DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II
Udyog Sadan, C-22 & 23, Qutub Institutional Area
(Behind Qutub Hotel), New Delhi- 110016
Case No.187/2023
Mrs. Neha Malhotra
W/o Late Mr. Mohit Malhotra
R/o Flat No.105, Pocket-6, Sector-2
North West Delhi, Rohini-110085. .…Complainant
VERSUS
ICICI Lombard GIC Ltd.
3rd Floor, Veera Tower, above ICICI Bank
S-26, 27, 28, Green Park Extn. Market
New Delhi, District South Delhi-110016.
Having Regd. & Corp. Office at:
ICICI Lombard GIC Ltd.
ICICI Lombard House, 414, Veer Savarkar Marg
Near Siddhi Vinayak Temple, Prabhadevi
Mumbai, Maharashtra-400025.
PNB Housing Finance Limited
Branch: Green Park
At: Building No.S-8, Uphar Cinema Complex
Green Park Extension, Delhi.
Insurance Regulartory and Development Authority of India
Gate No.3 Jeevan Tara Building
First Floor Sansad Marg
New Delhi-110001. ….Opposite Parties
Coram:
Ms. Monika A Srivastava, President
Ms. Kiran Kaushal, Member
Present: Adv. Ankita Baluria along with Adv. Samridhi proxy counsel along with complainant.
None for OP-2.
ORDER
Date of Institution:28.06.2023
Date of Order :05.12.2024
President: Ms. Monika A Srivastava
Complainant has filed the present complaint seeking direction to OP-1 to pass the claim of the complainant for a sum of Rs.28,00,000/- along with interest @18% from 27.08.2021 i.e. the date of rejection; Rs.10,00,000/- towards harassment by OP-1; another Rs.10,00,000/- against OP-2 for sending their recovery agents and Rs.1,00,000/- as litigation cost. OP-1 is ICICI Lombard General Insurance Co., OP-2 is PNB Housing and OP-3 is IRDA (Insurance Recovery and Development Authority of India).
- It is stated by the complainant that her husband Late Sh. Mohit had availed a home loan facility from OP-2 for a sum of Rs.30,00,000/- for a tenure of 240 months dated 26.05.2017 which was to end on 10.06.2037. Copy of the loan disbursement letter is annexed as annexure-1.
- It is stated that under the scheme of “Group secure mind” OP-1 was providing insurance to the loans provided by OP-2. Husband of the complainant was informed that the scheme launched by OP-2 is in collaboration with OP-1 to facilitate and secure interest of families of the borrower of home loan in case of any misfortune. An insurance was availed at the behest of OP-1 of Rs.28,00,000/- dated 30.05.2017 for a term of five years for the loan availed from OP-2.
- It is further stated that the complainant herein was the nominee of this insurance policy. Copy of risk assumption letter issued by OP-1 is annexed as annexure-2. In this regard, complainant paid a sum of Rs.1,28,000/- in favour of OP-1 towards the premium.
- It is stated that the husband of the complainant contacted Covid-19 and developed bradycardia and was put on ventilator support on 02.05.2021. He suffered a cardiac arrest. Copy of the medical documents of the late husband of the complainant are annexed as annexure-3 and the death summary is annexed as annexure-4. Death certificate is annexure-5.
- Complainant submitted the claim with OP-1 to get the insured sum and payment of the remaining loan to OP-2 on account of death of the complainant due to critical illness. However, OP-1 rejected the claim of the complainant vide letter dated 27.08.2021 stating as under:-
“As per death summary of Cygnus MLS Super Speciality Hospital, Delhi, insured (husband of the complainant) with diagnosed that Covid+ and expired on 02.05.2021 due to cardiac failure with respiratory failure. On further verification there is no evidence on any major medial illness covered and defined under the policy. Since the claim falls decided the purview of major medical illness and procedures define and covered under the policy.”
The rejection letter is annexed as annexure-6.
- It is stated by the complainant that her husband suffered cardiac arrest due which he had a cardiac failure which is covered under clause (C) (3) of the risk assessment letter dated 30.05.2017 and therefore OP-1 is liable to pay a sum of Rs.28,00,000/-. It is stated that OP-1 has committed grave negligence and deficiency in their service while rejecting the claim of the complainant. It is further stated that the reason of heart attack is not discussed or clarified in the insurance policy. The Clause I (C) (3) of the policy says that death should be due to “heart attack of specific severity” without specifying any further reason or the cause of heart attack.
- It is further stated that OP-1 has failed to specify the severity of heart attack and it is accompanying illnesses and has illegally rejected the claim of the complainant.
- It is stated that due to rejection of insurance by OP-1, OP-2 proceeded under SARFAESI Act 2002. Copy of the legal notice under section 13(2) of SARFAESI dated 14.01.2022, possession letter dated 02.08.2022 and receiver notice dated 01.10.2022 sent by OP-2 is annexed as annexure-7.
- It is stated that on account of the arbitrary rejection of the claim by OP-1 and pressure tactics used by OP-2 to recover outstanding dues of home loan, the complainant has suffered mentally, emotionally and financially.
- It is stated that OP-2 has been harassing the complainant and her minor children. They were threatened and abused by the bouncers and recovery agents of OP-2 and to protect herself complainant approached DRT and secured a stay order against OP-2 dated 14.10.2022 in SA No.387/2022. Copy of the said order is annexed as annexure-8.
- It is further stated that the complainant had earlier filed a consumer case before the Ghaziabad, DCDRC under a mistaken legal advice and was given liberty to file a fresh complaint in the appropriate jurisdiction vide order dated 05.04.2023. The said order is annexed as annexure-9.
- It is stated by the complainant that OP-2 was well aware of the existing policy availed by the deceased husband of the complainant and yet breached the fiduciary terms existing between financial institution and the customer by passing on the buck to OP-1. It is stated that the acts of OP-1 and 2 amount to deficiency as per Section 2(11) of CPA.
- It is further stated that complainant sent legal notice to OP-3 which is a redressal portal set up by the Parliament dated 19.04.2023 and 27.04.2023 which was duly delivered. In response to the online grievance Redressal portal OP-3, OP-1 again rejected claim of the complainant dated 10.05.2023 which is annexed as annexure-12.
- In its reply, OP-1 has stated that the complaint is liable to be dismissed for want of cause of action as there is no deficiency in service on the part of OP-1 and that the claim was repudiated as per the terms and conditions of the insurance policy. It is further stated that the matter involves details of facts, medical evidence and cross examination which is not possible in a summary proceeding.
- OP-1 has not disputed the policy taken by the deceased husband of the complainant. It is stated that the policy covered certain specified illness/disease, major medical illness, personal accident and loss of job. It is stated that complainant filed her claim to OP-1 and a letter was sent her on 02.07.2021 seeking documents and another reminder letter was sent to her on 20.07.2021. These letters are annexed as B & C respectively. It is stated that despite the request made to the complainant she did not submit complete documents to OP and submit medical documents of the deceased and discharge summary of Cygnus Hospital which are annexed as annexure-D (colly).
- It was found out during investigation of the medical documents of the deceased that he was diagnosed that Covid-19 Pneumonia, Cardio failure with respiratory failure and expired on 02.05.2021. On further verification it was found that the deceased did not suffer from any major medical illness covered and deficient under the policy which are given under section 1 of the policy:-
- Major Medical Illness & Procedures
- First diagnosis of the below-mentioned Illnesses more specifically described below:
- Cancer of specified severity
- Kidney failure requiring regular Dialysis
- Multiple sclerosis with persisting symptoms;
- Benign Brain Tumor
- Parkinson’s Disease before the age of 50 years
- Alzheimer’s Disease before the age of 50 years
- End stage Liver Disease
- Undergoing for the first time of the following surgical procedures, more specifically described below:
- Major Organ/Bone Marrow Transplant;
- Open heart replacement or repair of heart valves
- Open chest CABG
- Surgery of Aorta;
- Occurrence for the first time of the following medical events more specifically described below:
- Stroke resulting in permanent symptoms;
- Permanent Paralysis of Limbs;
- First Heart Attack of specified Severity
- Major Burns;
- Loss of Speech;
- Deafness
- Coma of specified severity
- It is further stated that after considering the medical document of the deceased of the terms and conditions of the policy claim of the complainant was repudiated vide letter dated 27.08.2021 which is self-explanatory and is annexed as annexure-E. It is denied by OP-1 that the deceased/insured expired due to heart attack of a specific severity.
- In its reply, OP-2 has stated that the main grievance of the complainant is against the rejection of her insurance claim by OP-1 and therefore the complaint is not maintainable against OP-2. It is stated that OP-2 has been just made a party for the reason that the loan facility was availed by the complainant from OP-2 however, OP-2 has no role to play in insurance claim of the complainant. On this ground OP-2 has sought deletion of his name.
- It is further stated that measures undertaken by OP-2 are statutory remedies initiated in accordance with law. It is denied by OP-2 that it sent agents to intimidate the complainant. It is stated that since May 2021 till now complainant has not paid a single EMI towards the repayment of her loan dues and OP-2 was construed to initiate recovery proceedings against her as per law. It is reiterated that the action undertaken by OP-2 under SARFAESI was only to recover their dues and the motive was not to harass or torture the complainant and it is stated that such measures undertaken by OP-2 cannot be termed as deficiency of service under the Consumer Protection act.
- It is further stated by OP-2 that vide order dated 14.10.2022 Ld. DRT has passed an order directing both parties to maintain status quo qua the property in question and therefore rights of the complainant are already protected by Ld. DRT. It is stated that the complainant is indulging in multiplicity of litigation for reasons best known to her.
- In her rejoinder to the replies of both OP-1 and OP-2, complainant has denied the allegations made by both the OPs. It is denied by the complainant that the claim falls outside the purview of the major claim illness and procedures defined covered under the policy.
- With regard to the OP-2 it is stated by the complainant that OP-2 cannot shift entire burden upon the complainant to deal with the claim not provided by OP-1 as OP-1 was introduced by OP-2 to the husband of the complainant so that the loan amount may be secured.
- All the parties have filed their evidence affidavits written arguments. This Commission has gone through the entire material on record. Complainant has relied on the judgments passed by Hon’ble High Court of Madras in N. Laxmi Vs. IRDA on 29.04.2024 and passed by Hon’ble SCDRC Gujarat in ICICI Lombard GIC Ltd. Vs. Jagrut Nagarik – PV Moorjani on 26.10.2023, Saralaben J. Gurjar Vs. ICICI Lombard ICICI GIC Ltd. passed in 2022 and TATA AIG GIC Vs. Jyotsanaben Budhabhai Rana passed on 31.05.2023.
- OP-1 has filed medical literature differentiating between heart attack and heart failure and bradycardia patient and with mild and moderate Corona Virus Disease. OP-1 has also filed judgments passed in ECGC Vs. Garg Sons International 2013 (1) SCALE 410 and Venkataraman Krishan Murthy Vs. Lodha Underground Building Mart Pvt. Ltd.
This Commission has gone through the entire material on record. It is undisputed that the deceased husband of the complainant took an insurance policy from OP-1 to secure housing loan taken by him and the complainant from OP-2. It is also undisputed that the husband of the complainant was diagnosed by Covid-19 and the cause of death is given in the certificate as ‘cardiac failure’ with respiratory failure.
The judgments provided by OP-1 i.e. ECGC Vs. Garg Sons International lays down “terms of the agreement have to be strictly construed by courts” and Lodha Ground Build Mart states “court cannot interpret the contract”.
The judgments relied on by the complainant directly deals with the same issue as is under discussion in the present case and the Hon’ble Madras High Court has held :-
“9. The petitioner’s husband died due to cardiac arrest during the Covid. Only because of Covid he suffered with cardiac arrest and noting (sic) but heart attack and the demise of the petitioner’s husband as very much covered under the policy. Has held by the Hon’ble Supreme Court of India, the insurance company should not be too technical and acted arbitrarily. There is no doubt over the insurance policy, which was taken by the petitioner’s husband. After issuance of insurance policy, they have received premium amount and therefore, the claim cannot be rejected on technical ground.
10. As held by this court Jasmine Ebenzer case, as stated supra even though law seems to be clear constituting the balance between insuring party and the insured, in reality there is no equality between two as insurer is the richest corporation and the individual is an ordinary individual, in fact, in many cases, the individual has no legal entity about the ambiguous language used in the company’s policy with an intention to waive them from the liability to pay an insured on happening of an agreed event. Many a times the companies wilfully negligent in reimbursing the insured who instead getting their amount from the company have to pay the court for getting their rights enforced. The case on hand is a classic example of the same. The petitioner’s husband suffering with sudden cardiac arrest and it falls under the one of the disease covered under the policy. Further the policy conditions covered the disease and no one can be stated as it is not major medical illness.
Similar verdict was given by the Hon’ble SCDRC Gujarat wherein it was held under para 5.1 “Ld. Representative respondent/original complaint argued that the cause of death shown in the death certificate is Acute Cardio Respiratory Arrest which is covered under the policy terms and conditions, specifically it is covered under the critical illness. There is no clarification in the policy terms and conditions that in which circumstances the acute cardio respiratory arrest will not be considered under the critical illness. The immediate cause for death was Acute Cardio Respiratory Arrest it may be because of Covid-19 disease.”
In para 6.2 it was further held “these two distinct heart conditions are linked. Sudden cardiac arrest can occur after a heart attack or during recovery. Heart attacks increase the risk for sudden cardiac arrest. Many heart attacks do not immediately lead to sudden cardiac arrest but when sudden cardiac arrest occurs, heart attack is a common cause. Other heart conditions may also disrupt heart’s rhythm and lead to sudden cardiac arrest.”
Similar is the verdict given in Saralaben’s case, the insurance company has construed and interpreted the major illness narrowly and niggardly against the interested customers which frustrates the breach ……of CP Act. Hon’ble Supreme Court in Shushil Gupta (Smt.) vs. LIC: 1995 Suppl. 1 SCC 754 has held that we would accept the one which favours the policy holders as the same advances the purpose for which the policy is taken and would be in consonance with the object to be achieved.
Hence, contentions of the insurance company cannot be accepted. The illnesses listed by OP under section 1 of the policy covers first heart attack of specified severity as has been held and discussed in the above cases that there is a direct link of heart attack and cardiac arrest because of which the husband of the complainant died and therefore it would be taken as illness covered under the policy.
OP-1 is therefore directed to pay a sum of Rs.28,00,000/- with interest of 7% per annum from the date of rejection and the letter i.e. 27.08.2021 to the nominee of the deceased husband of the complainant i.e. complainant herself within three months from the date of pronouncement of the order failing which the interest payable on the said amount shall be 9%. OP-1 has also pay a sum of Rs.1,00,000/- to the complainant for causing harassment to her in her trying times. It was recorded earlier in order dated 11.07.2024 that no cause of action survived against OP-2 as the proceedings were held before the Hon’ble DRT.
Copy of the order be provided to the parties as per rules. File be consigned to record room. Order be uploaded on the website.
