DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION ERNAKULAM
Dated this the 22nd day of November 2024
Filed on: 28.01.2022
PRESENT
Shri. D.B.Binu President
Shri. V.Ramachandran Member
Smt. Sreevidhia.T.N Member
C.C.No. 70 of 2022
COMPLAINANT
Biji Sebastian, aged 44 years, W/o Adv. Haridas. E, Manjali Thirukudumba Mandhiram, Mookkanoor PO, Erappu, Angamaly, Ernakulam, Pin- 683577
Vs
OPPOSITE PARTY
Asst. Vice President, HDFC ERGO General Insurance Company, 2nd Floor, Chicago Plaza, Rajaji Road, Near KSRTC, Kochi, Pin- 682 004.
(Rep. by Adv. Ramu P.S., Ground Floor, S.A. Nivas, Ponneth Temple Road, Kadavanthra, Cochin-20)
F I N A L O R D E R
D.B. Binu, President.
1) A brief statement of facts of this complaint is as stated below:
The complainant, widow and mother of two children, has filed this complaint against the opposite party, alleging deficiency in service. Her late husband, while availing of a car loan from HDFC Bank in 2018, was encouraged to purchase a Sarv Suraksha Plus insurance policy from the opposite party. The policy assured coverage of the outstanding car loan in the event of his death, along with family protection benefits. The policy, valid from 27.03.2018 to 26.03.2023, was obtained for a premium of Rs. 6761.
On 16.05.2021, the complainant’s husband experienced severe chest pain and passed away on the way to MAGJ Hospital, Mookkannur, due to a heart attack. The complainant subsequently submitted a claim under the policy, which covers critical illnesses, including heart attacks. However, the opposite party repudiated the claim, citing non-accidental death and an assumption of pre-existing conditions like diabetes, COPD, or old tuberculosis as reasons for denial. The complainant asserts that her husband had no prior history of these illnesses and that the assumptions made in the hospital certificate were unfounded since no postmortem was conducted.
The complainant further highlighted contradictions in the opposite party’s statements. While the repudiation letter cited pre-existing conditions as the cause, the version filed before the Commission admitted that the insured died of a heart attack, which falls under critical illness coverage.
The complainant has submitted supporting evidence, including the policy certificate, premium receipt, death certificate, and hospital declaration. She seeks redressal for the wrongful repudiation of her claim, asserting that the opposite party’s actions amount to a clear deficiency in service. She requests the Commission to direct the opposite party to honour the claim as per the policy terms.
2. NOTICE
The commission issued a notice to the opposite party, who subsequently filed their version.
3. Version of the Opposite Party
The opposite party denies all allegations, claims, and demands made by the complainant, as false, baseless, and without merit. The opposite party stated that the complaint is frivolous, vexatious, and legally untenable, warranting dismissal with costs.
The opposite party contends that the complainant is not a consumer as defined under Section 35 of the Consumer Protection Act, and the complaint is barred by limitation. Furthermore, the complainant has allegedly suppressed material facts, and the policy-issuing office does not fall within the jurisdiction of the Commission.
Regarding the claim, the complainant’s husband purchased a Sarv Suraksha Plus Policy (valid from 27.03.2018 to 26.03.2023) that provided coverage under specific conditions, including accidental death and permanent total disability. The opposite party asserts that the policy is a contract bound by its terms and conditions, and claims cannot traverse beyond its scope.
The opposite party states that the insured died of a heart attack at home on 16.05.2021. While a claim under the critical illness section was made, it was rejected as the death was not accidental and did not qualify as permanent total disability. The repudiation was based on the hospital's report dated 09.07.2021 and was consistent with the policy's Section 5 terms.
The complainant had previously filed a complaint before the Insurance Ombudsman (Complaint No. KOC-G-018-2122-0126) but later withdrew it.
In conclusion, the opposite party stated that the claim was justifiably repudiated and the present complaint is devoid of merit. It seeks dismissal of the complaint with costs.
4. Evidence:
The complainant submitted a proof affidavit along with six documents. The documents in the complaint are marked as Exhibits A1 to A6.
- Exhibit A1: Copy of the Insurance Policy issued by Opposite Party.
- Exhibit A2: Copy of the receipt for Rs. 1,276/- as premium issued by opposite party dated 27/03/2018.
- Exhibit A3: Brochure of Sarv Suraksha Policy issued by opposite party.
- Exhibit A4: Copy of Death Certificate
- Exhibit A5: Copy of Death Declaration Certificate
- Exhibit A6: Copy of Repudiation letter
The opposite party submitted four documents. The documents in the complaint are marked as Exhibits B1 to B4.
- Exhibit B1: Copy of Surv Suraksha Policy bearing No. 2950202159108400002 for the period from 27.03.2018 to 26.03.2023 with conditions.
- Exhibit B2: Copy of Claim Form dated 13.01.2021 submitted by the complainant to the opposite party.
- Exhibit B3: Copy of the Certificate issued from MAGJ hospital dated 09.07.2021.
- Exhibit B4: Copy of Repudiation letter dated 16.07.2021 issued by the opposite party to the complainant.
5. Points for Consideration:
i) Whether there is any deficiency in service or unfair trade practice by the opposite parties?
ii) If so, whether the complainant is entitled to any relief?
iii) Costs of the proceedings, if any?
6. ARGUMENT NOTE FILED BY THE COMPLAINANT
The complainant, a widow aged 46 years and the mother of two daughters, submits this argument against the opposite party. Her late husband availed a car loan from HDFC Bank in 2018. At that time, HDFC Bank required her husband to purchase the Sarv Suraksha Plus insurance policy (Certificate No. 2950202159108400000, Invoice No. 202159108400000, Customer ID 100338057013, Master Policy No. 29992013633863001) to secure the loan. The policy promised to cover the outstanding loan amount in the event of the insured's death and to provide family protection, including educational assistance for children. Believing these assurances, her husband purchased the policy by paying a premium of Rs. 6761. The insurance certificate and receipt for the premium, confirming critical illness coverage, including heart attacks, are submitted as Exhibit A1.
On 16.05.2021, the complainant’s husband experienced severe chest pain and was rushed to MAGJ Hospital, Mookkannur, where he passed away due to a heart attack while en route. The complainant has submitted the death certificate as Exhibit A4. Following the opposite party's instructions, a death declaration certificate was obtained from the hospital and is filed as Exhibit A5.
The complainant filed a claim under the policy, as heart attacks are explicitly included in the critical illness coverage. However, the opposite party repudiated the claim, citing non-accidental death and the hospital certificate’s mention of potential pre-existing conditions such as diabetes, COPD, or old tuberculosis. The complainant refutes these claims, stating that her husband had no treatment records or history of these illnesses. The hospital’s assumption, unsupported by postmortem evidence, is baseless and is being misused to deny the claim.
The complainant highlights contradictions in the opposite party’s arguments. While the repudiation letter cites pre-existing conditions, their version submitted to the Commission acknowledges the death was due to a heart attack, which qualifies as a critical illness under the policy. These inconsistencies undermine the credibility of the opposite party’s defence.
The complainant has also submitted the repudiation letter as Exhibit A6 and the policy terms and conditions to support her case. She requests the Commission to consider these exhibits, uphold her claim, and grant appropriate relief.
7. ARGUMENT NOTES OF THE OPPOSITE PARTY
The opposite party submits that the complaint is not maintainable in law or on facts. The insurance policy is a contract binding both parties to its terms and conditions, which must be adhered to strictly. The Sarv Suraksha Plus Policy (Policy No. 29502021591108400002, valid from 27/03/2018 to 26/03/2023) provides eight types of coverage, subject to specific terms, conditions, and limitations. A copy of the policy and its conditions is marked as Exhibit B1.
The complainant’s husband passed away on 16/05/2021 due to a heart attack at home. The complainant initially claimed under the Credit Shield section but later claimed under the Critical Illness section in the present complaint. However, the policy’s Critical Illness benefit requires the insured to survive for 30 days following a critical illness diagnosis. As the insured died the same day, this condition was not met. The submitted claim form is marked as Exhibit B2. The Sarv Suraksha Plus Policy included coverage for accidental death or permanent total disability under Section 5, which states:
“In the event of accidental death or permanent total disability of the insured during the policy period, the Company will pay the outstanding loan amount.”
Since the death was due to a heart attack and non-accidental, the claim does not qualify under this provision. The MAGJ Hospital report dated 09/07/2021, confirming the nature of death, is marked as Exhibit B3.
The claim was justifiably repudiated under Section 5 of the policy, and the repudiation letter is marked as Exhibit B4.
The complainant previously moved a complaint before the Insurance Ombudsman (Complaint No. KOC-G-018-2122-0126), which was later withdrawn.
The opposite party asserts that the complaint is devoid of merit and frivolous. The complainant has suppressed material facts and filed a claim contrary to the policy's terms. The opposite party cites the Hon'ble Supreme Court judgment in Alka Shukla v. LIC, 2019 (6) SCC 64, supporting the validity of claim repudiation based on policy terms.
In light of the above arguments, supported by Exhibit B1 to B4, the opposite party prays that the Commission dismiss the complaint with compensatory costs.
We have meticulously considered the detailed submissions of both parties, as well as thoroughly reviewed the entire record of evidence, including the argument notes.
i) Whether there is any deficiency in service or unfair trade practice by the opposite party?
The complainant alleges that the opposite party, HDFC ERGO General Insurance Company, wrongfully repudiated the insurance claim made under the Sarv Suraksha Plus Policy, which provided critical illness coverage. She claims the repudiation was based on unsupported assumptions of pre-existing conditions and contradictory reasoning. However, the opposite party denies any deficiency in service, stating that the claim was repudiated in accordance with the terms of the policy.
The key points observed by the Commission are as follows:
Policy Terms and Conditions (Exhibits A1 & B1):
The Sarv Suraksha Plus Policy is a contract between the insurer and the insured. The policy explicitly states that the Critical Illness benefit requires the insured to survive for a minimum of 30 days post-diagnosis of a covered illness. In this case, the insured passed away on the same day (16.05.2021) due to a heart attack. Thus, the survival condition was not met.
Coverage for Heart Attack:
Although heart attack is listed under the Critical Illness section, its coverage is contingent upon the insured meeting specific conditions, including survival for 30 days. This requirement was neither fulfilled nor disputed by the complainant.
Deficiency in Service:
The Commission finds no evidence of any unfair trade practice or deficiency in service by the opposite party. The claim repudiation was based on clear policy terms, as evidenced in the repudiation letter (Exhibit B4). The opposite party has demonstrated that the policy terms were communicated to the insured, and the complainant has not substantiated her allegation of misrepresentation or arbitrary denial.
ii) If so, whether the complainant is entitled to relief?
Given that the policy conditions were not satisfied, the complainant is not entitled to relief. The policy's contractual nature binds both parties, and deviation from its terms cannot be permitted.
iii) Costs of the proceedings, if any?
As the complaint lacks merit, the complainant is not entitled to costs. The opposite party has sought compensatory costs for defending a frivolous complaint. However, considering the complainant’s circumstances as a widow and mother of two children, the Commission deems it appropriate not to impose costs.
8. Legal Analysis and Supporting Case Laws
In Alka Shukla v. Life Insurance Corporation of India (2019), the Hon'ble Supreme Court dealt with the accident benefit component of a life insurance policy. The policy stipulated that the benefit would be payable if the insured's death was caused by an accident resulting in bodily injuries. However, the terms "bodily injury" and "outward, violent and visible means" were not explicitly defined in the policy.
The Hon'ble Supreme Court held that there was no evidence to establish that the insured suffered a bodily injury due to a fall from a bike or that this led to a heart attack. Furthermore, the court noted the absence of proof that the accident was caused by violent, outward, and visible means. Consequently, the appeal was dismissed, upholding the judgment of the Hon'ble National Consumer Disputes Redressal Commission (NCDRC).
This case underscores the necessity of clear evidence linking the insured’s death to the specific terms outlined in an insurance policy and reinforces the principle that courts must adhere strictly to contractual terms in determining liability.
The Hon'ble Supreme Court, in United India Insurance Co. Ltd. v. M/S Harchand Rai Chandan Lal (2004), reaffirmed the principle that insurance policies are contractual agreements and must be interpreted strictly in accordance with their terms. The Court held that the insured cannot claim anything more than what is covered under the policy and that deviations from the expressly stated terms are impermissible.
Similarly, in General Assurance Society Ltd. v. Chandumull Jain and Anr. (1966) 3 SCR 500, the Constitution Bench of the Hon'ble Supreme Court emphasized the contractual nature of insurance policies. It observed:
"In interpreting documents relating to a contract of insurance, the duty of the court is to interpret the words in which the contract is expressed by the parties, because it is not for the court to make a new contract, however reasonable, if the parties have not made it themselves."
These judgments reinforce the settled legal position that courts are bound to interpret insurance policies strictly based on their terms and conditions. The role of the court is to interpret the contract as it stands, without rewriting or modifying its provisions. In the present case, the repudiation of the insurance claim by the opposite party is found to be justified as it strictly adheres to the terms of the Sarv Suraksha Plus Policy. The complainant has failed to meet the necessary conditions specified under the policy, and as such, no relief can be granted.
9. Liability of the Opposite Party
The opposite party has demonstrated that it acted in accordance with the terms of the policy and that the repudiation of the claim was neither arbitrary nor unjustified. Consequently, no liability can be affixed to the opposite party.
10. Conclusion
Based on the analysis, evidence, and legal precedents, the Commission concludes that there is no deficiency in service or unfair trade practice by the opposite party. The complaint is dismissed as devoid of merit.
Order
The complaint is dismissed. No order as to costs.
Pronounced in the Open Commission on this the 22nd day of November 2024.
Sd/-
D.B.Binu, President
Sd/-
V. Ramachandran, Member
Sd/-
Sreevidhia.T.N, Member
Forwarded/By Order
Assistant Registrar
APPENDIX
Complainant’s Evidence
- Exhibit A1: Copy of the Insurance Policy issued by Opposite Party.
- Exhibit A2: Copy of the receipt for Rs. 1,276/- as premium issued by opposite party dated 27/03/2018.
- Exhibit A3: Brochure of Sarv Suraksha Policy issued by opposite party.
- Exhibit A4: Copy of Death Certificate
- Exhibit A5: Copy of Death Declaration Certificate
- Exhibit A6: Copy of Repudiation letter
Opposite Parties’ Evidence
- Exhibit B1: Copy of Surv Suraksha Policy bearing No. 2950202159108400002 for the period from 27.03.2018 to 26.03.2023 with conditions.
- Exhibit B2: Copy of Claim Form dated 13.01.2021 submitted by the complainant to the opposite party.
- Exhibit B3: Copy of the Certificate issued from MAGJ hospital dated 09.07.2021.
- Exhibit B4: Copy of Repudiation letter dated 16.07.2021 issued by the opposite party to the complainant.
Date of Despatch
By Hand:
By post:
AKR/
Order in CC No. 70/2022
Dated : 22/11/2024
