The complainant Smt. Meenakshi (Wd/o Sh. Vikram Jeet DLI) has filed the present complaint against the titled opposite parties (for short, the OP1/OP2 and the OP3) upon getting hurt at their acts of commissions and omissions that have allegedly infringed her statutory consumer rights. She proceeds to explain that the OP1/OP2 Housing Fin. Co. had advanced Four nos of Equity Loans against Mortgage of Properties in the names of her Late husband Sh. Vikram Jeet, his mother Smt. Romesh Kumari and his wife (herself) Meenakshi against the primary security of Residential Houses at Lamini & Bhadroya and collateral (additional) security of Insurance Policies on the lives of all co-borrowers each for an aggregate amount of all the four property loans.

2.       Thus, in compliance to the insurance clause of the OP1/OP2 Sanction Late Vikram Jeet was got secured vide the Master Insurance Policy # PB000290 purchased by the OP1/2 Financers from the OP3 Insurers, who had got the insured medically examined thoroughly by its medical-team along with other collateral. However, in the month of November' 2020, Vikram Jeet suddenly fell ill and breathed his last on 26.11.2020, in the Hospital on account of Cardiac Arrest.

3.       The opposite parties were duly intimated and requested to set-off the balance loan amounts with the death claim(s) PC176868 but the OP kept the resolve deferred on one count or the other and finally on 31.08.2021 the OP3 intimated of the repudiation of the related claim and on 06.09.2021 the OP1/OP2 finance-rs drew a demand of Rs.96,72,492/- upon the complainant as the outstanding balance in the loan accounts. The complainant after the death of her husband had no permanent source of income but the OP1/2 coerced her to pay urgently Rs.13 Lac, in advance, as full and final settlement of loan accounts visa-a-vis insurance claims. But that was not to be, as she paid Rs.13 Lac (by borrowing it from friends/relatives) the OP1 started misusing her security checks as payment checks U/s 138 of the NI Act, 1882.

4.       The complainant further alleges that the OP3 have rejected her husband's insurance death-claims on the ground that he had been a chronic-alcoholic and had also suppressed material information that were material to disclose, at the time of purchase of the policies, whereas that's not true as her husband was never a chronic alcoholic nor did he suppress any material information at the time of purchase of the said policies. Rather, it's a well-knit plan of the opposite parties to decline her otherwise a genuine claim. This very arrogant and inconsiderate attitude on the part of the OP has delayed the repayment towards loan accounts accruing an avoidable additional interest. Even in the past, the OP have been charging heavy amounts of penal-interest not in consonance but rather in contravention of the Regulatory Bank (Reserve Bank of India) Guidelines.

5.       Lastly the complainant, exhausted and helpless, against the powerful Finance cum Insurance lobby preferred the present complaint seeking directives to the opposite parties to set-off the present outstanding in all loan accounts with the proceeds of the claim- filed and to pay her the balance amount besides Rs.5,000/- as compensation along with cost of litigation besides any other relief as deem fit to the commission in the interest of justice. The complainant Smt. Meenakshi has filed the following evidence/documents to prove her version of the complaint:

             i)    Ex.C1 - Self Declaration (Affidavit) deposing the contents of the complaint;

            ii)    Ex.C2 - Aadhar Card of the complainant;

           iii)    Ex.C3 – Claim Repudiation Letter dated 31.08.2021 by the OP3 Insurer.

           iv)    Ex.C4 – Demand Notice for Rs.96,72,492/- as on 31.08.2021 by the OP1/2;

            v)    Ex.C5 – Member's Ins. Certificate Policy-PP000095- Initial S.I. Rs.360,711/- ;    

           vi)    Ex.C6 – Member's Ins. Certificate Policy-PP000290; Initial S.I. Rs.92,15,640/- ;

           vii)   Ex.C7 – A/c Statement P & S Bank exhibiting OP3's  credit 29/30.12,2020;

          viii)   Ex.C8 – Complainant's A/c Statement with the OP1 F.  Year 2021-22;         

            ix)   Ex.C9 to Ex.C12 – Legal Notice to OP1, OP2 & OP3  with postal Receipts;

              x)  Ex.C13 – Reply to Legal Notice by the OP1/OP2;         

             xi)  Ex.C14 – Death Certificate of the DLI Vikram Jeet;

            xii)  Ex.C15 – DMC Hospital Discharge Summary;

            xiii) Ex.C16 to Ex.C18 – Affidavit(s) deposing the DLI to be non-alcoholic;

            xiv) Replication(s)/ Rejoinder(s) to written replies by the OP1/2 and the OP3.

6.       The titled opposite parties (OP1 & OP2), in response to the commission’s summons appeared through their counsel and filed their written reply stating therein preliminary objections as:

1. Not maintainable here, as there's lack of territorial jurisdiction;
2. The main grievance in the complaint has been against the OP3 insurers, so the same need be dismissed against them;
3. The Complainant had availed of four nos. of Loans and had further requested to finance insurance premium, so there has been no instance of coercion etc.
4. The complainant along with other legal heirs of the DLI are obligated to repay the loans as they have inherited the DLI Estate;
5. And, the OP1/2 being the secured creditors have every right to recover the outstanding EMI as well as the balance outstanding in the loan accounts.
6. Further, on merits, the OP1/2 in its written statement have either denied or shrugged the contents of the complaint addressing these as matters of records etc.; Further, the terms and conditions were fully disclosed to the DLI and co-borrowers and they had only financed the insurance premia and the recall notice of 06.09.2021 had been in right order. It was incorrect that the sum of Rs.13 Lac was collected through force with commitment to issue NOC and filing of 138 NI Complaint has been ther legal right. No additional interest was charged in contravention of the RBI guidelines etc. Lastly, the OP1/2 have only financed the DLI and others and have no business/ hand in the impugned  repudiation of the insurance claim of the DLI. Finally, the OP1/2 have sought dismissal of the complaint being bereft of any merit.

The OP1/2 in support of their version and pleadings in defense have produced the following evidentiary documents:

          i)       Ex.OPw1,2/A Self declaration by the Asstt. Manager Aditya Kochar deposing the contents of the written reply as well as the sanctity of the evidence;

          ii)      Ex.OP1/1 Terms & Conditions of Sanction of Home Loan Tru-Fixed-Plus (II);

          iii)     EX.OP1/2 Statement of Insurance Premium Funding;

          iv)     Ex.OP1/3 Demand Notice U/s 13(2) of 17.09.2021of SARFAESI Act, 2002;

           v)     EX.OP1/4 Reply dated 13.01.2022 to Legal Notice of 10.01.2022.

7.       The OP3 insurers upon notice/summons also appeared through its counsel and filed its written reply stating therein preliminary objections as:

1. The complainant has no cause of action and locus-standi to file the present complaint as there has been no deficiency in service at any stage, on its part. As insurance has been a contract of utmost good faith between the two parties the insured had failed to disclose relevant facts regarding his health and thus causing breach of the utmost good faith. Moreover, the complainant has not come to the court with clean hands and have concealed the true and material facts, here.
2. Further, on merits, the OP3 in its written statement have either denied or shrugged the contents of the complaint addressing these as record matters etc.; However, the OP3 has restated that the complainant had secured the insurance through non-disclosure and concealment of the true cum material facts pertaining to his health, as such her claim PC176868 was correctly rightly repudiated on 31.08.2021. During the routine investigations it had transpired that the DLI had been a chronic alcoholic and suffered liver-cirrhosis prior to purchase of the policy. The OP3 has taken expert opinion from Dr. C H Asrani DNB, MBBS & PGD in Medico Legal Systems who has opined that the DLI had been suffering from acute alcoholic-ism and Cirrhosis of Liver. The claim was rightly repudiated and dismissal of complaint with costs has been prayed.

The OP3 insurers have placed forth following documents/evidence in support of their prosecution of defense.

          i)       Ex.OP3/1 – Affidavit of Dr. C H Asrani the expert opinion;

          ii)      Ex.OP3/2 – Claim Repudiation Letter dated 31.08.2021;

          iii)     Ex.OP3/3 – Certificate Insurance Policy PP000290 S.I. Rs.92,15,640/- ;

          iv)     Ex.OP3/4 – Proposal Form dated 22.11.2018;

          v)      EX.OP3/5 – Group Claim Form PP000290;

Pleadings & Arguments: (The OP Insurers’ Side):

A.      The learned counsel for the OP insurers has pleaded and argued that the policy was issued on the basis of self declaration by the applicant/ life assured that was later found to be false and thus the death claim was repudiated. There’s no deficiency in service on the part of the OP insurers.

B.      The Expert’s report provides ample proofs for causing repudiation of the claim.

8.       We have examined the available documents/evidence on the records so as to statutorily interpret the meaning and purpose of each document and also the scope of adverse inference on account of some documents ignored to be produced by the contesting litigants against the back-drop of the arguments as put forth by the learned counsels for their respective litigants. We find that the present dispute has arisen on account of the impugned ‘repudiation’ of the insurance death-claim pertaining to the Policy in question, by the OP3 insurers, as filed by the present complainant pertaining to the ‘death-claim’ of her late (demised) husband Vikram Jeet, the DLA (deceased life assured). The complainant has been legal heir of DLA.

9.       We observe that the one and the only prime eventful aspersion founding/supporting the repudiation of the impugned 'death claim' in question has been the chronic-alcoholism (of the DLA) and Non-disclosure/concealment (by the DLA) of his pre-existing ailments at the time of purchase of the policy, in question.

Somehow, we do not concur with the logic of the repudiation and are inclined to examine the validity & legality of the impugned repudiation (of the related insurance death-claim) in the back-drop of the preceding and also the succeeding acts & events in the light of the facts on records and current law on insurance vis-à-vis consumer proposition’s subject matter, in issue. We find that the related insurance policy was admittedly issued on the strength of the DLA undergoing an exhaustive medical examination at the hands of medical staff of the OP3’s nomination and thus his health status (including pre-existing diseases, if any) were fully known to the OP and its representatives and presently the OP are estopped from repudiating the death-claim on the strength of the Expert's report based on the randomly procured documents from the Swastik Hospital, Pathankot. Moreover, section 45(3) of the Insurance Act, 1938 (as amended up to date) bars repudiation of Policy on account of mis-statement(s) and/or suppression of fact(s) that are within the knowledge of the insurers or its representatives. And, to top it up all the OP have ignored to produce the DLA’s Medical Examination Reports and the evidence of delivery of Terms & Conditions of Policy, to the complainant. In our view the cause of death given by the doctor nowhere suggests even remotely that the DLA had died due to alcoholic cirrhosis of liver. He was subjected to thorough tests/medical examinations by the panel doctors of the company and was found being in possession of good and sound health and entitled for the insurance cover. It is otherwise not a case where the insured was at any prior point of time held to be a case of liver cirrhosis or being alcoholic for several past years. It is also not a case where insured had been admitted or hospitalized for any disease resulting from his being alcoholic. The medical record produced by the OP shows that after more than one year and ten months of obtaining the insurance policy the DLA landed in the hospital. There is no medical record showing prior treatment ever obtained by the complainant with a history of cirrhosis or chronic liver disease.

10.     Thus, the OP have failed to produce any cogent evidence, to support its allegation of chronic alcoholic-ism and intentional non-disclosure/suppression of the pre-existing ailments. However, the complainant has successfully been able to produce affidavits of three independent persons that the DLA had been a person with clean/ simple habits and never indulged in drinking sprees/alcoholism. The expert opinion produced by way of an affidavit of Dr C H Asrani deposes his opinion on the causes of such symptoms manifesting in patients, in general, as per his study of the subject matter but these do not specifically and categorically relate to the DLA patient, as Doctor Asrani had never examined the DLA patient nor he has deposed that he ever consulted the treating doctors before forming an opinion and submission of his affidavit and have simply examined the DLA reports only, so we cannot solely rely upon this opinion sans some other secondary supporting evidence. He only gives opinions on the basis of documents and medical record provided to him on payment of his professional charges/fees by the OP. He is not a specialist in the field. Therefore, the report/affidavit of said doctor is not reliable and cannot be accepted.

11.     We find that the OP insurers here have arbitrarily repudiated the present claim merely on the ‘presumption’ that the DLA had been alcoholic and had knowledge of his pre-existing ailments. To remove all ambiguity, it may be clarified here that an ‘insurance claim’ and for that matter any ‘issue’ can be neither legally ‘favored’ nor legally ‘ousted’ on mere ‘presumption’ how strong it might appear to be.

12.     We further find that the present policy in question was purchased through the services of insurers representative(s)/ agent(s) i.e., the OP1/2 financing the premia of these policies and the proposal/report(s) etc; hence it is understood that all the DLA’s information in totality was fully available in the hands of the OP insurers’ Representative(s)/Agent(s) and thus the OP are estopped from taking the plea of non-disclosure etc. The OP insurers must realize that their administrative decisions in settling insurance claims are open to judicial review and thus need be taken with due application of mind and not arbitrarily and these should also be speaking in nature duly explaining the reason and logic of the decision as to how the same has been reached. The facts in issue need be appreciated while awarding sanctity to the current applicable law.

13.     Finally, in the matter pertaining to the present complaint and in the light of the all above, we set aside the OP3’s impugned repudiation of the death-claim being arbitrary (contra to laws of natural justice) and amounting to ‘deficiency in service'. Further, we find that the OP1, 2 Finance-rs to be in full connivance with the insurers OP3 and have jointly infringed the consumer rights of the complainant. Thus, we restrict the OP1,2 by order not to reach/ draw demand bills etc forthwith upon the complainant and instead a final demand bill aggregating all the loan accounts will be drawn upon the OP3 insurers and who are hereby ordered to pay the same out of the death-claim proceeds and pay the balance amount to the complainant. Both the OP finance-rs and the insurers shall ensure that no penal-interest or other charges are debited in all the loan accounts since inception and Rs.13 Lac stands reversed.

14.     Thus, we ORDER the OP1,2 Finance-rs to present the final demand bill, in the above directed order, in all the four loan accounts of the complainant, to the OP3 insurers within 45 days of the receipt of the certified copy of these orders besides to pay a lump sum amount of Rs.10,000/- to the complainant as compensation and cost of the present litigation. Further, the OP3 insurers are ordered to pay the OP1,2 bills so received through the impugned ‘insurance claim’ passed to the full Sum Insured (S.I.) of the related Policy, in question, with full accrued benefits, if any, and pay the balance amount to the complainant within 15 days of the receipt of the demand bills along with Rs.10,000/- as compensation for the undue harassment mental agony inflicted upon the widow complainant besides Rs.5,000/- as cost of litigation otherwise the entire awarded amount shall attract interest @ 6 % PA from the date of the orders till actually paid.

15.     The complaint could not be decided within the stipulated period due to heavy pendency of Court Cases, vacancies in the office and due to pandemic of Covid-19.

16.     Copy of the order be communicated to the parties free of charges. After compliance, file be consigned to record.

 (Naveen Puri)

                                                                President.

ANNOUNCED:                                 (B.S.Matharu)

JUNE 17, 2022.                                           Member.

YP.