Punjab

Ludhiana

CC/22/279

Neelam - Complainant(s)

Versus

ICICI Lombard General Insurance Co.Ltd - Opp.Party(s)

Gagandeep Singh

08 Oct 2024

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, LUDHIANA.

                             Consumer Complaint No:  279 dated 12.07.2022.                                       Date of decision: 08.10.2024. 

 

Neelam Kumari Wd/o. Mohinder Pal, R/o. 1275/12/42 Street No.9, Chander Lok Colony, Ludhiana-141007. M. No.6239300571.                                                                                                                        ..…Complainant

                                                Versus

1. ICICI Lombard General Insurance Company Ltd., ICICI Bank Tower, Plot No.12, Financial District, NanakramGuda, Gachibowli, Hydrabad through its authorized signatory.500034.
2. ICICI Lombard General Insurance Company Ltd., TF 1-5, 3^rd Floor, 88, Kunal Tower, The Mall Road, Ludhiana, Punjab-141001 through its authorized signatory.141001.
3. DCB Bank, SCO 10, 11, Ferozepur Rd, Feroze Gandhi Market, JilaKacheri Area, Model Gram, Ludhiana, Punjab through its authorized signatory.141001.                                                                                                                                                    …..Opposite parties 

Complaint Under Section 34 of The Consumer Protection Act as amended up to date on account of deficiency in service and unfair trade practice adopted by the opposite parties.

QUORUM:

SH. SANJEEV BATRA, PRESIDENT

MS. MONIKA BHAGAT, MEMBER

 

COUNSEL FOR THE PARTIES:

For complainant             :         Sh. Gagandeep Singh, Advocate

For OP1 and OP2          :         Sh. Rajeev Abhi, Advocate.

For OP3                         :         Sh. Rahul Rajput, Advocate.

 

 

ORDER

PER SANJEEV BATRA, PRESIDENT

1.                Briefly stated, the facts of the case are that husband of the complainant namely Sh. Mohinder Pal S/o. Sh. Baldev Raj took loan from OP3 for earning his livelihood and further on the allurement of OP3, her husband took insurance policy from OP1 and OP2 in which the complainant was appointed as a nominee. OP3 also allured her husband that in case of death during the tenure of loan, then the EMI’s of the loan would be closed and amount whatsoever would be left towards the said loan will be adjusted by the insured amount of the insurance policy. The complainant stated that on such assurance and allurement of OP3, her husband took insurance policy No.4148/GSG/176897308 under the LAN No.DRBLLUD00487607 having sum assured of Rs.10,00,000/- on premium of Rs.30,000/- to OP1 and OP2.

                   The complainant further stated that on 11.09.2020 her husband died at Dayanand Medical Hospital and College, Ludhiana due to severe ARDS (Covid-19). Death certificate was issued by the said hospital. Thereafter, the complainant approached the OPs for reimbursement of the amount of the said insurance policy by filling the claim form along with requisite documents. The Ops assured to release the amount within short period and to adjust the loan amount with the insured amount of the insurance policy. However, the complainant received a letter dated 23.10.2020 from OP1 and OP2 vide which they repudiated the claim by stating that the policy covers only specific vector borne related death benefit and malaria related death benefit. The OPs repudiated the claim on flimsy ground that the policy does not cover the death of her husband and denied the amount of insurance policy. According to the complainant, the repudiation of the claim by the OPs is illegal and beyond the terms and conditions of the policy. Death of her husband is duly covered under the said policy and the OPs are duty bound to release the amount of insurance policy. Further the Govt. of India also issued instructions to every Insurance Company which are providing the General Insurance Health Policies to cover Covid-19 under the health policy of every insured person. The complainant approached the OPs to stop the EMIs by adjusting the insured amount of the insurance policy but the OPs did not pay any heed to her request.  The complainant sent a legal notice dated 11.01.2022 upon the OPs but to no effect. Hence this complaint, whereby the complainant has prayed for issuing direction to the OPs to release the amount of insurance policy i.e. Rs.10,00,000/- and to pay compensation of Rs.2,00,000/-.

2.                Upon notice, OP1 and OP2 appeared and filed written statement and assailed the complaint by taking preliminary objections on the grounds of maintainability; the complaint being bad for non-joinder of parties; lack of jurisdiction; the complainant being estopped by her own act and conduct; concealment of material facts etc. OP1 and OP2 stated that this commission has got no jurisdiction to try and decide the present complaint where the provisions of SARFAESI Act have been invoked as the jurisdiction of the Court/Consumer Commission are barred U/s.34 of the SARFAESI Act and that the said Act has an overriding effect on other laws as per section 35 of the said Act. Further the complainant has not impleaded legal heirs of the deceased Mohinder Pal. OP1 and OP2 further stated that on the receipt of the same it was duly entertained and processed. The complainant had obtained the insurance policy from opposite party No.1 and 2 bearing No.4148/GSG/176897308/00 valid from 31.07.2019 to 29.07.2024 under the Group Safeguard Insurance Policy issued by them in favour of OP1 DCB Bank. The insurance policy is a contract in itself and the parties are bound by the terms and conditions of the policy. Nothing can be added or subtracted out of it. As per policy conditions i.e. policy certificate part I of the schedule the policy covers specific vector borne related death benefits and malaria related death benefits. A claim has been lodged on account of death of Sh. Mohinder Pal in DMC Hospital, Ludhiana along with the documents of treatment of Sh. Mohinder Pal. After the receipt of the claim and submission of claim documents by the complainant and after scrutinizing the same it is understood from the discharge summary of DMC Hospital, Ludhiana that Sh Mohinder Pal was treated for severe ARDS and Covid-19. After the due application of mind by their officials in terms of the insurance policy and its terms and conditions, the claim of the complainant was repudiated as no claim vide letter dated 23.10.2020 on the grounds that claim falls outside the purview of policy terms and conditions since as per the discharge summary of DMC & Hospital Ludhiana Sh. Mohinder Pal was treated for severe ARDS and Covid-19 since as per policy certificate part I of the schedule the policy covers specific vector borne death benefits and malaria related death benefits. According to OP1 and OP2, they have rightly repudiated the claim on the legal and valid grounds.

                   On merits, OP1 and OP2 reiterated the crux of averments made in the preliminary objections and brief facts of the case. OP1 and OP2 have denied that there is any deficiency of service and have also prayed for dismissal of the complaint.

3.                OP3 filed separate written statement and assailed the complaint by taking preliminary objections/submissions on the grounds of maintainability; the complaint being false, frivolous, devoid of any merits and is an abuse of process of law; suppression of material facts; the complainant has not approached with clean hands; the complainant is not a Consumer of OP3; lack of cause of action etc. OP3 stated that there is no privity of contract between the complainant and OP3 as her husband applied and got insurance policy from OP1 and OP2 and further OP3 has been unnecessarily dragged in the litigation. The policy was availed after filing the proposal form after understanding the significance of the proposed contract. Op3 further stated that it gathered information from OP1 and OP2 and found that insurance policy No.4080/DCB/146364154/00/002 was issued on 29.03.2018 for a period of five years. In case there is any issue relating to insurance policy etc. the complainant must have reached or contacted OP1 and OP2.

                   On merits, OP3 reiterated the crux of averments made in the preliminary objections and brief facts of the case. OP3 has denied that there is any deficiency of service and has also prayed for dismissal of the complaint.

4.                In evidence, the complainant tendered her affidavit as Ex. CA and reiterated the averments of the complaint. The complainant also placed on record documents Ex. C1 to Ex. C7 and closed the evidence.

5.                On the other hand, the counsel for OP1 and OP2 tendered affidavit Ex. RA of Sh. Divyam Suri, Manager Legal of OP1 and OP2 office at Chandigarh  along with documents Ex. R1 to Ex. R10 and closed the evidence.

                   The counsel for OP3 tendered affidavit Ex. RA/2 of Sh. Gurjinder Singh, Legal Officer of OP3 and closed the evidence.

6.                We have heard the arguments of the counsel for the parties and also gone through the complaint, affidavit and annexed documents as well as written statements, affidavits and documents produced on record by the parties.

7.                It is an admitted case of the complainant that on 26.07.2019, her husband Sh. Mohinder Pal (Deceased Life Assured “DLA”) got sanctioned loan of Rs.10,50,000/- from OP3 Bank vide sanction letter dated 26.07.2019 Ex. C7 in which Rahul Sharma and the complainant Neelam Kumari were made co-applicants. To secure the said loan, DLA got an insurance policy Ex. R1 from OP1 and OP2 under Group Safeguard Insurance plan having policy tenure of five years i.e. from 31.07.2019 to 29.07.2024 against a total premium of Rs.5500/-. The relevant part of the policy Ex. R1 is reproduced as under:-

“2. Details of the insured along with the Benefits (as per table below)

Specific vector borne disease related Death Benefit	1000000	100% of Sum Insured
Malaria related Death Benefit	1000000	100% of Sum Insured

 

Unfortunately, on 11.09.2020, the DLA died at Dayanand Medical Hospital and College, Ludhiana due to Severe ARDS (Covid-19) and the complainant submitted the claim with OP1 and OP2 for disbursal of sum assured in order to adjust the same towards the outstanding loan amount. However, OP1 and OP2 repudiated the claim of the complainant vide repudiation letter dated 23.10.2020 Ex. R8 and Ex. R9. The operative part of repudiation letter dated 23.10.2020 is reproduced as under:-

“Refer the claims documents submitted by you for the above-mentioned claim number. On scrutiny of the documents, we regret to inform you that the claims stands rejected for the following reason(s) as per the policy terms & conditions.

SL No.	Policy Condition	Clause(s)
1	Policy certificate Part I of the schedule	The policy cover Specific Vector Borne related Death Benefit and Malaria related Death Benefit.
Remarks	It is understood from the discharge summary of Dayanand Medical College and Hospital, Ludhiana that you were treated for Severe ARDS and Covid 19. Hence the same falls outside the purview of policy Terms and Conditions.

 

8.                As per death certificate dated 12.09.2020 issued by Dayanand Medical College & Hospital, Ludhiana, the insured Mohinder Pal died due to Severe ARDS due to Covid-19 (Severe disease). As per the terms and conditions of the policy Ex. R1, the policy covered Specific Vector Borne related Death Benefit and Malaria related Death Benefit. Since Mohinder Pal died of Covid-19 positive, it has to be seen whether death due to Covid-19 is covered under terms and conditions of the policy.  Further perusal of the terms and conditions of the insurance policy shows that death by way of Covid-19 is not covered. Therefore, ex-facie it appears that the diseases of which Mohinder Pal died, was not covered under the policy.

9.                It is settled law that the terms of insurance policy have to be strictly construed as per the terms and conditions of the policy document which is a binding contract between the parties and nothing can be added or subtracted by giving a different meaning to the words mentioned therein. In this regard, reference can be made to 2023 LiveLaw (SC) 90 in National Insurance Company Ltd. Vs The Chief Electoral Officer and others whereby the Hon’ble supreme Court of India has made the following observations:-

“26. We would first like to elucidate the principles on which a claim under any insurance policy is examined. It is trite to say that the terms of the insurance policy are to be strictly construed.

27. The insurance contracts are in the nature of special class of contracts having distinctive features such as utmost good faith, insurable interest, indemnity subrogation, contribution and proximate cause which are common to all types of insurances. Each class of insurance also has individual features of its own. The law governing insurance contracts is thus to be studied in three parts, namely, (1) general characteristics of insurance contracts, as contracts; (2) special characteristics of insurance contracts, as contracts of insurance, and (3) individual characteristics of each class of insurance.

 28. Now turning to some of the judicial pronouncements, wherein it has been opined that the words used in a contract of insurance must be given paramount importance and it is not open for the Court to add, delete or substitute any words (Suraj Mal Ram Niwas Oil Mills (P) Ltd. vs. United India Insurance Co. Ltd.) 2010 SCC Online SC 1148. Insurance contracts are in the nature where exceptions cannot be made on ground of equity and the Courts ought not to interfere with the terms of an insurance agreement (Export Credit Guarantee Corporation of India Limited vs. Garg Sons International) 2014(1) SCC 686.

29. This Court in Vikram Greentech India Ltd. v. New India Assurance Co. Ltd.2002(5) SCC 599 reiterated that the insured cannot claim anything more than what is covered by the insurance policy. The terms of the contract have to be construed strictly, without altering the nature of the contract as the same may affect the interests of the parties adversely. The clauses of an insurance policy have to be read as they are. Consequently, the terms 8 Justice K Kannan, Principles of Insurance Law Chapter 3 (Volume 1, 10th ed. 2017, pg. 31) 9 2010 SCC OnLine SC 1148 10 2014 1 SCC 686 11 (2009) 5 SCC 599 6 of the insurance policy, that fix the responsibility of the insurance company must also be read strictly.

30. In several other judgments, this court has held that the insurance contract must be read as a whole and every attempt should be made to harmonise the terms thereof, keeping in mind that the rule of contra proferentem does not apply in case of commercial contract, for the reason that a clause in a commercial contract is bilateral and has mutually been agreed upon.”

 

10.              During the course of arguments, the counsel for the OPs has drawn attention of this Commission to the guidelines dated 23.03.2020 and 04.03.2020 issued by IRDA.  We have considered the guidelines of IRDA referred to by the counsel for the OPs whereby the insurance cases were exhorted to deal with and reimburse Covid-19 related claims expeditiously. However, these guidelines or instructions issued by IRDA cannot be read in addition or derogation of the terms and conditions of the insurance policy. Even otherwise, there is no mention in these instructions that Covid-19 should be treated as critical illness in addition to the other critical illnesses mentioned in the insurance policies. Therefore, on the basis of IRDA instructions dated 23.03.2020, 04.03.2020 and 30.03.2020, it cannot be said that death by Covid-19 or Pneumonia should be treated as death from critical illness. A perusal of the instructions further reveals that by way of these instructions, the insurance companies were simply directed to disburse the medical claims of Covid patients as expeditiously as possible considering the fact that during the Covid period people in general were in distress and were not in position to pay the hospital expenses due to pandemic conditions.

12.               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.  

13.              Due to huge pendency of cases, the complaint could not be decided within statutory period.

 

 

(Monika Bhagat)                              (Sanjeev Batra)               Member                                         President  

 

Announced in Open Commission.

Dated:08.10.2024.

Gobind Ram.