Date of Filing 05.04.2023

                                                                                                       Date of Disposal: 21.11.2023

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION

THIRUVALLUR

BEFORE TMT. Dr.S.M. LATHA MAHESWARI, MA. ML, Ph.D (Law),                                    …….PRESIDENT

               THIRU.P.VINODH KUMAR, B.Sc., BL,                                                                           ……MEMBER-I

CC.No.29/2023

THIS TUESDAY, THE 21^th DAY OF NOVEMBER 2023

Mrs.T.Jeevitha,

W/o.Late B.C.Anand Pratap,

F-11, 2^nd Floor, Rail Nagar,

Koyambedu, Chennai 600 107.                                                              ......Complainant.

                                                                        //Vs//

M/s.Kotak Mahindra Life Insurance Company Limited,

Rep. by its Managing Director,

Having its registered office at

Kotak Towers, 7^th Floor,

Zone-IV, Building No.21,

Infinity Park, Off Western Express Highway,

Gurgaon Mulund Link Road,

Malad East, Mumbai 400 097.                                                             …..Opposite party.

Counsel for the complainant                                       : Liberty Law Associates.

Counsel for the opposite party                                   : Mr.B.Sathish Kumar, Advocate.

This complaint coming before us on various dates and finally on 07.11.2023 in the presence of Liberty Law Associates counsel for the complainant and Mr.B.Sathish Kumar, counsel for the opposite party and upon perusing the documents and evidences of both sides this Commission delivered the following:

ORDER

PRONOUNCED BY THIRU.P.VINODH KUMAR, MEMBER-I

1. This complaint has been filed by the complainant u/s 35 of the Consumer Protection Act, 2019 alleging deficiency in service against the opposite party with regard to repudiation of insurance claim of the complainant and direct the opposite party to pay a sum of Rs.50,00,000/- being the sum assured together with interest at the rate of 12% per annum from the date of complaint till the date of payment along with cost of the proceedings.

Summary of facts culminating into complaint:-

2. It is the case of the complainant that her husband Late B.C.Anand Pratap subscribed for a life insurance policy from the opposite party bearing Policy No.70139833 dated 11.02.2019 for a basic sum assured of Rs.50,00,000/- under KOTAK e-Term Plan –UIN-107N104V01 Client ID – 66950766. It was submitted that her husband had undergone the necessary and mandatory medical tests and check up by the opposite party’s designated Doctors as per the instructions of the opposite party.  Thereafter issued the policy with life insurance cover with an extra premium and the reason for revised plan was Anaemic and personal medical history of Asthma.  The policy term was for 16 years and the monthly premium payable was Rs.958/- per month commencing from 11.02.2019. The insured was regularly paying the insurance premium.  The complainant was the nominee under the policy.  The sum assured for death claim was Rs.50,00,000/-. It was further submitted that her husband fell sick on 19.03.2021 with liver problem and was admitted in Saveetha Medical College for treatment.  He was hospitalized for 16 days from 19.03.2021 to 03.04.2021 and discharged on 03.04.2021 since his position was improving and as such desired to continue further treatment if absolutely necessary at any other local hospital but, unfortunately her husband expired on 03.04.2021 due to cardiac arrest.  After intimating about the death of her husband to the opposite party the complainant had submitted the claim enclosing the required documents to the opposite party's Branch Office at Padur, Ambattur, Chennai on 26.04.2021. In spite of providing all the additional documents and repeated follow up with the local officials of the opposite party, the complainant was given a static reply that the claim was under process. That the Opposite party's claims Department informed her vide letter dated 12.08.2021 that after investigation, a resolution would be provided by 25.08.2021. All of a sudden vide letter dated 23.08.2021 Grievance Desk advised the complainant to take up the matter with their Grievance officer. That vide letter dated 10.11.2021 received by the complainant on 14.12.2021 the opposite party repudiated her genuine claim stating that her late husband was suffering from history of Corneal section PHACO along with Hepatic Steatesis Grade-1 and the said information had not been disclosed by the life assured in the proposal form.  That Corneal Section PHACO is an EYE RELATED ISSUE and Hepatic Steatesis Grade 1, which as per medical studies and as understood by common man was a mild Hepatic Stetosis (grade 1 and grade 2 hepatic stetosis) that usually does not cause symptoms or complications. The accumulation of fat in the liver is small and does not lead to inflammation of it. Thus it is very clear that the real cause of death of her husband was due to Cardiac Arrest and not due to the alleged non disclosed reasons as mentioned in the repudiation letter. The death was due to natural cause and there was no nexus between the cause of death and the alleged non-disclosure. Hence the complainant issued a legal to the opposite party on 28.12.2021 objecting to the untenable and alleged reasons for repudiation of her legitimate claim. However, the opposite party sent a reply reiterating the same untenable reasons on 29.01.2022.  Thereafter the complainant approached the Insurance Ombudsman on 28.02.2022 to redress her grievance. However, the Insurance ombudsman did not allow the complaint stating that there is no scope to intervene in the Insurer's decision of repudiation of death claim under the subject policy No. 70139833 with liberty to the complainant to approach any other appropriate Forum/Court against the insurer.  The opposite party is guilty of having committed Unfair Trade Practice and deficiency in service as defined under the Consumer Protection Act, 2019 by repudiating the legitimate claim of the complainant. The deficiency in service and Unfair Trade Practice adopted by the opposite party has caused great mental agony, hardship and suffering to the complainant and the opposite party is liable to compensate her for the same. Thus aggrieved by the act of the opposite party the present complaint was filed to direct the opposite party to pay a sum of Rs.50,00,000/- being the sum assured together with interest at the rate of 12% per annum from the date of complaint till the date of payment along with cost of the proceedings.

The crux of the defence put forth by the opposite party:-

3. The opposite party filed written version disputing the complaint allegations contending interalia that the Hon’ble Commission has no pecuniary jurisdiction to try and entertain the complaint as pecuniary jurisdiction of this Commission was limited to Rs.50,00,000/-. The Managing Director should be deleted as party as the same was not necessary and proper party in the complaint. That the husband of the complainant had approached the opposite party for the purchase of Life Insurance plan for himself and had submitted the digital kotak E-Proposal bearing No.70139833 with form ID No.30101093 dated 15.01.2019 for Kotak E-term form.  In the Proposal form he agreed to the benefits, charges terms and conditions and the risk factor involved. Accordingly after understanding all the benefits the deceased life assured had disclosed the history of Asthma & alcohol habits.  Even the deceased life assured had undergone the medical examination for the purpose of the issuance of the policy which were basic screening test and were not diagnostic in nature. Hence the revised plan was offered on 02.02.2019 and the same was accepted by him and his premium amount was rated up. After issuance of subject policy and delivery of policy document, free look period for subject policy was provided to the policy holder.  The life assured retained the policy document and did not raise any grievance during the free look period which implies that was satisfied with all the terms and conditions.  Thus as per settled law, policy which its terms and conditions was duly accepted by the policy holder thereby policy became a duly entered contract between the policy holder and insurance company. That on 29.04.2021 the complainant being the nominee under the policy has approached the opposite party and intimated the death of life assured and also submitted the death claim from on 26.04.2021 along with medical certificate stating that the life assured expired on 03.04.2021 due to cardiac arrest with Decompensate Chronic Liver Disease. That after receipt of the death claim intimation the opposite party had conducted the statutory investigation in order to verify the authenticity of the claim as per policy.  During the investigation it was found that the Deceased Life Assured had concealed the material facts that he was suffering from hepatic Stenosis Grade-I and had a history of PHACO Corneal Section prior to signing of the proposal form.  Further as per the medical documents of Sir Ivan Stedford Hospital Chennai life assured admitted on 25.10.2012 for diagnosed as Perianal abscess and Incision and drainage done with general anesthesia discharged on 27.10.2012 with medical advice. Further outpatient medical records from Ramachandra Hospital dated 21.04.2018 procured during the assessment of the said claim.  As per SRM OPD records dated 21.04.2018 life assured was presented with complaint of Loin to groin pain, scattering of light last 20 days and blurred vision last 20 days.  USG taken and diagnosed hepatic steatosis grade-I and diagnosed history of color blindness since young.  Life assured was known case of wheezing from childhood and was under regular treatment and medication. Further Life assured was admitted in Aravind Eye Hospital, Chennai on 31.05.2018 for the complaint of Right Eye Defective vision and was diagnosed with posterior sub capsular cataract in Right eye.  Life assured underwent surgery on 31.05.2018 through temporal clear corneal section PHACO done and ASPHERIC IOC placed in the bag in right eye discharged on 31.05.2018.  Further Life assured admitted in Aravind Eye Hospital, Chennai on 30.06.2018 with complaint of Defective vision of Left Eye and diagnosed as immature cataract, left eye psuedophakia/Posterior Chamber intraocular lens.  Life assured underwent surgery on 30.06.2018 and through temporal clear corneal section PHACO done and ASPHERIC IOC placed in the bag in left eye discharged on 30.06.2018.  USG whole abdomen report dated 30.11.2020 issued by G.J Multispecialty Hospital, Chennai which mentioned impression as Cirrhosis of Liver, Ascites. Certificate issued by Dr.G.Rajesh Kumar from G.J. Multispecialty hospital dated 19.03.2021 which mentioned that Mr.Anand 40/M K/C/O Cirrhosis of Liver/Anemia/Acute Kidney Disease ascites.  Further was referred to higher center for further management. Inpatient case sheet issued by Saveetha Medical College & Hospital, Kancheepuram dated 19.03.2021 wherein under provisional diagnosis as severe Anemia, Decompensate Chronic Liver Disease, BA.  USG Thorax dated 02.04.2021 issued by consultant Radiologist of the Saveetha medical College & Hospital mentioned Right sided moderate pleural effusion, left minimal pleural effusion.  Biochemistry report issued Lab Report issued by Saveetha Medical College Hospital dated 03.04.2021 wherein urea, creatinine was found to be on higher side.  Further in liver function test total bilirubin was found to be on higher side along with SGOT also being high.  That the above mention records were clear indicative of the fact that prior to application of the personal form, the deceased life assured was an identified case of Hepatic Stenosis Grade –I and had history of PHACO Corneal Section. That it has been known fact that the life assured was consuming alcohol since the year 2010 which was a contributing factor for this disease. Further it was noted that Deceased Life Assured was a known case of Cirrhosis of Liver, ascites and had not disclosed the same in the proposal form. That liver disease do not occur overnight, rather it takes many year to develop liver diseases and its serious complications. That the non-disclosure of the above pre-existing diseases in the proposal form amounts to fraud as per section 45(2) of the Insurance Act as amended from time to time and if the said facts at the time of the issuance of the policy were in the knowledge of the opposite party Insurance Company.  Accordingly the opposite party after receiving the correct facts had repudiated the claim on the ground of non-disclosure of material fact as per the terms and conditions and taking into the consideration section 45 of the Insurance Act 1938 and had dispatched the repudiation letter dated 10.11.2021 to the complainant. That the complainant through his counsel had served legal notice dated 28.12.2021 upon the opposite party Insurance Company which was received on 03.11.20222.  The same was replied by the opposite party Insurance Company on 29.01.2022 stating the above mentioned facts that the claim under the subject policy was repudiated and declined due to non-disclosure and suppression of material information as per the section 45 of the Insurance Act 1938 as amended from time to time.  That the complainant had also filed a complaint before the Insurance Ombudsman, Chennai on 28.02.2022 with regard to the death claim repudiation which was heard through video conferencing on 04.07.2022.  Taking into accounts the facts and circumstances of the case an award dated 29.07.2022 was passed by the Hon’ble Insurance Ombudsman stating that there is no scope to intervene in the Insurance’s decision of repudiation of death claim under the subject policy. The proposal form was not merely a document to be signed and submitted for formality.  It is the basis for the contract of insurance.  That the deceased life assured was died within three years of the issuance of the policy and thus could be questioned as per the section 45 of the Insurance Act 1938. That from the above stated facts, circumstances and documents clearly established the fact that the complainant has approached this Commission with unclean hands and the current claimant is nothing but an abuse process of law. Thus the opposite party sought for the dismissal of the complaint.

4. On the side of complainant proof affidavit was filed and documents marked as Ex.A1 to Ex A14 were submitted. On the side of opposite party proof affidavit was filed and documents marked as Ex.B1 to Ex.B13 were submitted.

Points for consideration:-

1) Whether there is any deficiency in service as alleged by the complainant against the opposite party has been successfully proved by the complainant with admissible evidence?

2) If so, to what reliefs the complainant is entitled?

Point No.1:-

5. It is the case of the complainant that her husband Late B.C.Anand Pratap, availed a Life Insurance Policy from the opposite party vide policy No.70139833 dated 11.02.2019 for a sum assured of Rs.50,00,000/-.  The insured was regularly paying the insurance premium.  The complainant’s husband fell sick on 19.03.2021 and subsequently he died on 03.04.2021 due to cardiac arrest.  The complainant submitted the claim form on 26.04.2021. The opposite party repudiated the claim stating that the pre-existing of medial ailments was not disclosed in the proposal form.  The death was due to natural cause and there was no nexus between the cause of death and the alleged non disclosure of pre-existing disease.  The opposite party committed deficiency in service and unfair trade practice by repudiating the genuine claim of the complainant on false grounds and hence the complaint.

6. To prove the claim, the complainant deposed proof affidavit with 14 documents which were marked as Ex.A1 to Ex.A14.  Ex.A1 is the opposite party’s letter with revised plan, Ex.A2 is the Insurance Policy, Ex.A3 is the receipt for payment of premium, Ex.A4 is the Avadi Municipal Corporation Medical Certificate, Ex.A5 is the Discharge Summary of Saveetha Medical College & Hospital, Ex.A6 is the Death Certificate Issued by Avadi Corporation, Ex.A7 is the acknowledgement for receipt of death claim with policy document, Ex.A8 is the email communication between the complainant and the opposite party, Ex.A9 is the opposite party’s letter to the complainant, Ex.A10 is the opposite party letter to the complainant, Ex.A11 is the repudiation letter from opposite party, Ex.A12 is the legal notice issued by the complainant to the opposite party, Ex.A13 is the reply from the opposite party to the complainant and Ex.A14 is the rental agreement.

7. Per contra, the opposite party disputing all the allegations interalia contended that the complainant’s husband had not disclosed his pre-existing diseases in the proposal form and suppressed all the material facts.  During investigation, the opposite party came to know about the several ailments suffered by the husband of the complainant.  The husband of the complainant had not disclosed his pre-existing ailments and therefore he had committed fraud as per section 45(2) of Insurance Act.  The opposite party replied to the legal notice dated 28.12.2021 issued by the complainant.  Hence the opposite party had not committed any deficiency in service and unfair trade practice in repudiating the claim of the complainant.  The Hon’ble Commission has no pecuniary jurisdiction to entertain this complaint and hence prays to dismiss the complaint.

8. To refute the claim of the complainant, the opposite party deposed proof affidavit with 13 documents which were marked as Ex.B1 to Ex.B13.  Ex.B1 is the questionnaires and medical form, Ex.B2 is the copy of revision in requested plan, Ex.B3 is the policy document along with proposal form, Ex.B4 is the death claim intimation form, Ex.B5 is the discharge summary of Sir Ivan Stedford Hospital, Chennai, Ex.B6 is the medical records from Ramachandra Hospital, Ex.B7 is the copy of USG Abdomen, Biochemistry Lab Report and Hematology report issued by G.J. Multispecialty Hospital, Ex.B8 is the Doctor Certificate issued by Dr.G.Rajesh Kumar from G.J. Multispecialty Hospital, Ex.B9 is the copy of investigation report, Ex.B10 is the Investigator’s affidavit, Ex.B11 is the repudiation letter, Ex.B12 is the reply to the legal notice issued by the complainant and Ex.B13 is the Insurance Ombudsman award.

9. It is an admitted fact that the complainant’s deceased husband availed a Life Insurance Policy from opposite party vide policy No.70138933 for a sum assured of Rs.50,00,000/-.  It is not disputed that the insured was regularly paying the premium amount.  The deceased himself had disclosed his history of Asthma and alcohol habits in the proposal form.  Subsequently the opposite party had taken the deceased for medical examination and hence the revised plan was offered to the policy holder and the same was accepted by the husband of the complainant.  Ex.A1 is the letter from opposite party with revised plain.  Ex.A2 is the Insurance Policy issued by the opposite party.

10. It is also not disputed that the deceased was admitted in Hospital on 19.03.2021 and discharged on 03.04.2021.  He died on 03.04.2021 due to cardiac arrest.  The same can be evidenced from Ex.A5 and Ex.A6.  Ex.A5 is the Discharge Summary issued by Saveetha Hospital and Ex.A6 is the Death Certificate issued by Avadi Corporation.

11. The complainant submitted the death claim was submitted to the opposite party on 26.04.2021.  Upon receipt of claim form from the complainant the opposite party investigated that the deceased was suffering from history of corneal section PHACO along with Hepatic Stenosis Grade-I and the said information had not been disclosed by him in the proposal form and hence the opposite party repudiated the claim vide letter dated 10.11.2021 which is marked as Ex.A11.

12. The counsel for the opposite party argued that there is no deficiency in service and unfair trade practice on the part of opposite party as alleged by the complainant.  The opposite party had conducted the investigation thoroughly upon receipt of claim form from the complainant and found that the deceased husband of the complainant suppressed the following medial ailments suffered by him and failed to mention the same in the proposal form submitted to the opposite party

As per the medical documents of Sir Ivan Stedford Hospital Chennai life assured admitted on 25.10.2012 for diagnosed as Perianal abscess and Incision and drainage done with general anesthesia discharged on 27.10.2012 with medical advice.

Outpatient medical records from Ramachandra Hospital dated 21.04.2018 procured during the assessment of the said claim.  As per SRM OPD records dated 21.04.2018 life assured was presented with complaint of Loin to groin pain, scattering of light last 20 days and blurred vision last 20 days.  USG taken and diagnosed hepatic steatosis grade-I and diagnosed history of color blindness since young.  Life assured was known case of wheezing from childhood and was under regular treatment and medication.

Life assured was admitted in Aravind Eye Hospital, Chennai on 31.05.2018 for the complaint of Right Eye Defective vision and was diagnosed with posterior sub capsular cataract in Right eye.  Life assured underwent surgery on 31.05.2018 through temporal clear corneal section PHACO done and ASPHERIC IOC placed in the bag in right eye discharged on 31.05.2018.

 Life assured admitted in Aravind Eye Hospital, Chennai on 30.06.2018 with complaint of Defective vision of Left Eye and diagnosed as immature cataract, left eye psuedophakia/Posterior Chamber intraocular lens.  Life assured underwent surgery on 30.06.2018 and through temporal clear corneal section PHACO done and ASPHERIC IOC placed in the bag in left eye discharged on 30.06.2018.

 USG whole abdomen report dated 30.11.2020 issued by G.J Multispecialty Hospital, Chennai which mentioned impression as Cirrhosis of Liver, Ascites.

 Certificate issued by Dr.G.Rajesh Kumar from G.J. Multispecialty hospital dated 19.03.2021 which mentioned that Mr.Anand 40/M K/C/O Cirrhosis of Liver/Anemia/Acute Kidney Disease ascites.  Further was referred to higher center for further management.

 Inpatient case sheet issued by Saveetha Medical College & Hospital, Kancheepuram dated 19.03.2021 wherein under provisional diagnosis as severe Anemia, Decompensate Chronic Liver Disease, BA. 

USG Thorax dated 02.04.2021 issued by consultant Radiologist of the Saveetha medical College & Hospital mentioned Right sided moderate pleural effusion, left minimal pleural effusion.  Biochemistry report issued Lab Report issued by Saveetha Medical College Hospital dated 03.04.2021 wherein urea, creatinine was found to be on higher side.  Further in liver function test total bilirubin was found to be on higher side along with SGOT also being high. The counsel for opposite party had drawn our attention to Ex.B5 to Ex.B8 to support its repudiation.

13. We have carefully perused all the documents.  On perusal of Ex.B9 and Ex.B10 the investigation report and affidavit reveals that enquiry has been conducted to know the health condition of the deceased and the investigation report do not disclose the fact that the death of complainant’s husband was caused due to pre-existing diseases.  There is no such documentary evidence to show the nexus between the cardiac arrest and pre-existing diseases of the deceased.  It is evidenced from the documents that the most of the medical records are related eye ailments.  More over the opposite party had not filed a single document to show that the deceased was suffering from liver disease since 2018.  The investigation does not refer any single document to substantiate the cause of death.  The opposite party also repudiated the genuine claim of the complainant only on the basis of the investigation report.

14. On perusal Ex.A4 Medical Certificate cause of death by Avadi Municipality Corporation reveals that the deceased policy holder Mr.B.C.Anand Pratap died due to cardiac arrest and DCLD.  However, the opposite party had not proved with documents that the complainant‘s husband was suffering DCLD since 2018.  If it is pre-existing as alleged by the opposite party, it could have been verified in the medical examination conducted by the opposite party during the proposal form submitted by the deceased insurer.  More over the opposite party had not filed medical examination result of deceased which was taken at the time of revision of policy as document before this commission.

15. Moreover insurance is the contract of UBERRIMA FIDES (at most good faith) this maxim is not only applicable to Insurance companies and also applicable to the insurer.  The insurer buying the insurance with good intention to safeguard the liability to himself as well as to his legal heir.  But in this case, the opposite party acted against the good faith.  The opposite party used to sell the policies on several promises, but when claim arises, the opposite party is blowing hot and cold and repudiates the claim with cooked up reasons.

16. The case in hard, the opposite party failed to establish that the deceased insurer Mr.B.C.Anand Pratap suppressed the material facts about the pre existing ailments.  The opposite party had revised the policy terms after inducting the insurer into medical examination.  The opposite party had not filed the medical reports before this Commission.  But the opposite party simply relied on the investigation report.  In the absence of any valid reason with proper documentary evidence, the pre existing ailments cannot be considered to be a material to repudiate the claim so far as the death of the deceased concerned.  Consequently it cannot be said that there was suppression of material facts and therefore no liability of the complainant arose under the policy. Mere incorrect or wrong answer to the question which ultimately do not have any connection with the death of the insured would not absolve the opposite party from their liability under the policy.  From the facts and circumstances the opposite party cannot escape from the liability on the ground of suppression of material facts when the repudiation of opposite party is unjust and baseless which amounts to unfair trade practice and deficiency in service.  Hence we came to the conclusion that the opposite party had committed deficiency in service and unfair trade practice in repudiating the genuine claim of the complainant.  This point is answered accordingly.

Point No.2:-

17. From the above discussions and findings, the opposite party had committed deficiency in service by repudiating the genuine claim of the complainant with cooked up reasons.  The repudiation of claim definitely caused mental agony to the complainant who already lost her husband.  Hence the complainant is entitled for compensation.  Therefore we inclined to direct the opposite party to pay Rs.50,00,000/- being the sum assured of the insurance policy and to pay a sum of Rs.25,000/- towards compensation for the mental agony and deficiency in service and to pay Rs.10,000/- towards cost of this proceedings to the complainant.

In the result, the complaint is partly allowed against the opposite party directing them

a) To pay a sum of Rs.50,00,000/- (Rupees fifty lakhs only) being the sum assured of the insurance policy to the complainant within six weeks from the date of receipt of copy of this order;

b) To pay a sum of Rs.25,000/- (Rupees twenty five thousand only) towards compensation for the mental agony and hardship caused to the complainant;

c) To pay a sum of Rs.10,000/- (Rupees ten thousand only) towards litigation expenses to the complainant;

d) Amount in clause (a) if not paid within six weeks from the date of receipt of copy of this order, interest at the rate of 9% will be levied on the said amount from the date of complaint till realization.

Dictated by the Member-I to the steno-typist, transcribed and computerized by him, corrected by the Member-I and pronounced by us in the open Commission on this 21^th day of November 2023.

Sd/-                                                                                                                         Sd/-

MEMBER-I                                                                                                      PRESIDENT

List of document filed by the complainant:-

List of documents filed by the opposite party-

          Sd/-                                                                                                                 Sd/-

   MEMBER-I                                                                                                      PRESIDENT