BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, AMBALA.

1. Kamaljeet Kaur, age 32-years, widow of late Shri Harinder Singh,
2. Evaanjot Singh, age 2 years, minor son of late Shri Harinder Singh, through her mother, natural guardian and next friend Smt. Kamaljeet Kaur,

Both resident of House no.300, Urban Estate, Old Housing Board, Sector-13, Karnal and now residing of House No.2340/B-12, Geeta Nagari, Ambala City.

          ……. Complainants.

                                                Versus

1. SBI Life Insurance Company Ltd., 8th Level, Seawoods Grand Central, Tower 2, Plot No. R-1, Sector-40, Seawoods, Nerul Node, Navi Mumbai through its Managing Director/Chairman.
2. The Manager, SBI Life Insurance Company Ltd., SCO 144, Second Floor, Near OPS Vidhya Mandir School, Urban Estate, Karnal.

Also office at First Floor, Triloki Chambers, above Canara Bank, Opposite Municipal Corporation, Ambala Cantt.

3. Jitender, Insurance Advisor (IA/CIF 991041390) c/o SBI Life Insurance Company Limited, SCO 144, Second Floor, Near OPS Vidhya Mandir School, Urban Estate, Karnal.

                                                                                   ….…. Opposite Parties.

Before:        Smt. Neena Sandhu, President.

                       Smt. Ruby Sharma, Member.           

Present:       Shri Yogesh Sehgal, Advocate, counsel for the complainants.

                      Shri U.S. Chauhan, Advocate, counsel for the OPs No.1 & 2.

                    None for the OP No.3.          

Order:        Smt. Neena Sandhu, President.

                   Complainants have filed this complaint under Section 35 of the Consumer Protection Act, 2019 (hereinafter referred to as ‘the Act’) against the Opposite Parties (hereinafter referred to as ‘OPs’) praying for issuance of directions to them to pay assured amount of Rs.10,00,000/- alongwith interest and Rs.2,00,000/- as compensation for mental agony and harassment or any other relief which this Commission deems fit and proper in the circumstances of case.

2.             Brief facts of the case are that the marriage of complainant no.1 was solemnized with Harinder Singh, resident of House No.300, Urban Estate, Old Housing Board, Sector-13, Karnal and out of this wedlock, complainant no.2 was born. Shri Harinder Singh got SBI life-Smart scholar policy from the OPs vide Customer No.649922479, Policy No.51593099304, UIN No.111L073V02, Proposal No.51NB147810 and the date of commencement of the said policy was 27-06-2019, for which he paid premium of Rs.1,00,000/- per annum. Yearly premium was to be paid for a period of 5 years. Sum assured under the said policy was Rs.10,00,000/-. Due date of last premium was 27-06-2023 and date of maturity/cover end date was 27-06-2039. Various papers were got signed from Sh.Harinder  Singh by the OPs. Shri Harinder Singh son of Shri Kehar Singh paid the first premium installment of Rs.1,00,000/- to the OPs, which was accepted and the policy was issued to Shri Harinder Singh. Shri Harinder Singh died on 08-09-2019 and the death certificate was issued by Government of Chandigarh, Department of Health Services, Chandigarh on 7-10-2019. After the death of Shri Harinder Singh, both the complainants shifted to the house of father of  complainant no.1 and started residing there. After about one and a half month of death of Shri Harinder Singh, the complainants submitted claim with the OPs for payment of the sum assured of Rs.10 lacs under the policy in question and submitted all the relevant documents. However, the OPs repudiated the claim of the complainants vide   letter dated 20-03-2020 on the ground that "late Shri Harinder Singh was suffering from Liver Disease, Cholecystitis and Diabetes Mellitus and was taking treatment for the same prior to the date of commencement of policy i.e. 27-06-2019". The OPs transferred an amount of Rs.1,00,000/- in the saving account of complainant no.1 in Punjab National Bank, Baldev Nagar, Ambala City on 06-03-2020. However, the OPs did not supply treatment record of the deceased-Harinder Singh alongwith the repudiation letter dated 20-03-2020. The cause of death of Shri Harinder Singh was not due to any liver disease, cholectstitis and diabetes mellitus as mentioned in the letter dated 20-03-2020 and thus repudiation of the claim of the complainants on account of death of Shri Harinder Singh is wrong and illegal. There was no nexus between the cause of death with the alleged material concealment. Various requests made by complainant no.1 in the matter to the OPs did not yield any result. Hence, the present complaint.
3.           Upon notice, OPs No.1 to 3, appeared and filed written version, wherein they raised preliminary objections to the effect that  the complaint is not maintainable for want of territorial jurisdiction;  the complaint is  bad for joinder of Managing Director/Chairman of the company as necessary parties; the agreement cannot be deemed to be a valid contract in terms of Section 10 of the Indian Contract Act, 1872 read with Section 14 and Section 18 together of the said Act and as such the contract of insurance is void ab initio and hence the repudiation of the claim is just and legal; the complaint is liable to be dismissed in limine; the insured himself is guilty of suppressing and concealing the material and true facts regarding his pre-existing illness at the time of taking the policy from the OPs; the complaint is frivolous and malicious and hence is liable to be dismissed etc. On merits while admitting the fact regarding purchase of the policy in question by Sh. Harinder Singh; payment of premium by him; his death and repudiation of claim filed by the complainants, the OPs stated that the Deceased Life Assured - Late Mr. Harinder Singh committed a breach of the principle of Utmost Good faith by suppressing the material fact in the proposal form that he was suffering from Alcoholic Liver Disease, Acute Cholecystitis, Diabetes mellitus Type-2, Portal hypertension and was under treatment for the same prior to the date of applying for insurance under the policy and procured the insurance policy fraudulently. Had he disclosed the existence of said illness at the time of taking the policy, the insurance cover would not have been granted to the insured by the OPs. As the risk needs to be assessed while accepting the proposal form for insurance cover, it is essential that the proposer or person whose life has to be insured gives true and correct answers to the questions in the proposal form. In the instant case, the insured answered negatively to all the questions in the medical questionnaire in the proposal form. In the proposal form under point no. 13, Medical and other details of Life to be assured, the DLA replied in negative to the specific questions as under:-
   1. 13 (4) During the last 10 years, have you undergone or advised to undergo hospitalization or an operation or any investigation or tests or Medical treatment?
   2. 13(14) Do you have Diabetes or have ever suffered or treated or have you been advised to undergo investigation for Diabetes?
   3. 13 (15) Are you suffering from, or did you suffer or undergo investigation in the past from or have you been advised to undergo investigation or treatment for: c) Liver Disease (Jaundice/ Hepatitis, etc.)"
4.           In the proposal form, under point no. 18, the insured had declared that "I hereby declare that the foregoing statements and answers have been given by me after fully understanding the questions and the same are true, accurate and complete in every manner and that I have not withheld any information. Further, I have not provided any false information in reply to any question. I understand and agree that the statements in this proposal constitute warranties. I do hereby agree and declare that these statements and this declaration shall be the basis of the contract of assurance between me and SBI Life Insurance Co.Ltd. (Company) and that if there is any mis-statement or suppression of material information or if any untrue statements are contained therein or in case of fraud, the said contract Shall be treated as per the provisions of Section 45 of the Insurance Act 1938, as amended from time to time........" 
5.           Based on the proposal form and other proposal documents and believing therein to be true and correct and in utmost good faith, the policy in question was issued to the insured.  Mr. Harinder Singh was reported to have died on 08.09.2019. The OPs received the claim intimation dated 15.01.2020 from the complainant no.1. During the assessment of claim it was found in the Discharge Summary of Post Graduate Institute of Medical Education and Research, Chandigarh that on 13.01.2019 that the DLA was Known case of (K/C/O) Chronic liver Disease and K/C/O DMt2 (Diabetes mellitus Type-2). Further, it was also noted that Decomposition Liver Disease (1) HE-1 2 Moderate Asaus (3) Jaundice.
6.           As per the Discharge Summary of Life Care Hospital, Karnal, for the period from 24.01.2019 to 30.01.2019 also, it was noted that insured was final diagnosed with alcoholic Liver Disease with Acute Calculus Cholecystitis with first time detected Type 2 DM. During the given period, the insured also went through Pathological test which supports the illness prior to the commencement of the policy. Furthermore, as per the Discharge Summary of Post Graduate Institute of Medical Education and Research, Chandigarh, for the period from 18.03.2019 to 01.04.2019, it was noted that DLA was diagnosis with ACLF-ASH/Left Knee Septic arthritis/Synovectomy + Debridement + Lavage (20/03/2019); Blood Stream infection taphyocuccus Aureus; Right sided pneumonia with synpneumonic effusion and Chronic-Ethnol related cirrhosis with Ascites / HE- II recovered portal HRN/Non-Bleeder/Type 2 DM. As per the CT Scan Report dated 04.05.2019 issued by Department of Radio diagnosis & Imaging of Post Graduate Institute of Medical Education and Research, Chandigarh it was noted that the insured was having the Clinical history and findings : c/o acute chronic liver failure. It is further noted under Impression Head that DLA was Chronic Liver parenchymal disease with portal hypertension, no arterial hypervascular lesion in liver to suggest HCC, Retroperitoneal lymphadenopathy and Cholelithiasis. Thus, it was amply proved from the above documents that Shri Harinder Singh was suffering from Alcoholic Liver Disease, Acute Cholecystitis, Diabetes mellitus Type-2, Portal hypertension and was taking treatment prior to signing the proposal form, but he did not disclose the material fact regarding his preexisting illness in the proposal form. Hence the claim under the policy  in question was repudiated as per the terms and conditions of the policy and the amount of Rs.1,00,000/- was refunded to the complainant's account no. xxxxx0326 held in Punjab National Bank, Ambala City Baldev Nagar Branch on 06.03.2020 towards refund of premium. The decision to repudiate the claim was communicated to the complainants vide claim letter dated 20.03.2020. Rest of the averments of the complainants were denied by OPs No.1 to 3 and prayed for dismissal of the present complaint with costs.
7.           Learned counsel for the complainants tendered affidavit of complainant no.1 as Annexure CA alongwith documents as Annexure CB to CJ and closed the evidence on behalf of complainants. On the other hand, learned counsel for the OPs No.1 & 2 tendered affidavit of Neelam Singh wife of Shri Surinder Pal Singh, aged about 57 years having office F Wing, 8^th Floor, Seawood Grand Central, Plot No. R-1, Sector-40, Seawoods, Nerul, Navi Mumbai-400 706 as Annexure OP-A alongwith documents Annexure OP-1 to OP-10 and closed the evidence on behalf of OPs No.1 & 2.
8.           We have heard the learned counsel for the complainant and learned counsel for the OPs No.1 and 2 and have also carefully gone through the case file.
9.           Learned counsel for the complainants submitted that since the OPs have failed to prove that there was any nexus with the treatment of ACLF-ASH/Left Knee Septic arthritis/Synovectomy + Debridement + Lavage (20/03/2019) taken by Shri Harinder Singh with alleged Alcoholic Liver Disease, Acute Cholecystitis, Diabetes mellitus Type-2, Portal hypertension, yet, genuine claim filed by the complainants under the policy in question has been repudiated by the OPs No.1 to 3, which act amounts to deficiency in providing service, negligence and adoption of unfair trade practice on their part. 
10.           On the contrary, the learned counsel for the OPs No.1 and 2 submitted that since there has been concealment of material facts with regard to the disease referred to above i.e. Alcoholic Liver Disease, Acute Cholecystitis, Diabetes mellitus Type-2, Portal hypertension, suffered by Shri Harinder Singh, at the time of obtaining the insurance policy in question, as such, the claim of the complainants was rightly rejected by the OPs No.1 and 2, strictly as per terms and conditions of the insurance policy.
11.           Admittedly, the claim of the complainants was repudiated by the insurance company vide letter dated 20-03-2020, Annexure CC, on the ground that there has been concealment/suppression of material facts by Shri Harinder Singh at the time of obtaining the policy in question, with regard to his pre-existing disease i.e. Liver Disease, Cholecystitis, Diabetes Mellitus and was taking treatment for the same. Under these circumstances, the following questions fall  for consideration before this Commission:-
    1. Whether this Commission is vested with territorial jurisdiction to decide this complaint?
    2. Whether, the disease for which Shri Harinder Singh took treatment during subsistence of the policy in question had any direct nexus with the pre-existing disease aforesaid or not? and
    3. Whether, OPs No.1 and 2 were justifying in repudiating the claim of the complainant?
12.           The first question that falls for consideration is as to whether this Commission has territorial jurisdiction to entertain and decide this complaint? It may be stated here that since the complainants are resident of Ambala, which falls under the territorial jurisdiction of this Commission as such, in this view of the matter, this Commission has territorial jurisdiction to decide this complaint in view of Section 34 (2) (d) of CPA 2019 and therefore, objection taken by the OPs in this regard is rejected.
13.           Coming to the first question is, as to whether, OPs No.1 to 3 have been able to prove their case that the treatment taken by Shri Harinder Singh during subsistence of the policy in question i.e. ACLF-ASH/Left Knee Septic arthritis/ Synovectomy + Debridement + Lavage (20/03/2019), had any direct nexus with the said alleged pre-existing diseases i.e. Alcoholic Liver Disease, Acute Cholecystitis, Diabetes mellitus Type-2, Portal hypertension or not? It may be stated here that it is the own case of OPs No.1 to 3 that Shri Harinder Singh was diagnosed to be suffering from pre-existing disease i.e. Alcoholic Liver Disease, Acute Cholecystitis, Diabetes mellitus Type-2, Portal hypertension for which he took treatment in Life Care Hospital, Karnal, for the period from 24.01.2019 to 30.01.2019 and also 19.02.2019 to 24.02.2019. Whereas, on the other hand, it is clearly coming out from the Medical Certificate of Cause of Death, Annexure CE, having been issued by the PGIMER, Chandigarh that the IMMEDIATE CAUSE OF DEATH of the insured was CARDIO PUL ARREST and the ANTECEDENT CAUSE OF DEATH of the insured- Shri Harinder Singh was due to SEPTIC SHOCK NECROTIZING FASCIITIS.  Not even a single document has been placed on record by OPs  No.1 to 3 to prove that there was any nexus  of the alleged pre-existing disease i.e. Alcoholic Liver Disease, Acute Cholecystitis, Diabetes mellitus Type-2, Portal hypertension for which the insured took treatment in Life Care Hospital, Karnal, for the period from 24.01.2019 to 30.01.2019 and also 19.02.2019 to 24.02.2019, with the  disease i.e. SEPTIC SHOCK NECROTIZING FASCIITIS (ACLF-ASH/Left Knee Septic arthritis/Synovectomy + Debridement + Lavage for which he took treatment in the PGIMER for the period from 18.03.2019 to 01.04.2019. Thus even if it is assumed that the insured was suffering from pre-existing disease, referred to above, even then it had no direct nexus with the treatment taken by the insured, for which the claim in question has been raised by the complainants being his legal heirs, after his death. A similar question as to whether, the claim is payable, in case there is no direct nexus with the treatment taken by the insured, with the pre-existing disease he is suffering from, fell for determination before the Hon’ble Supreme Court in Sulbha Prakash Motegaonkar & Ors. Vs. LIC of India [Civil Appeal No.8245 of 2015] decided on 5.10.2015, wherein,  although it was proved that the insured therein had concealed regarding his pre-existing disease but he died on account of some other reason, even then the Hon’ble Supreme Court of India, allowed the consumer complaint while holding that the disease from which the insured died had no nexus with the pre-existing disease. Relevant part of the said order is reproduced hereunder:-

“…..We are of the opinion that the 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 his lumbar spondilitis 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 Neelam Chopra Vs. Life Insurance Corporation of India and Ors, Revision Petition No. 4461 of 2012 decided on 08.10.2018, the Hon’ble National Commission  held as under :

“13.    From the above observations of the Hon'ble Supreme Court, it is clear that suppression of any information relating to pre-existing disease if it has not resulted in death or has no direct relationship to cause of death, would not completely disentitle the claimant for the claim.”

15.           Recently, also, similar view has been taken by the Hon’ble National Commission in MANJULA Vs.  MANJULA, REVISION PETITION NO. 895 OF 2021, decided on 26 September 2023.  Relevant part of this order is reproduced below:-

“………5.    We have carefully gone through the facts and circumstances of the case, orders of the State Commission, other relevant records, case laws relied upon by the parties / State Commission and written arguments of the petitioner and respondent.  Considering that there was no nexus between the material fact / information relating to pre-existing ailment alleged to  have been suppressed and the cause of death, keeping in view the decision of Hon’ble Supreme Court in Sulbha Prakash Matogaonkar (supra) and other judgments of this Commission cited , we find that State Commission committed a material irregularity in allowing the appeal of Respondents herein and are of the view that repudiation of the claim by OP Insurance Company is not correct. 

In view of the foregoing, the order of the State Commission is set aside and order of the District Forum is restored….”

16.           Considering this fact that there was no nexus between the material fact/information relating to pre-existing ailment alleged to  have been suppressed by the insured and the cause of death, keeping in view the decision of Hon’ble Supreme Court in Sulbha Prakash Matogaonkar (supra) and other judgments of the Hon’ble National Commission  cited above,  we are of the view that repudiation of the claim of the complainants by OPs No.1 and 2 is not correct.  The complainants are therefore held entitled to get the sum assured under the policy in question. Perusal of policy document Annexure CB/OP-1, reveals that the basic Sum Assured is of Rs.10,00,000/-.  From the copy of statement of account Annexure CG, it is evident that on 06.03.2020, the insurance company has credited the amount of Rs.1 Lac in the account of the complainant, therefore, it is liable to pay the remaining sum assured amount of Rs.9,00,000/- (nine lacs) (Rs.10,00,000/- – Rs.1,00,000/-).
17.           Complaint against OP No.3 is liable to be dismissed because he being Advisor of the Company has limited role in the matter and it is OPs No.1 and 2 who have received premium from the insured and also repudiated the claim filed by the complainants.
18.           In view of the aforesaid discussion, we hereby dismiss the present complaint against OP No.3 and allow the same against OPs No.1 and 2 and they are directed in the following manner:-
    1. To pay the sum assured amount of Rs.9 lacs (Rs.10 lac – Rs.1 Lac) to the complainants alongwith interest @6% p.a. from the date of repudiation of the claim onwards i.e. from 20-03-2020.
    2. To pay Rs.5,000/- as compensation for the mental agony and physical harassment suffered by the complainant.
    3. To pay Rs.3,000/- as litigation expenses.

The OPs No.1 and 2 are further directed to comply with the aforesaid directions within the period of 45 days, from the date of receipt of the certified copy of the order, failing which the OPs No.1 and 2 shall pay interest @ 8% per annum on the awarded amount, from the date of default, till realization. Certified copy of this order be supplied to the parties concerned, forthwith, free of cost as permissible under Rules. File be indexed and consigned to the Record Room.

Announced:- 09.10.2023