Chandigarh

DF-II

CC/15/2024

MRS. PARAMJIT KAUR - Complainant(s)

Versus

HDFC LIFE INSURANCE COMPANY LIMITED - Opp.Party(s)

POONAM THAKUR

11 Jun 2024

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-II

U.T. CHANDIGARH

 

Consumer Complaint No.	:	15/2024
Date of Institution	:	08.01.2024
Date of Decision	:	11.06.2024

 

                                       

       

Mrs. Paramjit Kaur wife of Late Daya Ram, Resident of #34B, Sector 46A, Chandigarh – 160047. Presently, Residing at #503, Bishanpura, Zirakpur, District S.A.S. Nagar (Mohali).

        ...  Complainant.

Versus

 

1.     HDFC Life Insurance Company Ltd., Lodha Excelus, 13th Floor, Apollo Mills Compound, N.M. Joshi Marg, Mahalaxmi, Mumbai – 400011, through its Authorized Signatory or its Managing Director.

2.     HDFC Bank Limited  SCO 33, 1st Floor, Sector 41-D, Chandigarh through its Authorized Signatory or Its Branch Manager.

…. Opposite Parties

 

BEFORE:
	SHRI AMRINDER SINGH SIDHU,	PRESIDENT
	SHRI B.M.SHARMA	MEMBER
Present:-
	Sh.Ricky Verma & Ms.Poonam Thakur, Counsel for the complainant Ms.Monika Thathai, Counsel for OP No.1. Sh.Vaibhav Singh Tara, Counsel for OP No.2.

       

ORDER BY AMRINDER SINGH SIDHU, M.A.(Eng.),LLM,PRESIDENT

1.         The complainant has filed the present complaint alleging therein that the  OP No.2 had sanctioned and disbursed a loan of ₹22.50 lakhs to Complainant and her deceased husband during his life time to construct a dwelling unit on Plot No.187 at village Bishanpura, Tehsil Derabassi, District S.A.S. Nagar, Mohali. The said loan was to be paid in 156 EMIs commencing from 01.10.2021. In order to secure aforesaid loan, they further requested the Bank to provide additional financial assistance towards procuring an insurance policy from OP No.1 by way of a top up loan. As such, another top up loan of ₹1,46,212/- for insurance was sanctioned/ disbursed.  The sum assured under the policy was Rs.23,96,211/- lacs and the policy was a single premium plan with date of commencement as 16.09.2021 and the same was to be expired on 15.09.2026 and the complainant was nominee under the policy.  Unfortunately the husband of Complainant namely Sh.Daya Ram expired on 06.06.2023. The complainant lodged the claim with OP No.1 through OP No.2 intimating the OP No.2 vide letter dated 08.08.2023. The complainant was under the impression that in the event of the insured dying during the loan period, then the loan shall be covered under the policy from OP No.1 and the LRs will not have to pay any EMI and entire remaining amount was to be paid by OP No.1 but OP No.1 failed to make the payment of the loan to OP No.2 due to which Rs.15,94,129/- become outstanding as per loan statement (Annexure C-5).  OP No.2 insisting the complainant to pay the loan amount and has been charging interest on the interest and the penalty has also been added in the account which is against the policy.  As per Section 14 of the IRDA, OP No.1 was required to decide the claim within 120 days but they failed to do so. It has further been alleged that the act of non-settling the claim and non-payment of the loan amount amounts to deficiency in service as well as unfair trade practice on the part of the insurance company.  The complainant has filed the instant complaint seeking directions to OP No.1 to make the payment of loan amount to OP No.2 with interest  from the date of lodging of the claim till its realization; OP No.2 be directed not to charge any penal interest, late penalty, any other charges etc. on the loan amount till the time amount is paid by OP No.1 and to waive off the penalty till the complainant lodged the complaint with OP No.1 through OP No.2 and to pay compensation for mental agony and physical harassment as well as litigation expenses.
2.         In its written version, OP No.1 has admitted that Sh.Daya Ram along with the complainant secured the loan through HDFC Life Group Credit Protect plus Insurance Plan by submitting  signed Member Enrollment Form dated 13.09.2021 for sum assured of Rs.23,96,211/- against the premium of Rs.1,23,908.07 in single payment mode.  The DLA was insured under Master Policy No.PP000289 having certificate No.PP00028901YKR00 commencing from 16.09.2021 and the complainant was nominee under the policy.  Before the accepting the Member Enrollment Form, the contents of the Enrollment Form and the terms and conditions of the policy and exclusions attached to the terms and conditions were read and explained to the LA.  It has been admitted that the complainant lodged the death claim by submitted a group claim form dated 17.07.2023 (ANNEXURE OP-1/3) and the medical record of the treatment taken by the deceased life assured i.e. Sh. Daya Ram from PGI, Chandigarh (ANNEXURE OP-1/4). From the perusal of the medical record, it transpired that the DLA was suffering from cancer since 2021 and one of the main cause of death was "ADENOCARCINOMA RECTUM" & "POST CHEMOTHERAPY" and that the DLA was taking treatment from PGI much prior to issuance of the certificate of insurance, hence, the complainant was asked to explain that since when her husband was suffering from cancer. It was also transpired that Sh.Daya Ram (DLA) was taking treatment from PGI Chandigarh since 2019 as is evident from CR Number because the first four digits of CR number denotes to the year of treatment. It has further been stated that from the perusal of the treatment record of the deceased from PGI, Chandigarh under CR No.2019 0715 8330 entry for (5/6/23), it was apparently clear that the deceased was a known case of Rectum Cancer since 2021 (infact 2019). It implies that not only deceased but even the complainant through her letter dated 15.11.2023 tried to conceal material facts from them.  It has further been stated that vide letter dated 04.12.2023, the OP No.1 requested the complainant to provide the required documents i.e. (a) First and all the consultation notes for diagnosis & Treatment of medical condition of Rectum Cancer detected in 2021,  (b) first Biopsy report and (c) Surgical, Chemotherapy medical records etc. from the hospital/ treating doctor. However, the same has not been submitted by the complainant and as such the status of the claim is still pending and she preferred to file the present complaint.  It has further been stated that the complaint being premature, deserves to be dismissed.  It has further been stated that in case if the Policyholder/Policy Proposer is not satisfied with the features/the terms & conditions of the policy then Policyholder/Proposer can withdraw/return the policy within 15/30 days of the receipt of the Policy Document i.e. under "Freelook Period" provision. However, the LA/complainant had admittedly not approached the Opposite Party No.1 within the Free look Period that apparently deemed admitted that the Complainant agreed with the terms and conditions of the Policy. The remaining allegations have been denied, being false. Pleading that there is no deficiency in service or unfair trade practice on its part, OP No.1 prayed for dismissal of the complaint.
3.         In its separate written version, it has been stated that the HDFC Ltd. merged by way of amalgamation with HDFC Bank Ltd. in terms of the order dated 17.03.2023 passed by the NCLT, Mumbai. It has further been stated that a loan of Rs. 22,50,000/- was sanctioned and subsequently disbursed for construction of a dwelling unit on land/property identified as Plot No. 187, Village Bishanpura, Tehsil Derabassi, District SAS Nagar to the complainant and her husband vide Loan Account No. 663348913. In this regard, a copy of the Sanction Letter dated 15.06.2021 and a copy of the Home Loan Agreement dated 13.09.2021, along with Most Important Terms and Conditions (MITC) is being filed herewith as Exhibit OP-2/2 and Exhibit OP-2/3 respectively. In order to secure aforesaid loan, they further requested the Bank to provide additional financial assistance towards procuring an insurance policy from OP No.1 by way of a top up loan. As such, another top up loan of ₹1,46,212/- for insurance was sanctioned/ disbursed.  The sum assured under the policy was Rs.23,96,211/- lacs and the policy was a single premium plan with date of commencement as 16.09.2021 and the same was to expired on 15.09.2026 and the complainant was nominee under the policy. It has further been stated that  the complainant failed to maintain financial discipline qua the above loans availed by her from the Opposite Party No.2 and failed to make regular repayments as per the schedule agreed by way of the Loan Agreements and, therefore, OP No.2 has been constrained to issue a Loan Recall Notice dated 28.02.2024 thereby recalling both the loans availed by the Borrowers and thereafter, they were constrained to initiate action under provisions of the SARFAESI Act, 2002 in order to recover public money advanced in the form of loan(s). In view thereof, a Demand Notice dated 15.03.2024 under Section 13(2) of the said Act stands issued/served to the Complainant/Legal Heirs, providing them a statutory period of 60 days to repay the amount claimed therein. The said notice also stands published in newspapers in accordance with the law/Act.  It has further been stated that in view of Section 13(2) of the SARFAESI Act, the complaint is not maintainable qua it. The remaining allegations have been denied, being false. Pleading that there is no deficiency in service or unfair trade practice on their part, OP No.2 also prayed for dismissal of the complaint qua it.
4.        The complainant filed replication to the written reply of OP No.2 and controverted its stand and reiterating her own.
5.         Parties filed their respective affidavits and documents in support of their case.
6.         We have heard the Counsel for the contesting parties and have gone through the documents on record, including written submissions.
7.         At the time of arguments, the Counsel for OP No.2 moved an Misc. application No.254 of 2024 for placing on record newspaper publication(s) (Annexure A-1) of demand notice dated 15.03.2024 as Ex.RX. In view of the grounds mentioned in the application, the same is partly allowed and the documents are ordered to be taken on record.
8.         The perusal of policy Ex.C-2 duly proves that the husband of the complainant was duly insured with OP No.1 with the sum assured of Rs.23,96,211/-. The only ground taken by OP No.1 that on receiving the death claim intimation for the above said policy the investigation revealed that deceased Life assured late Sh.Daya Ram was found to be suffering from cancer since 2021 and one of the main cause of death was "ADENOCARCINOMA RECTUM" & "POST CHEMOTHERAPY" and that the was taking treatment from PGI much prior to issuance of the certificate of insurance.  However, we are not agreed with this ground taken by OP No.1 in the written version as the deceased life assured (DLA) had disclosed his age in the proposal form as 57 years as such it was the duty of the Insurance company to get the medical tests of the deceased life assured before issuing the policy as per IRDA of India to thorough check up of policy holder in case the insured was more than 45 years but no medical examination was got conducted by the Insurance company. The arguments of the complainant regarding non-conducting of medical examination by the Insurance company at the time of taking policy by the complainant remained unrebutted by OP No.1. Moreover it has been held by our own Hon’ble State Commission, Chandigarh in case SBI General Insurance Company Limited Vs. Balwinder Singh Jolly 2016(4) CLT 372 that if Insurance company failed to conduct thorough check up of the policy holder then Insurance company has no right to decline the insurance claim on non disclosure of the facts of pre existing disease when the policy was taken. Moreover, OP No.1 was within their right to cancel the policy if it doubted or found any information supplied by the deceased life assured being false or wrong, but this has not been done. The complainant should not be harassed by the insurance company by demanding unnecessary documents which are not in her possession.
9.         It is observed that the complainant has filed this complaint alleging deficiency in service and unfair trade practice  against the OPs on account of not allowing the claim of the complainant within prescribed period of 30-45 days as mandated by the IRDAI despite filing the claim along with the relevant documents with OP No.1. OP No.1 has taken a stand that the complainant has not provided the remaining documents to OP No.1 and, therefore, her claim could not be decided. It is observed that the complainant submitted her claim along with the relevant documents and OP No.1 is asking for the submission of those documents which are not in possession of the complainant. Moreover, OP No.1 has neither appointed any inquiry officer or investigator officer for the collection of documents from the concerned quarter but keep on delaying the matter. Further, on 09.05.2024, the record of the concerned quarter was filed by OP No.1 in this Commission. Therefore, OP No.1 could have decided the claim of the complainant after taking into consideration of the said documents but OP No.1 still keep on delaying the matter and the maxim ‘Justice delayed is justice denied’ comes into operation because  OP No.2 has initiated the proceedings against the complainant as unfortunately her husband the only bread earner of the family died on 06.06.2023 and she defaulted the loan account and it is to be classified as NPA because  OP No.2 Bank had sanctioned and disbursed the loan amount of Rs.22.50 lakhs to the complainant and her deceased husband during his life time to construct a dwelling unit on Plot No.187 at village Bishanpura, Tehsil Derabassi, District S.A.S. Nagar, Mohali and in order to secure aforesaid loan, at their request, OP No.2 provided the additional financial assistance towards procuring an insurance policy from OP No.1 by way of a top up loan. As such, another top up loan of ₹1,46,212/- for insurance was sanctioned/ disbursed by OP No.2.

                It is observed that OPs No.1 and 2 are two different entities of HDFC and one provided the loans and other provided insurance cover to secure the loan amount. Now the one i.e. OP No.1 is not deciding the claim of the complainant and other i.e. OP No.2 has initiated the NPA proceedings against the complainant. So, she is suffering at the hands of both of them without any fault on her part. Definitely not deciding the claim of the claimant/complainant by OP No.1 even after placing all the documents by the concerned quarter on 09.05.2024 before this Commission amounts to deficiency in service as well as unfair trade practice of delaying    the claim and not granting the same.  The Hon’ble Supreme Court of India in case titled as Gurmel Singh Versus Branch Manager, National Insurance Co. Ltd. in Civil Appeal No. 4071 OF 2022, decided on 20.05.2022 has held as under:- 

        “In many cases, it is found that the insurance companies are refusing the claim on flimsy grounds and/or technical grounds. While settling the claims, the insurance company should not be too technical and ask for the documents, which the insured is not in a position to produce due to circumstances beyond his control”.

10.         Rest, the stand taken by OP No.1 that the insured (deceased) did not disclose that he was suffering from pre-existing disease in his form and the complainant not entitled to the claimed amount is not sustainable because the burden was upon the OP No.1 to prove that the insured/deceased had concealed material fact of his pre-existing disease at the time of taking the policy.  It was the duty of the OPs to conduct a thorough enquiry about the previous treatment taken by the insured/deceased. OP No.1 has failed to prove on record that the disease was within the knowledge of the insured/deceased and he had intentionally withheld the same while filing the application form. Even if insured was suffering from the disease, it is quite possible that he should not have made aware of it taking into account the deadly disease and its fearful effects of disclosing of the same to him.  Mostly, the elders/concerned relatives don’t disclose the disease to the patient believing that disclosure of such deadly disease will have ill effect on the health of the concerned patient.  In some deadly disease cases, the factum of disease was not disclosed to the patient and was kept hidden from him in order to maintain his moral. In the present complaint, the complainant has specifically denied that the insured/deceased was aware of the disease at the time of taking the policy/filing the application form.  Though, the insured/deceased might be suffering from the disease yet there is nothing on record that he was aware of it and has the knowledge about it and willfully or intentionally did not disclose the same while taking insurance policy. Moreover, it is not a case where insured/deceased took the policy in his individual capacity with intention to take advantage of it but a Group Insurance Policy where he got insured fortunately. The very purpose of getting an insurance policy is to secure his family for future perils. If the insured/deceased who is only bread earner of the family died then the very purpose of getting the insurance policy would be frustrated in the event of its failure to disburse the same to his family/beneficiary.
11.         Further, despite the fact that the medical record of the insured/deceased was submitted before this Commission on 09.05.2024, it was neither verified by the treating doctor nor affidavit of treating doctor was placed on record. Moreover, the submission of secondary evidence i.e. photocopies of record without producing the original copies i.e. primary evidence before this Commission could not be taken into consideration/account in the absence of primary evidence. Secondary evidence can be placed on record only in the absence of primary evidence. Affidavit of treating doctor could ascertain that the disease was within the knowledge of the insured/deceased or not. In the absence of affidavit of treating doctor to this effect, mere record on file is not enough to prove the same.
12.         In M/s Max Bupa Health Insurance Co. Ltd. Vs Rakesh Walia, Appeal No.191 of 2016 decided on 18.8.2016, it has been held that as per IRDAI Regulations,  it is mandatory in case of issue of mediclaim policy   in favour of a person more than 45 years of age, to get him thoroughly examined.  In that case actually medical examination was got done.  However, insured was not put to thorough medical examination which led to this Commission to observe that in such cases, insurance company has to suffer the consequences.”

                In the present complaint, the complainant /wife of the insured/deceased and the insured/deceased both were above 45 years of age when they availed insurance policy by paying the premium. None of them were medically examined, hence, the insurance has to suffer the consequences.

13.         It is usual with the insurance company to show all types of green pasters to the customer at the time of selling insurance policies, and when it comes to payment of the insurance claim, they invent all sort of excuses to deny the claim. In the facts of this case, ratio of the decision of Hon’ble Apex Court in case of Dharmendra Goel Vs. Oriental Insurance Co. Ltd., III (2008) CPJ 63 (SC) is fully attracted, wherein it was held that, Insurance Company being in a dominant position, often acts in an unreasonable manner and after having accepted the value of a particular insured goods, disowns that very figure on one pretext or the other, when they are called upon to pay compensation.  This ‘take it or leave it’, attitude is clearly unwarranted not only as being bad in law, but ethically indefensible.  It is generally seen that the insurance companies are only interested in earning the premiums and find ways and means to decline claims.

                In similar set of facts the Hon’ble Punjab & Haryana High Court in case titled as New India Assurance Company Limited Vs. Smt.Usha Yadav & Others 2008(3) RCR (Civil) Page 111 went on to hold as under:-

          “It seems that the insurance companies are only interested in earning the premiums and find ways and means to decline claims. All conditions which generally are hidden, need to be simplified so that these are easily understood by a person at the time of buying any policy.  The Insurance Companies in such cases rely upon clauses of the agreement, which a person is generally made to sign on dotted lines at the time of obtaining policy. Insurance Company also directed to pay costs of Rs.5000/- for luxury litigation, being rich.

                In view of the above discussion, we hold that the OP-Insurance Company has committed deficiency in service by not releasing the claim under the policy.

14.         For the reasons recorded above, the present complaint deserves to be partly allowed and the same is accordingly partly allowed. OP No.1-Company is directed to clear the loan account of the complainant and her husband by crediting the sum assured of Rs.23,96,211/-  maintained with OP No.2 on the date of death of the LA i.e. 06.06.2023 and to pay the remaining amount to the complainant along with interest  @ 9% p.a. from 07.06.2023 till the date of its actual realization to the complainant.
15.         The complaint qua OP No.2-Bank stands dismissed.
16.         This order be complied with by OP No.1 within 60 days from the date of receipt of its certified copy.
17.         The pending application(s), if any, stands disposed of accordingly.
18.         Certified copies of this order be sent to the parties as per rules. The file be consigned.

Announced in open Commission 11.06.2024
	Sd/- (AMRINDER SINGH SIDHU) PRESIDENT
	Sd/-
	(B.M.SHARMA) MEMBER