Order by:
Sh.Amrinder Singh Sidhu, President
1. This Consumer Complaint has been received by transfer vide order dated 26.11.2021 of Hon’ble President, State Consumer Disputes Redressal Commission, Punjab at Chandigarh under section 48 of CPA Act, vide letter No.04/22/2021/4 C.P.A/38 dated 17.1.2022 from District Consumer Commission, Ludhiana to District Consumer Commission, Moga to decide the same in Camp Court at Ludhiana and said order was ordered to be affected from 14th March, 2022.
2. The complainant has filed the instant complaint under section 12 of the Consumer Protection Act, 1986 (now section 35 of Consumer Protection Act, 2019) on the allegations that Sukhpal Kaur (since expired) had availed Life Insurance Policy from Opposite Party vide No.302531496 for a sum of Rs.5 lakh. During the policy period, said Sukhpal Kaur has expired on 10.02.2016 due to brain hemorrhage and the complainant being the nominee of life assured has lodged the claim with the Opposite Party for the sum assured. But the Opposite Party repudiated the claim of the complainant on the ground of non disclosure of pre existing disease of the life assured, but this reason for the repudiation of the claim of the complainant is not genuine, because the life assured was died due to brain hemorrhage and as such, there is deficiency in service on the part of the Opposite Party. Vide instant complaint, the complainant has sought the following reliefs.
a) The Opposite Party may be directed to pay the insured amount of rs.5 lakhs and also pay compensation amounting to Rs.2 lakh for causing him mental tension and harassment besides Rs.22,000/- as litigation expenses or any other relief to which this District Consumer Commission may deem fit be also granted.
3. Opposite Party appeared through counsel and contested the complaint by filing the written version taking preliminary objections therein inter alia that the complaint filed by the complainant is not maintainable and is liable to be dismissed as the complainant has attempted to misguide and mislead this District Consumer Commission. It is submitted that the policy holder Sukhpal Kaur had suppressed the material facts at the time of obtaining the policy in question. Further alleges that the life assured was admitted in Dayanand Medical College & Hospital, Ludhiana on 16.04.2015 and discharged from the hospital on 22.04.2015 where diagnosis arrived at was PRIMIGRAVIDA23 WEEKS (means she was pregnant), chronic Hypertension with ASCITIES (fluid in abdomen) and DYSPNEA (Breathlessness) and date of commencement of policy was 28.11.2015. The admission in the hospital was before taking the insurance policy and the same facts are not disclosed in the proposal form at the time of taking of the policy as such, the claim was repudiated on the ground of suppression of material facts in terms and provisions of section 45 of the Insurance Act. On merits, Opposite Party took up the same and similar pleas as taken up by them in the preliminary objections. Hence, the instant complaint is not maintainable and the same may be dismissed with costs.
4. In order to prove his case, the complainant has tendered into evidence the affidavit Ex.CA alongwith copies of documents Ex.C1 to Ex.C9 and closed the evidence.
5. On the other hand, to rebut the evidence of the complainant, Opposite Party also tendered into evidence the affidavit Ex.RA alongwith copies of documents Ex.R1 and Ex.R2 and closed the respective evidence.
6. We have heard the ld.counsel for the parties and also gone through the documents placed on record.
7. Ld.counsel for the Complainants as well as ld.counsel for the Opposite Parties have mainly reiterated the facts as narrated in the complaint as well as in their written statements respectively. We have perused the rival contention of the ld.counsel for the parties. The only contention of the complainant is that Sukhpal Kaur life assured has expired on 10.02.2016 due to brain hemorrhage and the complainant being the nominee of life assured has lodged the claim with the Opposite Party for the sum assured. But the Opposite Party repudiated the claim of the complainant on the ground of non disclosure of pre existing disease of the life assured, but this reason for the repudiation of the claim of the complainant is not genuine, because the life assured was died due to brain hemorrhage and as such, there is deficiency in service on the part of the Opposite Party. On the other hand, ld.counsel for the Opposite Party has repelled the aforesaid contention of the ld.counsel for the complainant on the ground that the policy holder Sukhpal Kaur had suppressed the material facts at the time of obtaining the policy in question. Further alleges that the life assured was admitted in Dayanand Medical College & Hospital, Ludhiana on 16.04.2015 and discharged from the hospital on 22.04.2015 where diagnosis arrived at was PRIMIGRAVIDA23 WEEKS (means she was pregnant), chronic Hypertension with ASCITIES (fluid in abdomen) and DYSPNEA (Breathlessness) and date of commencement of policy was 28.11.2015. The admission in the hospital was before taking the insurance policy and the same facts are not disclosed in the proposal form at the time of taking of the policy as such, the claim was repudiated on the ground of suppression of material facts in terms and provisions of section 45 of the Insurance Act due to breach of terms and conditions of the policy. The case of the Opposite Party is that in Dayanand Medical College & Hospital, Ludhiana, the life assured was Diagnosed as PRIMIGRAVIDA23 WEEKS (means she was pregnant), chronic Hypertension with ASCITIES (fluid in abdomen) and DYSPNEA (Breathlessness), but in the claimant’s statement produced on record as Ex.C7, the cause of death is mentioned as Brain haemorrhage and we are of the view that there is no nexus between the brain haemorrhage and concealment of facts. Moreover, as mentioned above by the Opposite Party that the life assured was Diagnosed as PRIMIGRAVIDA23 WEEKS (means she was pregnant), chronic Hypertension with ASCITIES (fluid in abdomen) and DYSPNEA (Breathlessness), but the onus to establish this fact is upon the Opposite Party in this case. We have perused the documents placed by the Opposite Party on record, but there is nothing on record regarding the treatment of life assured in Dayanand Medical College & Hospital, Ludhiana, and there is neither any affidavit nor complete particulars of the investigator recorded in them to prove that the deceased life assured was Diagnosed as PRIMIGRAVIDA23 WEEKS (means she was pregnant), chronic Hypertension with ASCITIES (fluid in abdomen) and DYSPNEA (Breathlessness) and what was the nexus between the alleged diseases and death of deceased life assured. Even the original certificate has not been placed on the record. In the absence of any affidavit of investigator and the affidavit of treating doctor of the hospital, we do not place any reliance upon these documents, as pressed into service by the Opposite Parties in this case. However, no such investigation record has been produced by the opposite parties. Consequently, we are of this view that Opposite Parties have failed to discharge the onus solemnly laid upon it to prove this fact that deceased life assured had suppressed the material facts while obtaining the policy in question from the Opposite Party. In case Bajaj Allianz Life Insurance Co. Ltd. & Ors. Vs. Raj Kumar III (2014) CPJ 221 (NC), it was held by the Hon’ble National Commission that “usually, the authorized doctor of the Insurance Company examines the insured to assess the fitness and after complete satisfaction, the policy is issued. It was held that the Insurance Company wrongly repudiated the claim of the complainant.” However, the Opposite Party has not placed on record any evidence that before issuing the policy they ever got medically examined the insured . So the abovesaid law squarely covers the case of the complainant that it was the duty of the insurer to get medically examined while issuing the policy and once the policy was issued the insurer cannot take the plea of pre-existing disease of the insured.
8. It also needs to be mentioned that Section 19 of the General Insurance Business (Nationalization) Act, 1972 states that it shall be the duty of every Insurance Company to carry on general insurance business so as to develop it to the best advantage of the community. The denial of medical expenses reimbursement is utterly arbitrary on the ground that disease in question was pre-existing disease. It is mere an excuse to escape liability and is not bona fide intention of the insurance company. Fairness and non-arbitrariness are considered as two immutable pillars supporting the equity principle, an unshakable threshold of State and public behavior. Any policy in the realm of insurance company should be informed, fair and non-arbitrary. When the insurance policy has exclusions/conditions to repudiate the claim or limit the liability, the same must be specifically brought to the notice of the insured and are required to be got signed to show that such exclusions and conditions have been brought to his/her notice. Recently, our own Hon’ble State Consumer Disputes Redressal Commission, Chandigarh in First Appeal No. 50 of 2019 titled as Bajaj Alliance General Vs. Arjan Singh decided on 04.03.2021 also held so.
9. The need for interpreting a contract always arises in two situations, (i) when a gap is needed to be filled in the contract and (ii) an ambiguity is needed to be resolved in the contract, then to find out correct intention of the contract, spirit behind it is required to be considered. Normally, the insurance policy is a contract of adhesion in which other party is left with hardly any bargaining power as compared to the insurer. Insurance contracts are standard form contracts and are drafted by the insurance company and as such, insurance company is at higher footing than the insured. The benefit of such clause, as exclusion clause, would go to the insured unless the same is explained in clear terms by the insurer. In such circumstances, the tribunal would be more oriented towards the interpretation which goes against the party who has inserted/drafted the disputed clause in the agreement/contract. The adjudicating authority is required to look into whether the intention of the party is to exclude or limit liability has been appropriately explained to the other party or not. This Commission while interpreting insurance agreement is to honour the intention of the parties, who have signed the agreement. Even if the agreement had general exclusion/condition for misrepresentation still fraudulent misrepresentation and non-disclosure may not be there. The innocent and negligent misrepresentations are to be ignored. On the other hand, the rulings (i) Satwant Kaur Sandhu Vs. New India Assurance Company Limited, (ii) Murti Devi Vs. Birla Sun Life Insurance and (iii) Mamohan nanda Vs. United India Insurance Company Limited, cited by the ld.counsel for the Opposite Parties are not applicable and relevant to the facts of the present case. The insurance companies are in haste to charge the premium, but when the time to pay the insurance claim comes, they generally take up one excuse or the other to avoid their liability. The reliance of counsel for the appellant on law laid down in “Life Insurance Corporation of India Vs. Priya Sharma & others” 2012(4)CPJ-646, “Life Insurance Corporation of India & others Vs. Harbans Kaur” 2009(3)CPC-677, and “Life Insurance Corporation of India & another Vs. Ashok Manocha” 2011(3)CPC-285, would have been applicable, had this fact been established that life assured suffered from pre-existing ailment of kidney and he deliberately suppressed this fact fraudulently from the Opposite Parties, when he took the insurance policy. In view of our finding recorded above that Opposite Parties had failed to prove this fact that deceased life assured has suppressed any material fact while obtaining the policdy in question from the Opposite Party and hence these authorities would not be attracted in this case. In this regard, on the same and similar facts and circumstances of the case, Hon’ble State Consumer Disputes Redressal Commission, in First Appeal No.62 of 2015 decided on 02.02.2017 in case India First Life Insurance Vs. Ms.Sudesh Rani also held so.
10. However, we are of the view that even if the life assured has breached the terms and conditions of the policy in question, even then the Insurance Company ought to have settled the claim of the complainant on “non standard basis” even if some of the conditions of the insurance policy are not adhered by the insured. In this regard, we are supported with judgment in case titled National Insurance Company Limited versus Kamal Singhal IV (2010)CPJ297 (NC) wherein the Hon'ble National Consumer Disputes Redressal Commission, New Delhi relying upon various decisions of the National Consumer Disputes Redressal Commission in the matter of (1) National Insurance Company Ltd. v. J. P. Leasing & Finance Pvt. Ltd. (RP No. 643/2005), (2) Punjab Chemical Agency v. National Insurance Company Ltd. (RP No. 2097/2009), (3) New India Assurance Co. Ltd. v. Bahrati Rajiv Bankar, (RP) No. 3294/2009) and (4) National Insurance Company Ltd. v. Jeetmal, (RP No.3366/2009) and also judgment of the Hon'ble Apex Court in the matter of Insurance Company Versus Nitin Khandewal IV (2008) CPJ 1(SC), held the breach of condition of the policy was not germane and also held further that : “the appellant Insurance Company is liable to indemnify the owner of the vehicle when the insurer has obtained comprehensive policy to the loss caused to the insurer”. The Hon'ble Supreme Court has further held that; “even assuming that there was a breach of policy, the appellant Insurance Company ought to have settled the claim on “non-standard basis.” Hon'ble Apex Court in back drop of these features, in these cases, allowed 70% of the claim of the claimant on the “non-standard basis”. This view was again reiterated by the Hon'ble Apex Court in the matter of Amalendu Sahoo versus Oriental Insurance Company Limited. II(2010) CPJ 9(SC)=II (2010)SLT 672. Hon'ble National Commission in the case National Insurance Company Limited versus Kamal Singhal referred to above relying upon the law laid down by the Hon'ble Supreme Court has held that;
“there being a long line of decisions on this score, we have no option but to uphold the finding of Fora below with modification that the claim be settled on 'non-standard' basis”, in terms of the guidelines issued by the Insurance Company. In case petitioner company fails to carry out the direction contained therein, the amount payable on 'non-standard' basis, shall carry interest @ 6% p.a from the date of expiry of six weeks till the date of actual payment”.
11. In such a situation the repudiation made by Opposite Party regarding genuine claim of the complainant appears to have been made without application of mind. It is usual with the insurance company to show all types of green pesters to the customer at the time of selling insurance policies, and when it comes to payment of the insurance claim, they invent all sort of excuses to deny the claim. In the facts of this case, ratio of the decision of Hon’ble Apex Court in case of Dharmendra Goel Vs. Oriental Insurance Co. Ltd., III (2008) CPJ 63 (SC) is fully attracted, wherein it was held that, Insurance Company being in a dominant position, often acts in an unreasonable manner and after having accepted the value of a particular insured goods, disowns that very figure on one pretext or the other, when they are called upon to pay compensation. This ‘take it or leave it’, attitude is clearly unwarranted not only as being bad in law, but ethically indefensible. It is generally seen that the insurance companies are only interested in earning the premiums and find ways and means to decline claims. In similar set of facts the Hon’ble Punjab & Haryana High Court in case titled as New India Assurance Company Limited Vs. Smt.Usha Yadav & Others 2008(3) RCR (Civil) Page 111 went on to hold as under:-
“It seems that the insurance companies are only interested in earning the premiums and find ways and means to decline claims. All conditions which generally are hidden, need to be simplified so that these are easily understood by a person at the time of buying any policy.The Insurance Companies in such cases rely upon clauses of the agreement, which a person is generally made to sign on dotted lines at the time of obtaining policy. Insurance Company also directed to pay costs of Rs.5000/- for luxury litigation, being rich.
12. Now come to the quantum of compensation. The complainant has claimed the sum assured of Rs.5 lakhs and hence having regard to the position of the law, as has been laid down, by the Hon'ble Apex Court in the various decisions referred to here-in-above and also the view expressed by the Hon'ble National Commission, we are of the considered view that in the present case the complainant, if not entitled for the entire sum assured, the Insurance Company definitely ought to have settled the complainant's claim on 'non-standard basis”, which in the facts and circumstances taking the assistance of the view expressed by the Hon'ble Apex Court and also by the Hon'ble National Commission, we allow 70% of the assessed amount on 'non-standard' basis” of the repair bills amount.
13. In view of the aforesaid facts and circumstances of the case, we allow the complaint of the Complainant partly and direct the Opposite party to make the payment of Rs.3,50,000/- (Rupees three lakh fifty thousands only) i.e. 70% of the sum assured of Rs.5 lakhs to the Complainant alongwith interest @ 8% per annum from the date of filing the present complaint i.e. 15.12.2017 till its actual realization. The compliance of this order be made by Opposite Party within 60 days from the date of receipt of this order, failing which the complainant shall be at liberty to get the order enforced through the indulgence of this District Commission. Copies of the order be furnished to the parties free of cost by District Consumer Commission, Ludhiana and thereafter, the file be consigned to record room after compliance.
14. Reason for delay in deciding the complaint.
This Consumer Complaint was originally filed at District Consumer Disputes Redressal Forum (Now Commission) at Ludhiana and it keep pending over there until Hon’ble State Consumer Disputes Redressal Commission, Punjab vide letter No.04/22/2021/4 C.P.A/38 dated 17.1.2022 has transferred the instant Consumer Complaint alongwith Other Complaints to District Consumer Commission, Moga with directions to work on this file onward from 14th March, 2022 and accordingly District Consumer Commission, Moga has decided the present complaint at Camp Court, Ludhiana, as early as possible as it could decide the same
Announced in Open Commission at Camp Court, Ludhiana.
