Chandigarh

StateCommission

A/238/2024

CANARA HSBC LIFE INSURANCE COMPANY - Complainant(s)

Versus

MRS. SUNITA - Opp.Party(s)

SANJEEV GOYAL & GAURAV BHARDWAJ

17 Jul 2024

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Appeal No.	:	238 of 2024
Date of Institution	:	25.06.2024
Date of Decision	:	17.07.2024

 

 

 

 

Canara HSBC Insurance Company Ltd. SCO No.3 First Floor, Madhya Marg, Chandigarh Sector 26, Chandigarh through its Authorized Signatory Harshita Chauhan, Senior Manager (Legal), available at Canara HSBC Life Insurance Co. Ltd. 139-P, Sector 44, Gurugram-122003

…Appellant/opposite party no.1

V e r s u s

1. Mrs. Sunita wife of late Sh. Jagdish Lal r/o #660, Trivedi Camp, Mubarakpur, SAS Nagar, Mohali (Pb.)

….Respondent No.1/complainant

2. Punjab National Bank, Branch Village Derabassi, District Mohali, through its Branch Manager.

 ….Respondent No.2/ opposite party no.2

BEFORE:

JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT MR. PREETINDER SINGH, MEMBER

Present:-  Sh.Gaurav Bhardwaj and Sh.Sanjeev Goyal, Advocates for the appellant.

JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT

M.A. No.579  of 2024 (Condonation of delay):-          

                   Alongwith this appeal, this application has also been filed by the applicant/appellant/opposite party no.1 for condonation of delay of 80 days (as per the office 82 days)  in filing the same. Arguments of the applicant on this application heard.

2.           For the reasons stated in this application, we are of the considered view that the applicant/appellant has been able to satisfy that there had been a sufficient cause for not preferring an appeal within the stipulated period. In this view of the matter, this application stands allowed and the delay of 80 days (as per the office 82 days)  in filing the appeal is condoned. Accordingly, this application stands dispose off. 

 

Appeal No.238 of 2024:-

3.           The appellant/opposite party no.1 has come up in this appeal assailing  the order dated 02.02.2024, passed by the District Consumer Disputes Redressal Commission-I, U.T., Chandigarh, whereby consumer complaint bearing no.901 of 2022 filed by the respondent no.1/complainant was partly allowed against it as under:-

“…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 Rs.10,18,726/- to the complainant (less the amount already paid, if any) alongwith interest @ 9% per annum from the date of repudiation of the claim i.e. 22.12.2021 onwards.
2. to pay Rs.50,000/- to the complainant as compensation for causing mental agony and harassment;
3. to pay Rs.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.

It is, however, made clear that the bank/financier (OP-2) shall have first charge over the aforesaid awarded amount, to the extent the same is due to be paid by the complainant towards the discharge of loan liability, if any, of the DLA.

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....”

4.           Before the District Commission, it was the case of the complainant that her late husband namely Sh. Jagdish Lal (hereinafter referred to as “LIFE ASSURED”), had availed home loan facility from OP-2/bank after completing all the formalities at the time of release of home loan amount of Rs.11,50,000/-. At that time, OP-2 had also offered him loan insurance policy (Annexure C-1) for the purpose of safeguarding repayment of installments of loan in case of death of the loanee.  At the time of sanction of loan, OP-2 was known as Oriental Bank of Commerce and after its merger with Punjab National Bank, OP-2 is doing business under the name and style of Punjab National Bank/OP-2.  OP-1/insurer is a joint venture of Canara Bank and PNB (formerly known as Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd.) and doing business in the field of insuring home loan. OP-2, while sanctioning home loan to loanee, made him a member of Master Policy issued to it by OP-1.  It was stated that OP-2 did not explain the terms & conditions nor had issued any membership certificate of the said policy nor his signatures were obtained. An amount of Rs.49,204.82 was charged by OP-2 by saying that bank has got the loan insured and the said premium amount was one time till the last installment is paid. The tenure of the loan was 9 years w.e.f. 31.12.2018 to 31.12.2027. At the time of obtaining loan,  “LIFE ASSURED”  had already retired from Govt. job and was 60 years of age.  It was averred that the Manager of OP-2 never called the  “LIFE ASSURED”  for medical checkup.  On 8.8.2020 at morning time,  “LIFE ASSURED”  faced breathing problem during COVID-19 and he was shifted to a private nursing home at Derabassi and due to non availability of oxygen and ventilator, he was shifted to GMCH-32, Chandigarh where he was detected with COVID-19 positive and unfortunately died on 12.8.2020. The cremation of  “LIFE ASSURED”  was performed as per guidelines of the Govt. prevailing at that time.  Even in the medical record issued by GMCH-32, it was specifically mentioned that the cause of death was shortness of breath as he was suffering from fever for the last five days. The “LIFE ASSURED”  had developed diabetes and CAD problem after the age of 55 years, but, he was normal thereafter and was taking treatment and was quite fit before his death.  Thereafter the complainant, being nominee of the  “LIFE ASSURED” , had applied for payment of the sum assured to pay the balance loan amount, but, OP-1/insurer had repudiated the claim vide email (Annexure C-5) on the ground that  “LIFE ASSURED”  was suffering from diabetes and CAD problem, which was not disclosed by him before obtaining the subject policy. Hence, consumer complaint was filed before the District Commission.
5.           In the reply filed, opposite party no.1, while taking preliminary objections regarding maintainability, cause of action, concealment of material facts and misrepresentation of facts, admitted that the  “LIFE ASSURED” availed home loan from OP-2 for total sum of Rs.11,50,000/- and got the said amount insured from the it vide subject policy after understanding its terms and conditions.  It was further alleged that  “LIFE ASSURED”  was required to provide answers with respect to his medical history and he had replied in ‘No’ under the column asking about any previous disease from which he was suffering.  It was stated that as the  “LIFE ASSURED”  has concealed material facts qua his previous ailment before obtaining the subject policy, there is fundamental breach of the terms and conditions of the subject policy and the claim of the complainant was rightly repudiated, especially when during investigation it was found that the  “LIFE ASSURED”  was suffering from diabetes since last 12 years and Coronary Artery Disease (CAD) since the year 2013.
6.           Despite service, none put in appearance on behalf of opposite party no.2, as a result of which, it was proceeded against exparte vide order dated 16.01.2023 by the District Commission.
7.           The contesting parties led evidence in support of their case.
8.           The District Commission after hearing the contesting parties and on going through the documents on record, partly allowed the complaint in the manner stated above. Hence this appeal has been filed by the appellant/opposite party no.1.
9.           We have heard the  counsel for the appellant at the preliminary stage, and scanned the material available on the record.
10.           At the time of arguments, counsel for the appellant has vehemently contended that since the insured at the time of taking the policy in question had concealed material fact qua  his previous ailment i.e. he was suffering from diabetes since last 12 years and Coronary Artery Disease (CAD) since the year 2013, which fact is proved from the treating hospital certificate is Annexure OP-4, the claim was rightly rejected by the appellant, yet, the District Commission fell into a grave error in partly allowing the consumer complaint, while holding to the contrary.          
11.           It is not in dispute that the cause of death of the insured  was not due to  diabetes and CAD problem but “COIVD 19” as he was admitted in the said hospital with the complaint of fever and shortness of breath, as is evident from the Treating Hospital Certificate, Annexure OP-4. Thus, even for the sake of arguments, it is presumed that the insured was suffering from diabetes and CAD problem, even then the appellant could not have repudiated the claim of the complainant because the appellant has failed to prove on record that the cause of death of the insured i.e. (COVID-19)/fever and shortness of breath was having direct nexus with the alleged disease(s) or that the insured died because of diabetes or CAD.  Our this view is supported by the principle of law laid down by the Hon’ble Supreme Court in Sulbha Prakash Motegaonkar v. LIC, 2015 SCC Online SC 1880. Relevant part of the said order is reproduced hereunder:-  

“………..The repudiation of the appellants' claim has been upheld by the National Commission and it is under these circumstances the appellants are before this Court.

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 spondilitis with PID with sciatica persuaded the respondent not to grant the insurance claim.

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.

Accordingly, we set aside the order passed by the National Commission and allow the appeal. The respondent will accept the claim made by the appellants within a period of four weeks from today and make the due payment…..”

12.           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.

13.           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.”

14.           In Lachman Sarup Vs. LIC of India, Revision Petition No. 42 of 2013 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.

15.           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.

16.           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.

17.           Similar view has been recently reiterated by the Hon’ble Supreme Court in Om Prakash Ahuja V. Reliance General Insurance Co. Ltd.| 2023 LiveLaw (SC) 509.
18.           The Hon’ble National Commission, under similar circumstances, in Life Insurance Corporation Of India Versus Dr. Nilam Hetalkumar Patel & 4 Ors., Revision Petition No. 1096 Of 2019 Decided On 20 September 2023 has recently held as under:-

“………..10. State Commission also relied upon judgment in P.Venkat Naidu Vs. Life Insurance Corporation of India IV ( 2011) CPJ 6 ( SC), which was upheld by the Supreme Court. Other case law relied upon by the State Commission was case of LIC Vs. Jyotsna Rawal, RP No. 864 of 2008 decided by the National Commission, relying on the judgment of Hon’ble Supreme Court in Sulbha Prakash Matogaonkar and Ors. ( supra) and case of Neelam Chopra Vs. LIC and Ors in RP No. 4461 of 2012. After taking note of various judgments of this Commission and Hon’ble Supreme Court, the State Commission concluded that “ …….It is very clear that the husband of original complainant no.1 was suf ering from major depression and he died due to heart attack. Thus, it cannot be said that there is any nexus between the ailment and the cause of death. Hence, the repudiation of the claim made by the LIC on the ground of non disclosure of material facts is not justified.” State Commission also duly considered various case laws cited by LIC in support of their contention that there was non-disclosure of material facts and even if there is no nexus with the disease and the cause of death of deceased, then also the LIC was entitled to repudiate the claim of the Complainant and observed as follows: “All the above cited cases are decided by the Hon’ble National Commission in the year 2014-2015 in which it was held that if there is non disclosure of material facts then nexus between the disease and the cause of death is not material. This pronouncement is now no longer a good law as the contrary view has been taken by the Honourable Supreme Court of India in the case of Sulbha Prakash case (supra), which was followed by the Honourable National Commission in the latest judgment which was delivered in December 2018 in the case of Reliance Nippon Life Insurance Co. Ltd. Vs. Yellapu Venkata.”

 

11. Accordingly, State Commission held that “……… if there is no nexus between the disease and the cause of death then the repudiation of the claim has been made by the Insurance company is not legal and valid. In the instant case, the deceased insured before taking the policies was suffering from major depression but he died due to cardiovascular arrest and therefore, the repudiation of the claim made by the LIC was not legal and valid” and upheld the order of the District Forum and dismissed seven appeals and also allowed the two Consumer Complaints.

 

12. We have carefully gone through the facts and circumstances of the case, orders of the State Commission, other relevant records, case laws relied upon by the parties / State Commission and rival contentions of the parties and are of the view that State Commission has correctly placed reliance on the judgment of Hon’ble Supreme Court in Sulbha Prakash Motogaonkar ( supra ) that as there is no nexus between the disease, information about which was not disclosed and the cause of death, hence the repudiation of the claim by OP Insurance Company is not correct….”

 

19.           It is therefore held that in the present case also, the act of the appellant in repudiating the genuine claim of the complainant is not justified, especially, when it has failed to prove any nexus of the disease with which the life assured  was allegedly suffering from, with  that of COVID-19 and such an act of the appellant, amounts to deficiency in rendering service, negligence and adoption of unfair trade practice. The District Commission was thus right in partly allowing the consumer complaint. 
20.           In view of the above discussion, it is held that the impugned order 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 and the same stands upheld.
21.           Consequently, this appeal stands dismissed at the preliminary stage, with no order as to cost.
22.           Application bearing no.580 of 2024 (stay) stands dismissed having been rendered infructuous.
23.           Certified copies of this order be sent to the parties, free of charge, forthwith.
24.           The concerned file be consigned to Record Room, after completion and the record of the District Commission-I, U.T, Chandigarh, after annexing the additional documents, if any, submitted before this Commission in this appeal, be sent back immediately.

 

Pronounced

17.07.2024

Sd/-

 [JUSTICE RAJ SHEKHAR ATTRI]

PRESIDENT

 

 

Sd/-

(PREETINDER SINGH)

MEMBER

Rg.