Reserved
State Consumer Disputes Redressal Commission
U.P. Lucknow.
Complaint Case No.193 of 2016
Vikas Chandra, aged about 41 years,
S/o Sri Krishna Kumar Srivastava,
R/o H. No.110, Swapnalok Colony, Kamta,
Chinhat, Lucknow-226010 …Complainant.
Versus
1- HDFC Ergo General Insurance Company Limited,
Ratan Square, 20-A, Vidhan Sabha Marg, Lucknow
through its Manager, PIN-226001
2- Housing Development finance Corporation Limited,
Aliganj Branch, Lucknow through its Branch
Manager, PIN 226001 ...Opposite parties.
Present:-
1- Hon’ble Sri Rajendra Singh, Member.
2- Hon’ble Sri Vikas Saxena, Member.
Sri Ambrish Kaushal, Advocate for the complainant.
Sri T.J.S. Makkar, Advocate for the Opposite Parties.
Date : 6.10.2022
JUDGMENT
Per Sri Rajendra Singh, Member- This complaint has been filed by the complainant for following prayer:-
(a) That, the opposite party should be directed to pay the sum assured of Rs.22,89,905.00 to the complainant with 18% interest from 26.2.2015 till the date of payment.
(b) That, the opposite party should be directed to pay the amount deposited by complainant as instalment of home loan.
(c) That, Your Honour may further be pleased to grant any other relief which may deem fit and proper against the opposite parties.
In short, the brief facts of the complaint case are that, the complainant had purchased a house at Lucknow for
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Rs.32,00,000.00 out of which he took a loan of Rs.22,89,905.00 from the opposite party no.2. The branch manager of the opposite party no.2 on disbursement of first instalment of the loan got the signatures on various loan documents including few forms of their sister concern insurance company i.e. opposite party no.1. It was told by the Manager of opposite party no.2 that the insurance namely “Home Suraksha Plus” was for the purpose of insuring the loan amount against any happening of accident or any major illness. The complainant informed him about his hyper- tension but the branch manager of opposite party no.2 told that it was not required. A huge premium of Rs.89,903.00 was paid to get the insurance coverage for five years, for the period of 30.3.2012 to 29.3.2017 under policy no.2918200233243000002.
The complainant did not receive the policy document, so he informed the branch manager of the opposite party no.2 several times but no action was taken by the opposite parties. The complainant for the first time received the original policy bond in the first week of March, 2015 without the copy of proposal form and that too after the repudiation of claim by insurance company on dated 26.2.2015. the policy bond must accompany the copy of proposal form as per IRDA rules. The act of opposite party no.1 of not supplying the policy bond along with copy of proposal form is deficiency in service.
The complainant has gone to Kanpur on 20.3.2014 for a meeting there at 7.30 p.m. he felt severe pain in his chest. His colleagues immediately took him to Kanpur Medical College where he was admitted in L.P.S. Institute of Cardiology. Here the complaint was subjected to angiography on 21.3.2014 and
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other investigations were also done including echo. The doctors of L.P.S. institute of Cardiology of Kanpur Medical College were of opinion that complainant has suffered heart attach (Myco Cardial Infarction). The complainant was admitted till 24.3.2016 and was discharged from L.P.S. Institute of Cardiology, Kanpur Medical College on 24.3.2016.
The complainant under the policy no. 29182002332430
00002 filed a claim for sum assured but opposite party no.1 repudiated the claim vide its letter dated 26.2.2015. The opposite party no.1 had committed gross deficiency in service for not making payment of the sum assured and repudiating the claim as ‘No Claim’ without considering that the complainant was not suffering from heart ailment prior to commencement of policy and the signature of the complainant on the blank proposal form was taken before the manager of opposite party no.2, who on the information of the complainant about his suffering with hypertension told it was not a material fact under the policy of “Home Suraksha Plus”.
The complainant is entitled for sum assured of Rs.22,89,905.00 with 18% interest as compensation towards mental pain and physical agony form 20.3.2014 i.e. date of suffering of Myo Cardial Infarction (Heart Attack). The complainant is also entitled for the sum which he has deposited as instalments of the home loan after suffering Myo Cardial Infarction as the insurance company did not pay the loan as contracted between the parties, that in case of any major illness the insurance company will pay the entire loan.
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The complaint is being filed before this Hon’ble State Commission within its pecuniary and territorial jurisdiction as the value of complaint is more than Rs.20,00,000.00 and the insurance policy was purchased from Lucknow. The complaint is filed within the period of limitation as the claim was repudiated as ‘No Claim’ on 26.2.2015 which gave rise to ‘cause of action’ for filing the aforesaid complaint. Therefore, the complaint was within the limitation provided under the Consumer Protection Act, 1986.
The opposite party no.1 filed their written statement wherein it is stated that the complainant is an educated person and it is very well expected of him that he would sign any document only after reading the contents thereof.
Insurance is a contract based on mutual trust, the disclosure of pre-existing illness is the pious obligation of proposer and in the instant case, admittedly the pre-existing disease was not disclosed by the complainant. The policy documents had been sent to the insured complainant immediately upon issuance of policy. If the policy document was not received by him, the complainant should have demanded the duplicate of the same in writing from the answering opposite party but he never did so raising a reasonable presumption that the documents were very well available with him.
The discharge documents reveal that the complainant was discharged on 24.3.2014 and not on 24.3.2016 as alleged by the complainant. The claim was validly repudiated for the reason that the insured had concealed his pre-existing ailments which he was duty bound to disclose in the proposal form.
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The contents of para 6 of the complaint are vehemently denied. Long standing hypertension is an underlying cause for Myocardial Infarction. Moreover, the complainant being well educated, should have signed the documents only after properly perusing its contents and properly filling it up correctly disclosing all the relevant information and thus he cannot claim any benefit out of wrong committed by himself.
The instant policy was issued/obtained by the complainant for coverage of specified diseases/ailments and the exclusions were specifically informed to the complainant and in fact given in writing and the same are also available on the website of the answering opposite party. As per discharge certificate submitted by the complainant himself, the complainant was diagnosed to be suffering from type 2 diabetes/hypertension with IWMI and PWMI.
The complainant did not disclose that he had been suffering from hypertension and diabetes while obtaining the insurance policy even though he was required to disclose all ailments which he had been suffering from in the policy proposal form. When the claim was lodged by the complainants, the same was got verified by the answering opposite party and upon enquiries, it was revealed that the complainant had been suffering from hypertension since the last six years and it is a known fact that hypertension is the underlying cause for Myocardial Infarct.
The relevant portion of policy working are being reproduced herein after for ready reference and perusal of the Hon’ble Commission.
“The company shall not be liable to make any payment directly or indirectly arising out of the following events:
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Any pre-existing illness-Any insured event arising on account of or in connection with any pre-existing illness.”
It is abundantly clear that the complainant who was diagnosed with type 2 diabetes/hypertension with IWMI and PWMI was not covered for the said ailments having been specifically excluded from the purview of policy because of pre-existing illness/condition and thus the claim was therefore, rightly repudiated. Since the claim has been validly been repudiated, after due application of mind, through a detailed and reasoned letter of repudiation expeditiously, there is absolutely no deficiency in services rendered by the opposite party and as such the instant claim before this Hon’ble Commission is not maintainable.
The opposite party no.2 has filed its written statement wherein it is stated that the complainant took financial assistance from the answering opposite party for purchasing a house. The relief and any award of compensation is to be decided by the Hon’ble Commission, hence, the contents are denied.
The complainant has not prayed for any specific relief against the answering opposite party no.2 and on the basis of the facts and circumstances mentioned below in additional pleas, the complainant is not entitled to get any relief against the answering opposite party no.2.
The opposite party no.2 i.e. HDFC Ltd. had provided financial assistance to Mr. Vikas Chandra and Mrs. Alka Srivastava for purchase of a house bearing House no.110 built on part of Khasra no.246, Swapna Lok, Gram Kamta, Pargana & Tehsil, Lucknow, District Lucknow. The complainant contacted the answering opposite party no.2
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during his housing loan formalities and asked to finance the premium amount of the insurance policy of HDFC Ergo General Insurance also, which was Rs.89,905.00 and necessary documents were executed by the complainant in this regard. After scrutinizing the property and other documents furnished by the complainant and on the basis of documents executed a total loan of Rs.22,89,905.00 was sanctioned and disbursed in March, 2012 out of which Rs.22,00,000.000 was paid towards housing loan and Rs.89,905.00 was paid by the answering defendant towards insurance premium of the policy taken by the complainant from defendant no.1, i.e. HDFC ERGO General Insurance.
The answering opposite party no.2 has no role in issuance of the insurance policy or with respect to its claim settlement. It only provides financial assistance in the form of loan to pay the premium amount of the insurance policy taken. The complainant further took a top up loan for Rs.4,50,000.00 from the answering opposite party no.2 in February, 2014 in which the complainant did not chose to take any insurance policy.
The above fact shows that taking an insurance policy is not mandatory but is advisory in nature and the person taking the insurance policy is always advised to use his own discretion in taking the insurance policy.
We have heard ld. Counsel for the complainant Sri Ambrish Kaushal and ld. Counsel for the opposite party Sri T.J.S. Makkar. We have perused the pleading, evidence and documents available on record.
In the present case, it has been stated that the patient was suffering from type-2 DM/hypertension and he concealed
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it from the proposal form, therefore, he is not entitled for any claim. In this regard we have to see the following judicial pronouncements:
In Revision Petition no.2021/2009, L.I.C. of India vs. Smt. Chawla Devi, the Hon’ble NCDRC has said that it is not proper to conceal the plea existence disease. The case sheet of the deceased has been written by the concerned doctor disclosing that she was suffering from breathlessness and C expectoration but the revisionist could not submit any document regarding this disease and also failed to submit the affidavit of the concerned doctor.
In the case of S.B.I. Life Insurance Co. Ltd. vs. Harvindar Kaur & ors. III (2014) CPJ 552 (NC), it has been held that the doctor allegedly treated the deceased person and opined that the patient was suffering from pulmonary hypertension for the last 2 years, the appellant neither proved the discharge copy by the concerned doctor nor filed the affidavit of the concerned doctor, therefore, it cannot be relied on.
The Hon'ble National Commission in National Insurance Co. Ltd. Vs. Bipul Kunda (2005 CTJ 377 (CP) (NCDRC) ) has held that for repudiating a claim of an insured, it is for the insurer to show that a statement on a fact, which was material for the policy, had been suppressed by the insured and that statement was fraudulently made by him/her with the knowledge of the falsity of that statement.
It may be stated here that if the claim is repudiated by the insurance company on the ground that the insured had suppressed the material facts, the burden shall lie heavily on
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the insurance company and for that the law laid down by the Hon'ble Supreme Court in the case of Life Insurance Corporation of India Vs. G.M. Channabasamma (1991) 1 SCC 357; AIR 1991 SC 392)
Pre-existing disease is one for which the insured should have undergone hospitalisation or undergone long treatment or operation. Otherwise, for laymen these day to day normal problems are not to be disclosed as even otherwise medical terminology of such problems is difficult to understand and know.
It may be stated here that a person might be suffering from a disease but he may not take care to that and go to a doctor. Quite often a person, who might be having some problem with the heart may not be knowing about it and may not go to a doctor. The question always, which has to be determined, is, was the pre-existing disease to the knowledge of the insured. That knowledge could be attributed if the person takes some or the other treatment from a doctor/hospital and on point of pre-existing disease the law laid down by this Commission in the case of New India Assurance Co. Ltd. Vs. Vishwanath Manglunia ( ( 2006 ) 3 CPJ 68 )
All diseases are not fatal and in this respect the following points should be kept in mind :
(i) ‘Disease' means a serious derangement of health or chronic deep-seated disease frequently one that is ultimately fatal for which an insured must have been hospitalized or
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operated upon in the near proximity of obtaining the mediclaim policy.
(ii) Such a disease should not only be existing at the time of taking the policy but also should have existed in the near proximity. If the insured had been hospitalized or operated upon for the said diseases in the near past, say six months or a year he is supposed to disclose the said fact to rule out the failure of his claim on the ground of concealment of information as to ' pre-existing disease'.
(iii) Malaise of hypertension, diabetes, occasional pain, cold, headache, arthritis and the like in the body are normal wear and tear of modern day life which is full of tension at the place of work, in and out of the house and are controllable on day to day basis by standard medication and cannot be used as concealment of ' pre-existing disease' for repudiation of the insurance claim unless an insured in the near proximity of taking of the policy is hospitalized or operated upon for the treatment of these diseases or any other disease.
(iv) If insured had been even otherwise living normal and healthy life and attending to his duties and daily chores like any other person and is not declared as a ' diseased person' as referred above he cannot be held guilty for concealment of any disease, the medical terminology of which is even not known to an educated person unless he is hospitalized and operated upon for a particular disease in the near proximity of date of insurance policy say few days or months.
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(v) Disease that can be easily detected by subjecting the insured to basic tests like blood test, ECG, etc. the insured is not supposed to disclose such disease because of otherwise leading a normal and healthy life and cannot be branded as ' diseased person'.
(vi) Insurance company cannot take advantage of the act of ' ommission and commission' as it is under obligation to ensure before issuing mediclaim policy whether a person is fit to be insured or not. It appears that insurance company do not discharge this obligation as half of the population is suffering from such malaises and they would be left with no or very little business. Thus any attempt on the part of the insurer to repudiate the claim for such non-disclosure is not permissible, or is ' exclusion' clause' invokable.
In this case, the opposite party did not file any affidavit of the concerned doctor who treated the patient nor produced the concerned doctor in evidence. So, it is clear that in absence of such condition it cannot be relied on that the patient was suffering from so and so disease.
Hypertension is not a disease, it may or may not be there in the body.
The certificate dated 4.8.2014 has been filed in which Dr. Umeshwar Pandey has written that Sri Vikas Chandra is a known case of DN for 15 days and HTN for six years. Where is the prescription of the last six years?
It is the duty of the opposite party to file each and every prescription regarding treatment of Typ-2 DM. The said photocopy of the certificate of a doctor is of no importance.
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It has been seen that now it the insurance company are floating the insurance scheme on a printed proforma. Their agent took these proforma to the insured person and they themselves filled the form and only get the signature of the insured person.
In the present case, the complainant has very specifically stated that the did not receive the policy document and he informed the branch manager of the opposite party no.2 several times but no action was taken by the opposite parties. The complainant has further stated that for the first time he received the original policy bond in the first week of March, 2015 without the copy of proposal form and that too after repudiation of the claim by the insurance company on 26.2.2015. This is a specific allegation by the complaint against the opposite parties. The opposite party in its written statement has stated that “if the policy document was not received by him, the complainant should have demanded the duplicate of the same in writing from the answering opposite party but he never did. So arising the reasonable presumption that the documents were very well available with him.”
This statement may also be construed in other form that the complainant never received the policy documents as stated by him and he demanded it many times but the opposite party did not make it available to him. The specific allegation of the complainant should be answered with cogent and reliable evidence as such, filing the copying of the registered/speed post receipt or certificate from the postal department that the policy has been handed over to the complainant. So, the burden could not be shifted on the
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complainant and the opposite party failed to prove that the policy bond has been sent to the complainant in time.
Regarding proposal and acceptance of a contract it is necessary to enter into a contract. We have seen the policy bond which has been printed in so small letters that nobody can go through of the conditions unless specifically be mentioned to the insured person that so and so conditions are very important. Besides this the important conditions should highlighted and should be in bold letters with a warning to the insured person at first page that you must go at page number so and so and condition number so and so which may affect your claim but nothing has been done in this case. In this case, some case laws and specially we will see the British law on the very aspect.
Strange, no court has ever considered this aspect and this delay on the part of the Insurance Company !
In the present age the dimensions of the problems are increasing and this is due to standard form contracts. For example Life Insurance Corporation entered into thousands of contracts per day and so the condition is of Railway Department. For such a big corporate or business organisation, it is not possible to enter into contract/agreement with each and every person, therefore they got the contract printed containing so many conditions in very small words which is hardly to read. These conditions restrict their liability or limit their responsibilities. With such a big corporate, no one can bargain therefore the only option for them is to accept it whether good or not. Hon’ble Lord Denning held in the case of Sharn B Vs Shoe Lane Parking Ltd (1971) 1
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All ER 686 CA – “not only a single consumer from the thousands ever read such conditions . If he would have sit to read it, he would have missed his train or ship.”
From this the big corporates get the opportunity to take benefit of the weakness of general public because they can impose such conditions on them which looks like personal laws. By which they get complete exemption from the liabilities arising out of such contracts. Under such conditions the courts have to accept that the persons putting their signatures on such conditions bind themselves by these conditions. This Rule is famous in the Name of L Estrange VS Graucob Ltd , 1934 All ER 16.
One woman named ‘L’ put their signature on a contract without reading it and purchased a cigarette vending machine. By the conditions of the contract exemption was taken from all the defects of the machine. the machine proved to be complete useless. The Court came to the conclusion that the vendor did not take any pain to bring such serious conditions in the knowledge of Mrs L but in spite of this, the decision taken that if signature has been put on the contract if there is no fraud or misrepresentation, the person putting his signature becomes bound by it and it is immaterial whether he has read the document or not.
Later on the court came to think about it and came to the conclusion that reasonable notice should be given to the person to whom he is entering into a contract. this principle was inaugurated in Handerson Vs Stevenson , (18750 32 LT 709 by House of Lords. In this case a person purchased a ticket for voyage. On the top of the ticket it
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was printed “Dublin to white heaven”. There were some conditions on the backside of the ticket in which one is related to the luggage of the passengers which it that due to damage of the luggage is of the passengers the company will not be liable. Neither the plaintiff saw the back of the ticket nor there was any warning on the front of the ticket for going through the conditions which were printed on the back of the ticket. Due to careless attitude of the employees, the legacy of the plaintiff was destroyed. In spite of the exemption clause, the company was held liable. The House Of Lords said that plaintiff could not be held binding by such conditions which he had never seen, about which he had no knowledge and which are not related to the text printed on the front of the ticket. The result of this case would be otherwise if it would have been printed on the front of the ticket that kindly see the back of the ticket for conditions. Offer is sufficient when the general public came to know that there are some conditions on the ticket. This aspect was specifically discussed in Parker Vs South Eastern Railway Co. , (1877) 2 CPD 416 . In this case the plaintiff deposited his luggage in the cloakroom of a luggage railway company. He was given a ticket. On the front of the ticket it was printed that see the back of the ticket and there were some conditions out of which one was it that the company had no responsibility on the loss of any article having more than £ 10. The luggage of the plaintiff lost. The company to the defense of this condition. The plaintiff said that he realized that something is printed on the ticket but he did not read it. The court held that the
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plaintiff knew that there are some conditions so he cannot take plea that he has no knowledge of the conditions.
The offer of a general proposal should be clear and if there is/ are any conditions, should be either printed in bold letter or in red letters or there may be a warning on the front of the page that kindly go through the condition number so and so which is very important for the contract. In the printed policy of life insurance, there are so many conditions in very little font that no one goes through these conditions and also the agent working on behalf of the life insurance company never takes pain to disclose these conditions to the policyholder. It is the duty of Life Insurance Corporation that he should tell such conditions to the policyholder at the time of entering into an agreement because the proposal should be clear so that he may accept it according to his free will.
Therefore, in the present case, it is clear that the complainant’s claim has be wrongly repudiated by the opposite party and the complainant is entitled to get the relief as claim by him against the opposite party no.1. The complainant’s case is allowed accordingly.
ORDER
The complaint is allowed with cost. The opposite party no.1 is directed to pay the sum insured with interest @ 10% from 26.2.2015 till the date of actual payment and it should be complied with within 8 weeks from the date of this judgment and if not paid within 8 weeks of the date of the judgment of the case, the rate of interest will by 15% from 26.2.2015 till the date of actual payment.
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The complainant is entitled Rs.5 lakhs towards mental agony, torture, harassment and depression and this amount should be paid within 8 weeks from the date of this judgment otherwise interest @ 10% after 8 weeks from the date of judgment of this complaint till the date of actual payment will be payable.
The opposite party is directed to pay the amount deposited by the complainant as instalments towards home loan and if any amount paid, it shall be adjusted to the amount.
The stenographer is requested to upload this order on the Website of this Commission today itself.
Certified copy of this judgment be provided to the parties as per rules.
(Vikas Saxena) (Rajendra Singh)
Member Presiding Member
Judgment dated/typed signed by us and pronounced in the open court.
Consign to record.
(Vikas Saxena) (Rajendra Singh)
Member Presiding Member
Jafri, PA II
Court 2
