Chandigarh

DF-I

CC/234/2021

Mohinderjit Kaur - Complainant(s)

Versus

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

Rashpinder Singh

05 Jun 2024

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-I,

U.T. CHANDIGARH

 

                                     

Consumer Complaint No.	:	CC/234/2021
Date of Institution	:	08/04/2021
Date of Decision	:	05/06/2024

Mohinderjit Kaur aged about 54 years W/o late Sh. Harbhajan Singh, Permanent Address Babarpur, Patiala, Punjab-147201.

… Complainant

V E R S U S

1. HDFC Life Insurance Company Limited, 11^th Floor, Lodha Exceleus, Apollo Mills Compound, N.M. Joshi Rod, Mahalaxmi, Mumbai-400011.

2. HDFC Housing Development Finance Corporation Limited, Roman House, H T Parekh Marg, 169, Backbay Reclamation, Churchgate, Mumbai-400020.

3. HDFC Housing Development Finance Corporation Limited, CRM, HDFC Limited, SCO 153-155, Sector 8-C, Madhya Marg, Chandigarh 160018.

4. HDFC Housing Development Finance Corporation Limited, SCF 6, 1^st Floor, Leela Bhavan Market, Patiala-147001.

… Opposite Parties

CORAM :	SHRI PAWANJIT SINGH	PRESIDENT
	MRS. SURJEET KAUR	MEMBER

 

                                                       

ARGUED BY	:	Sh. Rashpinder Singh, Advocate for complainant
	:	Mrs. Monika Thatai,  Advocate, Proxy for Sh. Nitin Thatai, Advocate for OP-1
	:	Ms. Neetu Singh, Advocate for OPs 2 to 4

 

Per Pawanjit Singh, President

1. The present consumer complaint has been filed by Smt.Mohinderjit Kaur, complainant against the aforesaid opposite parties (hereinafter referred to as the OPs).  The brief facts of the case are as under :-

1. It transpires from the allegations, as projected in the consumer complaint, that the complainant is the wife of late Sh. Harbhajan Singh, who, during his lifetime was willing to purchase one house in Nabha.  After seeing the advertisement of OP-2, late Sh. Harbhajan Singh alongwith the complainant approached OP-2 through OP-4.  After going through the documents as well as financial capacity of late Sh. Harbhajan Singh, OP-4 informed him and the complainant that they would refer their case to OP-3 for sanctioning of loan and on being satisfied with the documents, OP-3 would refer the loan case to OP-2 who would take the final decision.  After some time, OP-4 contacted the complainant and her husband and informed that after going through the documents, OP-2 has agreed to sanction loan for an amount of ₹17.00 lacs in favour of the husband of complainant.  Accordingly, loan agreement was executed between the OPs and the husband of the complainant. While signing the loan agreement, OP-3 had informed Harbhajan Singh and the complainant that there is offer going on in the insurance plans and they can avail one plan namely accidental plan in which the complainant and their family would stay safe as after getting the plan, if anything happened to Harbhajan Singh, then the whole loan amount would be paid by the insurance company.  On this, the complainant and her husband fell into the sweet talking of OP-3 and asked it to issue the policy upon which they told that there would be additional EMI of ₹2,277/- per month.  Complainant and her husband had agreed to the terms of OPs and asked the OPs to sanction loan and issue the insurance policy upon which loan as well as policy was issued/sanctioned.  Letter issued to PUDA by OP-2 is Ex.C-1.  Thereafter, aforesaid Harbhajan Singh and complainant paid the installments of loan as well as insurance policy timely and copy of statement showing the outstanding amount is Ex.C-2. Unfortunately, Harbhajan Singh met with an accident due to which he suffered serious injuries on his backbone and became totally bedridden.  After some days, when he was not recovering, he was taken to the hospital where the doctors tried their best, but, they could not save him and he died on 1.6.2020. Copy of the death certificate is Ex.C-3 whereas the medical record is Ex.C-4 colly.  After the death of Harbhajan Singh (hereinafter referred to as “DLA”), the OPs started pressurizing the complainant by sending notice (Ex.C-5) to pay EMI, but, due to the sudden death of her husband, complainant fell into financial crisis as he was the only bread earner of the family.  Thereafter complainant contacted OPs and requested that the loan amount is to be paid by OP-1/insurer as the complainant and her husband were paying the installments of insurance premium to OPs 2 to 4 who had obtained the subject policy in order to secure the loan. However, to the utter surprise of complainant, OP-1 repudiated the claim vide letter dated 19.2.2021 (Ex.C-6) on false and frivolous grounds.  Even before the issuance of the policy document, which was got sanctioned by the complainant as well as the DLA, the same were pre-printed and nothing was informed to the complainant or the DLA at the time of getting the signatures.  As OP-1 has wrongly repudiated the claim of the complainant despite of the fact that the entire loan amount was insured by it, the said act of OP-1 amounts to deficiency in service and unfair trade practice. OPs were requested several times to admit the claim, but, with no result.  Hence, the present consumer complaint.
2. OPs resisted the consumer complaint and filed their separate written versions.
3. In its written version, OP-1, inter alia, took preliminary objections of maintainability, concealment of facts and cause of action.  However, it is admitted that the DLA approached OP-2 for getting housing loan for purchase of a house and the agent of OP-2 explained all the terms and conditions of the loan to him, who, after accepting the same to be correct, had signed the same and thereafter OP-2 had agreed to sanction loan to the tune of ₹17.00 lacs in favour of the DLA. After getting the loan sanctioned, DLA submitted the member enrolment form dated 25.3.2019 to the answering OP and the proposal for insurance policy was accepted by the DLA on the standard rates based on the information provided by the DLA and consequently the subject policy was issued to the complainant which had originally commenced from 30.3.2019 for a period of 15 years and a single premium of ₹1,90,495.97 was received by the answering OP with sum assured of ₹19,24,785/- and the copy of the insurance certificate and terms and conditions are OP-1/2 and OP-1/3.  It is wrong that the DLA was not made aware of the terms and conditions of the subject policy and his signatures were obtained on the printed form.  In fact, the DLA was suffering from pre-existing disease as he was history of alcohol use disorder since last 25 years, alcoholic liver disease on medication, portal hypertension on medication, cirrhosis on medication, gastritis, jaundice from past 3 years and Pedal Edema from past 3 years, which fact was not disclosed by him at that time and he had even concealed the facts about pre-existing disease even in the proposal form.  Not only this, the DLA has also violated the terms and conditions of the policy as he had not disclosed about the pre-existing disease. On merits, the facts as stated in the preliminary objections have been reiterated. The cause of action set up by the complainant is denied.  The consumer complaint is sought to be contested.
4. In their separate written version, OPs 2 to 4, inter alia, took preliminary objections of maintainability, cause of action and concealment of material facts.  On merits, admitted that home loan of ₹17.00 lacs was sanctioned in favour of DLA whereas the loan for an amount of ₹2,24,785/- was sanctioned vide insurance policy and the total outstanding amount towards the DLA is ₹19,70,229/-. It is further denied that the complainant has no cause of action against the answering OP and the consumer complaint of the complainant be dismissed with costs.  The cause of action set up by the complainant is denied.  Consumer complaint is sought to be contested.
5. In separate replications, complainant re-asserted the claim put forth in the consumer complaint and prayer has been made that the consumer complaint be allowed as prayed for.

2. In order to prove their case, parties have tendered/proved their evidence by way of respective affidavits and supporting documents.
3. We have heard the learned counsel for the parties and also gone through the file carefully, including written arguments.
   1. At the very outset, it may be observed that when it is an admitted case of the parties that the deceased husband of the complainant namely Sh. Harbhajan Singh i.e. the DLA had obtained the home loan to the tune of ₹17,00,000/- from OP-2 and the same was got insured by the financier/OPs 2 to 4, being master policy holder by obtaining member certificate of insurance in the name of DLA from the insurer/OP-1 on payment of ₹1,90,495.97, which was also paid by raising loan in favour of the DLA by OPs 2 to 4, as is also evident from Member’s Certificate of Insurance (Annexure OP-1/3) showing  sum assured of ₹19,24,785/- and the DLA died on 1.6.2020, as is also evident from the copy of death certificate (Ex.C-3), the case is reduced to a narrow compass as it is to be determined if OP-1/insurer is unjustified in repudiating the genuine claim of the complainant and the complainant, being nominee as well as wife of DLA, is entitled to the reliefs prayed for in the consumer complaint, as is the case of complainant, or if OP-1/insurer has rightly repudiated the claim of the complainant and the consumer complaint of the complainant, being false and frivolous, is liable to be dismissed, as is the defence of OP-1.
   2. In the backdrop of the foregoing admitted and disputed facts on record, one thing is clear that the entire case of the parties is revolving around the documentary evidence placed on record by them and the same is required to be scanned carefully to determine the real controversy between the parties.
   3. Perusal of the home loan agreement (Ex.OP 2-4/1) clearly indicates that OPs 2 to 4/financier had sanctioned home loan of ₹17,00,000/- in favour of the DLA.  Ex.OP 2-4/2 further indicates that another loan of ₹2,24,785/- was sanctioned in favour of the DLA for payment of insurance premium to OP-1.  Ex.OP 2-4/3 further indicates that an amount of ₹17,44,072/- was outstanding in the loan account of the DLA on 2.9.2021. 
   4. Perusal of copy of Member’s certificate of insurance (Annexure OP-1/3) clearly indicates that an amount of ₹1,90,495.97 alongwith taxes to the tune of ₹34,289.23 was paid to OP-1 being the premium amount for obtaining the subject insurance policy to cover the sum assured of ₹19,24,785/- and the subject policy commenced w.e.f. 30.3.2019 to 29.3.2034. 
   5. OP-1/5 is the investigation report carried out by the investigator deputed by OP-1 in which the investigator had opined that he had found pre-policy history of LA i.e. k/c/o AUD for 25 years, pedal edema for 3 years and jaundice for three years.
   6. Ex.C-4 (Colly.) is the registration card of the DLA issued by the Department of Radiodiagnosis, Rajindra Hospital, Patiala which indicates that on 20.5.2020 DLA was brought with compression fracture of body of L₁ vertebra with sparing of posterior elements and the relevant portion of the same is reproduced below for ready reference :-

       “Impression : Compression fracture of body of L₁ vertebra as described.”

 

7. The medical certificate of cause of death (at page 30 of Annexure C-4 Colly.) further shows that the immediate cause of death was “shock”, Heptic Enceph., alcoholic liver disease, alcohol use disorder, lumbar 3 vertebral fracture and the manner of death was ‘natural’.
8. The learned counsel for the complainant contended with vehemence that as it stands proved on record that the DLA had firstly suffered injuries in the accident, which were also found by the medical officer at Rajindra Hospital, Patiala in the registration card/slip making clear that compression fracture of body of L1 vertebral was found on the person of DLA, which was further opined by the medical officer in form No.4 (available at page 30 of Ex. C-4 Colly.) that the same was one of the cause of death of the DLA and further as the member enrollment form (Annexure OP-1/2) indicates that the same does not bear the signature of the declarant/assured and the vernacular declaration remained unfilled without signature of the declarant and even the subject policy was obtained by OPs 2 to 4/financier and nothing was asked about the pre-existing disease of the DLA and further the entire policy is silent that in case of any pre-existing disease, the claim will not be settled, OP-1/insurer has wrongly repudiated the claim of the complainant and the consumer complaint deserves to be allowed.
9. On the other hand, learned counsel for OP-1/insurer contended with vehemence that as it stands proved on record that the DLA was suffering from pre-existing ailment i.e. AUD, pedal edema and jaundice, which was never disclosed by him at the time of obtaining the subject policy, the OP has rightly repudiated the claim of the complainant and the consumer complaint of the complainant deserves to be dismissed.
10. However, there is no force in the contention of learned counsel for OP-1 as it stands proved on record that, in fact, DLA had not died only on account of the pre-existing ailment, rather he has also died on account of vertebra fracture which, as per medical science, can also cause death of a person.  Not only this, even the subject policy clearly indicates that the same was obtained by OPs 2 to 4 in order to get the loan amount secured since the same is in the name of HDFC Limited who is master policy holder and the DLA was only enrolled as member to HDFC Life Group Credit Protect Plus Insurance Plan by raising loan of ₹2,24,785/- in favour of the DLA and the same was paid to OP-1/ insurer and the DLA was also paying installments of the said loan till his death, including the installments of home loan.  This certificate nowhere indicates that in case of any pre-existing disease to the member, his claim would be repudiated in case of his death. The membership declaration form (Annexure OP-1/2) further indicates that, in fact, the same was filled by the OPs and they simply procured the signature of the DLA even without bothering to get his signature on the declaration as the declaration columns are unfilled. Further, OP-1 has also failed to prove on record any document showing that complainant was made aware of the fact that in case he has concealed any fact about his previous ailment, he will not be entitled for any claim.
11. Not only this, when it has come on record that, in fact, the subject policy was obtained by OPs 2 to 4 in order to secure the loan amount, it was incumbent upon OP-1/insurer before issuing the subject policy to get the loanee (DLA in the present case) medically examined.   In this regard, reliance can be had on the judgment of the Hon'ble Punjab and Haryana High Court in the case of Aviva Life Insurance Company India Limited Vs. Sarita Tripathi & Anr., CWP No.14892 of 2015 decided on 17.10.2022 in which it has been held that the insurer ought not to rescind the claim as it had option not to rely on such declaration and to satisfy itself about the medical and health conditions and also held that where the cause of death has no proximity to health, the said information would only be a relevant information. The relevant paragraphs of the said judgment are reproduced below for ready reference:-

 “30. If the Insurance Company chose not to subject the insured to medical examination before issuing the policy, it ought not rescind the claim as it had options not to rely on such declaration and to satisfy itself about the medical and health conditions. Having exercised its commercial prudence, it should not be permitted to escape its liability. Once it chose to not subject the proposer to medical examination, it can be safely assumed that such information was not grossly material to its decision or that the cost of medical examination to ascertain the health condition was not worth the risk to be covered. 1231

37. Taking into consideration the circumstances referred to above as well as the alleged suppression of material facts and the undisputed factual aspect that the cause of death was neither directly nor indirectly related to any health issues, ailment, sickness or disease and was altogether an independent, unrelated risk i.e. the motor vehicular accident, this Court is of the opinion that the fact of suppression of coronary angiography would have been a material information in case the cause of death was directly or indirectly linked to health. However, since the cause of death has no proximity to health, the said information would only be a relevant information. The insurance policies intend to provide respite to the family upon occurrence of an unfortunate event, the interpretation to be adopted should advance the object of law. The legislative intent of information to be “material” cannot be completely ignored and to deprive an insured of all benefits treating all information to be material.”

12. Further, the Hon’ble National Commission in the case titled as Neelam Chopra Vs. Life Insurance Corporation of India & Ors., IV (2018) CPJ 321 (NC) while dealing with the question of suppression/ non-disclosure of material facts has held as under :-

     12. In the present case, clearly the cause of death is cardio respiratory arrest and this disease was not existing when the proposal form was filled. Clearly, there is no suppression of material information in respect of this disease, which is the main cause of death. The other disease of LL Hansen, which was prevailing for five weeks on the date of admission on 1.8.2003 was also not existing when the proposal was filed by the DLA. The fact of DLA having been treated in the year 2002 for LL Hansen is not supported from any direct evidence though PGI Chandigarh in its certificate has mentioned that disease was treated in 2002. Moreover, this disease does not have any correlation with the cause of death in the present case. Hon’ble Supreme Court in Sulbha Prakash Motegaonkar and Ors. v. Life Insurance Corporation of India, Civil Appeal No.8245 of 2015, decided on 5.10.2015 (SC) has held the following:

        “We have heard learned Counsel for the parties.

                It is not the case of the Insurance Company that the ailment that the deceased was suffering from was a life threatening disease which could or did cause the death of the insured. In fact, the clear case is that the deceased died due to ischaemic heart disease and also because of myocardial infarction. The concealment of lumbar spondylitis with PID with sciatica persuaded the respondent not to grant the insurance claim.

                We are of the opinion that National Commission was in error in denying to the appellants the insurance claim and accepting the repudiation of the claim by the respondent. The death of the insured due to ischaemic heart disease and myocardial infarction had nothing to do with this lumbar spondylitis with PID with sciatica. In our considered opinion, since the alleged concealment was not of such a nature as would disentitle the deceased from getting his life insured, the repudiation of the claim was incorrect and not justified.”

13. In view of the foregoing discussion and the ratio of law laid down above, it is clear that OP-1/insurer has not been able to connect the previous diseases/ailments with the cause of death of the DLA.  Hence, it is unsafe to hold that OP-1/insurer was justified in repudiating/rejecting the claim of the complainant qua the subject policy and the present consumer complaint deserves to succeed. 
14. Now coming to the quantum of amount to be awarded in the instant case, since it is an admitted case of the parties that the subject policy commenced w.e.f.30.3.2019 and the DLA had died on 1.6.2020, the complainant, being nominee of the deceased insured, is entitled for the death benefit as per the terms and conditions mentioned in the Member’s Certificate of Insurance (Annexure OP-1/3) and the relevant portion of the same is reproduced as under for ready reference :-

“1. Death Benefit : The sum assured payable on death An additional sum assured is payable on death of the member due to accident during the term of the membership as specified in Schedule of Benefits, shown in Appendix A.”

              Thus, as per Annexure OP-1/3, the total sum assured is ₹19,24,785/- and complainant is entitled to the said amount. However, as the death benefit also provides additional sum assured on the death of member due to accident, during the term of membership, as specified in the schedule of benefits shown in Appendix A (attached with Annexure
OP-1/3 at page 39) and further it has come on record that the subject policy commenced on 30.3.2019 and the DLA died on 1.6.2020 i.e. in the 15^th month from the commencement of the policy, complainant is entitled for the additional sum assured of ₹36,49,570/- as per the schedule of benefits. Accordingly, OP-1/insurer is liable to pay total amount of ₹19,24,785 + ₹36,49,570 = ₹55,74,355/-  to the complainant alongwith interest and compensation etc. for the harassment caused to her. 

4. In the light of the aforesaid discussion, the present consumer complaint succeeds, the same is hereby partly allowed and OP-1 is directed as under :-

1. to pay ₹55,74,355/- to the complainant alongwith interest @ 9% per annum from the date of repudiation of the claim i.e. 19.2.2021 onwards.
2. to pay ₹30,000/- to the complainant as compensation for causing mental agony and harassment;
3. to pay ₹10,000/- to the complainant as costs of litigation.

5. This order be complied with by OP-1 within forty five days from the date of receipt of its certified copy, failing which, the payable amounts, mentioned at Sr.No.(i) & (ii) above, shall carry interest @ 12% per annum from the date of this order, till realization, apart from compliance of direction at Sr.No.(iii) above.  It is, however, made clear that the financier (OPs 2 to 4) shall have first charge over the aforesaid awarded amount, to the extent the same is due to be paid by the complainant towards the discharge of loan liability, if any, of the DLA.
6. Since no deficiency in service or unfair trade practice has been proved against OPs 2 to 4, the consumer complaint against them stands dismissed with no order as to costs.
7. Pending miscellaneous application(s), if any, also stands disposed of accordingly.
8. Certified copies of this order be sent to the parties free of charge. The file be consigned.

05/06/2024 hg	Sd/- [Pawanjit Singh] President
	Sd/- [Surjeet Kaur] Member