Date of Filing 20.02.2023

                                                                                                                  Date of Disposal: 31.10.2023

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.24/2023

THIS TUESDAY, THE 31^st DAY OF OCTOBER 2023

Mrs.V.Vijaya,

W/o.Late Mr.Vairavan,

No.147/6, D.No.81, Gangaiamman Koil Street,

PRH Road, Lakshmipuram,

Madhavaram, Chennai 600 099.                                                           ......Complainant.

                                                                           //Vs//

1.M/s.HDFC Life Insurance Company Limited,

   Rep. by its Manager,

   11^th Floor, Lodha Excelus,

   Apollo Mills Compound,

   N.M.Joshi Road, Mahalakxmi,

   Mumbai 400 011.

2.M/s.HDB Financial Services Limited,

   Rep. by its Manager,

   2^nd Floor, Lakshmi Complex,

   8/14, New Avadi Road,

   Villivakkam, Chennai 600 049.                                                     …..Opposite Parties.

Counsel for the complainant                              : M/s.C.N.Vinobha, Advocate.

Counsel for the 1^st opposite party                     : M/s. S.Muthukumaravel, Advocate.

Counsel for the 2^nd opposite party                    : exparte.

This complaint coming before us on various dates and finally on 17.10.2023 in the presence of M/s.C.N.Vinobha, counsel for the complainant and M/s. S.Muthukumaravel counsel for the 1^st opposite party and the 2^nd opposite party was set exparte on 20.06.2023 for non appearance and for non filing of written version as per the statute and upon perusing the documents and evidences of both sides this Commission delivered the following:

ORDER

PRONOUNCED BY TMT.Dr.S.M. LATHA MAHESWARI, PRESIDENT

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 parties in the matter of repudiation of insurance claim of the complainant along with a prayer to release the Insurance amount vide Policy No.PP000239, a sum of Rs.36,11,614/- and also to pay a sum of Rs.5,00,000/- towards compensation for the mental agony and hardship caused to the complainant.

Summary of facts culminating into complaint:-

2. It was the case of the complainant that her husband Mr.M.Vairavan was the Proprietor of M/s. Aqua Kingdom.  To develop his business he had taken Term Loan to the tune of Rs.36,11,615/- from the 2^nd opposite party on 31.12.2019.  In the Loan Agreement M/s. Auqa Kingdom, Represented by its Proprietor Mr.M.Vairavan was the Borrower, Mr.M.Vairavan who was the husband of the complainant and the complainant stood as Co-Borrowers. At the time of executing the loan agreement, the husband of the complainant had taken Insurance Policy from the 1^st opposite party in the scheme of “HDFC LIFE Group Credit Project Plus Insurance” vide Policy No.PP000239 for a sum of Rs.36,11,614/- towards death benefits.  After taking the loan, the complainant paid the EMI without any default. Husband of the complainant died on 24.05.2021 due to COVID-19.  After demise of her husband the complainant was not unable to repay the loan amount properly.  Hence the complainant approached the 1^st opposite party to release the insurance amount. But the 1^st opposite party rejected the complainant’s claim on 24.09.2021, wrongly stating that the husband of the complainant suffered with Accelerated Hypertension and Diabetes Mellitus prior to taking insurance policy. During the course of time, the 2^nd opposite party continuously demanded the complainant to pay loan amount and finally on 07.09.2022 Ex-parte Arbitral Award was passed by the 2^nd opposite party to pay a sum of Rs.38,58,930/- as on 06.10.2021. The reason mentioned by the 1^st opposite party was totally illegal.  Initially the husband of the complainant did not suffer Hypertension and Diabetes, he died only due to Covid-19.  It was clearly mentioned in the Death Certificate issued by the Greater Chennai Corporation dated 24.05.2021.  At the time of taking insurance the husband of the complainant was not affected with Accelerated Hypertension and Diabetes Mellitus. Thus aggrieved by the acts of the opposite parties the present complaint was filed to direct the opposite parties to release the amount vide Insurance Policy No.PP000239, sum of Rs.36,11,614/- and to pay a sum of Rs.5,00,000/- towards compensation for the mental agony and hardship caused to the complainant.

The crux of the defence put forth by the 1^st opposite party:-

3. The 1^st opposite party filed version disputing the complaint allegations contending interalia that the complaint was liable to be dismissed on the ground of suppression of material facts and documents.  The Discharge Summary of the deceased person Mr.Vairavan was not filed. Policy No.PP000239 was taken by the complainant’s husband on 31.12.2019 for a sum assured of Rs.36,11,614/-and the premium collected was Rs.1,11,615/-. Policy Term was 3 years for the HDFC Life Group Credit protect Plus Insurance Plan and the same was mentioned in the Member Enrollment form.  As per the information, the complainant’s husband Mr.Vairavan who died on 24.05.2021 was suffering with Accelerated Hypertension and the aliment was existing for past 20 years and also suffering from Diabetes (TYPE DM) for around 6 years. But the same was suppressed in the Proposal Form.  Thus in the Proposal Form the life assured failed to submit the exact particular of the pre-existing aliments and if the life assured would have disclosed the same, the opposite party would have been in a better position to evaluate the insured for further investigation and would not have issued the life insurance cover but unfortunately the life assured had suppressed the same.  Hence the repudiation of claim was justified and valid.  Thus the 1^st 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 A7 were submitted. On the side of 1^st opposite party proof affidavit was filed and documents marked as Ex.B1 to Ex.B5 were submitted. Though notice was served to the 2^nd opposite party, he did not file any Vakalath and written version and hence he was called absent and was set exparte on 20.06.2023 for non appearance and for non filing of written version as per the statute.

Points for consideration:

1. Whether the complaint as filed before this Commission is maintainable and could be taken up for consideration as already an Arbitration Award has been passed against the complainant?
2. Whether the alleged deficiency in service on the part of opposite parties in the matter of repudiation of insurance claim of the complainant amounts to deficiency in service?
3. To what relief the complainant is entitled?

 5. Point No.1:-

The following documents were filed on the side of complainant in support of his contentions;

1. Burial Ground Report of Death of complainant’s husband dated 24.05.2021 was marked as Ex.A1;
2. Mortuary card of the complainant’s husband dated 24.05.2021 was marked as Ex.A2;
3. Death Certificate issued by the Corporation of Chennai dated 12.11.2021 was marked as Ex.A3;
4. Legal heir certificate dated 30.11.2021 was marked as Ex.A4;
5. Copy of insurance claim rejected by the 1^st opposite party dated 24.09.2021 was marked as Ex.A5;
6. Copy of insurance claim rejected by the 1^st opposite party dated 19.01.2022 was marked as Ex.A6;
7. Arbitration Award passed by the 2^nd opposite party dated 07.09.2022 was marked as Ex.A7;

On the side of opposite party the following documents were filed in proof of their defence;

8. Claim rejection letter No.PC194997 sent by the 1^st opposite party to the complainant dated 24.09.2021 was marked as Ex.B1;
9. Member Enrolment Form – SMQ Regulated entity dated 30.12.2019 was marked as Ex.B2;
10. Doctor’s/Hospital Certificate was marked as Ex.B3;
11. Group claim form was marked as Ex.B4;
12. Mortuary card dated 24.05.2021 was marked as Ex.B5;

6. Heard both the learned counsels appearing for the complainant as well as the 1^st opposite party.

7. Argument was made by the learned counsel appearing for the complainant that though the complainant’s husband died due to COVID-19, the insurance claim was rejected by the opposite parties citing the reason that the insured suffered Accelerated Hypertension and Diabetes Mellitus but not mentioned in the Proposal Form.  It was argued by the learned counsel that due to the death of her husband she could not run the business and could not repay the loan and also as the loan was covered under the policy it is for the insurance company to adjust the loan amount out of the insured amount.  Thus he sought for the complaint to be allowed as prayed for.

8. On the other hand the 1^st opposite party’s learned counsel argued that the complainant’s husband had suppressed that he was suffering with Accelerated Hypertension and Diabetes Mellitus at the time of taking policy. If he had mentioned the same they would have assessed it for fixing the premium.  Thus it is his arguments that by suppressing a pre-existing aliment the complainant had taken the policy and hence not entitled for the relief of any insurance amount.  As an Arbitration Award was filed as a document by the complainant a question arise as to maintainability of this consumer complaint.  Hence we Suomoto raised and decided the said issue.  But on verification we found that the Arbitral award relates to the loan availed by the complainant’s husband and the Arbitral proceedings having intimated by the 2^nd opposite party/financier it does not act as a bar to the consumer complaint filed before this Commission alleging deficiency in service against the opposite parties and hence it is concluded that the present complaint is maintainable before this Commission.

Point No.2:-

9. Coming to the merits of the complainant the main contention by the 1^st opposite party for rejecting the complaint is that the insured failed to disclose that he was suffering with Accelerated Hypertension for 20 years and Diabetes (TYPE DM) for 6years.  They have filed Ex.B3 the Certificate issued by the Hospital with regard to the details of aliment suffered by the deceased/insured.  Ex.B2 is the Member Enrollment Form submitted by the 1^st opposite party wherein under the heading Health details of life to be assured it has been stated that the insured did not possess any aliments at the time of insurance policy. When we analyzed the repudiation letter (Ex.B1) issued by the 1^st opposite party it has been stated in that, the life assured has been suffering with Accelerated Hypertension and Diabetes Mellitus prior to issuance of the policy.  Further it is also argued by the opposite party that had these informations been provided to the Insurance Company at the time of applying for the policy, they would have called for further medical tests/questionnaires to decide as to whether to offer insurance coverage or not and also in fixation of premium.  It is thus made clear that the insured had suppressed the material facts about his health conditions which was pre-existing decease at the time of taking policy.

10. In such situation the insurer has every right to repudiate the claim arising after the death of the insured on the ground that the insured did not disclose the material facts at the time of entering into contract though the reason for the death is Covid +ve which is of different nature.  If it is proved that the proposer had failed to disclose material facts the contract of insurance becomes vitiated as contract of insurance is based on the principle of “Uberrimea fidei” and any person claiming any benefit under the policy is not entitled for the same.  We find support of our decision from various decisions rendered by the Supreme Court particularly in United India Insurance Company Limited Vs Harchand Rai Chandan Lal reported in (2004) 8 SCC 644]  and in Vikram Greentech (I) Ltd. & Anr. Vs New India Assurance Co. Ltd reported in (2009) 5 SCC 599   wherein it has been held that

“An insurance policy is to be construed strictly as per the terms and conditions of the policy document which is a binding contract between the parties and nothing can be added or subtracted by giving a different meaning to the words mentioned therein. Therefore, violation of any terms and conditions mentioned in the policy document by the insured (such as suppression of material facts or intentional non-disclosure or rendering of wrong and misguiding statements by the insured) lead to discharge of the insurer from his liability to approve the claim”.

11. Thus we hold that the reason cited by the 1^st opposite party/insurance company for repudiating the claim of the complainant could not be termed as unfair trade practice or deficiency in service.  Thus we answer the point accordingly in favour of the opposite parties and as against the complainant.

Point No.3:-

12. As we have held above that the complainant had failed to prove that the opposite parties had committed any deficiency in service and unfair trade practice, she is not entitled any relief from the complaint.  Thus we answer the point accordingly.

In the result, the complaint is dismissed.  No order as to cost.

Dictated by the President to the steno-typist, transcribed and computerized by him, corrected by the President and pronounced by us in the open Commission on this 31^st day of October 2023

     -Sd-                                                                                                                       -Sd-

MEMBER-I                                                                                                           PRESIDENT

List of document filed by the complainant:-

List of documents filed by the 1^st opposite party:-

     -Sd-                                                                                                                    -Sd-

MEMBER-I                                                                                                       PRESIDENT