Haryana

Karnal

474/2013

Naresh Kumari W/o Krishan - Complainant(s)

Versus

ICICI Home Finance Company Limited - Opp.Party(s)

D.P. Raman

29 Sep 2016

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM KARNAL.

                                                              Complaint No.474 of 2013

                                                             Date of instt.  17.12.2013

                                                               Date of decision:29.09.2016

 

Smt. Naresh Kumari wife of Shri Krishan resident of House no.2, Sector-4, Part-2 U.E.Karnal.

 

                                                                         ……..Complainant.

                                                Versus

1. Managing Director, ICICI Home Finance Co. Ltd. ICICI Bank Towers Bandra Kurla Comlex, Mumbai-400051 (India) through its Manager Sector 12 Karnal

2. Managing Director, ICICI Bank Ltd., (home loan) SCO 129-130 Madhya Marg, Sector-9-C, Chandigarh through its Manager Sector 12, Karnal.

3. ICICI Home Finance Co. Ltd. Sector-12 Karnal through its Manager.

4.Managing Director, ICICI Prudential Life Insurance Co. Ltd. ICICI prolife Towers 1089, Appa Saheb Marathe Marg, Parbha Devi, Mumbai- 400025 through its Manager Sector-12, Karnal.

5. Manager, ICICI Prudential Life Insurance Co. Ltd. BSEL Tech, C-Wing, 1^st floor Vashi Navi Mumbai-400073 through its Manager Sector-12 Karnal.

6. ICICI Prudential Life Insurance Co.Ltd. Sector-12, Karnal through its Manager.

 

                                                                                 ………Opposite Parties.

 

                     Complaint u/s 12  of the Consumer Protection Act.

 

Before                   Sh.K.C.Sharma……….President.

                   Sh.Anil Sharma…….Member.

 

Present:-      Shri D.P.Raman Advocate for complainant.

                    Shri  Vineet Rathore Advocate for opposite parties no.1 to 3.

                    Shri Vikash Chauhan Advocate for opposite parties no.4 to 6.

                                     

 ORDER:

 

                        This complaint has been filed by the complainant u/s 12 of the Consumer protection Act, 1986, on the averments that her husband Shri Krishan (deceased life assured) applied for house loan of Rs.12,25,728/- on 13.3.2010, vide application no.7778104562 and loan account no.(LAN) LBKNL 00001801310 and at the same time he was insured, vide application no.0569122 on 17.4.2010. Premium of Rs.25,728/- was received by the opposite parties for insuring his life. Thereafter, installments were regularly paid by him to the Bank of the opposite parties. At the time of approval of the loan, the officials of the opposite parties and interviewed her husband and he explained to them about the history regarding treatment of Carcinoma Pancreas in the year 2009, but he was cured at that time and was hale and hearty. Even some documents were taken into the possession by the officials of the opposite parties in that regard. Signatures of her husband were obtained by the officials on blank forms. Unfortunately, her husband died on 8.9.2012 due to fever and Appendices problem. Thereafter, she lodged claim and submitted the requisite documents with the opposite parties. However, her claim was repudiated on the ground that her husband had concealed the disease due to which he had died. She also got served a legal notice upon the opposite parties, but the same also did not yield any result. Such acts and conduct on the part of the opposite parties amounted to deficiency in service, which caused her mental pain, agony and harassment apart from financial loss.

2.                Notice of the complaint was given to opposite parties. The opposite parties no.1 to 3 filed joint written statement controverting the claim of the complainant. Objections have been raised that the complaint is not maintainable; that  the complaint does not fall within the purview of definition of consumer; that there was no deficiency in service on the part of the opposite parties and that the complicated questions of law and facts are involved, which can only be decided by Civil Court.

                   On merits, it has been submitted that the husband of the complainant was disbursed a loan to the tune of Rs.12,25,728/- in the year 2010 and the same stood utilized. Under the agreement, one Rajesh Raheja and complainant stood as co-applicants i.e. under the category of borrowers. He mortgaged the property i.e. plot no.2 measuring 144 sq.meters sector-4 Phase II, Urban Estate Karnal to secure the loan amount. The husband of complainant had purchased policy from ICICI Prudential out of his own free will and opposite parties no.1 to 3 had nothing to do with the contract between him and ICICI Prudential Life Insurance Co. Ltd. The other allegations made in the complaint have been denied.

3.                Opposite parties no.4 to 6 also filed written statement disputing the claim of the complainant. Objections have been raised that the complaint is not maintainable; that the complainant has concealed and suppressed the material facts from this forum and that there was no deficiency in service on the part of the opposite parties no.4 to 6.

                   On merits, it has been pleaded that the opposite parties no.4 to 6 received duly filled application form from the proposer. Based upon the information provided in the said application/proposal form and considering the same to be correct, company issued policy no.13824534 on 26.04.2010 under non-medical category. The husband of the complainant gave wrong information in the application form in respect of questions no. H(4) and H(7)of the proposal form, regarding his health. The death claim of the deceased life assured was received on 19.09.2012 stating that he had expired on 08.09.2012. After careful evaluation of the records obtained, during the claim processing, it was noted that the life assured was hospitalized on August 25,2009 and diagnosed of “Carcinoma Pancreas” and underwent “Whipples Procedure”. This medical history was prior to the issuance of the policy and the same was not disclosed by life assured in the proposal form at policy issuance stage. The complainant in order to conceal the relevant medical record of the life assured had not supplied the same inspite of repeated reminders. Insurance is a contract of utmost good faith and from the documents on record it was clearly evident that there was clear breach of faith by the life assured, therefore, vide letter dated 16.2.2013 the company repudiated the claim accordingly and declared the contract/policy as void from inception. The legal notice sent by the complainant was duly replied. The other allegations made in the complaint have been denied.

4.                In evidence of the complainant, her affidavit Ex.CW1/A and documents Ex.C1 to C17 have been tendered.

5.                 On the other hand, in evidence of the opposite parties no.1 to 3, affidavit of Rakesh Kumar Ex.OP-1/A  and documents Ex.OP-1/A to Ex.OP-1/D and in evidence of opposite parties no.4 to 6, affidavit of  Swati Singh Legal Manager Ex.RW1/A and documents Ex.R1 to Ex.R6 have been tendered.

6.                We have appraised the evidence on record, the material circumstances of the case and the arguments advanced by the learned counsel for the parties.

7.                The husband of the complainant had obtained loan from opposite parties no.1 to 3 and also got his life insured from opposite parties no. 4 to 6 vide policy no.13824534 dated 26.04.2010. He expired on 8.9.2012 during subsistence of the policy. The complainant lodged claim with the opposite parties, but the opposite parties no.4 to 6 repudiated the claim, vide letter dated 16.02.2013 on the ground that the deceased life assured was hospitalized on August 25, 2009 and diagnosed “Carcinoma Pancreas” and underwent “Whipples Procedure”, but in the proposal form he concealed about the said medical condition.

8.                Learned counsel for the complainant laid emphasis on the contention that the deceased life assured had explained to the officials of the opposite parties no.3 and 6 about the history regarding treatment of “Carcinoma Pancreas” in the year 2009, but they did not mention that fact intentionally in the proposal form. Moreover, the deceased life assured was hale and hearty at the time of submitting the proposal form, as he was cured from the disease completely and even some documents were taken into possession by the officials of the opposite parties in that regard. Thus, there was no concealment of any fact what talk of material fact by the deceased life assured while submitting proposal form for obtaining the policy. It has further been argued that the repudiation of the claim by the opposite parties was against the principles of natural justice, equity and good conscience and the same amounted to deficiency in service on their part.

9.                On the other hand learned counsel for the opposite parties no.4 to 6 vehemently argued that the contract of insurance is based upon principle of uberrima fide i.e. utmost good faith and concealment of any material fact renders the policy void. The deceased life assured submitted proposal form for obtaining the policy and in the said proposal form questions no.H(4) and H(7) related to his health and he replied all the questions in negative.  On investigation, it was found that on 25.8.2009 he was hospitalized and diagnosed of “Carcinoma Pancreas” and underwent “Whipples Procedure”, but he concealed that fact in the proposal form, therefore, the claim of the complainant regarding death of her husband was rightly repudiated by the opposite parties. In support of his contention he relied upon Satwant Kaur Sandhu Versus New India Assurance company IV (2009) CPJ 8 (SC), Life  Insurance  Corporation of India Versus Krishan Chander Sharma, revision petition no.1935 of 1999 decided by Hon’ble  National Commission on 23.1.2006 and Life Insurance Corporation of India and another Versus Bimla  Devi revision petition no.3806 of 2009 decided by Hon’ble National Commission on 12.8.2015.

10.               In Satwant Kaur Sandhu’s case (Supra)   the policy holder was suffering from chronic diabetic renal failure, but that fact was not disclosed while obtaining the policy. It was held by the Hon’ble Supreme Court that term “material fact” is not defined in the Insurance Act and therefore, it has been understood and explained by the courts in general term to mean as any  fact which would influence the judgment of a prudent insurer in fixing premium or determining whether he would like to accept the risk.  Any fact which goes to the root of the contract of Insurance and has a bearing on the risk involved would be material.   As cited in Pollock and Mulla’s Indian Contract and Specific Relief Act any fact, the knowledge or ignorance of which would materially influence an insurer in making contract or estimating the degree and character of risk in fixing rate of premium is a material fact. If, the proposer   has knowledge of  such facts, he is obliged to disclose it  particularly while answering the questions in the proposal form. Needless to emphasis that any inaccurate answer will entitle to insurer to repudiate his liability, because there is clear term that information sought for in the proposal form is material for the purpose of a entering into a contract of Insurance. It was further held that contract of insurance is a uberrima fide meaning a contract of utmost good faith of the assured.  Thus, it needs little emphasis that when an information on a specific aspect is asked for in the proposal form, an assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge. It is not for the proposer to determine, whether the information sought for is material for the purpose of the policy or not. Of course, obligation to disclose extends only to fact which are known to the applicant and not  what he ought to have known. The obligation to disclose necessarily depends upon the knowledge one possesses.

11.                   In  Krishan Chander’s case(Supra), the deceased life assured got treatment for Asthma  and allergic  bronchitis from 23.5.92 to  9.6.1993 and again from 28.7.1993 to 12.8.1993, but that fact was not disclosed  in the proposal form.  Though the life assured died due to heart failure on 22.9.1994, yet claim  put forth by her husband was repudiated on the ground that she withheld information regarding  her health at the time of purchasing the policy. It was held by the Hon’ble National Commission that answers given by the life assured in the  proposal form were false  to her knowledge, therefore, insurance company was justified in repudiating the claim.

 12.             In Bimla Devi’s case (Supra)  the deceased had undergone an operation for right kidney stone on 18.5.1998 and had availed medical leave for 46 days i.e. from 16.5.1998 to 30.6.1998.The deceased had also taken treatment from Apollo Hospital, New Delhi. The claim was repudiated by the Corporation on the ground that deceased had concealed vital facts regarding his health at the time of making proposal for insurance.  Therefore, the complainant was not entitled to any claim under the policy. It was held by Hon’ble National Commission that upshot of the entire discussion is that in a contract of Insurance any fact which   would influence the mind of a prudent insurer in deciding whether to accept or not to accept the risk is a “material fact” .If the proposer has knowledge of such fact, he is obliged to disclose it particularly while answering questions in the proposal form. Needless to emphasise that any inaccurate answer will entitle the insurer to repudiate his liability because there is clear presumption that any information sought for in the proposal form is material fact  for the purpose of entering into a contract of insurance.  Under the facts and circumstances of the case, it was held that it was clear that the insured had suppressed the material information about the procedure   he had  undergone in 1998  and his  medical condition thereafter, therefore, the claim was rightly repudiated.

13.              The facts of the present case are to be analyzed, keeping in view the proposition of law laid down in the aforediscussed authorities. It is pertinent to note that the complainant in the complaint has admitted that the deceased life assured had explained the history to the officials of opposite parties no.3 and 6 before obtaining loan and policy, at the time of interview, regarding his treatment for  “Carcinoma Pancreas” in the year 2009. The opposite parties have produced the copy of the proposal form Ex.R1. The same was signed by the deceased life assured alongwith declaration made there under. Questions no.H(4) and H(7)  and the answers given by the life assured to these questions are relevant for deciding the present case. Therefore, for proper appreciation of the matter, the same are reproduced as under:-

Question H(4) : Have you consulted any doctor for surgical operations or have been hospitalized for any disorder or been advised to undergo any medical investigations/treatment for any medical condition other than for minor cough, cold or flu during the last 5 years? ………No.

 

Question H(7): Are you aware of or have you ever been treated or hospitalized for cancer, tumor, cysts or any other growths?......No.

                  

                   Thus, it is emphatically clear that the deceased life assured concealed that he was hospitalized on August 25, 2009 and diagnosed “Carcinoma Pancreas” and underwent “Whipples Procedure”. The copy of the discharge summary issued by Rajiv Gandhi Cancer Institute and Research Centre is Ex.R3, which shows that he was admitted in the hospital on 25.08.2009 and discharged on 19.9.2009. He was diagnosed for “Carcinoma Pancreas” and underwent “Whipples Procedure” was performed on 26.08.2009 and Rexploration for secondary hemorrhage took place on 07.09.2009. However, he did not disclose about his treatment for “Carcinoma Pancreas” in his proposal form, though, the medical history was prior to the submission of the proposal form. Insurance is a contract of utmost good faith and from the documents on record and admission by the complainant it stands established that there was clear breach of faith by the deceased life assured. Therefore, the insurance company was justified in repudiating the claim and declaring the contract/policy as void from inception.

14.              As a sequel to the foregoing reasons, we do not find any merit in the present complaint. Therefore, the same is hereby dismissed. The parties concerned be communicated of the order accordingly and the file be consigned to the record room after due compliance.

Announced

Dated: 29.9.2016

                                                                                      (K.C.Sharma)

                                                                                         President,

                                                                             District Consumer Disputes

                                                                             Redressal Forum, Karnal.

                             (Anil Sharma)

                               Member