Delhi

North

CC/260/2016

SAROJ BALA - Complainant(s)

Versus

LIC - Opp.Party(s)

24 Oct 2024

ORDER

District Consumer Disputes Redressal Commission-I (North District)

[Govt. of NCT of Delhi]

Ground Floor, Court Annexe -2 Building, Tis Hazari Court Complex, Delhi- 110054

Consumer Complaint No.:260/2016

 

IN THE MATTER OF:

 

Smt. Saroj Bala

W/o Late Sh. Rishi Prakash

House No.19, Naharpur,

Sector-7, Rohini,

Delhi.                                                …                                    Complainant

 

                                                          Vs

 

Life Insurance Corporation of India,

16 A, Kamla Nagar,

Delhi-110007.

Through its Branch Manager                …                                    Opposite Party

 

ORDER

24/10/2024

Ashwani Kumar Mehta, Member:

 

1.       The present complaint has been filed under Section 12 of the Consumer Protection Act, 1986. The brief details of facts, as alleged by the Complainant in the Complaint in hand, are that:-

1. Late Shri Rishi Prakash/deceased husband of the complainant was insured by the OP vide Policy No. 126974614 with date of commencement of policy as 28.12.2014 and date of commencement of Risk as 31.12.2014 for sum of Rs.5,50,000/- against payment of the premium of Rs.2890/- to be paid monthly. The monthly premium were being paid through ECS from his saving account No.21180100008870 maintained with Bank of Baroda, Sector-7, Rohini, Delhi -85. The complainant was nominee in the said policy, being his wife.
2. The husband of the complainant namely Rishi Prakash/Insured suddenly fell ill in the month of March 2016 and was admitted in Dr. Baba Saheb Ambedkar Hospital, Rohini, New Delhi and unfortunately, during his treatment, he died on 26.03.2015.
3. After the death of the husband of complainant, being the nominee / widow of Late Rishi Prakash/Insured, the complainant informed the OP and filed appropriate application for claim against the above said policy along with requisite documents with the OP but the OP vide their letter Ref No. Claims/Repudiation/114/11-E dated 13.04.2016 rejected the claim of the complainant on the ground that the husband of the complainant had concealed the fact regarding his health at the time of buying the insurance.

 

2.       It has further been stated that prior to March 2016, the husband of complainant was neither aware about any illness/ disease nor ever admitted in hospital nor suffered any serious illness; hence, question of concealing any information from the opposite party never arose. The husband of the complainant was a government employee and never availed any medical leave or long time leave from his office/ department as apparent from the office record but the opposite party with malafide intentions have rejected the claim of complainant. The complainant has also sent a legal notice dated 25.04.2016 to the opposite party which was duly served upon the opposite party but the opposite party neither complied with the instructions of the legal notice nor replied the same. As such, the opposite party have failed to render proper services. The deficiencies of service on the part of opposite party is highly undesirable, which has caused physical pain to complainant, as well as mental harassment, agony and torture along with the financial loss to complainant. The present complaint has therefore, been filed praying for directions to the OP:-

1. to pay the insured amount of Rs.5,50,000/-, in respect of Policy No. 126974614, along with interest @ 24% per annum from the date of amount due;
2. to pay damages for unnecessary harassment to the complainant to the tune of Rs.1,00,000/-, and
3. Award a sum of Rs.11,000/- towards the cost of this complaint and other expenses.

 

3.       The complainant has also filed copies of joint Bank Account of Rishi Prakash & Saroj Bala, death claim under Policy no.1269746141, death claims through email of Kuldeep Kumar, policy bond, Certificate of cremation, Medical Attendants Certificate & Hospital treatment, Certificate of Employer & applications of  leave during the period from 2011 to 2014 applied to Head of office of deceased, Leave record from December 2011 to 27.03.2015, Electronic Fund transfer mandate form, cancelled cheque, passbook of account of Saroj Bala, Election I-card of Saroj Bala, Death certificate from Baba Saheb Ambedkar Hospital Rohini, Death Certificate of MCD & Election I-card, death claim dated 08.05.2015, LIC Acknowledgment slip, letter of LIC to Medical Superintendent, Medical certificates of deceased, death claim letter dated 26.08.2015, complaint letter to LIC dated 17.09.2015, death claim dated 17.11.2015, legal notice dated 25.04.2016 & postal receipts, certified copies of treatment of deceased by Ambedkar Hospital along with the complaint.

 

4.       Accordingly, notice was issued to the OP and in response, the OP has filed reply denying all allegations & pleading no deficiency of service, has prayed for dismissal of complaint stating that:-

1. The present complaint is not maintainable in law and on facts of the case, hence, the same is liable to be dismissed with costs. This Forum has no jurisdiction to entertain the present complaint, as such, the same is liable to be dismissed with heavy costs.
2. The present compliant is not maintainable against the OP as there is no deficiency in service of any kind, as alleged, on the part of the OP and as such the complaint of the Complainant is liable to be dismissed with heavy costs. The present complaint of the Complainant is not maintainable in law against the OP as no law permits any person to take advantage of his own wrong. Hence, the present complaint is liable to be dismissed with heavy costs.
3. the Complainant has not approached this Forum with clean hands and has suppressed the true and material facts from this Forum, having malafide intention and ulterior motives on his part to achieve his illegal goal to extract money from the answering OP, without having any legal right as the life assured/policy holder, now deceased, in his lifetime suppressed the true and material facts regarding his ill health from the OP at the time of taking the policy.
4. The policy in question, is an early claim in which as per rules, thorough investigation regarding the health, habit and occupation of the life assured/policy holder (now deceased), was required to know the exact cause of death and duration of disease etc. The life assured, now deceased, withheld all the material information regarding his health, in the proposal form, at the time of taking the policy, when he was suffering COPD (Chronic Obstructive Pulmonary Disease), Acute Ex. with CVA (Cerebral Vascular Accident) 1 Years back. He did not, however, disclose these facts in his Proposal Form, rather he gave false information therein, having malafide intention on his part. Therefore, claim was repudiated vide letter dated 13.04.2016 after considering and scrutinizing all the aspects of the case and complainant was duly served with the same. Therefore, answering OP did not give reply of legal notice dated 25.04.2016 to the complainant.

 

5.       Both the parties have filed their respective evidences by way of Affidavit and written arguments. Accordingly, we have perused the entire record averments/documents/Evidence including written arguments and observed that the OP has repudiated the claim on the ground of concealment of pre-existence of disease by the DLA and the question before this commission is to conclude as to whether there was any deliberate concealment of pre-existing disease by the DLA while filing the proposal form? The OP has also contended that the required documents have not been furnished with the claim.

6.       We have perused the records filed by both the parties and found that as per leave records of the DLA for the period from December 2011 to 27.03.2015, available with his employer, the DLA has availed total 15 days earned leaves in two blocks for the period from (1) 04.02.2015 to 08.02.2015 and (2) 17.03.2015 to 26.03.2015. The deceased has also availed medical leave from (1) 13.05.2011 to 16.05.2011 = 4 days (2) 15.01.2013 to 19.01.2013 =5days and (2) 21.03.2014 to 24.03.2014 = 4 days on account of illness/fever etc. Copies of medical certificates supporting these medical leaves are also available on record. This leave record does not reveal any kind of leave taken for the treatment of a critical disease i.e. COPD (Chronic Obstructive Pulmonary Disease), Acute Ex. with CVA (Cerebral Vascular Accident) which has been considered as a vital reason to repudiate the claim.

7.       Further, the records of Dr. BSA Hospital also indicate that the deceased/patient was admitted on 26.03.2015 in emergency. The Emergency Registration Card number BSA- 40417 also indicates that deceased was admitted to the hospital on 26.03.2015 at 07:29 AM for treatment of cough/ difficulty in breathing/ general weakness. The admission summary prepared on 26-03-2015 at 9:13:58 AM has recorded the “provisional diagnosis (to be complete within 24 hours of admission) as “COPD & CVA””. A copy of diagnostic test/investigation of NCCT HEAD dated 26.03.2015 at 12:25 PM has also been filed with the complaint wherein following observations/findings have been reported:-

“The study shows normal attenuation in the cerebral parenchyma, basal ganglia, thalami, brainstem and cerebellum with no abnormal attenuating focus.

                        No evidence of intracranial bleed is seen.

                        The ventricular system & basal cisterns are normal.

                        No midline shift is seen.

                        Impression:   CT imaging reveals no significant intracranial abnormality.

                        Please correlate clinically & with other investigations.

Report meant for diagnostic purpose & not valid for medico legal purposes.”

8.         It has also been seen that the Complainant/ deceased’s wife has provided all the documents which were available with her but the OP insurance  could not file any medical records/ history/evidence to prove that the deceased has concealed any pre-existing disease which was in his knowledge the time of filling proposal form for taking insurance. The onus to prove that “the DLA was taking treatment of any critical disease at the time of filling the proposal form for purchasing insurance” was on the OP. The OP has also raised baseless objections to deny the allegations of deficiency in service and has not elaborated as to how these objections, discussed at para 4 (a), (b) & (c) above, are relevant. Therefore, all these objections are rejected.

9.       The judgment dated 09-10-2018 of the Hon’ble DSCDRC in First Appeal No.306/2011 in the matter of M/s BAJAJ ALLIANZ LIFE INSURANCE COMPANY LIMITED VERSUS Mrs. ANJU KUMARI is relevant in this matter wherein following observations have been made on the issue of pre-existing diseases:- 

“9.       On the concept, meaning and import of word disease, pre-existing disease in reference to medical insurance policy, this commission has drawn following ten conclusions in a highly extensive, dissecting manner in their decision in the matter of Pradeep Kumar Garg versus National Insurance Co. Ltd., FA-482/2005 decided on 01.08.2008. These are as under: 

1. Disease means a serious derangement of health or chronic deep-seated disease frequently one that is ultimately fatal for which an insured must have been hospitalized or operated upon in the near proximity of obtaining the mediclaim policy.
2. Such a disease should not only be existing at the time of taking the policy but also should have existed in the near proximity. If the insured had been hospitalized or operated upon for the said disease in the near past, say, six months or a year he is supposed to disclose the said fact to rule out the failure of his claim on the ground of concealment of information as to pre-existing disease.
3. Malaise of hypertension, diabetes, occasional pain, cold, headache, arthritis and the like in the body are normal wear and tear of modern day life which is full of tension at the place of work, in or out of the house and are controllable on day to day basis by standard medication and cannot be used as concealment of pre-existing disease for repudiation of the insurance claim unless an insured in the near proximity of taking of the policy is hospitalized or operated upon for the treatment of these diseases or any other disease.
4. If insured had been even otherwise living normal and healthy life and attending to his duties and daily chores like any other person and is not declared as a diseased person as referred above he cannot be held guilty for concealment of any disease, the medical terminology of which is even not known to an educated person unless he is hospitalized and operated upon for a particular disease in the near proximity of date of insurance policy say few days or months.
5. Disease that can be easily detected by subjecting the insured to basic tests like blood tests, ECG etc. the insured is not supposed to disclose such disease because of otherwise leading a normal and healthy life and cannot be branded as diseased person.
6. Insurance company cannot take advantage of its act of omission and commission as it is under obligation to ensure before issuing medi-claim policy whether a person is fit to be insured or not. It appears that insurance companies don’t discharge this obligation as half of the population is suffering from such malaises and they would be left with no or very little business.

Thus any attempt on the part of the insurer to repudiate the claim for such non-disclosure is not permissible, nor is exclusion clause invokable.

7. Claim of any insured should not be cannot be       

repudiated by taking a clue or remote reference to any so called disease from the discharge summary of the insured had concealed his hospitalisation or operation for the said disease undertaken in the reasonable near proximity as referred above.

8. Day to day history or history of several years of some or the other  physical problem one may face occasionally without having landed for hospitalisation or operation for the disease cannot be used for repudiating the claim. For instance an insured had suffered from a particular disease for which he was hospitalised or operated upon 5, 10 to 20 years ago and since then had been living healthy and normal life cannot be accused of concealment of pre-existing disease while taking mediclaim policy as after being cured of the disease, he does not suffer from any disease much less the pre-existing disease while taking mediclaim policy as after being cured of the disease, he does not suffer from any disease much less the pre-existing disease.
9. For instance to pay that insured has concealed the fact that he was having pain in the chest off and on for years but has never diagnosed or operated upon for heart disease but suddenly lands up in the hospital for the said purpose and therefore is disentitled for claim bares dubious design of the insurer to defeat the rightful claim of the insured on flimsy ground. Instances are not rare where people suffer a massive attack without having even been hospitalised or operated upon at any age say for 20 years or so.

10. Non-instance of hospitalisation/or operation for disease that too in the reasonable proximity of the date of mediclaim policy is the only ground on which insured claim can be repudiated and on no other ground.

 

10.     This Commission has taken a view in that case that unless and until a person is hospitalised or undergoes operation for a particular disease in the near proximity of obtaining insurance policy or any disease for which he has never been hospitalised or undergone operation is not a pre-existing disease. If a person conceals the factum of his hospitalisation of a particular disease or operation undergone by him in the near proximity of obtaining the insurance policy say a year or two, only then it can be termed a concealment of factum of disease and doctrine of good faith under Section 45 of the Insurance Act can then alone be pressed in by Insurance company and not otherwise. Doctrine of good faith is two way traffic and not a one way traffic. If the Insurance Company take benefit of doctrine of good faith then they have to accept whatever the insured declares and should not subject the insured to medical test and get certificate from the doctor on the panel that the insured possesses sound and good health and is entitled to mediclaim insurance policy. Such a certificate will be meaningless and of no relevance as to the state of health of a person.

11.     The issue of pre-existing disease has been dealt with by the Hon’ble NCDRC in the matter of Tarlok Chand Khanna vs. United India Insurance Co. Ltd. RP-686/2007 decided on 16.08.2001 holding as under: 

In fact, the onus to prove that she had a pre-existing disease was on the respondent who failed to file any expert medical or credible evidence in support of its case. Further, the deceased had been taking the mediclaim insurance policy from the respondent right from 1996 and she had also as per the practice, been examined by the doctor of the respondent/insurance company who has nowhere recorded that she had any medical problem relating to the knees. 

12.     The Hon’ble NCDRC is yet another judgement in National Insurance co. Ltd. vs. Rai Narain-2008 NCT 559 (NC)- the Hon’ble NCDRC held as under: 

Most of the people are totally unaware of the symptoms of the disease that they suffer and hence they cannot be made liable to suffer because the Insurance Company relies on their clause 4.1 of the policy in a mala-fide manner to repudiate all the claims. No claim is payable under the medi-claim policy as every human being is born to die and diseases are perhaps pre-existing in the system totally unknown to him which he is genuinely unaware of them. Hindsight everyone relies much later that he should have known from some symptom. If this is so every person should do medical studies and further not take any insurance policy. 

13.     The Hon’ble NCDRC in the matter of Praveen Damani versus Oriental Insurance Company Ltd. as reported in IV [2006] CPJ 189 (NC) has held as under: 

“....If this interpretation is upheld, the Insurance Company is not liable to pay any claim, whatsoever, because every person suffers from symptoms of any disease without the knowledge of the same. This policy is not a policy at all, as it is just a contract entered only for the purpose of accepting the premium without the bonafide intention of giving any benefit to the insured under the garb of pre-existing disease. Most of the people are totally unaware of the symptoms of the disease that they suffer and hence they cannot be made liable to suffer because the Insurance Company relies on their clause 4.1 of the policy in a malafide manner to repudiate all the claims. No claim is payable under the mediclaim policy as every human being is born to die and diseases are perhaps pre-existing in the system totally unknown to him which he is genuinely unaware of them. Hindsight everyone relies much alter than he would have known from some symptom. If this is so every person should do medical studies and further not take any insurance policy. Even on the facts on record, there is no material to show that the petitioner had any symptoms like chest pain etc. prior to 11.08.2000.” 

14.     Similar view was taken by the Hon’ble NCDRC in the matter of LIC of India Vs Priya Sharma and ors reported in IV [2012] CPJ 646 (NC) holding that onus to prove that the insured was suffering from pre-existing disease is on the insurer. The insurer had admittedly not examined any doctor to prove this fact and consequently repudiation not justified.

10.     In the matter of Sunil Sharma V. National Insurance Company Ltd [II(2015)CPJ46(Del)], it has been observed that “Insurance Companies to be honest & forthright in its approach while settling an insurance claim, factors which are material and germane should be given importance. Insurance claims cannot be rejected on flimsy and technical grounds otherwise confidence of people in insurance companies would be deeply eroded”.

 

11.     Further, in the matter of Shriram General Insurance Co. Ltd. v. Ramcharan Dhobi [MANU/CF/0032/2017], it has been observed that “Insurance Claims cannot be rejected on purely technical grounds like delay in intimation or submission of documents.”

12.     The IRDA, vide Circular No. IRDA/HLTH/MISC/CIR/216/09/2011 dated 20.09.2011, has also stated that “the insurers' decision to reject a claim shall be based on sound logic and valid grounds.

13.       The judgment in the matter of “Life Insurance Corporation of India & Anr. Vs. Naseem Bano III (2012) CPJ 208 NC is also relevant wherein it was held that “repudiation of claim was not justified if there was no evidence to show that prior to filling up of the policy form there was any record of any hospital, slips of doctors or prescriptions showing medicines since heart attack had no nexus with diabetes”.

14.      It has also been held in the matter of “Life Insurance Corporation of India & Ors. Vs. Kunari Devi” IV (2008) CPJ 89 NC that “history recorded in the hospital's bed head cannot be treated as evidence as doctor's evidence was not recorded and hence suppression of disease was not proved.”

15.     Therefore, Taking into consideration the above discussions & findings, we are of the opinion that the deficiency in service on the part of the OP has been proved. The repudiation of claim was not justified if there was no evidence / record of any hospital, slips of doctors or prescriptions showing treatment of DLA for COPD (Chronic Obstructive Pulmonary Disease), Acute Ex. with CVA (Cerebral Vascular Accident) prior to filling up the policy form.  The unjustified repudiation of the claim, has also caused mental pain, agony and harassment to the widow/nominee of the DLA for which the OP is also liable to pay compensation.

16.     We also consider appropriate to refer to the following observations of Hon’ble High Court of Judicature at Madras, in judgment dated 29.04.2024 in W.P.No.26233 of 2022 and W.M.P.No.10847 of 2024 in the matter of N. Lakshmi Vs The Insurance Regulatory and Development Authority of India, & 3 Ors about the conduct of Insurance companies in settling the claims :-

10. As held by this Court in Jasmine Ebenezer case, as stated supra, even though law seems to be clear constituting a balance between the insuring party and insured, in reality, there is no equality between the two as insurer is the richest corporation and the individual is an ordinary individual. In fact, in many cases, the individual has no legal knowledge about the ambiguous language used in the company's policy with an intention to waive them from the liability to pay the injured on happening of an agreed event. Many a times the companies willfully neglect reimbursing the insured, who instead of getting their amount from the company have to pay the Courts for getting their rights enforced. The case on hand is the 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 cover the disease and no one can be stated as it is not major medical illness.”

 

17.     In view of the above observations, we feel appropriate to direct the OP to pay to the complainant:-

i.       Rs.5,50,000/-(Rs. Five Lakh fifty Thousand only) within 30 days from the date of receipt of this order, with interest @ 9% per annum from 13-04-2016 (the date of repudiation of the claim) till the date of payment;

ii.      Rs. 1,00,000/- (Rs. One Lakh only) as compensation for the mental pain, agony and harassment;

iii.    Rs.11,000/- (Rs. Eleven Thousand only) for litigation expenses.

 

18.     It is clarified that if the amount, as directed above at para 14 (i), (ii) and (iii), is not paid by the OP to the Complainant within 30 days from the date of receipt of this order, the OP shall be liable to pay interest @12% per annum on the entire awarded amount from the date of expiry of 30 days period.

19.     Order be given dasti to the parties in accordance with rules. Order be also uploaded on the website. Thereafter, file be consigned to the record room.

 

                           ASHWANI KUMAR MEHTA                                                  HARPREET KAUR CHARYA

                                           Member                                                                                          Member      

                                  DCDRC-1 (North)                                                                         DCDRC-1 (North)

 

                                              DIVYA JYOTI JAIPURIAR

                                                President 

                          DCDRC-1 (North)