Haryana

Ambala

CC/32/2023

MAMTA DEVI. - Complainant(s)

Versus

LIFE INSURANCE CO.OF INDIA. - Opp.Party(s)

GURUDUTT SHARMA

19 Jul 2024

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, AMBALA.

Complaint case no.	:	32 of 2023
Date of Institution	:	25.01.2023
Date of decision	:	19.07.2024

Mamta Devi Wd/O Late Sh. Rajinder Sharma R/O H.No. 84, Hira Nagar, Ambala City age about 44 having Aadhar Number 285099883137.

          ……. Complainant.

Versus

1. Life Insurance Co. of India, Ambala City through its Manager/ Branch Manager.
2. Varinder (3878331) LIC Agent R/o House No.72/1145, Baldev Nagar, Ambala City - 134007 (M): 9017619872
3. Life Insurance Company of India, Jeewan Bharti Towers, 11,124, Connaught Circus, P.B. No.630, New Delhi. 110001 through its Manager (Claims) DM.

                                                                                   ….…. Opposite Parties.

Before:       Smt. Neena Sandhu, President.

                      Smt. Ruby Sharma, Member,

          Shri Vinod Kumar Sharma, Member.           

 

Present:      Shri Rupinder Singh, Advocate, counsel for the complainant.

                     Shri Gursewak Singh Antal, Advocate, counsel for the OPs No.1 & 3.

                   Shri Tushar Kumar, Advocate, counsel for the OP No.2.                

Order:        Smt. Neena Sandhu, President.

                   Complainant has filed this complaint under Section 35 of the Consumer Protection Act, 2019 (hereinafter referred to as ‘the Act’) against the Opposite Parties (hereinafter referred to as ‘OPs’) praying for issuance of following directions to them:-

1. To pay the claim amount of  Rs.12 lacs alongwith interest;
2. To pay Rs.50000/- as compensation for mental agony and harassment;
3. To pay Rs.25000/- as cost of litigation

OR

Grant any other relief which this Hon’ble Commission deems fit.

 

2.             Brief facts of the case are that in the month of August 2020, OP No.2, agent of OP No.1 allured the husband of complainant to get himself insured through life insurance policy of OP No.1, which covered the death for an amount of Rs.12,00,000/-. As per the terms and conditions of the policy, the husband of complainant had to pay the premium of Rs.5146/- till 11.07.2036 and the date of maturity of the policy is 11.08.2045. He was issued policy no. 146473399, with commencement date as 11.08.2020 for the risk cover amount of Rs.12,00,000/- and he was regularly paying the amount of the premium of the policy. Unfortunately the husband of complainant expired on 01.08.2021, due to sudden cardiac arrest. After the death of husband of complainant, the complainant applied for the claim and deposited all the requisite documents in this regard with the OPs but the claim was repudiated by the OPs vide letter dated 02.03.2022 on the ground that the policy holder was having a Urinary Bladder Carcinoma prior to the commencement of the risk under policy. As the husband of complainant was illiterate person and the entire proposal form was filled by the insurance agent i.e.  OP No.2 so the concealment of the fact does not arise at all. The husband of complainant was not having any disease at the time of taking the policy. Moreover, there is no nexus of the disease urinary bladder carcinoma as the deceased died due to the sudden chest pain. The OPs also did not disclose the terms and conditions of the policy in question to the insured. Various requests were made to the OPs to pay the claim amount but to no avail.   Hence, the present complaint.
3.           Upon notice, OPs No.1 and 3, appeared through their counsel and filed their joint written version wherein they raised preliminary objections to the effect that the present complaint is not maintainable in the present form; the complaint is false, frivolous and vexatious etc. On merits, it is stated that complainant is not entitled to any claim and the OP No.1 has already repudiated the claim as the Policy was taken with the intention to deceive by suppression of material information regarding illness, which was in the knowledge of life assured. But still a lenient view was taken by the competent authority for refund of premium received under the Policy and an amount of Rs.61195/- was paid to the complainant on 25.02.2022. The decision of repudiation with refund of premium had duly been conveyed to the complainant vide letter dated 02.03.2022. It has been held by Hon'ble National Commission in L.I.C. of India V/s Sunita Sharma C P R Page No. 31- 1994(1) that if a claim has been repudiated by Insurance Co. through a speaking order and reasons are not irrelevant & extraneous then it is not a case of deficiency and repudiation is valid. The claim has been repudiated by speaking order after considering the facts and circumstances of the case and proper application of mind. At the time of taking aforesaid policy, a proposal form was duly filled and signed by the insured Shri Rajender Sharma wherein, he had given false answers.  The policy was taken on 11.08.2020 and as per the death certificate submitted by the nominee of the insured, the life assured expired on 01.08.2021. The duration of policy was only 11 months and 20 days from the date of commencement of risk. The policy had not completed 3 years. Being early claim, it was examined under section 45 of Insurance Act, 1938 which says that "A policy of life insurance may be called in question at any time within three years from the date of issuance of policy or the date of commencement of risk or the date of revival of policy or the date of the rider to the policy, whichever is later on grounds of fraud". So being early, investigation was conducted in this case and during investigation it was found that the policy holder has concealed the material facts regarding his health from the OPs. It was found that at the time of taking the said policy, the life assured was suffering from Cancer (Urinary Bladder Carcinoma) and had taken treatment from GMCH, Sector 32, Chandigarh and Rajindra Hospital. Patiala but he did not disclose this fact to the OPs at the time of taking the policy in question intentionally just to play fraud. Had the policy holder disclosed the OPs about his ill health and disease of Cancer (Urinary Bladder Carcinoma) at the time of taking the policy in Proposal form dated 10.07.2020, the OPs would have never issued the policy in question. This suppression of material facts which had a bearing on the granting of risk was clearly done with intent to deceive the Corporation. Hence, it was decided by the Competent Authority to repudiate all the liabilities under the policy. As per claim intimation received in concerned branch the Life Assured died on 01.08.2021 but is vehemently denied that the Life Assured died due to sudden Cardiac arrest. The deceased Sh. Rajender Sharma had intentionally got the high Sum Assured policy with monthly mode of premium payment just to gain illegal claim benefits for his survivors. This suppression of material facts which had a bearing on the granting of risk was clearly done it with intent to deceive the Corporation. Rest of the averments of the complainant were denied by the OPs No.1 and 3 and prayed for dismissal of the present complaint with costs.
4.           Upon notice, OP No.2, appeared and filed written version wherein he raised preliminary objections to the effect that the complaint is not maintainable in the present form; the complainant is estoped from her own act and conduct to file the complaint; the complaint is bad for mis-joinder and non-joinder of necessary parties; the complainant has not come to this Commission with clean hands and suppressed the material facts etc. On merits, it has been stated that complainant's husband (Since Deceased) at the time of taking the policy have suppressed the material facts and by concealing the material facts have obtained the policy wrongly and illegally. At the time of taking the policy the insured has not disclosed about the Pre-existing decease and concealing the material facts as well as the pre-existing decease, he had filled up the form and after going through the all the contents, he had appended his signatures, as such the complaint is liable to be dismissed outrightly. OP No.2 is not the employee of the OP No.1 rather, he is earning his livelihood by doing the labour jobs. Rest of the averments of the complainant were denied by the OP No.2 and prayed for dismissal of the present complaint with costs.
5.           Learned counsel for the complainant tendered affidavit of complainant as Annexure CW/A alongwith documents as Annexure C-1 to C-18 and closed the evidence on behalf of complainant. On the other hand, learned counsel for the OPs No.1 and 3 tendered affidavit of Anju Arora, Manager (Legal and HFP) of OP No.1-Life Insurance Corporation of India, Divisional Office, Karnal as Annexure OP-1+3/A alongwith documents Annexure OP1+3/1 to OP1+/3/12 and closed the evidence on behalf of OPs No.1 and 3. Learned counsel for the OP No.2 tendered affidavit of Varinder Singh son of Shri Sunder Singh, R/o House No.72/1145, Baldev Nagar, Ambala City as annexure OP-2/A and closed the evidence on behalf of OP No.2.
6.           We have heard the learned counsel for the parties and have also carefully gone through the case file.
7.           Learned counsel for the complainant submitted that neither any wrong information was provided by the insured with regard to his health at the time of filling up of the proposal form nor he was suffering from any pre-existing disease, yet, the genuine claim filed by the complainant being legal heir of the insured has been repudiated by the OPs, which act amounts to deficiency in providing service. 
8.           On the contrary, the learned counsel for the OPs No.1 & 3 submitted that since there has been concealment of material facts with regard to the disease referred to above, suffered by the insured, at the time of obtaining the insurance policy in question, as such, the claim filed by the complainants was rightly rejected by the OPs No.1 and 3, strictly as per terms and conditions of the insurance policy.
9.           The learned counsel for the OP No.2 submitted that OP No.2 is merely an agent. The premium amount from the insured was received by the OPs No.1 & 3 and the claim was also repudiated by the OPs No.1 and 3, as such, the complaint filed against OP No.2 is not maintainable and the same may be dismissed against him with costs. 
10.           Admittedly, the claim of the complainant was repudiated by the insurance company i.e OPs No.1 & 3, vide letter dated 02.03.2022, Annexure C-9, on the ground that there has been concealment of fact with regard to his pre-existing disease i.e. Cancer (Urinary Bladder Carcinoma).  The moot question, which falls for adjudication in this case is, as to whether the insurance company has been able to prove its case that the treatment taken by the insured during subsistence of the policy in question, had any direct nexus with the said alleged pre-existing diseases or not? As per the OPs the insured was suffering from pre-existing disease i.e. Cancer (Urinary Bladder Carcinoma). From the Death Summary dated 31.07.2021, Annexure C-8 issued by the Heart Centre Hospital, Ambala, Haryana (Treating Hospital), it is coming out that the cause of death of the insured was CARDIAC ARREST.   Not even a single document has been placed on record by the OPs to prove that there was any nexus between the decease, information about which was not disclosed and the cause of death.  For arguments sake if it is assumed that the insured was diagnosed for the said disease  (Urinary Bladder Carcinoma) and was taking treatment even then it had no direct nexus with the treatment taken by the insured and died i.e. CARDIAC ARREST, for which the claim in question has been raised by the complainant. A similar question as to whether, the claim is payable, in case there is no direct nexus with the treatment taken by the insured, with the pre-existing disease he is suffering from and was not disclosed, fell for determination before the Honourable Supreme Court in Sulbha Prakash Motegaonkar & Ors. Vs. LIC of India [Civil Appeal No.8245 of 2015] decided on 5.10.2015, wherein,  although it was proved that the insured therein had concealed regarding his pre-existing disease but he died on account of some other reason, even then the Honourable Supreme Court of India, allowed the consumer complaint while holding that the disease from which the insured died had no nexus with the pre-existing disease. Relevant part of the said order is reproduced hereunder:-

“…..We are of the opinion that the 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 his lumbar spondilitis 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…….”

11.           In Neelam Chopra Vs. Life Insurance Corporation of India and Ors, Revision Petition No. 4461 of 2012 decided on 08.10.2018, the Honourable National Commission  held as under :

“13.    From the above observations of the Hon'ble Supreme Court, it is clear that suppression of any information relating to pre-existing disease if it has not resulted in death or has no direct relationship to cause of death, would not completely disentitle the claimant for the claim.”

12.           The Honourable National Commission in Life Insurance Corporation Of India Versus Dr. Nilam Hetalkumar Patel & 4 Ors., Revision Petition No. 1096 Of 2019 Decided On 20 September 2023 under almost the  similar situation has held as under:-

“………..10. State Commission also relied upon judgment in P.Venkat Naidu Vs. Life Insurance Corporation of India IV ( 2011) CPJ 6 ( SC), which was upheld by the Supreme Court. Other case law relied upon by the State Commission was case of LIC Vs. Jyotsna Rawal, RP No. 864 of 2008 decided by the National Commission, relying on the judgment of Honourable Supreme Court in Sulbha Prakash Matogaonkar and Ors. ( supra) and case of Neelam Chopra Vs. LIC and Ors in RP No. 4461 of 2012. After taking note of various judgments of this Commission and Honourable Supreme Court, the State Commission concluded that “ …….It is very clear that the husband of original complainant no.1 was suf ering from major depression and he died due to heart attack. Thus, it cannot be said that there is any nexus between the ailment and the cause of death. Hence, the repudiation of the claim made by the LIC on the ground of non disclosure of material facts is not justified.” State Commission also duly considered various case laws cited by LIC in support of their contention that there was non-disclosure of material facts and even if there is no nexus with the disease and the cause of death of deceased, then also the LIC was entitled to repudiate the claim of the Complainant and observed as follows: “All the above cited cases are decided by the Honourable National Commission in the year 2014-2015 in which it was held that if there is non disclosure of material facts then nexus between the disease and the cause of death is not material. This pronouncement is now no longer a good law as the contrary view has been taken by the Honourable Supreme Court of India in the case of Sulbha Prakash case (supra), which was followed by the Honourable National Commission in the latest judgment which was delivered in December 2018 in the case of Reliance Nippon Life Insurance Co. Ltd. Vs. Yellapu Venkata.”

 

11. Accordingly, State Commission held that “……… if there is no nexus between the disease and the cause of death then the repudiation of the claim has been made by the Insurance company is not legal and valid. In the instant case, the deceased insured before taking the policies was suffering from major depression but he died due to cardiovascular arrest and therefore, the repudiation of the claim made by the LIC was not legal and valid” and upheld the order of the District Forum and dismissed seven appeals and also allowed the two Consumer Complaints.

 

12. We have carefully gone through the facts and circumstances of the case, orders of the State Commission, other relevant records, case laws relied upon by the parties / State Commission and rival contentions of the parties and are of the view that State Commission has correctly placed reliance on the judgment of Honourable Supreme Court in Sulbha Prakash Motogaonkar ( supra ) that as there is no nexus between the disease, information about which was not disclosed and the cause of death, hence the repudiation of the claim by OP Insurance Company is not correct….”

13.           Considering that there was no nexus between the material fact / information relating to pre-existing ailment alleged to  have been suppressed and the cause of death and keeping in view the decision of Honourable Supreme Court in Sulbha Prakash Matogaonkar (supra) and other judgments of the Honourable National Commission  cited above,  we are of the view that repudiation of the claim by OPs No.1 and 3 is not correct. Complainant is thus entitled to get the sum assured amount of Rs.12,00,000/-, as is evident from the policy schedule, Annexure C-1, minus the amount of premium if already refunded to the complainant.
14.           The complaint filed against OP No.2 is liable to be dismissed, because he being the Agent of the Company has limited role in the matter and it is OPs No.1 and 3 who have received premium from the insured and also repudiated the claim of the complainant.
15.           In view of the aforesaid discussion, we hereby dismiss the present complaint against OP No.2 and allow the same against OPs No.1 & 3 and direct them, in the following manner:-
    1. To pay the sum assured amount of Rs.12 lacs to the complainant alongwith interest @6% p.a. from 02.03.2022, i.e the date of repudiation of the claim, till its realization.  However, OPs No.1 & 3 are at liberty to deduct the amount of premium if already refunded to the complainant.
    2. To pay Rs.5,000/- as compensation for the mental agony and physical harassment suffered by the complainant.
    3. To pay Rs.3,000/- as litigation expenses.  

                   The OPs No.1 and 3 are further directed to comply with the aforesaid directions within the period of 45 days, from the date of receipt of the certified copy of the order, failing which the OPs No.1 to 3 shall pay interest @ 8% per annum on the awarded amount, from the date of default, till realization. Certified copy of this order be supplied to the parties concerned, forthwith, free of cost as permissible under Rules. File be indexed and consigned to the Record Room.

 Announced:- 19.07.2024

 

(Vinod Kumar Sharma)	(Ruby Sharma)	(Neena Sandhu)
Member	Member	President