Haryana

Karnal

CC/434/2021

Vijay Chawla - Complainant(s)

Versus

SBI Life Insurance Company - Opp.Party(s)

Ved Pal

22 Aug 2024

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, KARNAL.

 

                                                        Complaint No.434 of 2021

                                                        Date of instt.27.08.2021

                                                        Date of Decision:22.08.2024

 

Vijay Chawla son of Jaswant Rai Chawla, resident of house no.1924, sector-4, Part-II, Urban Estate, Karnal, aged about 51 years. Aadhar no.5867-4860-8493.

                                                                        …….Complainant.

                                              Versus

 

1. SBI Life Insurance Company SCO no.144, 2^nd floor, near OPS Vidhya Mandir School, Urban Estate, Karnal through its Branch Manager.
2. State Bank of India, Branch at Sector-12, Urban Estate, Karnal, through its Branch Manager.

 

                                                                   …..Opposite Parties.

 

Complaint under Section 35 of Consumer Protection Act, 2019.

 

Before   Shri Jaswant Singh……President.     

      Ms. Sarvjeet Kaur……Member

 

 Argued by: Shri Ravi Sharma, counsel for the complainant.

                    Shri N.K.Zak, counsel for the OP no.1.

                      Sh. Sudershan Chaudhary, counsel for the OP no.2.

 

                     (Jaswant Singh, President)

ORDER:   

                

                The complainant has filed the present complaint under Section 35 of the Consumer Protection Act, 2019 against the opposite parties (hereinafter referred to as ‘OPs’) on the averments that wife of complainant namely Smt. Kamlesh Chawla took house loan of Rs.12.00 lakhs for the construction of her house no.1924 Sector-4, Part-II, Urban Estate, Karnal from the OP no.2. The wife of the complainant was having a saving account no.00000020280923256 with the OP no.2. After getting said loan, the wife of complainant started repaying the loan installments to the OP no.2. When loan amount remained to the tune of Rs.10,85,000/- then the official of the OP no.2 forced to the wife of the complainant to purchase life insurance policy of the balance loan amount from its sister concern i.e. OP no.1. The official of the OP no.2 assured the wife of complainant that said amount always covers the risk of the balance loan amount and that if anything would be mis-happened with the loanee then her legal heirs shall not have to pay the loan amount as the life insurance amount would be adjusted in the loan amount and bank will issue No Dues Certificate qua said loan amount. The wife of complainant agreed for the instructions of the OP no.2 and then OP no.2 through OP no.1 got issued insurance policy bearing no.70746298704 which was having risk cover value of Rs.10,85,000/-. The said policy is for SBI Life Group Rinn Raksha Series III-SP Plan. The OP no.1 also financed the insurance premium amount of said life insurance policy and the EMI of same was Rs.457/- which was being deducted by the OP no.1 from the saving account of the wife of the complainant. The wife of complainant started suffering from fever on 22.04.2021 and on 23.04.2021 she got her RT-PCR tested and she was found ‘Corona Positive’. The said report was received on 27.04.2021. On 28.04.2021, she was admitted in the Park Hospital, Kanral for her treatment but unfortunately on 02.05.2021 she died during her illness. The cause of death of wife of the complainant was diagnosed as covid-19 Pneumonia Sepsis. After death of his wife, complainant lodged the claim with the OPs and submitted all the required documents. Thereafter, complainant requested the OPs several times for settlement of the claim but OPs did not pay any heed to the request of complainant and lastly repudiated the claim of complainant, vide letter dated 30.06.2021 on the ground that the deceased was suffering from heart disease and was under treatment prior to the purchase of the policy. The OP no.1 transferred an amount of Rs.38084/- in the account of the complainant on 30.06.2021, which is the amount of premium received by the OP no.1 through OP no.2. The OP no.1 refunded the said amount just to save its skin from the payment of life insurance amount of his wife. The repudiation of the claim of complainant is illegal, null and void because the cause of death of wife of complainant is covid-19. It is further alleged that in the meantime, the complainant approached the OP no.2 for adjustment of the loan amount from the insurance amount but OP no.2 started postponed the matter on one pretext or the other and deducted the EMI from the saving account of the wife of complainant whereas the fact is that after death of wife of complainant, the OP no.2 was not entitled for single penny from the complainant but despite of that OP no.2 has deducted an amount of Rs.44,400/- in a illegal and unlawful manner and also deducting the insurance premium of Rs.1828/- i.e. of four months knowing well that loanee has expired and after death no insurance can be deducted. It is matter of surprise, on one hand OP no.1 refunding the insurance premium and whereas OP no.2 is deducting the insurance premium from the account of wife of complainant, which show the malafide intentions of both the OPs. Due to this act and conduct of the OPs, complainant has suffered mental pain, agony, harassment as well as financial loss. In this way there is deficiency in service and unfair trade practice on the part of the OPs. Hence this complaint.

2.             On notice, OP no.1 appeared and filed its written version raising preliminary objections with regard to maintainability; cause of action; locus standi and concealment of true and material facts. On merits, it is pleaded that Deceased Life Assured, Mrs. Kamlesh Chawla had availed a loan from State Bank of India and had applied for Rinn Raksha Group Insurance Scheme under Master Policy no.70000018311 issued to State Bank of India vide membership form no.7011578875 dated 29.05.2020 under loan account no.34942919656. The risk commenced on 30.05.2020 for an initial sum assured of Rs.10,94,940/- at inception for a single premium payment mode and loan term of 120 months. The DLA paid Rs.44940/- towards single premium. The risk cover under the said group insurance scheme is of diminishing nature and the sum assured tapers down as per the schedule given in the COI. As per the clause no.3.2, Death Benefit of the Master Policy, “3.2.1 if all the due premiums have been paid, on death of life assured during the policy term, we will pay sum assured as per the option chosen or in case no option is chosen, we will pay sum assured as per the sum assured schedule mentioned in the certificate of insurance, whichever is applicable, if the claim is found admissible. The same is mentioned in Point no.21, sub clause1, Death Benefit of the Certificate of Insurance (COI) “In the event of the 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 is applicable, provided all premiums due up to 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.” Thus, in the instant case, it is clear from the Annexure-1, Table of Sum Assured Benefits of the COI, the sum assured as on the date of death is Rs.10,28,570/- since the DLA is reported to have died on 02.05.2021 at Park Hospital, Karnal and cause of death is stated as Covid-19. It is further pleaded that during investigation of claim it was revealed that the DLA often went to Sri Balaji Action Institute. The investigator obtained the reports of the DLA from Sri Balaji Action Institute and also the record of the DLA of Park Hospital. From the said documents, it was revealed that the DLA was suffering from Heart Disease prior to the date of applying for the insurance cover, hence she was not eligible to even apply for the same. However, the DLA suppressed the facts of her pre-existing illness of the Heat Disease for which she was under regular treatment, however she did not disclose these facts in the membership form and replied to the specific question in negative and thus the DLA procured the insurance cover fraudulently. As per the private OPD card of Sri Balaji Action Medical Institute, New Delhi, dated 26.12.2017 and 12.12.2017, the DLA was case of DCMP (she was advised 2Decho screening, the observations were systolic dysfunction LVF 25%. As per Echocardiography and color Doppler report dated 11.08.2018 of the DLA  of the Sri Balaji Action Medical Institute, New Delhi, the Left Ventricular Ejection Function was 37%. The final impression was stated as “Global LV Hyperkinesia, Moderate LV Systolic Dysfunction with LVF=37%. It is evident from the record of Sri Balaji Action Medical Institute, New Delhi, that the DLA was a case of DCMP and was taking treatment for Heart Disease from the said hospital during the year 2019 also. As per the private OPD card of Sri Balaji Action Medical Institute dated 19.02.2020, the DLA was a case of DCMP, she was advised 2Decho. As per Echocardiography and color Doppler report dated 19.02.2020 of the DLA, of Sri Balaji Action Medical Institute, New Delhi, the Left Ventricular Ejection Function was 35%. The final impression was stated as “Global LV Hyperkinesia, Moderate LV Systolic Dysfunction with LVF=35%. Grade I LV Diastolic Dysfunction, Mild MIR, Mild TR with mild PAH (RVSP=32 mmhg). DLA was suffering from Heart Disease and was under treatment for the same prior to the date of commencement of risk, which she did not disclose in the proposal form and procured the insurance policy fraudulently. If the DLA had disclosed the existence of Heart Disease and its treatment at the time of taking the insurance cover, the insurance cover would not have been granted to the DLA by OP. The DLA herself is guilty of suppressing and concealing the material and true facts regarding her pre-existing illness at the time of taking the policy. Hence, the claim under the policy was repudiated and an amount of Rs.38,084/- was transferred to the complainant’s bank account towards the refund of premium as per the policy terms and conditions. There is no deficiency in service and unfair trade practice on the part of the OP. The other allegations made in the complaint have been denied and prayed for dismissal of the complaint.

3.             OP no.2 filed its separate written version raising preliminary objections with regard to maintainability; cause of action; locus standi and concealment of true and material facts. On merits, it is pleaded that the insurable interest of the complainant is covered by the OP no.1 and as such no liability can be fastened upon the OP no.2. The OP no.2 never forced the complainant for getting her life insured with the OP no.1 as alleged, rather she approached the OP no.2 for getting her life insured with the OP no.1 under the Rinn Raksha Group Insurance Scheme and accordingly she got issued that policy and the amount of insurance premium was transferred through OP no.2. It is further pleaded that no intimation was given in the office of OP no.2 and as such the amount of premium was rightly transferred to the OP no.1. Since the amount has not been paid by the OP no.1 to the OP no.2 hence there arises no question at all of adjusting the outstanding loan amount. There is no deficiency in service and unfair trade practice on the part of the OP. The other allegations made in the complaint have been denied and prayed for dismissal of the complaint.

4.             Parties then led their respective evidence.

5.             Learned counsel for the complainant has tendered into evidence affidavit of complainant Ex.CW1/A, copy of death claim put up sheet Ex.C1, copy of RTPCR Test Report Ex.C2, copy of death summary Ex.C3, copy of death report Ex.C4, copy of death certificate Ex.C5, copy of claim intimation letter Ex.C6, copy of repudiation letter dated 30.06.2021 Ex.C7, copy of statement of account from 01.04.2021 to 13.08.2021 Ex.C8, copy of policy guidelines of SBI Life qua Covid-19 Ex.C9 and closed the evidence on 17.11.2022 by suffering separate statement.

6.             On the other hand, learned counsel for the OP no.1 has tendered into evidence affidavit of Neelam Singh Ex.OP1/A, copy of Membership Form Ex.OP1, copy of Customer Declaration Ex.OP2, copy of insurance policy Ex.OP3, copy of claim form Ex.OP4, copy of Claim Investigation Report Ex.OP5, copy of Medical Attendant’s Certificate Ex.OP6, copy of Death Summary Ex.OP7, copy of Private OPD card Ex.OP8, copy of Medical Report dated 11.08.2018 Ex.OP9, copy of Private OPD card dated 19.02.2020 Ex.OP11, copy of repudiation letter dated 30.06.2021 Ex.OP12 and closed the evidence on 17.04.2023 by suffering separate statement.

7.             Learned counsel for the OP no.2 has tendered into evidence affidavit of Pushpa Kumari, Branch Manager Ex.OP2/A, copy of statement of account of saving account Ex.OP2/1, copy of statement of account of housing loan Ex.OP2/2, copy of statement of account of Rinn Raksha Policy Ex.OP2/3, copy of request letter Ex.OP2/4, copy of request letter for additional loan for payment of life insurance premium Ex.OP2/5, copy of additional loan letter Ex.OP2/6, copy of customer declaration Ex.OP2/7, copy of memorandum of loan agreement for home loan granted to public Ex.OP2/8, copy of authority letter Ex.OP2/9 and closed the evidence on 11.03.2024 by suffering separate statement.

 8.            We have heard the learned counsel for the parties and perused the case file carefully and have also gone through the evidence led by the parties.

9.             Learned counsel for complainant, while reiterating the contents of the complaint, has vehemently argued that the wife of complainant availed for a house loan of Rs.12,00,000/- from the OP no.2 and for securing the said loan, she had purchased a life insurance policy from the OP no.1. The life assured expired on 02.05.2021 due to Covid-19 and after the death of his wife, complainant contacted the OPs and submitted all documents and death certificate of his wife and requested for the adjusted the loan from the insurance company and to issue the NOC but OPs did not pay any heed to the request of complainant and repudiated the claim of the complainant on the false and frivolous ground and lastly prayed for allowing the complaint. Learned counsel for the complainant relied upon the case law titled as SBI General Insurance Company Limited Vs. Balwinder Singh Jolly and Another 2016(4) CLT 372 and Life Insurance Corporation of India Vs. Sudha Jain 2007(2) CLT 423.

10.           Per contra, learned counsel for the OP no.1, while reiterating the contents of written version, has vehemently argued that at the time of securing the loan, the insured was not having a good health and was suffering from Heart Disease. This fact had not been disclosed by the insured, at the time of purchasing the policy. Thus, the claim of the complainant has rightly been repudiated by the OP and lastly prayed for dismissal of the complaint.

11.           Learned counsel for the OP no.2, while reiterating the contents of written version, has vehemently argued that the wife of complainant availed a loan of Rs.12,00,000/- and got insured the said loan from OP no.1.  There is no role of OP no.2 except to disburse and recover the loan amount and lastly prayed for dismissal of the complaint qua OP no.2.

12.           We have duly considered the rival contention of the parties.

13.           Admittedly, Mrs. Kamlesh Chawla insured (since deceased) had availed the loan of Rs.12,00,000/- from the OP no.2 and purchased the insurance policy from the OP no.1 to secure the loan amount of Rs.10,85,000/-. It is also admitted that during the subsistence of the insurance policy, life assured was expired on 02.05.2021. It is also admitted that complainant is the nominee in the said policy.

14.           The claim of the complainant has been repudiated the by OP no.2, vide letter Ex.C7/Ex.OP12 dated 30.06.2021 on the grounds of “suppression of material information related to health of the life assured, as per the medical records of the life assured, she was suffering from Heart Disease, which had not been disclosed by the life assured at the time of inception of the policy.”

15.           The claim of the complainant has been repudiated by the OP no.1 on the above mentioned ground. The onus to prove that the wife of complainant was having pre-existing disease at the time of purchasing the policy was relied upon the OP but OP has miserably failed to prove its version by leading any cogent and convincing evidence. The case of OP based upon the OPD card Ex.OP8 dated 12.12.2017, Medical Report Ex.OP9 dated 11.08.2018, OPD card Ex.OP10 dated 05.08.2019 and OPD card Ex.OP11 dated 19.02.2020 of Action Medical Institute, New Delhi.  All the above medical record are photocopies.  Moreover, OP no.1 neither examined the doctors who issued the said treatment record nor tendered their affidavits in evidence to prove its version. Thus, the said medical records have no weightage in the eyes of law. If the contention of the OP is to be considered as a true, even then there is no nexus between the cause of death and prior disease as alleged. When there is no nexus between the cause of death and prior disease then the claim of the complainant cannot be repudiated. In this regard, we are fortified with the observation of Hon’ble Supreme Court in case law titled as Sulbha Prakash Motegaoneka Vs. Lif Insurance Corporation of India, in civil appeal no.8245 of 2015, decided on 05.10.2015 wherein Hon’ble Supreme Court held that the suppression of information regarding any pre-existing disease, if it has not resulted in death or has no connection to cause of death it would not disentitle the claimant for the claim. Further, in Chanda Devi Vs. LIC in complaint no.551/2016, decided on 23.11.201 of Hon’ble State Commission Delhi wherein Hon’ble State Commission, Delhi held that if the reason of the death is not in nexus with pre-existing disease and there is no evidence placed on record by the OP to show that the death was on account of pre-existing disease of the life assured, then the contention of the OP in the repudiation letter has no merit. Further, in  case titled as Religare Health Insurance Company Versus Harwant Singh decided on 08.02.2021 wherein Hon’ble State commission, Panchkula held that hypertension is a common ailment and it can be controlled by the medication and it is not necessary that a person suffering from hypertension would always suffer a heart attack or other ailment. Similar view was taken by the Hon’ble National Commission in case titled as Satish Chander Madan Vs. Bajaj Allianz General Insurance Copany Ltd. (2016) CPJ 613 (NC). In case titled as  Aditya Birla Health Insurance Company Ltd. Vs. Deepinder Singh 1(2021) CPJ 156 (Punjab State Commission) wherein Hon’ble Punjab State Commission held that “Consumer Protection Act, 1986- Sections 2(1)(g), 14(1)(d), 15- Insurance Regulatory and Development Authority (Protection of Policy holders’s interest) Regulations, 2017- Regulation 10- Insurance (Mediclaim)- Surgery of shoulder- Alleged non-disclosure of pre-existing disease- Repudiation of claim- Deficiency in service- District Forum allowed complaint- Hence appeal- Respondent/ complainant was admitted to hospital on 10.10.2018 with problem of right shoulder pain and after surgery was discharged on 21.10.2018 in satisfactory condition- Expenditure of Rs.81,595/- was incurred on said treatment- Complainant lodged reimbursement claim for Rs.82,981/- and same was repudiated- Except medical record of ailment, OPs have not placed on record any independent evidence that insured had knowledge or that he had been taking treatment of disease, before purchasing this policy- In absence of any specific evidence on record how disease, if any, to which insured does not have knowledge can be termed as pre-existing disease- Repudiation not justified- Complaint was rightly allowed”.

16.           Moreover, OP no.1 itself relied upon the investigation report Ex.OP5. The summary of investigation is reproduced as under:-

        “Summary of Investigation

        This claim appears to be genuine-Covid-19 case, Major points are as below:

.       As per enquiries, LA was health and fit.

.       LA had no health related while taking this policy. LA had no health related issue. No past medical history of LA found.

.       As per enquiries, LA was salaried. LA was posted as Sub Post Master at HBC office Karnal. ID card, Employer Certificate and Pay slip enclosed herewith.

.       Claimant has his own business of spare parts named United Automobiles situated at Meera Ghati Chowk since 17 years.

.       LA often went to Shri Balaji Action Medical Institute for routine checkup. All checkup reports enclosed herewith.

.       On 13.04.2021, LA was vaccinated for Covid-19 at office.

.       On 16.04.2021, LA had Covid-19 symptoms i.e. fever and sour throat.

.       On 23.04.2021, LA was admitted to Park Hospital Karnal and was kept in ICU ward.

.       On 02.05.2021, LA got sudden heart attack and CRP was given to LA but there was no improvement in LA’s health.

.       After 30 minutes of CRP, LA suddenly died due to covid-19, Septic Shock and Pneumonia. Death summary enclosed herewith.

.       LA was cremated on same day at nearby cremation ground. No cremations slip available with family.

.       Death certificate of LA issued by the Registrar, Birth and Death, Municipal Corporation Karnal verified and found genuine.

.       Aadhar card, voter card, PAN card and ID card of LA and Aadhar card, PAN card and voter card of claimant procured.

.       Pay slip, ITR and Computation of Income as Income proof enclosed herewith.

.       Vicinity also checked in this case. As per vicinity, LA was healthy and LA had no health related issue. LA was salaried and was posted at HBC office Karnal.

.       On 02.05.2021, LA died at Park Hospital Karnal due to covid-19 and was cremated on same day at nearby cremation ground.

.       Living standard of LA is good.

.       There are 3 members in LA’s family. LA’s husband has his own business of spare parts.

.       Insurer may decide the claim on merits.

 

 17.          In the said summary of investigation, it has been clearly mentioned that life assured was healthy and fit and had no health issue while taking the policy and also no medical history. Thus, it has been proved from the summary of investigation, life assured was not having any pre-existing disease at the time of purchasing the insurance policy.  Complainant also relied upon the guidelines of insurance qua the Covid-19 Ex.C9, the relevant portion of the said guidelines reproduced as under:-

“However, Coronavirus does not fall under the term of pre-existing health condition. If an existing life insurance policy holder passes away due to coronavirus, the beneficiaries or nominee will be eligible for the death benefit. The life insurance or term insurance benefit be duly paid to the nominee upon filing a valid life insurance claim.”

18.             Furthermore, nowadays, it has become a trend on the part of the insurance company to repudiate the claim of the insurer on the false and flimsy grounds which is otherwise proved genuine one. Thus, the plea taken by the OPs is having no force. In this regard, we place reliance on the judgment of Hon’ble Punjab and Haryana High Court titled as New India Assurance Company Ltd. Versus Smt. Usha Yadav & others 2008 (3) RCR (Civil) 111, has held as under:-

“It seems that the Insurance Companies are only interested in earning the premiums which are rather too stiff now a days, but are not keen and are found to be evasive to discharge their liability. In large number of cases, the Insurance companies make the effected people to fight for getting their genuine claims. The Insurance Companies in such cases rely upon clauses of the agreements, which a person is generally made to sign on dotted lines at the time of obtaining policy. This is, thus pressed into service to either repudiate the claim or to reject the same. The Insurance Companies normally build their case on such clauses of the policy, but would adopt methods which would not be governed by the strict conditions contained in the policy.”

 

19.          As per Rinn Raksha Membership Form Ex.OP1, the date of birth of the deceased life assured was 04.04.1969 and the policy was purchased in the year 2020 and at that time the age of insured was more than 45 years. Thus, as per guidelines of IRDAI, the insurance company was bound to get the insured medically examined before issuance of insurance policy. In this regard, we place reliance upon case titled as  National Insurance Company Ltd. Versus Harbirinder Singh appeal no.220 of 2016 decided on 30.09.2016, wherein Hon’ble State Commission U.T. Chandigarh has held that if the complainant and his wife both are older than 45 years of age but there is nothing on record to show that before insurance policy was issued to them, the appellants got them medically examined, which as per instructions issued by Insurance Regularly & Development Authority of India (IRDAI) is must in such like cases. Similarly, view was taken by Hon’ble Chandigarh State Commission in case of M/s Max Bupa Health Insurance Co.Ltd. Vs. Rakesh Walia, appeal no.191 of 2016 decided on 18.08.2016  and held that if contrary to the instructions issued by IRDAI, an insured above the age of 45 years, was not put to through medical examination, claim raised after issuance of insurance of policy cannot be rejected on account of non-disclosure of the fact of pre-existing disease when policy was obtained.

20.           Keeping in view, the ratio of the law laid down in aforesaid judgments, facts and circumstances of the present complaint, we are of the considered view that act of the OP no.1, while repudiating the claim of the complainant amounts to deficiency in service and unfair trade practice, which is otherwise proved genuine one. 

21.           The loan amount had been insured by the OP no.2 through OP no.1. As per insurance policy, on the death of insured, remaining loan amount is to be paid by the insurance company i.e. OP no.1. Hence, OP no.1 is liable to pay the remaining loan amount after the death of life assured. It is made clear that if any loan amount was pending prior to death of life assured, for that complainant shall be liable to pay the same. It is also made clear if any loan amount and premium amount deducted/received by the OPs after the death of life assured, the same have to refund to the complainant. However, OP no.1 is also entitled to recover the premium amount which has already been refunded to the complainant.

 22.          Thus, as a sequel to abovesaid discussion, we allow the present complaint and direct the insurance company i.e. OP no.1 to pay the remaining loan amount to the bank i.e. OP no.2.  We further direct the OP no.1 to pay Rs.25,000/- to the complainant on account of mental agony and harassment suffered by him and Rs.11,000/- for litigation expenses. This order shall be complied with within 45 days from the receipt of copy of this order. We further direct the OP no.2, on receipt of loan amount, to issue the No Objection Certificate (NOC) and return the documents taken at the time of availing the loan. The parties concerned be communicated the order accordingly, and the file be consigned to the record room, after due compliance.

Announced

Dated: 22.08.2024   

                                                               President,

                                                 District Consumer Disputes

                                                 Redressal Commission, Karnal.

             

                        (Sarvjeet Kaur)

                            Member