Haryana

StateCommission

CC/193/2015

Succha Singh - Complainant(s)

Versus

HDFC Life Insurance - Opp.Party(s)

karna Singh

01 Mar 2018

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

                                                 

Complaint No     :    193 of 2015

Date of Institution:    02.11.2015

Date of Decision :     01.03.2018

 

Suchha Singh, Village Birthe Beri, P.O. Rajaund, Kaithal-136033, Haryana.

                                      Complainant

Versus

1.      The Head Branch Office, HDFC Life, SL Karnal Branch, Narayan Plaza, SCO 778-779, Kunjpura Road, Opposite Mahavir Dal, Karnal-132001.

2.      The Head, Registered Office, Ramon House, H.T. Parekh Marg, 169 Backbay Reclamation, Church Gate, Mumbai-400020.

                                      Opposite Parties

 

CORAM:             Hon’ble Mr. Justice Nawab Singh, President.

                             Mr. Balbir Singh, Judicial Member.

                                                                                                         

Argued by:          Shri Sanjiv Kumar Aggarwal, Advocate for Complainant.

                             Shri Sandeep Suri, Advocate for Opposite Parties.

 

                                                   O R D E R

 

BALBIR SINGH, JUDICIAL MEMBER

 

        Kuldeep Singh son of complainant-Sucha Singh (since deceased) during his life time obtained a life insurance policy namely HDFC SL Progrowth Flexi, bearing No.14556985 (Exhibit C-2) from HDFC Standard Life Insurance Company Limited (for short ‘the Insurance Company’) for a period of ten years mentioning date of commencement as August 31^st, 2011 and Sum Assured as Rs.55,00,000/-. The proposal for providing the insurance policy was accepted vide letter dated 03^rd September, 2011 (Exhibit C-2). Kuldeep Singh (hereinafter referred to as the ‘Life Assured’) was required to pay an amount of Rs.5,50,000/- annually as premium.   The life assured used to make payment of the premium amount regularly without any default and paid total amount of Rs.16,50,000/- as premium till February 28^th, 2014.  Kuldeep Singh was quite healthy. Unfortunately he died on March 25^th, 2014 at Arpana Hospital, Madhuban within a short time span due to illness.  Complainant being nominee of the life assured submitted his insurance claim alongwith relevant documents but ultimately vide letter dated March 17^th, 2015 the insurance claim of the complainant was repudiated.  According to the complainant his claim was repudiated on false and fictitious grounds.  The complainant was shocked to know that the opposite party only credited an amount of Rs.23,30,875.99 in the account of the complainant on March 23^rd, 2015 towards death claim of his son instead of making payment of the total sum assured of Rs.55,00,000/-.

2.                The complainant has filed the present complaint with a prayer to direct the opposite parties to make payment of the total sum assured to the complainant with interest at the rate of 18% per annum from the date of death of Kuldeep Singh; to pay an amount of Rs.2,00,000/- on account of un-necessary harassment, mental agony and an amount of Rs.25,000/- on account of litigation expenses.

3.                The opposite parties in their written version have taken plea that the complainant has not placed on the file the complete insurance policy and record; that the State Consumer Commission has no jurisdiction to decide this complaint and that it is not a case of deficiency in service. It is pleaded that the insurance policy provided to Kuldeep Singh is a Linked Policy. The investment was made in the share market as per the policy applied for and the returns of the policy were based on share market. The complainant is not entitled to receive the amount claimed as the life assured concealed material facts when the insurance policy was provided. The life assured concealed this fact that he was suffering from chronic liver disease prior to the issuance of the policy. He was a chronic alcoholic. During investigation it was established that the life assured was suffering from chronic liver disease and he was a chronic alcoholic. The life assured was diagnosed as chronic liver disease decompensated (alcoholic liver disease) hepatitis-B and hepatitis-C. Alcoholic cirrhosis develops if a person drinks heavily for a decade or more. An amount of Rs.23,30,875/- has already been paid to the complainant as per terms and conditions of the insurance policy being Unit Fund Value. The Insurance Company received information regarding claim of the complainant on September 04^th, 2014 very late. The amount was paid as per settlement on March 14^th, 2015. It is admitted fact that the HDFC progrowth policy was obtained by Kuldeep Singh life assured during his life time mentioning total sum assured as rupees fifty lacs. The complainant is not entitled to receive any more amount from the opposite parties. It is prayed that the complaint filed by the complainant be dismissed with cost.

4.                Complainant in his evidence has appeared as CW-1 and produced the following documents:-

1	Affidavit of complainant Sucha Singh	Exhibit C-1
2	Letter dated 03.09.2011	Exhibit C-2
3	Death Certificate of Kuldeep Singh	Exhibit C-3
4	Certificate of illness	Exhibit C-4
5	Death Certificate of Kuldeep Singh	Exhibit C-5
6	Letter dated 17.03.2015	Exhibit C-6
7	Declaration	Exhibit C-7
8	Letter dated 23.03.2015	Exhibit C-8
9	Legal Notice	Exhibit C-9

 

5.                Opposite Parties in their evidence examined Amit Khanna, Deputy Manager (Legal & Compliance) HDFC Standard Life Insurance Company Limited as OPW-1 and produced the following documents:-

1	Affidavit of Amit Khanna, Deputy Manager	Exhibit OPW1/A
2	Typed copy of medical record/history of Kuldeep Singh issued by Arpana Hospital	Exhibit OP-1
3	Medical record/history of Kuldeep Singh issued by Arpana Hospital	Exhibit OP-2
4	Death claim investigation report	Exhibit OP-3
5	Unit Linked Proposal Form	Exhibit OP-4
6	Terms and conditions of policy	Exhibit OP-5
7	Policy Revival Letter issued by HDFC Standard Life Insurance Company Limited	Exhibit OP-6
8	Policy Servicing Request Form 1	Exhibit OP-7
9	Form J	Exhibit OP-8
10	Death Claim-Further Requirement	Exhibit OP-9
11	Letter dated 17.03.2015 regarding death claim	Exhibit OP-10

 

6.                We have heard learned counsel for the parties and perused the case file as well as written arguments submitted by the learned counsel for the complainant.

7.                During the course of arguments, there was no controversy of any type that Kuldeep Singh son of the complainant Sucha Singh was provided Insurance Policy namely HDFC SL Progrowth Flexi, bearing No.14556985 (Exhibit C-2) in the month of August, 2011, on payment of an amount of Rs.5,50,000/- as premium mentioning the total Sum Assured as Rs.55.00 lacs and date of commencement of the policy as 31^st August, 2011. Policy Term was 10 years. The life assured made payment of three installments premium amount up to 28^th February, 2014 total amounting to Rs.16,50,000/-. It is admitted fact and is evident from the Death Certificate Exhibit C-5 that the life assured died on March 25^th, 2014 at Arpana Hospital, Madhuban. The complainant being father of the life assured submitted his insurance claim before the opposite parties. An amount of Rs.23,30,875/- including an amount of Rs.16,50,000/- already deposited by the life assured as premium amount and as ‘Fund Value’ was credited in the account of the complainant on March 14^th, 2015 as is evident from letter Exhibit C-8.  Vide letter dated March 17^th, 2015 (Exhibit C-6) the Insurance Company repudiated the claim of the complainant on the ground that the life assured was suffering from Chronic Liver Disease prior to obtaining the insurance policy and the life assured forged documents with regard to his income.

8.                It is admitted fact that the life assured did not deposit the fourth installment of the premium of the insurance policy to be paid on or before August 31^st, 2013.  Due to non-payment of the premium amount, the insurance policy got lapsed. After the insurance policy had lapsed, the life assured Kuldeep Singh on January 06^th, 2014 was got admitted in Arpana Hospital, Karnal, which is evident from Doctors Certificate (Exhibit C-4) and hospital record Exhibit OP-1, History of Kuldeep Singh issued from Arpana Hospital Exhibit OP-2 that the life assured remained admitted in Arpana Hospital, Karnal from January 06^th, 2014 up to February 18^th, 2014 and thereafter from March 20^th, 2014 up to March 25^th, 2014 for his treatment. It is mentioned in Doctors Certificate Exhibit C-4 and above mentioned documents that as per details of diagnosis, the life assured was a patient of chronic liver disease )Alcoholic Hepatitis B + Hepatitis C). The opposite parties could not produce any other document to prove that the life assured prior to January 06^th, 2014 ever remained admitted in any hospital or he got treatment regarding chronic liver disease.

9.                It is admitted fact that the life assured did not make payment of fourth installment of annual premium amount Rs.5,50,000/- which was to be paid on or before 31^st August, 2013 Policy revival letter Exhibit OP-6 was issued on 02^nd October, 2013 addressed to the life assured mentioning that the insurance policy stood lapsed as 4^th installment had not been paid and the life assured was entitled for revival of the insurance policy within 30 days on or before 05^th November, 2013. In this way, as the life assured Kuldeep Singh neither made payment of the fourth installment of the premium amount nor utilized option given for revival of the insurance policy, the insurance policy got lapsed. Later on the life assured Kuldeep Singh deposited the 4^th installment of the premium amount and other charges on January 30^th, 2014 and got the insurance policy revived. The insurance claim was submitted by the complainant Sucha Singh-father of the life assured on 04^th September, 2014 and the insurance claim of the complainant was repudiated vide letter dated 17^th March, 2015 Exhibit OP-10 on the ground that the life assured was suffering from Chronic liver disease prior to issuance of the insurance policy and the documents produced by the life assured as proof of his income were found fake. The insurance claim was repudiated stating that material facts had been concealed by the life assured at the time of submitting the proposal form after receiving report of the surveyor and investigator appointed by the Insurance Company Exhibit OP-3.

10.              The life assured Kuldeep Singh was provided the life insurance policy mentioning total sum assured as Rs.55.00 lacs on the basis of information given by the life assured regarding his annual income. As per version of the opposite parties, the information given by the life assured was found false. The life assured to prove his annual income submitted before the insurance company form ‘J’ 12 in number (Exhibit OP-8) In fact the income from sale of agricultural produce wheat crop is shown in the name of Sucha Singh, father of the life assured and not in the name of Kuldeep Singh himself. Moreover, during investigation it was found that Subhash Chander, Commission Agent, who allegedly issued the above mentioned 12 Form ‘J’ recorded his statement that forms ‘J’ were not issued from his firm. On the bottom of the Photostat copies of ‘J’ form 12 in number (Exhibit OP-8), it is mentioned that Subhash Chand, Commission agent stated that Form ‘J’ were not issued from their firm. Subhash Chand did not specifically deny his signatures upon Form ‘J’. Neither affidavit of Subhash Chand, Commission Agent has been tendered in evidence nor the opposite parties preferred to examine Subhash Chand to deny issuance of these documents.

11.              Moreover, if there was doubt of any type regarding issuance of Form ‘J’ and annual income of the life assured, the opposite parties should have made proper verification at the time of issuance of the insurance policy. The opposite parties provided life insurance policy in the name of Kuldeep Singh, life assured knowing fully well that Forms ‘J’ 12 in number (Exhibit OP-8) were issued in the name of Sucha Singh, father of the life assured. Moreover, this fact also cannot be overlooked that in joint family system, the income from family property and even income earned by one member of the family is to be used to meet the financial needs of other family members also who do not earn any income. Moreover, when the opposite parties did not raise objection and accepted as correct the annual income of the life assured as mentioned in the proposal form on the basis of Form ‘J’ in the name of Sucha Singh, the opposite parties are stopped by their own acts and conduct from raising any plea regarding income of the life assured when insurance claim is filed.

12.              We feel regarding proof of age, identity and income of the life assured the insurance company should make verification at the time of acceptance of the insurance policy.  In case the life assured is unable to satisfy the insurance company regarding his/her age, identity or income, the insurance company should not issue insurance policy in his/her favour.  It is generally found that at the time of issuance of the insurance policy, the insurance company remains in haste to receive premium amount and to increase its business. The insurance company starts making verification regarding age, income and identity as and when the insurance claim is submitted so that the insurance company may be able to avoid payment as per terms of the insurance policy. On this point of controversy, a decision of the Hon’ble National Consumer Disputes Redressal Commission, New Delhi (for short ‘the National Commission’) in case Bajaj Allianz Life Insurance Company Limited and another versus Virender Singh, 2015(2) C.P.J.710 and another decision of the Hon’ble National Commission in case Life Insurance Corporation of India and another versus Chanagoni Upendra and others, 2012(1) C.P.J. 409 support the version of the complainant.

13.              We have closely perused the above cited case laws. Cited case laws above fully support the version of the complainant. In Virender Singh’s case (Supra) claim of the complainant was repudiated on the ground merely School Leaving Certificate having been found to be forged document during verification. No evidence was produced by the insurance company to prove actual age of the life assured. Findings were given that the claim of the claimant was justified.

14.              As per facts of Chanagoni Upendra’s case (Supra), the annual income of the life assured was only Rs.10,500/- and the life assured had falsely submitted information regarding his income as Rs.40,000/-. In that case also findings were given that once the insurance company had accepted the proposal and issued the policy in question, the insurance claim cannot be repudiated on the ground of showing less income.

15.              As per discussions above in detail, we have no hesitation in holding that repudiation of the insurance claim submitted by the complainant on the ground that the complainant could not prove income of the life assured mentioned in the proposal form is unjustified.

16.              Now coming to the other ground that the life assured concealed true and material facts regarding his health. Kuldeep Singh life assured was suffering from Chronic Liver Disease before obtaining the insurance policy but concealed this fact at the time of submitting the proposal form. In this case, the opposite parties could not adduce in evidence any such document to prove that before issuance of the insurance policy, the life assured was suffering from Chronic Liver Disease or he remained admitted in any hospital for treatment in this regard.

17.              On the basis of pleadings and documents on the file, findings can be given that the life assured was got admitted in Arpana Hospital, Karnal on January 06^th, 2014 where he remained admitted up to February 18^th, 2014. Thereafter also the life assured remained admitted in Arpana Hospital, Karnal from March 20^th, 2014 up to March 25^th, 2014 the day the life assured breathed his last due to Chronic Liver Disease. It is evident from the hospital record Exhibit OP-1, admission record Exhibit OP-2 as well as Doctor's Certificate Exhibit C-4. It is evident from Death Certificate issued by Registrar Birth and Death Exhibit C-5 and Dearth Certificate issued from Arpana Hospital dated 23^rd, December, 2014 (Exhibit C-3) that the life assured died on March 25^th, 2014. As mentioned in Doctors Certificate Exhibit C-4 and other documents, Kuldeep Singh was admitted as a patient of Chronic Liver Disease Alcoholic Hepatitis B and Hepatitis C. In the History of Kuldeep Singh issued by Arpana Hospital (Exhibit OP-1) the cause of death of the life assured has been mentioned as “Sudden Cardiac Arrest OLD (ALC + Hep B + Hep C) C Hepatic Coma C Ascitis”. In this way, findings can be safely given that the life assured died due to chronic liver disease and the life assured as well as others family members came to know first time regarding chronic liver disease on January 06^th, 2014 when the life assured was admitted in Arpana Hospital, Karnal.

18.              It is admitted fact that at the time of revival of the insurance policy, the life assured deposited 4^th installment premium amount including other charges on January 30^th, 2014. So, situation is quite clear that the life assured in the beginning was not willing for continuation of the insurance policy in his name and he did not deposit the 4^th installment of the premium amount of Rs.5,50,000/-. The life assured did not avail opportunity to get the insurance policy revived despite issuance of policy revival letter dated 02^nd, October, 2013 Exhibit OP-6. The life assured was given opportunity for revival of the insurance policy within a period of 30 days up to November 05^th, 2013. All of a sudden Kuldeep Singh life assured took a decision to deposit 4^th installment of the premium amount and other charges on January 30^th, 2014 when he was admitted in Arpana Hospital and was undergoing treatment for chronic liver disease. The insurance policy was revived by the opposite parties. So, it is clear that at the time of revival of the policy, the life assured concealed this fact that he was suffering from chronic liver disease. It appears that the policy was got revived when the life assured and other family members thought that there were very remote chances of survival of the life assured from illness. Certainly, this act on the part of the life assured can be considered as an act of unfair trade practice and repudiation of the insurance claim on this ground was justified.

19.              During the course of arguments learned counsel for the complainant argued that repudiation of the insurance claim was not justified keeping in mind the provision of Section 45 of the Insurance Act, 1938.  It is argued that as provided under Section 30 of the Life Insurance Corporation Act, 1956, no policy of insurance can be repudiated after expiry of two years. In support of his this contention, learned counsel for the complainant placed his reliance upon a decision of the Hon’ble Supreme Court of India in case law Life Insurance Corporation of India versus Smt. Asha Goel, 2012(3) C.P.J. 5.  

20.              We have closely perused the above cited case law. Cited case law is not of much help to the complainant in this case as facts and circumstances of the case in hand are somewhat different. Under Section 30 of the Insurance Corporation Act, 1956 it is provided that no policy of insurance can be repudiated after expiry of two years unless the insurer shows that such statement of fact was on a material matter and suppression was fraudulent on the part of the policy holder. As per facts of the case in hand it is quite clear that the life assured got his insurance policy revived when he came to know that he was suffering from chronic liver disease and chances of his survival from illness were remote.

21.              Learned counsel for the complainant argued that the opposite parties failed to prove that the life assured was suffering from chronic liver disease or any other disease before issuance of the insurance policy, as such repudiation of the insurance claim submitted by the complainant is not justified. The complainant is not entitled to receive the total sum assured Rs.55.00 lacs instead of an amount of Rs.23,30,875.99 which has already been received by the complainant being total premium amount deposited as well as Fund Value. In support of his this contention learned counsel for the complainant placed reliance upon a decision of the Hon’ble National Commission, New Delhi in case Pyari Devi versus LIC of India, 2016(1) C.P.J. 81 as well as a decision of the Hon’ble Chandigarh State Consumer Disputes Redressal Commission, in case Sh. Baljit Singh Banga versus Life insurance Corporation of India and Others, 2003(1) C.P.C. 74.  

22.              We have closely perused the above cited case laws. As per facts of Pyari Devi’s case (Supra), it could not be proved that the life assured was suffering from cough and breathlessness for the last two years prior to issuance of the insurance policy.  Similarly, as per facts of Baljit Singh Banga’s case (Supra), there was no evidence to prove that the deceased had intentionally suppressed his ailment at the time of taking the insurance policy. We feel cited case laws above are of no help to the complainant in this case as facts of the case in hand are different. As per facts of the case in hand, the insurance policy got lapsed in the month of September, 2013 when fourth installment of the premium amount was not deposited. The complainant did not apply for revival of the insurance policy within a period of 30 days after receiving a letter in this regard from the Insurance Company. The life assured got the insurance policy revived when on January 30^th, 2014 he was admitted in hospital for treatment of chronic disease. The life assured concealed regarding his ill health before revival of the insurance policy.

23.              It is well settled principle of law that revival of the policy is a new contract and the insurer can repudiate the insurance claim if it finds that the policy was got revived by the insured on mis-statement and by concealment of true facts regarding his/her health. In case law LIFE INSURANCE CORP. OF INDIA & ANR. versus KEMPAMMA & ANR. I(2013) CPJ 653 (NC), Hon’ble National Commission held as under:-

“11.   Learned Counsel for the respondent further argued that statement regarding his health at the time of revival of lapsed policy is not to be seen. This argument is devoid of force in the light of judgment rendered by this Commission in R.P. No.85 of 2007, Pritam Kaur v. LIC of India, in which it was held that “At the time of revival fresh declaration is taken on the basis of which new contract is entered into”. Thus, it becomes clear that at the time of revival of policy new contract comes into existence and if assured suppresses material fact or gives false declaration regarding his health, Insurance Company is entitled to repudiate claim.”

24.              As a result as per discussions above in detail, we have no hesitation in holding that repudiation of the insurance claim submitted by the complainant vide letter dated March 17^th, 2015 is justified on the ground that the life assured concealed that he was suffering from chronic liver disease. Resultantly, we find no illegality in the repudiation letter issued by the Insurance Company. It is held that the complainant is not entitled to any amount of insurance policy obtained by the life assured Kuldeep Singh. Hence, the complaint is dismissed being devoid of merits.

 

Announced: 01.03.2018

(Balbir Singh) Judicial Member

(Nawab Singh) President

 

CL