District Consumer Disputes Redressal Forum,
Tarn Taran (Punjab)
Consumer Complaint No: 75 of 2014
Date of Institution: 13.10.2014
Date of Decision: 25.2.2016
- Rajwinder Kaur widow of Sukhwinder Singh son of Manjit Singh
- Jobanjit Singh aged 10 years (minor) son of Late Sukhwinder Singh son of Manjit Singh,
- Robandeep Singh aged 6 years (minor) son of Late Sukhwinder Singh both the minors through their mother, next friend and natural guardian Smt. Rajwinder Kaur, widow of Sukhwinder Singh, resident of Guru Teg Bahadur Colony, Fateh Chack, Tarn Taran.
…Complainants
Versus
- S.B.I. Life Insurance Company Limited, Branch Office, Sarhali Road, Tarn Taran through its Manager
- Natraj, M.V. Road & Western Express Highway Junction, Andheri (East) Mumbai- 400069 (Regd.Office) through its Managing Director.
…Opposite Parties.
Complaint Under Section 10, 11, 12 & 13 of the Consumer Protection Act, 1986.
Present:
For the complainants Sh.Amanbir Singh Dhillon, Advocate
For the Opposite parties Sh. Deepinder Singh, Advocate
Coram: Sh. S.S. Panesar, President
Sh. R.D. Sharma Member
Smt. Jaswinder Kaur, Member
Sh S.S. Panesar, President
- Smt. Rajwinder Kaur and others being the legal heirs of Sukhwinder Singh filed this complaint under Section 10, 11, 12 and 13 of the Consumer Protection Act 1986 (herein-after called as ‘the Act’) against S.B.I. Life Insurance Company Limited Branch Office, Sarhali Road Tarn Taran through its Manager and another (herein-after called as ‘Opposite Parties- Insurance Company’) supported by various documents leveling allegations of deficiency of service on the part of the opposite parties.
- Briefly stated, the facts of the complaint are that Sukhwinder Singh son of Manjit Singh has purchased a life insurance policy bearing No. 17013093107 from Opposite Parties- Insurance Company on 24.12.2012. The insurance policy was for a sum of Rs. 7,50,000/- and annual premium was of Rs.92,025/-. Sukhwinder Singh was hale and hearty at the time of purchasing the policy. However, Sukhwinder Singh died on 21.5.2013 after paying first installment. As per terms and conditions of the insurance policy, the Opposite Parties are legally bound to make full and final death claim to the legal heirs of Sukhwinder Singh (deceased). It is averred that after the death of Sukhwinder Singh policy holder, the complainants submitted their complete death claim file to the Opposite Parties- Insurance Company to receive the amount of death claim, but the Opposite Parties- Insurance Company lingered on the matter on one pretext or the other and finally rejected the death claim of the complainant on flimsy ground vide letter dated 2.9.2013. It was alleged in the said letter that the deceased policy holder was suffering from Non Hodgkins Lymphoma whereas as per complainants, the deceased was not suffering from any such disease. In this way, the opposite parties are guilty of fault, imperfection, inadequacy in quality and service, manner of performance of service, unfair trade practice as well as gross negligence. This act of the Opposite Parties resulted in great mental pain, stress, inconvenience, agony, harassment and monetary loss to the complainants. A prayer has been made to accept the complaint and for directing the opposite parties to settle the death claim of the insurance policy bearing No. 17013093107 amounting to Rs.7,50,000/- and to pay Rs. 20,000/- on account of mental and physical harassment and Rs. 50,000/- on account of deficiency in service alongwith interest at the rate of 18% per annum.
- Opposite Parties appeared through their counsel and filed joint written version taking preliminary objections viz-a-viz the complaint is not maintainable for want of territorial jurisdiction; that the Managing Director is not involved in the day to day activities of the company, therefore, the complaint is liable to be dismissed against Opposite Party No. 2; that the complaint is liable to be dismissed for want of permission from this Forum; that the Life Insurance is a contract of utmost good faith wherein the insured is duty bound to disclose everything concerning to his health. But Sukhwinder Singh has committed a breach of principle of utmost good faith by suppressing the material facts of suffering from the disease Non Hodgkins Lymphoma in the proposal form. Hodgkins Lymphoma is a type of Lymphoma which is a cancer originating from white blood cells called lymphocytes; that any contract of insurance procured by breach of the principle of utmost good faith is a nullity and void ab-initio; that the Proposal Form is the basis to decide the eligibility as to whether a proposer could be granted insurance cover or not. Any suppression of material fact in the proposal form would constitute a breach of the doctrine of utmost good faith; that there is no deficiency in service on the part of the opposite parties, therefore, the complaint deserves to be dismissed; that action of the opposite parties is as per terms and conditions of the policy, as such, no deficiency could be alleged against the opposite parties and it did not fall within the definition of Section 2(1)(c) and Section 2(1)(g) of the Act; that the complainants have got no cause of action to file the instant complaint; that the D.L.A committed a fraud with an intention to obtain the insurance cover by suppressing the history of pre existing disease which was very well within his knowledge. It was also submitted that the issuance of policy has been admitted and the date of commencement was 31.12.2012. The insured sum is admitted as Rs.7,50,000/- and other benefits are subject to the terms and conditions of the insurance policy. It was submitted that the life assured was duty bound to disclose the every factual information in the proposal form which is the sole basis to decide the eligibility as to whether a proposer could be granted insurance policy or not. It was submitted that any suppression of material facts in the proposal form would constitute a breach of the doctrine of utmost good faith. If the insurer comes to know about the suppression of any material fact then the insurer is well within its right to repudiate the claim under the insurance cover note so granted on the basis of such proposal. It was submitted that in the proposal form Para No. 13(iv) DLA replied in negative regarding the diseases. On 27.12.2012, the DLA had under gone for medical examination and has failed to disclose his pre existing illness during the medical examination. It was submitted that the proposal form and medical examination form are the fundamental basis for assessment of risk and answer to each and every question asked for therein is vital for the underwriter to decide whether the proposed life is to be insured or not. The DLA died on 21.5.2013 after 4 months 21 days of insurance policy, though DLA was suffering from Non Hodgkins Lymphoma prior to the issue of insurance policy. According to the Opposite Parties, DLA was under treatment at Patel Hospital as per treatment summary. Thus, as per medical report, DLA was suffering from Non Hodgkins Lymphoma. Patient of NHL-Diffuse large B-cell Lymphoma prior to the date of signing the proposal form which fact was suppressed from the opposite parties. DLA had suppressed the material information and facts relating to his disease from the opposite parties, therefore, the contract of insurance policy is void ab initio. In the written version, the opposite parties have also mentioned several judicial pronouncements which were not required in the pleadings. On Merits, it was submitted that the DLA has applied for SBI life insurance policy vide proposal No. 17QH984532 dated 24.12.2012 on the basis of information furnished in the proposal form and relying the information to be true and correct the proposal form was accepted and policy in question was issued with date of commencement dated 31.12.2012 for basic sum assured of Rs. 7,50,000/- having yearly premium of Rs. 92,025/-. It was also admitted that the claim intimation was received and during assessment of claim, it was revealed that the DLA had availed the insurance cover fraudulently by suppressing his pre existing illness of Non Hodgkins Lymphoma, therefore, the complainants are not entitled to sum assured of Rs.7,50,000/- or any other relief. It was alleged that the opposite parties are not legally bound to make full and final payment of death claim of insurance policy. It was pleaded that the repudiation of claim is based on medical records which is regarding pre existing illness i.e. Non Hodgkins Lymphoma prior to the date of signing the proposal form. It was admitted that DLA had undergone medical examination on 27.12.2012 but he failed to disclose his pre existing illness during that time and also during medical examination. The DLA had replied in negative regarding his pre existing disease. It was admitted that the intimation regarding the repudiation of claim was given on 2.9.2013. It was pleaded that the opposite parties have conducted medical examination in this case and the medical examination does not relieve the proposer from his/ her duties of disclosure of medical facts. The medical examination conducted was only a preliminary medical examination. The disease like Non Hodgkins Lymphoma would not reveal at the time of preliminary medical examination if a person is under regular medication for the same, the diseases are either suppressed or temporally brought under control. It was submitted that such type of medical examination are genuine in nature. It was submitted that the opposite parties were not guilty of fault, imperfection, inadequacy in quality and service and nature, manner of performance of service, unfair trade practice as well as gross negligence. The other allegations contained in the complaint were denied being wrong and false and finally prayed for dismissal of the complaint.
- In order to prove their case, the complainants tendered in to evidence duly sworn affidavit of Rajwinder Kaur one of the complainants Ex. C.1 alongwith following documents.
Ex. C.2 Self attested copy of Proposal Form
Ex. C.3 Self attested copy of letter dated 2.9.2013
Ex. C.4 Self attested copy of death certificate of
Sukhwinder Singh
Ex. C.5 Self attested copy of letter dated 2.1.2013
addressed to Sukhwinder Singh.
and closed the evidence on behalf of complainants.
5. In order to rebut the evidence of the complainants, the Opposite Parties- Insurance Company have tendered in to evidence affidavit of Mrs. Danya K.P. Ex. OP1 & 2/1 and the opposite parties also examined (i) Ravinder Kumar Accountant of Dr. Lal Path Labs Amritsar, (ii) Davinder Sharma Manager of Spiral CT and MRI Centre Chandigarh, (iii) Dharam Rajput, official of Patel Hospital, Civil Lines, Jalandhar alongwith following documents
Ex.OP1,2/2 Photostat copy of Proposal Form
Ex.OP1,2/3 Photostat copy of letter dated 2.1.2013
Ex.OP1,2/4 Photostat copy of Medical examination Form
Ex.OP1,2/5 Photostat copy of Surgical Pathology Report
Ex.OP1,2/6 Photostat copy of whole body (18F-FDG)
PET CT Scan conducted by Spiral C.T & MRI Centre
Ex.OP1,2/7 Photostat copy of Treatment Summary of
Patel Hospital civil Lines Jalandhar
Ex.OP1,2/8 Photostat copy of repudiation letter dated 2.9.2013 addressed to Mrs Rajwinder Kaur
Ex.OP1,2/9 Attested copy of whole body (18F-FDG)
PET CT Scan conducted by Spiral C.T & MRI Centre
Ex.OP1,2/10 Attested copy of Surgical Pathology report of Sukhwinder Singh
Ex.OP1,2/11 Attested copy of Treatment Summary of
Patel Hospital civil Lines Jalandhar
and closed the evidence.
6. We have heard ld. counsel for both the parties at length and have also carefully gone through the record as well as synopsis of written arguments filed on behalf of both the parties separately.
7. On the basis of evidence on record, ld. counsel for the complainants has vehemently contended that Sukhwinder Singh (now deceased) predecessor-in-interest of the complainants purchased life insurance policy bearing No. 17013093107 from opposite parties on 24.12.2012, copy whereof accounts for Ex. OP1,2/3. Life assured Sukhwinder Singh died on 21.5.2013, copy of death certificate is Ex. C4 on record. Insurance policy in dispute was for a sum of Rs.7,50,000/- and first premium to the tune of Rs. 92,025/- was paid by the life assured to the Opposite Parties at the time of issue of insurance cover. Sukhwinder Singh life assured was hale and hearty at the time of purchase of the policy in dispute from Opposite Party No.1. As per the terms and conditions of the insurance policy in dispute, the Opposite Parties are legally bound to make the full and final death claim of above mentioned insurance policy to the legal heirs of deceased holder. After the death of Sukhwinder Singh policy holder, the complainants submitted the complete death claim file to the Opposite Parties for getting the death claim of the policy holder from the Opposite Parties, but the Opposite Parties rejected the claim of the complainants vide letter dated 2.9.2013 copy whereof accounts for Ex.OP1,2/8. Opposite parties vide letter dated 2.9.2013 while rejecting the claim of the life assured, alleged that deceased policy holder was suffering from disease known as Non-Hodgkins Lymphoma, but however, deceased policy holder was not suffering from any such ailment as alleged by the Opposite Parties. The Opposite Parties had taken the clinical tests of life assured at the time of issue of the insurance policy and had he been suffering from any such disease, the same might have been detected then and there. Burden to prove the pre-existing disease of Sukhwinder Singh (now deceased) was upon the Opposite Parties, but, however, they did not summon the doctor(s) concerned to prove the factum of pre-existing disease. The Opposite Parties have examined Sh. Ravinder Kumar Accountant at Lal Path Lab, Amritsar to prove the alleged medical record of Sukhwinder Singh (now deceased). In fact, said accountant has nothing to do with the reports and only doctor concerned, who medically treated Sukhwinder Singh (now deceased) was capable to prove the alleged medical record Ex.OP1 & 2/10. Similarly, Opposite Parties have examined Sh. Davinder Sharma, Manager of Spiral CT and MRI Centre to prove the alleged medical record of Sukhwinder Singh (now deceased) Ex. OP1 & 2,/9. In fact, said Manager has nothing to do with the report and only Dr. Arun Gupta, MD, Consultant Radiologist as mentioned in the alleged report dated 19.10.2011 was capable to prove the alleged medical record of Sukhwinder Singh (now deceased). Further, Opposite Parties produced the alleged medical record of deceased Sukhwinder Singh through Sh. Dharam Rajput of Patel Hospital Civil Lines Jalandhar Ex. OP1 &2/11. In fact, said person was not competent to prove the alleged medical record, while it was the doctor concerned only who was capable to prove the medical record of Sukhwinder Singh (now deceased). In this way, Opposite Parties have miserably failed to connect the alleged medical record with Life Assured Sukhwinder Singh (now deceased).
8. Ld. counsel for the complainants have further contended that in the alleged medical record, the name of Sukhwinder Singh only find mentioned and no complete particulars of Sukhwinder Singh (now deceased) i.e. father’s name, residential address, etc. is present on the alleged record. There might be numerous persons having the name of Sukhwinder Singh and the alleged medical record adduced by the Opposite Parties cannot be said to be pertaining to life assured Sukhwinder Singh (now deceased). Moreover, at page No. 7 of the alleged medical record, the father’s name of deceased Sukhwinder Singh has been mentioned as Maan Singh whereas the actual name of father of deceased Sukhwinder Singh was Manjit Singh.
9. In the case in hand, Opposite Party No.1-Insurance Company issued the policy to Sukhwinder Singh (now deceased), but now Opposite Party No.1-Insurance Company with malafide intention to harass the complainants, has failed to issue the claim amount in favour of the complainants. It is contended that the Opposite Parties are deficient and negligent in service and it is further contended that the complainants are entitled to receive the claim amount of Rs.7,50,000/- being first class heirs of life assured Sukhwinder Singh (now deceased). Besides that, the complainants may also be awarded compensation to the tune of Rs. 50,000/- as well as litigation expenses to the tune of Rs. 20,000/-, and complaint may be allowed accordingly.
10. However, on the other hand, ld. counsel for the Opposite Parties has vehemently contended that the question which has come up for adjudication before this Forum was as to whether the repudiation of insurance claim is valid or not ? It is not denied that Sukhwinder Singh (now deceased) obtained insurance policy in dispute on 24.12.2012, but he was suffering from the disease known as ‘Non Hodgkins Lymphoma’ prior to the commencement of the policy. The material fact regarding the disease was not disclosed by Sukhwinder Singh (now deceased) at the time of obtaining the insurance policy. Life assured intentionally suppressed the material fact regarding his suffering from Non Hodgkins Lymphoma, which is commonly known as ‘cancer’. Life assured was very well aware of the said fact. The life assured signed the proposal form with malafide intention and concealed the material facts regarding treatment, he got for said disease for the year 2010-11. Opposite parties have examined (i) Ravinder Kumar Accountant of Dr. Lal Path Labs Amritsar, (ii) Davinder Sharma Manager of Spiral CT and MRI Centre Chandigarh and (iii) Dharam Rajput, official of Patel Hospital, Civil Lines, Jalandhar to prove the medial record(s) pertaining to the disease suffered by the life assured. As per the law laid down by Apex Court and Hon’ble National Commission in catena of Judgments, the doctrine of utmost good faith should prevail while obtaining the insurance policies and when the said good faith is breached, the complainant is not entitled to any relief. The insurer is justified in repudiating the claim when there is suppression of material facts. In the instant case, the deceased, while signing the proposal form had intentionally concealed and suppressed the material facts that he was inflicted with the Non Hodgkins Lymphoma prior to the commencement of the policy. Life assured had failed to disclose the disease suffered by him and further fact that he took treatment for the disease before obtaining the insurance policy in question. In Para No. 13 of the proposal Form Ex. Ex.C2 the life assured specifically denied the factum of the pre existing disease, thus, breached the doctrine of utmost good faith and took the insurance cover in dispute with malafide intention to defraud the opposite parties.
11. It has been further contended that the defence taken by the complainants that the medical examination of the life assured was got done by the Opposite Parties before issue of insurance policy in dispute, however, the objection is not tenable because entire medical investigation was never done and only routine medical examination is undertaken and it is the statement of the deceased which is relied upon. But, however in the instant case life assured made a wrong statement regarding his medical health as per reply made in Para No. 13 of the proposal form. It has been held in case Maya Devi Vs LIC in Revision Petition No. 2091/2007 that the contention that the disease was not detected at the time of medical examination by the doctors of the respondent/ insurance company, does not carry much credibility because as is well known, these check ups are general in nature. Further, reliance has been placed on the case Satwant Kaur Sandhu Vs New India Assurance Company Ltd. 2009(4) CLT Page 398, wherein, it has been held by the Hon’ble Supreme Court of India that in the contract of insurance any fact which would influence the mind of a prudent insurer in deciding whether to accept or not to accept the risk is a material fact. If the proposal has knowledge of such fact, he is obliged to disclose it particularly while answering question in the proposal form. Any inaccurate answer will entitle the insurer to repudiate his liability because there is clear presumption that any information sought for, in the proposal form is material for the purpose of entering into a contract of insurance.
12. Ld. counsel for the Opposite Parties has further contended that if claim has been repudiated on the ground of suppression of pre-existing disease, same is valid and legal repudiation. Reliance has been placed upon Paramjit Kaur Vs Life Insurance Corporation of India & Anr. in IV (2014) CPJ 132(NC) wherein it has been held that when there is deliberate suppression of material facts pertaining to health on part of life assured, contract of insurance which is based on principle of utmost good faith gets vitiated and cause of death becomes irrelevant. Repudiation in such like cases is justified.
13. Ld. counsel for the Opposite Parties has further contended that Opposite Parties have mentioned the facts in detail regarding concealment of material facts pertaining to disease suffered by life assured in the written version and they have led evidence to prove the said fact by calling record from the concerned employees of the hospital. There was absolutely no necessity to call the doctor concerned who attended on the life assured (now deceased) for proving said record. Reliance has been placed upon Rajwant Kaur Vs ICICI Prudential Life Insurance Company Ltd. in Revision Petition No. 1170 of 2015 (NC) decided on 21.5.2015, wherein it has been held that “counsel for the petitioner did not pick up any conflict with this Para and insists that doctor should have been summoned. It is difficult to fathom as to why doctor be summoned.”
14 On the basis of aforesaid contentions, it has been canvassed before us that the complainants have miserably failed to prove their case. It is proved on record that Sukhwinder Singh (now deceased) life assured was suffering from pre existing disease and he was guilty of suppression of material facts at the time of issue of the policy. Repudiation of the claim preferred by the complainants has been made validity and legally by the opposite parties and no fault can be found therein. It is, therefore, contended that complaint may be dismissed with costs.
15. We have given thoughtful consideration to the rival contentions.
16. There is no dispute inter-se parties that Sukhwinder Singh (now deceased) life assured obtained insurance cover for an amount of Rs. 7,50,000/- on 24.12.2012 on payment of Rs. 92,025/- as first premium. It is also not disputed that Sukhwinder Singh (now deceased) life assured expired on 21.05.2013, copy of death certificate accounts for Ex.C4. It is the case of the Opposite Parties that the claim of the complainants has been repudiated on the ground that deceased was guilty of suppression of pre existing disease at the time of issue of the insurance cover. But, however, there is no evidence on record that the exclusion clause was duly communicated to the insured at the time of issue of the insurance cover. Reliance in this regard can be had on National Insurance Company Ltd. Vs Mona Ohri & Anr 2011(2) CPJ 383 where it has been laid down by Hon’ble State Commission, Punjab, Chandigarh that when insurance companies want to apply Exclusion Clause to deny insurance claim they have to prove that Exclusionary Clause was duly communicated to insured reference can be made to the Judgment reported as M/s Modern Instulator Ltd. Vs Insurance Co.Ltd. 1(2000) CPJ 1 (SC) in which it was held as under:-
“9.In view of the above settled position of law we are of the opinion that the view expressed by the National Commission is not correct. As the above terms and conditions of 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. Therefore, the finding of the National Commission is untenable in law”
Considering the validity of exclusion clause in the standard form contract Hon’ble Punjab and Haryana High Court in case Iffco Tokio General Insurance Company Ltd. Vs. Permanent Lok Adalat 2012(1) RCR (Civil) 901 (DB), went on to hold that the principle deducible from various precedents is that the courts would not enforce when called upon to do so, strike down such an unfair and unreasonable clause in a contract, entered into between parties who are not equal in bargaining power. For instance, the above principle would apply where the inequality of bargaining power is the result of the great disparity in the economic strength of the contracting parties. It would also apply where a man has no choice or rather, no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a set of rules as part of the contract, however, unfair, unreasonable and unconscionable a clause in that contract or form or rules may be. The types of contract to which the principle formulated above applies to terms which are so unfair and unreasonable that they shock the conscience of the Court. They are opposed to public policy and require to be adjudged void. In that regard we may place reliance on the Judgment of Hon’ble the Supreme Court rendered in the case: Central Inland Water Transport Corporation Ltd. Vs Brojo Nath Ganguly, AIR 1986 SC 1571.
17. It is not the case of the Opposite Parties that the exclusion clause was brought to the knowledge of life assured or that the same was explained to him before entering into a contract of insurance in dispute. It is now too late for opposite parties to rely on the alleged exclusion clause to dislodge the claim of the complainants.
18. Not only that, the law relied upon the opposite parties is not applicable to the facts of the present case. Claim has been repudiated by the opposite parties simply on account of facts that some misrepresentation was made regarding the health of life assured at the time of issue of the insurance cover. But the requisite evidence on record does not advance the case of the Opposite Parties in any manner. It was incumbent upon the Opposite Parties not only to prove that alleged medical evidence pertained to the life assured, but also that it was Sukhwinder Singh the life assured, who already underwent that treatment. But the bulk of medical record does not depict father’s name or address of the life assured. If at one place in the alleged record, father’s name of the patient is given, the same was mentioned as Maan Singh, whereas, the name of father of life assured was actually Manjit Singh. All this shows that there is some hanky panky in the record and it is totally unsafe to rely on that record to dislodge the claim of the complainants.
19. From aforesaid discussion, it transpires that the repudiation in this case has not been done legally rather the same has been undergone mechanically. Medical evidence regarding the alleged pre-existing disease has been relied upon erroneously. Opposite parties are found to be deficient in service. Consequently, instant complaint succeeds and the complainants are entitled to get the assured amount of Rs. 7,50,000/- under the insurance policy in dispute. Besides that, they are also entitled to get compensation to the tune of Rs. 20,000/- (Rupees Twenty thousand only) on account of deficient service on part of opposite parties. If the awarded sum is not paid by the Opposite Parties within a period of 30 days from the receipt of copy of order, the complainants shall be entitled to recover the awarded amount alongwith interest @ 6% per annum from the date of passing of the order until full and final payment. All the complainants happen to be class one heirs of Sukhwinder Singh, now deceased, as such they held entitled to receive the awarded amount in equal shares. Complainants No. 2 Jobanjit Singh and complainant No. 3 Robandeep Singh are minors and the amount falling to their respective shares, be kept in the shape of an F.D.R each in some nationalised bank until they attain the age of majority. Copies of the order be sent to the parties free of costs immediately and thereafter the file be consigned to the record room.
Announced in Open Forum
Dated: 25.02.2016
(S.S. Panesar)
President
(Jaswinder Kaur) (R.D.Sharma)
Member Member
hrg
