Meena Rani filed a consumer case on 02 Nov 2023 against HDFC Life in the Ludhiana Consumer Court. The case no is CC/20/76 and the judgment uploaded on 10 Nov 2023.
DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, LUDHIANA.
Complaint No:76 dated 25.02.2020. Date of decision: 02.11.2023.
1. Meena Rani wife of Late Shri Ajay Kumar
2. Shivangi Kaushal aged about 22 years daughter of late Shri Ajay Kumar,
3. Shivam Kaushal aged about 20 years
4. Kaushalya Devi wife of Shri Madan Lal
All residents of House No.474, Ward No.17, Kuzigaran Mohalla, Khanna, Ludhiana. ..…Complainants
Versus
Complaint Under Section 12 of the Consumer Protection Act.
QUORUM:
SH. SANJEEV BATRA, PRESIDENT
SH. JASWINDER SINGH, MEMBER
MS. MONIKA BHAGAT, MEMBER
COUNSEL FOR THE PARTIES:
For complainant : Sh. Devan Verma, Advocate.
For OP1 and OP2 : Sh. Nitin Kapila, Advocate.
For OP3 : Exparte.
ORDER
PER SANJEEV BATRA, PRESIDENT
1. Shorn of unnecessary details, the facts of the case are that the complainant and her husband late Ajay Kumar had taken loan from OP3 who also issued the insurance policy of late Shri Ajay Kumar vide policy No.PP000239 having claim No.Lan PC144625/6889624 to the tune of Rs.12,13,981/- towards death benefits on dated 31.03.2019 and the premium was paid at that time was of Rs.13,982/-. No such detail in the shape of letter has been given to the complainant. Unfortunately, the health of husband of complainant was become deteriorated and as such, he was took to hospital at Batra Clinic & Nursing Home but before reaching at the hospital, husband of complainant had already been expired and a certificate in this respect was also issued by Batra Clinic & Nursing Home, Malerkotla Road, Khanna. Thereafter, as per the terms and conditions of the policy, the complainants being legal heirs of deceased has approached the OPs and lodged the claim within the stipulated time period prescribed by the company and thereafter, on 07.12.2019, the claim of the complainants repudiated on the ground that the life assured was suffering from diabetes and hypertension and generalized Cerebral Atrophy which is prior to issuance of the policy. Such repudiation of claim lodged by the complainants with the OPs is claimed to be illegal as before getting the policy of deceased, the Ops has examined him and no disease has been found in it and deceased was never suffering from any disease of diabetes and hypertension and generalized cerebral atrophy. The complainants visited the office of OPs many times but despite that they have not acceded the requests of the complainant. In the end, the complainant prayed for issuance of directions to the OPs to pay the claim along with interest and compensation of Rs.1 lac and litigation expenses of Rs.22,000/-.
2. Notice to opposite party No.3 sent through registered post on 19.03.2021 but none turned up for opposite party No.3 despite service of notice and as such, opposite party No.3 was proceeded against exparte vide order dated 30.04.2021.
3. Upon notice, opposite party No.1 and 2 appeared and filed joint written statement and took the preliminary objections that the present complaint is false, frivolous and vexatious and there is no deficiency on the part of the answering opposite parties since they have acted in accordance with the terms and conditions of the policy. The complaint is liable to be dismissed in view of the section 2(1)(g) of the Consumer Protection Act. It is submitted that the policy in question is a contract entered into between the deceased Sh.Ajay Kumar and answering OPs the parties are bound by the terms and conditions of the contract. The present complaint is not maintainable as the complainants have not come to the Court with clean hands and have suppressed the material facts form this Commission. It is pertinent to mention here that Sh.Ajay Kumar was husband of complainant no.1, father of complainants no.2 and 3 and son of complainant no.4. The complainant and her deceased husband Sh.Ajay Kumar had taken loan from the OP3 and that time, the insurance policy of late Sh.Ajay Kumar was issued on 31.03.2019 vide policy No.PP000239 to the tune of Rs.12,13,981/- towards the death benefits and a premium of Rs.13,982/- was paid towards the said policy. The policy was issued on the basis of proposal made to the OP1 and OP2 which was accepted at standard rates based on the information provided in the member information form submitted by the deceased and against which the policy was issued on 31.03.2019. The Member Enrolment Forum deals with ‘Health Details of Life to be assured’. In this connection under short medical questionnaire, the following relevant questions were answered as “NO’:-
1]Have you ever suffered or are currently suffering from: (a)Chest pain or heart attack or any other heart disease. (b)Cancer, tumour growth or cyst of any kind. (c)Stroke, Paralysis, Epilepsy, any psychiatric/mental disorder, disorder of brain/nervous system or any kind of physical disabilities. (d)Asthma, Tuberculosis or lung disorder (e)Disease or disorder of muscles, bones or joint, arthritis or blood disorder (anemia) or any endocrine disorder. (f)Disease of kidney, digestive system (stomach, pancreas, gall bladder, intestine) liver, hepatitis B or C or HIV/AIDS infection. (g)Diabetes, high blood pressure.
| NO |
6] Are you taking any medication or has a doctor ever attended to you for any conditions, diseases or impairment not mentioned above (except for cough or cold)] | NO |
However, from the investigations, it was established that the life assured namely Sh.Ajay Kumar was suffering from diabetes and hypertension and generalized Cerebral Atrophy which is prior to the issuance of the policy and he remained under treatment and was fully aware of the said diseases. The said fact was not disclosed in the application/proposal form. It is submitted that as the vital information was not provided to the answering OPs at the time of applying for the insurance policy, the claim of the complainants could not be accepted and the same was declined vide letter dated 07.12.2019.
On merits, the opposite parties reiterated the crux of averments made in the preliminary objections. The opposite parties submitted that no alleged request was ever made by the complainants to the answering OPs with regard to approach by them with the answering OPs nor there was any occasion for the same as the claim is not legally payable to the complainants. False story has been created by the complainants in the complaint. The answering OPs denied any deficiency in service on their part and in the end, prayed for dismissal of the complaint.
4. In replication filed to the written statement filed by the complainants, they have reiterated the allegations leveled in the complaint and denied the averments made in the written statement and prayed for relief as claimed in the complaint.
5. In support of case of the complainants, counsel for the complainants tendered in evidence affidavit of complainant No.1 as Ex. CW1/A in which she reiterated the allegations and the claim of compensation as stated in the complaint. Further, counsel for the complainants tendered in evidence documents Ex.C1 to Ex.C5 and closed the evidence.
6. On the other hand, the counsel for the OP1 and OP2 tendered in evidence affidavit Ex. RA of Sh. Gurpreet Singh, Deputy Manager Legal & Compliance, HDFC Life Insurance Co. Ltd., Chandigarh along with documents Ex. R1 to Ex. R24 and closed the evidence.
7. We have heard the arguments of the counsel for the parties and also gone through the complaint, affidavit and annexed documents and written statement, affidavit and documents produced on record by both the parties.
8. Complainant No.1 is the wife, complainant No.2 and 3 are children and complainant No.4 is the mother of deceased namely Ajay Kumar who was extended business loan facilities by OP3 for a sum of Rs.12,00,000/-. Letter in this regard is Ex. R9. On 31.03.2019, OP1 and OP2 being the Master Policyholder of HDFC Life Group Credit Protect Plus Insurance plan, enrolled Ajay Kumar deceased as member vide membership enrolment form Ex. R2 and a sum of Rs.12,13,981/- was assured having policy term of 2 years. The health details of Ajay Kumar is reproduced as under, which he answered in ‘Negative’. Unfortunately, on 02.10.2019, health condition of Ajay Kumar suddenly deteriorated and at 08.15 PM he was declared brought dead at Batra Clinic and Nursing Home, Khanna vide certificate Ex. C2 = Ex. R5. Ex. C3 is the death certificate of Ajay Kumar. On receiving claim intimation, the OPs got conducted investigation as per investigation report Ex. R11. After scrutinizing the documents, vide letter dated 07.12.2019 Ex. C1, the claim was repudiated by the OPs, operative part of which reads as under:-
“The policy was issued on the basis of an application by Late Mr. Ajay Kumar to HDFC Life Insurance Co. Ltd. (hereinafter referred to as “The Company”) for a sum assured of INR 12,13,981.00 towards death benefits.
This case was accepted at standard rates based on the information provided in the member information from and the policy was issued on 31/03/2019.
We would like to bring to your attention, the “Member Enrolment Form” in the Member Enrolment Form, which deals with ‘Health Details of the Life to be Assured’. In this connection, under short Medical Questionnaire in the Member Enrolment Form (which deals with ‘Health Details of Life to be Assured), the following relevant question(s) was/were answered as ‘No’.
HEALTH DETAISL FO LIFE TO BE ASSURED:
1]Have you ever suffered or are currently suffering from: (a)Chest pain or heart attack or any other heart disease. (b)Cancer, tumour growth or cyst of any kind. (c)Stroke, Paralysis, Epilepsy, any psychiatric/mental disorder, disorder of brain/nervous system or any kind of physical disabilities. (d)Asthma, Tuberculosis or lung disorder (e)Disease or disorder of muscles, bones or joint, arthritis or blood disorder (anemia) or any endocrine disorder. (f)Disease of kidney, digestive system (stomach, pancreas, gall bladder, intestine) liver, hepatitis B or C or HIV/AIDS infection. (g)Diabetes, high blood pressure.
| NO |
6] Are you taking any medication or has a doctor ever attended to you for any conditions, diseases or impairment not mentioned above (except for cough or cold)] | NO |
Our investigations have however established that the Life Assured was suffering from Diabetes and Hypertension and Generalised Cerebral Atrophy which is prior to issuance of the policy.
Had this information been provided to the Company at the time of applying for the insurance policy, we would have called for further medical tests/questionnaires. Based on the reports only, we would have decided to offer insurance cover.
Since this viral information was not provided to us at the time of applying for the policy, we are unable to accept your claim.
Also note that, if the insured member had multiple insurance covers under the same or different products; final claim decision in other claims may vary according to policy specifications and availability of supporting documents at the time of claim decision.”
9. Now the point of determination arises whether repudiation of the claim by the OPs was justified or not?
10. As per certificate Ex. C2 = Ex. R5 of Batra Clinic & Nursing Home, the insured Sh. Ajay Kumar was brought dead on 02.10.2019 at 08.15 PM. However, the OPs have produced Ex. R12 to Ex. R18 the medical record of the insured Ajay Kumar qua the diagnosis of his previous ailment w.e.f. 24.12.2014 to 19.08.2017. Ex. R12, Ex. R13 is the medical record of PGI Hospital, Chandigarh dated 03.02.2015 stating that the insured was having Type-2 Diabetes Mellitus for 3 years, HTN and symptomatic for one year. His speech was also found impaired. Further Ex. R15, Ex. R16 dated 19.08.2017 is the record of SPS Hospitals, Ludhiana regarding brain MRI examination of Ajay Kumar. Ex. R17 dated 24.12.2014 and Ex. R18 dated 19.04.2015 is the 2D MRI brain reports of Ajay Kumar conducted at Preet Scan Centre, Khanna whereby MR imaging of brain of Ajay Kumar revealed generalized cerebral atrophy. In all these medical records/reports, the insured Ajay Kumar was having brain related disease i.e. cerebral atrophy and was taking treatment for the said disease much before obtaining the insurance policy Ex. R7 commencing from 31.03.2019 by filling member enrolment form/proposal form Ex. R2. However, the insured Ajay Kumar answered the relevant questions regarding his health condition in ‘Negative’. Accordingly, the opposite parties repudiated the claim of the complainant vide Claim Denial Letter dated 07.12.2019 Ex. C1 on the ground of non-disclosure of pre-existing disease. So there is a concealment and suppression of material facts which could have affected the decision of the opposite parties with regard to the terms and conditions of the policy.
11. The Insurance Regulatory and Development Authority of India (IRDAI) in its notification dated 16.10.2002 issued the Insurance Regulatory and Development Authority (Protection of Policyholders’ Interests) Regulations 2002 whereby the “Proposal Form” is defined in Regulation 2(d) as under:-
“2(d) “Proposal form” means a form to be filed in by a proposer for insurance, for furnishing all material information required by the insurer in respect of a risk, in order to enable the insurer to decide whether to accept or decline, to undertake the s\risk and in the event of acceptance of the risk, to determine the rates, terms and conditions of a cover to be granted.
Further Regulation 4, deals with proposals for insurance as under:-
12. In a case titled as Manmohan Nanda Vs United India Assurance Co. Ltd. and others 2022(I) CPJ 20 (SC) wherein the Hon’ble Supreme Court of India has held as under:-
(i) There is a duty or obligation of disclosure by the insured regarding any material fact at the time of making the proposal. What constitutes a material fact would depend upon the nature of the insurance policy to be taken, the risk to be covered, as well as the queries that are raised in the proposal form.
(ii) What may be a material fact in a case would also depend upon the health and medical condition of the proposer.
(iii) If specific queries are made in a proposal form then it is expected that specific answers are given by the insured who is bound by the duty to disclose all material facts.
(iv) If any query or column in a proposal form is left blank then the insurance company must ask the insured to fill it up. If in spite of any column being left blank, the insurance company accepts the premium and issues a policy, it cannot at a later stage, when a claim is made under the policy, say that there was a suppression or nondisclosure of a material fact, and seek to repudiate the claim.
(v) The insurance company has the right to seek details regarding medical condition, if any, of the proposer by getting the proposer examined by one of its empanelled doctors. If, on the consideration of the medical report, the insurance company is satisfied about the medical condition of the proposer and that there is no risk of preexisting illness, and on such satisfaction it has issued the policy, it cannot thereafter, contend that there was a possible preexisting illness or sickness which has led to the claim being made by the insured and for that reason repudiate the claim.
(vi) The insurer must be able to assess the likely risks that may arise from the status of health and existing disease, if any, disclosed by the insured in the proposal form before issuing the insurance policy. Once the policy has been issued after assessing the medical condition of the insured, the insurer cannot repudiate the claim by citing an existing medical condition which was disclosed by the insured in the proposal form, which condition has led to a particular risk in respect of which the claim has been made by the insured.
(vii) In other words, a prudent insurer has to gauge the possible risk that the policy would have to cover and accordingly decide to either accept the proposal form and issue a policy or decline to do so. Such an exercise is dependant on the queries made in the proposal form and the answer to the said queries given by the proposer.
13. Reference can be made to Branch Manager, Bajaj Allianz Life Insurance Company Ltd. and others Vs Dalbir Kaur in 2021 (217) AIC 50 whereby the Hon’ble Supreme Court of India has held that the contract of insurance is one of the utmost good faith and proposer who seeks to obtain policy of life insurance is duty bound to disclose all material facts bearing upon issue as to whether insurer would consider it appropriate to assume risk which is proposed. The Hon’ble Supreme Court has further held that the proposer failed to disclose vomiting of blood which had taken place barely month prior to issuance of policy of insurance and of hospitalization which had been occasioned as consequences. The assured was suffering from pre-existing ailment and judgment of NCDRC directing payment of sum insured was set aside.
Further reference can be made to Reliance life Insurance Co. Ltd. and others Vs Rekhaben Nareshbhai Rathod in 2019 (2) R.C.R. (Civil) 909 whereby the Hon’ble Supreme Court of India has held that two months prior to policy obtained from appellant insured obtained policy from another company and this fact was not disclosed by the insured. Repudiation was made within two years period from commencement of insurance cover. The proposer was aware of contents of form that he was required to fill and disclosure of material for assessment of risk which was being taken by insurer which entitled the insurer to repudiate the claim.
14. There is another aspect of this case which emerges out from the close scrutiny of the medical record. The deceased was a patient of Cerebral Atrophy and had difficulty in speech and presentation of himself. The officials extending him loan facilities as well as insurance cover were required to be more vigilant in extending the respective facilities to him considering his health issues. The officials of insurance company could have subjected the insured to medical examination. The deceased might have visited the premises of OP3 bank at the time of executing the loan as well as insurance documents. Apparently the officials of the OPs pretended themselves to be oblivious of these facts for the reasons best known to them. It is apposite to mention that the life assured died within about 9 months from availing the loan as well as insurance facilities.
15. As a result of the foregoing discussion, we are of the considered view that the insured Ajay Kumar was guilty of concealment of material facts as he failed to disclose in the proposal form that he was taking treatment and medication prior to issuance of the insurance policy. Therefore, in our considered view, the claim lodged by the complainant in respect of the death of the insured Ajay Kumar has been rightly repudiated. In this regard, the reference can also be made to the law laid down in Satwant Kaur Sandhu Vs New India Assurance Co. Ltd. Civil Appeal No.2776 of 2002 decided n 10.07.2009 whereby it has been held that if there was clear suppression of material facts in regard to the health of the insured, the insurer was fully justified in repudiating the insurance contract.
16. As a result of above discussion, the complaint fails and the same is hereby dismissed. However, there shall be no order as to costs. Copies of the order be supplied to the parties free of costs as per rules. File be indexed and consigned to record room.
17. Due to huge pendency of cases, the complaint could not be decided within statutory period.
(Monika Bhagat) (Jaswinder Singh) (Sanjeev Batra) Member Member President
Announced in Open Commission.
Dated:02.11.2023.
Gurpreet Sharma.
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