Order by:
Sh.Mohinder Singh Brar, Member
1. The complainant has filed the instant complaint under section 35 of the Consumer Protection Act, 2019 stating that father of the complainant Gurmeet Singh s/o Pal Singh resident of Kaunke Kalan, District Ludhiana had taken a vehicle loan of Rs.11,10,000/- from HDFC Bank, Moga. The said loan was to be repaid in installment of Rs.35611/-. The said bank introduced a policy no.CP000058 and the said bank assured the father of complainant that the above said policy is beneficial for return the above said loan and can help in future if any mis-happening occurred and in order to secure the loan, the said bank has given a insurance policy to the father of complainant stating that in case the father of complainant had died then the loan liability insurance automatically bear by the company under the insurance policy and LRs can claim the said amount in future and an amount of Rs.46367/- has been paid against the said insurance by the father of complainant. The policy was issued under product name HDFC Group Credit Protect Plus insurance. Unfortunately, Gurmeet Singh expired on 22.3.2021 and complainant informed the opposite party regarding said death and requested the opposite party to pay the benefits due under the policy no.CP000058. Alleged that complainant has completed all the formalities and went to the office of Opposite Parties several times, but to no effect. Alleged that the complainant is nominee of Gurmeet Singh under the said policy and he is entitled to get the benefits of the said policy. Submitted that similar complaint was filed, but the same was withdrawn due to technical defect with liberty to file a fresh one. Due to such illegal and unwarranted acts of the Opposite Parties, the complainant has suffered huge mental tension and agony. Hence, this complaint. Vide instant complaint, the complainant has sought the following reliefs:-
a) Opposite Parties may be directed to pay Rs.11,10,000/- under the policy CP000058 with regard to vehicle no.PB-29-M-9366 alongwith interest @ 12% per annum from the date of claim till its realization.
b) To pay an amount of Rs.50,000/- as compensation on account of mental tension and harassment.
c) To pay an amount of Rs.5,000/- as litigation expenses.
d) And any other relief which this Commission may deem fit and proper be granted to the complainant in the interest of justice and equity.
2. Opposite Parties No.1 & 2 appeared through counsel and contested the complaint by filing written reply taking preliminary objections therein inter alia that the contents of the complaint are false, frivolous and vexatious in nature, as such the complaint is neither tenable in law nor on facts; the complainant had suppressed several material facts from this Commission and has not approached this Commission with clean hands; the Jurisdiction of the case does not falls under learned Commission. Averred that one Gurmeet Singh (now deceased) son of Pal Singh (i.e. father of the complainant), Resident of Village Kaunke Kalan, District Ludhiana had taken a used commercial vehicle loan of Rs. 12,21,993/- from the opposite party no.2. At the time of advancement of said loan, to secure the repayment of loan amount, in case the death of the loanee, the loanee Gurmeet Singh had taken a ‘Group Credit Protect Plus Insurance Plan’ for the sum of Rs. 11,10,000/- issued by the opposite party no.3 by paying the premium to the opposite party no.3. As per the terms and conditions of this policy, if any insurance claim would be passed under this policy in the event of the death of the loanee, in that case, the entire insurance claim amount will be paid by the Opposite Party No. 3 i.e. by the insurance company directly to the Opposite Party No. 2 to clear the outstanding loan amount due towards the deceased loanee. In the present case, till 14.11.2023, the outstanding loan amount against the deceased Gurmeet Singh son of Pal Singh is Rs.13,28,947/-. In this way, if this Commission has found that the present complaint filed by the complainant is genuine one, in that case, if any insurance claim is ordered to be payable by the Opposite Party No.3 to the complainant Kulwinder Singh, then, the answering Opposite Party No.1 & 2 are having 1st right/charge/lien on the said amount of insurance claim to square off the outstanding loan of the deceased Gurmeet Singh. Averred that the complainant i.e. the legal heir of the deceased loanee with malafide intention presented cooked up story, so as to wriggle out his liability towards the Opposite Party Nos. 1 & 2 and to grab the claim amount for which he has no legal right and title. Averred further that the complainant is not a consumer as defined under the Consumer Act; there is no deficiency of service on the part of the answering Opposite Parties; the complainant is not entitled to any relief or compensation as prayed in the instant complaint. On merits, all other allegations made in the complaint are denied and a prayer for dismissal of the complaint is made.
3. Opposite Party No.3 appeared through counsel and contested the complaint by filing written reply taking preliminary objections therein inter alia that the complaint under the reply is not maintainable and is liable to be dismissed as the complainant has attempted to misguide and mislead this Commission; earlier another complaint was filed by Simarjit Kaur (wrongly mentioned in reply as Satinder Kaur) vide CC/91/2022 on the same cause of action which was dismissed as withdrawn on 04.01.2023, therefore the second complaint on same cause of action is not maintainable; no cause of action ever arose in favour of the complainant and against the answering Opposite Party to file the present complaint and hence, the complaint under reply is an abuse of the process of law. Averred that the father of the Complainant i.e. Gurmeet Singh (herein referred as Deceased Life Assured/DLA) approached opposite party no.1 i.e. HDFC Bank for availing financial assistance for purchasing a vehicle. In pursuance to the said request, the Opposite party no.1 sanctioned a loan to the tune of Rs.12,21,993/- in favour of DLA. The DLA further wanted to secure the loan and therefore approached the answering opposite party. The husband of the complainant after careful consideration agreed to buy the insurance policy namely "HDFC Life Group Credit Protect Plus Insurance Plan" and paid Rs.46,366/- in single payment mode towards the premium. Afterwards, the answering opposite party insured the DLA under Master Policy No.CP000058 having Member No.02TWJOO commencing from 02.01.2019. The cover term was for 5 years and base sum assured in the policy was Rs.11,10,000/-. The complainant i.e. Mr. Kulwinder Singh was the nominee in the said Policy. On the basis of the information furnished in the member enrollment form, the enrollment form was processed by the answering Opposite Party and thereafter policy was issued for initial sum assured of Rs.11,10,000/- towards death benefits. Submitted that after having understood and agreed to the terms and conditions the DLA applied on his free will and consent. Averred further that in the said members enrollment form, there was a short medical questionnaire regarding the health details of the insured member in which it was stated that the DLA was not suffering from any kind of ailment. Averred further that it has been alleged by the complainant that unfortunately on 22.03.2021 the DLA i.e. Sh. Gurmeet Singh passed away, thereafter the complainant Mr. Kulwinder Singh lodged the death claim with the answering opposite party and submitted a group claim form dated 29.06.2021. However, during the processing of death claim of deceased life assured, the answering opposite party hired an investigation agency to know about the past history of the DLA. The investigation agency submitted its report and it was established that the Insurance was done of a chronic sick patient as the Deceased life assured was suffering from Diabetes since last 4-5 years i.e. prior to the policy issuance which facts the Deceased life assured with malafide intention did not disclose in the membership form. From the perusal of the medical documents, it is evident that the Deceased Life assured was a known case of Diabetes Mellitus II, which would mean that at the time of taking the policy, the deceased life assured was suffering from this disease but the same was concealed by him from the answering opposite party. In lieu of the procured medical documents, the answering opposite party repudiated the claim of the complainant vide letter dated 01.11.2021. Had this information been provided to the answering opposite party at the time of application for insurance, the answering Opposite Party would have called for further medical tests, questionnaire and based on the reports only would have decided to offer insurance cover or not. Hence, the claim has rightly been denied by the answering Opposite Party. Averred further that the following declaration was given by the Deceased Life Assured in the member enrollment form:-
"I, understand, agree and confirm that these statements and this declaration are the basis of the contract between the insurer and the policyholder. If any untrue statement are contained herein or there has been any non disclosure of any material fact, the policy to be issued by the insurer in the name of the policy holder may be treated as void as far as I am concerned…….”
Averred further that if there has been breach of one of the basic principles of the life insurance which is of “Utmost good faith”. The answering Opposite Party had no other alternative but to repudiate the claim of the complainant after taking into consideration the provisions of Section 45 of the Insurance Act, 1938. Averred that there is neither any deficiency in service nor unfair trade practice on the part of the answering Opposite Party. On merits, all other allegations made in the complaint are denied and a prayer for dismissal of the complaint is made.
4. In order to prove his case, the complainant has placed on record his affidavit Ex.C1/A alongwith copies of documents Ex.C1 to Ex.C6.
5. On the other hand, Opposite Parties No.1 & 2 have placed on record affidavit of Sh.Harpreet Nath, Manager-Legal, HDFC Bank Ltd. as Ex.OP1&2/A alongwith copies of documents Ex.OP1 & 2/1 to Ex.OP1 & 2,/4. Whereas, Opposite Party No.3 has placed on record copies of documents Ex.OP3/1 to Ex.OP3/7 and affidavit of Sh.Gurpreet Singh, Senior Manager (Legal), HDFC Life Insurance Company Limited as Ex.OP3/8.
6. We have heard the ld. counsel for both the parties and also gone through the record.
7. It is an admitted fact that father of the complainant namely Gurmeet Singh (now deceased) had obtained a vehicle loan from Opposite Parties No.1 & 2 and got secured the said loan vide insurance policy of Opposite Party No.3, vide which, the whole loan availed by Gurmeet Singh was covered in case of death and he was duly issued Member's Certificate of Insurance namely ‘HDFC Life Group Credit Protect Insurance Plan (Ex.C1). It is well proved on record that during the coverage of the above policy, the father of the complainant expired on 22.03.2021. After the death of his father, the complainant being nominee under the alleged policy, lodged the claim with Opposite Party No.3, but the Opposite Party No.3 rejected the claim of the complainant on the ground that father of the complainant was suffering from diabetes mellitus prior to issuance of the policy; whereas, the complainant has denied the factum that his father ever suffered with diabetes mellitus and alleged that Opposite Party No.3 wrongly and illegally repudiated the claim.
8. We are of the concerted view that if the insured/deceased policy holder was suffering from Diabetes Mellitus before the issuance of the policy in that case also the Opposite Party No.3 is not liable to reject the claim of the complainant, as diabetes mellitus is common life style disease and cannot be treated as preexisting disease. Reliance in this regard is placed on RP No. 4461 of 2012, Neelam Chopra Vs. Life Insurance Corporation of India & Ors., decided on 08.10.2018, (NC), wherein the Hon’ble National Commission has held as under:-
"11. From the above, it is clear that the insurance claim cannot be denied on the ground of these life style diseases that are so common. However, it does not give any right to the person insured to suppress information in respect of such diseases. The person insured may suffer consequences in terms of the reduced claims.
14. Moreover, the non-disclosure of information in respect of this life style disease of diabetes, will not totally disentitle the complainant for indemnification of the claim in the light of the judgment of Hon'ble High Court of Delhi in Hari Om Agarwal Vs. Oriental Insurance Co. Ltd., (supra)."
From the aforesaid settled law, it is clear that the common lifestyle diseases like diabetes and hypertension cannot be treated as pre-existing diseases and also there non-disclosure is not fatal to the claim lodged by the complainant, therefore, cannot be a ground of rejection of the claim. In these circumstances, the rejection of the claim in question by the Opposite Party No.3 is not genuine.
9. We have gone through the terms and conditions as mentioned in ‘Member’s Certificate of Insurance’ (Ex.C1) and the relevant Condition no.17 of the said term is mentioned as under:-
“In case of Regulated Entities, under Lender- Borrower Scheme, the Outstanding Loan amount, if any shall be payable to the Master Policyholder subject to prior authorization from the Member taken at the inception of policy, out of total Death Benefit otherwise payable to the Nominee. Any residual benefit shall be paid to the Nominee or Beneficiary, as applicable.”
From the above condition, it is clear that the outstanding loan amount, if any shall be payable to the Master Policy holder, subject to prior authorization from the Member i.e. Policy holder taken at the inception of the policy, out of the total Death Benefit otherwise payable to the Nominee. Further as per “General Insurance Document’ attached with (Ex.OP3/2), the deceased policy holder i.e. Gurmeet Singh had given authorization to HDFC Life to make payment of Outstanding Loan Balance amount to Master Policyholder i.e. HDFC Bank. The contents of said authorization duly signed by the insured are reproduced as under:-
“I do hereby declare that I have received Loan of Rs.11,10,000 from HDFC Bank Ltd. (“Master Policyholder”). Loan Account Number is 83574064. In order to secure the said loan, I have taken the above referred policy from HDFC Life Insurance Company Limited (HDFC life). In consideration of receiving the said loan, I hereby authorize HDFC Life to make payment of Outstanding Loan Balance amount to Master Policyholder by deducting from the claim proceeds payable on happening of the contingent event covered by the Group Life Insurance Scheme/Policy reference above.
In view of the above discussion, we are of the concerted view that
as per the policy condition, the Opposite Party No.3-Insurance Company has to credit the sum assured amount of the policy in the loan account of the complainant and thereafter, if any amount left remaining, the complainant being nominee is entitled for the same.
10. Sequel to the above discussion, the instant complaint is allowed in part with the following directions:-
1. Opposite Party No.3 is directed to credit the sum assured amount of Rs.11,10,000/- in the Loan Account No.83574064 of the father of complainant as on the date of death of the loanee/deceased policy holder Gurmeet Singh i.e. 22.03.2021 and thereafter work out the balance principal amount in the said vehicle loan account as on 23.03.2021. In case, after adjusting the amount of sum assured in the Loan Account of the father of complainant, if any amount is left to be paid, the complainant shall be liable to pay the same.
2. Opposite Parties No.1 & 2-HDFC Bank shall deduct entire installments so paid by father of the complainant upto date in the said Loan Account No.83574064 from April, 2021 against the balance principle alongwith applicable interest arrived at on April, 2021 after deduction of sum assured amount, as directed above and refund the balance excess amount, if any to the legal heirs of the complainant in equal shares. Opposite Parties No.1 & 2 Bank are further directed to supply fresh/latest Account Statement to the complainant in respect of Loan Account No. 83574064 in question showing the deduction of sum assured amount, as directed above, as well as balance principal amount alongwith interest arrived at in the said account as on April, 2021 and installments so paid by complainant upto date as well as refund, if any.
3. Further Opposite Party No.3 is directed to pay compository cost of Rs.10,000/-(Rupees Ten Thousand only) to be paid to the complainant on account of compensation and litigation expenses.
4. Opposite Parties No.1 to 3 are directed to comply with the order within 45 days from the date of receipt of copy of this order, failing which, the Opposite Parties No.1 to 3, jointly and severally, are further burdened with additional cost of Rs.20,000/-(Rupees Twenty Thousand only) to be paid to the complainant for non compliance of the order.
13. The pending application, if any also stands disposed of. Copies of the order be furnished to the parties free of costs. File is ordered to be consigned to the record room.
Announced on Open Commission
