Order by:
Sh.Amrinder Singh Sidhu, President
1. The complainant has filed the instant complaint under section 12 of the Consumer Protection Act, 1986 (now section 35 of Consumer Protection Act, 2019) on the allegations that on the allurement of the agent of the Opposite Parties, Gurmeet Singh husband of the complainant had purchased the life insurance policy on dated 23.04.2018 from opposite party vide policy no:- 20338162 plan:- CUI HDFC Life Uday and paid the premium for the same. Further alleges that said life assured died on 17.07.2018. Thereafter, the complainant being nominee of life assured visited the office of opposite parties for the death claim of her husband and also deposited the Original above said policy along with other documents in the office of opposite parties on their request, but death claim of her husband not given to complainant. Thereafter, the opposite parties voluntary return the insurance premium amount Rs.47,847/- on dated: 19.09.2018 without any consent of complainant, After that opposite parties has refused the death claim of above said insured person vide letter dated 21.09.2018 with pretext "The Life assured was suffering diabetes mellitus and alcoholic liver disease prior to the policy issuance". Not only this, the complainant issued legal notice to opposite parties through counsel on dated 18.10.2019 but the opposite parties did not give any reply to the legal notice dated 18.10.2019. .After that, the complainant again issued legal notice dated 18.02.2020 to opposite parties through his counsel which was sent through Registered Post. But the opposite parties wrongly and illegally rejected the death claim of above said died insured person, whereas at the time of issuing the above said insurance policy, the insured person namely Gurmeet Singh was not suffering from any diseases. As such, there is deficiency in service on the part of the Opposite Parties. Vide instant complaint, the complainant has sought the following reliefs.
a) The Opposite Parties may be directed to reimburse the death claim amounting to Rs.10 lakhs alongwith interest @ 18 % per annum from the date of payment till its actual realization.
b) The amount of Rs.4 lakhs be allowed to be paid by the opposite parties on account of compensation due to mental tension and harassment caused by the complainant besides Rs.15,000/- as litigation expenses.
c) And any other relief to which this Hon’ble Consumer Commission, Moga may deem fit be granted in the interest of justice and equity.
2. Opposite Parties-Insurance Company appeared through counsel and contested the complaint by filing the written version taking preliminary objections therein inter alia that the complaint filed by the complainant is not maintainable and is liable to be dismissed as the complainant has attempted to misguide and mislead this District Consumer Commission. Brief facts are that the husband Singh (herein referred as Deceased life assured/DLA) to Opposite parties, an had submitted Online/ Electronic Form/ Proposal/ Application No. 1303071740407 dated 23.04.2018 for the purchase of a policy by the name "HDFC LIFE UDAY POLICY". The proposal was accepted on the standard rates based on the information provided by the DLA and consequently a policy was issued bearing Policy No.20338162 on 25.04.2018, the Policy Term and Premium Paying term was that of 12 years and 8 years respectively. The Premium was Rs.47,847) (exclusive of GST) annually and sum assured on death was Rs 4,78,470/ Copy of the Electronic Enrolment/Proposal Form alongwith Customer Consent Document dated 23.04.2018 and before acceptance of the proposal by the Opposite parties, the contents. of the proposal/application/terms and conditions of the policy and exclusions attached to the terms and conditions were read and explained to the DLA in the language best known to him by the concerned financial consultant. On the basis of the information furnished in the enrolment form, the same was processed by the opposite parties and thereafter the said certificate of insurance along with the terms and conditions were issued to the complainant. That, as per the guidelines of the IRDA the authority regulating the affairs of Opposite parties, the DLA was given detailed description about the features of the said Plan including the premium amount to be paid, all the charges that would be levied on the same and was also apprised with its terms and conditions. It was only after being completely aware as regards to the features of the Plan and terms of the Plan including the premium amount to be paid annually towards the said Plan and after having understood and agreed to the terms and conditions attached therewith, that, the complainant applied online on his free will and consent. That, the Complainant intimated the Opposite Parties that on 17.07.2018 the DLA i.e. Mr.Gurmeet Singh died due to natural reasons at his home. The Complainant then applied for the death claim of DLA. As it was an early months of risk commencement, the opposite parties made some inquiries with respect the past history of the DLA. Through the inquiry, it came to the knowledge of the Opposite Parties that the DLA was suffering from Liver Alcoholic Disease, Hepatic Encephalopathy (a nervous disorder Vein caused by severe liver disease), Diabetes Mellitus Type-2 X 3 years and also Splenic Thrombosis and had sought treatment from PGI, Chandigarh in 2016 vide CR No.201603529758 dated 24.06.2016 File No.HEPEC#69925 No.69925. The Liver Clinic File of the DLA from PGI Chandigarh dated 24.06.2016 shows clearly that the DLA was suffering from Hepatic Encephalopathy, Diabetes Mellitus Type-2 X 3 years, Alcoholic Liver Disease from time even before 2016. The cover page of the Liver Clinic File clearly mentions the name of the DLA along with his age, father's name and residence. Copy of Medical Record of PGI Chandigarh is annexed herewith as Annexure OP-4. v) L.C. That, the DLA made a false statement in the Enrolment/Proposal Form, whereby he disclose the past history of himself of Chronic Alcoholic X 20 years, Alcohol Liver Disease, (a nervous disorder Hepatic Encephalopathy caused by severe liver disease), Diabetes Mellitus Type-2 X 3 years and also Splenic Vein Thrombosis. The DLA was suffering from major File President / Member DCDRC, MOGAW did not diseases and was under a duty to disclose the same as per the insurance contract. The facts about the health condition of DLA were incorrectly disclosed in the Proposal Form, disclosure of the same was a material condition from underwriting perspective. In view of the above facts the Opposite parties vide letter dated 21.09.2018 rejected the death claim of the Complainant submitted by her on 14.08.2018 in accordance with section 45 of the Insurance Act, 1938. The opposite parties intimated the Complainant that the policy was issued on the basis of the Proposal dated 23.04.2018 made to HDFC Life Insurance Company Limited for a "Sum Assured on Death" of Rs.4,78,470/-. The proposal was accepted on the basis of information provided in the proposal form and the policy was issued on 25.04.2018. The DLA intentionally and willfully did not disclose in the application about the past history of Chronic Alcoholic X 20 years, Alcohol Liver disease, Hepatic Encephalopathy (a nervous disorder caused by severe liver disease), Diabetes Mellitus Type-2 X 3 years and also Splenic Vein Thrombosis. Had this information. been provided to the company at the time of applying for the insurance policy, it would have declined the application. However, the opposite parties processed an amount of Rs.47,847/- towards the refund of premium paid under the above said policy. That, it is relevant to mention here that had the DLA given a correct information regarding his pre-existing disease i.e. Chronic Alcoholic X 20 years, Alcohol Liver Disease, Hepatic Encephalopathy (a nervous disorder caused disease), by severe liver Diabetes Mellitus Type-2 X 3 years and also Splenic Vein Thrombosis, the opposite parties would not have issued the Certificate of Insurance on the existing terms and conditions, hence, no illegality has been committed by the Opposite parties while repudiating the claim of the complainant and the complaint may be dismissed with costs.
3. In order to prove her case, the complainant has tendered into evidence her affidavit Ex.C1 alongwith copies of documents Ex.C2 to Ex.C12, another affidavit Ex.C13 alongwith copies of documents Ex.C14 to Ex.C19, affidavit of Sukhdev Singh Ex.C20 and closed the evidence on behalf of the complainant.
4. On the other hand, to rebut the evidence of the complainant, Opposite Parties also tendered into evidence the affidavit of Sh.Arpit Higgans Ex.Ops1 to 3/1 alongwith copies of documents Ex.Ops1 to 3/2 to Ex.Ops1 to3/6 and closed the evidence.
5. We have heard the ld.counsel for the parties and also gone through the documents placed on record.
6. During the course of arguments, ld.counsel for the Complainant as well as ld.counsel for Opposite Parties has mainly reiterated the facts as narrated in the complaint as well as in the written statement respectively. We have perused the rival contentions of the parties and also gone through the record on file.
7. The main contention of the complainant is that at the time of proposal the life assured Gurmeet Singh was not suffering any disease, but the opposite parties voluntary return the insurance premium amount Rs.47,847/- on dated: 19.09.2018 without any consent of complainant, After that opposite parties has refused the death claim of above said insured person vide letter dated 21.09.2018 with pretext that the Life assured was suffering diabetes mellitus and alcoholic liver disease prior to the policy issuance. On the other hand, ld.counsel for the Opposite Parties has repelled the aforesaid contention of the complainant on the ground that the proposal was accepted on the basis of information provided in the proposal form and the policy was issued on 25.04.2018. The DLA intentionally and willfully did not disclose in the application about the past history of Chronic Alcoholic X 20 years, Alcohol Liver disease, Hepatic Encephalopathy (a nervous disorder caused by severe liver disease), Diabetes Mellitus Type-2 X 3 years and also Splenic Vein Thrombosis. Had this information. been provided to the company at the time of applying for the insurance policy, it would have declined the application. However, the opposite parties processed an amount of Rs.47,847/- towards the refund of premium paid under the above said policy. That, it is relevant to mention here that had the DLA given a correct information regarding his pre-existing disease i.e. Chronic Alcoholic X 20 years, Alcohol Liver Disease, Hepatic Encephalopathy (a nervous disorder caused disease), by severe liver Diabetes Mellitus Type-2 X 3 years and also Splenic Vein Thrombosis, the opposite parties would not have issued the Certificate of Insurance on the existing terms and conditions, hence, no illegality has been committed by the Opposite parties.
8. The main point for adjudication vehemently contended before us by Opposite Parties is that deceased life Gurmeet Singh had concealed the pre existing disease i.e. past history of Chronic Alcoholic X 20 years, Alcohol Liver disease, Hepatic Encephalopathy (a nervous disorder caused by severe liver disease), Diabetes Mellitus Type-2 X 3 years and also Splenic Vein Thrombosis. The onus to establish this fact is upon the Opposite Parties in this case. We have perused the copies of medical record placed by Opposite Parties of the treating hospital, but there is neither any affidavit nor complete particulars of the investigator recorded in them. Even the original certificate has not been placed on the record. There is no affidavit of doctor of the treating hospital to establish this fact on the record regarding previous disease of insured. He is a private doctor and not posted in any recognized health institute or government hospital. We are unable to rely upon the above referred investigation report appended with the Photostat copy of medical record of complainant. In the absence of any affidavit of investigator and the affidavit of treating doctor of the hospital, we do not place any reliance upon these documents, as pressed into service by the Opposite Parties in this case. Consequently, we are of this view that Opposite Parties have failed to discharge the onus solemnly laid upon it to prove this fact that life assured was suffering from above pre-existing disease before taking the policy and he deliberately and fraudulently concealed this material fact from Opposite Parties. We, thus, conclude that there is no substantive evidence on the record to prove this fact that life assured was suffering from any disease before he took the insurance policy and he willfully suppressed this fact fraudulently from the Opposite Parties. Moreover, if the life assured was suffering from any diseases prior to issuance of the policy, in question, the same must not have escaped the notice of the empanelled doctors of the Insurance Company. However, no such investigation record has been produced by the opposite parties. In case Bajaj Allianz Life Insurance Co. Ltd. & Ors. Vs. Raj Kumar III (2014) CPJ 221 (NC), it was held by the Hon’ble National Commission that “usually, the authorized doctor of the Insurance Company examines the insured to assess the fitness and after complete satisfaction, the policy is issued. It was held that the Insurance Company wrongly repudiated the claim of the complainant.”
9. Furthermore, as per the proposal form Ex.Ops1 to 3/3 (in the year 2018), at the time of obtaining the policy, the life assured has duly mentioned her age as 23.05.1969 (meaning thereby which is more than 45 years, so it was the bounden duty of the Opposite Parties-Insurance Company to get the life assured medically examined before issuing the policy in his name who was above 45 years of age. In support of his contention Ld.counsel for the complainant placed reliance upon I.R.D.A.I Rules and Instructions with regard to thorough medical examination if the insured is more than 45 years which is reproduced as under:-
“As per instructions issued by the Insurance Regulatory and Development Authority of India (IRDAI), it was bounded duty of the insurer to put insured to thorough medical examination in case Mediclaim insured was more than 45 years and if insurance company failed to do so then insurance company has no right to decline the insurance claim on account of non disclosure of the facts of pre existing disease when the policy was taken. The above observations is supported by law cited in SBI General Insurance Company Limited Vs. Balwinder Singh Jolly” 2016(4) CLT 372 of the Hon’ble State Commission, Chandigarh.”
However, the Opposite Parties-Insurance Company has not placed on record any evidence that before issuing the policy they ever got medically examined the insured. So the abovesaid law squarely covers the case of the complainant that it was the duty of the insurer to get medically examined while issuing the policy and once the policy was issued the insurer cannot take the plea of pre-existing disease of the insured.
10. It also needs to be mentioned that Section 19 of the General Insurance Business (Nationalization) Act, 1972 states that it shall be the duty of every Insurance Company to carry on general insurance business so as to develop it to the best advantage of the community. The denial of medical expenses reimbursement is utterly arbitrary on the ground that disease in question was pre-existing disease. It is mere an excuse to escape liability and is not bona fide intention of the insurance company. Fairness and non-arbitrariness are considered as two immutable pillars supporting the equity principle, an unshakable threshold of State and public behavior. Any policy in the realm of insurance company should be informed, fair and non-arbitrary. When the insurance policy has exclusions/conditions to repudiate the claim or limit the liability, the same must be specifically brought to the notice of the insured and are required to be got signed to show that such exclusions and conditions have been brought to his/her notice. Recently, our own Hon’ble State Consumer Disputes Redressal Commission, Chandigarh in First Appeal No. 50 of 2019 titled as Bajaj Alliance General Vs. Arjan Singh decided on 04.03.2021 also held so.
11. The need for interpreting a contract always arises in two situations, (i) when a gap is needed to be filled in the contract and (ii) an ambiguity is needed to be resolved in the contract, then to find out correct intention of the contract, spirit behind it is required to be considered. Normally, the insurance policy is a contract of adhesion in which other party is left with hardly any bargaining power as compared to the insurer. Insurance contracts are standard form contracts and are drafted by the insurance company and as such, insurance company is at higher footing than the insured. The benefit of such clause, as exclusion clause, would go to the insured unless the same is explained in clear terms by the insurer. In such circumstances, the tribunal would be more oriented towards the interpretation which goes against the party who has inserted/drafted the disputed clause in the agreement/contract. The adjudicating authority is required to look into whether the intention of the party is to exclude or limit liability has been appropriately explained to the other party or not. This Commission while interpreting insurance agreement is to honour the intention of the parties, who have signed the agreement. Even if the agreement had general exclusion/condition for misrepresentation still fraudulent misrepresentation and non-disclosure may not be there. The innocent and negligent misrepresentations are to be ignored. On the other hand, the rulings (i) Satwant Kaur Sandhu Vs. New India Assurance Company Limited, (ii) Murti Devi Vs. Birla Sun Life Insurance and (iii) Mamohan nanda Vs. United India Insurance Company Limited, cited by the ld.counsel for the Opposite Parties are not applicable and relevant to the facts of the present case. The insurance companies are in haste to charge the premium, but when the time to pay the insurance claim comes, they generally take up one excuse or the other to avoid their liability. The reliance of counsel for the appellant on law laid down in “Life Insurance Corporation of India Vs. Priya Sharma & others” 2012(4)CPJ-646, “Life Insurance Corporation of India & others Vs. Harbans Kaur” 2009(3)CPC-677, and “Life Insurance Corporation of India & another Vs. Ashok Manocha” 2011(3)CPC-285, would have been applicable, had this fact been established that life assured suffered from pre-existing ailment of kidney and he deliberately suppressed this fact fraudulently from the Opposite Parties, when he took the insurance policy. In view of our finding recorded above that Opposite Parties had failed to prove this fact that complainant was suffering from any pre-existing ailment and hence these authorities would not be attracted in this case. In this regard, on the same and similar facts and circumstances of the case, Hon’ble State Consumer Disputes Redressal Commission, in First Appeal No.62 of 2015 decided on 02.02.2017 in case India First Life Insurance Vs. Ms.Sudesh Rani also held so.
12. In such a situation the repudiation made by Opposite Parties-Insurance Company regarding genuine claim of the complainant have been made without application of mind. 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 seams 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.
13. In view of the above discussion, we hold that the Opposite Party-Insurance Company have wrongly and illegally rejected the claim of the complainant.
14. Now come to the quantum of compensation. The complainant has claimed the amount of Rs.10 lakhs as death claim of life assured Gurmeet Singh, but the sum assured on the death of life assured Gurmeet Singh was Rs.4,78,470/- and hence we hold that the complainant is entitled to the reimbursement of this amount.
15. In view of the aforesaid facts and circumstances of the case, we partly allow the complaint of the Complainant and direct Opposite Parties-Insurance Company to pay Rs.4,78,470/- (Rupees four lakh seventy eight thousand four hundred seventy only) to the complainant within 60 days from the date of receipt of copy of this order, failing which the Opposite Parties shall be liable to make the awarded amount alongwith interest @ 8% per annum from the date of filing the present complaint i.e. 02.07.2020 till its actual realization. Copies of the order be furnished to the parties free of costs. File is ordered to be consigned to the record room.
Announced in Open Commission.
Dated:12.07.2022.