Punjab

Ludhiana

CC/20/107

Baldev Singh - Complainant(s)

Versus

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

Ankush Gupta adv

14 Sep 2023

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, LUDHIANA.

                                                Complaint No:107 dated 16.07.2020.                                                         Date of decision: 14.09.2023.

 

Baldev Singh son of Lachhman Singh, resident of Kalsian, Raikot, District Ludhiana.                                                                                                                                                                                           ..…Complainant

                                                Versus

1. Max Life Insurance Company Limited, Regd. Office: 419, Bhai Mohan Singh Nagar, Railmajra, Tehsil Balachaur, District Nawanshahr, Punjab-144533, through its Manager.
2. Max Life Insurance Company Limited, Head Office: 11^th & 12^th Floor, DLF Square, Jacaranda Marg, DLF City Phase-II, Gurugram-122002, through its Director/M.D.                                                                                                                                                          …..Opposite parties 

Complaint Under section 12 and 14 of the Consumer Protection Act, 1986.

QUORUM:

SH. SANJEEV BATRA, PRESIDENT

SH. JASWINDER SINGH, MEMBER

MS. MONIKA BHAGAT, MEMBER

 

COUNSEL FOR THE PARTIES:

For complainant             :         Sh. Anshu  Gupta, Advocate.

For OPs                         :         Sh. Gurpreet Singh, Advocate.

 

ORDER

PER MONIKA BHAGAT, MEMBER

1.                Shorn of unnecessary details, the facts of the case are that on 07.08.2017, Smt. Karamjit Kaur, wife of the complainant availed one life insurance policy No.406856542 through Axis bank Ltd., Raikot branch, District Ludhiana having validity for a period of five years. In the said policy Gurminder Singh son was nominee of Smt. Karamjit Kaur. After availing the insurance policy, Smt. Karamjit Kaur paid two installments of premium of Rs.90,000/- each. Unfortunately, Smt. Karamjit Kaur expired on 30.07.2019 at Life Care Hospital, Raikot leaving behind complainant and his legal heir besides five children. After her death, the complainant lodged a claim with opposite parties upon which surveyor visited the complainant and took his signatures on blank papers, forms and proformas etc. and also took original policy, hospital record and other original documents on the pretext of paper formalities for approving claim. However, the opposite parties repudiated the claim on 30.11.2019 arbitrarily and unilaterally. The complainant wrote letters to the opposite parties with request to reconsider the claim but all in vain. The opposite parties only transferred Rs.1,80,000/- through RTGS into account of the complainant, which was received by him under protest. According to the complainant, repudiation of the claim is totally illegal, arbitrary, capricious whish amounts to deficiency in service and unfair trade practice on the part of the opposite parties due to which the complainant and suffered mental pain, agony, harassment etc. The complainant sent a legal notice dated 22.06.2020 upon the opposite parties through his counsel Sh. Anshu Gupta, Advocate but no reply has been received. Hence this compliant whereby the complainant has prayed for issuing directions to the opposite parties to make the payment of claim amount along with compensation of Rs.1,00,000/- and litigation expenses of Rs.21,000/-.

2.                Initially, none turned up on behalf of the opposite parties despite issuance of notice through registered post on 05.08.2020 and as such, the opposite parties were proceeded against exparte vide order dated 09.10.2020. Thereafter, the opposite parties through Sh. Gurpreet Singh, Advocate appeared on 16.09.2021 and filed application for setting aside exparte order. Vide order dated 16.09.2021, the application was allowed with permission join the proceedings from the stage the complaint was pending at.

                   Thereafter, the opposite parties filed Revision Petition No.31 of 2022 before the Hon’ble State Consumer Disputes Redressal Commission, Punjab, Chandigarh against the order dated 09.10.2020 and 16.09.2021 and the Hon’ble State Commission vide its order dated 22.08.2022 remanded the case to this Commission for deciding the same on merits with direction to allow the petitioners/OPs to file written statements along with documents/evidence and also to the complainant to file replication and documents, if any, in support of their contentions.   

3.                The opposite parties filed their joint written statement and by taking preliminary objections, assailed the complaint on the ground of maintainability of the complaint; concealment of facts; bad for non-joinder of necessary parties etc. The opposite parties stated that the complainant concealed the fact that his wife Karamjit Kaur did not disclose about her sufferings from headache and HTN since 6-7 years. Cardomegaly since 21.08.2014 and she was taking treatment from Medivision Diagonostic Centre, Ludhiana and Mayyo Imaging & Diagnostic Centre. The same is prior to policy inception and the same was not disclosed in proposal form or thereafter till policy inception, rather she concealed the entire facts of her sufferings. As such as per policy terms 11.10 the policy holder/ deceased Karamjit Kaur played a fraud by way of misrepresentation and forfeiture would be dealt with in accordance with provisions of 45 of the Insurance Act, 1938 as amended from time to time. The complainant further concealed the fact that the opposite parties after receiving the claim form, the case of deceased was investigated and during investigation as per OPD slips of Sub Divisional Hospital at Raikot dated 15.07.2019 and 20.07.2019 the Life assured Karamjit Kaur was patient of Headache and HTN x 6-7 years. On further investigation the Radiograph Chest Report of Life assured Karamjit Kaur from Madivision Diagnostic Centre Ludhiana but officials of above said Diagnostic Centre denies having record prior to 2018 but orally verified the copies of diagnostic report of Life Assured Karamjit Kaur as correct and as per Radiograph Chest Report dated 21.08.2014 E/D Cardomegaly found and as per ultrasound report dated 17.04.2016 the liver of life Assured Karamjit Kaur was enlarged and Impression of Hepatonmegaly and Ascities found. As such, the claim was repudiated IS EADI/F vide letter dated 30.11.2019. Whereas at the time of purchasing the policy, the official of the opposite parties disclosed and filled the proposal form at the instance of complainant and the facts disclosed by the Life Assured in this policy. Proposal form was filled and Section D, which requires the medical information where in Section 3 of the said section the Life assured denied intentionally about her sufferings. The life assured signed the declaration (Section G) on that behalf and on the basis of said declaration the policy was issued. However, if any of the information provided in the proposal form or the same is incomplete or incorrect, we reserve the right to vary the benefits, which may be payable and, further, if there has been nondisclosure of a material Insurance Act fact, section 45 of the applies. Thus the opposite parties was led to issue the above policy on the basis of false information and concealment of material facts regarding preexisting disease which rendered the contract of insurance under the policy to be void ab- initio. Moreover, the policy in question is ULIP product.

                   On merits, the opposite parties reiterated the crux of averments made in the preliminary objections and facts of the case. The opposite parties have denied that there is any deficiency of service and have also prayed for dismissal of the complaint.   

4.                In support of his claim, the complainant tendered his affidavit Ex. CA in which he reiterated the allegations and the claim of compensation as stated in the complaint. The complainant also tendered documents Ex. C1 is the copy of insurance policy documents, Ex. C2 is the copy of death certificate of Karamjit Kaur,  Ex. C3 is the copy of letter dated 23.09.2019, Ex. C4 is the copy of letter dated 30.11.2019, Ex. C5 is the copy of letter dated 07.01.2020, Ex. C6 is the copy of letter dated 08.01.2020, Ex. C7 is the copy of letter dated 15.02.2020 of the complainant, Ex. C8 is the copy of postal receipt, Ex. C9 to Ex. C11 are the copies of letters dated 09.03.2020, 19.03.2020 and 09.06.2020 respective written by the complainant, Ex. C12 is the copy of certificate dated 22.06.2020 issued by the doctor of Life Care Hospital, Ex. C13 is the copy of legal notice dated 22.06.2020, Ex. C14 and Ex. C15 are the copies of postal receipts and closed the evidence.

5.                On the other hand, counsel for the opposite parties tendered affidavit Ex. RWA of Sh. Prashant Singh, Deputy Manager Legal of the opposite parties  and 2 along with documents Ex. OP1/A and Ex. OP1/B are the copies of OPD slips of Punjab Health Systems Corporation, Raikot, Ex. OP1/C, Ex. OP1/C2 and Ex. OP1/D are the copies of test reports, Ex. OP1/E is the copy of investigation report  dated 27.09.2019, Ex. OP1/F is the copy of letter dated 30.11.2019, Ex. OP1/G is the copy of insurance policy documents, Ex. OP1/H is the copy of welcome letter and terms and conditions of the policy, Ex. OP1/I is the copy of statement of transfer of amount and closed the evidence.

6.                We have heard the arguments of the counsel for the parties and also gone through the complaint, affidavit and annexed documents and written reply along with affidavit and documents produced on record by both the parties.

7.                Smt. Karamjit Kaur, wife of the complainant (hereinafter called as LA) obtained an insurance policy on 07.08.2017 having a coverage term of 10 years with coverage multiple of 10 on annual target term of Rs.90,000/- which was payable for a term of 5 years and the policy maturity date was 09.08.2027. The policy assured a minimum sum of Rs.9,00,000/- if the life assured expires during the subsistence of policy. Unfortunately, on 30.07.2019, the LA expired and a claim was lodged with the opposite parties. Vide letter dated 30.11.2019 Ex. C4 = Ex. OP1/F, the claim was repudiated by the opposite parties, the operative part of which reads as under:-

“This is with reference to the captioned death claim filed by you wherein the proposal form was signed on 07AUG2017 in pursuance thereof the policy was issued on 09AUG2017.

We refer to the proposal forms wherein late Mrs. Karamjit Kaur had given a declaration that he had made complete, true and accurate disclosure of all the facts and circumstances as may be relevant for the acceptability of the proposal form. However, the following questions in the proposal form have been answered as ‘NO’

3)      Have you ever been investigated/treated or diagnosed for any of the following? Check all that apply

A)      Chest pain, Heart Attack, Stroke, Any other heart condition

B)      High Blood Sugar, Diabetes, Hypertension or High Blood Pressure

E)      Any Stomach or Intestinal Disorder such as Recurrent Indigestion or Ulcers, Jaundice or Any Liver Disorder.

During the process of the evaluation of the claim and pursuant investigation therein, w e have come to know that late Mrs. Karamjit Kaur was suffering from Cardiomegaly, Hepatonmegaly and Ascities and Hypertension prior to signing the proposal form.

Therefore, it is evident that above noted information which was material to the expectancy of the Life Insured was incorrectly made/withheld in the proposal form, based whereon, the policy in question was issued.

We wish to draw your attention to the following clause of the policy terms and conditions:

11.10. Fraud, Misrepresentation and Forfeiture

Fraud, misrepresentation and forfeiture would be dealt with in accordance with provision of Section 45 of the Insurance Act, 1938 as amended from time to time.

Annexure 1

 

6. Life Insurance Policy can be called in question within 3 years on the ground that any statement of or suppression of a fact material to expectancy of life of the insured was incorrectly made in the proposal or any document basis which policy was issued or revived or rider issued, For this, the insurer should communicate in writing to the insured or legal representative or nominee or assignees of insured, as applicable, mentioning the ground and materials on which decision to repudiate the policy of life insured is based.

7. In case repudiation is on ground of mis-statement and not on fraud, the premium collected on policy till the date of repudiation shall be paid to the insured or legal representative or nominee or assignees of insured within a period of 90 days from the date of repudiation.

It is further pertinent to mention here that if, at the stage of underwriting, had the above stated facts been disclosed to us, the captioned policy would not have been issued. Hence the said non-disclosure goes to the very root of the contract and since our acceptance thereof was based on the misrepresentation, we are bound to treat the same as void ab initio.

Hence, In light of the above information, we are declining the death claim against the above mentioned policy for reason of non-disclosure/ suppression of facts material to the expectancy of the Life.”

8.                Thereafter, the opposite parties transmitted the amount of Rs.1,80,000/- being amount of annual premium received by the opposite parties to the complainant. The complainant requested for reconsideration of his claim but the same was also declined vide letter dated 08.01.2020 Ex. C6. The complainant also sent a legal notice dated 22.06.2020 Ex. C13 but could not get desired results.

9.                The repudiation of the claim is based upon the findings of investigation report Ex. OP1/E appointed and deputed during the course of settlement of the claim. During the investigation, various hospitals were checked by the investigator and summarized the complete investigation findings as under:-

“Investigation Details Findings to be mentioned in Brief (Point wise)

Late Mrs. Karamjit Kaur (LA) w/o Baldev Singh was permanent resident of Village Kalsian, Tehsil- Raikot, District- Ludhiana. LA was a household lady. LA was suffering from heart disease, liver disease, Hypertension and Diabetes from a long time. On 29/07/2019, LA felt strong pain in the chest at night and family members rushed her to Life Care Hospital in Raikot. Doctor told that LA has heart attack and advised us to get the tests done in Ludhiana. Family members took LA to Ludhiana and MRI of LA was done. After that LA was admitted in ICU of Life Care Hospital. On 30/07/2019, during the treatment LA died at around 08:00 pm. Cremation of LA was done on the next day i.e. on 31/07/2019 on the local cremation ground.

During investigation of the case at the residence of LA, we collect some Medical Papers and Test Reports of LA related to treatment from 2014 to 2019, which are attached with the report.

As per OPD slips of Sub Divisional Hospital at Raikot dated 15/07/2019 and 20/07/2019, LA was patient of Headache and HTN x 6-7 years.

As per treatment record of Life Care Hospital at Raikot, LA admitted in the hospital on 30/07/2019. LA was a known case of HTN and DM. LA expired on 30/07/2019 at around 08:15 p.m.

As per Radiograph Chest Report of LA dated 21/08/2014, E/O Cardiomegaly found.

As per ultrasound report of LA dated 17/04/2016, Liver of LA was enlarged and Impression of Hepatomegaly and Ascitis found.

Hence as per our investigation based on the above facts, findings are:

*Pre-ailment of LA found.

*Discrepancy in occupation and income of LA found.

*No discrepancy in date of death.

*No discrepancy in age of LA.

*No murder or suicide suspected.”

 

10.              It appears that on the basis of two radiography reports, chest report dated 21.08.2014 and an ultrasound report dated 17.04.2016, LA was declared to have been suffering from heart disease and liver disease prior to obtaining of the policy. These are just reports which require the findings to be clinically correlated by the treating doctor so to arrive at a final diagnosis qua the ailments. However, no report of any treating doctor/expert has been placed on record either by the investigator or thereafter during the course of proceedings in the present complaint, so to arrive at a definite conclusion with regard to pre-ailment of the LA. Even assuming that at the time of death, she was a known case of HTN and DM, still the caim cannot be repudiated treating these to be preexisting diseases. It is well settled that on account of non-disclosure of such general diseases, the genuine claim cannot be rejected.

11.              In this regard, reference can be made to Religare Health Insurance Company Ltd. Vs Subhash Chander Aggarwal in 2017(3) CLT 140 whereby it has been held by Hon’ble Punjab State Consumer Disputes Redressal Commission, Chandigarh that hypertension is a common disease and can be controlled by medication and it is not necessary that person suffering from hypertension would always suffer a heart attack. Further reference can be made to Tarlok Chand Khanna Vs United India Insurance Co. Ltd. 2012(1) C.P.J. 84 whereby it has been held by Hon’ble National Consumer Disputes Redressal Commission, New Delhi  that the onus to prove that the insured was suffering from pre-existing disease was on the insurer and if the insurer has not produced the expert opinion, the reasons for repudiation of the claim were held to be unjustified. A reference can be further made to Lakhwinder Singh and another Vs United India Insurance Company etc.  decided in Appeal No.29 of 2009 whereby it has been held by Hon’ble State Consumer Disputes Redressal Commission, U.T, Chandigarh that the maladies like diabetes, hypertension being normal wear and tear of the life cannot be treated as pre-existing diseases.

11.              Further in a case titled as Manmohan Nanda Vs United India Assurance Co. Ltd. and others 2022(I) CPJ 20 (SC) wherein the Hon’ble Supreme Court of India has observed as under:-

“(6)   The appellant’s argument that there is no hard and fast rule that every person with DM-II will necessarily have a cardiac disease merely because it is a risk factor holds water. A person who does not suffer from DM-II can also suffer from a cardiac ailment. He had disclosed his DM-II status for which he was under treatment. The ECG report and other tests also indicated normal parameters. Further, statins were a preventive prescription to prevent development of cardiac issues as DM-II is a risk factor, not because he had a cardiac ailment or hyperlipidaemia. Further, the examining physician was informed of the same before the policy was taken. Accordingly, there was no suppression of any material fact by the appellant to the insurer.

(7)     It was for the insurer to gauge related complications based on the information provided. The insurance company did not think that the medical and health condition of the appellant was such which did not warrant issuance of a medical policy. The insurance company therefore did not decline the proposal of the assured as a prudent insurer.”

Therefore, in our considered view, the repudiation of the claim on the basis of non-disclosure of pre-existing diseases such as hypertension could not have been made a ground to reject the claim and cancel the policy on this ground cannot be sustained in the eyes of law.  The insurance companies are required to be more liberal in their approach without being too technical. In this case, the complainant has raised a claim of Rs.9,00,000/-. The opposite parties have already refunded the amount of Rs.1,80,000/-. In the given set of above said facts and circumstances, it would be just and appropriate if the opposite parties are directed to pay Rs.9,00,000/- minus Rs.1,80,000/- to the complainant along with composite costs of Rs.10,000/-.

12.              As a result of above discussion, the complaint is partly allowed with direction to the opposite parties to pay Rs.9,00,000/- minus Rs.1,80,000/- to the complainant  within period of 30 days from the date of receipt of copy of the order failing which the opposite parties shall pay interest @8% per annum on the settled amount to the complainant from the date of order till its actual payment. The opposite parties shall further pay a composite cost of Rs.10,000/- (Rupees Ten Thousand only) to the complainant. Payment of costs shall be made within a period of 30 days from the date of the receipt of the copy of this order. Copies of order be supplied to parties free of costs as per rules. File be indexed and consigned to record room.         

13.              Due to huge pendency of cases, the complaint could not be decided within statutory period.

 

(Monika Bhagat)          (Jaswinder Singh)             (Sanjeev Batra)

Member                         Member                              President        

 

Announced in Open Commission.

Dated:14.09.2023.

Gobind Ram.