Date of filing:26.06.2023 & 22.11.2023

                                                   Date of Disposal:12.11.2024

BEFORE THE KARNATAKA STATE CONSUMR DISPUTES REDRESSAL COMMISSION, BENGALURU (PRINCIPAL BENCH)

DATED: 12^th DAY OF NOVEMBER 2024

PRESENT

Mr Mr. K. B. SANGANNANAVAR: Pri. Dist. & Session Judge (R)- JUDICIAL MEMBER

Mrs.M.DIVYASHREE : LADY MEMBER

APPEAL NOs.1147 & 2189/2023

COMMON ORDER in A/1147/2023

BY Mr. K. B. SANGANNANAVAR: Pri. Dist. & Session Judge (R)- JUDICIAL MEMBER

1. These appeals are filed by OPs in CC/45/2022 on the file of DCDRC, Mandya, aggrieved by the order dated 05.05.2023.

(The parties to this appeal will be referred as to their rank assigned to them by the District Commission)

2. The Commission examined grounds of appeal, impugned order, appeal papers and heard learned counsels.

3. Now the point that arise for consideration of the Commission would be:

Whether impugned order dated 05.05.2023 passed in CC/45/2022 does call for an interference of the Commission for the grounds set out in the appeal memo?

4. One Mr.M.S.Prakash, S/o Sannappa, who is also son of Smt.Savithramma, had obtained loan from OP1 bank has also obtained an insurance policy from OP2 for the period from 31.03.2016 to 30.03.2024 for a sum assured at Rs.8,00,000/- and since insured Smt.Savithramma died on 19.08.2018, has raised a Consumer Complaint, on an allegation made against OP Nos.1 and 2 that they have repudiated his claim is unjustified and has sought for a direction against OP Nos.1 and 2 to pay the insurance amount along with compensation of Rs.5,00,000/- and interest @ 02% p.a. and grant any other reliefs in the interest of justice and equity.  The OP Nos.1 and 2 have contested the case raised by son of insured, denied  the allegations of their rendering deficiency of service, while OP1 had initiated SARFAESI proceedings, since loan account become NPA.

5. In view of rival contentions of the parties to the complaint, District Commission held an enquiry by receiving affidavit evidence of Mr.M.S.Prakash, Mr.Maradappa Nagasheshu Babu and Mr.Saket Kumar Barnwal, received documents commencing from Sl.No.1 to 6 for complainant, Sl.No.1 to 7 on behalf of OP No.1 and Sl.No.1 to 3 for OP No.2 respectively and after closure of enquiry   proceeded to allow the complaint in part and directed OPs are jointly and severally to adjust the insured amount to the complainant’s housing loan account and shall give the loan free certificate along with the original documents of the said mortgaged house and to pay Rs.25,000/- towards rendering deficiency of service.  It is this order is assailed in this appeal contending that District Commission has utterly disregarded the materials placed on record, committed grave error in holding OPs have rendered deficiency of service and the findings recorded by the District Commission had led to record erroneous findings, which is contrary to facts and law, is liable to be set aside.

6. It is undisputed fact that Smt.Savithramma and complainant herein are the borrowers of loan advanced by OP1. It is not in dispute that mother of complainant   Smt.Savithramma, is co-borrower and had obtained an insurance policy from OP2 for sum assured at Rs.8,00,000/- for the period from 31.03.2016 to 30.03.2024.  According to complainant, she was 60 years died on 19.08.2018 due to illness.  Let us   examine, whether policy issued by OP2 is a medical health policy.  It is not in dispute that policy issued under the name and style “Unihome Care Insurance Policy” which only covers accidental death.  Learned counsel for OP1 submits that as on 24.06.2023, complainant is admittedly a Co-borrower, is liable to make payment of Rs.11,85,265/-.  Further submits District Commission has filed to consider that the insurance policy is only for the coverage of PA and not death related illness and to find support placed a decision in the case of Satwant Kaur Sandhya v. New India Assurance Co. Ltd., (2009) 8 SCC 316, which was followed by Hon'ble NCDRC, in RP/3635/2017 of D.Padma v. Branch Manager, State Bank of Hyderabad, wherein held – “suppression of material information by the insured at the time of taking the policy, had deprived the Insurance Co. from taking an informed decision, and hence, the insured/legal heirs of the insured shall not be entitled for the Insurance Claim.”  Further relied on a decision in the case between the Branch Manager, National Insurance Co. Ltd. v. Smt.Mousumi Bhattacharjee and others (Civil Appeal No.2614/2019 @ SLP(C)No.4297/2017), the Hon’ble Apex Court held – “the insured death which occurred due to illness was not out of unforeseen or unexpected event, it cannot be categorised as Death due to accident, and hence the insured/legal heirs of the insured will not be eligible to claim the insurance money.” On the contrary, learned counsel for complainant submits that the denial of claim by OP2 is utterly arbitrary on the ground that his mother had pre-existing disease.  It is mere an excuse to escape liability and is not bonafide intention of the insurance company and has also placed decision in RP/2097/2017 in the case between Reliance Life Insurance Co. Ltd. and another v. Tarun Kumar Sudhir Halder and in the case between New India Assurance Co. Ltd. v. Smt. Usha Yadav and others reported in 2008(3)RCR and in the case of RP/587/2018 between LIC of India v. Jaswinder Kaur Case of the Hon'ble NCDRC to justify the finding recorded by the District Commission.

7. Let us examine the Loan Application Form submitted on the bank seeking consideration for loan of Rs.15,00,000/- wherein could see name of applicant as Smt.Savithramma and her son Mr.M.S.Prakash as co-applicant.  In other words, they are joint borrowers.  Proposed loan was sought for construction of house building.  One Mr.P.Shankar, S/o Late Ningegowda is a guarantor.  It is dated 20.03.2015.  The bank has considered their application and sanctioned Rs.8,00,000/- pending mortgage of their land and building to which Mr.P.Shankar and Mrs.Mamatha are co-obligants/guarantors.  The term of re-payment of 120 EMI of Rs.10,710/- p.m. commencing from 31.03.2016.  They have executed a Mortgage Deed on 27.03.2015 mortgaging the property under schedule wherein could see term loan at Rs.8,00,000/- at rate of 10.50% p.a.  While OP2 United India Insurance Co. Ltd. issued a policy in the name of Smt.Savithramma for the period from 31.03.2016 to 30.03.2024 under the policy name Unihome Care Insurance Policy wherein could see from schedule name of the borrower of the approved loan assured from OP1 is Smt.Savithramma.  The Sum insured under Sl.No.1 description is at Rs.8,00,000/- and at Sl.No.2 description is at Rs.8,00,000/-.  Son of Smt.Savithramma is co-obligant of the loan raised his claim to settle under PA at Rs.8,00,000/- to be adjusted to their loan account which according to OPs not entitled, since complainant in his complaint itself has stated his mother died due to ill-health.

8. Let us examine Unihome Care Insurance Policy Schedule clause-II, which, provides for definition of personal accident which would play a vital importance either to decide the complaint case or this appeal case. Personal accident defined as –

“Subject to the terms, exclusions, definitions and conditions contained herein or endorsed or otherwise expressed hereon the Company will pay the insured as herein after mentioned. If at any time during the currency of this policy the insured’s borrower shall sustain bodily injury resulting solely and directly from accident caused by external violent and visible means.The company shall pay to the insured or the borrower’s legal personal representative(s) as the case may be, the sum herein after set forth, that is to say: If such injury shall within twelve(12) calendar months of its occurrence be the sole and direct cause of the death of the insured’s borrower, the Capital sum insured stated in the schedule hereto.”

9. We could also find contents available under Sec.2 and Exclusions, applicable and if these terms and conditions are agreed upon between the insurer and insured to cover risk under PA, while the policy was in force between 31.03.2016 to 30.03.2024. Since the death occurred was on 19.08.2018, was a death as stated in the complaint  due to illness, holding insurer liable to pay Rs.8,00,000/- and to adjust such amount to the loan availed by insured and her son has to be held contrary to the terms and conditions of the policy. In order to substantiate  such view   the decision of the Hon’ble Apex Court in Civil Appeal No.2614/2019 in the case between The Branch Manager, National Insurance Co. Ltd. v. Smt. Mousumi Bhattacharjee and others, would come to the assistance of appellant/insurer to justify the repudiation of the claim submitted by complainant, wherein, in  para-18 of the decision of the Hon’ble Apex Court held – “…….where a disease is caused or transmitted in the natural course of events, it would not be covered by the definition of an accident.”  As such impugned order passed by District Commission has to be held unsustainable is liable to be set aside.  Hence proceed to allow the appeal Nos.1147/2023 and 2189/2023.  Consequently, set aside the order dated 05.05.2023 passed in CC/45/2022 on the file of DCDRC, Mandya and as a result dismiss the complaint with no order as to costs.

10. The Amount in deposit in appeals is directed to be refund in favour of concerned appellant in the respective appeal with proper identification by their advocate.

11. Keep the original order in 1147/2023 and copies thereof in other connected matter to complete the record.

12. Send a copy of this Order to the District Commission and parties to the appeal.

Lady Member                                Judicial Member  

*GGH*