Punjab

StateCommission

A/11/1693

Birla Sun Life Insurance Company Ltd. - Complainant(s)

Versus

Manisha Dhiman - Opp.Party(s)

Varun Gupta

27 Feb 2015

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB, DAKSHIN MARG, SECTOR-37A, CHANDIGARH

 

FIRST APPEAL No.1693 of 2011

 

                                                 Date of Institution: 21.11.2011

 Date of Decision  :  27.02.2015

 

1.      Birla Sun Life Insurance Co. Ltd. 2nd Floor, Vaman Centre,     Makhwana Road, Off. Andheri Kurla Road, Near Marol Naka,    Andheri (E), Mumbai-400059 through its Managing Director

 

2.      Birla Sun Life Insurance Co. Ltd. Branch Office, Opposite Bus         Stand, Nawanshahr through its Branch Manager

…..Appellants/Opposite Parties

 

VERSUS

 

 

Manisha Dhiman aged 32 years w/o Late Ashok Padam, R/o House No. 83, Village Bhawanipur, Tehsil Garhshankar, District Hoshiarpur.

 

…..Respondent/Complainant

 

First Appeal against the order dated 26.09.2011 passed by the District Consumer Disputes Redressal Forum, Hoshiarpur.

Quorum:

 

Hon’ble Mr.Justice Gurdev Singh, President

          Sh. Baldev Singh Sekhon, Member

                   Smt. Surinder Pal Kaur, Member

 

Present:

 

          For the appellant         :      None

          For the respondent     :      Sh. C.S.Marwaha, Advocate

BALDEV SINGH SEKHON, MEMBER

          This appeal has been filed by the appellants/opposite parties (in short 'the OPs') against the order dated 26.09.2011 passed by the District Consumer Disputes Redressal Forum, Hoshiarpur (in short “District Forum”), vide which the complaint filed by the respondent/complainant (hereinafter called the 'complainant') was partly allowed and the OPs were directed to pay to her the entire amount of benefits under the policy i.e. Rs.1,00,000/-, alongwith Rs.3,000/- as compensation on account of harassment and mental tension and Rs.2,000/- as costs of litigation, within 30 days from the receipt of the copy of the order; failing which, the complainant was held entitled to receive the said amounts from OPs with interest @ 9% per annum from the date of the order till realization.

2.      Briefly stated, the facts of the case are that Sh.  Ashok Padam, husband of the complainant, purchased insurance policy No.002039943 from OPs on 18.09.2008 with Guaranteed Maturity Benefit amounting to Rs. 2,17,000/-. The basic sum assured was Rs.1,28,030/-, the enhanced sum assured was Rs.1,23,000/- and AD&D rider sum assured was Rs.1,00,000/-. It was pleaded that on 18.09.2008, her husband paid the first premium of Rs.10,004.40 to OP No.2 and his application for life insurance was accepted. Sh. Ashok Padam, Deceased Life Assured (in short the 'DLA') was not having any medical problem at the time of purchase of policy, in question, and he was enjoying good health free from any  illness. Unfortunately, he died on 19.01.2010. After his death, complainant filed insurance claim with the OPs and submitted requisite documents. However, she was surprised to receive letter dated 25.03.2010 from the OPs vide which they only agreed to pay her "cash surrender value" of the policy as full and final settlement, to which she did not agree. It was also mentioned in the said letter that DLA  was suffering from Hypertension at the time of purchase of policy and that he gave false information about his health. The ground taken by the OPs was wrong and baseless as DLA was not suffering from Hypertension. Moreover, Hypertension  is not a serious disease. Non-settlement of the claim amounted to deficiency in service on the part of the OPs, as hypertension  had no nexus with the cause of his death. She also served a legal notice dated 8.4.2010 upon the OPs but to no effect. Hence, she filed complaint before District Forum seeking directions to the OPs to pay her the entire benefits under the policy, alongwith interest @ 24% per annum from the date of death of the DLA till realization. A compensation to the tune of Rs.50,000/- on account of inconvenience, harassment and frustration suffered by her at the hands of the OPs besides Rs.15,000/- as costs of litigation was also prayed.

3.      Upon notice, OPs contested the complaint by filling their written reply, pleading therein that the claim put forth by the complainant was not payable under Section 45 of Insurance Act, 1938. It was evident from the medical record of the DLA that he was suffering from Hypertension for past 3-4 years prior to the date of submission of proposal for insurance. DLA was duty bound to disclose his past medical history, as the same was material for the OPs to assess the risk to be undertaken. As such, complainant  was not entitled to get any benefit under the policy. It was further pleaded that the DLA died due to End Stage Renal Disease (ESRD) and Hypertension was the major cause leading to ESRD. Complainant stated in her claim statement that DLA had obtained treatment from Mittal Hospital for stomach problem, from National Kidney Hospital for dialysis, from New Ruby Hospital for Kidney transplant and from PGI Chandigarh for Heart shrinking. In the Medical Attendant's Certificate, issued by Dr.Sanjay Mittal of National Kidney Hospital, it is stated that DLA had h/o Hypertension for 3-4 years. In answer to a question "when and for what illness did you treat the patient in past?", the said doctor stated "Hypertension, Nephropathy with End Stage Renal Failure with severe anemia". It also contained a question, "Did previous illness, family history or habits in any way predispose to the cause of death or aggravate the illness?", which was replied as “hypertension and severe anemia” Thus, DLA deliberately concealed material information about his medical history at the time of filling proposal for insurance. However, an amount of Rs.9020.14 was refunded to complainant as "surrender value" under the provisions of the policy. The legal notice dated 26.6.2010 received from complainant was duly replied, vide letter dated 30.07.2010. OPs, thus, rightly repudiated the claim of the complainant under Section 45 of Insurance Act, 1938 and she was intimated about the same vide letter dated 25.03.2010.

4.      Parties led their evidence by way of affidavits and documents

before the District Forum, which after going through the same, allowed the complaint, in aforesaid terms.

5.      Aggrieved by this order, the OPs have come up in appeal on the grounds that in the Medical Attendant's Certificate (Ex.R-10) issued by Dr. Sanjay Mittal of National Kidney Hospital it is stated that the DLA had history of Hypertension for 3-4 years. The said certificate contained a question "When and for what illness did you treat the patient in the past?", in reply to which, doctor stated "Hypertension, Nephropathy with end stage renal failure with severe anemia". It also contained another question "Did previous illness, family history or habits in any way predispose to the cause of death or aggravated the illness?", against which, it was stated  "Hypertension and Severe Anemia". It was further submitted that during investigation of the claim, conducted by Guru Associates,   medical records of DLA was collected; which disclosed the fact that DLA was suffering from Hypertension since January, 2008. However at the time of filling proposal for insurance, DLA was asked to answer the following question:

          "3.     Have you ever had or sought advice for the following :

          a)      Chest pain, High Blood Pressure, Stroke, Heart Attack,                      Heart Murmur or other heart disorders?"

                    In answer to that he stated "NO".  Thus the DLA misstated  and obtained insurance by concealing the material facts about his medical health and thereby, committed breach of fundamental principles of "Utmost good faith." Therefore, the insurance, policy was declared void ab-initio. The OPs also proved on file the copies of the Claimant's Statement, Medical Certificate of National Kidney Hospital, Jalandhar and Medical Record of PGI, Chandigarh, investigation report of Guru Associates and other related documents to substantiate their case. It was further submitted that the District Forum has failed to appreciate the fact that the disease, from which the insured was suffering  at the time of purchasing the policy, had direct nexus with his death and that the insurance policy was purchased by the DLA in connivance with his wife in order to get wrongful gains. Acceptance of the appeal and setting aside of the impugned order was prayed.

6.      The admitted facts of the case are that the DLA obtained insurance policy No.002039943 from OPs on 18.09.2008, during the subsistence of which, he died on 19.01.2010. The insurance claim submitted by the complainant was repudiated by OPs vide letter dated 25.3.2010 Ex.C-2 on the ground that the DLA concealed material facts about his medical health while filling the proposal for insurance dated 10.9.2008 (Ex.R-1) wherein in reply to the question related to his personal history i.e. :

          "3.     Have you ever had or sought advice for the following :

          a)      Chest pain, High Blood Pressure, Stroke, Heart Attack,                      Heart Murmur or other heart disorders?"

          DLA replied in negative. However, during investigation of the claim, it was established that the DLA had been suffering from Hypertension prior to the issuance of policy and hence the reply in the application for the insurance was found to be false. Accordingly, the claim of the complainant was repudiated. OPs, however, agreed to refund the cash surrender value under the policy as ex-gratia and enclosed a cheque No.408955 dated 25.3.200 for Rs.9020.14; being the full and final settlement of the policy. Though the complainant has contended that the DLA was not suffering from any disease prior to the purchase of the policy, but it is observed that while submitting the claim form the complainant also filed Claimant's Statement Ex.R-7 in which she admitted that the DLA remained under treatment in Mittal Hospital, National Kidney Hospital, New Ruby Hospital and PGI, Chandigarh before his death. OPs have proved on record a Medical attendant's certificate (Ex.R-10) issued by Dr. Sanjay Mittal of National Kidney Hospital, where DLA remained under treatment from 01.02.2009 to 06.02.2009. In this certificate, it is mentioned that the DLA was treated for Hypertension, Nephropathy and End Stage Renal Failure with severe anemia during his stay in the hospital. Under the column "duration of the ailment", it is mentioned that he was suffering from Hypertension for 3-4 years. Further in reply to the question  "Did previous illness, family history or habits in any way predispose to the cause of death or aggravate the illness? If yes, describe fully", "Hypertension and severe anemia" is mentioned. Thus, it is established that the DLA was suffering from Hypertension well before he filled the application for insurance and he concealed this fact from the OPs while filling the proposal form Ex.R-1 on 10.09.2008. In the proposal form a declaration is made by the DLA as under :

          " I, hereby declare that all information I have and belief provided      in connection with this application for insurance is true and           complete to the best of my knowledge and that I am unaware of     any other information of a medical, personal or financial nature   which will have any material effect on the acceptance of this           application for Insurance.

          I hereby declare that all information as provided in this    application, pertaining to the medical, personal or financial           standing of the applicant and having any material effect on the   acceptance of this application for insurance is true and complete           to the best of my knowledge and belief. Should there be any   adverse change in my opinion I shall inform BSL of the same. "

7.      Thus, DLA violated the principles of utmost good faith. Hon'ble Supreme Court in Mithu Lal Vinayak V/s LIC of India -AIR 1962 SC 814 and in numerous other cases held that an Insurance Policy is an agreement in good faith between the insurer and the insured. Any breach of this agreement by suppressing material facts on the part of the insured would result in repudiation of claim by the insurer. Though the learned District forum has taken note of the Medical attendant's certificate Ex.R-10 but did not find it reliable, as the doctor issuing the said certificate was not examined before it. Hon'ble Supreme Court in IV (2009) CPJ 8(SC) "SATWANT KAUR SANDHU vs. NEW INDIA ASSURANCE COMPANY LIMITED)"  observed in para no. 22 of that judgment as under:-

"We do not find any substance in the contention of leaned counsel for the appellant that reliance could not be placed on the certificate obtained by the respondent from the hospital where the insured was treated. Apart from the fact that at no stage had the appellant pleaded that the insured was not treated at Vijaya Health Centre at Chennai, where he ultimately died. It is more than clear from the above said certificate that information about the medical history of the deceased must have been supplied by his family members at the time of admission in the hospital, a normal practice in any hospital. Significantly , even the declaration in the proposal form by the proposer authorizes the insurer to seek information  from any hospital he had attended or may attend concerning any disease or illness which may affect his health"

 

8.      In view of the above discussion and the law laid down by the Hon'ble Supreme Court, it is to be held that the DLA concealed material facts about his medical health at the time of obtaining the policy as he was suffering from Hypertension well before the filling of the proposal form. Thus, OPs were entitled to repudiate the claim of the complainant on the ground of material concealment of facts. Accordingly, the appeal filed by the OPs is allowed and the impugned order dated 26.9.2011 is set aside. Consequently, the complaint filed by the complainant is dismissed. No order as to cost.

9.      A sum of Rs. 25,000/- was deposited by the appellants at the time of filing of the appeal before this Commission. Another amount of Rs.25,000/- was deposited by them vide receipt No.840537 dated 03.01.2012 as per directions of this Commission. Both these amounts, alongwith interest which has accrued thereon, if any, shall be remitted by the registry to the appellants/OPs by way of a crossed cheque/demand draft after the expiry of 45 days of the sending of certified copy of the order to them.

10.    The arguments in the case were heard on 12.02.2015 and the order was reserved.  Now, the order be communicated to the parties.

11.    The appeal could not be decided within the statutory period because of the heavy pendency of the court cases.

 

 (JUSTICE GURDEV SINGH)

PRESIDENT

 

(BALDEV SINGH SEKHON)

MEMBER

 

(SURINDER PAL KAUR)

MEMBER

February 27, 2015