Chandigarh

DF-I

CC/438/2022

PamPa Das - Complainant(s)

Versus

ICICI Prudential Life Insurance Company - Opp.Party(s)

Rohit Goswami

05 Sep 2023

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-I,

U.T. CHANDIGARH

                                     

Consumer Complaint No.	:	CC/438/2022
Date of Institution	:	18/04/2022
Date of Decision	:	05/09/2023

 

1. PamPa Das w/o Tina Das Hno-2608 sector-44 Chandigarh.
2. Pritam Das (minor) s/o Tina Das Hno-2608 sector-44 Chandigarh through his mother.

… Complainants

V E R S U S

1. ICICI Prudential Life Insurance Company, SCO 1-2-3, First Floor, Sector 8C, Chandigarh through its Branch Manager/ Authorised Representative.
2. Fulteron Credit Sco-141-142, First Floor, Sector-8, Chandigarh through its Branch Manager/Authorised Representative.

… Opposite Parties

CORAM :	SHRI PAWANJIT SINGH	PRESIDENT
	MRS. SURJEET KAUR	MEMBER

 

                                                                               

ARGUED BY	:	Sh. Rohit Goswami, Counsel for complainant
	:	Sh. Gaurav Bhardwaj, Counsel for OP-1
	:	Sh. Himendra Pal Singh, Counsel for OP-2

 

Per Pawanjit Singh, President

1. The present consumer complaint has been filed by PamPa Das and another, complainants against the aforesaid opposite parties (hereinafter referred to as the OPs).  The brief facts of the case are as under :-

1. It transpires from the allegations as projected in the consumer complaint that late husband of complainant namely Sh. Tina Das had taken home loan from OP-2 to the tune of ₹5.00 lacs vide loan account No.022805000932. At that time, deceased Sh. Tina Das was allured by OPs to purchase a policy from OP-1 in order to secure loan amount.  It was assured to deceased that in case life assured dies due to some illness or accident, family of insured or nominee mentioned in the policy will get policy benefits alongwith sum assured. An amount of ₹5,003/- was paid by deceased/insured to OP-1 as premium against master policy No.24653771 (hereinafter referred to as “subject policy”) which was valid w.e.f.23.2.2019 to 23.2.2022. Unfortunately, deceased/insured, Sh.Tina Das suffered problem of breathing and cough with fever and immediately he was brought to Ace Heart Vascular Institute on 16.4.2021 where his tests were conducted and ultimately he died on 23.4.2021 due to COVID-19.  After sudden death of her husband, when complainant No.1 acquired her senses back, she approached the OP/insurer and submitted claim form, but, the OP failed to settle the claim. The complainants being nominee of the deceased insured again approached the OP for settlement of the claim, but, with no result. In this manner, the aforesaid acts of OPs amounts to deficiency in service on their part. OPs were requested several times to admit the claim, but, with no result.  Hence, the present consumer complaint.
2. OPs resisted the consumer complaint and filed their separate written versions.
3. In its written version, OP-1 took preliminary objections of maintainability and on the ground that the claim of the complainants was not covered under the terms and conditions of the subject policy.  It is also alleged that in fact as the deceased/insured had already paid the insured amount, before his death and he being ceased to be a member of the group and insurance coverage terminates on repayment of the loan, claim of complainants was rightly repudiated by the answering OP as per terms & conditions of the subject policy. On merits, admitted that the subject policy was valid w.e.f. 23.2.2019.  However, it is alleged that as the deceased/insured had ceased to be a member of the group prior to his death, the answering OP was not liable to pay any claim as the subject policy was not in existence at the time of death of the insured. The cause of action set up by the complainants is denied.  The consumer complaint is sought to be contested.
4. In its written reply OP-2 took preliminary objections of maintainability, concealment of facts and also that the complainants have not approached the Commission with clean hands.  On merits, it is admitted that the loan to the tune of ₹5.00 lacs was sanctioned to the deceased and the same was covered with one time premium of ₹5,003/- and further when the deceased ceased to be a member of the group for the purpose of insurance on 18.10.2019, when the loan was foreclosed, the consumer complaint of the complainant is not maintainable. The cause of action set up by the complainants is denied.  The consumer complaint is sought to be contested.
5. In rejoinder, complainants re-asserted the claim put forth in the consumer complaint and prayer has been made that the consumer complaint be allowed as prayed for.

2. In order to prove their case, parties have tendered/proved their evidence by way of respective affidavits and supporting documents.
3. We have heard the learned counsel for the parties and also gone through the file carefully, including the written arguments.
   1. At the very outset, it may be observed that when it is an admitted case of the parties that the home loan was sanctioned in favour of the deceased Sh. Tina Das (predecessor in interest of the complainants) by OP-2 for an amount of ₹5.00 lacs and the said loan was insured by OP-1 by receiving one time premium of ₹5,003/- and the subject policy was valid w.e.f. 23.2.2019 to 23.2.2022, as is also evident from the copy of subject policy (Annexure C-1), and further the said loan was foreclosed on 28.10.2019, as is also evident from the copy of statement of account (Annexure C), and further that the deceased had died on 23.4.2021, as is evident from the copy of death certificate (Annexure C-4), the case is reduced to a narrow compass as it is to be determined if OP-1 is unjustified in repudiating the claim of the complainant against the terms and conditions of the subject policy by holding that the deceased/insured has already foreclosed the loan account and he had ceased to be a member under the group insurance at the time of his death, and the complainants are entitled for the reliefs prayed for in the consumer complaint, as is the case of the complainants, or if the claim of the complainants was rightly repudiated by OP-1, as per the terms and conditions of the subject policy and the consumer complaint of the complainants is liable to be dismissed, as is the defence of OP-1.
   2. In the backdrop of the foregoing admitted and disputed facts on record, one thing is clear that the entire case of the parties is revolving around the terms and conditions of the subject policy.
   3. Perusal of clause 2 of subject policy (Annexure C-1) speaks about the benefits payable under the master policy whereas clause 4 of the subject policy speaks about termination of life insurance and the relevant portions of the same are reproduced below for ready reference :-

2. Benefits payable under the Master policy

As per the Benefit Option chosen by you, the following benefits are applicable :

• Benefit payable on earlier of death or terminal illness
• Additional Accidental Death Benefit

The benefits payable will be strictly as per the Coverage Schedule, irrespective of the loan repayments actually made by the Member or the outstanding loan amount of the Member at the time of occurrence of event giving rise to claim under the Master Policy.  Benefits are payable only -

a) if the cover with respect to the Member is in-force; and

b) if the occurrence giving rise to the claim takes place within the Member’s Coverage Term; and

c) before the repayment of loan.

4.     Termination of Life Insurance

A Members’ coverage under the Master Policy shall terminate on any of the following : if;

1. He/she ceases to satisfy any of the eligibility criteria;
2. He/she ceases to be a Member of the Group for what so ever reason;
3. Upon payment of any benefit by Us in respect of such Member
4. his/her relationship with the Master Policyholder ceases for any reason whatsoever;
5. he/she surrenders his/her membership of the Scheme;
6. he/she reaches Terminal Age;
7. If premium is not paid within the grace period
8. On expiry of Coverage Term.

 

4. Thus, one thing is clear from clause 2 of the subject policy that the benefit under the policy was payable strictly as per the coverage schedule as described above.  In the case in hand, as it is an admitted case of the parties that the entire loan amount stood paid by the deceased on or before 18.10.2019 and the loan account was foreclosed on the said date i.e. much prior to the death of the deceased/insured, who admittedly died on 23.4.2021, it is clear that the deceased had ceased to be covered under the subject policy which was though valid upto 23.2.2022, especially when the subject policy itself prescribes under clause 2 that the benefit to the insured was payable before the repayment of the loan. 
5. Moreover, clause 4 of the subject policy makes it clear that whenever the insured ceases to be a member of the group for whatsoever reason, the master policy shall be terminated and as already discussed above, the entire loan amount was already paid by the insured much before his death, and at the time of his death the subject policy was not in subsistence as the same was only valid before the repayment of loan, it is safe to hold that there is no deficiency in service or unfair trade practice on the part of OP-1 who has rightly repudiated the claim of the complainant.
6. However, though the complainants are not entitled for the sum insured, as claimed by them, but, as it has come on record that the deceased insured had paid premium of ₹5,003/- for three years i.e. for 36 months and he had foreclosed the loan within 8 months of the issuance of the subject policy, OP-1 is liable to refund the proportionate premium amount for 28 months i.e. ₹3,891/- on non standard basis and non refund of the same certainly amounts to deficiency in service on the part of OP-1.  In this manner both the complainants are entitled for refund of ₹3,891/- towards the partial premium amount alongwith interest and compensation etc. for harassment suffered by them.

4. In the light of the aforesaid discussion, the present consumer complaint succeeds, the same is hereby partly allowed and OP-1 is directed as under :-

1. to refund ₹3,891/- to the complainants alongwith interest @ 9% per annum w.e.f. 18.10.2019 i.e. the date of foreclosure of loan, till realization of the same.
2. to pay an amount of ₹3,000/- to the complainants as compensation for causing mental agony and harassment to them;
3. to pay ₹3,000/- to the complainants as costs of litigation.

5. This order be complied with by OP-1 within thirty days from the date of receipt of its certified copy, failing which, it shall make the payment of the amounts mentioned at Sr.No.(i) & (ii) above, with interest @ 12% per annum from the date of this order, till realization, apart from compliance of direction at Sr.No.(iii) above. It is, however, made clear that the aforesaid awarded amount shall be apportioned amongst the complainants in equal share i.e. in the ratio of 50:50 each.
6. The consumer complaint against OP-2 stands dismissed with no order as to costs.
7. Pending miscellaneous application(s), if any, also stands disposed of accordingly.
8. Certified copies of this order be sent to the parties free of charge. The file be consigned.

Announced 05/09/2023 hg			Sd/- [Pawanjit Singh] President
			Sd/- [Surjeet Kaur] Member