Punjab

Faridkot

CC/17/322

Davinder Singh - Complainant(s)

Versus

Shriram Life Insurance Company Ltd - Opp.Party(s)

charanjit Sidana

12 Mar 2019

ORDER

 DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, FARIDKOT

 

    C.C. No. :                322 of 2017

                                                    Date of Institution:     25.09.2017

                                                    Date of Decision :      12.03.2019

 

Davinder Singh aged about 37 years son of Shingara Singh, resident of House No.B-3663, Deviwala Road, Kotkapura, District Faridkot.

...Complainant

Versus

1. Shriram Life Insurance Company Ltd, Plot No.31 & 32, 5^th and 6^th Floor, Ramky Selenium, Beside Andhra Bank training Centre, Financial District Gachibowli, Hyderabad-500032.
2. India Infoline Finance Limited, 12A-10/13^th floor, Parinee Crescenzo, C-38& C-39, G Block, Behind MCA, Bandra Kurla Complex, Bandra East, Mumbai-400051.
3. Bhupinder Singh, Marketing Advisor, India Info Line Co. Ltd, Guru Truck Sales, Bathinda Road, Near Tinkoni, Kotkapura, District Faridkot.

........ Ops

Complaint under Section 12 of the

Consumer Protection Act, 1986.

 

Quorum: Sh. Ajit Aggarwal, President,

               Smt Param Pal Kaur, Member.

 

Present: Sh Charanjit Sidana, Ld Counsel for complainant,

              Sh Ashwani Sharma, Ld Counsel for OP-1,

              Sh Dheeraj Kumar, Ld Counsel for OP-2 and 3.

 

(Ajit Aggarwal, President)

                                         Complainant has filed the present complaint under Section 12 of the Consumer Protection Act, 1986 against OPs seeking directions to OPs to sanction the claim of policy no.160817018175893 and for further directing OPs to pay Rs.20,000/- as

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compensation for deficiency in service, harassment, inconvenience, mental agony besides litigation expenses.

2                                    Briefly stated, the case of the complainant is that deceased brother of complainant namely Jagsir Singh approached Op-2 to get vehicle loan, who sanctioned the loan for pre-owned vehicle bearing registration no. HR-39B-4944 on a condition that his brother would have to secure the loan amount by way of insurance policy through their linked insurance company i.e OP-1 and disclosed that it was an ordinary process and they impose the same on their each and every customer to secure the loan amount. For this purpose, OP-2 got signatures of deceased brother of complainant on blank proposal form alongwith Rs.15,000/-as premium of policy and then, OP-2 issued insurance policy of linked insurance company namely Shriram Life Group Life Protector (SP), Member Policy No. MN 160817018175893 with date of commencement 31.07.2016 and in this way, brother of complainant/ Jagsir Singh got insured his life and also received the loan amount. OP-1 also insured the said vehicle by Motor Insurance Cover i.e New India Insurance Company Ltd to secure the vehicle as well as compulsory act of Government. OP-2 charged Rs.42,595/-and issued Motor Insurance Policy to complainant after registration of same in the name of Jagsir Singh deceased on 5.08.2016. At the time of sanctioning of loan, Op-2 told Jagsir Singh that if he dies before clearance of loan, then, remaining loan amount would be recovered from Insurance

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Company and that was why it was compulsory for him to purchase the policy to save the loan amount. Brother of complainant deposited 5 Equal Monthly Installments of Rs.29,050/-each to OP-2 and brother of complainant died due to Dengue after being admitted in hospital for two days during this period of subsistence of policy and loan term. After death of his brother Jagsir Singh, complainant approached OP-2 and intimated them regarding death of his brother and also requested them to exempt the loan amount. Complainant also provided the documents demanded by OP-2, which OP-2 sent to OP-1. OP-1 appointed Surveyor, who visited the place of complainant and after completing investigation, demanded Rs.1,00,000/-from complainant as bribe to sanction the claim amount. Complainant refused to pay the demanded amount and on this, Surveyor made a false report and on his report, OP-1 repudiated the claim of complainant without any reason vide letter dated 10.07.2017.  Being dissatisfied with act of repudiation by OPs, complainant sent a letter to Appellant Authority of OP-1 on 5.09.2017, to which they have not filed any reply till now. Complainant also sent a legal notice dated 24.08.2017 to OPs and requested to pay the claim amount, but all in vain as they did not pay even a single penny. All this amounts to deficiency in service and trade mal practice on their part and it has caused harassment and mental agony to complainant and he has prayed for accepting the present complaint. Hence, the present complaint.

3                                             The counsel for complainant was heard with regard to admission of the complaint and vide order dated

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9.10.2017 passed by this Forum, complaint was admitted and notice was ordered to be issued to the opposite parties.

4                                          On receipt of the notice, the opposite party no. 1 filed written statement taking preliminary objections that there is no deficiency in service on the part of answering OP and complaint filed by complainant is false and frivolous and it is filed only to injure the goodwill and reputation of OPs. Moreover, complainant has concealed the material facts and no cause of action arises against answering OPs. It is averred that insurance policies are contracts governed by the Principles Uberrima Fide and proposer applying for insurance is expected to correctly furnish information regarding health, personal medical history and other information by giving correct answers to the questions in DOGH form, but in present case had the Insurance Company been provided correct information about health problems of deceased, it would have influenced the decision of Insurance Company in issuing the Policy. It is asserted that before commencement of  policy in question, deceased Jagsir Singh was suffering from pre-existing ailments for which he was taking treatment. To all the queries relating to health, deceased gave wrong answers and suppressed the material fact that he was suffering from pre-existing ailments and declaration given by him regarding his health, shows that he was aware that he was giving false declaration about his health at the time of proposal and by doing so, he induced Insurance Company to issue a Life Coverage under the policy based on wrongful and false disclosure and it amounts to fraud.

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Therefore, company was constrained to repudiate the claim under policy vide letter dated 4.07.2017 which was addressed to policy holder as well as complainant. Moreover, if any claim is payable, then, it is only Rs.8,70,000/-as on the date of death of deceased life assured, which would be payable only to the Master Policy Holder/OP-2, who after deducting the dues pending against the loan, if any pays the remaining balance to the nominee and this condition is clearly given in clause 3 of the policy document. After repudiation of claim, complainant approached Internal Claims Review Committee vide letter date d5.09.2017 for reconsideration of the claim and ICRC also upheld the decision of repudiation as per terms and conditions of the policy. Decision of Review Committee was sent to complainant vide letter dated 13.10.2017. It is further averred that complaint involves complex questions of law and facts requiring lengthy evidence, which is not possible in the summary procedure of this Forum. However, on merits Ops have denied all the allegations of complainant being wrong and incorrect and reiterated that there is no deficiency in service on their part and prayed for dismissal of complaint with costs.

5                                    OP-2 and 3 also filed reply through counsel and took .objections that complaint is not maintainable and is liable to be dismissed as it is based on false and frivolous allegations. It is averred that complainant has not come to the Forum with clean hands and has suppressed the material facts and it is filed with malafide intention to cause harassment to the answering OPs. It is averred that complainant is

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not their consumer as loan was taken by Jagsir Singh deceased brother of complainant and not by complainant. The complainant has shown himself as nominee of his deceased brother and he has not locus standi to file the present complaint as he is not the legal heir of deceased Jagsir Singh. Only nomination does not entitle complainant to become his legal heir. It is admitted that Jagsir Singh took loan in respect of vehicle in question alongwith his co-borrower Satish Kumar for Rs.9,51,399/-but he was very irregular in making payment of loan amount and as per terms and conditions of the agreement, OP-2 initiated arbitration proceedings against him and loan recall notice dated 9.05.2017 was issued to him and his co-applicant. All the other allegations have been denied being wrong and incorrect and prayer for dismissal of complaint is made.

6                                   Parties were given proper opportunities to prove their respective case. The complainant tendered in evidence his affidavit Ex.C-1, and documents Ex C-2 to C-10 and then, closed the evidence.

7                                      In order to rebut the evidence of the complainant, the opposite party 1 tendered in evidence, affidavit of E. Sridhar as Ex OP-1/1 and documents Ex OP-1/2 to Ex OP-2/9 and then, closed the evidence. Ld Counsel for OP-2 and Op-3 tendered in evidence documents Ex OP-2-3/1 to OP-2-3/7 and then, evidence of OP-2 and 3 was closed by order of this Forum dated 14.08.2018.

 

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8                                          The ld Counsel for complainant argued that for the purpose of taking vehicle loan, deceased brother of complainant namely Jagsir Singh approached OP-2, who sanctioned the loan for a pre-owned vehicle bearing on condition that his brother would have to secure the loan amount by way of insurance policy through their linked insurance company i.e OP-1 and disclosed that it was an ordinary process and they impose this condition on their each and every customer to secure the loan amount. OP-2 got signatures of deceased brother of complainant on blank proposal form alongwith Rs.15,000/-as premium of policy and then, OP-2 issued insurance policy of linked insurance company namely Shriram Life Group Life Protector (SP), Member Policy No. MN 160817018175893 with date of commencement 31.07.2016 and in this way, brother of complainant/ Jagsir Singh got insured  his life and also received the loan amount. OP-1 also insured the said vehicle by Motor Insurance Cover i.e New India Insurance Company Ltd to secure the vehicle as well as compulsory act of Government. OP-2 charged Rs.42,595/-and issued Motor Insurance Policy to complainant after registration of same in the name of Jagsir Singh deceased on 5.08.2016. At the time of sanctioning of loan, Op-2 told Jagsir Singh that if he dies before clearance of loan, then, remaining loan amount would be recovered from Insurance Company and that was why, it was compulsory for him to purchase the policy to save the loan amount. Brother of complainant deposited 5 Equal Monthly Installments of Rs.29,050/-each to OP-2. It is submitted that brother of complainant

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died due to Dengue after being admitted in hospital for two days during this period of subsistence of policy and loan term and after the death of his brother Jagsir Singh, complainant approached OP-2 and intimated them regarding death of his brother and also requested them to exempt the loan amount. Complainant provided the documents demanded by OP-2, which OP-2 sent to OP-1. OP-1 appointed Surveyor, who demanded Rs.1,00,000/-from complainant as bribe to sanction the claim amount and on refusal of complainant to pay the bribe, her made a false report and due to his false report, OP-1 repudiated the claim of complainant without any reason vide letter dated 10.07.2017.  Being dissatisfied with this act of repudiation, complainant sent a letter to Appellant Authority of OP-1 on 5.09.2017, to which they gave no reply. Legal notice also bore no fruit. All this amounts to deficiency in service. He has prayed for accepting the present complaint and stressed on documents Ex C-1 to 10.

9                     To controvert the allegations of complainant, ld counsel for OP-1 argued before the Forum that there is no deficiency in service on their part and complaint filed by him is false and frivolous and it is filed only to injure the goodwill and reputation of OPs. Complainant has concealed the material facts and no cause of action arises against them. It is argued that insurance policies are contracts governed by the Principles Uberrima Fide and proposer applying for insurance is expected to correctly furnish information regarding health, personal medical history and other information by giving correct answers to the questions in

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DOGH form, but complainant had not  provided correct information to Insurance Company. Before commencement of  policy in question, deceased Jagsir Singh was suffering from pre-existing ailments for which he was taking treatment. To all the queries relating to health, deceased gave wrong answers and suppressed the material fact that he was suffering from pre-existing ailments and declaration given by him regarding his health, shows that he was aware that he was giving false declaration about his health at the time of proposal and by doing so, he induced Insurance Company to issue a Life Coverage under the policy based on wrongful and false disclosure and it amounts to fraud. Therefore, action of Insurance Company in repudiating the claim under policy vide letter dated 4.07.2017 is correct. It is further argued that if any claim is payable, then, it is only Rs.8,70,000/-as on the date of death of deceased life assured, which would be payable only to the Master Policy Holder/OP-2, who after deducting the dues pending against the loan, if any pays the remaining balance to the nominee and this condition is clearly given in clause 3 of the policy document. After repudiation, complainant approached Internal Claims Review Committee vide letter dated 5.09.2017 for reconsideration of the claim and ICRC also upheld the decision of repudiation. Decision of Review Committee was sent to complainant vide letter dated 13.10.2017. It is further averred that all the allegations of complainant are wrong and incorrect and reiterated that there is no deficiency in service on their part and prayed for dismissal of complaint with costs.

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10                                    Ld Counsel for OP-2 and 3 argued that complaint is not maintainable and he is not their consumer as loan was taken by Jagsir Singh deceased brother of complainant and not by complainant. The complainant has shown himself as nominee of his deceased brother, but he is not the legal heir of deceased Jagsir Singh. Only nomination does not entitle him to become legal heir. Though it is admitted that Jagsir Singh took loan alongwith his co-borrower Satish Kumar for Rs.9,51,399/-but he was very irregular in making payment of loan amount and as per terms and conditions of the agreement, OP-2 initiated arbitration proceedings against him and loan recall notice was also issued to him and his co-applicant. All the other allegations have been denied with prayer to dismiss the complaint .

11                          We have heard the learned counsel for the parties and have very carefully gone through the affidavits and documents on the file.

12                      The case of complainant is that his brother Jagsir Singh now deceased took loan from Ops and while sanctioning loan, OPs imposed a condition that he would have to secure the loan amount by way of purchasing insurance policy through their linked insurance company / OP-1 and told Jagsir Singh that if he dies before clearance of loan, then, remaining loan amount would be recovered from Insurance Company. Said Jagsir Singh deposited 5 EMIs of Rs.29,050/-each to OP-2. He died due to Dengue after being admitted in hospital for two

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days  and after death of his brother Jagsir Singh, complainant approached OPs, but they repudiated the claim of complainant on false report given by Surveyor who demanded heavy bribe from complainant for sanctioning his claim.  Complainant also approached the Appellant Authority of OP-1 vide letter dt 5.09.2017, but they have not filed any reply to that. Legal notice also served no purpose as OPs did not pay even a single penny. All this amounts to deficiency in service. On the other hand, stand of OP-1 is that deceased brother of complainant suppressed material information regarding his pre-existing health problems and ailments from them and gave incorrect information about his health. As per OP-1 they have correctly repudiated the claim of complainant as per terms and conditions of the policy. However, it is also seen that OP-1 have themselves mentioned in their version that if any claim is payable, then, it is only Rs.8,70,000/-as on the date of death of deceased life assured, which would be payable only to the Master Policy Holder/OP-2, who after deducting the dues pending against the loan, if any pays the remaining balance to the nominee and this condition is clearly given in clause 3 of the policy document. After repudiation, complainant approached Internal Claims Review Committee vide letter dated 5.09.2017 for reconsideration of the claim and ICRC also upheld the decision of repudiation. Decision of Review Committee was sent to complainant vide letter dated 13.10.2017 and as per OP-1 they have rightly repudiated the claim of complainant. OP-2 and 3 took plea that complainant is nominee and not the legal heir of them and is not entitled

 

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to seek claim amount. As per OP-2 and 3, deceased Jagsir Singh was irregular in making payment of loan instalments and arbitration proceedings were initiated against him. They have prayed for dismissal of complaint with costs.

13                                               Complainant has relied upon document Ex C-2, copy of Insurance Certificate which proves the fact that deceased brother of complainant got insured his vehicle with OPs and deposited five equal monthly instalments (EMIs) worth Rs.29,050/- each. Ex C-3 Death Certificate itself clears that brother of complainant died due to Dengu on 9.01.2017 and prior to his death he remained in hospital for two days. Through document Ex C-5, complainant has proved his grievance that vide letter dated 4.07.2017 OPs repudiated the claim of complainant for insurance on account of death of his brother. It is averred the OP-1 repudiated the claim of complainant on the ground that prior to death his deceased brother was suffering from Chronic Obstructive Pulmonary Disorder and Left Ventricular Failure, but OPs have failed to produce on record any documentary evidence proving the fact that brother of complainant was suffering from any such disease or was having any prior history of said disease. Plea taken by OP-1 that his brother was a known case of Chronic Obstructive Pulmonary Disorder has no footing in the eyes of law and there is no documentary evidence in favour of it. Legal notice Ex C-6 alongwith postal receipts Ex C-7 and Ex C-8 issued by complainant through his counsel also proves the

 

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grievance of  complainant. Ex C-9 is the letter written by complainant to OPs wherein he made requests to OPs to pass his genuine claim.

14                                 From the careful perusal of record and in the light of evidence produced by complainant, this Forum is of considered opinion that OP-1 has wrongly and illegally repudiated the claim of complainant on false grounds which amounts to deficiency in service and unfair trade practice on their part. Hence, the present complaint is hereby allowed against Op-1. OP-1 is directed to pay Rs.8,70,000/-(Eight lacs and seventy thousands) as claim on account of death of Jagsir Singh brother of complainant who was insured with them alongwith interest at the rate of 9 % per anum from the date of filing the present complaint till final realization. As the insurance policy in question is to secure the loan granted by OP-2 to Jagsir Singh brother of complainant, as such, OP-1 is directed to firstly pay the award amount to OP-2 and to settle the loan account of Jagsir Singh deceased with OP-2 and after settlement of loan account, if anything remains balance, then it shall be paid to complainant. OP-1 is further directed to pay Rs.5,000/-to complainant on account of compensation for harassment suffered by him and for litigation expenses. Complaint against OP-2 and 3 stands hereby dismissed. Compliance of this order be made within one month of receipt of the copy of the order, failing which complainant shall be entitled to proceed under Section 25 and 27 of the Consumer Protection Act. Copy of order be given to parties free of cost under rules. File be consigned to record room.

Announced in Open Forum

 

Dated : 12.03.2019       

 

(Param Pal Kaur)               (Ajit Aggarwal)

                                        Member                             President