Order by:

Smt.Priti Malhotra, President

1.       The complainant has filed the instant complaint under section 35 of the Consumer Protection Act, 2019 stating that husband of the complainant Mr. Manish Jaiswal availed a loan from opposite party No.3. At the time of availing of the loan, the officials of opposite parties represented the husband of the complainant to avail an insurance policy floated by opposite party No.1 and in that insurance policy, the whole of the loan availed by Manish Jaiswal is covered and in case of death, the whole of the loan will be paid by the Insurance Company i.e. opposite parties No.1 & 2. Believing the representation of the opposite parties, Manish Jaiswal availed the said insurance policy and paid a premium of Rs.50,000/- to opposite parties No.1 & 2 and opposite party No.2 duly issued a Member's Certificate of Insurance to Manish Jaiswal dated 30.09.2019. The complainant Anjana Jaiswal is nominee in the said policy. At the time of insurance, the officials of opposite party No.1 did not disclose any conditions to Manish Jaiswal. Neither any policy was given to Manish Jaiswal. Unfortunately Manish Jaiswal died on 25.04.2021. Thereafter, opposite party No.3 started pressing for repayment of loan and added illegal amount in the shape of penalty, penal interest etc. The amount of Rs.23,10,395/- was outstanding at the time of death of Manish Jaiswal. Thereafter, the complainant came to know about the insurance policy and lodged the claim of Rs.23,10,395/- i.e. the loan amount with opposite parties No.1 & 2, but to the surprise of the complainant, opposite parties No.1 & 2 rejected the claim of the complainant stating that Manish Jaiswal was suffering from diabetes mellitus. Alleged that a false ground has been taken by opposite parties No.1 & 2 to reject the claim of the complainant. Alleged further that as per the Member's Certificate issued to Manish Jaiswal, there is no exclusion clause mentioned in the same. Manish Jaiswal was not suffering from diabetes mellitus and was not diagnosed with diabetes mellitus within 48 months prior to the issuance of policy. Further alleged that opposite parties No.1 & 2 have wrongly mentioned that Manish Jaiswal was suffering from diabetes. Otherwise also, diabetes is not a life threatening disease and it has no bearing on the insurance policy. Manish Jaiswal did not die due to diabetes, so the disease of diabetes has no concern with the death of Manish Jaiswal. Alleged further that after the receiving of letter of rejection of claim dated 27.08.2021, the complainant has requested the opposite parties many times to make the payment of the claim of the complainant. Due to non-payment of claim, the complainant suffered mental tension and harassment. The complainant also served a registered notice dated 21.10.2021 upon the opposite parties, but to no effect. Hence, this complaint. Vide instant complaint, the complainant has sought the following reliefs:-

a)       Opposite parties may be directed to make the payment of Rs.23,10,395/- alongwith interest @ 18% p.a. and amount of penal interest and penalty imposed alongwith interest @ 18% p.a from 25.04.2021 till realization.

b)      To pay an amount of Rs.5,00,000/- as compensation on account of damages, mental tension and harassment.

c)       To pay an amount of Rs.33,000/- as cost of the complaint.

d)      And any other relief which this Commission may deem fit and proper be granted to the complainant in the interest of justice and equity.

2.       Opposite parties appeared through counsel and contested the complaint by filing written reply taking preliminary objections therein inter alia that the intricate questions of law and facts are involved in the present complaint which require documents and evidence for determination which is not possible in the summary procedure under C.P. Act and appropriate remedy, if any, lies only in the Civil Court; the complainant has concealed material facts and documents from this Commission as well as Opposite Parties, therefore, the complainant is not entitled to any relief. The complainant has concealed the fact that the replying opposite parties on receipt of claim of complainant regarding the death of life assured Manish Jaiswal, appointed Sakshi Investigator & Detective Agency to investigate the claim and the investigator established that the life assured was suffering from Diabetes Mellitus and hypertension prior to issuance of policy. Had this information been provided to the replying opposite parties at the time applying for the insurance policy, the replying opposite parties would have called for further medical tests/ questionnaires basis which the decision to offer insurance cover or not would have been taken. As this vital information was not provided to the replying opposite parties at the time of applying for the policy, as such the replying opposite parties expressed regret & their inability to accept the claim of the complainant under the given policy, vide letter dated 27.08.2021. In view of the above, the claim is not admissible under the terms, conditions and provisions of the policy and therefore no amount is payable to the complainant. If the complainant wished to represent her claim, she could do so within 30 days of the receipt of this letter. The claim was rightly repudiated vide letter dated 27.08.2021 as terms and conditions of the policy. Further averred that the complainant is not consumer of replying Opposite Parties; the complainant has no locus standi or cause of action to file the present complaint against Opposite Parties; the complaint is not maintainable. On merits, all other allegations made in the complaint are denied and a prayer for dismissal of the complaint is made.

3.       Opposite Party No.3 appeared through counsel and contested the complaint by filing written reply taking preliminary objections therein inter alia that the complaint filed by the complainant is completely false, frivolous, vexatious, devoid of merits and is an abuse of process of law. The complainant is leveling false allegations against answering Opposite Party by suppressing material and correct facts from this Commission; the complainant has approached this Commission with unclean hands; the complaint has been filed against the answering Opposite Party without any just and reasonable cause. The complaint is without any cause of action against answering Opposite Party; there is no privity of contract between the complainant and answering Opposite Party. The answering Opposite Party unnecessarily dragged into the unwarranted and uncalled litigation. Averred that the complainant had availed insurance policy from Opposite Parties No.1 & 2 and Opposite Party No.3 had assisted the complainant in obtaining the insurance policy by assisting in completion of required documents. The contract of insurance is between the complainant and Opposite Parties No.1 & 2. The complainant is not the consumer of answering Opposite Party within the meaning of Consumer Protection Act. Averred that complainant has availed the policy and had filled out the proposal form and submitted all the necessary documents. At the time of filing of proposal form, the complainant had declared that contents of the said proposal form and documents had been fully explained to him and that the complainant had fully understood the significance of the propose contract. There is no deficiency in service on the part of answering Opposite Party. Acceptance or rejection of claim is the sole Prerogative of Opposite Parties No.1 & 2 and answering Opposite Party has nothing to do with that. On merits, all other allegations made in the complaint are denied and a prayer for dismissal of the complaint is made.

4.       In order to prove her case, complainant has tendered into evidence her affidavit Ex.C1 alongwith copies of documents Ex.C2 to Ex.C8.

5.       To rebut the evidence of complainant, Opposite Parties No.1 & 2 have tendered into evidence copies of documents Ex.OP1,2/1 to Ex.OP1,2/5 and affidavit of Sh.Gurpreet Singh, Manager Legal, HDFC Standard Life Insurance Company Ltd. as Ex.OP1,2/6 alongwith copies of other documents Ex.OP1,2/7 & Ex.OP1,2/8. Whereas, Opposite Party No.3 has tendered into evidence affidavit of Sh.Gurjinder Singh, Authorized Signatory/Legal Officer, DCB Bank Ltd. as Ex.OP3/A alongwith copies of documents Ex.OP3/1 to Ex.OP3/3.

6.       We have heard the ld. counsel for the parties, gone through the written arguments submitted on behalf of all the Opposite Parties and also gone through documents placed on record.

7.       It is an admitted fact that husband of the complainant namely Manish Jaiswal (now deceased) had obtained loan from Opposite Party No.3 and got secured the said loan vide insurance policy of Opposite Parties No.1 & 2, vide which the whole loan availed by Manish Jaiswal was covered in case of death and he was duly issued Member's Certificate of Insurance (Ex.C7). It is well proved on record that during the currency of the above policy, the husband of the complainant expired on 25.04.2021. After the death of her husband, the complainant being nominee under the alleged policy, lodged the claim with Opposite Parties No.1 & 2, but the Opposite Parties No.1 & 2 rejected the claim of the complainant on the ground that husband of the complainant was suffering from diabetes mellitus prior to issuance of the policy; whereas, the complainant has denied the factum that husband of the complainant ever suffered with diabetes mellitus and alleged that Opposite Parties No.1 & 2 wrongly and illegally repudiated the claim.

8.       It is pertinent to mention here that during the pendency of the complaint ld. counsel for Opposite Parties No.1 & 2 filed an application for summoning the ‘Concerned Official/doctor from DMC & Hospital, Ludhiana alongwith OPD record relating to the alleged treatment of diabetes etc. being taken by Manish Jaiswal i.e. deceased policy holder in question for dated 04.09.2014, 27.12.2014 and 10.11.2014 respectively. Dismissing the said application, vide order dated 08.08.2022, Opposite Parties No.1 & 2 were given liberty to file the questionnaire/interrogatory. Opposite Parties no.1 & 2 filed interrogatories on 09.09.2022 and reply to the said interrogatories was also filed by the complainant on 23.09.2023 and case was adjourned for remaining evidence of Opposite Parties No.1 & 2. But despite being given sufficient opportunities, the Opposite Parties No.1 & 2 failed to tender any remaining evidence, hence vide order dated 04.11.2022 the evidence of Opposite Parties No.1 & 2 stand closed by order. Thereafter, against the orders dated 08.08.2022 and 04.11.2022 passed by this Commission, the Opposite Parties no.1 & 2 filed Revision Petition before the Hon’ble State Consumer Disputes Redressal Commission, Punjab, Chandigarh, wherein the application filed by the petitioner/Opposite Parties no.1 &2 for summoning the concerned official/doctor alongwith relevant record stand allowed. Therefore, complying the order dated 23.09.2023 passed by Hon’ble State Commission as well considering the said application, the concerned witness was summoned alongwith relevant record vide order dated 11.05.2023, but however, summoned witness had not come present, however a letter was received from Dayanand Medical College and Hospital, through email vide which it has been stated by the hospital that it had destroyed the Medical Records of the patient Manish for the year, 2014 and the required record is not available with them.

9.       In the given circumstances in the interest of justice the issue in dispute is to be decided on the basis of evidence placed on record by the respective parties.

10.     The record reveals that in order to substantiate their claim, the Opposite Parties No.1 & 2 have placed on record few documents claimed to be the treatment record of Manish Jaiswal i.e. husband of the complainant qua the alleged ailment of Diabetes Mellitus being suffered by him. It is being reiterated that the Opposite Parties No.1 & 2 have alleged that husband of the complainant i.e. Manish Jaiswal has taken the treatment for diabetes mellitus and hypertension from DMC & Hospital, Ludhiana prior to the issuance of the policy in question. Also they have relied upon the report of its investigator (Ex.OP1 & 2/4). Thorough perusal of the documents referred and placed on record by Opposite Parties No.1 & 2 reveals that the said record dated 04.09.2014, 27.12.2014 and 10.11.2014 pertains to one Manish only, but there is no authentic evidence to prove that the said record is of the husband of the complainant i.e. Manish Jaiswal, as there is no further details been shown in the record to prove the same. In the absence of any cogent and relevant evidence, it could not be presumed that the said treatment record placed on record by Opposite Parties No.1 & 2 is of the husband of the complainant as alleged. Also the investigation report relied upon by Opposite Parties No.1 & 2 is based upon the alleged treatment record. Thus that record failed to establish the stand of Opposite Parties No.1 & 2. In our considered opinion the repudiation in question is highly unjustified.

11.     However, even for the sake of arguments, if we presume that the insured/deceased policy holder was suffering from Diabetes Mellitus before the issuance of the policy in that case also the Opposite Parties No.1 & 2 are not liable to reject the claim of the complainant, as diabetes mellitus is common life style disease and cannot be treated as preexisting disease. Reliance in this regard is placed on RP No. 4461 of 2012, Neelam Chopra Vs. Life Insurance Corporation of India & Ors., decided on 08.10.2018, (NC), wherein the Hon’ble National Commission has held as under:-

"11. From the above, it is clear that the insurance claim cannot be denied on the ground of these life style diseases that are so common. However, it does not give any right to the person insured to suppress information in respect of such diseases. The person insured may suffer consequences in terms of the reduced claims.

14. Moreover, the non-disclosure of information in respect of this life style disease of diabetes, will not totally disentitle the complainant for indemnification of the claim in the light of the judgment of Hon'ble High Court of Delhi in Hari Om Agarwal Vs. Oriental Insurance Co. Ltd., (supra)."

From the aforesaid settled law, it is clear that the common lifestyle diseases like diabetes and hypertension cannot be treated as pre-existing diseases and also there non-disclosure is not fatal to the claim lodged by the complainant, therefore, cannot be a ground of repudiation of the claim. In these circumstances, the repudiation of the claim in question by the Opposite Parties No.1 & 2 is not genuine.

12.     We have gone through the terms and conditions as mentioned in ‘Member’s Certificate of Insurance’ (Ex.C7) and the relevant Condition no.4 of the said term is mentioned as under:-

“In case of Regulated Entities, under Lender- Borrower Scheme, the Outstanding Loan amount, if any shall be payable to the Master Policyholder subject to prior authorization from the Member taken at the inception of policy, out of total Death Benefit otherwise payable to the Nominee. Any residual benefit shall be paid to the Nominee or Beneficiary, as applicable.”

From the above condition, it is clear that the outstanding loan amount, if any shall be payable to the Master Policy holder, subject to prior authorization from the Member i.e. Policy holder taken at the inception of the policy, out of the total Death Benefit otherwise payable to the Nominee. Further as per “Member Enrollment Form-SMQ, Regulated Entity” (Ex.OP1 & 2/1), the deceased policy holder i.e. Manish Jaiwal had given authorization to HDFC Life to make payment of Outstanding Loan Balance amount to Master Policyholder i.e. DCB Bank. The contents of said authorization duly signed by the insured are reproduced as under:-

Payment Authorization

I do hereby declare that I have received Loan from M/s DCB Bank Ltd. (“Master Policyholder”). In order to secure the said loan, I have taken the above referred policy from HDFC Life Insurance Company Limited. In consideration of receiving the said loan, I hereby authorize HDFC Life to make payment of Outstanding Loan Balance amount to Master Policyholder by deducting from the claim proceeds payable on happening of the contingent event covered by the Group Life Insurance Scheme/Policy reference above.

In view of the above discussion, we are of the concerted view that
as per the policy condition, the Opposite Parties No.1 & 2-Insurance Company  has to credit the sum assured amount of the policy in the loan account of the complainant and thereafter, if any amount left remaining, the complainant being nominee is entitled for the same.

13.     Sequel to the above discussion, the instant complaint is partly allowed with the following directions:-

1.       Opposite Parties No.1 & 2 are directed to credit the sum assured amount of Rs.23,10,395/- in the Loan Account No.DRBLMOG00492603 of the complainant as on the date of death of the loanee/deceased policy holder Manish Jaiswal i.e. 25.04.2021 and thereafter work out the balance principal amount in the said Home Loam account as on 26.04.2021. In case, after adjusting the amount of sum assured in the Loan Account of the complainant, if any amount is left to be paid, the complainant shall be liable to pay the same.

2.       Opposite Party No.3-DCB Bank shall deduct entire installments so paid by the complainant upto date in the said Loan Account No.DRBLMOG00492603 from May, 2021 against the balance principle alongwith applicable interest arrived at on May, 2021 after deduction of sum assured amount, as directed above and refund the balance excess amount, if any to the complainant. Opposite Party No.3 Bank is further directed to supply fresh/latest Account  Statement to the complainant in respect of Loan Account No.DRBLMOG00492603 in question showing the deduction of sum assured amount, as directed above, as well as balance principal amount alongwith interest arrived at in the said account as on May, 2021 and installments so paid by complainant upto date as well as refund, if any.

3.       Further Opposite Parties No.1 & 2, jointly and severally, are directed to pay compository cost of Rs.10,000/-(Rupees Ten Thousand only) to be paid to the complainant on account of compensation and litigation expenses. 

4.       Opposite Parties No.1 to 3 are directed to comply with the order within 45 days from the date of receipt of copy of this order, failing which, the Opposite Parties No.1 to 3, jointly and severally, are further burdened with additional cost of Rs.20,000/-(Rupees Twenty Thousand only) to be paid to the complainant for non compliance of the order.

13.     The pending application, if any also stands disposed of. Copies of the order be furnished to the parties free of costs. File is ordered to be consigned to the record room.

Announced on Open Commission