Chandigarh

DF-I

CC/662/2022

Harsimran Kaur - Complainant(s)

Versus

Pramerica Life Insurance Limited. - Opp.Party(s)

S.C. Thatai

26 Feb 2024

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-I,

U.T. CHANDIGARH

                                     

Consumer Complaint No.	:	CC/662/2022
Date of Institution	:	08/07/2022
Date of Decision	:	26/02/2024

 

Harsimran Kaur age 55 years w/o Late Sh.Ravinder Pal Singh resident of Flat No.802, Plot GH25, Kirti Cooperative Society, Sector 21, Faridabad, Haryana-121001 presently resident of House No.3715, Sector 46-C. Chandigarh.

… Complainant

V E R S U S

 

1. Pramerica Life Insurance Limited (Earlier known as DHFL Pramerica Life Insurance Company Limited), Registered & Corporate Office: 4^th Floor, Building No.9-B, Cyber City, DLF City Phase-III, Gurgaon-122002 through Ms. Kalpana Sampat, CEO & Managing Director.
2. Pramerica Life Insurance Limited (Earlier known as DHFL Pramerica Life Insurance Company Limited), SCO Nos.2941-2942, 1^st and 2^nd Floor, Sector 22-C, Chandigarh through its Branch Manager.
3. IndusInd Bank Ltd., First Floor, 2E/1, Jhandewalan Extn. Above Yes Bank, Near Jhandewalan Metro Station, New Delhi-110055 through its Branch Manager/Incharge.
4. IndusInd Bank Ltd. SCO Nos.53-54, Sector 8-C, Madhya Marg, Chandigarh-160017 through its Branch Manager/ Incharge.

… Opposite Parties

 

CORAM :	SHRI PAWANJIT SINGH	PRESIDENT
	MRS. SURJEET KAUR	MEMBER
	SHRI SURESH KUMAR SARDANA	MEMBER

 

ARGUED BY	:	Mrs. Monika Thatai, Advocate for complainant
	:	Sh. Tapish Kumar Gupta, Advocate for OPs 1 & 2 (through VC)
	:	Sh. Gaurav Kant Goel, Advocate for OPs 3 & 4

Per Pawanjit Singh, President

1. The present consumer complaint has been filed by Harsimran Kaur, complainant against the aforesaid opposite parties (hereinafter referred to as the OPs).  The brief facts of the case are as under :-

1. It transpires from the allegations as projected in the consumer complaint that, in the month of November 2019, deceased husband of the complainant namely Ravinder Pal Singh (hereinafter referred to as “DLA”) had approached OP-3 for obtaining home loan and accordingly home loan to the tune of ₹54,62,000/- was approved by OP-3 on 8.11.2019.  The tenure of the loan was for 156 months. At that time, husband of the complainant/DLA was insisted by OP-3 to secure loan by purchasing insurance policy. Accordingly, loan was insured by OPs1 & 2 under the policy namely DHFL Pramerica Group Credit Life (hereinafter referred to as “subject policy”) for sum insured of ₹52,11,582/- on receiving single premium of ₹2,94,999.51 for a period of 8 years and the complainant was appointed nominee in the subject policy.  Copies of the loan sanction letter dated 28.9.2019 loan account statement and certificate of insurance are Annexure C-1 to C-3.  At the time of availing loan, DLA was assured by the OPs that in case anything happens to him during the policy period, OPs 1 & 2/insurers would pay the remaining loan amount.  DLA kept on paying the installment of loan regularly to OPs 3 & 4 till April 2021.  In the month of April 2021, DLA was not feeling well, as a result of which he was admitted in Metro Heart Institute, Faridabad on 30.4.2021 where he unfortunately expired on 5.5.2021 due to complications of COVID-19 and the medical record of the hospital is Annexure C-4 whereas the death certificate is Annexure C-5. After the demise of DLA, complainant being his nominee, submitted death claim alongwith necessary documents to OPs 1 & 2 and requested to adjust the insured amount from the outstanding home loan amount.  However, vide letter dated 27.10.2021 (Annexure C-6), OPs have repudiated the genuine claim of the complainant on the ground that the DLA was suffering from hypertension prior to the date of application and information about the aforesaid disease was not disclosed to the OPs by the DLA and the premium amount of ₹2,94,999/- was also refunded to OP-3/Bank towards the full and final settlement of the claim.  Thereafter the complainant approached the Insurance Ombudsman at Chandigarh by filing complaint (Annexure C-7), which was transferred to the Insurance Ombudsman at New Delhi vide order dated 28.1.2022 (Annexure C-8) and finally the Ombudsman at New Delhi had passed order dated 23.3.2022 (Annexure C-9) by holding that as the claimed compensation was more than ₹30 lacs, the complaint was outside its purview.  In this manner, OPs 1 & 2 have wrongly repudiated the claim of the complainant on flimsy grounds and the said act amounts to deficiency in service and unfair trade practice on their part. OPs were requested several times to admit the claim, but, with no result.  Hence, the present consumer complaint.
2. OPs resisted the consumer complaint and filed their separate written versions.
3. In their written version OPs 1 & 2, inter alia, took preliminary objections of maintainability, cause of action and concealment of material facts.  It is alleged that as the DLA has concealed material facts qua the pre-existing disease i.e. hypertension from which he was suffering much prior to obtaining the subject policy and had been taking treatment for the same, the claim of complainant was rightly repudiated on account of suppression of material facts as per the terms and conditions of the subject policy.  It is admitted that the subject policy was obtained by the DLA through which the loan against property was insured with coverage amount of ₹52,11,582/- and the subject policy was valid w.e.f. 1.10.2019 to 30.9.2027 on payment of single premium of ₹2,94,999.51.  It is further admitted that the death claim intimation alongwith documents was submitted by the complainant, but, the claim of the complainant was repudiated on the ground that at the proposal stage, DLA had medical history of hypertension since 5-6 years i.e. prior to the date of signing the application form, for which he was taking treatment and as the said pre-existing disease was concealed by him from the answering OPs, the claim of the complainant was rightly repudiated and the premium amount of ₹2,94,999.51, after deduction of tax, was refunded to the master policy holder i.e. OPs 3 & 4. 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. OPs 3 & 4 in their written version, inter alia, took preliminary objections of maintainability, cause of action, jurisdiction and non-joinder of necessary parties.  On merits, admitted that the husband of the complainant was holder of an insurance policy with OPs 1 & 2 and on the death of the policyholder there is no deficiency in service or unfair trade practice on the part of the answering OPs as they have only sanctioned and approved the loan amount in favour of the DLA and the said loan amount was insured by OPs 1 & 2/insurers on obtaining premium amount.  Even the complainant is not claiming anything against the answering OPs and in this manner the complainant has no cause of action against the answering OPs. 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.
5. In separate replications, complainant re-asserted the claim put forth in the consumer complaint and prayer has been made that the consumer complaint be allowed as prayed for.

2. In order to prove their case, parties have tendered/proved their evidence by way of respective affidavits and supporting documents.
3. We have heard the learned counsel for the parties and also gone through the file carefully, including written arguments.
   1. At the very outset, it may be observed that when it is an admitted case of the parties that the DLA namely Ravinder Pal Singh had obtained home loan from OPs 3 & 4 to the tune of ₹54,62,000/-  and in order to secure the said loan the subject policy (Annexure C-3) was issued to OP-3 bank in the name of DLA on admitting him as a member of the master policy and got the said loan insured from OPs 1 & 2 to the tune of ₹52,11,582/- on payment of premium to the tune of ₹2,94,999.51 with coverage commencement date from 1.10.2019 to 30.9.2027 and due to the illness of DLA, he was admitted at the Metro Heart Institute, Faridabad on 30.4.2021 where he died on 5.5.2021, the case is reduced to a narrow compass as it is to be determined if OPs 1 &2 /insurers are unjustified in repudiating the claim of the complainant on the ground that DLA was suffering from hypertension i.e. pre-existing disease prior to obtaining the subject policy, which fact was concealed by the DLA, and the same is fundamental breach of the terms and conditions of the subject policy and the complainant is entitled to the reliefs prayed for in the consumer complaint, as is the case of the complainant or if the OPs have rightly repudiated the claim of the complainant and returned the premium amount and the consumer complaint of the complainant, being false and frivolous, is liable to be dismissed, as is the defence of the OPs.
   2. In the backdrop of the foregoing admitted and disputed facts on record, one thing is clear that the entire case of the parties is revolving around the loan documents, terms and conditions of the subject policy, medical record, repudiation letter and the investigation report and the same are required to be scanned carefully for determining the real controversy between the parties.
   3. Perusal of loan sanction letter (Annexure C-1) indicates that loan to the tune of ₹54,62,000/- was sanctioned in favour of the DLA with tenure of 156 months. Loan for the payment of premium amount of ₹2,95,000/- was also sanctioned for getting the loan amount insured.  Annexure C-2 is the copy of statement of loan account which indicates that an amount of ₹54,62,000/- i.e. the loan amount was disbursed in the account of the complainant on 7.12.2019 alongwith premium amount payable to the insurer to the tune of ₹2,95,000/- and the first installment was payable by the loanee on 7.1.2020.  Annexure C-3 is the certificate of insurance i.e. the subject policy which indicates that the DLA Ravinder Pal Singh had been admitted as member under the subject policy issued to IndusInd Bank Ltd. (OP-3) by OPs 1 & 2 with coverage sum assured of ₹52,11,582/-. The relevant portion of the terms and conditions pertaining to the death benefits in case of death of the insured member during coverage term is reproduced below for ready reference :-

 “ii)  Loan Share Percentage Basis : If the insured Members are covered on a "Loan Share Percentage Basis", then each co-borrower is insured up to his share of the benefit which is in the proportion of the loan taken. At the time of occurrence of insured event on the life of either of the borrower, the total benefit payable shall be up to the respective joint borrower's share. The cover for the surviving joint borrower will continue as it is.

                        In case of death of the Insured Member(s), the benefit will be payable to the respective Claimant(s). In case of ATPD or Terminal Illness, the benefit will be payable to the Insured Member(s). The Insured Member shall have an authorization in favour of the Company to the effect that in the unfortunate event of Insured Member's death during the Coverage Term, the claim amount, if any payable under the Master Policy shall first be utilized for payment to Master Policyholder for the outstanding loan amount as specified in Master Policyholders Credit Account Statement and the balance amount, if any, under the Master Policy will be payable to Insured Member's Nominees/legal heirs or legal representatives (as applicable). This option shall however be applicable only for certain categories of Master Policyholders. The eligible categories of Master Policyholders are Reserve Bank of India (RBI) regulated Scheduled Banks (including Co-operative Banks), NBFC's having certificate of registration from RBI and National Housing Board (NHB) regulated Housing Finance Companies in accordance with IRDAI guidelines as amended from time to time.

In all other cases, the death benefit shall be payable to the respective Claimant(s).

Full Pre-payment of loan (or) Foreclosure

Full pre-payment of loan: In case of any of the following options chosen by the insured member on full prepayment of the loan, the applicable terms and conditions will be as follows:

(a) Cover Continuation : The Insured Member will continue to be covered as per the existing terms and conditions. (b) Surrender: The Insured Member may request for surrender of his membership in which case the applicable Surrender Value will be paid.

Partial Pre-payment of loan : If the Insured Member makes a partial payment for the loan, the Insured Member’s coverage shall continue in accordance with the original Benefit Schedule. 

Foreclosure of loan by Master Policyholder : If the loan of the Insured Member is foreclosed by the Master Policyholder in accordance with terms and conditions entered into by the Insured Member with the Master Policyholder, the Insured Member’s coverage shall immediately and automatically terminate. The applicable Surrender Value will be paid to the Insured Member.”

4. As it is an admitted case of the parties that the first installment of loan was payable by the DLA on 7.1.2020 and the DLA had died on 5.5.2021, it is clear that the DLA has died in the 17^th month of coverage term, which started w.e.f. 7.1.2020.
5. So far as the medical report pertaining to the illness of the complainant and his admission in the hospital is concerned, it is clear from the inpatient history and physical examination record (Annexure C-4) by the Metro Heart Institute that the DLA was admitted in the said hospital on 30.4.2021 and at that time he was having chief complaints about fever, shortness of breath and cough.  It is also clear from the aforesaid record that though the COVID RTPCR of patient was also got conducted by the hospital, but, he was found negative.  Death certificate (Annexure C-5) indicates that the DLA had died on 5.5.2021 in the treating hospital. 
6. The medical record (Annexure OP-6, 7 & 8), having been relied upon by OPs 1 & 2 (annexed with the investigation report i.e. death summary of the DLA Ravinder Pal Singh (at page 139) indicates that the DLA was diagnosed with bilateral pneumonia with ARDS with Type I Respiratory, sepsis with septic shock, moderate – severe MR, Acute kidney injury and hypertension and the relevant portion of the same is reproduced below for ready reference :-

“Diagnosis :

• Bilateral Pneumonia with ARDS with Type I Respiratory.
• COVID RT PCR (02/05/2021) – Negative.
• Sepsis with Septic Shock
• Moderate – Severe MR
• Acute Kidney Injury
• Hypertension.”

 

7. Even the investigation report (Annexure OP-6 at page 95) indicates that the investigator had specifically concluded in his report that pre-ailment of LA not found and the concluding portion of the report is reproduced below for ready reference :-

“CONCLUSION:-

• Pre-ailment of LA not found.
• No discrepancy in date of death.
• No discrepancy in age of LA.
• No Murder or suicide suspected.

 

8. Repudiation letter (Annexure C-6) indicates that OPs 1 & 2 have repudiated the claim of the complainant on the ground that the DLA was suffering from hypertension prior to proposal date and the relevant portion of the same is reproduced below for ready reference :-

“With reference to your claim under the above policy on the life of the above mentioned deceased, we have to inform you that all liability under the policy has been repudiated by us. We have legally sustainable evidence to prove that "Mr. Ravinder Pal Singh suffered from hypertension prior to proposal date.

We refer to the proposal form number IIB00508200 dated 28/09/2019 wherein late Ravinder Pal Singh had given a declaration that he had made complete, true and accurate disclosure of all the facts and circumstances as may be relevant for the acceptability of the proposal form. However we have noticed that following question numbers in the proposal form have been answered as 'NO'.”

9. Learned counsel for the complainant contended with vehemence that as it stands proved on record that the DLA was not suffering with hypertension prior to obtaining the subject policy, OPs have wrongly repudiated the claim of the complainant and instant consumer complaint deserves to be allowed.
10. On the other hand, learned counsel for OPs 1 & 2/ insurers contended with vehemence that as it stands proved on record that the DLA has concealed the factum of being suffering from hypertension prior to obtaining the subject policy, the claim was rightly repudiated and the consumer complaint deserves to be dismissed.
11. However, there is no force in the contention of the learned counsel for OPs 1 & 2/insurer as even the investigator deputed by OPs to investigate the claim of the complainant vide his report (Annexure OP-6) had concluded that no pre-ailment of LA was found.  Moreover, even if for arguments sake it is presumed that DLA was suffering from hypertension before inception of the subject policy, law on this point is well settled.  It has been held by the Hon’ble State Commission, Delhi, in the case titled S.S. Jaspal Vs. National Insurance Co. Ltd. & Ors., IV (2022) CPJ 26 (Del.) that common lifestyle disease like diabetes and hypertension, cannot be treated as pre existing diseases and cannot be a ground of repudiation of claim by Insurance companies. The relevant portion of the order is reproduced as under :-

 “Consumer Protection Act, 1986 - Sections 2(1)(g), 14(1)(d), 15 - Insurance (Mediclaim) -Angioplasty and Stenting - Suppression of pre-existing disease alleged - Repudiation of claim Deficiency in service - District Forum dismissed Complaint - Hence Appeal - Complainant experienced pain in chest and remained admitted in Hospital from 24.6.2004 to 30.6.2004, where he had undergone Angioplasty and Stenting, by incurring Rs.3,20,126 on treatment - Previous medical history is based upon information provided by family of patient - Respondents failed to show any evidence regarding pre-existing disease suffered by insured at time of getting policy - Common lifestyle disease like diabetes and hypertension, cannot be treated as pre existing diseases and cannot be a ground of repudiation of claim by Insurance companies - Respondents failed to show any evidence that any medical tests or examination was done, before issuing said policy in question - Respondents are directed to pay a sum of Rs.3,20,126 (Cost of Medical Expenses) to Appellant along with interest @ 6% p.a.”

12. Similarly, the Hon’ble National Commission in the case titled Sunil Kumar Sharma v. Tata AIG Life Insurance Company and Ors., Revision Petition No.3557 of 2013 decided on 1.3.2021, while dealing with the issue of pre-existing disease, has held as under:-

“14.   Moreover the claim had been repudiated only on the ground that the insured was suffering from diabetes for a long time. So far as life style diseases like diabetes and high blood pressure are concerned, Hon'ble High Court of Delhi in Hari Om Agarwal Vs. Oriental Insurance Co. Ltd., W.P.(C) No.656 of 2007, decided on 17.09.2007 held as under:

"Insurance – Mediclaim -Reimbursement-Present Petition filed for appropriate directions to respondent to reimburse
expenses incurred by him for his medical treatment, in accordance with policy of insurance - Held, there is no dispute that diabetes was a condition at time of submission of proposal, so was hyper tension - Petitioner was advised to undergo ECG, which he did - Insurer accepted proposal and issued cover note. It is universally known that hypertension and diabetes can lead to a host of ailments, such as stroke, cardiac disease, renal failure, liver complications depending upon varied factors. That implies that there is probability of such ailments, equally they can arise in non-diabetics or those without hypertension. It would be apparent that giving a textual effect to Clause 4.1 of policy would in most such cases render mediclaim cover meaningless. Policy would be reduced to a contract with no content, in event of happening of contingency. Therefore Clause 4.1 of policy cannot be allowed to override insurer's primary liability. Main purpose rule would have to be pressed into service. Insurer renewed policy after petitioner underwent CABG procedure. Therefore refusal by insurer to process and reimburse petitioner's claim is arbitrary and unreasonable. As a state agency, it has to set standards of model behaviour; its attitude here has displayed a contrary tendency. Therefore direction issued to respondent to process petitioner's claim, and ensure that he is reimbursed for procedure undergone by him according to claim lodged with it, within six weeks and petition allowed."

13. Further, the Hon’ble National Commission in the case titled as Neelam Chopra Vs. Life Insurance Corporation of India & Ors., IV (2018) CPJ 321 (NC) while dealing with the question of suppression/ non-disclosure of material facts has held as under :-

     12. In the present case, clearly the cause of death is cardio respiratory arrest and this disease was not existing when the proposal form was filled. Clearly, there is no suppression of material information in respect of this disease, which is the main cause of death. The other disease of LL Hansen, which was prevailing for five weeks on the date of admission on 1.8.2003 was also not existing when the proposal was filed by the DLA. The fact of DLA having been treated in the year 2002 for LL Hansen is not supported from any direct evidence though PGI Chandigarh in its certificate has mentioned that disease was treated in 2002. Moreover, this disease does not have any correlation with the cause of death in the present case. Hon’ble Supreme Court in Sulbha Prakash Motegaonkar and Ors. v. Life Insurance Corporation of India, Civil Appeal No.8245 of 2015, decided on 5.10.2015 (SC) has held the following:

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

                We are of the opinion that 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 this 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. In view of the foregoing discussion and the ratio of law laid down above, it is clear that OPs 1&2/ insurers have not been able to connect the previous diseases/ailments with the cause of death of the DLA. Hence, it is unsafe to hold that OPs 1&2/ insurers were justified in repudiating/rejecting the claim of the complainant qua the subject policy and the present consumer complaint deserves to succeed. 
15. Now coming to the quantum of amount to be awarded in the instant case, since it is an admitted case of the parties that the subject policy commenced w.e.f.1.10.2019 and the DLA had died on 5.5.2021, as per the Benefit schedule attached with subject policy (page 87 of Annexure OP-3), OPs 1 & 2/ insurers are liable to pay an amount of ₹46,49,196.59 – ₹2,94,999.51 (i.e. the amount of premium already refunded) = ₹43,54,197.08 (rounded off to ₹43,54,197/-)  to the complainant alongwith interest and compensation etc. for the harassment caused to her. 
16. So far as the claim of complainant qua terminal illness is concerned, since learned counsel for complainant, vide her statement recorded on 22.2.2024, did not press the same, therefore, the terminal illness claim of the complainant is disallowed, being not pressed.

4. In the light of the aforesaid discussion, the present consumer complaint succeeds, the same is hereby partly allowed and OPs 1 & 2 are directed as under :-

1. to pay ₹43,54,197/- to the complainant alongwith interest @ 9% per annum from the date of repudiation of the claim i.e. 27.10.2021 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.

5. This order be complied with by OPs 1 & 2 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.
6. It is, however, made clear that the bank/financier (OPs 3 & 4) 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.
7. Since no deficiency in service or unfair trade practice has been proved against OPs 3 & 4, the consumer complaint against them stands dismissed with no order as to costs.
8. Pending miscellaneous application(s), if any, also stands disposed of accordingly.
9. Certified copies of this order be sent to the parties free of charge. The file be consigned.

26/02/2024 hg	Sd/- [Pawanjit Singh] President
	Sd/- [Surjeet Kaur] Member
	Sd/- [Suresh Kumar Sardana] Member