Haryana

Ambala

CC/263/2020

Ashok Kumar - Complainant(s)

Versus

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

L.R. Saini

07 Feb 2024

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, AMBALA.

Complaint case no.	:	263 of 2020
Date of Institution	:	05.11.2020
Date of decision	:	07.02.2024

 

Ashok Kumar Chhabra, aged 62 years, son of Shri Sona Ram R/o H.No.569, Laha Patti, village Saha, Sub Tehsil Saha District Ambala.

          ……. Complainant.

Versus

HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited), Regd. Office:11^th Floor, Lodha Excelus, Apollo Mills Compound, N.M. Joshi Road, Mahalaxmi, Mumbai-400011 through its Managing Director/Authorized Signatory.

….…. Opposite party

Before:        Smt. Neena Sandhu, President.

                      Smt. Ruby Sharma, Member,

          Shri Vinod Kumar Sharma, Member.           

 

Present:       Shri L.R. Saini, Advocate, counsel for the complainant.

                   Shri Puneet Sirpaul, Advocate, counsel for the OP.

         

Order:        Smt. Neena Sandhu, President.

                   Complainant has filed this complaint under Section 35 of the Consumer Protection Act, 2019 (hereinafter referred to as ‘the Act’) against the Opposite Party (hereinafter referred to as ‘OP’) praying for issuance of following directions to it:-

1. To settle the claim of the complainant which comes to Rs. 3 lacs.
2. To pay Rs.1 lac as compensation, on account of harassment, and mental tension, financial loss etc.
3. To pay Rs. 22,000/- as litigation expenses.   

Or

Grant any other relief which this Hon’ble Commission may deem fit.

 

2.             Brief facts of the case are that  the wife of the complainant namely Manju had purchased a policy No.20713846 named HDFC Life Sampoorn Samridhi Plus on 12.09.2018 on making payment of premium of Rs.30676/-. Due date to pay the next premium was 12.09.2019, which could not be paid by the wife of the complainant due to COVID-19. In the month of April 2020, the OP requested the wife of the complainant to deposit the pending premium in order to regularize the policy in question, which was paid by her on 27.04.2020. On 30.5.2020, the wife of the complainant suffered a heart attack and died in Village Saha, Distt. Ambala. After the death of wife of the complainant, the complainant applied for the claim regarding the said policy/plan issued by the OP  to the wife of the complainant, but the OP without paying the full amount of the policy/ plan transferred only Rs.30,676/- on 20.06.2020 i.e. installment amount received by the OP.  Thereafter the complainant also requested to the OP to give full benefit of the said policy/ plan in his favour, as the wife of the complainant has died due to heart attack, but the OP did not pay any heed to the genuine request of the complainant and also issued a letter dated 19.06.2020 mentioning therein that the policy in question was in lapsed condition due to non payment of premium.  Whereas, on the other hand, the premium due already stood received by the OP on 27.04.2020.  The OP in order to save itself from the liability of the full claim of the policy of wife of the complainant, intentionally and deliberately refunded the premium amount only to the complainant, which amounts to deficiency in providing service. The complainant got served a legal notice dated 11.09.2020 upon the OP to settle the claim of the complainant, but nothing was done by it. Hence this complaint.
3.           Upon notice, OP appeared and filed written version and raised preliminary objections to the effect that the complaint filed by the complainant is not maintainable; the complainant is not a consumer; the complainant has suppressed material facts from this Commission etc. On merits, it has been stated that he policy in question stood lapsed since long and suddenly thereafter the DLA deposited the premium due on 27.04.2020 for revival of the policy in question. Under those circumstances, when the OP smelled something fishy, then thorough investigation was conducted and it came to the light of the OP that the DLA had also obtained one insurance policy bearing No. 23306827, from PNB Met Life, the DLA died on 30.05.2020, the complainant submitted death claim form 23.07.2020, which stood rejected by PNB Met Life vide letter dated 19.08.2020, Annexure OP-4 on the basis of concealment of preexisting disease of cancer. Thereafter, the OP procured some medical treatment record of Capital Super Specialty Hospital, Civil Lines, Jagadhri, District Yamuna Nagar, Annexure OP-5 which proved that the DLA was admitted in the Hospital vide CR No. 1530/04/2020 dated 18.04.2020 and was got discharged on 13.05.2020. Thereafter DLA was again admitted on 16.05.2020; 22.05.2020 and was discharged on 30.05.2020 i.e. the date when she died. The DLA has filled personal statement of health for revival of the policy in question and sent it to the OP on 30.05.2020, Annexure OP-6 i.e. on the same day when she was discharged from the hospital. In the said personal statement, Annexure OP-6, the DLA has answered ‘NO’ to the question as to whether she is suffering for any cancer or tumour etc. It has been stated that when the complainant got to know that the DLA was at deathbed and she did not have much time, then he immediately sent the premium amount to the OP for revival of the policy in question.  The daughter of the DLA i.e. Ms. Minni Chhabra who was also an Insurance Agent with the OP and consultant in the policy in question, submitted the Health Revival form on 30.05.2020 through E-mail to the OP. Since the daughter of the DLA i.e. Ms. Minni Chhabra was a consultant in this policy therefore she was fully aware that before reviving the policy, submission of a COVID 19 Questionnaire was mandatory. The complainant alongwith the DLA and Minni Chhabra played a fraud upon the OP by concealing the material facts from the OP. The OP reverted at the E-mail of Ms. Minni Chabbra to submit the COVID-19 Questionnaire so that the OP can process further. In the meantime, the OP checked the veracity of health form for the revival of the policy submitted on 30.05.2020. However, the OP never received the COVID-19 Questionnaire from the complainant or his daughter besides this the DLA in connivance with the complainant deliberately concealed her pre-existing disease of cancer. After the death of the DLA on 30.05.2020, the complainant submitted the death claim form on 17.06.2020. Since neither the DLA nor the complainant submitted the complete documents for the revival of policy and there was an active concealment of pre-existing disease by the DLA therefore the OP refunded the premium amount of Rs.30,767/- in the account of complainant on 19.06.2020. The DLA made a false statement in the Revival policy form, whereby she did not disclose the past history of herself of Cancer and of Insurance Policy taken from PNB Met Life. Thus, the DLA, complainant and their daughter Ms. Minni Chhabra played a fraud upon the OP by misleading on wrong facts. The DLA or the complainant never submitted the COVID- 19 Questionnaire with the OP and the DLA as well as the complainant with malafide intention concealed the pre- existing disease of the DLA therefore with no other option left, the OP chose not to revive the policy and refunded the premium amount in the account of the complainant. Rest of the averments of the complainant were denied by the OP and prayed for dismissal of the present complaint with heavy costs.
4.           Learned counsel for the complainant tendered affidavit of the complainant as Annexure CW1/A alongwith documents as Annexure C-1 to C-12 and closed the evidence on behalf of the complainant. Learned counsel for the OP tendered affidavit of Sh.Arpit Higgins, Senior Manager Legal, HDFC Life Insurance Company Limited, First & Second Floor, SCO No.149-151, Sector 43-B, Chandigarh as Annexure OPA alongwith documents as Annexure OP-1 to OP-11 and closed evidence on behalf of the OP.
5.           We have heard the learned counsel for the parties and have also carefully gone through the case file.
6.           Learned counsel for the complainant submitted that despite the fact that the OP received premium of the lapsed policy on 27.04.2020, yet, by rejecting the claim in question, on the ground of non receipt of premium, has committed deficiency in rendering service. He further submitted that the death of the DLA occurred due to heart attack, which has no connection with the disease of cancer suffered by the DLA at later stage.
7.           Learned counsel for the OP submitted that since the insured had concealed the material fact with regard to her pre-existing ailment of cancer at the time of revival of the policy in question, as stated in entire treatment records of the hospital from where she was taking treatment, wherefrom it is clearly coming out that she was suffering from last stage of cancer and ultimately died on 30.05.2022, as such, claim filed by the complainant was rightly repudiated by the OP.
8.           It is significant to mention here that to prove its case, the OP has placed on record treatment records of the Capital Super Speciality Hospital, Annexure OP-5 colly, for the period from 18.04.2020 to 30.05.2020, which shows that the wife of the complainant-Manju (insured) was taking treatment of cancer i.e. sigmoid adeno carcinoma i.e. Adenocarcinoma which is a type of cancer that starts in the gland cells that make mucus to lubricate and protect the inside of the colon and rectum. It is also coming out from the said record that before the date of making payment of premium of the lapsed policy on 27.04.2020, the DLA was taking treatment of cancer starting from on 18.04.2020 in the said hospital. Thus, the treatment records Annexure OP-5 colly,           leaves no doubt with this Commission to hold that the wife of the complainant was suffering from cancer before revival of the policy in question, yet, there has been concealment with regard to the same, in the Health Revival form dated 30.05.2020, Annexure OP-6, wherein it was asked as to whether she is being treated from cancer, tumour, cyst, leukemia, growth lump or other malignance, it has been answered as “NO”.  It may be stated here that the contracts of insurance including the contract of life assurance are contracts uberrima fides and every fact of material must be disclosed. If there are any misstatements or suppression of material facts, the policy can be called into question.
9.           However, to writhe out of the situation, counsel for the complainant contented that since the DLA died because of heart attack in the Village Saha, as is evident from Report of Death Certificate dated 04.06.2020 as well as Letter No.125 dated 01.09.2022, issued by the Registrar, Birth and Death, which has no nexus with cancer, as such, the OP was not entitled to repudiate the claim of the complainant. It may be stated here that in this connection we may notice the decision of the Hon’ble Supreme  Court in Mithoolal Nayak Vs. Life Insurance Corporation of India (AIR 1962 SC 814), in which the position of law was stated as under:

“……The three conditions for the application of the second part of s.                          45 are:

(a) the statement must be on a material matter or must suppress facts which it was material to disclose ;

(b) the supression must be fraudulently made by the policy holder; and

(c) the policy holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose.

Where the policy holder, who had been treated, a few months before he submitted a proposal for the insurance of his life with the insurance company by a physician of repute for certain serious ailments as anaemia, shortness of breath and asthma, not only failed to disclose in his answers to the questions put to him by the insurance company that he suffered from those ailments but he made a false statement to the effect that he had not been treated by any doctor for any such serious ailment, Held (i) that, judged by the standard laid down in s. 17, Contract Act, the policy holder was clearly guilty of a fraudulent suppression of material facts when he made his statements, which he must have known were deliberately false and hence, the policy issued to him relying on those statements was vitiated.

(ii) The principle underlying the Explanation to s.19 of the Contract Act is that a false representation, whether fraudulent or innocent, is irrelevant if it has not induced the party to whom it is made to act upon it by entering into a contract. That principle did not apply in the instant case. The terms of the policy made it clear that the averments made as to the state of health of the insured in the proposal form and the personal statement were the basis of the contract between the parties and the circumstance between the parties and the circumstance that the policy holder had taken pains to falsify or conceal that he had been treated for a serious ailment by a physician only a few months before the policy was taken showed that the falsification or concealment had an important bearing in obtaining the other partys consent. A man who has so acted cannot afterwards turn round and say It could have made no difference if you had known the truth. In the circumstances no advantage could be taken of the Explanation to s.19 of the Contract Act.

This decision was relied upon in Life Insurance Corporation of India vs. Smt.G.M.Channabasamma (1991) (1) SCC 357, in which the following observations were made: It is well settled that a contract of insurance is contract uberrima fides and there must be complete good faith on the part of the assured. The assured is thus under a solemn obligation to make full disclosure of material facts which may be relevant for the insurer to take into account while deciding whether the proposal should be accepted or not. While making a disclosure of the relevant facts, the duty of the insured to state them correctly cannot be diluted. Section 45 of the Act has made special provisions for a life insurance policy if it is called in question by the insurer after the expiry of two years from the date on which it was effected. Having regard to the facts of the present case, learned counsel for the parties have rightly stated that this distinction is not material in the present appeal. If the allegations of fact made on behalf of the appellant Company are found to be correct, all the three conditions mentioned in the section and discussed in Mithoolal Nayak vs. Life Insurance Corporation of India must be held to have been satisfied. We must, therefore, proceed to examine the evidence led by the parties in the case.…”.

10.           This has been reiterated by the Hon’ble Supreme Court in the judgments in P C Chacko vs Chairman, Life Insurance Corporation of India and Satwant Kaur Sandhu vs New India Assurance Company Limited. In Satwant Kaur Sandhu vs New India Assurance Company Ltd., at the time of obtaining the Mediclaim policy, the insured suffered from chronic diabetes and renal failure, but failed to disclose the details of these illnesses in the policy proposal form. Upholding the repudiation of liability by the insurance company, the Hon’ble Supreme Court held as under:

“…..25. The upshot of the entire discussion is that in a contract of insurance, any fact which would influence the mind of a prudent insurer in deciding whether to accept or not to accept the risk is a “material fact”. If the proposer has knowledge of such fact, he is obliged to disclose it particularly while answering questions in the proposal form. Needless to emphasise that any inaccurate answer will entitle the insurer to repudiate his liability because there is clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance….”

 

11.           In this view of the matter, since the OP has proved on record that there has been a material concealment at the time of  revival of the policy in question with regard to treatment  being taken by the wife of the complainant, as such, the OP was right in repudiating the claim in question. Resultantly, this complaint stands dismissed with no order as to cost. Certified copy of this order be supplied to the parties concerned, forthwith, free of cost as permissible under Rules. File be indexed and consigned to the Record Room.

 

Announced:- 07.02.2024

 

(Vinod Kumar Sharma)	(Ruby Sharma)	(Neena Sandhu)
Member	Member	President