Chandigarh

StateCommission

A/194/2023

HDFC ERGO GENERAL INSURANCE CO LTD - Complainant(s)

Versus

KAVUNGAL MAURALIDHARAN - Opp.Party(s)

VISHAL AGGARWAL

19 Dec 2023

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Appeal No.	:	194 of 2023
Date of Institution	:	08.08.2023
Date of Decision	:	19.12.2023

 

 

 

 

 

1]       HDFC Ergo General Insurance Company Ltd., SCO No.124-125, Madhya           Marg, Sector 8-C, Chandigarh 160008 and 5^th Floor, Tower-1, Stellar IT   Park, C-25, Sector 62, Noida-201301 through Shweta Pokhriyal   Manager-Legal.

2]       HDFC Ergo General Insurance Company Ltd., 1^st Floor, HDFC House, 165-166, Backbay Reclamation, H.T. Parekh Marg, Churchgate, Mumbai and 5^th Floor, Tower-1, Stellar IT Park, C-25, Sector 62, Noida-201301 through Shweta Pokhriyal, Manager-Legal.

…..Appellants/Opposite Parties No.2 & 3.

Versus

1]       Mr. Kavungal Muralidharan s/o Late Sh. K. K. Panicker, (since deceased) through his legal heirs:

1. Prateek Murali son of Late Mr. Kavungal Muralidharan.
2. Pranav Murali son of Late Mr. Kavungal Muralidharan.
3. Shyama Murali wife of Late Mr. Kavungal Muralidharan.

….Respondent(s)/Complainant(s).

2]       HDFC Bank Ltd., Plot No.28, Industrial Area, Phase-1, Chandigarh – 160002 through its Branch Manager.

….Respondent/Opposite Party No.1.

3]       Santokh Hospital, #846, Sector 38-A, Chandigarh through its Doctor Sh. Rajiv Gupta.

….Respondent/Opposite Party No.4.

ARGUED BY :-    

 

Sh. Vishal Aggarwal, Advocate for the appellants.

Sh. Pankaj Chandgothia, Advocate for respondent No.1.

Ms. Niharika Goel, Advocate for respondent No.2.

Sh. Gaurav Bhardwaj, Advocate for respondent No.3.

 

Appeal No.	:	125 of 2023
Date of Institution	:	05.06.2023
Date of Decision	:	19.12.2023

 

 

 

 

 

Mr. Kavungal Muralidharan s/o Late Sh. K. K. Panicker, House No.5684, Sector 38 West, Chandigarh – 160036 (now expired) through his Legal Heirs:

1. Mr. Prateek Murali s/o Late Mr. Kavungal Muralidharan.
2. Mr. Pranav Murali s/o Late Mr. Kavungal Muralidharan.
3. Mrs. Shyama Murali w/o Late Mr. Kavungal Muralidharan.

…..Appellant(s)/Complainant(s).

Versus

1. HDFC Bank Ltd., Plot No.28, Industrial Area, Phase-1, Chandigarh 160002 through its Branch Manager.
2. HDFC ERGO General Insurance Company Ltd., SCO 124-125, Madhya Marg, Sector 8C, Chandigarh 160008 through its Branch Manager.
3. HDFC ERGO General Insurance Company Ltd., 1^st Floor, HDFC House, 165-166, Backbay Reclamation, H.T. Parekh Marg, Churchgate, Mumbai-400020 through its M.D.
4. Santokh Hospital, #846, Sector 38-A, Chandigarh through its Doctor Sh. Rajiv Gupta.

...Respondents/Opposite Parties.

 

BEFORE:    JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT

                   MR. RAJESH K. ARYA, MEMBER

 

ARGUED BY :-    

 

Sh. Pankaj Chandgothia, Advocate for the appellant(s).

Ms. Niharika Goel, Advocate for respondent No.1.

Sh. Vishal Aggarwal, Advocate for respondents No.2 and 3.

Sh. Gaurav Bhardwaj, Advocate for respondent No.4.

 

PER  RAJESH  K. ARYA, MEMBER

 

          Vide this common order we are deciding aforesaid two appeals i.e. appeal No.194 of 2023 filed by opposite parties No.2 & 3 – HDFC Ergo General Insurance Company Limited against order dated 20.04.2023 passed by District Consumer Disputes Redressal Commission-II, U.T., Chandigarh (in short ‘District Commission), vide which, consumer complaint No.518 of 2019 filed by the complainant (deceased) has been partly allowed and appeal No.125 of 2023 filed by the complainant - Mr. Kavungal Muralidhara (since deceased) through his Legal Heirs for enhancement. The District Commission vide the impugned order dated 20.04.2023, inter-alia, passed the following order:-

 “19.  Consequently, the present complaint deserves to be partly allowed qua OPs No.2 and 3 and the same is accordingly partly allowed. OPs No.2 and 3 are directed to pay Rs.7,00,000/-  (i.e. Rs.1,00,000/- on account of critical illness, Rs.1,00,000/- on account of loss of job and Rs.5,00,000/- on account of permanent partial disability) to the complainant, along with interest @ 9% p.a. from the date of repudiation of the claim i.e. 17.05.2019 (Annexure C-10) till date of its actual realization.  They are also directed to pay the loan EMIs to OP No.1-HDFC Bank Ltd. on behalf of the complainant from the date of his illness i.e. January, 2019 upto the maximum sum assured of Rs.5,00,000/-. OP No.1-bank is also directed to refund to the complainant the amount paid by the complainant on account of EMIs since 2019 till the date of last payment upto maximum amount of Rs.5,00,000/- (Rupees Five Lakhs only). OPs No.2 and 3 are also directed to pay lump sum compensation of Rs.25,000/- to the complainant on account of mental tension and harassment and litigation expenses.

20.    This order be complied with by OP No.1, OPs No.2 & 3, within 60 days from the date of receipt of its certified copy.”

However, the District Commission dismissed the complaint against opposite party No.4 – Santokh Hospital.

2]      Briefly stated the facts as narrated in the impugned order passed by the District Commission are as under:-

“1.    The complainant has filed the present complaint under provisions of the Consumer Protection Act, 1986, as amended up-to-date alleging therein that he is consumer of the OPs as he is having bank account with OP No.1. The complainant applied for a loan of Rs.5.00 lakhs with the OP Bank for purchase of the vehicle. The OP No.1 sanctioned the loan of Rs.5,06,590/- vide sanction letter dated 22-10-2016 (Annexure C-1). At the time of granting loan, OP-Bank forced the complainant to take insurance policy namely Sarva Suraksha Plus” (Annexure C-4) from the sister concern (OPs No.2 and 3) against the premium of Rs.6590 /-, which was deducted from the loan amount itself by the OP-Bank. A further perusal would show that the agent of OP No.2 for the purpose of the policy was OP No.1 i.e. Bank itself. The Bank, therefore, further benefited by earning commission on the sale of the policies, which amounts to unfair trade practice. The complainant further alleged that earlier the complainant took a personal loan from OP-Bank which was sanctioned and granted on 08-06-2016, for Rs.1,09,000/- and at that time also, the OP-Bank forced the complainant to take an insurance policy namely “Serv Suraksha Pro” from their sister concerns i.e. OPs No.2 and 3, against the premium of Rs.2170/- which was deducted from the loan amount itself by the OP-Bank. A further perusal would show that the agent of OP No.2 for the purpose of the policy was OP No.1-Bank itself. The complainant has further stated that unfortunately in the month of January 2019, he suddenly suffered critical kidney failure for which, he was hospitalized in Sandhu Hospital sector 38 Chandigarh on 07.01.2019 and discharged on 15.01.2019. The said critical illness is duly covered under both the insurance policies issued by OPs. The complainant filed the respective claim forms under both the policies separately to claim the benefits as available under the policies. Under the policy (Annexure C-4), the OPs are liable to pay fixed sum assured of Rs.1,00,000/- under critical illness coverage. Similarly under policy (Annexure C-6), the OPs are liable to pay Rs.1,00,000/- under the head of critical illness coverage. The complainant is further entitled to an additional sum of Rs.1,00,000/- as sum insured towards loss of job besides sum insured for Rs.5,00,000/- each under the head “Credit Shield Insurance”.  However, the OPs mechanically rejected the claim without applying their judicious mind vide Annexure C-10 on the ground that the complainant has suffered hypertension since 18 years and diabetes before the policy start date. According to the complainant, the OPs illegally rejected the claim as there is neither medical report to that effect nor hypertension or diabetes can be said to be that cause of kidney failure. The complainant alleged that the OPs are also liable to pay/reimburse EMI’s due since January 2019 on both the loans to the complainant as same were paid by him. Alleging that the aforesaid acts of omission and commission on the part of the OPs amount to deficiency in service and unfair trade practice, the complainant has filed the instant complaint seeking directions to the OPs to pay the claim of Rs.9 lakhs under the policies issued by OP No.2 under the agency of OP No.1 and to reimburse EMIs paid by him to the bank since January 2019 on both the loans along with compensation for mental and physical harassment and litigation expenses.

2.    After the service of notice of complaint upon the OPs, they appeared before this Commission and filed their respective written versions to the complaint.  At the very outset, OPs No.1 and 2 denied all the averments and contentions made by the complainant in the complaint against them. They took preliminary objections inter alia that the complainant has not approached this commission with clean hands; the complaint is not maintainable; there is no deficiency in service or unfair trade practice on the part of the opposite parties; the complaint has been filed with mala fide intention; the complainant does not fall within the definition of the consumers; this commission has no jurisdiction to try and decide the present complaint; the allegations levelled by the complainant involved  complicated question of law and facts which cannot be adjudicated in the summary trial before this Commission but the matter needs to be tried in full scale trial before the civil court of competent jurisdiction; the complaint is barred by limitation; the complainant has no locus standi and cause of action to file the present complaint. On merits, it has been stated that the claim is not covered under the critical illness under the insurance policies as the complainant has been suffering from diabetes last 18 years which is before the inception of the policy which is clearly mentioned in the discharge summary of the treating hospital.  The treating doctor in the hospital notes clearly stated that the patient is a known case of type 2 DM for last 18 years and on regular medication, probable cause of chronic kidney disease is T2DM.  It has further been stated that the complainant neither suffered as accidental death nor contracted any permanent total disability and as such the claim under the credit shied is not payable.  It has further stated that the complainant had to resign from his job due to his poor health conditions and as per the terms and conditions of the insurance policy, loss of job due to any reason other than retrenchment is excluded from the purview of the policy.  It has further been stated that the claim was rightly repudiated as per the terms and conditions of the insurance policy. The remaining allegations levelled by the complainant have been denied by OPs No.2 and 3. Lastly OPs No.2 and 3 prayed for dismissal of the complaint against them.

3.    In its separate written version, OP No.1 has not denied the facts with regard to availing of the loan by the complainant. However, it has been stated that the complainant is aggrieved against the rejection of the claim by the OPs No.2 and 3 and it has no concern with the same. It has been denied that they have forced the complainant to purchase the policies from OPs No.2 and 3 or that OPs No.2 and 3 are the sister concerns of OP No.1. It has been stated that OP Bank and the Insurance Company are two different entities, with completely different management and roles.  It has been stated that there is no deficiency in service on its part. Lastly OP No.1 prayed for dismissal of the complaint against it.

4.    Despite due service through registered post, OP No.4 failed to put in appearance and as a result thereof it was ordered to be proceeded against exparte vide order dated 30.07.2019.”

3]      In appeal bearing No.194 of 2023, the appellants/opposite parties No.2 & 3 have sought setting aside of the impugned order by stating that all the policies issued by any company is subject to certain conditions which are approved by none else than IRDA which is the statutory body and the same is binding upon all companies as well as the insured. It has further been stated that the District Commission wrongly awarded relief of Rs.1 Lakh under the head ‘Loss of Job’ because such a relief could be granted only in the event of the insured person losing his job due to retrenchment from his employer in view of mergers and acquisitions. It has further been stated that the appellant – insurance company is liable to pay compensation in case of permanent total disability/permanent partial disability only if the same is caused by way of an accident. It has further been stated that the insured had suffered kidney failure, which was in no terms, could be termed as an accident and therefore, the findings of the District Commission are totally illegal and against law and liable to be set aside. It has further been stated that the District Commission has wrongly ordered to pay the balance EMIs up-to a sum of Rs.5 Lakhs and to refund any excess payment made by the complainant after 2019. It has further been stated that the same has been awarded under the head of Credit Shield Insurance Cover. It has further been stated that the terms and conditions of the policy are very clear to state that the company was required to pay the loan availed by the insured under Credit Shield Cover in case of his death by way of an accident only. It has further been stated that the claimant was not entitled to any amount as it is clear from the record that the insured had been diagnosed of Chronic Kidney failure which in no terms could be construed to be an accidental death/disability whatsoever. It has further been stated that the accident has been denied under credit shield which states that ‘accident or accidental means a sudden, unintended and fortuitous external and visible evident, which is not so in the present case. It has further been stated that the District Commission has failed to appreciate the facts on record and thus, the impugned order is liable to be set aside.

4]      On the other hand, in appeal bearing No.125 of 2023 filed by the appellant/complainant (since deceased) through his Legal Heirs and the written arguments, it has been stated that the Legal Representatives had to pay off and close the loan in the name of the deceased by paying from the funds and estate of the deceased, even though they were not legally liable to do so, as rightly held in the impugned order and therefore, the direction to pay the loan EMIs to HDFC Bank needs to be modified. Enhancement in compensation and litigation costs has also been sought besides claiming total claim of Rs.9 Lakhs under the policies and reimbursement of EMIs paid by the appellant since January 2019 on both the loans.

5]      We have heard the counsel for the parties and have also gone through the impugned order, record and the written arguments filed by the appellants.

6]      First coming to appeal bearing No.194 of 2023 filed by appellants/opposite parties No.2 & 3 – HDFC Ergo General Insurance Company Ltd., it may be stated here that we are in consonance with the view held by the District Commission that the ground of repudiation of claim are wrong and arbitrary because in order to prove their case of pre-existing disease i.e. hypertension for the last 18 years or diabetes as alleged, neither opposite parties No.2 & 3 placed on record any medical record nor filed any affidavit of the concerned treating doctor by way of evidence and as such, in the absence of such an evidence, they failed to make out any case of pre-existing disease. Citing the law laid down by Hon’ble National Consumer Disputes Redressal Commission, New Delhi in cases titled ‘New India Assurance Co. Ltd. Vs. Arun Krishan Puri’, III(2009) CPJ 6 (NC) and Satish Chander Madan Vs. M/s. Bajaj Allianz General Insurance Co. Ltd., Revision Petition No.3619 of 2013 – decided on 11.1.2016 , the District Commission righty held the repudiation wrong and arbitrary. Once repudiation has been held to be wrong and unjustified, the only question, which arises for consideration by this Commission, as to what extent the complainant was to be indemnified under the policy in question. Firstly, the District Commission has awarded the sum assured of Rs.1,00,000/- to the complainant under the head of critical illness coverage on account of suffering from any critical illness, which in our concerted view, has been rightly awarded under the said head. Once the appellants/opposite parties No.2 & 3 had failed to make out any case of pre-existing disease and the repudiation has been held to be wrong and arbitrary, the complainant was very much entitled to the sum assured of Rs.1,00,000/- under the policy as he had suffered critical kidney failure in January 2019, which was very much covered under the head of critical illness coverage of the policy (Annexure C-4). The District Commission, in our view, has rightly awarded this relief to the complainant.

7]      As regards relief of Rs.1 Lakh, awarded by the District Commission, under the head ‘Loss of Job’, it is the contention of the appellants/opposite parties No.2 & 3 that the District Commission has erred in awarding such a relief as this relief could be granted only in the event of the insured person losing his job due to retrenchment from his employer in view of mergers and acquisitions. From bare perusal of Section 4 relating to Loss of Job (applicable for salaried persons only), it becomes crystal clear that benefit under this head could be extended to the complainant only in the event of the complainant losing his job due to retrenchment from his employer in view of mergers and acquisitions and further the loss of job due to reasons other than retrenchment as a result of mergers and  acquisitions or as a result of any disciplinary action was specifically excluded under exclusion applicable to Section 4. Therefore, in our concerted view, the District Commission has wrongly and illegally awarded an amount of Rs.1 Lakh to the complainant under the head “Loss of Job’, for which the complainant was not, in any way, entitled to. In this view of the matter, relief awarded under the head “Loss of Job” is set aside. 

8]      As regards awarding of Rs.5 Lakhs under the head “permanent total disability/permanent partial disability” of the insurance policies in question, the contention of the appellants/opposite parties No.2 & 3 is that the complainant could be entitled to this amount only in case the disability/permanent partial disability would be the result of accident. We find force in this contention of theirs because the critical illness of the complainant i.e. kidney failure, in no way, could be said to be the result of any accident. Clause 2.3 relating to “Coverage Part C: Permanent Partial disability” clearly stipulates that it was only in the event of accidental bodily injury causing the insured’s permanent partial disability, the Company was to pay the percentage of the sum insured as specified for each and every form of impairment mentioned in the PPD Table. Therefore, the view held by the District Commission that the case of the complainant fell within the ambit of permanent partial disability is totally wrong and baseless. In this view of the matter, the relief of Rs.5 Lakhs awarded by the District Commission under the head “Permanent Partial Disability” is also set aside.

9]      The next contention of the appellants/ opposite parties No.2 & 3 is that the District Commission wrongly directed them to pay the balance EMIs up-to a sum of Rs.5 Lakhs and to refund any excess payment made by the complainant after 2019 because the terms and conditions of the policy clearly state that the company was required to pay the loan available by the insured under ‘Credit Shield Cover’ in case of death of the insured by way of an accident only. Bare perusal of Section 5 relating to coverage under credit shield clearly shows that it was only in the event of accidential death or permanent total disability of the insured person during the policy period, the Company was to pay the balance outstanding loan amount to the legal heirs of the insured or the named insured subject to the maximum sum insured specified in the schedule. However, in the instant case, since neither the death of the complainant was accidental nor he was a case of permanent total disability, therefore, he was not entitled to any relief under this head. Therefore, relief awarded by the District Commission under this head is also set aside.

10]    In view of observations made in the earlier part of the order, we do not find any force in appeal bearing No.125 of 2023 filed by the appellant/complainant (since deceased) through his Legal Heirs and the same is liable to be dismissed. However, while dismissing the appeal, we observe that the District Commission, in failure of non-compliance of its order within the stipulated period, has not put any penal clause, which, in our considered view, it should have done. 

11]    Appeal bearing No.194 of 2023 filed by the appellants/opposite parties No.2 & 3 is liable to be partly accepted and the impugned order is liable to be modified, to the extent indicated above.

12]    For the reasons recorded above, appeal bearing No.125 of 2023 filed by the appellant/complainant (since deceased) through his Legal Heirs is dismissed being devoid of any merit with no orders as to costs.

13]    However, appeal bearing No.194 of 2023 filed by the appellants/opposite parties No.2 & 3 is partly accepted and the impugned order is modified to read as under:-

(i)       The appellants/opposite parties No.2 & 3 are directed to pay an amount of Rs.1,00,000/- (Rs.One Lakh only) on account of critical illness to the Legal Heirs of the complainant (since deceased) alongwith interest @9% p.a. from the date of repudiation of the claim i.e. 17.05.2019 (Annexure C-10) till the date of actual realization.

(ii)      the appellants/opposite parties No.2 & 3 are also directed to pay an amount of Rs.25,000/- as lump-sum compensation to the Legal Heirs of the complainant (since deceased) on account of mental tension and harassment and litigation expenses.

(iii)     This order be complied with by the appellants/opposite parties No.2 & 3 within a period of 30 days from the date of receipt of its certified copy, failing which, the amount of Rs.1 Lakh awarded at para (i) above shall carry penal interest @12% p.a. and lump-sum compensation of Rs.25,000/- shall carry interest @9% p.a., from the date of default i.e. after expiry of 30 days’ period till actual realization.   

14]              Pending miscellaneous application(s), if any, in both the appeals stand disposed of having been rendered infructous. 

15]              Certified copy of this order be placed in the file of appeal No.125 of 2023.

16]              Certified copy of this order be sent to the parties free of charge.

17]              Files be consigned to the Record Room after completion.

Pronounced.

19.12.2023.

(RAJ SHEKHAR ATTRI)

PRESIDENT

 

 

 

 

 

(RAJESH K. ARYA)

MEMBER

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