Delhi

North East

CC/510/2014

Smt. Meena Singh - Complainant(s)

Versus

Life Ins. Corporation of India - Opp.Party(s)

18 Jun 2020

ORDER

0 DISTRICT CONSUMER DISPUTES REDRESSAL FORUM: NORTH-EAST

GOVT. OF NCT OF DELHI

D.C. OFFICE COMPLEX, BUNKAR VIHAR, NAND NAGRI, DELHI-93

 

Complaint Case No.  510/14

 

In the matter of:

	Smt. Meera Singh W/o Vikram Singh R/o:- B-95, B-Block, Gokal Puri, Delhi-110094	Complainant
	Versus
	Life Insurance Corporation of India Ltd. Jeevan Prakash Building, 25, K.G. Marg New Delhi-110001	Opposite Party

 

DATE OF INSTITUTION:       JUDGMENT RESERVED ON:               DATE OF DECISION      :

22.12.2014 18.06.2020 18.06.2020

 

N.K. Sharma, President

Ms. Sonica Mehrotra, Member

 

Order passed by Ms. Sonica Mehrotra, Member

 

ORDER

1. Facts germane for disposal of the present complaint are that one Sunder, brother of the complainant had purchased a life insurance policy bearing no. 125553173 from the OP in June 2010 w.e.f. 14.10.2006 for coverage of total sum assured Rs. 1,94,100/- and death benefit sum assured of Rs. 2,50,000/- on payment of             Rs 3,062.00/- as premium thereof to OP with the  complainant appointed as nominee of the said cover. The next premium payable for the said policy was due in September 2010 but before that on 20.06.2010, Sunder (the DLA) got admitted in Lal Ram Sarup (LRS) Institute, Mehrauli New Delhi for some illness and during the course of treatment died on 22.06.2010 in the said hospital. The complainant, being the nominee of the DLA applied to OP for claiming the death sum assured amount as per policy and was assured its payment after completion of formalities which despite having been completed by the complainant, was never released by OP despite complainant’s several visits and reminder to OP. The complainant got issued a legal notice dated 20.10.2014 to OP through the complainant’s counsel calling upon OP to release Rs. 2,50,000/- towards death benefits alongwith compensation but even the said legal notice went unheeded to. Therefore as a last resort, the complainant alleging deficiency of service and unfair trade practice on the part of OP in having failed to release the sum assured / insured amount to the complainant without assigning any justifiable reason, was constrained to file the present complaint praying for issuance of direction against the OP to release the DLA of Rs. 2,50,000/- alongwith interest @ 24% p.a w.e.f 20.06.2010 alongwith compensation of Rs. 2,50,000/ for mental, agony harassment and deficiency of service and also prayed for litigation expenses.
2. Complainant has attached copy of policy schedule alongwith first premium receipt, copy of death certificate of DLA issued by MCD South zone with copy of receipt issued by the medical superintendent LRS institute certifying death of DLA and copy of legal notice dated 20.10.2014 by complainant’s counsel to OP alongwith courier receipt.
3. Notice was issued to the OP on 17.03.2015. OP entered appearance and filed its written statement vide which it took the preliminary objection that the claim of the complainant was settled on 24.05.2013 by repudiating the same on ground that the DLA was suffering from Pre Existing Disease (PED) Pulmonary TB and Multi Drug Resistant (MDR) with Tennio Pnenmio Shock before he proposed for the above policy and for which disease he was already in consultation and treatment from hospital but the DLA did not disclose these facts in the proposal form / personal statement  at the time of taking policy cover from the OP despite him being in personal knowledge of the same and instead gave false answer with regard to his health condition in view of which misrepresentation / concealment,  the claim was rejected with an option given to the complainant to approach the zonal office / appellate authority of OP for reconsideration. The OP, while admitting the factum of DLA having been assured to the tune of  Rs. 2,50,000/-, submitted that the complainant has contradicted her own stand by submitting in the complaint that DLA died due sum illness whereas in her letter to the OP annexed as annexure R1, she had intimated the cause of the death of DLA due to fall in the house and suffering grievous injuries on account of the said fall leading to his death. The claim being an early one required and intensive enquiry since the death of DLA was barely after a week from taking the cover and on detailed enquiry his pre-existing disease was revealed from the hospital records vide medial attendant certificate (claim form B) which assigned primary cause of death as PTB (MDR) with tension Pneumonia Thorax suffered by DLA during his life time and diagnosed six-seven months back before date of admission / death with symptoms of fever / cough and sputum and chest pain etc. the said form was dually signed by the CMO of LRS institute on 18.09.2010. therefore the OP relying upon the said information, rightfully rejected the death claim  vide letter dated 24.05.2013 to the complainant in which it highlighted the complainant’s replied in the negative for disease of tuberculosis in question 11 (e) in the proposal form. Therefore, OP denying non release of sum assured as being illegal or arbitrary or unwarranted as alleged by the complainant, prayed for dismissal of the complaint for want of any cause of action and denied any deficiency of service or unfair trade practice on its part. OP has attached copy of letter of  death intimation by complainant  to OP alongwith repudiation letter dated 24.05.2013 by OP to complainant with attached copy of medical attendant certificate and copy of statement of complainant / nominee dated 15.08.2010 on the form issued by OP.
4. Rejoinder in rebuttal to defence taken by OP was filed by the complainant reasserting her grievance in the complaint and denying the DLA suffering from the diseases alleged by the OP before taking the policy or having consulted Doctors or undergone treatment thereof. Complainant’s submitted that the DLA was not aware of any such disease(s) and the same were detected only on admission of DLA to the hospital. The complainant further submitted that the DLA had merely signed the proposal form on a blank printed format and it was the OP’s agent which had filled the details in the proposal form as per his whims and fancies and complainant denied DLA have concealed  material  facts about the status of his health. Therefore complainant prayed for relief claim.
5. Evidence by way of affidavit was filed by the complainant exhibiting the documents relied upon as Ex CW1/1 TO CW1/6.
6. Evidence by way of affidavit was field by the OP through its branch manager exhibiting the documents relied upon as RW1/1 to RW1/4.
7. Written arguments were filed by the both the parties in reassertion of their respective grievance / defence. OP relied upon land mark judgment of Hon'ble Supreme Court in Satwant Kaur Sandhu Vs New India Assurance Co. Ltd. VI (2009) SLT 338 and judgment of Hon’ble NCDRC in RP no. 1555/ 2011 titled Gurmeet Kaur @ Meeto and Anr Vs LIC of India for upholding repudiation claim on ground of willful concealment of pre-existing disease. In hearing held on 31.05.2018, this Forum had directed the complainant to place on record relationship proof of herself with the diseased since she is claiming to be sister and nominee of the DLA i.e. beneficiary of the policy cover taken by the DLA. In compliance to which the complainant filed copy of her PAN card and urged that Sukh Lal was father of the deceased as well as the complainant.
8. We have heard the rival contention of both the parties and have bestowed our anxious consideration to the record placed before us. The factum of the DLA having taken life insurance cover from OP on 14.06.2010 with complainant as nominee / beneficiary thereof is not in dispute as also the factum of his death on 22.06.2010.  The core question for consideration is whether the fact that at the time of taking out the policy in question, the DLA was suffering from TB and therefore on account of non-disclosure of this fact in the proposal form, the OP was justified in repudiating the claim since the dispute between the parties arose when OP, post filing of claim by the complainant as nominee of DLA post his death, rejected the claim on grounds of concealment of  pre-existing disease of DLA and misrepresentation in the claim form thereby disentitling the nominee from any benefit thereof. On keen scrutiny of documents, it has indeed come to light that the complainant has given two different causes of the death of the DLA in her complaint and death intimation letter in one of which she has stated that the DLA died due to illness and other she has stated that the cause of death was grievous injury suffered by DLA due to a fall in the house. The medical records procured from the LRS institute in form of medical attendant certificate revealed that the primary cause of death of DLA was Pulmonary TB (MDR) with tension Pneumonia Thorax with clear symptoms of the illness which were first observed by the DLA himself 6-7 month back i.e. around end of 2009- beginning of 2010 and this status was revealed by the doctor on duty Dr. Sanjay Gupta who was the medical attendant of DLA and the said declaration was dually signed by him on 18.09.2010. Therefore, it is clearly established that not only was the complainant well aware of such terminal disease prior to taking the policy cover from OP but the said disease also was the cause of his death. The complainant in the rejoinder to the written statement has also not denied and rather admitted that the DLA was suffering from TB at the time of admission to LRS institute even though she has submitted that this was the first time that knowledge of such disease was acquired by DLA and the complainant notwithstanding that the cause of death was made out to be either illness or injury due to fall. However, the medical attendant records revealed that DLA was suffering from a pre-existing disease before taking the policy cover but he willfully concealed the same at the time of taking the policy cover from OP by falsely declaring in the negative in question 11(e) in the proposal form of not suffering from
   Tuberculosis. The Hon'ble National Commission in catena of judgments as dealt hereinbelow has consistently been of the view that willful suppression of pre-existing disease merits repudiation of death claim. In Sunita Rani Vs PNB Met Life Insurance Co. III (2017) CPJ 445 (NC) held in a case of suppression of pre-existing disease (DM-II for 10-12 years) and DLA on insulin with K/c/o hypertension (3 years) and cirrhosis of lever that death claim repudiation was justified in view of history of DLA given incorrectly as “NO” against high BP, diabetes etc., which got revealed from the hospital records. The Hon'ble National Commission in Kancharla Padmavathi Vs Sriram Life Insurance Co. Ltd. IV (2017) CPJ 23 (NC) held in a case where there was silence of 11 months from the complainant after rejection of death claim and complainant having failed to give evidence of sound health of the DLA contrary to the DLA having died within five months of taking policy and concealing disease of diabetes, urine infection and kidney failure that the death claim was rightfully rejected for suppression of PED. The Hon'ble National Commission in Sunita Goyal Vs Bajaj Allianz Life Insurance Co. Ltd. IV (2017) CPJ 54 (NC) held in a death claim rejection that the cause of death was renal failure and the DLA was admitted in kidney hospital and obtained treatment of DM and HTN and was diagnosed with chronic renal failure but willfully concealed the pre-existing disease in the proposal form that the repudiation was valid. The Hon'ble National Commission in Amarnath Vs. LIC IV (2017) CPJ 481 (NC) held in a case where death claim was rejected on grounds of suppression of pre-existing disease of brain tumor and AIDS that the concealment forfeited benefits which would have otherwise accrued to the nominee of DLA had the DLA disclosed them. The Hon'ble National Commission observed that on disclosure either the proposal would have been rejected by insurance company or the DLA would have subjected to extensive medical checkup. The Hon'ble National Commission in Charanjit Singh Vs LIC II (2018) CPJ 204 (NC) held death claim rejection for suppression of pre-existing disease of renal failure, CAD, LV dysfunction and HTN as justified since insurance cover was taken by DLA practicing fraud and concealment. The Hon'ble National Commission further in Allaudin @ Ajaudin Vs Kotak Mahindra Life Insurance Co. Ltd. II (2018) CPJ 445 (NC) held in a case of death claim rejection for suppression of pre-existing disease of TB that concealment of information influenced decision of insurer because either no cover would have extended or DLA would have been subjected to thorough investigation and that the DLA had played fraud and that the factum of TB was not disputed though claim of death being a natural one was made and all answers about health in the proposal form were given in the negative. The Hon'ble National Commission in Darshan Singh Vs HDFC Standard Life Insurance Co. Ltd. II (2019) CPJ 243 (NC) held death claim repudiation in suppression of pre-existing disease of esophagus cancer by DLA as justified in view of record of treatment undergone at cancer hospital by DLA produced by the record keeper thereof and death having occurred barely within one month of taking policy cover. The Hon'ble National Commission in Balwinder Kaur vs LIC IV (2019) CPJ 211 (NC) held that the death claim rejection for willful suppression of pre-existing disease that DM-II for last 10 years which was disclosed from discharge summary but not provided in proposal form and death having occurred due to Diabetic Ketoacidosis (DKA) as justified. In the recent / latest judgment of Hon'ble National Commission in Seema Begum Vs HDFC Standard Life Insurance Co. Ltd. I (2020) CPJ 411 (NC) decided on 15.01.2020 held in a case of death claim rejection for suppression of PED of heart ailment and death having been caused due to heart attach barely within 12 days of taking the policy cover that the rejection was valid as DLA withheld material information which influenced policy maker / insurer’s decision and did not reveal his ECHO report taken before the policy and the fact that the DLA answered in the negative to any heart ailment in the proposal form. In light of the exhaustive legal discourse discussed relevant and squarely applicable the case in hand in which too the DLA willfully concealed the factum of pre-existing PTB (MDR) from OP which disease he was suffering from since 6-7 months prior to taking the policy cover in June 2010, thereby disentitling the complainant as nominee for deriving any benefits from the said policy. However, notwithstanding, the rightful repudiation of death claim by OP, the fact cannot be ignored that there was a long delay of two and a half years on the part of OP in deciding the fate of the complainant’s claim which was raised in June 2010 but was repudiated in March 2013 despite OP having received claim intimation in August 2010 from the complainant on the form filled by her and all relevant and material information regarding PED status of the DLA by September 2010 from the concerned hospital and treating doctor all of which records have been filled by the OP itself and this act of inordinate and unexplained delay in deciding the claim amounts to deficiency in service as per Section 2(1)(o) and (g) of Consumer Protection Act 1986. The Hon'ble National Commission in Tanawala Synthetic Textile Ltd. Vs Oriental Insurance Co. Ltd. (1996) 3 CPJ 99 (NC) held that a long delay of more than three years on the part of insurance company in deciding the claim of the insured itself amounts to deficiency of service. The Hon'ble National Commission in Ghai Agro Mills Ltd. Vs New India Assurance Co. Ltd. (1996) 3 CPJ 47 (NC) held the insurance company deficient in service for repudiating a claim after a delay of more than five years and that the complainant was entitled to receive compensation from the insurance co. for the said delay. Therefore the complaint is partly allowed only to the extent of compensation for delayed decision on the claim and we therefore direct OP to pay compensation of Rs. 6000/- to the complainant for inordinate delay of three years in considering the claim.  Let the order be complied with by OP within 30 days of receipt of copy of this order.
9. Let the copy of this order be sent to both parties free of cost as per Regulation 21 (1) of Consumer Protection Regulation 2005.
10.  File be consigned to record room.
11.  Announced on 18.06.2020 s

 

(N.K. Sharma)     President

(Sonica Mehrotra)  Member