Chandigarh

DF-I

CC/528/2021

Rajni Garg - Complainant(s)

Versus

Kotak Mahindra Life Insurance Co. Ltd. - Opp.Party(s)

Amarbir Dhaliwal

05 Feb 2024

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-I,

U.T. CHANDIGARH

                                     

Consumer Complaint No.	:	CC/528/2021
Date of Institution	:	12/08/2021
Date of Decision	:	05/02/2024

 

Rajni Garg w/o Late Sh. Pardeep Garg, resident of House No.20/1, Sector 28-A, Chandigarh, U.T.

… Complainant

V E R S U S

1. Kotak Mahindra Life Insurance Company Ltd. through its Managing Director/Director.

Registered Office : 2^nd Floor, Plot No.#C-12, G-Block, BKC, Bandra (E), Mumbai.

Branch Office :- SCO 153 154 155, Sector 9C, Madhya Marg, Chandigarh 160017.

2. Sh. Rajesh Kushwaha s/o Brighu Nath Kushwaha r/o #100, Gurjivan Vihar, Dhakoli, Zirakpur, Distt. SAS Nagar.

… Opposite Parties

3. M/s L & T Housing Finance Limited, through its M.D/Director.

Regd. Office : Brindavan, Plot No.177, Vidyanagar Marg, C.S.T. Road, Kalina, Santacruz (E), Mumbai-400098.

Branch Office : 174, Dakshin Marg, Industrial Area, Phase II, Chandigarh 160002.

… Proforma party

CORAM :	SHRI PAWANJIT SINGH	PRESIDENT
	SHRI SURESH KUMAR SARDANA	MEMBER

 

                                                                               

ARGUED BY	:	Sh.Devinder Kumar, Advocate for complainant
	:	Sh.Mrigank Sharma, Advocate for OP-1 (through VC)
	:	Sh.Gaurav Sharma, Advocate for OPs 2 & 3

Per Pawanjit Singh, President

1. The present consumer complaint has been filed by Rajni Garg, complainant 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 the husband of the complainant namely Sh. Pardeep Garg had availed home loan of ₹77,40,000/- from OP-3, by mortgaging his only residential house as he was in financial distress.  In the month of June-July 2019, OP-2, who is marketing and sales manager of OP-3, allured aforesaid Pardeep Garg to get himself insured from OP-1/insurer so that the loan sanctioned in his favour be secured.  By acceding to the request of OP-2, aforesaid Pardeep Garg, Deceased Life Assured (hereinafter referred to as “DLA”) had got the aforesaid loan insured from OP-1. Annexure C-3 is the policy cover (hereinafter referred to as “subject policy”) as per which the sum assured is ₹79,90,593/-. Even at that time DLA had disclosed to OP-2 that he was suffering from kidney disease, but, OP-2 had assured that the same will not be any hindrance for availing policy benefit.  In the month of October, 2020, the DLA fell ill and he was diagnosed with COVID-19 and was admitted in PGI, Chandigarh on 26.10.2020, where he died on 2.11.2020. Thereafter, the complainant approached OP-1/insurer to pay the benefits arising out of the subject policy. However, vide letter dated 24.4.2021 (Annexure C-4), OP-1 rejected the claim on the ground that the DLA had concealed his health ailment of kidney disease while purchasing the subject policy.  Before obtaining the subject policy by the DLA, OP-2 had obtained his signatures on various blank papers.  In this manner, the aforesaid acts of the OPs amounts to deficiency in service and unfair trade practice. 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, inter alia, took preliminary objections of maintainability, concealment of facts, cause of action and also that the DLA had not got any good faith.  However, it is admitted that the subject policy was obtained by the DLA from the answering OP. Before obtaining the subject policy, the DLA had filled the medical questionnaire and had disclosed that he was not suffering from any disease and has not specifically disclosed about kidney disease from which he was suffering and as the deceased insured has concealed material facts and misrepresented facts to the insurer before obtaining the subject policy, the claim of the complainant was rightly rejected.  On merits, the facts as stated in the preliminary objections have been reiterated. The cause of action set up by the complainant is denied.  The consumer complaint is sought to be contested.
4. In his written version OP-2, inter alia, took preliminary objections of maintainability, cause of action, locus standi, limitation and also that there is no deficiency in service on his part.  It is however, denied that the answering OP had allured the DLA to get himself insured from OP-1.  All the allegations made against the answering OP are denied. On merits, the facts as stated in the preliminary objections have been reiterated. The cause of action set up by the complainant is denied.  The consumer complaint is sought to be contested.
5. In its written version OP-3, inter alia, took preliminary objections of maintainability, cause of action etc. On merits it is admitted that the DLA had obtained loan from the answering OP.  It is further alleged that in case insurance claim is payable to the complainant, the same is payable only by OP-1 and not by the answering OP.  On merits, the facts as stated in the preliminary objections have been reiterated. The cause of action set up by the complainant is denied.  The consumer complaint is sought to be contested.
6. In separate rejoinders, complainant 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 written arguments.
   1. At the very outset, it may be observed that when it is an admitted case of the parties that the DLA had obtained loan from OP-3 and got the same insured from OP-1 with reducing cover benefit commencing w.e.f. 30.8.2019 to 29.8.2033 on payment of one time premium of ₹2,50,592.81, as is also evident from the policy schedule (Annexure R-1/3) and the DLA has died on 2.11.2020, as is also evident from copy of death certificate (Annexure R-1/5), the case is reduced to a narrow compass as it is to be determined if OP-1/insurer is unjustified in repudiating/rejecting the genuine claim of the complainant and the complainant is entitled to the reliefs prayed for in the consumer complaint, as is the case of the complainant or if OP-1/insurer has rightly rejected/repudiated the claim of the complainant and consumer complaint of the complainant deserves to be dismissed, as is the defence of OPs.
   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 (Annexure R-1/3), investigation report (Annexure R-1/5), medical record of DLA (Annexure R-1/6 and R-1/7) and the repudiation letter (Annexure R-1/8) and the same are required to be scanned carefully to determine the real controversy between the parties.
   3. Perusal of the subject policy (Annexure R-1/3) clearly indicates that it covered the risk upto ₹79,90,593/- commencing w.e.f. 30.8.2019 to 29.8.2033 and the same is reducing cover type policy.  Page 32 of the said policy (Annexure R-1/3) gives details of the reducing cover which is linked with the tenure of the loan amount. 
   4. Annexure R-1/4 is the intimation form which was submitted by the complainant with OP-1.  Annexure R-1/5 (page 36) is the investigation report submitted by the investigator, Om Prakash, deputed by OP-1 and page 40 thereof clearly indicates that it was found by the investigator that the DLA had died on 2.11.2020 due to Covid-19 at PGI, Chandigarh.
   5. Annexure R-1/6 is medical certificate of cause of death of the DLA which clearly indicates that the cause of death of the DLA was hypoxic cardiac arrest and Covid-19 pneumonia sepsis. Annexure R-1/7 is the prescription slip issued by the hospital on which OP-1 has emphasized that since DLA was suffering from kidney disease prior to the purchase of subject policy, as a result the claim of the complainant was repudiated. However, except this reference made by the medical officer on Annexure R-1/7, OP-1 could not lead any evidence to prove that the DLA was suffering from kidney disease prior to the purchase of the subject policy.
   6. Annexure C-4/R-1/8 is the repudiation letter dated 24.4.2021, which clearly indicates that the claim of the complainant was rejected by relying upon the medical record submitted by her to OP-1/insurer as well as collected by the investigator during investigation and the relevant portion of the same is reproduced below for ready reference :-

“Upon investigation and assessment of the above mentioned claim, we have received documents which prove that the Member was suffering from Chronic Kidney Disease-Stage 5 since year 2018 was on Maintenance Hemodialysis. In this regard, we have relied on:

1. Medical cause of death certificate issued from Post Graduate Institute of Medical Education & Research, Chandigarh dated October 26, 2020 procured during the assessment of the said claim
2. The Outpatient card issued from Post Graduate Institute of Medical Education & Research, Chandigarh dated October 20th, 2020 procured during the assessment of the said claim

All the information and other documents procured during the assessment of the said claim;

It is noted that the above mentioned information was not disclosed by the Member in the DOGH and the said nondisclosure amounts to fraud as per Section 45 (2) of the Insurance Act, 1938. Had such information been disclosed, we would not have issued the Cover.

In view of the cited facts, we hereby repudiate the subject Claim.”

7. Thus, one thing is clear on record that OP-1 has repudiated the claim of the complainant on the ground that the DLA was suffering from kidney disease since the year 2018, which was not disclosed by him before purchasing the subject policy and as material facts have been concealed by the DLA, there is fundamental breach of the subject policy and the claim of the complainant was repudiated. 
8. However, we do not find any merit in the said ground of repudiation of the claim as it is the admitted case of the parties that the DLA has died due to hypoxic cardiac arrest and COVID-19 pneumonia sepsis whereas the DLA was alleged to have been suffering from kidney disease prior to purchasing the subject policy, merely on the basis of past history mentioned in the out patient  card prepared by the hospital, without making any enquiry from the treating doctor or by filing his affidavit by OP-1/insurer and on the basis of this evidence it cannot be held that the DLA was suffering from kidney or pre-existing disease.  It has also been held by our own Hon’ble State Commission, UT, Chandigarh in the case of Manish Goyal Vs. Max Bupa Health Insurance Company Limited & Ors., 2018 (2) CLT 205 as under :-

A. Consumer Protection Act, 1986 Section 2(1)(g) Insurance claim - Rejected - On ground that insured not disclosed the pre existing disease and Doctor recorded the past history of illness - Held, opposite parties failed to produce on record any document to show that the insured was still suffering from the said disease - Opposite parties further failed to get information from the hospital, as to whether the doctor who recorded the past history recorded such information on the basis of the information given by the insured or her relative or some medical prescriptions were consulted - It was the duty of the opposite parties to prove who supplied this information to the hospital and also to conduct a thorough enquiry about the previous treatment of alleged epilepsy or tuberculosis obtained by complainant - However, no such enquiry was conducted- Even the affidavit of the Doctor who recorded the said history had not been produced on record - So, merely on basis of past history mentioned in the Patient Admission Record, prepared by Hospital, it could not be held that insured was suffering from epilepsy or tuberculosis at the time of taking the policy and she had intentionally concealed the said material fact. Complaint partly allowed.”

9. Moreover, even if it is proved that the DLA was suffering from kidney disease, same has no nexus with the cause of death. The Hon’ble National Commission in Neelam Chopra Vs. Life Insurance Corporation of India & Ors., IV (2018) CPJ 321 (NC) while dealing with the question of suppression/non-disclosure of material facts has held as under:-

                   12. In the present case, clearly the cause of death is cardio respiratory arrest and this disease was not existing when the proposal form was filled. Clearly, there is no suppression of material information in respect of this disease, which is the main cause of death. The other disease of LL Hansen, which was prevailing for five weeks on the date of admission on 1.8.2003 was also not existing when the proposal was filed by the DLA. The fact of DLA having been treated in the year 2002 for LL Hansen is not supported from any direct evidence though PGI Chandigarh in its certificate has mentioned that disease was treated in 2002. Moreover, this disease does not have any correlation with the cause of death in the present case. Hon’ble Supreme Court in Sulbha Prakash Motegaonkar and Ors. v. Life Insurance Corporation of India, Civil Appeal No.8245 of 2015, decided on 5.10.2015 (SC) has held the following:

        “We have heard learned Counsel for the parties.

                It is not the case of the Insurance Company that the ailment that the deceased was suffering from was a life threatening disease which could or did cause the death of the insured. In fact, the clear case is that the deceased died due to ischaemic heart disease and also because of myocardial infarction. The concealment of lumbar spondylitis with PID with sciatica persuaded the respondent not to grant the insurance claim.

                We are of the opinion that National Commission was in error in denying to the appellants the insurance claim and accepting the repudiation of the claim by the respondent. The death of the insured due to ischaemic heart disease and myocardial infarction had nothing to do with this lumbar spondylitis with PID with sciatica. In our considered opinion, since the alleged concealment was not of such a nature as would disentitle the deceased from getting his life insured, the repudiation of the claim was incorrect and not justified.”

10. In view of the foregoing discussion and the ratio of law laid down above, it is clear that the OP/insurer has not been able to connect the previous diseases/ ailments with the cause of death of the DLA.
11. Not only this, OP-1 has itself placed on record one declaration/undertaking dated 16.8.2019 (Annexure R-1/2) given by the DLA which itself shows that the borrower/insurer was made aware of the fact that he would not be eligible for the insurance cover in case he suffered from any two out of the five disease mentioned therein.  The relevant portion of the said declaration/undertaking is reproduced below for ready reference:-

“2)    Have you suffered or are currently suffering from any of the below serious diseases within the last three years?

• Cancer

• Heart Problem

• Kidney Problem

• Liver Problem

• Lung Disease

*In case your answer to any of the two questions above is "Yes", then you would not be eligible for the insurance cover.”

12. If for argument’s sake it is believed that the DLA had concealed the factum of his suffering from kidney disease prior to the purchase of the subject policy, even then as per the aforesaid declaration/ undertaking, in order to make the complainant ineligible, it was required to be proved on record that the DLA was suffering from two out of the aforementioned five diseases, but, that is not so in the present consumer complaint. 
13. In view of the foregoing, it is unsafe to hold that the insurer/OP-1 was justified in repudiating/rejecting the claim of the complainant and accordingly the present consumer complaint deserves to succeed.
14. Now coming to the quantum of relief to be awarded in the instant case, since it is an admitted case of the parties that the subject policy commenced w.e.f. 30.8.2019 and the DLA had died on 2.11.2020 i.e. within 14-15 months of the commencement of the subject policy, as per life cover schedule (at page 32 of Annexure R-1/3), OP-1/insurer is liable to pay an amount of ₹79,90,593/- to the complainant alongwith interest and compensation etc. for the harassment caused to her as it is the own case of OP-3/bank that the loan account had been closed and nothing is pending against the complainant.

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 pay ₹79,90,953/- to the complainant alongwith interest @ 9% per annum from the date of repudiation of the claim i.e. 24.4.2021 onwards.
2. to pay ₹20,000/- to the complainant as compensation for causing mental agony and harassment;
3. to pay ₹10,000/- to the complainant as costs of litigation.

5. This order be complied with by OP-1 within forty five days from the date of receipt of its certified copy, failing which, the payable amounts, mentioned at Sr.No.(i) & (ii) above, shall carry interest @ 12% per annum from the date of this order, till realization, apart from compliance of direction at Sr.No.(iii) above.
6. Since no deficiency in service or unfair trade practice has been proved against OPs 2 & 3, the consumer complaint against them 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.

05/02/2024 hg	Sd/- [Pawanjit Singh] President
	Sd/- [Suresh Kumar Sardana] Member