Chandigarh

DF-II

CC/518/2020

Kanchan Verma - Complainant(s)

Versus

Shriram Housing Finance Co. Ltd. - Opp.Party(s)

Mandeep Kumar

08 Oct 2024

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-II, U.T. CHANDIGARH

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Consumer Complaint  No	:	518 of 2020
Date  of  Institution	:	06.10.2020
Date   of   Decision	:	08.10.2024

 

 

 

 

Kanchan Verma aged 42 years wife of Late Sh.Ajay Kumar, resident of House No.762, Ward No.10, Rani Mohalla, Derabassi, Distt. SAS Nagar Mohali (wife and nominee of deceased Late Ajay Kumar)

             … … … Complainant

 

Versus

1.  Shriram Housing Finance Company Limited, SCO No.362-363, 2^nd Floor, Sector 34, Chandigarh through its Managing Director.

2.  Shriram Life Insurance Co. Limited, SCO No.16-17, 2^nd Floor, near BSNL Office, Sector 34-A, Chandigarh through its Managing Director.

3.  Shriram Housing Finance Limited, Level 3, Wockhardt Tower, East Wing, Bandra-Kurla Complex, Mumbai 400051 through its Managing Director.

4.  Shriram Life Insurance Co. Ltd., Plot No.31-32, Ramky, Selenium, Finance District, Gachi Bowli, Hyderabad (Telangana) 500032 through its Managing Director.  

   … … … Opposite Parties

 

BEFORE:  MR.AMRINDER SINGH SIDHU,       PRESIDENT

                MR.SURESH KUMAR SARDANA,       MEMBER

                               

Argued by:    Sh.Mandeep Kumar, Counsel for Complainant.

Sh.Deep Inder, Advocate Proxy for Sh.Mukesh Pandit, Counsel for OP No.1 & 3.

Sh.Pradeep Sharma, Counsel for OP No.2 & 4.

 

 

ORDER BY AMRINDER SINGH SIDHU, M.A.(Eng.),LLM,PRESIDENT

 

1]       The complainant has filed the present complaint pleading that her husband Sh.Ajay Kumar (now deceased) availed housing loan of Rs.16,70,000/- from OP No.1 on 22.08.2018. The loan was availed for purchase of property situated at Gulabgarh Road within M.C. limit of Derabassi. In the loan document, complainant was principal loanee and her husband was shown as co-applicant. The installment of the loan was deducted from the account of husband of complainant and he was also provided death claim policy by the OPs. The loan was repaid in 20 years in installment of Rs.19,472/- per month.

    It is stated that the official of OP No.1 allured the husband of complainant to avail life insurance on the said account and also allured to pay installment of Rs.20,695/- and loan amount was extended to Rs.17,67,115/-. The OPs deducted premium amount of Rs.83,148/- at the time of granting of said loan vide member policy No.MN181026031712053. The policy of health insurance was issued by the OPs under the policy ‘Shri Ram Life Group Life Protector Plan SP’ and complainant was shown as nominee of Late Sh.Ajay Kumar. At the time of granting loan as well as purchasing life insurance policy, all the requisite documents were supplied by the complainant to the OPs. It is stated that it was told by OPs that in case of death of principal loanee, the amount of life insurance will be adjusted in housing loan.

    It is stated that husband of complainant Sh.Ajay Kumar died on 20.07.2020. After death of her husband, the complainant approached the OPs and requested life insurance amount and also requested to adjust the said amount in loan account but the OPs flatly refused to adjust the claim amount in loan account and told the complainant to pay the loan amount to OPs. It is stated that husband of complainant Ajay Kumar when availed the loan as well as health claim policy, the OPs never opt to conduct any medical examination but they simply satisfied with the documents submitted but now OPs raised issue regarding the ailment of Ajay Kumar i.e. his pre existing diseases and health ailments, which is totally against the bye-laws and terms & conditions of the legal procedure. It is stated that at the time of taking insurance policy, complainant’s husband did not withhold any information and his previous health history shows that he was not suffering from such type of disease earlier. Alleging the aforesaid acts on the part of OPs amount to deficiency in service and unfair trade practice, the complainant has filed the present complaint with a prayer to direct the OPs to adjust the insurance policy amount in housing loan account or to forfeit the loan amount; to release all other benefits of policy; pay compensation for mental agony and harassment and litigation expenses.

 

2]       OP No.1 & 3 filed their joint written version and while admitting the factual matrix of the case stated that OP No.1 never allured the complainant to avail the insurance policy or payment of the installments. The complainant himself duly read the policy papers and agreed to sign the same with his free will. It is stated that OP No.1 & 3 only provided the financial assistance after the requisite documents were provided by the complainant and her deceased husband. It is stated that OP No.1 & 3 are merely aggrieved against the conduct of the complainant towards the default in payment of the said loan account. It is further stated that loan account has become a bad debt due to the regular defaults in the EMI payments and the said account was classified as NPA on 05.01.2021 and OP No.1 & 3 had issued a demand notice to the complainant for the recovery of dues against the home loan account. Denying any deficiency in service or unfair trade practice as well as all other allegations, the OP No.1 & 3 have prayed for dismissal of the complaint. 

3]        OP No.2 & 4 filed their joint written version and while admitting the factual matrix of the case stated that the investigation was got conducted from private investigator and as per the investigation report dated 31.07.2020, it was found by the investigator that the cause of death of deceased life assured was Accute Liver Failure and during the enquiry it came out that deceased life assured was diabetic from 6 to 7 years and he was taking medicine of diabetes on regular basis. It is stated that it was also found from medical papers of deceased life assured that he was a patient of Chronic Calcific Pancreatitis and other related ailments. It is stated that cause of death as mentioned in the death summary is “Hypovolemic Shcok, Massive Upper Gastrointestinal Bleeding, Acute Kidney Injury, Acute on Chronic Liver Failure and Type-II Diabetes Mellitus”.

     It is stated that on investigation, it was found that deceased life assured suffered from Chronic Liver Disease since 2017, which is prior to the policy commencement date which he did not disclose in the declaration of good health form. It is further stated that by referring to the principle of Uberrima Fide i.e. utmost good faith and Section 45 of Insurance Act, 1938, the claim was legally repudiated. Denying any deficiency in service or unfair trade practice as well as all other allegations, the OP No.2 & 4 have prayed for dismissal of the complaint.

4]       Replication has also been filed by the complainant controverting the assertions of OPs as made in their written version.

5]       Parties led evidence in support of their contention.

6]       We have heard the learned counsels for the parties and have gone through entire documents on record.

7]       The question to be decided whether there is deficiency in service or unfair trade practice on the part of the OPs in repudiating the insurance claim of the complainant on the ground of pre-existing disease or not?

 

8]       To find out answer to this issue, it is important to take into consideration the following facts and circumstances of the present complaint:-

9]       The perusal of policy (Ex.C-4/Annexure R-2) proves that the husband of the complainant was duly insured with OP No.2 & 4-Insurance Company with the sum assured of Rs.17,68,115/-. The OP No.2 & 4-Insurance Company have admittedly repudiated the claim of the complainant vide letter dated 29.08.2020 (Annexure R-9) on the ground of non disclosure of material facts. 

10]      It is an admitted fact that the husband of the complainant was died during the existence of the insurance policy. The claim of the complainant was repudiated vide letter dated 29.08.2020 on the ground of non disclosure of material facts in the Declaration of Good Health Form for Insurance because the deceased life assured was suffering from pre-existing diseases of Chronic Calcific Pancreatitis and Diabetes Mellitus. The stand taken by OP No.2 & 4-Insurance Company that the insured (deceased) did not disclose that he was suffering from pre-existing disease in his form and the complainant not entitled to the claimed amount is not sustainable because the burden was upon the OP No.2 & 4-Insurance Company to prove that the insured/deceased had concealed material fact of his pre-existing disease at the time of taking the policy. It was the duty of the OP No.2 & 4-Insurance Company to conduct a thorough enquiry about the previous treatment taken by the insured/deceased. Even if insured was suffering from the disease, it is quite possible that he should not have made aware of it taking into account the deadly disease and its fearful effects of disclosing of the same to him. Mostly, the elders/concerned relatives don’t disclose the disease to the patient believing that disclosure of such deadly disease will have ill effect on the health of the concerned patient. In some deadly disease cases, the factum of disease was not disclosed to the patient and was kept hidden from him in order to maintain his moral. In the present complaint, the complainant has specifically denied that the insured/deceased was aware of the disease at the time of taking the policy/filing the application form. Though, the insured/deceased might be suffering from the disease yet there is nothing on record that he was aware of it and has the knowledge about it and willfully or intentionally did not disclose the same while taking insurance policy. The very purpose of getting an insurance policy is to secure his family for future perils. If the insured/deceased who is only bread earner of the family died then the very purpose of getting the insurance policy would be frustrated in the event of its failure to disburse the same to his family/beneficiary.

11]     No doubt, OP No.2 & 4-Insurance Company have relied upon the medical record of the deceased life assured but OP No.2 & 4 have neither summoned the concerned record nor examined the concerned doctor before this Commission to prove the same. Further, there is neither any affidavit of the concerned doctor in favour of OP No.2 & 4-Insurance Company. There is no affidavit of the treating doctor to establish that the deceased life assured was suffering from pre-existing disease prior to the insurance policy. In the absence of any affidavit of the treating doctor of the concerned hospital to the aforesaid effect, reliance cannot be made just on prescription slips or passing reference in the notes of treatment. Consequently it can be safely held that OP No.2 & 4-Insurance Company have failed to discharge the burden to prove that the life assured was suffering from the pre-existing disease prior to the taking the insurance policy. In New India Assurance Co. Ltd. Vs. Arun Krishan Puri, III(2009) CPJ 6 (NC), it was held that onus to prove the pre-existing disease of the insured at the time of taking the policy lay on the insurer. Further in the absence of verification of discharge summary by the doctor, who treated/issued the same, no reliance can be placed on it. In the absence of such evidence, the repudiation of the claim by OP No.2 & 4-Insurance Company cannot held to be justified.

12]      Further, it has been held by our own Hon’ble State Commission, U.T. Chandigarh in complaint titled as SBI General Insurance Company Limited Vs. Balwinder Singh Jolly 2016(4) CLT 372 that if Insurance company failed to conduct thorough (Medical) check up of the policy holder (at the time of issuance of the policy) then Insurance company has no right to decline the insurance claim on non disclosure of the facts of pre existing disease when the policy was taken.

13]      Not only this, it is usual with the insurance company to show all types of green pastures to the customer at the time of selling insurance policies, and when it comes to payment of the insurance claim, they invent all sorts of excuses to deny the claim. In the facts of this case, ratio of the decision of Hon’ble Apex Court in case of Dharmendra Goel Vs. Oriental Insurance Co. Ltd., III (2008) CPJ 63 (SC) is fully attracted, wherein it was held that, Insurance Company being in a dominant position, often acts in an unreasonable manner and after having accepted the value of a particular insured goods, disowns that very figure on one pretext or the other, when they are called upon to pay compensation.  This ‘take it or leave it’, attitude is clearly unwarranted not only as being bad in law, but ethically indefensible. It is generally seen that the insurance companies are only interested in earning the premiums and find ways and means to decline claims.

14]      In similar set of facts the Hon’ble Punjab & Haryana High Court, Chandigarh in case titled as New India Assurance Company Limited Vs. Smt.Usha Yadav & Others, 2008(3) RCR (Civil) Page 111 went on to hold as under:-

“It seems that the insurance companies are only interested in earning the premiums and find ways and means to decline claims. All conditions which generally are hidden, need to be simplified so that these are easily understood by a person at the time of buying any policy.  The Insurance Companies in such cases rely upon clauses of the agreement, which a person is generally made to sign on dotted lines at the time of obtaining policy. Insurance Company also directed to pay costs of Rs.5000/- for luxury litigation, being rich”

 

15]      In view of the above discussion, it can be safely concluded that OP No.2 & 4-Insurance Company have committed deficiency in service by wrongly and illegally rejecting the claim of the complainant. Consequently, the present complaint deserves to be partly allowed and the same is accordingly partly allowed with directions that whatever is due towards OP No.1 & 3 shall be paid by OP No.2 & 4 as OP No.2 & 4 insured the complainant against the loan amount advanced by OP No.1 & 3. If, in case OP No.1 & 3 Financier is successful in recovering the amount from the complainant then the same shall be refunded to the complainant alongwith interest @ 10% per annum from the date of recovery by OP No.1 & 3 till the date of its actual realization. Further, OPs are directed to return the original documents concerning property to the complainant. OPs are also directed to pay compensation of Rs.20,000/- to the complainant alongwith costs of Rs.10,000/- as litigation expenses to the complainant in equal share.

         The above said order shall be complied with by the OPs within a period of 45 days from the date of receipt of certified copy of this order.

16]      The pending application(s) if any, stands disposed of accordingly.

        The Office is directed to send certified copy of this order to the parties, free of cost, as per rules & law under The Consumer Protection Rules & Act accordingly. After compliance file be consigned to record room.

Announced

08.10.2024                                                               

Sd/-

 (AMRINDER SINGH SIDHU)

PRESIDENT

 

 

Sd/-

 (SURESH KUMAR SARDANA)

MEMBER

as