Punjab

Faridkot

CC/14/160

Manjit Kaur - Complainant(s)

Versus

Max Life Insurance co. Ltd. - Opp.Party(s)

A.S.Sekhon

30 Jun 2015

ORDER

 DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, FARIDKOT

 

 

Complaint No. :      160

Date of Institution:  20.11.2014

Date of Decision :   30.06.2015

 

 

Manjit Kaur w/o late Sh Raj Kumar s/o Tirath Ram r/o House No. 1314 Ward No. 4. Giani Lal Singh Wali Gali, Prem Nagar, Kotkapura, Teshil Kotkapura District Faridkot.                                                                                                 

 

...Complainant

Versus

 

Max Life Insurance Company Ltd, 2^nd Floor Operations Centre 90-A, Udyog Vihar, Sector 18, Gurgaon (Haryana) through its Assistant Claims.

.....Opposite Party (OP)

 

Complaint under Section 12 of the

Consumer Protection Act, 1986.

 

 

Quorum: Sh. Ajit Aggarwal, President,

               Smt Parampal Kaur, Member,

               Sh P Singla, Member.

 

Present: Sh A. S Sekhon, Ld Counsel for complainant,

              Sh Vipan Tayal, Ld Counsel for OP.

 

( Ajit Aggarwal, President)

                           Complainant has filed the present complaint under Section 12 of the Consumer Protection Act, 1986 against OP seeking directions to OP to make payment of claim amount worth Rs 6,00,000/- pertaining to Insurance Policy No. 405948167 in the name of husband of complainant alongwith interest from the date of becoming due till realization and for further directing OP to pay Rs 1,00,000/- as compensation for harassment, inconvenience, mental agony and Rs 25,000/-as litigation expenses.

2                       Briefly stated, the case of the complainant is that husband of complainant purchased Life Insurance Policy bearing no. 405948167 for a sum of Rs 6,00,000/-with annual instalment worth Rs 60,000/- and payment of the said policy was to be made by OP on maturity or death of policy holder, whichever is earlier; that after purchase of policy, husband of complainant suffered from cancer and due to this, he died on 3.06.2014 and being only legal heir of Sh Raj Kumar, complainant/Manjit Kaur submitted all the documents as per requirement of the OP for obtaining the insurance claim, but OP paid only Rs.59,313.62 through bank account of complainant and complainant was surprised to know that instead of making payment of full  claim amount worth Rs 6,00,000/-, OP credited only Rs.59,313.62 and thereafter, complainant filed her claim for payment of total payment with claim reference no. 13794374 and in response thereof, OP intimated complainant vide letter dt 31.07.2014 that during claim evaluation, it came to their notice that Raj Kumar/policy holder was suffering from cancer prior to signing the proposal form; that this observation of OP is totally wrong and OP has wrongly rejected the claim of complainant because before issuance of insurance policy, OP obtained medical certificate of policy holder and after being satisfied, issued the said policy; that complainant had made many oral as well as written requests before OP for making payment of claim amount, but repudiation of claim by OP amounts to deficiency in service and trade mal practice on the part of OP and it has caused harassment and mental agony to complainant for which she has prayed for directions to Ops to pay Rs 1,00,000/-as compensation and Rs.25,000/- for cost of litigation besides the main relief. Hence, the present complaint.

3                              The counsel for complainant was heard with regard to admission of the complaint and vide order dated 21.11.2014, complaint was admitted and notice was ordered to be issued to the opposite party.

4                                    On receipt of the notice, the opposite party filed written statement taking preliminary objections that no cause of action arises against answering OP and complainant has concealed the material facts from the OP by not disclosing that prior to obtain insurance policy on 23.09.2013, husband of complainant was suffering from cancer, which is revealed by  report received from the investigation agency showing that Deceased Life Insured/husband of complainant was suffering from cancer and subsequently underwent chemotherapy on 12.12.2011 at Guru Gobind Singh Medical College & Hospital, Faridkot; that on 23.09.2013 after fully understanding the terms and conditions of the insurance policy, husband of complainant filled the proposal form for Max Life Maxis Plan with Proposal No. 405948167 for a sum of Rs6,00,000/- with annual premium of Rs 60,000/- to be paid till 30.09.2019 every year and in response thereof, answering OP issued policy bearing no. 405948167; that on 20.06.2014, answering OP received letter alongwith death certificate intimating that husband of complainant/Deceased Life Insured/DLA has expired on 3.06.2014 and in response thereof, OP remitted amount of Rs 59,313.62 in the bank account of complainant on the basis of numbers of units and NAV prevailing in the policy at the time of intimation of death claim; that OP requested complainant to provide Form C, attending Physician Statement and Medical Certificate confirming the cause of death and past medical history if any pertaining the death claim; that on 10.07.2014 OP received report from the Mack Insurance Auxiliary Services Pvt Ltd intimating the OP that Deceased Life Insured/husband of complainant was suffering from cancer and subsequently underwent chemotherapy on 12.12.2011 at Guru Gobind Singh Medical College & Hospital, Faridkot; that on 31.07.2014, OP issued letter to complainant wherein repudiated the claim of complainant on the ground that prior to issuance of policy, husband of complainant was suffering from cancer and he concealed this fact from the answering OP and therefore, death claim against policy in question is declined and thereafter, OP received letter from complainant on 3.09.2014 vide which complainant explained that her husband died due to heart attack and not because of cancer; that OP issued letter dt 10.09.2014 to complainant  informing that her husband was suffering from cancer prior to issuance of policy and due to non disclosure of medical facts, death claim of complainant is repudiated. However, on merits, OP reiterated that complaint filed by complainant is false, misconceived and groundless and there is no deficiency in service on the part of answering OP. The allegations with regard to relief sought too were refuted with a prayer that complaint deserves to be dismissed with costs.

5                                               Parties were given proper opportunities to prove their respective case. The complainant tendered in evidence his affidavit Ex.C-1, and documents Ex C-2 to C-5 and then, closed his evidence.

6                                   In order to rebut the evidence of the complainant, the opposite party tendered in evidence, affidavit of Sh Dr Syed Asif Asstt Vice President of OP as Ex OP-1 and documents Ex OP-2 and OP-15 and then, closed the evidence.

7                                                 We have heard the learned counsel for the parties and have very carefully gone through the affidavits and documents on the file.

 

8                                            The ld counsel for complainant has strenuously argued that sh Raj Kumar husband of complainant purchased Life Insurance Policy for a sum of Rs 6,00,000/-with annual premium of Rs 60,000/-from Ops to secure his life. After purchase of the policy, he suffered from cancer and died due to this disease on 3.06.2014 and the complainant being the legal heir of her husband is entitled for the insurance amount of Rs 6,00,000/-. She duly filed her claim before Ops but Ops paid only Rs 59,313.62 of claim under insurance policy  to complainant instead of full payment of Rs 6,00,000/-. The complainant approached Ops and Ops vide their letter dt 31.07.2014 intimated that it came to their notice that Raj Kumar deceased was suffering from cancer prior to the purchase of the policy, so, complainant is not entitled for full claim amount. The counsel for complainant argued that Raj Kumar was not suffering from any health problem prior to the purchase of insurance policy. He suffered from cancer after the purchase of said insurance policy. At the time of issuance of Policy, Ops obtained fitness certificate of the deceased and have themselves got conducted entire medical examination of the deceased to their satisfaction and at that time, no

such disease was detected in his medical check-up and the Ops issued insurance policy after their satisfaction and now they have illegally and wrongly repudiated the claim of the complainant. It is a clear cut deficiency in service and trade mal practice on the part of Ops. The Ops cannot repudiate the claim of the complainant they should be ordered for payment of entire claim amount with interest.

9                                                   To controvert the averments of complainant counsel, ld counsel for Ops argued that Raj Kumar deceased had not disclosed his prior disease at the time of issuance of insurance policy. The complainant has also concealed the material fact from this Forum. The contract of Insurance is based on Uberrima Fides and every material fact needs to be disclosed pertaining to the health of the insured & needs to be brought into light before the Insurance Company and any non disclosure of this fact amounts to breach of contract. He stated that deceased Raj Kumar/husband of complainant was suffering from cancer and got treatment for cancer at Guru Gobind Singh Medical College & Hospital, Faridkot. He also underwent chemotherapy on 12.12.2011 and at the time of signing the proposal form and issuance of insurance policy, he was fully aware about his prior disease and intentionally concealed this material fact

from the Insurance Company. In proposal form, clause E (3) has been made querying ‘That if you have ever been investigated, treated or diagnosed for (viii) Cancer, tumour or growth (Malignant or benign)? and this question was duly answered as ‘No’ no by the deceased life assured. He was already aware that he was suffering from cancer and taking treatment for the same.

10                                                     The ld counsel for Ops argued that after the death of insured, complainant filed death claim alongwith relevant documents to the Insurance Company and claimed the full amount under the insurance policy of her husband. The Insurance Company after receiving the intimation from the complainant credited the amount of Rs.59,313.62 to her bank account according to terms and conditions laid down in the  Insurance Policy on the basis of number of units and NAV prevailing at that time. Insurance Company after receiving the death claim duly initiated investigation from Mack Insurance Auxiliary Services Pvt Ltd and Insurance Company duly received Investigation Report from the same which revealed that deceased Life Assured was suffering from cancer. The FNCA of Liver SOL report dt 2.10.2011 issued by Dr Monika Dixit stated that the DLA was suffering from Carcinoma-Metastatic Poorly differentiated High Grade Adenocarcinoma and the OPD prescription issued by Guru Gobind Singh Medical College & Hospital, Faridkot stated that the DLA was advised for Chemotherapy on 12.12.2011. Further, the report of Dr Lal Pathlabs dt 18.09.2011 states that test for CA 19.9 Pancreatic Cancer Marker was conducted on the DLA which is indicative of progressive malignant disease and poor therapeutic response. Thus, such past history that the DLA was suffering from cancer prior to the signing of the proposal form which was concealed from the respondent company and had opted for the said policy only to play fraud and extract money from the respondent company. This clearly shows the malafide intention of the DLA that the said policy was only taken on the ground for extracting money from the respondent company. Ld counsel for Ops has placed reliance upon the judgment titled as Life Insurance Corp. of India & Ors Vs Asho Goel (Smt) & Anr 2001 SCC 160, wherein it was held that contracts of insurance including the contract of life assurance are contracts uberrima fides and every fact of material must be disclosed, otherwise, there is good ground for rescission of the contract. The duty to disclose material facts continues right up to the conclusion of the contract and also implies any material alteration in the character of the risk which may take place between the proposal and its acceptance. If there are any misstatements or suppression of the material facts, the policy can be called into question. For determination of the question whether suppression relates to a fact, which is in the exclusive knowledge of the person intending to take the policy and it could not be ascertained by reasonable enquiry by a prudent person. It has not been shown in this case that repudiation of the contract of insurance was not done by the respondent with extreme care and caution or was otherwise invalid in law. Reliance has also been placed on judgment titled as Satwant Kaur Sandhu Vs New India Assurance Company Ltd, SC 2776 of 2002 passed by Hon’ble Supreme Court, wherein Hon’ble Apex Court has referred to the term “Proposal Form” as defined under the Insurance Regulatory and Development Authority, 2002 as a “Form” to be filled in by the proposer for insurance, for furnishing all material information required by the insurer to decide whether to accept or decline, to undertake the risk and in the event of acceptance of the risk, to determine the rates, terms and conditions of a cover to be granted and observed that in a contract of insurance, any fact which would influence the mind of a prudent insurer in deciding whether to accept or not to accept the risk is “material fact”. If the proposer has knowledge of such fact, he is obliged to disclose it particularly while answering questions in the proposal form.

11                                                              In the light of non disclosure of medical facts on the part of complaint, the insurance Policy was cancelled by Ops/Insurance Company as per clause 13.7 of the Insurance Policy document and amount as per terms and conditions of the Insurance Policy has already been paid to the complainant. Therefore, complainant is not entitled for the full amount of insurance policy. In support thereof, Ops placed reliance on the judgment passed by Hon’ble Supreme Court in Satwant Kaur Sandhu Vs New India Assurance Company, wherein Hon’ble Supreme Court did not find any substance in the contention of the ld 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, appellant at no staged pleaded that the insured was not treated at Vijya Health Centre at Chennai, where his ultimately died. It is more than clear from the 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 authorises the insurer to seek information from any hospital he had attended or may attend concerning any disease or illness, which may affect his health. As such, due to the non disclosure of the material facts in the proposal form, now, complainant cannot claim the insurance amount from the Insurance Company. Ops have made full investigation, which revealed the prior illness of deceased life assured. Ld Counsel for complainant argued that Ops took medical fitness certificate of the deceased at the time of Insurance Policy and got conducted medical examination of the deceased. In reply Ld Counsel for Ops argued that that medical check up was of general nature and these type of diseases cannot be diagnosed at the time of that check-up and complainant should have brought this fact into the knowledge of OPs prior to the purchase of insurance policy, but though complainant was fully aware about his disease but he intentionally did not disclose about his cancer disease to Ops before taking the insurance policy.

12                            Ld Counsel for complainant argued that investigation by OPs regarding the health of deceased was made after filing the death claim by complainant and Ops did not inform about it to the complainant and the report produced by Investigating Company can not be relied upon. On it ld counsel for Ops have placed reliance upon judgment Satwant Kaur Sandhu Vs New India Assurance Company (supra) wherein Hon’ble Apex Court has held that there is no substance in the contentions of appellant.

13                                       In the light of above discussion, this Forum reaches at the conclusion that Raj Kumar/deceased husband of complainant got issued the policy in dispute by intentionally concealing his earlier disease of cancer from the OPs, knowing well that he would die in short period, only to extract money from OPs. As such, complainant has failed to prove her case on file, rather OPs have fully proved their version, therefore, complaint is hereby dismissed. However, in peculiar circumstances of the case, parties are left to bear their own costs. Copy of the order be supplied to parties free of cost as per law. File be consigned to the record room.

Announced in open Forum:

Dated: 30.06.2015

Member                 Member                 President

(Parampal Kaur)    (P Singla)              (Ajit Aggarwal)