Punjab

Ludhiana

CC/15/663

Parul Singla - Complainant(s)

Versus

PNB Housing Finance Ltd - Opp.Party(s)

M.K.Madaan Adv.

06 Oct 2017

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, LUDHIANA.

 

Consumer Complaint No. : 663 of 06.11.2015

   Date of Decision            :  06.10.2017

1.Parul Singla son of Late Rajesh Kumar,

2.Neelam Singla widow of late Sh.Rajesh Kumar,

Both r/o H.No.1, St.No.10, Satjot Nagar, Preet Nagar, Manakwal, Dhandra Road,   Ludhiana.

….. Complainants

                                                            Versus       

1.Punjab National Bank Housing Finance Limited, Pakhowal Road, Ludhiana, through its Manager.

2.Bharti Axa Life Insurance Company Limited, Complaint Cell, Unit 601 & 602, 6^th Floor, Raheja Titanium, Off Western Express Highway, Goregaon (East), Mumbai-400063, through its authorized officer/Branch Manager.

…Opposite parties

 

          (Complaint U/s 12 of the Consumer Protection Act, 1986)

 

QUORUM:

SH.G.K.DHIR, PRESIDENT

SH.PARAM JIT SINGH BEWLI, MEMBER

COUNSEL FOR THE PARTIES:

 

For complainants             :         Sh.S.S.Kalsi, Advocate

For Op1                           :         Ex-parte

For OP2                           :         Sh.V.S.Mand, Advocate

 

PER G.K DHIR, PRESIDENT

 

1.                           Sh.Rajesh Kumar, father of complainant no.1, but husband of complainant no.2 availed housing loan facility of amount of Rs.19,93,224/- in January 2015 from OP1. The said loan was secured against property and was insured by Op2 on payment of premium at the rate of Rs.58,224/-. This premium was deducted by OP2 directly from OP1. At the time of sanction of loan, Ops assured Sh.Rajesh Kumar(now deceased) that loan is fully insured and in case, of any mis-happening or in case of his death, OP2 will pay loan amount directly to OP1. Death of borrower Sh.Rajesh Kumar took place on 15.3.2015 and thereafter, complainants requested Ops many times to adjust the insured  amount towards the outstanding loan amount for closing the loan account of Sh.Rajesh Kumar. Matter was procrastinated, but ultimately OP2 rejected the claim of complainants on the false and frivolous grounds that Sh.Rajesh Kumar was suffering from Chronic Liver disease. Repudiation of claim alleged to be on false and frivolous grounds because Sh.Rajesh Kumar was not suffering from any chronic liver disease(CLD). In fact, Sh.Rajesh Kumar was admitted in the hospital in 2014, but discharged only after four days and thereafter, he was having good health. Complainants called upon Ops many times to co-operate with them, but they have not accommodated. Complainants have made the account regular by depositing the amount of Rs.45,000/- in the months of June and August, 2015. By pleading deficiency in service on the part of Ops, prayer made for directing Ops to allow the genuine claim of complainants and to adjust the insured amount towards the loan amount of approximate worth of Rs.9 lac and even direction against OP1 sought for calling upon it not to proceed further against the complainants as well as their mortgaged property. Compensation for mental harassment of Rs.1 lac even sought.

2.                 OP1 is ex-parte in this case, but OP2 filed written reply by pleading interalia as if its business is to provide life insurance cover to its customers throughout the country. Present complaint alleged to be false, frivolous and vexatious, filed for abusing the process of law. Op2 strictly acted as per terms and conditions of the policy contract, terms of which are binding on the parties. No deficient services provided. OP2 received duly filled, “Self Filled Questionnaire” or SFQ on 5.12.2014 from the Life assured with regard to Group Policy No.PLUD6660003584. On the basis of the information provided through this SFQ, Op2 enrolled the life assured after acceptance of proposal by issue of policy on 20.1.2015. However, the information provided by the Life assured in SFQ was established to be untrue and false and as such Op2 repudiated the claim as per terms and conditions of the policy and the statutory provisions. Claim was repudiated by a speaking order on the ground of mis-statement of information and suppression of material facts as well as of false information. Life assured at the time of submitting the online proposal and SFQ, did not disclose that he was hospitalized in August 2014 and diagnosed to be suffering from Chronic Liver Disease, Portal hypertension and Ascites and Oesophagus Varices. Had this information been provided to OP2, then OP2 under no circumstances would have processed the proposal further, but could have declined the same. Contract of insurance is a contract of utmost good faith and insurer bound to honour the claim as per terms and conditions of the policy only. Life assured did not disclose the correct health status at the time of availing of the policy and as such, the policy proved to be initiated by a frivolous act. After acceptance of the proposal, the policy was issued and thereafter, the policy documents were sent to the assured at the address mentioned in the proposal form. Terms and conditions of the policy were also sent along with a forwarding letter for disclosing about the free look provision. Copy of proposal form even was sent to the assured in the Welcome kit duly dispatched to the assured. In the free look period of 15 days, life assured did not approach OP2 with any request for correction in the proposal form with respect to his health and life style condition. The policy documents were retained by the life assured and they were never returned to OP2 for cancellation even during free look period implying that the terms and conditions of the policy accepted by the assured. OP2 received the claim documents containing information as if the life assured expired on 15.3.2016 i.e. within four months of enrollment. Thereafter, certain processes of documentation and verification for early decision of claims were taken by OP company. On careful evaluation of the records got by the OP company, it was established that life assured was hospitalized in August 2014, on being diagnosed regarding sufferance from Chronic Liver Disease, Portal hypertension and Ascites and Oesophagus Varices. However in the SFQ, life assured gave intimation as if he has not got any treatment or consultation from any doctor or specialist for any ailment apart from the minor ailment like colds and flu for the last five years. Even it was disclosed through SFQ as if life assured has never been hospitalized or undergone hospital treatment for the last five years. The life assured further disclosed to have not suffered or had been treated for any form of disability or medical condition such as heart disease including angina; heart attack; heart failure; high blood pressure etc. Right from the proposal, the assured was abundantly made clear to furnish truthful answers to the questions because information supplied will be of immense importance for accepting the life insurance proposal. It was clearly stated in the SFQ itself that if reply to a question turns out to be false or misleading, then contract of insurance to be declared null and void and claim under the policy liable to be repudiated in that event. As per section 45 of The Insurance Act, 1938, Op2 has right to repudiate the claim and declare the policy as null and void on finding that information supplied by the assured was false and contained mis-representation. It is claimed that perusal of proposal form clearly establishes the malafide act on the part of the assured. Repudiation of insurance claim took place vide letter dated 10.8.2015 as per terms and conditions of the policy on the ground of suppression of material facts qua state of health of the complainant and as such it is claimed that OP2 has never provided any deficient services and nor had adopted any unfair trade practice. Each and every other averments of the complaint denied.

3.                 Complainant to prove his case tendered in evidence his affidavit Ex.CA along with documents Ex.C1 to Ex.C11 and then his counsel closed the evidence.

4.                 On the other hand, counsel for Op2 tendered in evidence affidavit Ex.RA of Ms.Sunita Yadav, Associate Manager-Legal of OP2 along with documents Ex.R1 to Ex.R3 and then closed the evidence.

5.                 Written arguments in this case submitted by OP2 alone, but not by the complainant. Oral arguments by counsel for complainant and counsel for OP2 even addressed and those were heard. Records gone through minutely. 

6.                 Sh.S.S.Kalsi, Advocate for complainant vehemently contends that housing loan contracted by Sh.Rajesh Kumar from OP1 was insured with OP2 and as such, after death of borrower, complainants being his legal heirs are entitled to the insurance amount. Moreover, in view of insurance of loan, OP2 bound to repay the loan amount to OP1 by adjusting the insurance amount towards payable loan amount and thereafter, reimburse  the  residue to the complainants. It is also contended that repudiation of claim is absolutely unjustified, particularly when deceased was neither a smoker and nor alcoholic and his admission earlier was for only four days, but his death was natural. It is claimed that Jaundice was only the disease, from which, Sh.Rajesh Kumar  suffered and as such, there was no concealment of facts. No affidavit of doctor has been produced for establishing that actually deceased suffered from chronic liver disease     in August 2014 and as such, repudiation of claim contended to be fully unjustified, particularly when terms and conditions of insurance policy was not disclosed to Rajesh Kumar. All these submissions advanced by counsel for complainant has no force when looked into the light of evidence produced on record by the parties.

7.                 Perusal of Ex.C1 certainly reveals that  housing loan of             Rs.19,35,000/- was contracted by Sh.Rajesh Kumar from OP no.1 and same was fully insured on payment of premium of Rs.58,224/-. After death of borrower Sh.Rajesh Kumar, complainants were called upon to pay the outstanding due loan amount through letter Ex.C2 dated 25.4.2015. But it is the claim of complainants that amount is not payable and that is why legal notice Ex.C3 through postal receipts  Ex.C4 to Ex.C6                was sent. Claim of the complainants based on the insurance policy was repudiated and complainant no.1 was not satisfied with the decision of OP2 and as such, he sent letter Ex.C7 to Complaints Cell of OP2 by admitting as if his father remained admitted in hospital in 2014, but was discharged after four days and thereafter, he remained in good health. Copy of death certificate of Sh.Rajesh Kumar is produced on record as Ex.C8 and notice for recovery of outstanding loan amount issued u/s 13(2) of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 is produced on record as Ex.C9. Perusal of Ex.C9 reveals as if certificate for recovery was issued and that is why this notice issued. Reply to this notice sent by the complainant through counsel to OP1 and copy of same is produced on record as Ex.C10. Copy of detail of bill of treatment of Sh.Rajesh Kumar during period from 25.8.2014 to 29.8.2014 from Dayanand Medical College and Hospital, Ludhiana is produced on record as Ex.C11, but record of discharge summary has not been produced in that respect at all. So, complainants virtually have not produced the complete record of treatment of Sh.Rajesh Kumar during period from 25.8.2014 to 29.8.2014, but OP2 collected that material and produced on record the same as Ex.R2.

8.                 Perusal of Ex.R2 reveals that Sh.Rajesh Kumar was diagnosed for ‘Chronic Liver Disease/PTCT. In Ex.R2 itself it is found by the senior resident doctor as if insulin level was low and as such, on the strength of Ex.R2, certainly OP2 able to establish as if Sh.Rajesh Kumar was suffering from Chronic liver disease from 25.8.2014 to 29.8.2014 and that is why, he got treatment for the same from DMC & Hospital, Ludhiana. So, submission advanced by counsel for complainant has no force that deceased Sh.Rajesh Kumar was not suffering from any chronic liver disease, but he suffered from Jaundice alone in August 2014. Rather, sufferance of Sh.Rajesh       Kumar from chronic liver disease is established by contents of Ex.R2.

9.                 After going through copy of proposal form Ex.R1 submitted by Sh.Rajesh Kumar on 5.12.2014 with OP2, it is made out as if he specifically disclosed that he was not suffering from any respiratory disease, chest pain, paralysis, any liver disease(including Hepatitis B or C) etc. Signature of Sh.Rajesh Kumar are there on this proposal form Ex.R1 and as such, it is obvious that though Sh.Rajesh Kumar suffered from Chronic Liver disease within four months before filing of the proposal form, but he concealed that fact. This concealment certainly was deliberate because a person who remained admitted in DMC & Hospital, Ludhiana during period from 25.8.2014 to 29.8.2014 for treatment of chronic liver disease bound to know about the same, but while submitting the proposal form just within four months thereafter on 5.12.2014, he concealed that fact. So, certainly submissions advanced by counsel for OP2 has force that life assured deliberately withheld the true information regarding his sufferance from chronic liver disease.

10.               After going through declaration of enrollment printed on the proposal form Ex.R1 itself, it is made out that complainant was made known that information  supplied by him through the proposal form will be formed the basis for issue of insurance policy. Further, life assured was made aware that withholding of or of omission or failure to disclose any medical or financial information will invalidate his insurance coverage. When this declaration of enrollment  on the proposal form       Ex.R1 is signed by the borrower Sh.Rajesh Kumar, then certainly submissions advanced     by counsel for OP2 has force that life assured was made aware of the consequences of withholding of information regarding state of health. Another declaration of enrollment of this proposal form Ex.R1 itself is to the effect as if life assured understood and agreed    that in case any information provided by him in the proposal form found to be false or was withheld or was omitted to be supplied regarding any medical or financial condition, then the same will invalidate the insurance coverage. When such   declaration on the proposal form Ex.R1 is there and the borrower signed  underneath    this declaration, then it is obvious that life assured was made aware of the importance  of disclosure of true information regarding his state of health as well as of financial condition. As withholding of the information regarding sufferance of Sh.Rajesh Kumar from Chronic Liver Disease was deliberate and as such, repudiation of claim on ground of suppression of material information qua state of health is justified by keeping in view the terms of declarations of enrollment itself contained in Ex.R1, which provides for invalidation of insurance coverage on account of withholding of this material information.

11.               After going through another declaration contained in Ex.R1 itself, it is made out that life assured was made aware that all proceeds received from OP2 will be first used to settle the outstanding loan amount and the excess amount, if any, will be payable to the beneficiary Parul Singla, related to life assured as a spouse. In view of this declaration contained in Ex.R1, submissions of counsel for complainant has no force that as the loan was insured and as such, liability of complainants to pay the loan amount does not remain. Rather, the loan was secured against the mortgaged property and as such, insurance cover alone was an additional coverage for the benefit of the borrower or his legal heirs. As repudiation of claim is fully justified in view of suppression of material facts qua the state of health of the life assured and as such OP2 not liable to pay any amount of insurance to complainants or OP1. Being so, OP1 entitled to recover the outstanding loan amount from the complainants, being legal heirs of deceased, but as per law and rules and regulations only. Claim repudiation letter Ex.R3 spells out the detailed reasons, which are borne out from the record as disclosed by contents of Ex.R1 and Ex.R2 discussed in detail above and as such, repudiation of claim is quite appropriate. In view of this, there is no deficiency in service on the part of Ops and nor they had adopted any unfair trade practice.

12.               Therefore, as a sequel of the above discussion, complaint dismissed without any order as to costs. Copies of order be supplied to parties free of costs as per rules.

13.                         File be indexed and consigned to record room.

 

 (Param Jit Singh Bewli)                                     (G.K.Dhir)

 Member                                                              President

Announced in Open Forum

Dated:06.10.2017

Gurpreet Sharma.