Chandigarh

DF-I

CC/93/2021

Kamaldeep Malhan - Complainant(s)

Versus

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

Kamal Kant Verma

06 Dec 2023

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-I,

U.T. CHANDIGARH

                                     

Consumer Complaint No.	:	CC/93/2021
Date of Institution	:	12/02/2021
Date of Decision	:	06/12/2023

 

Kamaldeep Malhan, aged 57 years son of Sh. Brahm Sagar Malhan r/o House No.273, Sector 20-A, Chandigarh.

… Complainant

V E R S U S

Life Insurance Corporation of India, Divisional Office Jeevan Parkash Building, Sector 17-B, Chandigarh.

… Opposite Party

CORAM :	SHRI PAWANJIT SINGH	PRESIDENT
	MRS. SURJEET KAUR	MEMBER
	SHRI SURESH KUMAR SARDANA	MEMBER

                                                                               

ARGUED BY	:	Sh. Kamal Kant Verma, Advocate for complainant
	:	Sh. Saksham Arora, Advocate for OP

Per Pawanjit Singh, President

1. The present consumer complaint has been filed by Kamaldeep Malhan, complainant against the aforesaid opposite party (hereinafter referred to as the OP).  The brief facts of the case are as under :-

1. It transpires from the allegations as projected in the consumer complaint that the complainant, being health conscious person, had been obtaining family medicare policies for the last many years from family friends and insurance agents for himself and his wife, Mrs. Nitika Malhan.  Copies of the last five years policies are Annexure C-1 to C-5. The insurance agent, who is also a family friend of the complainant, had suggested to obtain a life insurance policy for self and on behalf of his wife by giving assurances that the said policy is safe one in case of any untoward incident.  Accordingly, in the month of July 2018, complainant had purchased two policies (Annexure C-6 & C-7) (hereinafter referred to as “subject policies”) for his wife having sum assured of ₹2.00 lacs and ₹3.00 lacs respectively on payment of premium of ₹26,560/- and ₹17,494/- vide receipts (Annexure C-8 & C-9). Both the policies commenced w.e.f. 21.7.2018 with date of maturity as 21.7.2037. On the night of 26.1.2020 at around 11.07 p.m., wife of the complainant suffered from bleeding from the rectum and immediately she was taken to the General Hospital, Sector 16, Chandigarh where she was admitted.  After treatment and on advice of the treating doctor, complainant brought her home. However, at that time she was not passing her natural calls and around 10.00 p.m. again bleeding from the rectum started and she became unconscious.  Immediately the local physician was called who declared her dead.  In this manner, the wife of the complainant (hereinafter referred to as “deceased insured”) died due to aforesaid disease. The complainant, who was in great mental shock due to the untimely death of his wife, informed the OP about the same through letter (Annexure C-11) after about 25 days. OP asked the complainant to submit the treatment record to it for consideration and accordingly on 19.5.2020, complainant submitted all the record to the OP.  Earlier the deceased insured was treated for the UTI infection in the Landmark Hospital in the year 2019 and was cured and at that time she was also found to be diabetic. The complete record of Landmark Hospital is Annexure C-14.  However, vide two letters dated 14.8.2020 (Annexure C-15 & C-16), OPs repudiated the claim of the complainant on the ground that the deceased insured was suffering from Type 2 diabetes mellitus and the said fact was suppressed while filling the proposal form and there was an intention to mislead the OP and the premium amount was refunded towards the full and final settlement of the claim.  It is further alleged that as the deceased insured had died due to bleeding from the rectum, which has no nexus with diabetes, OP has wrongly repudiated the claim of the complainant on flimsy grounds. In this manner, the aforesaid act of the OP amounts to deficiency in service and unfair trade practice. OP was requested several times to admit the claim, but, with no result.  Hence, the present consumer complaint.
2. OP resisted the consumer complaint and filed its written version, inter alia, taking preliminary objections of maintainability, cause of action, concealment of facts and also that there is violation of the terms and conditions of the policy.  However, it is admitted that the subject policies were purchased by the complainant for his wife, by filling the proposal form dated 21.7.2018 and as in the said proposal form nothing had been disclosed about the fact that she was a patient of high diabetes, on account of the suppression of material facts by the complainant, the claim of the complainant was repudiated and the premium amounts were refunded.  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.
3. Despite grant of sufficient opportunity, rejoinder was not filed by the complainant to rebut the stand of the OP.

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.
   1. At the very outset, it may be observed that when it is an admitted case of the parties that the wife of the complainant, Smt.Nitika Malhan i.e. deceased insured had obtained the two subject insurance policies with sum assured of ₹2.00 lacs and ₹3.00 lacs respectively, as is evident from subject policies/ receipts (Annexure C-6 to C-9), and the deceased insured was admitted in the Govt. Multi Speciality Hospital, Sector 16, Chandigarh (GMSH-16) on 26.11.2020 with the complaint of bleeding per rectum and after treatment she was discharged from the said hospital and on the next day i.e. 27.11.2020 she died, as is also evident from the death certificate (Annexure C-10) and the claim was lodged by the complainant with the OP, which was repudiated by the OP on the ground that the complainant has suppressed material facts qua the pre-existing disease i.e. Type 2 diabetes mellitus for which the deceased insured was taking treatment from different hospitals and also that on the repudiation of the claim of the complainant, premium amount paid by the complainant for both the policies to the tune of ₹17,494/- and ₹26,560/- had been refunded to the complainant, the case is reduced to a narrow compass as it is to be determined if the OP is unjustified in repudiating the genuine claim of the complainant on the ground of suppression of material facts and the complainant is entitled to the reliefs prayed for in the consumer complaint, as is the case of the complainant, or if the OP has rightly repudiated the claim of the complainant in pursuance to the terms and conditions of the subject policies and the consumer complaint of the complainant, being false and frivolous, is liable to be dismissed, as is the defence of the OP.
   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 documentary evidence led by both the parties i.e. the subject policies alongwith the medical record and the repudiation letters, and the same are required to be scanned carefully in order to determine the real controversy between the parties.
   3. Perusal of Annexure C-1 to C-5 clearly indicates that the complainant and his wife had been purchasing the family health medicare policies since the year 2014 onwards whereas the subject policies (Annexure C-6 & C-7) were purchased in the name of his wife/deceased insured with sum assured of ₹2.00 lacs and ₹3.00 lacs, on payment of premium of ₹17,494/- and ₹26,560/-. Annexure C-10 is the treatment card of the GMSH-16 which indicates that the complainant was admitted with the problem of bleeding per rectum and history of HTN and DM.  Annexure C-11 is the intimation letter sent to the OP by the complainant qua the death of his wife.  Annexure C-14 (colly.) is the record issued by the Landmark Hospital qua the earlier treatment given to the deceased insured which nowhere indicates that she was earlier treated for bleeding per rectum.  Annexure C-15 & C-16 are the repudiation letters which indicates that the OP has repudiated the claims of the complainant on the ground of suppression of material facts qua Type 2 Diabetes Mellitus of the deceased insured for which she was taking treatment from the PGI Chandigarh and another hospital.
   4. The learned counsel for the complainant contended with vehemence that as it stands proved on record that the deceased insured had never suffered from bleeding per rectum, on account of which she died on 27.1.2020 after taking treatment from GMSH-16, Chandigarh, and further when it has come on record that the deceased insured was patient of diabetes mellitus, for which she has also been taking treatment, and the said disease has no nexus with the present disease, which she had suffered before her death, and further when OP has also failed to prove on record that the complainant has not disclosed about the previous history of diabetes mellitus, OP has wrongly repudiated the claim of the complainant and the consumer complaint be allowed.
   5. On the other hand, learned counsel for the OP contended with vehemence that as it stands proved on record that the complainant as well as the deceased insured has suppressed material facts qua the previous ailment of diabetes mellitus for which she was taking treatment from various hospitals and even in the proposal form the said fact has not been disclosed by the complainant, the claim of the complainant was rightly repudiated by the OP and the consumer complaint be dismissed with costs.
   6. However, there is no force in the contention of the learned counsel for the OP as it is an admitted case of the parties that the deceased insured was suffering from bleeding per rectum just before her death for which she was taken to the GMSH-16, Chandigarh for treatment, which is also evident from the treatment card of the said hospital (Annexure C-10).  There is no document on the file showing that the deceased insured ever had suffered from said disease even before obtaining the subject policies from the OP.  Though the OP has come with the plea that the deceased insured had taken treatment from the PGI as well as Bharat Vikas Parishad Charitable Medical Centre, Sector 24, Chandigarh and she was diagnosed with type 2 diabetes mellitus and as the said fact has not been disclosed in the proposal form, rather she had given false answers to the questions, the claim of complainant was repudiated.  However, since the OP has failed to produce copy of treatment card/history issued by the PGI, Chandigarh or any test report from the aforesaid Bharat Vikas Parishad, regarding which reference has also been given in the repudiation letter, OP has failed to prove on record that the complainant was suffering from any such disease.
   7. Moreover, much emphasis has been given by the OP to the proposal form as it has been alleged in the written version that the complainant/deceased insured did not disclose in the proposal from about the previous ailment and has given false information while filling the said form, but, surprisingly even the said form has not seen the light of the day as the same has not been produced or proved on record in order to show that the complainant/deceased insured had given false information or has concealed any fact from the OP.
   8. Not only this, even as per the medical jurisprudence diabetes mellitus is not cause for rectal bleeding, rather the most common causes for rectal bleeding are diverticulosis, hemorrhoids, anal fissures and colitis. It has been held by the Hon’ble State Commission, Delhi, in the case titled S.S. Jaspal Vs. National Insurance Co. Ltd. & Ors., IV (2022) CPJ 26 (Del.) that common lifestyle disease like diabetes and hypertension, cannot be treated as pre existing diseases and cannot be a ground of repudiation of claim by Insurance companies. The relevant portion of the order is reproduced as under :-

 “Consumer Protection Act, 1986 - Sections 2(1)(g), 14(1)(d), 15 - Insurance (Mediclaim) -Angioplasty and Stenting - Suppression of pre-existing disease alleged - Repudiation of claim Deficiency in service - District Forum dismissed Complaint - Hence Appeal - Complainant experienced pain in chest and remained admitted in Hospital from 24.6.2004 to 30.6.2004, where he had undergone Angioplasty and Stenting, by incurring Rs.3,20,126 on treatment - Previous medical history is based upon information provided by family of patient - Respondents failed to show any evidence regarding pre-existing disease suffered by insured at time of getting policy - Common lifestyle disease like diabetes and hypertension, cannot be treated as pre existing diseases and cannot be a ground of repudiation of claim by Insurance companies - Respondents failed to show any evidence that any medical tests or examination was done, before issuing said policy in question - Respondents are directed to pay a sum of Rs.3,20,126 (Cost of Medical Expenses) to Appellant along with interest @ 6% p.a.”

9. Similarly, the Hon’ble National Commission in case titled Sunil Kumar Sharma v. Tata AIG Life Insurance Company and Ors., Revision Petition No.3557 of 2013 decided on 1.3.2021, while dealing with issue of pre-existing disease, has held as under:-

“14.   Moreover the claim had been repudiated only on the ground that the insured was suffering from diabetes for a long time. So far as life style diseases like diabetes and high blood pressure are concerned, Hon'ble High Court of Delhi in Hari Om Agarwal Vs. Oriental Insurance Co. Ltd., W.P.(C) No.656 of 2007, decided on 17.09.2007 held as under:

"Insurance – Mediclaim -Reimbursement-Present Petition filed for appropriate directions to respondent to reimburse
expenses incurred by him for his medical treatment, in accordance with policy of insurance - Held, there is no dispute that diabetes was a condition at time of submission of proposal, so was hyper tension - Petitioner was advised to undergo ECG, which he did - Insurer accepted proposal and issued cover note. It is universally known that hypertension and diabetes can lead to a host of ailments, such as stroke, cardiac disease, renal failure, liver complications depending upon varied factors. That implies that there is probability of such ailments, equally they can arise in non-diabetics or those without hypertension. It would be apparent that giving a textual effect to Clause 4.1 of policy would in most such cases render mediclaim cover meaningless. Policy would be reduced to a contract with no content, in event of happening of contingency. Therefore Clause 4.1 of policy cannot be allowed to override insurer's primary liability. Main purpose rule would have to be pressed into service. Insurer renewed policy after petitioner underwent CABG procedure. Therefore refusal by insurer to process and reimburse petitioner's claim is arbitrary and unreasonable. As a state agency, it has to set standards of model behaviour; its attitude here has displayed a contrary tendency. Therefore direction issued to respondent to process petitioner's claim, and ensure that he is reimbursed for procedure undergone by him according to claim lodged with it, within six weeks and petition allowed."

10. Further 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.”

11. In view of the foregoing discussion and the ratio of law laid down above, it is clear that the OP has not been able to connect the previous diseases/ ailments with the present diseases/ailments, for which the deceased insured had taken treatment from the treating hospital.  Hence, it is unsafe to hold that the OP was justified in repudiating the claim of the complainant and the present consumer complaint deserves to succeed. 
12. Now coming to the quantum of relief to be awarded to the complainant, since it is an admitted case of parties that the OP has already refunded premium amount of subject policies i.e. ₹17,494/- & ₹26,560/- = ₹44,054/- vide repudiation letters (Annexure C-15 & C-16), it is safe to hold that the OP is liable to pay the total sum assured in respect of two subject policies (₹2,00,000/- + ₹3,00,000/- = ₹5,00,000/-) after deducting the said amount (i.e. ₹5,00,000/- - ₹44,054 = ₹4,55,946/-) to the complainant alongwith interest and compensation etc. for the harassment suffered by him.

4. In the light of the aforesaid discussion, the present consumer complaint succeeds, the same is hereby partly allowed and OP is directed as under :-

1. to pay ₹4,55,946/- to the complainant alongwith interest @ 9% per annum from the date of repudiation of the claim i.e. 14.8.2020 onwards.
2. to pay an amount of ₹10,000/- to the complainant as compensation for causing mental agony and harassment to him;
3. to pay ₹10,000/- to the complainant as costs of litigation.

5. This order be complied with by the OP 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. Pending miscellaneous application(s), if any, also stands disposed of accordingly.
7. Certified copies of this order be sent to the parties free of charge. The file be consigned.

Announced 06/12/2023 hg			Sd/- [Pawanjit Singh] President
			Sd/- [Surjeet Kaur] Member
			Sd/- [Suresh Kumar Sardana] Member