PER:

Charanjit Singh, President

1        The complainants have filed the present complaint by invoking the provisions of Consumer Protection Act under Section 35 and 38 against the opposite party on the allegations that the complainants are the legal heirs of Gurdev Singh and insurance cover was taken by the deceased  husband of complainant No. 1 and father of the complainants No. 2, 3. From opposite party for the sum assured of Rs. 5,00,000/- and accrued Bonus thereto by paying the premium of Rs. 6,761/- and having assigned policy Sarv Suraksha covering risk period 28.9.2018 till 27.7.2023. The complainant No. 3 is pursuing her complaint through complainant No.2  by duly authorizing him. The deceased husband / father of the complainants  unfortunately expired on 24.7.2020 with the stopping of Heart beat. The opposite party was also informed of the said and fortunate demise of husband/ father of the complainants and all necessary formalities were completed with the opposite party. The opposite party instead of making the said payment till the filing of the present complaint has not made any heed to decide the said genuine claim within the statutory period, its almost seven months till the filing of the present complaint, the opposite party has not decided much less paid the genuine claim of the complainant insptie of the several futile visits and calls to the opposite party. No policy conditions were ever conveyed to the complainant and only cover note was issued to the complainant, moreover, the policy was in regular payment mode and has been issued by virtue of car loan granted by the HDFC Bank LTD. and the cover for the loss of life of the insured is Rs. 5 Lacs. The said non settlement of the genuine claim by the opposite party is against the principle of law and against the principles of natural justice. The complainant has prayed that the following reliefs:-

1. The opposite party be directed to pay the amount of Rs. 5,00,000/- alongwith accrued bonus if any, alongwith interest from 24.7.2020 till realization.
2. The opposite party be directed to pay the compensation of Rs. 5  Lac to the complainant.
3. The opposite party be directed to pay the adequate cost of the litigation.

Alongwith the complaint, the complainant has placed on record affidavit of Jasminder Singh Ex. C-1, copy of the authority letter Ex. C-2, Cover note Ex C-3.

2        Notice of this complaint was sent to the opposite party and opposite party appeared through counsel and filed written version and pleaded that the complainants have concealed the true and material facts from the knowledge of this Commission, therefore, they are not entitled for any claim. The intimation of alleged loss/ death of insured was given to the opposite party on 2.2.2021 which is duly proved from claim form dated 2.2.2021 and the complainants with an ulterior motive have not given the date of intimation in the complaint intentionally, which is given after a gap of seven months, whereas the intimation of loss was required to be given to the opposite party immediately or in case of any event within 14 days, after the loss. Thereafter, after receiving the claim intimation on 2.2.2021 it was observed that as per the claim form the insured suffered a Heart attack on 24.7.2020 and unfortunately expired on the same day. As per terms and conditions of the policy the claim for critical illness does not meet the requirement for its eligibility and same was accordingly declined and closed as ‘No Claim’ and intimation in this regard was given to the complainants vide email dated 12.2.2021. Mr. Gurdev Singh was insured for the period 28.9.2018 to 27.7.2023 vide policy No. 2950 2024 5200 001 under the ‘Sarv Suraksha’ Policy by the opposite party for benefits as detailed in coverage details of the policy subject  to conditions and exclusions of the policy wordings. The benefits under the policy are governed by the terms and conditions of the policy and the liability of the opposite party is limited to the insured perils occurring within the policy period subject to conditions and exceptions as mentioned in the terms and condition of the policy. As alleged in the complaint, the insured unfortunately expired on 24.7.2020 with the stopping of heart. A claim was lodged with the respondent on 2.2.2021 i.e. after a delay of almost 6 months. The claim was lodged seeking benefits under Critical illness, credit  Shield and Personal Accident sections of the policy alleging that the insured suffered from Acute Myocardial Infarction. As per the terms and conditions of the policy, any event which has given rise to the claim has to be intimated to the opposite party immediately or in case of any event within 14 days. Relevant condition is mentioned herein below:-

General Condition applicable to all covers

3        Duties and obligations after occurrence of an insured Event

It is a condition precedent to Company’s liability under this policy that, upon the happening of any event giving rise to or likely to give rise to a claim under this policy:

1. The insured shall immediately and in any event within 14 days give written notice to the same to the address shown in the Schedule for this purpose, and in case of notification of an event likely to give rise to a claim to specify the grounds for such belief, and”

That despite an inordinate delay in lodging of claim without any justification, the respondent lodged the claim of complainant and decided to process the claim on merits.  

Claim under Critical Illness: that as per the claim Form, the insured suffered a Heart Attack on 24.7.2020 and expired on the same day. That as per the terms and conditions of the policy, for any claim to be admissible under Critical illness, the insured person first has to be diagnosed with a Critical Illness, the insured person first has to be diagnosed with a Critical illness as mentioned in the policy and further has to survive for a period of 30 days from the date of such Diagnosis. Relevant condition is reproduced as Under:-

          Section 1 Critical Illness

If the insured person named in the schedule is diagnosed as suffering from a Critical Illness which first occurs or manifests itself during the policy Period, and the insured person survives for a minimum 30 days from the date of diagnosis, the Company shall pay the critical illness benefit as shown in the Schedule.”

That as per the terms and conditions of the policy the claim “Critical Illness” is defined in the following manner:

“Critical Illness” means an illness, sickness or disease or a corrective measure as specified in Section 1 of this Policy.” 

The list of Illnesses categorized as Critical illness is taken from the Guidelines on Standardization in Health Insurance. The definitions used to define these Critical Illnesses have been duly provided by the Guidelines on Standardization in Health Insurance issued by IRDAI. Accordingly, the same illnesses have been incorporated as Critical Illness by the respondent as well. The liability of the respondent would arise only if the insured is diagnosed with any of the illnesses mentioned in the terms and conditions of policy. As per the policy terms and conditions, only the following diseases are covered under Critical Illnesses section of the policy:

1. First Heart Attack- of Specified Severity
2. Open Chest CABG
3. Stroke resulting in Permanent symptoms
4. Cancer of specified severity
5. Kidney Failure Requiring Regular Dialysis
6. Major Organ/ Bone Marrow Transplant
7. Multiple Sclerosis with persistent symptoms
8. Surgery of Aorta
9. Primary Pulmonary Arterial Hypertension
10. Permanent Paralysis of Limbs.

Any claim arising out of the aforesaid ailment shall be payable subject to terms and conditions of the policy. In the present case the insured has failed to submit any document which confirms the diagnosis of any Critical Illness.

Without prejudice to the above submission, it is submitted that the insured allegedly suffered a Heart Attack on 24.7.2020 and unfortunately expired on the same. As per the terms and conditions the insured has to survive for a period of 30 days after diagnosis. In present case both the conditions for a claim to be admissible under Critical Illness i.e. diagnosis of Critical Illness and subsequent surviving for a period of 30 days were not fulfilled and so the claim was repudiated vide e-mail dated 12.2.202. As such, the claim of complainants is not maintainable and the present complaint liable to be dismissed on this short ground.

Claim under Accidental Death: without prejudice to the above submissions, it is submitted that a claim to be admissible under Accidental Death Category, there should be an Accidental Bodily Injury which has caused the death of the insured within 12 months of the Accidental Bodily Injury. Relevant Condition is reproduced herein under:-

“Section 2. Personal Accident

Coverage parts

2.1 Coverage part A : Death

2.1.1 The company will pay the sum insured in the event of Accidental Bodily injury causing the Insured’s death within 12 months of the Accidental Bodily Injury being sustained, where after this policy shall expire.”

That the terms “ Accident or Accidental” and “Bodily Injury” is defined in the following manner:

“Accident or Accidental” means a sudden, unforeseen and involuntary event caused by external, visible and violent means.

“Bodily Injury” means physically bodily harm or injury, but does not include any mental sickness, disease or illness.

That in the present case is an admitted fact that there was no accidental bodily injury so claim under Accidental Death is not admissible.

7 claim under Credit Shield Insurance: Without prejudice to the above submissions, it is submitted that as per the terms and conditions of the policy, under Credit Shield insurance, the respondent is liable to pay the balance outstanding loan amount p to the maximum sum insured in the event of Accidental Death or Permanent Total Disability. The relevant condition is quoted herein below for your reference:

Section 5 Credit Shield Insurance Policy

Coverage

Credit Shield

In the event of Accidental Death or Permanent total Disability of the Insured Person during the Policy Period, the Company will make payment under this Policy as detailed below:-

The company will pay the balance outstanding loan amount to the legal heirs of the insured or the named insured subject to maximum Sum Insured specified in the Schedule.

The outstanding loan amount would not include any arrears of the borrower due to any reasons whatsoever. The claim to be settled only in respect of the death of first named borrower and not in respect of others, which may happening if loan is taken, jointly.

That as per the terms and conditions of the policy the term Accident is defined in the following manner.

“Accident or Accidental” mans a sudden, unforeseen and involuntary event caused by external, visible and violent means.

That since the cause of death in the present case is not accidental in nature, claim of the complainant does not meet the terms and conditions of the policy and the claim under Credit Shield is not admissible. Both the parties are bound with the terms and conditions of the policy which are duly supplied to the complainant and no claim can be passed beyond the terms and conditions of the policy. The present complaint has been filed without any cause of action against the opposite party. The complainants are estopped by their act and conduct from filing the present complaint. The complainants have no locus standi to file the present complaint. The complainants are not the legal heirs of the deceased and no document has been provided to prove this fact and prayed for dismissal of the complaint. Alongwith the written version, the opposite party has placed on record affidavit of Shaweta Pokhryal Manager Claims Legal Ex. OP1, Self attested copy of power of attorney / authority letter Ex. OP2, Self attested copy of Policy Ex. OP3, Self attested copy of terms and conditions Ex. OP4, Self attested copy of repudiation email dated 12.2.2021 Ex. OP5, elf attested copy of claim form Ex. OP6.

3        We have heard the Ld. counsels for the parties and have gone through the record.

4        In the present case it is not disputed that Gurdev Singh predecessor in interest of the complainants was insured with the opposite parties. The opposite party has taken the objection in the written version that the intimation of alleged loss/ death of insured was given to the opposite party on 2.2.2021 which is duly proved from claim form dated 2.2.2021 and the complainants with an ulterior motive have not given the date of intimation in the complaint intentionally, which is given after a gap of seven months, whereas the intimation of loss was required to be given to the opposite party immediately or in case of any event within 14 days, after the loss. This objection of the opposite parties has no value. As held by the Hon’ble Supreme Court of India in the matter of Om Prakash vs. Reliance General Insurance and Anr. As reported in IV (2017) CPJ 10 (SC) the delay in intimation of the event to the insurer cannot be the only ground for repudiation. The relevant extract of the judgment in support of this argument is as under:

“11. It is common knowledge that a person who lost his vehicle may not straightaway go to the Insurance Company to claim compensation. At first, he will make efforts to trace the vehicle. It is true that the owner has to intimate the insurer immediately after the theft of the vehicle. However, this condition should not bar settlement of genuine claims particularly when the delay in intimation or submission of documents is due to unavoidable circumstances. The decision of the insurer to reject the claim has to be based on valid grounds. Rejection of the claims on purely technical grounds in a mechanical manner will result on loss of confidence of policy holders in the insurance industry. If the reason for delay in making a claim is satisfactorily explained, such a claim cannot be rejected on the ground of delay. It is also necessary to state here that it would not be fair and reasonable to reject genuine claims which had already been verified and found to be correct by the investigator. The condition regarding the delay shall not be a shelter to repudiate the insurance claims which have been otherwise proved to be genuine. It needs no emphasis that the Consumer Protection Act aims at providing better protection of the interest of consumers. It is a beneficial legislation that deserves liberal construction. This laudable object should not be forgotten while considering the explanation for the delay.

12. In the instant case, the appellant has given cogent reasons for the delay of 8 days in informing the respondent about the incident. The investigator had verified the theft to be genuine and the payment of Rs. 7,85,000 towards the claim was approved by the Corporate Claims, which, in our opinion is just and proper. The National Commission, therefore is not justified in rejecting the claim of the appellant without considering the explanation for the delay. We are also of the view that the claimant is entitled for a sum of Rs. 50,000/- towards compensation.

The Hon’ble NCDRC have also taken similar view in the following two matters:

a. National Insurance Company Ltd. versus B Venkarwany (RP 2852/2013) decided on 06.12.2014;

b. National Insurance Company Co. Ltd. versus Kulwant Singh reported in IV [2014] CPJ 62 (NC).” 21. H

5        The opposite party has repudiated the claim of the complainant vide repudiation letter dated 12.2.2021 Ex. OP-5 which is reproduced as follows:-

“We would like to draw your attention. Your claim has been declined due to below mentioned reason which is the basis for disallowing the claim, an extract of which is mentioned below for your ready reference:-

As per the submitted documents, the insured suffered Acute Myocardial Infarction on 24.7.2020 and expired on the same day. As per the policy terms and conditions for Critical Illness to be admissible, the Insured person has to survive for a minimum period of 30 days from the time of diagnosis of Critical illness. As the said condition is not fulfilled in this case, this claim is being repudiated (Kindly refer Section1: Critical illness which states “If the insured Person named in the schedule is diagnosed as suffering from a Critical illness which first occurs or manifests itself during the Policy Period, and the Insured survives for a minimum of 30 days from the date of diagnosis, the Company shall pay the Critical illness Benefit”

The opposite party has repudiated the claim of the complainant that as per the policy terms and conditions for Critical Illness to be admissible, the Insured person has to survive for a minimum period of 30 days from the time of diagnosis of Critical illness. As the said condition is not fulfilled in this case, this claim is repudiated. On the other hand, the case of the complainant is that the opposite party has not supplied the terms and conditions of the policy to the complainant. The opposite party has not placed on record any postal receipt which shows that any terms and conditions have been supplied to the complainant at the time of insurance. It is further contended by Ld. counsel for the complainants that the opposite party has not explained the terms and conditions of the policy in question to the complainant and same are not supplied or explained to complainants or their predecessor at the time of inception of insurance policy. He placed reliance on citation 2001(1)CPR 93 (Supreme Court) 242 titled as M/s Modern Insulators Ltd Vs The Oriental Insurance Company Ltd, wherein Hon’ble Apex Court held that clauses which are not explained to complainant are not binding upon the insured and are required to be ignored. Furthermore, It is usual with the insurance company to show all types of green pastures to the customer at the time of selling insurance policies, and when it comes to payment of the insurance claim, they invent all sort of excuses to deny the claim. In the facts of this case, ratio of the decision of Hon’ble Apex Court in case of DharmendraGoel Vs. Oriental Insurance Co. Ltd., III (2008) CPJ 63 (SC) is fully attracted, wherein it was held that, Insurance Company being in a dominant position, often acts in an unreasonable manner and after having accepted the value of a particular insured goods, disowns that very figure on one pretext or the other, when they are called upon to pay compensation.  This ‘take it or leave it’, attitude is clearly unwarranted not only as being bad in law, but ethically indefensible.  It is generally seen that the insurance companies are only interested in earning the premiums and find ways and means to decline claims. In similar set of facts the Hon’ble Punjab & Haryana High Court in case titled as New India Assurance Company Limited Vs. Smt.UshaYadav& Others 2008(3) RCR (Civil) Page 111 went on to hold as under:-

“It seams that the insurance companies are only interested in earning the premiums and find ways and means to decline claims. All conditions which generally are hidden, need to be simplified so that these are easily understood by a person at the time of buying any policy.        The Insurance Companies in such cases rely upon clauses of the agreement, which a person is generally made to sign on dotted lines at the time of obtaining policy. Insurance Company also directed to pay costs of Rs.5000/- for luxury litigation, being rich.

          The opposite party has failed to prove that the terms and conditions were ever supplied to the complainant. The opposite party has not placed on record any document which show that the terms and conditions have been supplied and explained to the complainants or their predecessor. The terms and conditions which are not communicated to the complainants are not binding upon the complainant.  The opposite party has repudiated the genuine claim of the complainants as such, it amounts to deficiency in service and unfair trade practice on the part of the opposite party.

6        In view of the above discussion, the present complaint is allowed and the opposite party is directed to make insurance claim to the complainants in equal shares as follows:-

          (i)                Sukhwinder Kaur          34%

          (ii)               Jasminder Singh            33%

          (iii)              Manbir kaur                   33% 

Complainant is also entitled to Rs.20,000/-(Rs. Twenty Thousand only) as compensation on account of harassment and mental agony and Rs. 10,000/-  (Rs Ten Thousand only) as litigation expenses from the opposite party . Opposite Party is directed to comply with the order within one month from the date of receipt of copy of the order, failing which the complainants are entitled to interest @ 9% per annum, on the awarded amount, from the date of complaint till its realisation.  Copy of order be supplied to the parties free of costs as per rules. File be consigned to record room. Complaint could not be decided within prescribed period due to heavy pendency and Covid-19.

Announced in Open Commission

27.01.2022