BEFORE THE KARNATAKA STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

BANGALORE (ADDL. BENCH)

DATED THIS THE 6^th DAY OF APRIL 2022

PRESENT

MR. RAVISHANKAR                           : JUDICIAL MEMBER

MRS. SUNITA CHANNABASAPPA BAGEWADI :      MEMBER

CONSUMER COMPLAINT NO. 402/2018

V/s

ORDER

MRS. SUNITA CHANNABASAPPA BAGEWADI, MEMBER

1.      This is a complaint filed by the complainant alleging deficiency in service on the part of the Opposite Party in not settling the claim of the complainant in a sum of Rs.53,35,129/- with interest along with Rs.10,000/- towards mental agony and Rs.10,000/- towards costs of litigation.

2.      The averments in the complaint are as hereunder;

It is the case of the complainant that she is the wife of one deceased Mr. Veeresh in his lifetime has obtained Max Life Insurance Policy bearing No.258122704 on 10.12.2014 and the insured made a complainant as a nominee to the policy.  The husband of the complainant was paying premiums regularly.  In the month of October 2016, the husband of the complainant fell ill and suddenly died due to Aspiration on 26.10.2016.  Being a nominee to the Opposite Party No.1 insurance policy, the complainant approached the insurance company for settlement death claim with relevant documents.  But, the Opposite Party No.1 insurance company repudiated the claim on the ground that the deceased had suppressed the earlier deceased.  But, the complainant alleged that after securing the medical test from the penal doctors, the deceased husband of the complainant had obtained the insurance policy.  The complainant sent a legal notice to the Opposite Party, but, the Opposite Party replied by denying the claim by assigning the same reason mentioned in the claim rejection letter.  Hence, the complaint.

3.      After service of notice, the Opposite Party Nos. 1 & 2 appeared through their counsel and filed their version.  As the objections filed by the Opposite Parties running in number of pages, we considered the required material version in the reasons as the point only involved in present case is whether the life assured has suppressed the material fact at the time of obtaining the insurance policy.  The Opposite Party No.1 further contended that life assured has knowingly willfully and prudently suppressed his past medical history of Bibrachial Amyotropy.  As per outpatient records of KLES Hospital dt.04.03.2014 and 06.03.2014 obtained during investigation it was revealed that the life assured had history of weakness in both upper limbs since two years.  Moreover, the said intentional non-disclosure of the proposal stage clearly indicates that the life assured had obtained such policy only with an intention to induce the respondent to issue the insurance policy on his life.  Hence, the life assured was breached the fundamental policy conditions. 

4.      The Opposite Party No.1 further contended that u/s 45 of Insurance Act, 1938, the insurance company can challenge the policy on the ground of concealment of material fact by the insured within three years from the date of commencement of the policy.  In the present case, the subject policy was issued on 10.12.2014 and the life assured was reported to have been died on 26.10.2016, i.e. within two years from the date of commencement of the subject policy.  The respondent have rightly, legally and in accordance with the terms and conditions of the policy repudiated the claim of the complainant on the ground of intentional non-disclosure of material facts by the life assured.  Hence, the Opposite Party is justifying in repudiating the claim and cancelling the policy and refunding of the premium amount of Rs.9,89,424=09.

5.      The Opposite Party No.2 in his version and contended that the insurance policy was offered to Late Veeresh as part of its extension of banking services to its customers and nothing more.  Thus this Opposite Party having intention to expand the business of the Opposite Party No.1 as claimed by the complainant is a figment of imagination of the complainant.  It is also pertinent to informed that the Opposite Parties are separate and distinct entities.  Thus the policy offered to late Veeresh is only a benefit offered by this Opposite Party in course of banking services to its customer.  It is yet again relevant to submit that mere issuance of policy would not make the insurer liable when the policy by itself was obtained by suppression of material facts.  As far as this Opposite Party is concerned, it has only rendered banking services to its customer and nothing more.  The contract of insurance was between Mr. Veeresh and the Opposite Party No.1. 

6.      Further, it is submitted that the payment of premium on the policy was made on 10.12.2014 i.e., Rs.5 lakhs when the policy was issued.  The second premium was due on 10.12.2015 which was paid after due date i.e., on 03.03.2016 i.e. Rs.2,57,000=30 that too by converting the annual mode of premium to half yearly mode.  The second half yearly premium was paid on 20.10.2016 i.e. for Rs.2,61,976/- i.e, a week before the demise of late Veeresh.  It is submitted that the complainant sought for the sume assured through this Opposite Party on 16.12.2016 and the same was forwarded to the Opposite Party No.1 since it is the Opposite Party No.1 who has to pay the insured amount.  However, the same was declined on the ground that the policy had lapsed.  The complainant then approached this Opposite Party for reconsideration of the claim which was then resent by this Opposite Party to the 1^st Opposite Party.  That on receipt of the same, the Opposite Party No.1 reiterates its stand and declined the death claim on the ground that the insured Mr. Veeresh had suppressed his state of health while availing the policy i.e, material medical non disclosure. 

7.      This Opposite Party submits that it is no doubt that the insured Mr. Veeresh was referred to a panel of doctors for medical test.  However, the said tests are conducted only to know the general health of the person and not to find out regarding some ailments which would not be visible during general medical tests.  Mr. Veeresh was suffering from Type 2 diabetes Mellitus, bibrachial amyotrothic and neuralgic amyotrophy since March 2014 i.e. prior to signing of the proposal form on 12.12.2014.  Thus it threadbare brings forth that Mr. Veeresh did not disclose his illness as required in the proposal form in the beginning itself.  Furthermore, immediate representations are made by the 2^nd Opposite Party to the 1^st Opposite Party on the claim settlement with an intend to provide quality service.  However, in cases where the customer himself is at fault i.e, he has misrepresented while taking the policy, this Opposite Party bank cannot do much since, the insurance contract between the customer and the 1^st Opposite Party seeks about various clauses which could lead to repudiation of claims.  The Opposite Party submits that it is not liable to pay a sum of Rs.53,35,129/- with interest to the complainant towards death claim of Mr. Veeresh as claimed by the complainant. 

8.      The complainant files affidavit evidence and marked documents at Ex.C-1 to C-12.  The Opposite Party No.1 files affidavit evidence and marked documents at Ex.R-1 to R-12.  Opposite Party No.2 neither filed affidavit evidence nor marked any documents.  Heard the arguments of both counsels.

9.      On perusal, the following points will arise for our consideration;

(i)       Whether the complaint is deserves to be allowed?

            (ii)      What order?

10.    The findings to the above points are;

                   (i)       Affirmative

                   (ii)      As per final order

REASONS

11.    We have gone through the complaint, objections and documents produced by both parties, we noticed that the policy is not in dispute.  It is not the case of the Opposite Parties that the premium has not been paid nor it is the case of the Opposite Parties that the policy is not valid.  The Opposite Parties contended that the second premium was due on 10.12.2015 which was paid after due date i.e. on 03.03.2016 at Rs.2,57,000=30 and second premium was paid on 20.10.2016 for Rs.2,61,976/- a week before the demise of late Mr. Veeresh/life assured.  The only crucial point involved in the present case is that at the time of obtaining the policy the life assured/husband of the complainant has suppressed the material facts regarding his health for which the life assured concealed in KLES Hospital, Belagavi as the outpatient before filing the proposal form. 

12.    The Opposite Parties have relied on number of documents in their defence and also relied number of judgements passed by Hon’ble Supreme Court of India and Hon'ble National Consumer Disputes Redressal Commission to prove that the life assured was consulted with complaints of progressive upper limb weakness right & left (Bibrachial Amyotropy)  in KLES Hospital on 04.03.2014 and 06.03.2014.  However, to establish and to come to the conclusion whether really there was suppression of material facts with regarding to his health.  We have relied on the documents produced by the Opposite Party No.1, the outpatient history Ex.R-5 will throw the light on the contention taken by the Opposite Parties and repudiated the claim of the complainant.  After going through the proposal form Ex.C-2 and MSR Hospital records produced by both the parties under Max Life Gain Policy bearing No.258122704wherein under the heading questions and clauses No.3 (a) to (p) to which life assured has answered are being shown and the answers to questions of clauses mentioned as “ NO ”.  The another document of MSR Hospital lab report and CBC report, we noticed that there is no life threatened disease to the life assured.  Hence, after going through the documents in the “Course in the hospital”, the discharge summary dt.26.10.2016 Ex.C-5 it is mentioned as

“patient was admitted in MICU.  Necessary investigations were done.  Patient was treated conservatively with oxygen support, nebulizer.  At around 12.00 a.m, the patient suddenly became unresponsive to palnful stimulus/oral communication BP not record able and patient started desaturating.  Peripheral and central pulsations not feet CR was stated and continued injection Atropine given emergency intubation was done and breaths were given.  Inspite of the above efforts, patient could not be resuscitated back.  Pupils were dilated and fixed ECG shows flat line.  Patient was declared dead at 1.00 a.m. on 26.10.2016.”

13.    Per contra the Opposite Party No.1 produced some documents of Department of Neurology of KLES Dr. Prabhakar Kore Hospital, Belagavi outpatient record of deceased Mr.Veeresh dt.04.03.2014 and 06.03.2014 in which the life assured was consulted with complaints of progressive upper limb weakness right and left much prior to submitting the proposal form.  However, the Opposite Party No.1 produced this document and proposal form was submitted by the deceased life assured on 12.12.2014 after nine months.  The investigation report produced by the Opposite Party No.1 shows that the life assured suffering from Bibrachial Amyotropy but the death of the life assured occurred on 26.10.2016 by “aspiration”.  From 06.03.2014 to 26.10.2016 there was no any document putforth before us to show that the life assured had taken any treatment as inpatient in KLES Hospital, Belagavi or any other hospital for the said disease Bibrachial Amyotrop.  The life assured has produced one document that MSR hospital lab report dt.11.12.2014 shown that the tests were done before one day of submitting the proposal form and the lab report reveals no any life threatening problem in the health of life assured.  Moreover, there is no any affidavit from doctors of KLES Hospital to show that before taking the policy, the complainant suffered from such diseases.  Moreover, as per the document submitted by the complainant from the insurance company attaining statement for death claim form ‘ C ’ general opinion of Dr. E.T. Pranith King, Chief Medical Officer, In Column No. 4 & 5 immediate cause of death and underlying cause of death shows as aspiration.  Therefore, the Opposite Parties failed to establish that the complainant was taken treatment for Bibrachial Amyotropy from 04.03.2014 to 26.10.2016 prior to obtaining the policy.

14.    The life assured consulted at KLES Hospital on 04.03.2014 & 06.03.2014 but, there is no any lab report or any test report and also there is no any document to show about his treatment.  Moreover, before issuing the policy, the deceased was referred to the panel of doctors for medical tests.  We have also gone through Dr. E.T. Pranith Singh statement we can noticed that the death of the life assured was occurred due to aspiration not by Bibrachial Amyotropy.  Hence, Opposite Parties have failed to establish evidence except documents of KLES Hospital outpatient consultation and cause for aspiration and cause of death for the aspiration.  The insurance company has right to seek details regarding medical condition of proposer person and on the consideration of medical report the insurer satisfied about the medical condition of proposal and there is no risk of pre-existing disease and on such satisfaction it was issued the policy.  Thereafter contended that there was a pre-existing disease being made by the insured and for that reason repudiated the claim.  Once the policy has been issued after assessing the medical condition of the insured, the insured cannot repudiated the claim that pre-existing disease which was not disclosed by insured in proposal form.  Moreover, the Opposite Party No.1 contended in his objection that u/s 45 of Insurance Act, 1938, the insurance company can challenge the policy on the ground of concealment of material fact by the insured within three years from the date of commencement of the policy.  In the present case, the subject policy was issued on 10.12.2014 and the life assured was reported to have been died on 26.10.2016, i.e. within two years from the date of commencement of the subject policy.  The respondent have rightly, legally and in accordance with the terms and conditions of the policy repudiated the claim of the complainant on the ground of intentional non-disclosure of material facts by the life assured.  Hence, in the present case the repudiation of the policy by the insurance company was illegal and not in accordance with law.  On perusal of the policy, we do not find any such conditions in the policy.  Hence, this contention of the Opposite Party No.1 is not acceptable and believable.  

15.    Perused the entire documents, we noticed that the life assured has taken the policy through Opposite Party No.2 bank, it has rendered only banking services to its customers.  The policy contract is between the deceased and the Opposite Party No.1 only.  Moreover, there is no any allegation by the complainant against the Opposite Party No.2 and the Opposite Party No.2 also forwarded the claim of the complainant to the Opposite Party No.1 immediately.  Hence, the Opposite Party No.2 is a formal party in this complaint.  Hence, the complaint against the Opposite Party No.2 is dismissed.  Hence, the following;

06.04.2022

ORDER

The complaint is allowed.

The Opposite Party No.1 is directed to pay the guaranteed death benefit of Rs.53,35,129=91 along with interest at 6% p.a. from the date of repudiation of the claim i.e. 27.06.2017, till realization to the complainant after deducting Rs.9,89,424=09 which was already paid by the insurance company to the complainant.

Further, the Opposite Party No.1 also directed to pay a sum of Rs.25,000/- towards costs of litigation.

Forward free copies to both the parties. 

                                                Sd/-                                                             Sd/-

                                          MEMBER                                           JUDICIAL MEMBER

KCS*