STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

PNB Met Life India Insurance Co. Ltd., First Floor, Techniplex 1, Techniplex Complex, Off Veer Savarkar Flyover, Goregaon West, Mumbai 400062, Maharashtra through its Chairman.

…Appellant/OP No.1

V e r s u s

1. Mrs. Kusum Lata w/o Sh. Ramesh Kumar Garg, House No.2011, Sector 45-C, Chandigarh.

….Respondent No.1/complainant

2. Punjab National Bank, SCO No.809, NAC, Manimajra, UT, Chandigarh

….Respondent No.2/OP No.2

ARGUED BY:

Sh.Rajesh Sabharwal, Advocate, alongwith Sh.Manpreet Singh Kanda, Advocate for the appellant.

Sh.Mashwinder Singh, Advocate for the respondent No.1

Respondent No.2 exparte vide order dated 13.03.2024.

PER RAJESH K. ARYA, MEMBER

                   The opposite party no.1/appellant has assailed the order dated 01.01.2024 passed by the District Commission-I, U.T., Chandigarh (in short the District Commission), whereby the consumer complaint bearing no.434 of 2022, filed by the complainant/respondent no.1 was partly allowed against it in the following manner:-

“…In the light of the aforesaid discussion, the present consumer complaint succeeds, the same is hereby partly allowed and OP-1 is directed as under :-

1. to pay the sum insured of ₹30.00 lacs out of which ₹20,61,189.64 will be paid to OP-2/bank whereas the balance amount of ₹9,38,810.36 will be paid to the complainant alongwith interest @ 9% per annum from the date of repudiation of the claim i.e. 17.3.2021 onwards
2. to pay ₹50,000/- to the complainant as compensation for causing mental agony and harassment;
3. to pay ₹10,000/- to the complainant as costs of litigation.

This order be complied with by OP-1 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.

Since no deficiency in service or unfair trade practice has been proved against OP-2, the consumer complaint against it stands dismissed with no order as to costs.....”

2.           The District Commission noted down the following facts of the consumer complaint:-  

“……It transpires from the allegations as projected in the consumer complaint that Ramesh Kumar Garg, deceased husband of the complainant had taken loan of ₹9,97,300/- and ₹30.00 lacs from the Punjab National Bank (OP-2) and he was included for insurance coverage under the Met Loan & Life Suraksha Policy No.00000299 (Group Policy) (hereinafter referred to as “first policy”) with sum assured of ₹9,97,300/- and policy No.0000653 (Group Policy) (hereinafter referred to as “subject policy”) with sum assured of ₹30.00 lacs and copies of the insurance certificates are Ex.C-1 and Ex.C-2 respectively. On 5.12.2020, husband of complainant was admitted to Govt. Medical College & Hospital, Sector 32, Chandigarh where he was tested and found COVID positive and on 13.12.2020 he died in the said hospital. Copy of the death certificate and certificate of cause of death are Ex.C-3 & Ex.C-4. Immediately after death of her husband, complainant informed the OPs about the same and requested for settlement of claim.  OP-1 processed the claim and made payment of claim pertaining to first policy, but, denied the claim with respect to the subject policy on the ground of non-disclosure of essential facts qua suffering from Leukemia by the deceased before obtaining the policy. Copies of the repudiation letters are Ex.C-5 & Ex.C-6. Thereafter the complainant applied for re-examination of claim (Ex.C-7), but, the same was also denied by the OP (Ex.C-8).  At the time of issuance of the policy, deceased life assured, Ramesh Kumar Garg was hale and hearty and the OP has wrongly denied the claim of the complainant. The complainant had also approached the office of the Insurance Ombudsman vide application (Ex.C-9) who has also rejected the claim vide order dated 3.12.2021 (Ex.C-10).  Till date, OP has failed to give any proof that the husband of the complainant was having any pre-existing ailment. The complainant has regularly been paying the monthly installments of ₹30,500/ since the death of her husband. Even the OPs did not get the husband of the complainant medically examined through the authorised doctor which was otherwise compulsory and the repudiation of the claim of complainant at this stage by OP-1/ insurer 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.…….”

3.           Reply filed by opposite party no.1 was noted down by the District Commission as under:-

“………OP-1 resisted the consumer complaint and filed its written version, inter alia, taking preliminary objections of maintainability, concealment of facts and cause of action.  However, it is admitted that the subject policy was obtained by the deceased husband of the complainant in addition to another policy regarding which her claim was settled.  It is further alleged that the present claim of the complainant was denied on account of concealment of material facts by the deceased life assured (DLA) as he was suffering from various ailments prior to the purchase of the subject policy and the investigator found during investigation that the DLA was suffering from cancer since 3-4 years and was also diabetic from a long time before the issuance of the subject policy.  It is further alleged that the complainant has also approached the Insurance Ombudsman where her claim was also rejected. As the DLA has not disclosed about the pre-existing disease which he was suffering even at the time of purchasing the subject policy, the claim of the complainant was rightly repudiated by the answering OP. On merits, the facts as stated in the preliminary objections have been reiterated. The cause of action set up by the complainant is denied.  The consumer complaint is sought to be contested.

4.           When opposite party no.2  did not turn up before the District Commission, despite proper service, it was proceeded against ex-parte vide order dated 31.1.2023
5.           In the rejoinder filed, the complainant reiterated all the averments contained in her complaint and controverted those of the opposite party no.1.
6.           The contesting parties led evidence in support of their contentions before the District Commission.
7.           The District Commission after hearing the contesting parties and perusing the record partly allowed the consumer complaint vide order dated 01.01.2024 in the manner stated above  against opposite party no.1. However, complaint against opposite party no.2 was dismissed by the District Commission holding no deficiency in service on its part.
8.           Feeling aggrieved of the order impugned, this appeal has been filed by the  opposite party no.1/appellant.
9.           None put in appearance on behalf of respondent no.2 despite due service, as a result of which, it was proceeded against exparte vide order dated 13.03.2024.
10.           We have heard the contesting parties and have scanned the material available on record.
11.           The moot question which falls for consideration in this case is as to whether, the appellant was right in rejecting the claim of the insured on the ground that during investigation, it was found by the investigator that the insured  was suffering from cancer since 3-4 years and was also diabetic from a long time before the issuance of the subject policy or not?. It may be stated here that it is not in dispute that the deceased husband of respondent no.1 namely Ramesh Kumar Garg (in short the insured) had obtained two loans from respondent no.2, which were insured by  the appellant vide the policies in question with sum assured of Rs.30.00 lacs. It is also an admitted fact that on 13.12.2020, the insured had died at the Govt. Medical College & Hospital, Sector 32, Chandigarh due to cardio pulmonary arrest and COVID-19, which fact is clearly coming out from death certificate (Annexure C-3) and the medical certificate cause of death (Annexure C-4).  However, on the other hand, the medical record obtained by the appellant  through its investigator (Annexure R-7) indicated that the insured was earlier suffering from Leukemia. Be that as it may, from the death record of the insured, it is proved that the cause of his death was not Leukemia but “Cardiopulmonary Arrest” and “COIVD 19” meaning thereby that there is no nexus of death of the insured with the alleged pre-existing ailment. 
12.           It is also significant to mention here that perusal of the policy in question reveals that  there is no exclusion clause  contained therein qua rejection of claim for non-disclosure of any pre-existing disease. Thus, in this view of the matter also, the appellant has failed to justify the stand taken by it,  qua repudiation of the claim of respondent no.1.
13.           Even otherwise, as stated above, from the death record of the insured, it is proved that the cause of death of the insured was not Leukemia but he died on account of “Cardiopulmonary Arrest” and “COIVD 19” which had no nexus with each other. Thus, on this ground also, the appellant was not justified in repudiating the claim of respondent no.1.  In  Sulbha Prakash Motogaonkar and Others Vs. Life Insurance Corporation of India and Others, 2021 13 SCC 561, the Hon’ble Supreme Court has observed that if concealment is of such a nature that it has no nexus with the disease diagnosed by the insured, the insurance company cannot repudiate the claim. Relevant part of this order is reproduced below: - 

“6.……. The death of the insured due to ischaemic heart disease and myocardial infarction had nothing to do with his 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.           The Hon’ble Supreme Court in Sulbha Prakash Motegaonkar & Ors. Vs. LIC of India [Civil Appeal No.8245 of 2015] decided on 5.10.2015, wherein,  although it was proved that the insured therein had concealed regarding his pre-existing disease but he died on account of some other reason, allowed the consumer complaint while holding that the disease from which the insured had died has no nexus with the pre-existing disease. Relevant part of the said order is reproduced hereunder:-

“…..We are of the opinion that the 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 his lumbar spondilitis 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…….”

15.            In Life Insurance Corporation of  India Vs. Jyotsna Rawal, Revision Petition No. 864 of 2018 decided on 08.05.2018, also the Hon’ble National Commission, New Delhi,   held as under :

8.       In this context, I would like to rely upon the decision of Hon'ble Supreme Court in Civil Appeal No.8254 of 2015 in the case of Sulbha Prakash Motegaonkar & Ors. Vs. Life Insurance Corporation of India, decided on 05-10-2015. This was the case where the deceased died due to Ischemic Heart disease and myocardial infarction. There was a concealment of lumbar spondylitis with PID with sciatica and, therefore, the insurance company repudiated the claim. Hon'ble Supreme Court held that it was not the case of insurance company that the deceased was suffering from life threatening disease which could or did cause death of the insured. The Court observed as below:

"We are of the opinion that the 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 ischemic heart disease and myocardial infarction had nothing to do with his 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.

16.           In Neelam Chopra Vs. Life Insurance Corporation of India and Ors, Revision Petition No. 4461 of 2012 decided on 08.10.2018, the Hon’ble National Commission, New Delhi,   held as under :

“13.    From the above observations of the Hon'ble Supreme Court, it is clear that suppression of any information relating to pre-existing disease if it has not resulted in death or has no direct relationship to cause of death, would not completely disentitle the claimant for the claim.”

17.           In Lachman Sarup Vs. LIC of India, Revision Petition No. 42 of 2012 decided on 04.02.2019, the Hon’ble National Commission, New Delhi,   held  as under :

7………..Even if it is presumed for the sake of arguments that she had not succumbed to the injuries which she sustained when she fell from the stairs, the fact remains that the claim could not have been denied unless it was shown that she had died on account of suffering from Kochi's Chest. No material has been placed before this Commission to show that Kochi's Chest  by itself was a life threating disease even at the time when the deceased insured is alleged to have died. The onus was upon the insurer to prove either that the deceased insured had died on account of she suffering from Kochi's Chest or that Kochi's Chest was by itself a life threating disease. Therefore, relying upon the decision of the Hon'ble Supreme Court in Sulbha Prakash (supra),  I hold that the repudiation of the claim was not justified.

18.           In Bajaj Allianz General Insurance Co. Ltd. Vs. Usha P Joshi and Ors., First Appeal No. 48 of 2012 decided on 01.12.2019, the Hon’ble National Commission, New Delhi,   observed as under:

“13.   The Appellant has failed to show that diabetes, hypertension and angina had any nexus with ‘SYNCOPE’ for which the respondent was treated and the claim put up.”

18.    The appellant, however, has failed to bring to my notice any proved fact in support of the contention that there was suppression of any material information or concealment of a pre-existing disease which had the nexus with the disease for which the respondent/complainant was treated in USA and for which she had put up her claim.  It is noteworthy that the present claim is under ‘travel secure policy’ to redeem the insured for the expenses for the treatment of an ailments abroad. The appellant has failed to prove that the ailment with which the respondent/complainant had taken treatment while in USA had any nexus with her earlier condition of diabetes or two/three fainting episodes or hypertension etc. and that she had deliberately concealed her condition of “SYNCOPE” for which she was treated in USA.

19.           In Pratibha Bevinal Vs. Metlife India Insurance Co. Ltd., Consumer Complaint No. 88 of 2011 decided on 07.10.2022 the Hon’ble National Commission, New Delhi,   held as under :

7………This Commission in Revision Petitions (supra) has also been guided by this judgement of the Hon'ble Supreme Court and these orders have attained finality. In the instant case, the  OP 's ground for repudiation of the policy is the concealment of a heart condition and diabetes mellitus. However, the cause of death of the DLA is a road accident due to rash and negligent driving by a motor cyclist. I am, therefore, of the view that the matter is squarely covered by Sulbha Prakash Motegaonkar (supra) and therefore the complaint is liable to succeed.

20.           In view of the principle of law laid down by the Hon’ble Supreme Court and also the Hon’ble National Commission, New Delhi, in the above said cases and considering that there was no nexus between the Leukemia and cause of death of the insured on account of “Cardiopulmonary Arrest” and “COIVD 19, we are of the considered view that repudiation of the claim of the respondent no.1 by the appellant was not justified. The District Commission was also right in holding so.            
21.           Under these circumstances, we are of the considered opinion that the District Commission was right in partly allowing the consumer complaint while holding that rejection of the claim by the appellant lodged by the respondent no.1 amounts to deficiency in rendering service on the part of the appellant.
22.           In our considered opinion, the order impugned passed by the District Commission, being based on the correct appreciation of evidence and law on the point, does not suffer from any illegality or perversity, warranting the interference of this Commission. Resultantly, this appeal being devoid of merit is dismissed with no order as to cost.
23.           Pending application(s) if any stands dispose of, accordingly.
24.           Certified Copies of this order be sent to the parties free of charge forthwith.
25.           File be consigned to Record Room after completion.

Pronounced

12.06.2024

[RAJ SHEKHAR ATTRI]

PRESIDENT

[RAJESH K.ARYA]

MEMBER

Ad