Chandigarh

DF-I

CC/88/2023

JYOTI CHAWLA - Complainant(s)

Versus

MAX LIFE INSURANCE COMPANY LIMITED - Opp.Party(s)

MOHIT SAREEN

01 Apr 2024

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-I,

U.T. CHANDIGARH

                                     

Consumer Complaint No.	:	CC/88/2023
Date of Institution	:	17/02/2023
Date of Decision	:	01/04/2024

 

1. Mrs. Jyoti Chawla, aged 49 yrs, W/O Late Shri. Vipin Chawla @Vipan Kumar Chawla S/O Satpal Chawla;

2. Ms. Arushi Chawla, aged 22 yrs, D/O Late Shri. Vipin Chawla @Vipan Kumar Chawla S/O Satpal Chawla;

     Both residents of House No.285, Near Sanatan Shiv Mandir, Sector 8, Panchkula, Haryana-134109

… Complainants

V E R S U S

1. Max Life Insurance Company Limited (Corporate Identity Number (CIN): U74899PB2000PLC045626), through its Managing Director & Chief Executive officer/Directors/ Authorized Signatories, having its Corporate Office at: 11th floor, DLF Square, Jacaranda Marg, DLF City Phase II, Gurugram, Haryana 122002.

    2^nd Address: Max Life Insurance Company Limited, Operations Center - 2^nd floor, 90C, Sector 18, Udyog Vihar, Gurugram 122015.

2. Max Life Insurance Co. Ltd, through its Branch Manager, at S.C.O No.36-38, Sector 8-C, Madhya Marg, Chandigarh-160018.

3. Axis Bank Limited (Corporate Identity Number (CIN): L65110GJ1993PLC020769), through its Managing Director & Chief Executive officer/Directors/Authorized Signatories having its Corporate Office at: 'Axis House’, C-2, Wadia International Centre, Pandurang Budhkar Marg, Worli, Mumbai 400025

4. Axis Bank Limited, through its Circle Nodal Officer at Plot No.149, 1^st Floor, Industrial Area, Phase-1, Chandigarh-160002.

… Opposite Parties

 

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

                                                                               

ARGUED BY	:	Sh. Sameer Mahajan, Advocate for complainants
	:	Sh. Rajneesh Malhotra, Advocate for OPs 1 & 2 (through VC)
	:	Sh. Gaurav Gupta, Advocate for OPs  3 & 4.

 

Per Pawanjit Singh, President

1. The present consumer complaint has been filed by Mrs.Jyoti Chawla and Ms. Arushi Chawla, complainants against the aforesaid opposite parties (hereinafter referred to as the OPs).  The brief facts of the case are as under :-

1. It transpires from the allegations as projected in the consumer complaint that in the month of November 2021, Sh.Vipin Chawla (husband of complainant No.1 & father of complainant No.2) during his lifetime had approached OP-3 for availing finance facility of loan against property. However, officials of OP-3 informed Sh.Vipin Chawla that buying Group Credit Life Insurance Policy from OP-1 is mandatory and necessary for sanctioning and disbursal of the loan to secure and protect financial interest of OP-3 against the loan liability and to cover any future contingencies in the event of death.  Accordingly, husband of complainant was left with no other option except to sign on dotted lines at the time of obtaining the policy and accordingly the policy namely “Max Life Group Credit Life Secure Plan” (hereinafter referred to as “subject policy”) (Annexure C-2) was issued by OP-1 on payment of single premium to the tune of ₹68,817.56 and the same was valid w.e.f. 9.11.2021 with reducing cover death benefit option and sum assured of ₹20,68,818/- with period of coverage of 96 months. Unfortunately, on 15.2.2022 the insured husband of the complainant suffered sudden cardiac arrest, as a result of which he was admitted in emergency department of Civil Hospital, Panchkula and was declared dead at 05:17 a.m. by the doctors.  Copies of medical certificate of cause of death, hospital record and death certificate are C-3 (colly.).  Thereafter complainant No.1 informed OP-1 qua the sudden death of her husband, Sh. Vipin Chawla (hereinafter referred to as “DLA”) and lodged claim by submitting necessary documents.  However, the claim was repudiated vide letter dated 31.8.2022 (Annexure C-4) by the OPs on the ground of material non-disclosure and mis-statement of facts by the insured, who was suffering from hypertension, postural hypotension, depressive disorder etc.  It is further alleged that, in fact, the DLA was in good health at the time of purchasing the subject policy and he died on account of sudden cardiac arrest.  It is further averred that as OP-1 has repudiated the genuine claim of the complainants without any reason, the said act of OPs amounts to deficiency in service and unfair trade practice. OPs were requested several times to admit the claim, but, with no result. Hence, the present consumer complaint.
2. OPs resisted the consumer complaint and filed their separate written versions
3. OPs 1 & 2 in their written version, inter alia, took preliminary objections of maintainability, concealment of material facts and cause of action.  However, it is alleged that the claim of the complainants was repudiated by the answering OPs on the ground of concealment of material facts at the time of purchasing the subject policy since he was suffering from past history of hypertension, postural hypertension, depressive disorder etc. and was undergoing treatment for the same. On merits, admitted that the subject policy was obtained to secure the loan amount. It is further alleged that as DLA was well aware that he was suffering from past history of hypertension etc. and the said fact was not disclosed by him, even in the proposal form and other documents, due to fundamental breach of the subject policy i.e. due to concealment of material facts by the DLA, claim of the complainants was repudiated.  On merits, the facts as stated in the preliminary objections have been reiterated. The cause of action set up by the complainants is denied.  The consumer complaint is sought to be contested.
4. OPs 3 & 4 in their written version, inter alia, took preliminary objections of cause of action, bad for non-joinder and misjoinder of parties and limitation.  However, it is admitted that the DLA has availed credit facility of ₹33,19,888/- by applying for loan and he died on 15.2.2022.  It is further alleged that the legal heirs of the borrower applied for insurance cover under the subject policy and their claim was repudiated by OP-1, who had received the premium under the policy, but, the answering OPs have no role with respect to the payment of claim by the complainants and till date the complainants have legal liability of ₹37,74,702/- towards the availed loan.  It is further alleged that in case the claim of the complainants is allowed, answering OPs have first charge over the said claim amount.  On merits, the facts as stated in the preliminary objections have been reiterated. The cause of action set up by the complainants is denied.  The consumer complaint is sought to be contested.
5. Despite grant of sufficient opportunity, rejoinder was not filed by complainant to rebut stand of OPs.

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, including written arguments.
   1. At the very outset, it may be observed that when it is an admitted case of the parties that OP-3 had sanctioned loan of ₹38,19,888/- in favour of the DLA, who is admittedly husband of complainant No.1 and father of complainant No.2, and an amount of ₹20,68,818/- out of the total loan amount was secured on payment of premium of ₹68,817.56 to OP-1 when the subject policy (Annexure C-2) was obtained by OP-3 i.e. master policyholder in the name of life assured member namely Vipin Chawla (DLA) and the DLA had died on 15.2.2022 due to heart attack, as is also evident from the death certificate (Annexure C-3) and the claim of the complainants, who are legal heirs of the DLA was repudiated by the OPs vide letter dated 31.8.2022 (Annexure C-4) on the ground of concealment of material facts by DLA at the time of obtaining the subject policy from OP-1, the case is reduced to a narrow compass as it is to be determined if OP-1 is unjustified in repudiating the genuine claim of the complainants and the complainants are entitled to the reliefs prayed for in the consumer complaint, as is the case of the complainants or if the OP-1 has rightly  repudiated the claim of the complainants and the consumer complaint of the complainants, being false and frivolous, is liable to be dismissed, as is the defence of the OPs.
   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 subject policy (Annexure C-2) and its terms and conditions (Annexure C-5), medical record of the DLA (Annexure C-3 Colly.) and the repudiation letter (Annexure C-4) and the same are required to be scanned carefully for determining the real controversy between the parties.
   3. Perusal of the subject policy (Annexure C-2) clearly indicates that the same was valid w.e.f. 9.11.2021 and was issued in the name of OP-3/Axis Bank Ltd. and the details of the member Vipin Chawla i.e. DLA, having death benefit option are given. 
   4. Perusal of the policy schedule (Annexure C-5) containing the terms and conditions indicates that under Part F 1.2 participation of the eligible member through the master policy holder, following procedure has been explained to be completed :-

“PART F

GENERAL TERMS AND CONDITIONS

xxx                   xxx                   xxx

1.2    Participation

1.2.1 An Eligible Member may apply to Us through the Master Policyholder by completing the following procedure:

i.  by submitting an enrollment form for membership and satisfactory evidence of insurability through the Master Policyholder to Us; and

ii. submission of reports based on the medical examination, as determined by Us, shall be required for all Eligible Members whose total proposed Sum Assured, combined with amounts already insured or proposed to be insured under other policies issued by Us, exceeds the Free Cover Limit, as determined by Us and as specified in the Schedule.”

Thus, one thing is clear from the aforesaid policy schedule that it was mandatory for OP-1/insurer to seek reports based on medical examination of the member before issuance of the subject policy.

5. Perusal of copy of medical certificate of cause of death (annexed at page 46 of Annexure C-3 Colly.) issued by the Medical Superintendent of Civil Hospital, Panchkula clearly indicates that the DLA has died on 15.5.2022 at 5:17 a.m. due to cardiac arrest i.e. natural death.
6. Another document having been relied upon by OPs 1 & 2 is the copy of discharge summary qua the DLA having been issued by Ojas Super Speciality Hospitality, Panchkula (annexed at page 45 of Annexure R-6 Colly.), which clearly indicates that the DLA was admitted in the said hospital on 3.9.2018 and was discharged on 4.9.2018 and the relevant portion of the same is reproduced below for ready reference:-

“DIAGNOSIS:-	#LEFT FIBULA DEPRESSION DISORDER ? UTI
CHIEF COMPLAINTS:-	GHABRAHAT VERTIGO IN MORNING TODAY BURNING  MICTURITION FREQUENCY OF MICTURITION.
CLINICAL HISTORY/ PROCEDURE:-	A 49 YEARS OLD HYPERTENSIVE MALE PRESENTED TO THE HOSPITAL WITH ABOVE COMPLAINTS.
HISTORY OF PAST ILLNES:-	HTN”

7. Annexure C-4 is copy of repudiation letter dated 31.8.2022 vide which the claim of the complainants was repudiated by OP-1. The relevant portion of the same is reproduced below for ready reference :-

        “xxx                 xxx                   xxx

However, as per available records with us, it has been confirmed that Late Vipin Kumar Chawla had past medical history of Hypertension, Postural Hypotension, Depressive Disorder, mild prostatomegaly, post-operative panic disorder prior to signing the Health Declaration Form. Had these medical conditions been disclosed to us at proposal stage we would not have issued the policy.

In the light of the above information, we are declining the death claim against the above-mentioned certificate of insurance for reason of material medical non-disclosure as described above.

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 assignee of insured, within a period of 90 days from the date of repudiation.

Hence, premium paid by Late Vipin Kumar Chawla of Rs.58,319/- (exclusive of service tax) shall be refunded to Axis Bank in Account No. 245010633007 by way of NEFT, being the master policyholder under the policy.”

8. The learned counsel for the complainants contended with vehemence that as it stands proved on record that the DLA has died due to heart attack, which otherwise has no relation with the previous ailment for which the DLA has taken treatment at Ojas Hospital, OP-1 has wrongly repudiated the claim of the complainants.
9. On the other hand, learned counsel for OPs 1 &2/insurer contended with vehemence that as it stands proved on record that prior to obtaining the subject policy, DLA had been suffering from “ghabrahat, vertigo, burning  micturition, frequency of micturition” and he had taken treatment from the Ojas Hospital where he remained admitted on 3.9.20218 and was discharged on 4.9.2018 and the said fact was never disclosed by him to them, the claim of the complainants was rightly repudiated by them.
10. However, there is no force in the contention of learned counsel for OPs 1 & 2 as perusal of the discharge summary (annexed at page 45 of Annexure R-6 Colly.), as discussed above, clearly indicates that the DLA was treated for “ghabrahat, vertigo, burning  micturition, frequency of micturition” in September 2018 and was having good heath after that and has died on 15.2.2022 due to cardiac arrest, as has also been opined by the Medical Superintendent in the medical certificate of cause of death, as discussed above, and the same has no relation with the previous ailment.
11. 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.”

12. Similarly, the Hon’ble National Commission in the 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 the 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."

13. Further, the Hon’ble National Commission in the case titled as 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.”

14. Not only this, even as per the terms and conditions of the subject policy, as referred in the policy schedule (Annexure C-5) it was made mandatory by OP-1/insurer for the participating eligible members before applying to OP-1 through master policy holder to complete the procedure of submission of reports based on the medical examination as determined by the insurer i.e. to complete other formalities, making it obligatory on the part of insurer/OP-1 to get the member medically examined and seek medical report and in the case in hand, despite of having the medical record of insured DLA with it, when OP-1 has decided to issue the policy to him, repudiation of the claim of the DLA is illegal as the said objection cannot be raised by OP-1/ insurer after the demise of the insured on the ground that he has concealed any material fact.  The learned counsel for the complainant has relied upon the judgment of the Hon’ble Apex Court in the case of Manmohan Nanda Vs. United India Assurance Co. Ltd. & Anr., 2022 (4) SCC 582 in which it was held as under :

“Consumer Protection Act, 1986 Section 21(9) Repudiation of mediclaim policy - Dismissal of Complaint on ground of non-disclosure of a pre-existing disease - Held, insurance company well aware of fact that insured was diabetic and was taking all necessary medication for preventing further complications and controlling the disease - Despite facts regarding medical record of insured, insurance company decided to issue policy to appellant - Thus, no suppression of any material fact by appellant to insurer - Acute myocardial infraction can occur in person who has no history of diabetes mellitus-II- Repudiation of policy by insurance company illegal and not in accordance with law……”

15. In view of the foregoing discussion and the ratio of law laid down above, it is clear that OPs 1&2/ insurers have not been able to connect the previous diseases/ailments with the cause of death of the DLA. Hence, it is unsafe to hold that OPs 1&2/ insurers were justified in repudiating/rejecting the claim of the complainants qua the subject policy and the present consumer complaint deserves to succeed. 
16. Now coming to the quantum of amount to be awarded in the instant case, since it is an admitted case of the parties that the policy had commenced w.e.f. 9.11.2021 and the DLA had died on 15.2.2022, as per the schedule of sum assured attached with subject policy (page 38 of Annexure C-2), the insurers/OPs 1 & 2 are liable to pay an amount of ₹20,22,344.84 (rounded off to ₹20,22,345/-) minus ₹58,319/-  (i.e. the amount of premium already refunded) = ₹19,64,026/- to the complainants alongwith interest and compensation etc. for the harassment caused to her. 

4. In the light of the aforesaid discussion, the present consumer complaint succeeds, the same is hereby partly allowed and  OPs 1 & 2 are directed as under :-

1. to pay ₹19,64,026/- to the complainants alongwith interest @ 9% per annum from the date of repudiation of the claim i.e. 31.12.2022 onwards.
2. to pay ₹40,0000/- to the complainants as compensation for causing mental agony and harassment;
3. to pay ₹10,000/- to the complainants as costs of litigation.

5. This order be complied with by OPs 1 & 2 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. It is, however, made clear that the aforesaid awarded amount shall be apportioned amongst the complainants in equal share i.e. in the ratio of 50:50 each.
6. It is also made clear that bank/financier (OPs 3 & 4) shall have first charge over the aforesaid awarded amount, to the extent the same is due to be paid by the complainants towards the discharge of loan liability, if any, of the DLA.
7. Since no deficiency in service or unfair trade practice has been proved against OPs 3 & 4, the consumer complaint against them stands dismissed with no order as to costs.
8. Pending miscellaneous application(s), if any, also stands disposed of accordingly.
9. Certified copies of this order be sent to the parties free of charge. The file be consigned.

01/04/2024 hg	Sd/- [Pawanjit Singh] President
	Sd/- [Surjeet Kaur] Member
	Sd/- [Suresh Kumar Sardana] Member