HDFC Life Insuance Co.Ltd V/S Seema Rani - Consumer Court Case

Punjab

Ludhiana

CC/19/239

Seema Rani - Complainant(s)

Versus

HDFC Life Insuance Co.Ltd - Opp.Party(s)

vikrant Verma Adv.

06 Oct 2023

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, LUDHIANA.

Complaint No: 239 dated 20.05.2019. Date of decision: 06.10.2023.

Seema Rani W/o. Late Tilak Raj, House No.314-D, Dugri Road, Model Town Extension, Ludhiana. ..…Complainant

Versus

HDFC Life Insurance Company Limited, Feroze Gandhi Market, Ludhiana, Through its Manager.
HDFC Life Insurance Company Limited, 13^th Floor, Lodha Excelus, Apollo Mills Compound, N.M. Joshi Marg, Mahalaxmi, Mumbai-400011. Through its Director.
M/s.Cholamandalam Investment and Finance Company Ltd, SCO 145, G.F. Feroze Gandhi Market, Ludhiana. Through its Manager. …..Opposite parties

Complaint Under Section 12 of the Consumer Protection Act, 1986.

QUORUM:

SH. SANJEEV BATRA, PRESIDENT

SH. JASWINDER SINGH, MEMBER

MS. MONIKA BHAGAT, MEMBER

COUNSEL FOR THE PARTIES:

For complainant : Sh. Kuldip Singh, Advocate.

For OP1 and OP2 : Sh. Nitin Kapila, Advocate.

For OP3 : Complaint against OP3 not admitted vide order dated 31.05.2019.

ORDER

PER SANJEEV BATRA, PRESIDENT

1. Shorn of unnecessary details, the facts of the complaint are that Sh. Tilak Raj, husband of the complainant got home loan of Rs.15,00,000/- from opposite party No.3 and paid Rs.56,994/- towards insurance premium of HDFC Life Insurance, in which the complainant was nominee of Tilak Raj. The complainant stated that on 27.01.2019, her husband Tilak Raj was admitted in Dayanand Medical College and Hospital, Ludhiana for treatment where the doctor declared him dead. After the death of her husband the complainant lodged a claim with the insurance company, who received the claim. In their reply dated 04.04.2019, the opposite party No.1 and 2 wrote a letter to the complainant, vide which they rejected the claim with remarks “Our investigations have however established that the life assured was suffering from Ischemic Cardiomyopathy which is prior to issuance of the policy. According to the complainant, the reason for rejection of her claim does not apply in her claim. In the end, the complainant prayed for issuing direction to the opposite parties to pass the order of claim of Rs.15,00,000/- along with interest as well as compensation for mental agony and harassment besides litigation expenses.

2. The complaint against OP3 was not admitted vide order dated 31.05.2019

3. Upon notice, opposite party No.1 and 2 appeared and filed written statement and by taking preliminary objections, assailed the complaint on the ground of maintainability of the complaint; suppression of material fact; lack of jurisdiction etc. Opposite party No.1 and 2 stated that husband of the complainant Mr. Tilak Raj had got sanctioned a loan for a sum of Rs.15,00,000/- from opposite party No.3 which had obtained Group Credit Protect Plus policy bearing No.PP000053 towards death benefits and the policy was issued on the basis of proposal made to opposite party No.1 and 2, which was accepted on the basis of information provided in the proposal form and policy was issued in terms of proposal which was effective from 27.12.2017 to 26.12.2022. According to opposite party No.1 and 2, in the documents submitted by the proposer in Member Enrollment Form, which deals with the health details of life to be assured under short medical questionnaire in the member enrollment form, the proposer answered ‘No’ to the relevant questions, which are reproduced as under:-

1] Have you ever suffered of are currently suffering from:

(a) Chest Pain or heart attack or any other heart disease (b) Cancer, tumour growth or cyst of any kind (c) Stroke, Paralysis, Epilepsy, any psychiatric/mental disorder, disorder of brain/nervous system or any kind of physical disabilities (d) Asthma, tuberculosis or lung disorder (e) Disease or disorder of muscles, bones or joint, arthritis or blood disorder (anaemia) or any endocrine disorder (f) Disease of kidney, digestive system (stomach pancreas, gall bladder, intestine.

6] Are you taking any medication or has a doctor ever attended to you for any conditions, diseases of impairment not mentioned above (except for cough or cold)?

According to opposite party No.1 and 2, from investigations, it was established that the life assured was suffering from Ischemic Cardiomyopathy prior to issuance of the policy and he remained under treatment from Global heart and Super Specialty Hospital, Ludhiana and was fully aware of the said diseases. This was not disclosed in the application/proposal form. The opposite party further stated that had this information been provided to the company at the time of applying for the insurance policy, they would have called for further medical test/questionnaire based on the reports only, they would have decided to offer insurance cover. Since vital information was not provided at the time of applying for insurance policy and as such, claim of the complainant could not be accepted and the same was declined vide letter dated 04.04.2019.

On merits, opposite party No.1 and 2 reiterated the crux of averments made in the preliminary objections. The opposite party No.1 and 2 have denied that there is any deficiency of service and have 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 welcome letter, Ex. C2 is the copy of insurance policy, Ex. C3 is the copy of Registration Card of Tilak Raj with DMCH, Ludhiana, Ex. C4 is the copy of death intimation of DMC&H, Ludhiana, Ex. C5 is the copy of Transit Pass for Dead Body, Ex. C6 is the copy of Death Certificate of Tilak Raj, issued by Chief Registrar Births and Death, Punjab, Ex. C7 is the copy of Death Certificate of Tilak Raj issued by DMC and Hospital, Ludhiana, Ex. C8 is the copy of letter for rejection of death claim, Ex. C9 is the copy of Aadhar card of the complainant and closed the evidence.

5. On the other hand, the counsel for the opposite parties tendered affidavit Ex. RA of Sh. Gurpreet Singh, Deputy Manager Legal & Compliance of HDFC Life Insurance Co. Ltd., Chandigarh and submitted documents Ex. R1 is the copy of claim form, Ex. R2 is the copy of insurance certificate, Ex. R3 is the copy of letter for adjustment of insurance premium amount by Tilak Raj, Ex. R4, Ex. R21, Ex. R22 are the copies of death certificate of Tilak Raj issued by Chief Registrar Births and Death, Punjab, Ex. R5, Ex. R32 are the copies of death certificate of Tilak Raj issued by DMC and Hospital, Ludhiana, Ex. R6 is the copy of intimation of death by DMCH, Ludhiana, Ex. R7 is the copy of Registration Card of Tilak Raj with DMCH, Ludhiana, Ex. R8 is the copy of Aadhar card of Tilak Raj, Ex. R9 is the copy of Aadhar card of Seema, Ex. R10 is the copy of account statement of Seema, Ex. R11 is the copy of cancelled cheque, Ex. R12 is the copy of Investigation Report of Sakshi, Investigation and Detective Agency, Ex. R13 to Ex. R17, Ex. R33 are the copies of photographs, Ex. R18 and Ex. R19, Ex. R31 is the copy of Aadhar card of Tilak Raj, Ex. R20 is the copy of death certificate of Tilak Raj issued by Swarg Ashram, Ludhiana, Ex. R23 to Ex. R30 are the copies of treatment record/investigation reports of Tilak Raj, Ex. R34 is the copy of death claim, Ex. R35 is the copy of authority letter and closed the evidence.

Opposite party No.1 and 2 moved an application for summoning concerned official/record keeper of Dayanand Medical College & Hospital, Ludhiana along with record, Dr. Barjesh K. Badhan of Global Heart & Super Specialty Hospital, Ludhiana along with compete record, concerned official/record keeper of Delta Heart Centre Ltd., Sarabha Nagar, Ludhiana along with compete record and concerned clerk/record keeper of Shri Krishna Hospital, Model Town, Ludhiana along with record. The said application was disposed of vide order dated 21.12.2022.

Sh. Hakam Singh, Deputy Section Officer, Record Office of DMC & Hospital, Ludhiana appeared on 06.02.2023 who vide his statement produced record Ex. RW3/1 of patient Tilak Raj having MRD/token No.660254 and stated that as per record, patient Tilak Raj was brought to their hospital on 27.01.2019 as brought dead and CPR was done for 30 minutes, injection ADR was given but patient could not survive and was declared dead.

Further Sh. Navdeep Jindal, Administrator in Global Heart & Super Speciality Hospital, Ludhiana appeared on 06.02.2023 and suffered his statement to produce the record of patient Tilak Raj i.e. OPD slips. He further stated that as per record, patient Tilak Raj was suffering from Hypertension from 6 months and Ischemic Cardiomypathy as on 03.08.2014 and heart of the patient was working at 28%. The patient was visited on 12.08.2014 and at that time he was also suffering from the same disease and he was given medicine accordingly. The patient again visited on 12.02.2017 as a case of hypertension, history of palpitation and respiration and ECG shown complete heart block. He was advised urgent TPI and admission. The said witness produced the record as Ex. RW2/1 to Ex. RW2/4.

Further Sh. Jaswinder Singh, Record Keeper of Delta Heart Centre Pvt. Ltd., Sarabha Nagar, Ludhiana and by suffering statement, he produced record of patient Tilak Raj having receipt No.4009 dated 01.08.2014 and as per record, he was got examined for Eco Cardiography and he also produced receipt as Ex. R4 and its report as Ex. R7.

Witness Ms. Daljeet Kaur, MRD Incharge Shri Krishna Hospital, Model Town, Ludhiana also appeared and produced record of patient Tilak Raj bearing No.31119 dated 31.07.2014 as Ex. R26, Ex. R28 and that he was got examined in their hospital.

6. We have heard the arguments of the counsel for the parties and also gone through the complaint, affidavit and annexed documents and affidavit produced on record by both the parties.

7. In this case, a member enrollment form for obtaining the policy of insurance was submitted by Tilak Raj deceased. The proposal/member enrolment form Ex. R2 at page No.5 contained “Health Details” responded by deceased to all queries in ‘Negative’, particularly query No.1 and 6.

1] Have you ever suffered of are currently suffering from:

6] Are you taking any medication or has a doctor ever attended to you for any conditions, diseases of impairment not mentioned above (except for cough or cold)?

The deceased also submitted a declaration in this regard. On the basis of the disclosures and declaration of the deceased, opposite parties No.1 and 2 issued an insurance policy namely HDFC Life Group Credit Protect Plus Insurance Plan Ex. C2 = Ex. R2 in the name of proposer Tilak Raj for the purpose of securing home loan of Rs.15,00,000/- taken from Cholamandalam Investment and Finance Company Limited, who was the Master Policy Holder. The policy coverage was for 5 years commencing from 27.12.2017 to 26.12.2022 and paid a single premium of Rs.56,994/-. On 27.01.2019, Tilak Raj was admitted in Dayanand Medical College and Hospital, Ludhiana where he was declared brought dead vide death intimation Ex. C4 = Ex. R5, R32.

8. Complainant being wife and nominee, preferred a claim dated 05.03.2019 Ex. R1 which was investigated and processed by the opposite parties. Sakshi Investigation & Detective Agency was appointed as investigator who submitted the final report Ex. R22, operative part of which is reproduced as under:-

“Remarks:

As per our investigation, this insurance policy is done of a heart and diabetic patient, who had Ischemic-Cardiomyopathy.
As per the vicinity checks, the people told us that the insured had heart disease and all people confirmed that this LA took the treatment mainly in the Global Heart Hospital in this Ludhiana city.
We visit the house of this LA and met the Nominee Mrs. Seema and after some very long discussion we procured some pre-policy medical records of this LA and confirmed the past illness of Mr. Tilak Raj but he did not disclose his Chronic illness at the time of taking this insurance policy.
We verified the Death Certificate of this LA and found this is a genuine DC.
We also verified the ID and address proof of this LA and found these all are genuine docs.
As per our investigation we found that your bank employees/channel partners are doing the insurance policies of the critically and chronic sick patients.

Remarks: This insurance is done of a Chronic Heart Patient & Chronic Diabetic Patient and we procured the pre-policy medical records of this LA, so pls do the needful.”

9. On the basis of the investigation report, whereby concealment of pre-existing ailment of Ischemic Cardiomyopathy was detected and on the basis of the investigation report, claim of the complainant was rejected vide rejection letter dated 04.04.2019 Ex. C8 = Ex. R34. The operative part of the rejection letter reads as under:-

“The Policy was issued on the basis of an application by late Tilak Raj to HDFC Life Insurance Co. Ltd. For a sum assured of INR 12,53,788.00 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 27.12.2017.

We would like to bring to your attention, the “Member Enrolment Form” in the Member Enrollment Form, which deals with “Health Details of Life to be Assured”. In this connection, under Short Medical Questionnaire in the Member Enrollment Form (which deals with “Health Details of Life to be Assured), the following relevant question(s) was/were answered as ‘NO’:

Section B Short Medical Questionnaire:

1] Have you ever suffered of are currently suffering from:

6] Are you taking any medication or has a doctor ever attended to you for any conditions, diseases of impairment not mentioned above (except for cough or cold)?

Our investigations have however established that the Life Assured was suffering from Ischemic Cardiomyopathy which is prior to issuance of the 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. Based on the reports only, we would have decided to offer insurance cover.

Since this vital information was not provided to us at the time of applying for the policy, we are unable to accept your claim.

Also note that, if the insured member had multiple insurance covers under the same or different products; final claim decision in other claims may vary according to policy specifications and availability of supporting documents at the time of claim decision.”

10. The Insurance Regulatory and Development Authority of India (IRDAI) in its notification dated 16.10.2002 issued the Insurance Regulatory and Development Authority (Protection of Policyholders’ Interests) Regulations 2002 whereby the “Proposal Form” is defined in Regulation 2(d) as under:-

“2(d) “Proposal form” means a form to be filed in by a proposer for insurance, for furnishing all material information required by the insurer in respect of a risk, in order to enable the insurer to decide whether to accept or decline, to undertake the s\risk and in the event of acceptance of the risk, to determine the rates, terms and conditions of a cover to be granted.

Further Regulation 4, deals with proposals for insurance as under:-

Except in cases of a marine insurance cover, where current market practices do not insist on a written proposal form, in all cases, a proposal for grant of a cover, either for life business or for general business, must be evidenced by a written document. It is the duty of an insurer to furnish to the insured free of charge, within 30 days of the acceptance of a proposal, a copy of the proposal form.
Forms and documents used in the grant of cover may, depending upon the circumstances of each case, be made available in languages recognized under the Constitution of India.
In filling the form of proposal, the prospect is to be guided by the provisions of Section 45 of the Act. Any proposal form seeking information for grant of life cover may prominently state therein the requirements of Section 45 of the Act.
Where a proposal form is not used, the insurer shall record the information obtained orally or in writing, and confirm it within a period of 15 days thereof with the proposer and incorporate the information in its cover note or policy. The onus of proof shall rest with the insurer in respect of any information not so recorded, where the insurer claims that the proposer suppressed any material information or provided misleading or false information on any matter material to the grant of a cover.”

11. In a case titled as Manmohan Nanda Vs United India Assurance Co. Ltd. and others 2022(I) CPJ 20 (SC) wherein the Hon’ble Supreme Court of India has held as under:-

(i) There is a duty or obligation of disclosure by the insured regarding any material fact at the time of making the proposal. What constitutes a material fact would depend upon the nature of the insurance policy to be taken, the risk to be covered, as well as the queries that are raised in the proposal form.

(ii) What may be a material fact in a case would also depend upon the health and medical condition of the proposer.

(iii) If specific queries are made in a proposal form then it is expected that specific answers are given by the insured who is bound by the duty to disclose all material facts.

(iv) If any query or column in a proposal form is left blank then the insurance company must ask the insured to fill it up. If in spite of any column being left blank, the insurance company accepts the premium and issues a policy, it cannot at a later stage, when a claim is made under the policy, say that there was a suppression or nondisclosure of a material fact, and seek to repudiate the claim.

(v) The insurance company has the right to seek details regarding medical condition, if any, of the proposer by getting the proposer examined by one of its empanelled doctors. If, on the consideration of the medical report, the insurance company is satisfied about the medical condition of the proposer and that there is no risk of preexisting illness, and on such satisfaction it has issued the policy, it cannot thereafter, contend that there was a possible preexisting illness or sickness which has led to the claim being made by the insured and for that reason repudiate the claim.

(vi) The insurer must be able to assess the likely risks that may arise from the status of health and existing disease, if any, disclosed by the insured in the proposal form before issuing the insurance policy. Once the policy has been issued after assessing the medical condition of the insured, the insurer cannot repudiate the claim by citing an existing medical condition which was disclosed by the insured in the proposal form, which condition has led to a particular risk in respect of which the claim has been made by the insured.

(vii) In other words, a prudent insurer has to gauge the possible risk that the policy would have to cover and accordingly decide to either accept the proposal form and issue a policy or decline to do so. Such an exercise is dependant on the queries made in the proposal form and the answer to the said queries given by the proposer.

In the present case, opposite party No.1 and 2 have sought the information with regard to pre-existing disease by making 9 queries, specifically query No.1 and 6 in member enrollment form. It was the duty of the deceased to make full disclosure and no information, substance or interest was required to be concealed or omitted. It may be noticed that the deceased was admitted in Dayanand Medical College and Hospital, Ludhiana within 13 months from the inception of the policy and practically, also took treatment from different hospital i.e. Global Heart and Super Specialty Hospital, Ludhiana, Delta Heart Centre, Ltd. Sarabha Nagar, Ludhiana as well as Shri Krishan Hospital, Model Town, Ludhiana. The treatment taken by the deceased Tilak Raj was further established by opposite party No.1 and 2 by summoning the witnesses from the said hospital. In his statement, Sh. Navdeep Jindal, Administrator in Global Heart and Super Specialty Hospital, Ferozepur Road, Ludhiana proved the pre-existing ailment of Tilak Raj by stating that he was suffering from hypertension from 6 months and Ischemic Cardiomyopathy as on 03.08.2014 and his heart was working at 28% only. The said witness further proved admission of Tilak Raj on 12.08.2014 and further on 12.02.2017. Further the witness Sh. Jaswinder Singh, Record Keeper of Delta Heart Centre Pvt. Ltd., Sarabha Nagar, Ludhiana proved the receipt Ex. R4 and report Ex. R7 regarding Eco Cardiogrpahy examination of Tilak Raj on 01.08.2014. Even the witness Ms. Daljeet Kaur, MRD Incharge of Shri Krishna Hospital, Model Town, Ludhiana also proved the copy of reports Ex. R26 and Ex. R28 regarding examination of Tilak Raj in their hospital on 31.07.2014. From the statements of the above said witnesses and record proved and produced by them establishes the fact of Tilak Raj having suffering from pre-existing ailment of Ischemic Cardiomyopathy and his heart was working 28% only at the time of commencement of the policy.

12. Section 45 of the Insurance Act provides that no policy of life insurance shall after the expiry of three years from the date on which it was effected, be called in question by an insurer of the Policy, was inaccurate of false, unless the insurer shows that statement was on material to disclose and that it was fraudulently made by the Policy holder and that the policy holder knew at the time of making it that the statement was false or that it was material to disclose. The previous admission/hospitalization of the deceased from DMC Hospital, Ludhiana was a relevant and material fact which was required to be disclosed at the time of obtaining the policy in question by the insured/deceased. So there is a concealment and suppression of material facts which could have affected the decision of the opposite parties with regard to the terms and conditions of the policy. So the opposite parties have rightly repudiated the claim of the complainant.

Reference can be made to Branch Manager, Bajaj Allianz Life Insurance Company Ltd. and others Vs Dalbir Kaur in 2021 (217) AIC 50 whereby the Hon’ble Supreme Court of India has held that the contract of insurance is one of the utmost good faith and proposer who seeks to obtain policy of life insurance is duty bound to disclose all material facts bearing upon issue as to whether insurer would consider it appropriate to assume risk which is proposed. The Hon’ble Supreme Court has further held that the proposer failed to disclose vomiting of blood which had taken place barely month prior to issuance of policy of insurance and of hospitalization which had been occasioned as consequences. The assured was suffering from pre-existing ailment and judgment of NCDRC directing payment of sum insured was set aside.

Further reference can be made to Reliance life Insurance Co. Ltd. and others Vs Rekhaben Nareshbhai Rathod in 2019 (2) R.C.R. (Civil) 909 whereby the Hon’ble Supreme Court of India has held that two months prior to policy obtained from appellant insured obtained policy from another company and this fact was not disclosed by the insured. Repudiation was made within two years period from commencement of insurance cover. The proposer was aware of contents of form that he was required to fill and disclosure of material for assessment of risk which was being taken by insurer which entitled the insurer to repudiate the claim. In the light of above said facts and circumstances, the opposite parties were justified in repudiating the claim of the complainant and as such, there is no deficiency in service on the part of the opposite parties.

13. As a result of above discussion, the complaint fails and the same is hereby dismissed. However, there shall be no order as to costs. Copies of order be supplied to parties free of costs as per rules. File be indexed and consigned to record room.

14. Due to huge pendency of cases, the complaint could not be decided within statutory period.

(Monika Bhagat) (Jaswinder Singh) (Sanjeev Batra) Member Member President

Announced in Open Commission.

Dated:06.10.2023.

Gobind Ram.

Punjab

Ludhiana

CC/19/239

Seema Rani - Complainant(s)

Versus

HDFC Life Insuance Co.Ltd - Opp.Party(s)

vikrant Verma Adv.

06 Oct 2023

ORDER

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