DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,

PATIALA.

                                      Consumer Complaint No. 325 of 17.8.2016

                                      Decided on:   29.11.2019

Jeenatul Nisha wife of Rafik Ahmed, resident of # 138, Alipur Road, Shakti Nagar, Patiala.

                                                                   …………...Complainant

                                      Versus

1.       SBI Life Insurance Co. Ltd., Corporate Office & Regd. Office: Natraj, M.V.Road & Western Express Highway Junction, Andheri €, Mumbai-400069through its Managing Director.

2.       State Bank of Patiala, Branch IOC, Near Railway Station, Patiala through its Manager.                                                                   …………Opposite Parties

                                      Complaint under Section 12 of the

                                      Consumer Protection Act, 1986.

QUORUM

                                      Sh. M.P.Singh Pahwa, President

                                      Smt. Inderjeet Kaur, Member

                                      Sh.B.S.Dhaliwal, Member      

ARGUED BY

                                      Sh.Inderpal Singh,Adv. counsel for complainant.

                                      Sh.Punkeet K Gupta,Adv. counsel for OP No.1.

                                      Sh.Hemant Nanda,Adv. counsel for OP No.2.             

 ORDER

                                   M.P.SINGH PAHWA,PRESIDENT

1. This is the complaint filed by Jeenatul Nisha   (hereinafter referred to as the complainant) against SBI Life Insurance Co. Ltd. and another, (hereinafter referred to as the OPs).
2. Briefly the case of the complainant is that she is widow of Rafik Ahmed s/o Kareem Mast. During his life time, Rafik Ahmed had availed SBI Rin Raksha personal loan of Rs.2,50,000/- vide loan account No.65243938162 from State Bank of Patiala , Branch IOC, Patiala.
3. The loan was repayable in 48 installments with interest. The loan was insured with OP No.1 vide policy No.70000004006, for sum assured of Rs.2,53,857/- and the policy commenced from 27.10.2015. It was valid till 27.10.2019 for a period of 48 months.Rafik Ahmed had paid premium of Rs.3857/- to the OPs.
4. Before issuance of the policy, the OP No.1 got medically examined Rafik Ahmed from the competent doctor as per directions of the OPs and he was found medically fit and was not suffering from any disease. Only after medical examination of Rafik Ahmed, he was insured, relating to the loan.
5.  Rafik Ahmed had regularly paid the loan to the bank, in installments. Unfortunately, he died natural death on 19.1.2016.Intimation of his death was immediately given to the OPs. Thereafter, complainant requested OP No.1 to disburse the claim and to make payment of due and outstanding amount to OP No.2 as the loan was insured. She also supplied relevant documents and filled the claim form. OPs assured that the amount of claim will be disbursed soon to OP No.2 by OP No.1 and loan will be cleared.
6. It is pleaded that the OP No.1 sent letter dated 13.4.2016 stating therein that the claim has been repudiated as deceased life assured had given a false good health declaration. He had not disclosed material fact at the time of entering into the scheme.
7. It is alleged that the rejection of the claim by the OP is illegal, arbitrary and is without any valid reason.
8. The complainant got served legal notice dated 27.6.2016 and requested OPs to make the payment of the sum assured by way of clearance of loan with the bank and to pay compensation of Rs.one lac, on account of mental agony, tension and humiliation in addition to Rs.11000/- costs of the legal notice. The notice was duly served upon OPs but OPs sent vague reply. OPs did not do the needful.

Hence this complaint.

9. Upon notice, OPs appeared through their respective counsel and contested the complaint by filing separate written replies.
10. In reply, OP No.1 after giving background and business of the company, raised preliminary objections that the address of OP No.1 is at Navi Mumbai but the complaint is filed before this Forum. Hence the complaint is not maintainable for want of territorial jurisdiction. It is liable to dismissed against OP No.1 ; that the Managing Director is not involved in day to day activities of the company and the Operations Department handles all the operational issues. The complaint is totally misplaced against the person who is named as OP No.1; that the life insurance contract is a contract of utmost good faith. The OP 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.
11.  The deceased life assured (for short DLA) Sri Rafik Ahmed committed a breach of the principle of utmost good faith by suppressing the material fact that he was suffering from heart disease prior to the date of commencement of risk. If DLA had disclosed the existence of heart disease, at the time of taking the policy, the insurance cover would not have been granted to DLA by the OP. The suppression of material fact is fatal to the contract of insurance. Therefore, the complaint is not maintainable.
12. The complaint has not been filed for real cause of justice but has been filed with malafide intention to harass  and pressurize the OP to sanction the claim filed by the complainant knowingfully well that the DLA had concealed and suppressed the material facts at the time of procuring insurance cover and DLA has committed fraud with the intention to obtain the insurance cover. There is no negligence, carelessness or deficiency in service on the part of the OP.
13. Thereafter the OP has given the brief facts of the case as under:

The deceased life assured Rafik Ahmed applied for insurance cover under Rinn Raksha Group Insurance under Master policy No.70000004006 issued to the State Bank of Patiala through membership form No.7005657591 dated 26.10.2015 to cover his loan account No.65243938162 availed from State Bank of Patiala. The risk commenced on 27.10.2015 for sum assured of Rs.2,53,857/- at inception. The DLA was issued certificate of insurance as an evidence of his insurance cover. The risk covered under the Group Insurance Scheme is of diminishing nature and the sum assured tapers down as the EMIs are paid off.

As per the certificate of insurance, point No.19, Policy benefits including the following:

Death Benefit: “In the event of death of the life assured during the policy term, the sum assured applicable for the month and year of death, as per the sum assured schedule (as mentioned in the annexure) is payable, provided all the premiums due upto the date of death have been fully paid. The death benefit will be payable irrespective of the actual outstanding loan amount or the amount outstanding as per the loan repayment schedule”.

In the instant case, it is clear from the Annexure 1, Table of Sum Assured Benefits of COI that outstanding loan amount as on the date of death is Rs.2,46,346/-.

14. Thereafter, OP raised legal objections similar to the objections raised earlier i.e. mainly concealment of material facts regarding his health.
15. It is also pleaded that the cover was issued on non medical basis. The proposal form is the primary document for assessment of risk and answer to each and every question is vital for underwriter to decide whether the proposed life is to be insured or not and incorrect information stated in the proposal form certainly vitiates the interest of the insurer. The insurer is well within its right to repudiate the claim whenever material facts are suppressed by the LA.
16. Rafik Ahmed was reported to have died on 27.10.2015.The policy resulted in a claim in just 2 months and 23 days. OP conducted an extensive investigation and found that the DLA was suffering from heart disease prior to the date of signing of the proposal form.
17. As per colour Doppler Echocardiography report dated 15.9.2015 of Dr.Teneja’s Heart Care Centre, final impression is mentioned as “Mild PAH (Pulmonary Arterial Hypertension), Moderate TR (Tricuspid regurgitation), RV Dysfunction( Right Ventricular Dysfunction) could be consistent with Cor-pulmonale, LV Diastolic Dysfunction (Left Ventricular Dysfunction).
18. As per the prescription of Dr.Taneja’s Heart Care Centre dated 15.9.2015, it is clear that DLA was diagnosed to have COPD, Cor Pulmonale.
19. The complainant has also admitted in her statement that DLA was taken to Taneja Hospital and was taking treatment. These documents are prior to the signing of membership form and clearly establishes that DLA was suffering from heart disease prior to date of signing of proposal form. Therefore, the OP is justified in repudiating the claim of the complainant.
20. It is further revealed that in the Master policy under clause 11.8 under the caption Non Disclosure, it is clearly mentioned that, “ We have issued the COI based on your/member statements in membership form, personal statement, medical reports and any other relevant documents. If we find that any of this information is inaccurate or false or the member has withheld any material information, we shall declare the member policy null and void but subject to section 45 of the Insurance Act,1938.”
21. It is also relevant to mention that in support of these submissions (Objections), the OP has also quoted various case laws, the repetition of which is considered not necessary at this stage for the sake of brevity.
22. On merits, it is admitted that the DLA had applied for insurance cover under Rinn Raksha Group Insurance under Master policy No.70000004006 issued to the State Bank of Patiala through membership form No.7005657591 dated 26.10.2015 to cover his loan and the risk commenced from 27.10.2015 with sum assured of Rs.2,53,857/- at inception.
23. In further version, the OP has reiterated its stand as taken in the preliminary objections and detailed above. In the end the OP prayed for the dismissal of the complaint.
24. OP No.2, in its reply raised preliminary objections regarding maintainability of the complaint mainly on the material facts  that there is no deficiency on his part; complaint is not maintainable.
25. On merits, it is admitted that Rafik Ahmed availed loan and the loan was insured with OP No.1 as per their terms and conditions. All the other averments are denied mainly due to relating to OP No.1.
26. Parties were afforded opportunity to produce their evidence.
27. In support of her case, complainant tendered in evidence her affidavit, affidavit of Ex.CA, affidavit of Kafil Ahamed, Ex.CB, affidavit of Brij Mohan, Ex.CC alongwith documents i.e. copy of death certificate, Ex.C1, copy of ration card,Ex.C2, copy of letter dated 13.4.2016,Ex.C3, copy of certificate of insurance Ex.C4 with terms and conditions, copy of Aadhar card, Ex.C5, copy of certificate, Ex.C6, copy of legal notice, Ex.C7, postal receipts, Exs.C8,C9, copy of membership form,Ex.C10, copy of attendance register,Ex.C11.
28. OP No.1 tendered into evidence affidavit of Ms Dhanya.K.P.,Manager-Legal, Ex.OPA, copy of policy document,Ex.OP1, copy of membership form,Ex.OP2, copy of certificate of insurance Ex.OP3, copy of investigation report,Ex.OP4, copy of ECO report,Ex.OP5, copy of statement of complainant, Ex.OP6, copy of letter dated 13.4.2016,Ex.OP7.
29. OP No.2 tendered into evidence affidavit of Sudama Prasad, Manager, Ex.OPB.
30. OP1 has also submitted written arguments.
31. We have heard the ld. counsel for the parties and gone through the record of the case.
32. The ld. counsel for the complainant has reiterated his stand as taken in the complaint. It is further submitted by the ld. counsel for the complainant that the OPs have repudiated the claim vide letter dated 13.4.2016,Ex.C3 on the ground that the DLA has singed declaration of good health.

As per medical treatment papers dated September,2015, he was suffering from heart disease prior to the commencement of the policy.

As such the OP has repudiated the claim and paid sum of Rs.3333/- received as premium.

33. It emerges that the OP has repudiated the claim only on the basis of medical record Ex.OP5. This record is allegedly collected by the Investigator, whose report is Ex.OP4. The name of the Investigator is not revealed. There is no affidavit of the Investigator to corroborate the report.
34. Moreover, from the medical record,Ex.OP5, also it cannot be concluded that the DLA was suffering from heart disease.  Final conclusion is  rather ‘No Wall Motion abnormality’.

Had there been any heart problem as alleged, the DLA was certainly to be admitted in the hospital or referred to some other hospital. There was treatment for only one day i.e. 15.9.2015 Mild PAH, moderate TR, RV, cannot be equated with any serious heart problem, justifying the repudiation of the claim.

Moreover, this alleged problem has no connection with the cause of death. It is not the case of the OP that DLA had died due to this problem. Therefore, the repudiation is unjustified and amounts deficiency in service and unfair trade practice.

35. On the other hand, the ld. counsel for the OP has submitted that the contract of insurance is based on good faith. The insured is required to reveal correct information regarding state of his health.

Membership form is Ex.OP2.Column No.5 relates to medical questionnaire and the insured was asked various questions regarding his health but the answers to all the questionnaire were in negative.

He was also specifically asked whether he has ever suffered/being treated/hospitalizedfor diagnosis to have chest pain, heart attack, heart disease or any other disorder of the circulatory systom. His answer was in negative.

36. The policy commenced from 27.10.2015.OP has collected the medical record from Dr.Taneja Heart Care Centre, Ex.OP5, which proves that the DLA was suffering from Mild PAH, moderate TR, RV. Therefore, this treatment was taken before availing policy. As such, it is proved that the DLA has concealed the actual state of his health. Hence OP has justified to repudiate the claim on the ground of suppression of material facts.
37. Ld. counsel for the OP has relied upon following case laws:

Neelam Gupta Vs. Reliance Life Insurance decided on 9.2.2011, by the Hon’ble National Consumer Disputes Redressal Commission, New Delhi, decision of Hon’ble Supreme Court in Appeal No.803 of 2008, titled as  Sea Lark Fisheries Vs. United India Insurance Co. & Anr. and appeal No.5322 of 2007 titled as P.C.Chacko and Another Vs. Chairman, Life Insurance Corporation of India and others, decided on 20.11.2007.

38. We have given careful consideration to the rival submissions and the cited case laws.
39. Admitted facts are that the deceased Rafik Ahmed, husband of the complainant availed housing loan from OP No.2, which was got insured from OP No.1. Rafik Ahmed died on 19.1.2016. The complainant lodged the insurance claim with the OP No.1 but the OP No.1 has repudiated the same vide letter dated 13.4.2016,Ex.C3.
40. From the perusal of this letter, it is noticed that the OP has concluded that Rafik Ahmed was suffering from heart disease prior to the commencement of the policy and has given false good health declaration. Therefore, the OP has repudiated the claim on the ground of concealment of material fact regarding health condition.
41. Copy of the membership form is on the file as Ex.C10.As per this document Rafik Ahmed denied having suffering from any kind of disease mentioned in column No.5.Therefore, it is to be examined whether the OP is able to prove that the deceased was suffering from heart disease and he was aware of this fact.
42. The OP has got the matter investigated. Report of the Investigator is Ex.OP4. It is noticed that the investigation has been conducted by Ganpati Associates. But name of the person who conducted the investigation is not mentioned. There is no affidavit of the person who conducted the investigation. It is concluded that there is no suspicion in the death of LA as found in field investigations.
43. Of course, it is mentioned that the LA died at home due to heart problem and he was cremated in his native place in Sultanpur UP but there is no evidence to show that the death was due to heart problem.

The Investigator has concluded on the basis of statement of complainant and record of Taneja Hospital.

44. Record of  Dr.Taneja’s hospital is on the file as Ex.OP5. It is dated 15.9.2015, which is certainly prior to the date of membership and commencement of the policy, which commenced on 27.10.2015.

It is only a simple prescription slip. The complaints made by the complainant are not mentioned in the prescription slip. Diagnosis of the problem is not mentioned in the prescription slip. The main reliance of the OP is on ECO Cardigraphy report Ex.OP5. The final Impression reported in the slip are as under:

1. Mild PAH, moderate TR, RV dysfunction (could be consistent with cor-pulmonale)

2. IV diastolic dysfunction
3. No wall motion abnormality   
4. PR  

45. Therefore, the main problems are stated regarding Mild PAH, moderate TR, RV dysfunction. There is no wall motion abnormality and PRETEROUS LV systolic function .There is no mention that the DLA was suffering from any heart problem.
46. Investigator has also noticed that the LA was in Govt. service. He was labour handling (Palledar) contractor.

Therefore, keeping in view the nature of the work of the DLA also, it cannot be expected that he would have understood the meaning of impressions reported in the ECO report.

In prescription slip the doctor has no where advised for admission or further treatment. He has prescribed only the medicines for five days and there is no advise for follow up also.

47. Therefore, from  the evidence collected by  OP also, it cannot be definitely concluded that the DLA was suffering from heart disease and that he was  in the knowledge of this fact. When the person is unaware from any disease, he cannot be held liable for concealment of this fact.
48. From the medical literature the Pulmonary Arterial Hypertension PAH is noticed as life threatening condition that gets worse over time but treatment can help symptoms and the patient can live better with the disease. Plenty of people who have it find ways to do all the things they love, just as they did before they were diagnosed.
49. In the case, it was simply mild PH and not PAH. Therefore, it was certainly curable with the medicines and he was prescribed medicines only for five days.

          Left ventricular diastolic dysfunction is also curable with effected treatment and it is admitted fact that clinical evidence is accumulating to support effective treatment in patience with left ventricular diastolic dysfunction.

50. Therefore, from this aspect also, it can be concluded that the complainant was not suffering from any serious heart problem as projected by the OPs.
51. The net conclusion is that the repudiation of the claim on the ground of suppression of facts regarding health condition is not sustainable, which amounts to deficiency in service and unfair trade practice.
52. The repudiation was by OP No.1. In written version, the OP has admitted that outstanding loan as on the date of death of DLA was
    Rs.2,46,346/-which was covered under the policy. Therefore, the OP No.1 is liable to pay this amount of Rs.2,46,346/- to the complainant and if this amount is still due against the DLA then this amount is to be paid to OP No.2, which is to be adjusted against the loan availed by the DLA. The OP is also liable to pay interest on this amount from 19.1.2016 as is payable to OP No.2 or was paid to OP No.2 against the loan account.
53. The complainant is also held entitled to the sum of Rs.10,000/- as compensation for having suffered from harassment, mental agony and humiliation and Rs.10,000/- as costs of litigation.    
54. For the reasons recorded above, the complaint is allowed and the OP No.1 is directed to comply with the aforesaid directions within a period of 45 days from the date of the receipt of the certified copy of this order. Certified copies of this order be sent to the parties free of cost under the Rules. Thereafter, file be indexed and consigned to the Record Room.

ANNOUNCED

DATED:29.11.2019     

 B.S.Dhaliwal                         Inderjeet Kaur              M. P. Singh Pahwa

       Member                                 Member                                      President