Punjab

Sangrur

CC/332/2015

Mamata Bansal - Complainant(s)

Versus

SBI - Opp.Party(s)

Shri Nem Kumar

09 Oct 2015

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, SANGRUR.

 

                                                               

                                                Complaint No.    332

                                                Instituted on:      19.05.2015

                                                Decided on:       09.10.2015

 

Mamata Bansal @ Mamta Rani aged 43 years Wd/o Ashok Kumar, resident of 39, Caption Karam Singh Nagar, Sunam Road, W.No.14, Sangrur, Tehsil and Distt. Sangrur (Pb).

                                                        …Complainant

                                Versus

1.             SBI Life Insurance Company Ltd. through its MD/Manager/authorised signatory, Registered Office: “Natraj”, MV Road and Western Express Highway Junction, Andheri (East) Mumbai 400 069;

2.             State Bank of Patiala through its Branch Manager, Branch Barra Chowk, Sangrur.

                                                        ..Opposite parties

 

For the complainant    :       Shri Nem Kumar, Adv.

For OP No.1              :       Shri Pawan Gupta, Adv.

For OP No.2              :       Shri Satpal Sharma, Adv.

 

 

Quorum:    Sukhpal Singh Gill, President

                K.C.Sharma, Member

                Sarita Garg, Member

 

 

Order by : Sukhpal Singh Gill, President.

 

1.             Smt. Mamata Bansal, complainant (referred to as complainant in short) has preferred the present complaint against the opposite parties (referred to as OPs in short) on the ground that the husband of the complainant, namely, Ashok Bansal obtained house loan from OP number 2 vide account number 65134449803 and to secure the loan, the OP number 2 got insured the borrower of the loan from OP number 1 and the insurance cover was for the period from 24.02.2012 to 29.02.2032 under SBI Life-RiNn Raksha Scheme and the insurance was for Rs.19,76,460/- under master policy number 70000000702 and membership number 701064784. 

 

2.             It is further averred that the husband of the complainant died on 2.12.2014 at his house and the information of which was given to OP. But the case of the complainant is that the OP number 2 wrongly repudiated the claim of the complainant vide letter dated 25.2.2015 on the false grounds of non disclosing of material fact qua health. It is further stated that the OP number 2 is required to get the amount of insurance claim from OP number 1 along with interest. Thus, alleging deficiency in service on the part of the Ops, the complainant has prayed that the OP number 1 be directed to pay to the complainant the insurance claim amount of Rs.19,76,460/- on account of death of husband of the complainant or to pay directly in the said loan account of the complainant with OP number 2 and further to pay litigation expenses.   

 

3.             In reply filed by Op number 1, it is stated that the privity of the contract is between the master policy holder and the insurer. The contract of insurance is entered into between the group policy holder and SBI Life, where under the individual members are covered. It is further stated that OP number 1 has a group insurance scheme for the borrowers of Housing loan from State Bank of Patiala where under the borrower-member is offered insurance subject to the terms and conditions incorporated in the Master policy which is issued in favour of the State Bank of Patiala bearing number 7000000702.  Further, preliminary objections are taken up that the complaint is not maintainable for want of territorial jurisdiction, 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 for insurance cover, failing which the insurer has every right to repudiate the claim. It is further stated that in the present case, Shri Ashok Kumar (referred to as DLA in short) has committed a breach of the principle of utmost good faith by suppressing the material fact that he was suffering and was under treatment for diabetes mellitus, diabetic neuropathy and bipolar mood disorder and was on treatment for the same prior to the enrolment into the insurance cover. It is stated further that there is no negligence, carelessness or deficiency in service on the part of the OP and it is further stated that the complaint is frivolous and malicious one which is liable to be dismissed.  On merits, it is stated that the DLA, Shri Ashok Bansal had availed a home loan from OP number 2 and had further applied for RiNn Raksha Group Insurance Scheme under master policy number 70000000702 through membership form number 701064784 dated 23.2.2012 and the sum insured was Rs.19,76,460/-.  It is stated further in the reply that the DLA did not provide the true information to the details asked for in the membership form.  It is further stated that the DLA had not disclosed material facts regarding his pre existing illness or diabetes Mellitus, Diabetic Neuropathy and Bipolar Mood Disorder and procured the insurance cover fraudulently, as such the claim of the complainant was repudiated.  It is further stated in the reply that the outstanding loan amount as on the date of death of the DLA was Rs.18,93,990/- on 2.12.2014.  It is stated further that the claim has rightly been repudiated.  However, any deficiency in service on the part of OP number 1 has been denied.

 

4.             In reply filed by OP number 2,  preliminary objections are taken up on the grounds that the complainant is not a consumer of the OPs under policy number 70000000702, membership number 701064784 of OP number 1, that the complainant has no cause of action to file the present complaint against the OP and the complainant is estopped from filing the present complaint by her own act, conduct and admission, that the complaint is not maintainable in the present form and the complainant has no locus standi and cause of action to file the present complaint.  On merits, it is admitted that the complainant and Ashok Bansal had obtained house loan from the OP number 2 under account number 65134449803.  It is further admitted that the complainant and her husband were insured under SBI Life Rin Raksha Scheme for the period from 24.2.2012 to 29.02.2032 with the maximum initial sum insured of Rs.19,76,460/-. It is also admitted by OP that insurance services of OP number 1 were availed by the complainant and the DLA through OP because the complainant and her husband obtained the house loan from the OP. It is further stated that the complainant and her husband executed certain documents in favour of the OP number 1 for getting their insurance policy and paid the insurance premium to OP number 1. It is admitted by OP that the husband of the complainant died on 2.12.2014, but the Op has no knowledge about the reason of death of the DLA.   It is stated that the claim has been rightly repudiated by OP number 1.  Lastly, it has been prayed that the complaint be dismissed with special costs.

 

5.             The learned counsel for the complainant has produced Ex.C-1 affidavit of complainant, Ex.C-2 copy of certificate of insurance, Ex.C-3 copy of death certificate of Ashok Bansal, Ex.C-4 copy of repudiation letter dated 25.2.2015, Ex.C-5 affidavit, Ex.C-6 copy of arrangement letter and closed evidence. On the other hand, the learned counsel for the OP number 1 has produced Ex.OP1/1 affidavit along with annexure A to H and closed evidence.  The learned counsel for OP number 2 has produced Ex.OP2/1 affidavit and Ex.OP2/2 copy of statement of accounts and closed evidence.

 

6.             We have carefully perused the complaint, version of the opposite parties, evidence produced on the file and written submissions and also heard the arguments of the learned counsel for the parties. In our opinion, the complaint merits acceptance, for these reasons.

 

7.             In the present complaint, the complainant and her husband had applied for financial assistance of house loan from OP number 2 and on sanctioning of the home loan of Rs.20,00,000/- , the OP number 2 got the complainant and DLA insured for an amount of Rs.19,76,460/- under the policy in question, which was valid for the period from 24.02.2012 to 29.02.2032.  OP number 2 got the policy cover for its beneficiaries from OP number 1 under the SBI Life RiNn Raksha Scheme and the master policy obtained by OP number 2 is Annexure 2 of document Ex.OP1/1.  In this policy obtained by OP number 2 for securing its house loan, the complainant has been shown as nominee though the loan was sanctioned and disbursed in the joint name of the complainant and her deceased husband.  On the death of the co-borrower i.e. DLA on 2.12.2014, the complainant/nominee had submitted the claim, but OP number 1 repudiated the same on the ground that “LA was suffering from kidney disease and diabetes from last 3-4 years” and the investigation report is as per Annexure D of document Ex.OP1/1.

 

8.             In the written reply, the OP number 2 had admitted having sanctioned and disbursed the house loan to the complainant and her husband and also having insured them for a sum of Rs.19,76,460/-.  Further OP number 2 has submitted that it has no knowledge about the reason of death of the DLA.

 

9.             After hearing the arguments of the learned counsel for the parties and on going through the documents placed on record, we find that the main point of controversy in the present complaint is that whether the insured/deceased was suffering from pre-existing disease or not and if yes, then whether it was a pre condition of the policy for settling the claim.

 

10.            OP number 1 in support of its version has placed on record the document Ex.OP1/1 in which policy document is Annexure B&C and the claim amount i.e. death benefit is “as per COI Schedule”, so, as the DLA died on 2.12.2014, as such, the maximum claim amount under the policy could be as per COI and the same is Rs.18,93,990/-.  In the policy document under the head ‘non disclosure’, it has been mentioned at clause 11.7.1 to 11.7.3 that:

“11.7.1      :We have issued your policy based on your statement in your master proposal form, and any other documents provided by you. If we find that any of this information is inaccurate or false or you have withheld any material information, we shall declare your policy null and void but subject to section 45 of the Insurance Act, 1938.

11.7.2       :We have issued the COI based on your/member statement 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.

11.7.3       :We will not pay any benefit and we will also not return the amounts you have paid.”

 

                Now, in the present case, the Op number 1 has repudiated the claim taking benefit of section 45 of the Insurance Act, 1938 and we find that this section has also been incorporated in the policy document under clause 13.3, which clearly says that :

“No policy of life insurance effected before the commencement of this Act after the expiry of two years from the date of commencement of this Act and no policy of life insurance effected after the coming into force of this Act shall, after the expiry of two years from the date of commencement of this Act and no policy of life insurance effected after the coming into force of this Act shall, after the expiry of two years from the date on which it was effected, be called in question by an insurer on the ground that a statement made in the proposal for insurance or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the policy, was inaccurate or false, unless the insurer shows that such a statement was on a material matter or suppressed facts, which it was material to disclose and that it was fraudulently made by the policy holder and that the policy holder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose.  Provided that nothing in this section shall prevent the insurer from calling for proof of age.

At any time if he is entitled to do so, and no policy shall be deemed to be called in question merely because the terms of the policy are adjusted on subsequent proof that the age of the life insured was incorrectly stated in the proposal.”

 

11.            But, in the present complaint, the insured died after more than two years and nine months from the issuance of the insurance policy in question and still OP number 1 is taking benefit of section 45 of the Insurance Act, 1938.

 

12.            Further we have minutely gone through the Annexure E, which relates to the period of September 2011, but then this does not confirm whether it is of the DLA or not and further if we go through the investigation report attached with this, we find no abnormality in the laboratory tests and the laboratory test reports are beyond any doubt, as the same are within the normal values.  The investigator has alleged that the DLA was suffering from “Kidney disease and diabetes from last 3-4 years”.  But, the blood investigation report clearly says that the kidney was normal as urea was 38 and creatine was 1.2, which are very well in the normal range and in this report, which is for the period from September, 2011, nothing has been mentioned with regard to the diabetes.  This report has not been supported by the affidavit of the person, who had made the investigations and OP number 1 has neither placed on file as to how the medical treatment record was procured by it, so the authenticity of this medical report is not beyond doubt as the age of the person under treatment has been written as 43 years, whereas the DLA was born on 14.2.1965 and was more than 46 years of age at that time, so it may very well be assumed that if the age is not correct then how the history mentioned in the treatment record is correct, so in the absence of any authentic corroborating evidence, we are unable to accept the version of Op number 1 that the DLA was suffering from any pre ailments.  In support of her version, the complainant has cited Gurbaaj Singh versus Metlife India Insurance Co. Ltd. 2014(4) CLT 195 (Punjab State Commission), in which it has been held that mere reference in history is not sufficient to say that the LA was suffering from any psychiatric disorder till any specific evidences comes on the record. Further the cause of death in this case is burn injuries and not psychiatric disorder.  The cause of death, therefore, again it will not be material point to the Ops to repudiate the claim of the complainant on that ground.”   Further the complainant has cited M/s. ICICI Prudential Life Insurance Company Limited versus Veena Sharma and others 2014(4) CLT 507 (NC), wherein it has been held that the onus to prove that the deceased had obtained  policy by suppressing facts relating to his illness was on the Corporation, but no tangible evidence was produced on its behalf to prove that the deceased was suffering from serious liver ailment at the time of taking policy and he deliberately suppressed this fact. Undisputedly, the policy was issued on 29.3.1998. The deceased must have filled the proforma some time prior to that date. Therefore, the Corporation ought to have produced evidence to prove that as on the date of filling the proforma, the deceased was suffering from any identified ailment and he had intentionally written ‘no’ against items nos. (a) to (d) to clause 11. This the corporation has failed to do.”

 

13.            Further the Hon’bel National Commission in Surinder Kaur and others versus LIC of India and others 2005(2) CPJ 32 (NC) has held that the insurance company is liable to pay interest @ 9% per annum.  The learned counsel for the complainant has also cited National Insurance Co. Ltd. versus Raj Narain 2008(1) CPC 684 (NC) wherein it has been observed that the fact of having pre existing disease not proved from the evidence on record. Moreover,  the exclusionary clause was never explained to the insured.

 

14.            The questionnaire with regard to health statement of the policy holder has also been designed to rob the insured of the benefits under the policy as after putting some specific questions, the OP number 1 has mentioned in the proposal form at serial number V that “ have you ever been suffered from any other disease not mentioned above”?  Such type of general clause is totally ridiculous, as with such type of clauses, no living person can get claim from the insurance company.  Firstly, the insurance companies collects the premium and then they repudiate the claim taking benefit of this kind of clauses and plead that insurance is based on “Doctrine of Almost Good Faith”, but then this doctorine of good faith is a two way traffic and is not only to benefit to the insurance companies.  In such cases, it is rather the insurance company, who betray the good faith of the policy holders who depart their hard earned money to pay the premium and then even just claim is not settled then the act of these insurance companies is not less than the paracite, who is breeding on the hard earned money of the public.  The Hon’ble National Commission in National Insurance Co. Limited versus Raj Narain (Supra) “.Most of the people are totally unaware of the symptoms of the disease that they suffer and hence they cannot be made liable to suffer because the Insurance company relies on their clause 4.1 of the policy in a mala fide manner to repudiate all the claims. No claim is payable under the medi-claim policy as every human being is born to die and diseases are perhaps pre-existing in the system totally unknown to him which he is genuinely unaware of them. Hindsight everyone relies much later that he should have known from some symptom. If this is so every person should do medical studies and further not take any insurance policy.”

 

 

15.            The Hon’ble Supreme Court of India in P. Vankat Naidu versus Life Insurance Corporation of India and another 2011(3) CPC 350 (Supreme Court),  it has been held in para 7  that since the respondents had come out with the case that the deceased did not disclose correct facts relating to his illness, it was for them to produce cogent evidence to prove the allegation. However, as found by the District Forum and the State Commission, the respondents did not produce any tangible evidence to prove that the deceased had withheld information about his hospitalization and treatment. Therefore, the National Commission was not justified in interfering with the concurrent finding recorded by the District forum and the State Commission by making a wild guesswork that the deceased had suppressed the facts relating to his illness.

 

16.                    So, in the absence of any cogent, reliable and trustworthy evidence on record, we do not concur with the version of OP number 1, whereas OP number 2 has submitted that it had no knowledge  about the reason of death of the DLA.  As such, we find that the OP number 1 is clear cut deficient in not paying the rightful insurance claim of the complainant.

 

 

17.            The insurance companies are in the habit to take these type of projections to save themselves from paying the insurance claim. The insurance companies are only interested in earning the premiums and find ways and means to decline claims. The above said view was taken by the Hon’ble Justice Ranjit Singh of Punjab and Haryana High Court in case titled as New India Assurance Company Limited versus Smt. Usha Yadav and others 2008(3) R.C.R. 9 Civil) 111.

 

 

18.            In view of our above discussion, we allow the complaint and direct the OP number 1 to pay to the complainant an amount of Rs.18,93,990/- (as per the COI schedule) alongwith interest @ 9% per annum from the date of repudiation of the claim i.e. 25.02.2015 till realisation in full.  OP number 1 is further directed to pay to the complainant an amount of Rs.11,000/- on account of litigation expenses.

 

 

 

19.            This order of ours be complied with within a period of thirty days of its communication. A  copy of this order be issued to the parties free of cost. File be consigned to records.

                Pronounced.

                October 9, 2015.

                                                        (Sukhpal Singh Gill)

                                                           President

 

 

                                                              (K.C.Sharma)

                                                                Member

 

 

                                                                (Sarita Garg)

                                                                    Member