Haryana

Karnal

CC/717/2022

Priya Rana - Complainant(s)

Versus

State Bank Of India - Opp.Party(s)

Sanjiv Mandhan

18 Apr 2024

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, KARNAL.

                                                        Complaint No. 717 of 2022

                                                        Date of instt.19.12.2022

                                                        Date of Decision:18.04.2024

 

1. Priya Rana aged about 33 years widow of late Shri Gulshan Chauhan. Aadhar no.6214 5898 3934.
2. Rudra Chauhan minor son of late Shri Gulshan Chuhan.
3. Rakshit Chauhan minor son of late Shri Gulshan Chauhan all residents of house no.101, sector-8, Part-II, Urban Estate, Karnal. Minors through their mother Smt. Priya Rana who is natural guardian and next friend of the minors.

                                                                        …….Complainants.

                                              Versus

 

1. State Bank of India, HUDA Complex, SCO no.5 Sector-8, Urban Estate, Karnal through its Branch Manager.

 

2. SBI Life Insurance Company Limited having its Branch Office at SCO no.144, 2^nd floor, near OPS Vidhya Mandir, Sector-13, Urban Estate, Karnal through its Branch Manager.

 

                                                                …..Opposite Parties.

 

Complaint under Section 35 of Consumer Protection Act, 2019.

 

Before   Sh. Jaswant Singh……President.      

      Sh. Vineet Kaushik…….Member

      Dr.  Suman Singh…..Member

 

 Argued by: Sh. Sanjiv Mandhan, counsel for the complainants.

                    OP no.1 exparte.

                    Shri N.K.Zak, counsel for the OP no.2.

 

                     (Jaswant Singh, President)

ORDER:   

                  The complainants have 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 complainants no.2 and 3 are minor and they are living under the care and custody of their mother Smt. Priya Rana i.e. complainant no.1 who is natural guardian and next friend of the minor. Late Shri Gulshan Chauhan the husband of complainant no.1 took the house loan of Rs.10 lakhs from the OP no.1. At the time of disbursing of the loan, OP no.1 asked the husband of complainant that he will have to get himself insured from the OP no.2 who is sister concern of the OP no.1 for an amount of Rs.10 lakhs and for that policy he will have to pay lump sum premium of Rs.29,854/-. The husband of complainant agreed for the same and got insured himself for an amount of Rs.10,29,854/-, vide insurance policy no.70000018311. The said policy is single premium payment policy.  The said policy is known with the name of “SBI Life RINn Raksha.” At the time of issuance of the said policy, it was disclosed by bank and insurance company is the loanee would die during the pendency of the loan, then the loan amount would be adjusted from the insurance policy of loanee and remaining amount will be refunded to his legal heirs.

 2.            Unfortunately, on 09.08.2021 headache started to the husband of complainant and he was immediately shifted to Shri Ram Chand Memorial Hospital, Karnal where his CT scan was conducted and first aid was given to him but his illness could not be cured there and he was advised to shift the patient at some higher institute. Accordingly, on the same day, he was shifted to Max Healthcare Hospital, Delhi where he remained under treatment up-till 27.08.2021 but his illness could not be cured and he died there. It is further alleged that after the death of her husband, complainant no.1 lodged a claim with the OPs for adjustment of the house loan amount from insurance benefit and to refund the excessive amount but OP did not do so and repudiated the claim of complainant, vide letter dated 21.01.2022 on the false and frivolous ground. In this way there is deficiency in service and unfair trade practice on the part of the OPs. Hence this complaint.

3.             On notice, OP no.1 did not appear despite service and opted to be proceeded against exparte, vide order dated 27.02.2023 of the Commission.

 4.            OP no.2 appeared and filed its written version raising preliminary objections with regard to maintainability; cause of action and concealment of true and material facts. On merits, it is pleaded that the deceased life assured, Gulshan Chauhan had applied for insurance coverage under SBI Life-Rinn Raksha Policy, master policy no.70000018311, with regard to his loan account no.39797146625, through membership form no.7012215046 dated 12.11.2020 alongwith a proposal deposit of Rs.29,854/- towards single premium. On the basis of information furnished in the Membership Form and declaration given, insurance cover was granted to the deceased life assured with cover date 13.11.2020 for an initial sum assured of Rs.10,29,854/- with the term of the policy was 300 months. The bank being the master policyholder is issued the Master Policy while the individual members are issued certificate of insurance (COI) as proof of their insurance coverage. Accordingly, the DLA was issued COI. It is specifically submitted that in case of death, the sum assured stated in the COI is paid, subject to the terms and conditions of the policy. It is further pleaded that the OP received death claim intimation from the complainant. The policy resulted in a claim in nine months days days only and hence OP conducted an extensive investigation into the death of late Gulshan Chauhan. During investigation of the death claim, it was revealed that the deceased life assured was suffering End Stage Renal Disease and Hypertension since 2019 prior to the date of commencement of risk under the insurance cover which he did not disclose in the membership form at the time of applying for the insurance cover. If the deceased life insured had disclosed the same, the insurance cover would not have been granted to deceased life assured. The suppression of material information is fatal to the contract of insurance, which is based on the principle of “Utmost Good Faith”. Thus, any contract of insurance procured by breach of the principle of Utmost Good Faith is a nullity and void ab-initio. Hence, the death claim was rightly repudiated. 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.

5.             Parties then led their respective evidence.

6.             Learned counsel for the complainants has tendered into evidence affidavit of complainant no.1 Ex.CW1/A, copy of repudiation letter dated 21.01.2022 Ex.C1, copy of death summary of hospital Ex.C2, copy of investigation report Ex.C3, copy of SBI Life welcome letter Ex.C4, copy of SBI Life Rinn Raksha certificate of insurance Ex.C5, copy of aadhar card of Priya Rana Ex.C6, copy of aahar card of Rudra Chauhan Ex.C7 and closed the evidence on 01.06.2023 by suffering separate statement.

7.             On the other hand, learned counsel for the OP no.2 has tendered into evidence affidavit of Neelam Singh, authorized representative Ex.OP2/A, copy of insurance policy Ex.OP2/1, copy of membership form Ex.OP2/2, copy of letter dated 17.11.2020 Ex.OP2/3, copy of claimant statement Ex.OP2/4, copy of claim investigation report Ex.OP2/5, copy of medical certificate Ex.OP2/6, copy of repudiation letter dated 21.10.2022 Ex.OP2/7 and closed the evidence on 02.08.2023 by suffering separate statement.

8.             We have heard 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 complainants, while reiterating the contents of the complaint, has vehemently argued that Gulshan Chauhan (since deceased) purchased the insurance policy during his life time for a sum of Rs.10,29,854/- from OP no.2 for securing the loan amount of Rs.10,00,000/-. Gulshan Chauhan expired on 27.08.2021 and thereafter death claim under abovesaid policy was submitted to the OP no.2 but OP no.2 did not pay the claim amount and repudiated the claim of complainant on the false and frivolous ground of pre-existing disease and lastly prayed for allowing the complaint. Learned counsel for complainant relied upon the judgment of Hon’ble Supreme Court of India in case titled as Sulbha Prakash Motegaoneka Versus Life Insurance Corporation of India, in civil appeal no.8245 of 2015, decided on 05.10.2015; Chanda Devi Vs. LIC in complaint no.551/2016, decided on 23.11.2021 of Hon’ble Delhi State Commission; Religare Health Insurance Company Versus Harwant Singh, decided on 08.02.2021 of Hon’ble State Commission, Chandigarh; Satish Chander Madan Vs.Bajaj Allianz General Insurance Company Ltd. (2016) CPJ 613 (NC) and Aditya Birla Health Insurance Co. Ltd. & anr. Versus Deepinder Singh & anr. I 2021 CPJ 156 (Punjab.

10.           Per contra, learned counsel of OP no.2 while, reiterating the contents of written version, has vehemently argued that on receipt of claim intimation from the complainant, OP conducted an investigation and found that the DLA was suffering End Stage Renal Disease and Hypertension since 2019 and suppressed this material facts at the time of making the proposal from the OP, hence the claim of complainant has been rightly repudiated, vide letter dated 21.01.2022 and lastly prayed for dismissal of the complaint.

11.           We have duly considered the rival contentions of the parties.

12.           Admittedly, on 12.11.2020, the life assured had purchased the insurance  policy from the OP no.2 for securing the loan amount of Rs.10,00,000/-. It is also admitted that complainant is the nominee in the policy in question.  It is also admitted that the life assured had died on 27.08.2021, during the subsistence of the policy in question.

13.           The claim of the complainant has been repudiated by the OP no.2, vide repudiated letter Ex.C1/ Ex.OP2/7 dated 21.10.2022 on the grounds that life Assured was suffering from End Stage Renal Disease, Hypertension and was under treatment for the same prior to the date of commencement of policy i.e.13.11.2020.

14.           The claim of the complainant has been repudiated by the OP no.2 on the aforesaid grounds. The onus to prove its version that deceased life assured was having End Stage Renal Disease and Hypertension prior to taking the policy was upon the OPs but OPs have miserably failed to prove its version by leading any cogent and convincing evidence. The OP i.e. insurance company has relied upon the investigating report Ex.OP2/5 and medical certificate Ex.OP2/6, wherein it is mentioned that Gulshan Chauhan was suffering End Stage Renal Disease and Hypertension since 2019 but OP no.2 failed to obtain the treatment record, from where DLA had taken a treatment for the said disease. OP no.1 neither examined the doctors who treated the DLA for the alleged diseases nor tendered their affidavits in evidence to prove its version. Thus, the said certificate is not admissible in the eyes of law. It was the duty of the OP no.2, to collect the record from the hospital from where the DLA had taken a treatment as alleged by the OP no.2 in its pleading. OP has tendered the photocopy of the investigation report. OP neither tender the affidavit of the investigator nor tender his original report. Thus, the said report has no value in the eyes of law.  It is a common practice of the doctors that they take the previous history of the patient just to diagnose the disease and nature of the health of patient, but it does not always mean that cause of death will be due to prior disease. Hence, the repudiation of the claim of complainant is only on the basis of presumption and assumption. 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.

15.           In this regard, we are fortified with the observation of Hon’ble Supreme Court in Sulbha Prakash’s case (supra) 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’s case (supra) 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 Harwant Singh’s case (supra) 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 Satish Chander’s case (supra). In Deepinder Singh’s case (supra) 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.  

“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”.

17.           Keeping in view, the ratio of the law laid down in aforesaid judgments, facts and circumstances of the present complaint, the act of the OP no.2 while repudiating the claim of the complainant amounts to deficiency, which is otherwise proved genuine one.         

18.           The loan amount has got been insured by the OP no.1 through OP no.2. As per insurance policy, on the death of insured, remaining loan amount is to be paid by the insurance company. Hence, OP no.2 is liable to pay the remaining loan amount after the death of life assured. It is made clear that if any loan amount pending prior to death of life assured, for that complainants shall be liable to pay the same and after the death of life assured, the insurance company i.e. OP no.2 shall pay the remaining loan amount to OP no.1.

18.           Thus, as a sequel to abovesaid discussion, we allow the present complaint and direct the insurance company i.e. OP no.2 to pay the remaining loan amount to the bank i.e. OP no.1 pending after the death of the deceased life assured.  We further direct the OP no.2 to pay Rs.25,000/- to the complainant on account of mental agony and harassment suffered by them 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.1, on receipt of loan amount, to issue the No Objection Certificate (NOC) and return the documents to the complainant no.1 which have been taken by the OP no.1 at the time of sanctioning the loan. The parties concerned be communicated the order accordingly, and the file be consigned to the record room, after due compliance.

Announced
Dated: 18.04.2024

 

  President,       

            District Consumer Disputes                          

Redressal Commission, Karnal.

 

                      (Vineet Kaushik)          (Dr. Suman Singh)        

                          Member                          Member