Versus
- HDB Financial Services through its Branch Manager having its Branch office at B-21-4243/2, First Floor, Khasra No.8057/802-8058/802, Khata No.436/1/551, Shimla Puri, Gali NO.2, Ludhiana-141003.
- HDFC Standard Life Insurance Company Limited through its Manager/Authorized Person having its branch office at SCO 41, 3rd &B 4th Flr, Feroze Gandhi Market, Ludhiana, Above Tanishq Showroom, Punjab-141001. …..Opposite parties
Complaint Under Section 35 of the Consumer Protection Act, 2019.
QUORUM:
SH. SANJEEV BATRA, PRESIDENT
SH. JASWINDER SINGH, MEMBER
SH. MONIKA BHAGAT, MEMBER
COUNSEL FOR THE PARTIES:
For complainant : Sh. Dalip Saggi, Advocate.
For OP1 : Sh. Rahul Rajput, Advocate.
For OP2 : Sh. Nitin Kapila, Advocate.
ORDER
PER SANJEEV BATRA, PRESIDENT
1. Shorn of unnecessary details, the facts of the complaint are that Late Sh. Suman Kumar, husband of the complainant initially had availed a Loan Against Property from OP1 for an amount of Rs.15,00,000/- in the year 2016 vide UCIC No.5546370223634196. OP1 asked the husband of the complainant to purchase HDFC Slic Credit Protect Plus life insurance policy from OP2 in order to secure his loan representing that in the event of his death, the amount of life insurance shall be utilized to pay the said loan and his legal heirs shall not be burned with payment of loan. At the representation of OP1, husband of the complainant purchased the said policy having Death Benefit from OP2 and paid one-time premium of Rs.33,690/- to be effective for five years. The complainant stated that OP1 approached her husband with a loan offer of Rs.25,00,000/- on showing his good record. The husband of the complainant availed the said loan vide UCIC No.3144377 and the same was sanctioned on 14.06.2018. The previous loan of Rs.15,00,000/- was foreclosed by OP1. OP1 further asked to purchase life insurance from OP2 for which the husband of the complainant paid a premium of Rs.29,884/- for five year term insurance having Death Benefit to be commenced from 31.05.2018 to 30.05.2023. having certificate No.4412761 and Master Policy No.PP000239 having sum assured of Rs.24,99,983/-. The complainant was nominee in the said policy. Thus, the husband of the complainant purchased two insurance policy having total amount of Rs.40,00,000/-.
The complainant further stated that her husband died on 21.08.2020 and she submitted a claim form to OP1 in September 2020 but the OPs failed to disburse the assured amount in both insurance policies on the reason that the husband of the complainant was suffering from uncontrolled DM with Diabetic Triopathy, CKD Stage 3, HTN, Cholelithiasis, Scabies, Hypothyroidism report prior to issuance of policy. The husband of the complainant was admitted to hospital on 03.08.2019 and he was not suffering from any disease prior to taking the insurance policy on 31.05.2018. The complainant further stated that as per brochure of insurance policy, the pre-existing disease clause does not apply to the Extra Life (Plan Option) which includes Death Benefit in addition to Accidental Death Benefit and the exclusion clause of pre-existing disease only applies Critical Life Option and repertoire. The OPs in connivance with each others have started the proceedings under SARFAESI Act against the complainant despite the husband of the complainant already availed insurance for the said loan against property. The complainant approached the OPs but the lingered on the matter on one pretext or the other. This act on the part of the OPs amounts to deficiency in service and unfair trade practice due to which the complainant had suffered mental trauma etc. In the end, the complainant has prayed for issuing direction to the OPs to disburse the amount of Rs.25,00,000/- of life insurance policy of her husband and also to pay compensation of Rs.10,00,000/-.
2. Upon notice, OP1 appeared and filed written statement by taking preliminary objections assailed the complaint on the ground of maintainability; the complaint being misconceived; the complainant has not approached this Commission with clean hands; the complainant being not a consumer; lack of cause of action; the complaint being barred under Section 26 of the Consumer Protection Act etc. OP1 stated that the complaint is based on false, frivolous and baseless allegations. The complainant had availed insurance policy from OP2 and all the documents in regard to insurance policy were signed by the mortgagor i.e. Suman Kumar and Renu Garg and OP1. The contract of insurance is between the mortgagor and OP2 and amount of premium is in favour of OP2 and the policy documents were issued directly to the mortgagor by OP2 itself. The mortgagor i.e. Suman Kumar being the Proprietor of Garg Hardware Store and Renu Garg had availed the policy and filled out the proposal forms and also submitted all the necessary documents. They took loan against property from OP1 of Rs.25,00,000/- and repayment was to be done in 130 installments of Rs.77,856/- each. Suman Kumar Being Proprietor of Garg Hardware Stone and the complainant Renu Garg appended their signatures on the loan agreement and at that time they did not raise any dispute regarding any terms and conditions of the loan. Moreover, as per cause 29 of the agreement, if there is any dispute in regard to loan then the matter should be referred to the Arbitration. OP1 further stated that the complainant has not suffered any such loss as she is not entitled to any relief.
On merits, OP1 reiterated the crux of averments made in the preliminary objections. OP1 has denied that there is any deficiency of service and has also prayed for dismissal of the complaint.
3. OP2 filed separate written statement and by taking preliminary objections assailed the complaint on the ground of maintainability; suppression and concealment of material facts; lack of cause of action etc. OP2 stated that Suman Kumar, husband of the complainant had obtained loan from OP1 and HDFC Life Group Credit Protect Plus Insurance Plan from OP2 vide policy No.PP000239 dated 31.05.2018, valid till 03.05.2023. The loan was availed for business purpose i.e. for commercial purpose. Suman Kumar had concealed the material facts regarding his pre-existing ailment at the time of taking/issuance of the policy which was issued on the basis of application submitted by him. A short medical questionnaire in Member Enrolment Form regarding “Health Details of life to be assured” was there and relevant questions regarding past medical history and medical conditions of Suman Kumar were asked but he intentionally concealed the same and answered those questions as “NO”. OP2 further stated that during the investigation, the life insured was found to be suffering from uncontrolled DM with Diabetic Triopathy, CKD Stage-3, HTN, Choesthiasis, Sacbies, Hypothyroidism report prior to issuance of policy. The case of the deceased was accepted at standard rates based on the information provided by him and the policy was issued on 31.05.2018. OP2 further stated that Suman Kumar expired on 21.08.2020 and after his death, the complainant lodged her claim under the said policy with OP2, which was registered, entertained and processed. From the investigations, it was established that the life assured was having pre-existing disease prior to issuance of the policy, which was not disclosed by the life assured. As vital information was deliberately not provided to OP2 at the time of applying for policy and as such, the claim of the complainant was rightly denied vide repudiation letter dated 10.11.2021.
On merits, OP2 reiterated the crux of averments made in the preliminary objections. OP2 has denied that there is any deficiency of service and has also prayed for dismissal of the complaint.
4. In support of her claim, the complainant tendered her affidavit Ex. CA in which she reiterated the allegations and the claim of compensation as stated in the complaint. The complainant also tendered documents Ex. C1 is the copy of sanction letter dated 22.09.2016 for issuance of loan of Rs.15,00,000/-, Ex. C2 is the copy of sanction letter dated 14.06.2018 for issuance of loan of Rs.25,00,000/-, Ex. C3 is the copy of insurance cover note from 31.05.2018 to 30.05.2023, Ex. C4 is the copy of death certificate of Suman Kumar, Ex. C5 is the copy of policy documents of HDFC Life Group Credit Protect Plus Insurance Plan, Ex. C6 is the copy of rejection letter dated 10.11.2021, Ex. C7 to Ex. C10, Ex. C17 and Ex. C18 is the medical record of DMC Hospital, Ex. C11 is the copy of medical record of Ludhiana Mediways Hospital, Ex. C12 is the copy of prescription slip of Kosmoss Bone & Joint Centre, Ex. C13 is the copy of discharge summary dated 29.07.2019 issued by DMC Hospital, Ex. C14 is the copy of consent form of Ludhiana Mediways Hospital, Ex. C15 is the copy of notice under SARFAESI Act, Ex. C16 is the copy of discharge summary of Renu Garg dated 07.04.2021 issued by DMC Hospital, Ex. C19 is the copy of prescription slip issued by SPS Hospital, Ludhiana and closed the evidence.
5. On the other hand, the counsel for OP1 tendered affidavit Ex. RW1/A of Mr. Amrish Sharma, Legal Officer of OP1 branch at Plot No.384, Ist Floor, DVS Tower, Near Petrol Pump, R.K. Road, Cheema Chowk, Ludhiana along with documents Ex. RW/1 is the Authority letter, Ex. RW/2 is the copy of loan agreement No.4412761, Ex. RW/3 is the copy of statement of account w.e.f. 01.01.2008 to 10.02.2022, Ex. RW/4 is the copy of notice under SARFAESI Act and closed the evidence.
The counsel for OP2 tendered affidavit Ex. RA2 of Sh. Gurpreet Singh, Deputy Manager (Legal), HDFC Life Insurance Company Ltd., SCO 149-151, Ist Floor, Sector 43-B, Chandigarh along with documents Ex. R1 is the copy of investigation report, Ex. R2 is the copy of cancelled cheque, Ex. R3 is the copy of discharge summary dated 29.07.2019 of DMC Hospital, Ex. R4 is the copy of medical record issued by SPS Hospitals, Ludhiana, Ex. R5 is the copy of lab report dated 18.12.2019, Ex. R6 is the copy of letter written by the complainant to OP1, Ex. R7 is the copy of insurance policy w.e.f. 31.05.2018 to 30.05.2023, Ex. R8 is the copy of intimation dated 19.09.2000 to OP2 regarding death Sh. Suman Kumar, Ex. R9 is the copy of Member Enrollment Form dated 29.05.2018, Ex. R10 is the copy of patient notes of DMC Hospital, Ex. R11 is the copy of rejection letter dated 10.11.2021 and closed the evidence.
6. We have heard the arguments of the counsel for the parties and also gone through the complaint, affidavit and annexed documents and written statements along with affidavit and documents produced on record by both the parties.
7. One Suman Kumar (now deceased) husband of the complainant, being Proprietor of M/s. Garg Hardware Store took term loan of Rs.15,00,000/- against property from OP1 vide sanction letter dated 22.09.2016 Ex. C1 payable in 120 EMIs of Rs.22,397/- each per month. The deceased Suman Kumar further took term loan of Rs.25,00,000/- against property vide sanction letter dated 14.06.2018 Ex. C2 after adjusting the balance loan amount sanctioned vide letter Ex. C1. The said loan amount of Rs.25,00,000/- was also to be payable in 120 EMIs of Rs.34,438/- each per month. A term loan agreement No.4412761 Ex. RW/2 was executed between the parties i.e. Suman Kumar and OP1 HDB Financial Services regarding loan of Rs.25,00,000/-.
8. OP1 being Master Policy Holder sent an Enrolment Form dated 29.05.2018 Ex. R9 to OP2 in order to enroll the deceased as a member under HDFC Life Group Credit Protect Plus Insurance Plan. Thereafter, a Master Policy No.PP000239 vide insurance cover note Ex. C3 = insurance policy Ex. R7 having sum assured of Rs.24,99,983/- with ‘Decreasing’ cover option for 5 years term commencing from 31.05.2018 to 30.05.2023. Extra Life (Accidental Death Benefit) plan was also opted. Unfortunately, during the subsistence of the policy, Suman Kumar expired on 21.08.2020. The complainant being wife and nominee in the policy preferred a claim before the opposite parties which was processed and got investigated by OP2 from Sakshi Investigation and Detective Agency whose investigator Dr. Kavinder Sharma submitted his report Ex. R1. The investigator made the following remarks:-
1. As per our Investigation LA died due to Kidney Disease at home on 21.08.2020.
2. During our investigation we found LA was Diabetic Patient from past 10 years and was taking treatment at DMC Hospital, Ludhiana. LA did not disclose that he was Diabetes Patient (10 years) prior to this insurance policy.
3. During our investigation we visited DMC Hospital Ludhiana and procured LA’s past illness medical records and attached to this investigation report.
4. As per our investigation in vicinity check neighbors confirmed LA was suffering from Sugar problem from many years.
5. As per our investigation LA’s cremation was done in Ludhiana.
6. As per our investigation we also verified the ID & Address Proof of the Insured & the Nominee, and these al docs are very genuine.
The investigator further made the following remarks:
“Remarks: This High Value Insurance Policy was given to a Chronic Diabetic Person who had DM-2 from last 10 years and had CKD from last about 3 Years also, so pls do the needful.”
9. After receipt of the investigation report Ex. R1, OP2 repudiated the claim vide repudiation letter dated 10.11.2021 Ex. C6 = Ex. R11, which reads as under:-
“We refer to the claim under the given policy on the life of Late Mr. Suman Kumar.
The given policy was issued based on the application of Late Mr. Suman Kumar to HDFC Life Insurance Co. Ltd. (herein after referred to as “The Company”) for purchase of the given plan for a sum assured of INR 1638210/- towards death benefits.
This case was accepted at standard rates based on the information provided in the Member Information Form and the policy was issued on 31/05/2018.
However, our investigations have established that the Life Assured was suffering from uncontrolled DM with Diabetic Triopathy, CKD Stage 3, HTN, Cholelithiasis, Scabies, Hypothyroidism report prior to insurance policy.
Had this information been provided to the Company at the time of applying for the insurance policy, we would have called for further medical tests/questionnaires basis which the decision to offer insurance cover would have been taken.
As this vital information was not provided to us at the time of applying for the policy, we regret our inability to accept your claim under the given policy.”
10. Now the point of determination arises whether OP2 were justified in repudiating the claim or not.
11. Vide the Member Enrolment Form Ex. R9, the insured was asked to furnish the details regarding his health, to which the insured answered as ‘NO’. The relevant particulars of column No.1 and 2 of Ex. R9 are reproduced as under:-
