under-bridge or over-bridge then people do cross from unmanned crossings. In this case, the insured while crossing the railway track/line came underneath the train which resulted into her death. Thus, under these circumstances, it cannot be said that the insured has willfully committed any illegal act or committed suicide. There is no direct evidence collected and produced by the OPs to prove that insured had not died due to accident but had committed suicide except bald observations of the surveyor. Thus, in the absence of any cogent and convincing evidence the OPs have failed to prove that the deceased has not met with an accident and committed suicide.  As such, we are of the considered opinion that the OP No.1 was not justified in repudiating the claim of the complainants.  From the perusal of Group Personal Accident Insurance Policy, Annexure C-2, it is evident that the Sunita Arora (since deceased) was insured for a total sum of Rs.35,00,000/-. Thus, the OP No.1 is liable to pay the said amount to the complainants. However, it is made clear that the first charge of the awarded amount will be of the OP no.2 to the extent of pending EMI if any without charging penalty.
12.           At the same time, it is also important to mention here that as per the version of OP No.2 in para no.2, that the principal amount in respect of the property in question stands “Zero” except the pending EMIs and other dues. Under these circumstances, since no deficiency in providing service has been proved on the part of OP No.2 as such the complaint against OP No.2 is liable to be dismissed.
13.           In view of the aforesaid discussion, we hereby dismiss the present complaint against OP No.2 and allow the same against OP No.1 and direct it, in the following manner:-
    1. To adjust the insured amount Rs.35,00,000,/- in the loan account of Sunita Arora/insured and after adjusting the payable amount pay the excess/remaining amount, if any to the complainants alongwith interest @6% p.a. from the date of repudiation of claim i.e. 06.01.2021, Annexure C-3, till its realization.
    2. To pay Rs.5,000/- as compensation for the mental agony and physical harassment suffered by the complainant.
    3. To pay Rs.3,000/- as litigation expenses.   

The OP No.1 is further directed to comply with the aforesaid directions within the period of 45 days, from the date of receipt of the certified copy of the order, failing which the OP No.1 shall pay interest @ 8% per annum on the awarded amount, from the date of default, till realization. Certified copy of this order be supplied to the parties concerned, forthwith, free of cost as permissible under Rules. File be indexed and consigned to the Record Room.

Announced:- 04.12.2023