Chandigarh

DF-II

CC/35/2020

Balwinder Kaur - Complainant(s)

Versus

SBI General Insurance Company Ltd. - Opp.Party(s)

Adv. Sapna Raheja Wasan

18 Sep 2024

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-II

U.T. CHANDIGARH

 

Consumer Complaint No.	:	CC/35/2020
Date of Institution	:	16/01/2020
Date of Decision	:	18/09/2024

       

                                       

                       

 

 

Balwinder Kaur widow of late Maninder Singh, resident of House No.594, Bishanpura, Preet Colony, Zirakpur, Tehsil : Dera Bassi, Distt. Mohali.

                                ...  Complainant

Versus

1.SBI General Insurance Company Ltd., Corporate & Registered Office : Natraj, 101, 201 and 301, Junction of Western Express Highway & Andheri Kurla Road, Andheri (East), Mumbai – 400069 through its Managing Director.

2.SBI General Insurance Company Ltd., Regional Office, SCO No.103-108, Sector 17-B, Chandigarh, through its Regional Manager.

3.State Bank of India, Sector 18 Branch, Chandigarh, through Branch Manager.

…. Opposite Parties

 

BEFORE:
	SHRI AMRINDER SINGH SIDHU	PRESIDENT
	SHRI SURESH KUMAR SARDANA	MEMBER

 

ARGUED BY:
	Sh. J.C. Mahey, Advocate Proxy for Ms. Sapna Raheja Wasan, Counsel for complainant Sh. J.P. Nahar, Counsel for OPs 1 & 2 Sh. Aman Singla, Counsel for OP-3

 

ORDER BY AMRINDER SINGH SIDHU, M.A.(Eng.),LLM,PRESIDENT

1.        The complainant has filed the present consumer complaint alleging that her husband late Sh. Maninder Singh was working as conductor with Chandigarh Transport Undertaking and in February 2018 he had availed facility of personal loan of ₹4.00 lacs from OP-3/bank.  On the asking of OP-3, the said loan was assured by Sh.Maninder Singh and OP-3 had told that in case of death of the borrower, loan account would be settled by the insurance company. Accordingly, he obtained the SBI General Insurance Policy (Annexure C-2) from OPs 1 & 2/ insurer valid w.e.f. 3.2.2018 to 2.2.2021 covering the amount of ₹4.00 lacs, which was  to be disbursed to the nominee of the insured i.e. Sh. Maninder Singh in the event of his death.  The monthly EMI of the policy was ₹9,510/- which was to be debited from the account of the insured maintained with OP-3. Unfortunately on 28.2.2018, when the insured was performing his duties as conductor, he suddenly collapsed and died instantaneously and in this regard DDR (Annexure C-4) was recorded.  Post mortem report (Annexure C-5) described the cause of death as sudden cardiac arrest. Thereafter on 20.3.2018 complainant, being nominee of the deceased insured, lodged claim with the OPs to liquidate the loan amount by depositing the claim amount in the loan account.  However, OPs 1 & 2 vide letter 30.6.2018 (Annexure C-6) repudiated the claim on the ground that the date of incident/death of Maninder Singh falls within 90 days since the policy start date.  It was disclosed to the complainant on 5.7.2018 that clause of 28 days of survival period is not fulfilled.  The complainant alleged that the master policy document was never supplied to her or her husband by the OPs.  Alleging that the aforesaid act of repudiation of her claim amounts to deficiency in service and unfair trade practice on the part of OPs, complainant has filed the instant consumer complaint seeking direction to the OPs to pay the insured amount of ₹4.00 lacs or to adjust the same against outstanding loan amount with OP-3 and pay interest, compensation and litigation expenses.
2.        Pursuant to the notice issued, OPs 1 & 2 and OP-3 appeared through counsel and filed their respective written versions.
3.        In their joint written version OPs 1 & 2 took preliminary objections that the complainant has not annexed any document in proof of the personal loan availed for ₹4.00 lacs.  It was admitted that OP-2 had issued insurance policy of ₹4.00 lacs which was valid w.e.f. 3.2.2018 to 2.2.2021 but the disbursement of the claim amount to the nominee in the event of death of the insured Sh.Maninder Singh was subject to terms and conditions of the policy.  Averred that the complainant has not annexed copy of the insurance policy sent to the insured vide letter dated 3.2.2018. It is submitted that they have rightly repudiated the claim of the complainant as per terms and conditions of the policy on the ground that the date of death of the insured falls within 90 days since the policy started and clause of 28 days of survival period was not fulfilled. Further, the policy was effective from 3.2.2018 and unfortunately the incident of death of the insured occurred on 28.2.2018 meaning thereby that the policy had just run for 25 days only.  The remaining allegations have been denied, being false. Pleading that there is no deficiency in service or unfair trade practice on their part, OPs prayed for dismissal of the consumer complaint.
4.        In its separate written version OP-3 took various preliminary objections including maintainability, jurisdiction, mis-joinder of necessary parties, complainant is not consumer etc.  On merits, admitted that the deceased insured had availed loan of ₹4.00 lacs from it. However, it is maintained that the consumer complaint is not maintainable against it as the dispute is with regard to repudiation of insurance claim by OPs 1 & 2.  It is averred that OP-3 had filed a civil suit for recovery against the complainant and another and the same is pending before the District Courts at Chandigarh. The remaining allegations have been denied, being false. Pleading that there is no deficiency in service or unfair trade practice on its part, OP-3 prayed for dismissal of the consumer complaint.
5.        The parties filed their respective affidavits and documents in support of their case.
6.        In replication, complainant controverted the stand of the OPs and reiterated his own.
7.        We have heard the learned Counsel for the parties and gone through the documents on record, including written arguments.
8.        The main question involved in the present consumer complaint is, whether there is any deficiency on the part of OPs in rendering service to the complainant or not?

              In order to find out answer to the above mentioned question, it is necessary to discuss the following facts and circumstances.

9.        OPs 1 & 2/insurer had repudiated the claim of the complainant vide letter dated 30.6.2018 (Annexure C-6) by holding that as per policy provision, any critical illness discovered within 90 days of policy issuance is excluded and further that the critical illness benefit is payable only if insured survives for a period of more than or equal to 28 days since date of diagnosis of critical illness.
10.        However, there is nothing on record that the terms and conditions of the policy were ever signed and agreed upon by the deceased insured, especially containing the exclusion clause. In M/s Modern Insulators Ltd. v. Oriental Insurance Co. Ltd., (2000) 2 SCC 734, it was held as under:-

        “(8) It is the fundamental principle of insurance law that utmost good faith must be observed by the contracting parties and good faith forbids either party from non-disclosure of the facts which the parties know. The insured has a duty to disclose and similarly it is the duty of the insurance company and its agents to disclose all material facts in their knowledge since the obligation of good faith applies to both equally.

9. …….. As the above terms and conditions of the standard policy wherein the exclusion clause was included, were neither a part of the contract of insurance nor disclosed to the appellant, respondent cannot claim the benefit of the said exclusion clause…….”

As such, in the absence of signature of the insured/ complainant on the terms & conditions of the policy containing the exclusion clause, it cannot be said that the same were ever disclosed/informed to him and thus are of no help to the OPs.

11.        Not only this, it is usual with the insurance companies to show all types of green pastures to the customer at the time of selling insurance policies, and when it comes to payment of the insurance claim, they invent all sorts of excuses to deny the claim. In the facts of this case, ratio of the decision of Hon’ble Apex Court in case of Dharmendra Goel Vs. Oriental Insurance Co. Ltd., III (2008) CPJ 63 (SC) is fully attracted, wherein it was held that, Insurance Company being in a dominant position, often acts in an unreasonable manner and after having accepted the value of a particular insured goods, disowns that very figure on one pretext or the other, when they are called upon to pay compensation.  This ‘take it or leave it’, attitude is clearly unwarranted not only as being bad in law, but ethically indefensible.  It is generally seen that the insurance companies are only interested in earning premiums and find ways and means to decline claims.
12.        In similar set of facts the Hon’ble Punjab & Haryana High Court, Chandigarh in case titled as New India Assurance Company Limited Vs. Smt.Usha Yadav & Others, 2008(3) RCR (Civil) Page 111 went on to hold as under:-

       “It seems that the insurance companies are only interested in earning the premiums and find ways and means to decline claims. All conditions which generally are hidden, need to be simplified so that these are easily understood by a person at the time of buying any policy.  The Insurance Companies in such cases rely upon clauses of the agreement, which a person is generally made to sign on dotted lines at the time of obtaining policy. Insurance Company also directed to pay costs of Rs.5000/- for luxury litigation, being rich.

 

Hence, we are of the opinion that OPs 1 & 2/insurers should not have repudiated the claim of complainant in toto and should have settled the same on non-standard basis and the said act certainly amounts to deficiency in service on their part.

13.        In view of the above discussion, the present consumer complaint deserves to succeed and the same is accordingly partly allowed and OPs 1 & 2/insurer are directed to pay 75% of the claim amount of ₹4,00,000/- to the complainant alongwith interest @ 6% per annum from the date of repudiation till the date of its actual realization. 
14.        This order be complied with by OPs 1 & 2 within 60 days from the date of receipt of its certified copy.
15.        Since no deficiency in service or unfair trade practice has been proved against OP-3, the consumer complaint against it stands dismissed with no order as to costs.
16.        The pending application(s), if any, stands disposed of accordingly.
17.        Certified copy of this order be sent to the parties, as per rules. After compliance file be consigned to record room.

Announced 18/09/2024 hg	(AMRINDER SINGH SIDHU) PRESIDENT
	(SURESH KUMAR SARDANA) MEMBER