Chandigarh

DF-I

CC/18/2021

Rajbala - Complainant(s)

Versus

DHFL Pramerica Life Insurance Co. Ltd. - Opp.Party(s)

Sat Parkash Singh

05 Apr 2023

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-I,

U.T. CHANDIGARH

                                     

Consumer Complaint No.	:	CC/18/2021
Date of Institution	:	07/01/2021
Date of Decision	:	05/04/2023

 

Rajbala w/o late Ramdutt Soni, r/o Village Bhana Bramnan, Tehsil Narwana, District Jind.

… Complainant

V E R S U S

1. DHFL Pramerica Life Insurance Co. Ltd., 4^th Floor, Building No.9, Tower-B, Cyber City, DLF Phase-III, Gurgaon through its Manager.
2. DHFL Pramerica Life Insurance Co. Ltd., SCO No.101,102,103, 2^nd Floor, Batra Building, Sector 17-D, Chandigarh through responsible person.

… Opposite Parties

3. Aadhar Housing Finance Limited, Shop No.14 &15, 1^st Floor, City Center Commercial Complex, Chottu Ram Chowk, Rohtak through its Manager.

… Proforma OP

 

CORAM :	SHRI PAWANJIT SINGH	PRESIDENT
	SHRI SURESH KUMAR SARDANA	MEMBER

 

                                                                               

ARGUED BY	:	None for complainant
	:	Sh. Abhay Josan, Counsel for OPs 1 & 2
	:	OP-3 ex-parte

 

Per Pawanjit Singh, President

1. The present consumer complaint has been filed by Smt.Raj Bala, complainant against the opposite parties (hereinafter referred to as the OPs).  The brief facts of the case are as under :-

1. It transpires from the allegations as projected in the consumer complaint that the husband of the complainant namely Sh. Ramdutt Soni had obtained a house loan of ₹8,47,160/- from OP-3 for 15 years which was payable in 180 monthly installments. The said loan was insured by OPs 1 & 2 who had issued the insurance policy namely “DHFL Pramerica Group Credit Life +” (hereinafter referred to as “subject policy”) by receiving premium of ₹82,001/- in advance as single installment and the said policy commenced w.e.f. 22.7.2019 to 21.7.2034.  The subject policy was issued to the husband of the complainant by the OPs after finding his physical health good and that he was eligible for taking the insurance loan. The husband of the complainant regularly paid the loan installments without any default.  Unfortunately, Sh. Ramdutt Soni suddenly died on 21.3.2020 due to heart attack. Thereafter the complainant moved an application alongwith other requisite documents to OP-1 for release of the insurance amount under the above mentioned policy but OPs 1 & 2 (hereinafter referred to as “contesting OPs”) lingered on the matter on one pretext or the other in order to escape from their liability. Finally, vide letter dated 28.7.2020, the contesting OPs illegally and arbitrarily repudiated the claim of the complainant. Thereafter the complainant served contesting OPs with legal notice, but, despite of that they failed to make payment.  OP-3 had also obtained a blank signed cheque and other surety documents from the husband of the complainant at the time of grant of loan.  OPs were requested several times to admit the claim, but, with no result. Hence, the present consumer complaint.
2. OPs 1 & 2 resisted the consumer complaint and filed their written version, inter alia, take preliminary objections of maintainability, concealment of facts, cause of action and jurisdiction.  It is also alleged that the Deceased Life Insured (hereinafter referred to as “DLI”) i.e. husband of the complainant namely Sh.Ramdutt Soni had availed a loan from OP-3 and on the basis of said loan, DLI had purchased the subject policy from the contesting OPs.  The terms and conditions of the insurance policy were clearly explained to the DLI who filled up the proposal form (Annexure R-1/2) before issuance of the subject policy alongwith the welcome letter (Annexure R-1/3) by declaring in the said form that he was not suffering from any disease at that time.  It is admitted that premium of ₹82,001.18 was received by the answering OPs and thereafter the subject policy was issued to the DLI.  However, it is alleged that when the investigator was asked by the answering OPs to trace out the medical history of the DLI, it was found that he was diagnosed with chronic kidney disease, diabetes and chronic liver disease before the purchase of the policy and the said fact has also been disclosed in the medical records (Annexure R-1/4).  As the DLI had not disclosed all the facts qua the pre-existing disease in his proposal form and he had made false declaration under the head of health declaration in the proposal form dated 12.7.2019, the claim of the complainant was accordingly repudiated by the answering OPs. Legal notice issued by complainant was received by OPs and the same was properly replied on 25.9.2020 (Annexure R-1/7). It has been held in various judgments by various Hon’ble Courts that insured is supposed to disclose each and every fact before purchasing the policy in question and in the case in hand as the DLI had not disclosed the said facts before purchasing the subject policy, the consumer complaint of the complainant is not maintainable.  It is further alleged that as the complainant is resident of District Jind (Haryana) and the documentation was also done at Jind, this Commission has no territorial jurisdiction.  The cause of action set up by the complainant is denied.  The consumer complaint is sought to be contested.
3. OP-3 was properly served and when OP-3 did not turn up before this Commission, despite proper service, it was proceeded against ex-parte on 7.4.2022.
4. Despite grant of numerous opportunities, no rejoinder was filed by the complainant to rebut the stand of the OPs.

2. In order to prove their case, contesting parties have tendered/proved their evidence by way of respective affidavits and supporting documents.
3. We have heard the learned counsel for OPs 1 & 2 and also gone through the file carefully.
   1. At the very outset, it may be observed that when it is an admitted case of the parties that house loan of ₹8,47,160/- was sanctioned by OP-3 in favour of husband of the complainant namely Sh. Ramdutt Soni i.e. the DLI and the said house loan was insured by OPs 1 & 2 vide the subject policy for 15 years valid w.e.f. 22.7.2019 to 21.7.2034 and further that the DLI had died on 21.3.2020, when the subject policy was subsisting, the case is reduced to a narrow compass as it is to be determined if the contesting OPs are unjustified in repudiating the claim of the complainant on the ground that the DLI had not disclosed about the pre-existing disease i.e. he was suffering from diabetes, heart disease and chronic kidney disease at the time of applying for the subject policy and the complainant is entitled for the reliefs prayed for in the consumer complaint, as is the case of the complainant, or if the contesting OPs are justified in repudiating the claim of the complainant on the ground that the DLI had concealed material facts while filling up the proposal form by not disclosing about the pre-existing diseases from which he was suffering and the consumer complaint of the complainant, being false and frivolous, is liable to be dismissed.
   2. The contention of the complainant is that as it stands proved on record that the DLI was not suffering from any disease at the time of purchase of the subject policy and at the same time it was the bounden duty of the contesting OPs to get the husband of the complainant medically examined, even as per the terms and conditions of the insurance policy, and as the contesting OPs have wrongly repudiated the claim of the complainant, the consumer complaint be allowed.
   3. On the other hand, learned counsel for contesting OPs contended with vehemence that as it stands proved from the medical history record (Annexure R-1/4) of the DLI that he was suffering from diabetes, heart disease and chronic kidney disease at the time of purchasing the subject policy, which fact was not disclosed by him, OPs were justified in repudiating the claim of the complainant and the consumer complaint of the complainant, being false and frivolous, be dismissed. 
   4. In the light of the foregoing facts on record, one thing is clear that the entire case of the parties is revolving around the terms and conditions of the insurance policy and for that purpose the same are required to be scanned carefully.  Annexure P-2/R-1/3 are the copies of the welcome letter with which abstract of terms and conditions and benefits of the subject policy are annexed and the relevant portion of the same is reproduced below for convenience :-

“Benefits under Plan A:

a)      Death Benefit: If an Insured Member dies when his Insurance coverage under the Policy is in force, the Coverage in-force will be payable to the Claimant.

xxx                       xxx                       xxx

Benefits under Plan B:

1. Death Benefit: If an Insured Member dies when his Insurance coverage under the Policy is in force, the Coverage in-force will be payable to the claimant.

          xxx                       xxx                       xxx

Exclusions

a)      Suicide : If the Insured Member commits suicide, whether sane or insane at the time, within one year from the Coverage Commencement Date as stated in the Schedule, then the liability of the Company shall be limited to a refund of 80% of the premium received.

b)      Accelerated Accidental Total and Permanent Disability arising directly or indirectly from any of the following are specifically excluded :

a)      The life Assured taking part in any hazardous sport or pastimes (including hunting, mountaineering, racing, steeple chasing, bungee jumping, etc.)

b)      The Life Assured flying in any kind of aircraft, other than as a bonafide passenger (whether fare-paying or not) on an aircraft of a licensed airline

c)      HIV or antibodies to such a virus.

d)      Self-inflicted injury, suicide or attempted suicide whether sane or insane

e)      Under the influence or abuse of drugs, alcohol, narcotics or psychotropic substance not prescribed by a registered medical practitioner

f)       Service in any military, airforce, naval or paramilitary

g)      War, civil commotion, invasion, terrorism, hostilities (whether war be declared or not)

h)      The Life Assured taking part in any strike, industrial dispute, riot, etc.

i)       The Life Assured taking part in any criminal or illegal activity with criminal intent

j)       Nuclear reaction, radiation or nuclear or chemical contamination.”

 

5. Thus, one thing is clear from the afore-extracted abstract of the terms and conditions and benefits of the policy that nothing has been contained therein that in case of any pre-existing disease of the insured, he will not be entitled for the insurance claim, rather it contains if an insured member dies when his insurance coverage under the policy is in force, the coverage in force will be payable to the claimant and similarly the exclusion clause does not contain that in case insured dies due to some pre-existing disease, after purchase of the policy, he shall not be entitled for any claim.
6. Moreover, the medical evidence (Annexure R-1/4), having been relied upon by OPs (at page 18-20 of their written version) indicates that the deceased Sh.Ramdutt Soni was found suffering from diabetes, heart disease and chronic kidney disease in March 2020 i.e. after the issuance of the subject policy which was admittedly issued on 22.7.2019, making it further clear that the deceased was not suffering from the aforesaid diseases at the time of issuance of the policy.  Not only this, the welcome letter sent by the contesting OPs to the DLI, Sh.Ramdutt Soni clearly indicates that he was requested to take his nominee through the benefits as well and he will have a period of 15 days from the date of the receipt of certificate of insurance to review the terms & conditions of the same and where he disagrees to any of these terms and conditions, he has an option to return the certificate of insurance stating the reasons for objection.  It further indicates that on the receipt of the letter alongwith certificate of insurance, the company (OP) will refund the premium received for the same, subject to deduction of proportionate risk premium for the period of cover and expenses incurred by the company on his medical examination and the related stamp fee. Thus, one thing is further clear from this welcome letter that it implies that the medical examination of the insured was to take place prior to the premium being paid by the insured.  Not only this, the welcome letter further makes it clear that the medical examination of the insured was compulsory which was to be got conducted by contesting OPs as they had already deducted/received the expenses for the medical examination of the insured.  Thus, it is further clear that if the medical examination of insured has not been got conducted by the contesting OPs, it cannot come with the plea that the DLI was suffering from any pre-existing disease which was not noticed by OPs or disclosed by DLI at the time of purchase of the policy by him.
7. Even otherwise, OPs also cannot read something more into the terms & conditions of the policy and come to the inference that one disease is relatable to other disease as a result of which the claim of the insured was rejected. 
8. The Hon’ble Madras High Court in the case titled Manivasagam Vs.  The Branch Manager, National Insurance Company Ltd. & Anr., W.A (MD) No.956 of 2011 decided on 30.1.2014 held as under :-

“If the disease for which the appellant/writ petitioner was treated, is not stated as pre-existing disease in the policy and there are no supporting documents to show that it was a pre-existing disease on the date of issuance of the policy, the Insurance Company is bound to honour the policy.”

 

9. Further the Hon’ble Punjab and Haryana High Court in the case titled as Star Health and Allied Insurance Company Limited Vs. Permanent Lok Adalat (Public Utility Services) and Anr., 2021 (3) PLR 517 held as under :-

“Legal Service Authorities Act, 1987 - Medical claim policy with interest - Challenged - Family Health Optima Insurance Plan - No question of concealment of facts by application - Wife of applicant admittedly discharged in healthy condition on 07.10.2017 and it is only on 11.10.2017 that her disease came to light - Thus, it cannot be said that there was any concealment by applicant on 07.10.2017 at time of renewal of policy - As per clause 7 of the policy, grace period up to 120 days from date of expiry of the policy is available for renewal and if renewal is made within this period, continuity benefits would be available - Clause that any disease/illness contracted or injury sustained during grace period would be deemed as pre-existing and would be subject to waiting period as existing under Clause 3(iii) not applicable - Hence, order of permanent Lok Adalat upheld”.

 

10. In the case in hand, as it has also come on record that the policy in question was purchased by the deceased Sh. Ramdutt Soni on 22.7.2019 and the alleged disease from which the deceased Sh. Ramdutt Soni was suffering i.e. diabetes, heart disease and chronic kidney disease came to light only in the month of March, 2020, contesting OPs were unjustified in repudiating the claim of the complainant on the ground of concealment of facts, especially when it has come on record that there is no iota of any evidence on record showing that prior to the issuance of the policy, deceased was suffering from the ailment which resulted in causing his death.
11. Not only this, as it has come on record that it was the bounden duty of the contesting OPs/insurer to get the insured/deceased medically examined, as they had already received medical expenses from him for his medical examination, and if the same was not done by them, they cannot escape from their liability on the ground that the DLI had concealed facts about his pre-existing disease.
12. It was also held by the Hon’ble Apex Court in the case of D.Srinivas Vs. SBI Life Insurance Co. Ltd. & Ors., Civil Appeal No.226 of 2018 decided on 16.2.2018 that where the insurance clause provided that the condition precedent for acceptance of the premium was the medical examination, it would be logical for an underwriter to accept the premium based on the medical examination and not otherwise and by the very fact that the insurer accepted the premium, waived the condition precedent of medical examination.
13. Similarly the application form (Annexure R-1/2), annexed with the written version of OPs, indicating the medical questionnaire where the deceased had replied in “No” about the disease, is of no help to OPs as it has otherwise been proved on record from the medical record, having been relied upon by both the parties, that the deceased was not suffering from any disease at the time of purchasing the policy, rather he had suffered from the disease which resulted in causing his death after about 8 months of the purchase of the policy. 
14. It is further clear from the certificate of insurance (Annexure P-2 at page 14) that the coverage amount of the policy was ₹8,38,804.22 in the 8^th month of the purchase of the policy.  As it is an admitted case of the parties that the deceased/insured Sh. Ramdutt Soni had died on 21.3.2020 i.e. in the 8^th month of purchase of the policy, therefore, the coverage in force to that extent is payable by the OPs.  Hence, the act of contesting OPs in repudiating the genuine claim of the complainant certainly amounts to deficiency in service and unfair trade practice on their part and the present consumer complaint deserves to be allowed.
15. So far as the objection of the contesting OPs with regard to territorial jurisdiction of this Commission is concerned, since the head office of the contesting OPs is at Chandigarh, therefore, this Commission is vested with powers to entertain and decide the present consumer complaint. 

4. In the light of the aforesaid discussion, the present consumer complaint succeeds, the same is hereby partly allowed and OPs 1 & 2 are directed as under :-

1. To pay to the complainant ₹8,38,804.22, as mentioned above, alongwith interest @ 9% per annum w.e.f. the date of death of the insured i.e. 21.3.2020, till its realisation.  However, OPs 1 & 2 are first directed to pay the said amount to OP-3, towards adjustment of outstanding amount, if any, in the house loan account, who will issue the NOC (and other documents, if any, retained by it while granting the loan) to the complainant on receipt of the said amount. 
2. to pay an amount of ₹50,000/- to the complainant as compensation for causing mental agony and harassment to her;
3. to pay ₹10,000/- to the complainant as costs of litigation.

5. This order be complied with by OPs 1 & 2 within thirty days from the date of receipt of its certified copy, failing which, they shall make the payment of the amounts mentioned at Sr.No.(i) & (ii) above, with interest @ 12% per annum from the date of this order, till realization, apart from compliance of direction at Sr.No.(iii) above.
6. Since no deficiency in service or unfair trade practice has been proved against OP-3, therefore, the consumer complaint qua it stands dismissed with no order as to costs.
7. Certified copies of this order be sent to the parties free of charge. The file be consigned.

Announced 05/04/2023 hg			Sd/-  [Pawanjit Singh] President
			Sd/- [Suresh Kumar Sardana] Member