BEFORE THE DISTT. CONSUMER DISPUTES REDRESSAL COMMISSION, ROPAR
Consumer Complaint No. : 31 of 28.04.2021
Date of decision : 19.09.2022
Poonam Sharma aged 46 years, widow of Rishi Raj Sharma, resident of House No.1235, Jain Street, Rupnagar, Tehsil & District Rupnagar
......Complainant
Versus
- SBI Life Insurance Co. Limited, Corporate and Registered Office Natraj M.V. Rod & Western Express Highway Junction Andheri (E) 400069
- SBI Life Insurance Co. Ltd. SCO-127-128, 3rd Floor, Sector 17-C, Chandigarh-0160017
- State Bank of India, 6342, Ropar, District Ropar
...Opposite Parties
Complaint under Consumer Protection Act
QUORUM
SH. RANJIT SINGH, PRESIDENT
SMT. RANVIR KAUR, MEMBER
ARGUED BY
Sh. Suraj Pal Singh, Adv. For complainant
Sh. Varinder Singh, Adv. counsel for O.Ps No.1 & 2
Sh. S.K. Bhanot, Adv. for OP No.3
ORDER
SH. RANJIT SINGH, PRESIDENT
The present order of ours will dispose of the above complaint filed under Consumer Protection Act, by the complainant against the Opposite Parties on the ground that on 23.2.2017, the husband of the complainant namely Rishi Raj Sharma was insured with the opposite parties and having member ID No.46242571 Master Policy No.70000011107 product name SBI Life Rinn Raksha UIN 111No.78V02. The policy was purchased by Rishi Raj Sharma, which covers protection on death of life insured during the term of policy. The benefit under the policy helps in repayment of outstanding loan as Rishi Raj Shrama since deceased has obtained loan of Rs.18,50,000/- for 324 month ad he was regularly paying the installment till his death and in order to protect the deceased had got the present policy in which the complainant was in nominee. At the time of issuance of policy, the opposite parties himself got the deceased Mr. Rishi Raj Sharma medically examined and he was not having any disease at that time and after making all the formalities and inquires the policy was issued after the satisfaction of the opposite parties. On 8.7.2018, Mr. Rishi Raj Sharma had pain in chest and he was admitted at Dayanand Medical College and Hospital, Ludhiana, where he was treated and died on 11.7.2018. After the death of Rishi Raj Sharma, the complainant had given the information on Email regarding the death of Rishi Raj Sharma to the opposite parties but the complainant was astonished that her claim has been repudiated on 21.11.2019 by the opposite parties without any reasonable cause. The complainant being nominee of the deceased Rishi Raj Sharma had made repeated requests to the opposite parties to make the claim of the deceased Rishi Raj Sharma but the opposite parties had given the reasons regarding the repudiation of claim i.e. due to non discloser of Mody. Thus, alleging deficiency in service, the complainant sought the following relief against the OPs:-
- To pay all the remaining loan instalments
- To pay Rs.50,000/- as compensation
- To pay Rs.30,000/- as litigation expenses
2. In reply, the OPs has filed written reply taking preliminary objection; that the life insurance contract is a contract of utmost good faith where in the proponent is duty bound to disclose everything concerning his/her health, habits and other related matters which are within his/her knowledge at the time of making the proposal, failing which the insurer has every right to repudiate the claim; that in life insurance contract, there is a positive duty on the proposer to disclose all facts material to the risk being proposed, accurately and fully. Every fact is material which would influence the judgment/assessment of risk by an insurer in fixing the premium or determining whether he will undertake the risk or not. Concealment is the failure of the insured to reveal a material fact to the insurer; that proponent is duty bound to disclose every factual information in the proposal form whether he/she considers it as material or not. The proposal form is the sole basis to decide the eligibility as to whether a member can be granted insurance cover; that there is no negligence, carelessness or deficiency in service on the part of the answering OPs; that the answering OPs have duly discharged all the obligations, no deficiency can be alleged on the part of the answering OPs; that the present complaint has not been filed for real cause of justice but has been filed with malafide intention to harass the answering OPs as well as pressurize the answering OPs to sanction the claim filed by the complainant knowing fully well that the DLA had concealed and suppressed the material fact at the time of procuring insurance cover from the answering OPs; that the DLA 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. On merits, it is stated that the DLA was insured based on the information provided by the DLA in the proposal form and believing the same to be true and correct. In life insurance contracts, there is a positive duty to the proposer to disclose all facts material to the risk being proposed, accurately and fully. Concealment is the failure of the insured to reveal a material fact to the insurer. In the instant case, the DLA was suffering from MODY and was under treatment for the same, which he did not disclose in the proposal form and procured the insurance cover fraudulently. If the DLA had disclosed the existence of said illness at the time of taking the insurance cover, the insurance cover would not have been granted to the DLA by the answering OPs. The suppression of material information is fatal to the contract of insurance, which is based on the principle of utmost good faith. It is further stated that on receipt of the death claim intimation from the complainant, the answering OPs conducted death claim investigation and during investigation, it was revealed that the DLA was suffering from Maturity on Set Diabetes since 20 years, hence he was not eligible to apply for the insurance cover, even though applied for the insurance cover, did not disclose the facts about his pre existing disease to specific medical questions and thus obtained the insurance cover fraudulently from the answering OPs. The facts of the pre existing disease of the DLA are evident from the death summary of the DLA issued by the DMCH Hospital, Ludhiana and the out patient records and progress sheet of treatment taken by the DLA from the PGI, Chandigarh. Hence, the claim was repudiated, on repudiation the complainant was paid Rs.52,972/- vide direct transfer to her bank account with State Bank of India, on 28.03.2019 and the decision taken was intimated to the complainant vide letter dated 28.03.2019. There is no provision in the terms and conditions of the policy to pay the outstanding loan amount. Thus, alleging no deficiency in service on the part of the OPs and prayed for dismissal the present complaint.
3. The learned counsel for the OP No.3 has filed written reply taking preliminary objections; that the complainant has no locus standi to file the present complaint and it does not lie; that the present complaint is not maintainable; the complaint is bad for mis joinder and non joinder for necessary party; that the complainant has wrongly impleaded OP No.3 as party; that the complainant has not come to this Court with clean hands and has concealed the material facts. On merits, it is stated that there is no deficiency in service on the part of answering OP. The dispute between the complainant and OPs No.1 & 2. The loan was applied and obtained by Rishi Raj and Vikas Sharma though the equitable mortgage was created by Vikas Sharma of his property with the answering OP and both got them ensured with Ops No.1 & 2 independently to secure their liability to repay the loan amount in case of death. Lastly prayed to dismiss the complaint against the answering OP.
4. The learned counsel for the parties have tendered certain documents in support of their version and closed the evidence.
5. We have heard the learned counsel for the contesting parties and have gone through the record file, carefully and minutely.
5. It is pertinent to mention here that the deceased Rishi Raj Sharma husband of the complainant is borrower in the loan amount and was insured for fully amount and entitled for the benefit of insurance.
6. The main objection of the OPs is that the Deceased Life Assured has not disclosed his pre existing disease but the same was not disclosed him in the proposal form.
Non disclosing of insured being a patient of diabetes did not amount to suppression of material facts they being a lifestyle diseases, so as to entitle the insurer to repudiate the claim as held by our own High Court in case Veena Sharma Vs Life Insurance Corporation of India 1999 (1) R.C.R. (Civil) 646. Disease that can be easily detected by subjecting the insured to basic tests like blood test, ECG, etc., the insured is not supposed to disclose such disease because of otherwise leading a normal and healthy life and cannot be branded as diseased person. Insurance Company cannot take advantage of its act of omission and commission as it is under obligation to ensure before issuing medi-claim policy whether a person is fit to be insured or not. It appears that Insurance Companies don’t discharge this obligation as half of the population is suffering from such malaises and they would be left with no or very little business. Thus any attempt on the part of the insurer to repudiate the claim for such non-disclosure is neither permissible nor is ‘exclusion clause’ invoceable. Claim of any insured should not be and cannot be repudiated by taking a clue or remote reference to any so-called disease from the discharge summary of the insured by invoking the ‘exclusion clause’ or non-disclosure of pre-existing disease’ unless the insured had concealed his hospitalization or operation for the said disease undertaken in the reasonable near proximity as referred above. Day-to-day history or history of several years of some or the other physical problem one may face occasionally without having landed for hospitalization or operation for the disease cannot be used for repudiating the claim. For instance an insured had suffered from a particular disease for which he was hospitalized or operated upon 5, 10 to 20 years ago and since then had been living healthy and normal life cannot be accused of concealment of pre-existing disease while taking medi-claim policy as after being cured of the disease, he does not suffer from any ‘disease’ much less the ‘pre-existing disease’. For instance to say that insured has concealed the fact that he was having pain in the chest off and on for years but has never been diagnosed or operated upon for heart disease but suddenly lands up in the hospital for the said purpose and, therefore is disentitled for claim bares dubious design of the insurer to defeat the rightful claim of the insured on flimsy ground. Instances are not rare where people suffer a massive attack without having even been hospitalized or operated upon at any age say for 20 years or so. Non-disclosure of hospitalization/or operation for disease that too in the reasonable proximity of the date of medi claim policy is the only ground on which insured claim can be repudiated and on no other ground.
6. It is important to mention here that SBI Life Insurance clearly mentioned in its terms and conditions that “you have not undergone medical examination for obtaining the insurance cover, then 80% of the premium refunded without interest”. But in the present case, the OPs did not do this. As per terms and conditions of the OPS No.1 & 2, co borrower clause (Para No.30) of the Insurance policy (contract) speaks about the case where a single loan co borrowers are insured, each for full loan amount. In case of death of any of the co-borrower during the subsistence/continuance of policy, the claim (for the whole of remaining/outstanding amount of loan) becomes payable. On payment of death claim, the insurance cover of the remain borrower (s) will be terminated by payment of surrender value to him/them. It is important to mention here that Sh. Rishi Raj Sharma was taken the insurance policy to secure his liability to repay the loan amount in case of his death.
7. At the time of insured the loan amount, the OPs gave the policy booklet to the complainant, in which the Insurance Company has mentioned in clause 3.1 Death benefit of sub clause 3.1.1. that if all the due premiums have been paid, on death of life assured the policy term, we will pay the sum assured as per the sum assured schedule mentioned in the certificate of insurance.
7. Even otherwise, with the fast growing business competition among the Insurance Companies, unhealthy practices develop to get maximum benefits and profits. It is not a case of a businessman, trader or an educated employed person but that of a common poor man. He puts his hard earned small savings in such schemes with a hope and aspiration that in case of accident or death, he or his family shall get some immediate financial assistance but in most of the cases, he is left cheated when his claim is rejected with just a stroke of pen that he concealed some material facts at the time of signing proposal form or the claim was not properly submitted before the Insurance Company or the claim is against the terms & conditions of the policy. That apart the agent of the company is required to explain all the details and conditions of the insurance policy sought by the customer. A common man is not supposed to know all the niceties and technicalities of law. Once accepting the premium and having entered into an agreement without verifying the facts, the Insurance Company cannot wriggle out of the liability merely by saying that the contract was made by misrepresentation and concealment. The insurance policies should not be issued and repudiated in such a casual mechanical manner. The policy entails the liability on both sides. It is rather exploitation of the customer and more or less fraud on the public. Such practice should be strongly deprecated.
8. It is important to mention here that in the loan, Sh. Rishi Raj Sharma, (deceased) was borrower and was insured for loan amount. The house on which the loan is taken is in the name of Vikas Sharma and he is also borrower as per loan document produced by the Bank. Vikas Sharma is still alive. Therefore, Vikas Sharma is liable to pay 50% of the loan amount still standing.
9. In view of our above discussion, we allow the complaint with observation that Sh. Rishi Raj Sharma is liable to pay only 50% loan amount is still standing as per loan document. Poonam Sharma, complainant is entitled to refund the amount paid by her in the shape of installments after the death of her husband (Rishi Raj Sharma) borrower along with interest @ 7% per annum. The complainant is also entitled compensation to the tune of Rs.50,000/- with litigation expenses to the tune of Rs.22,000/-. The OPs No.1 & 2 are directed to comply with the said order within a period of 30 days from the date of receipt of certified copy of this order. Free certified copies of this order be sent to the parties, as per rules. The files be consigned to record room.
ANNOUNCED (RANJIT SINGH)
Dated.19.09.2022 PRESIDENT
(RANVIR KAUR)
MEMBER
