DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II
Udyog Sadan, C-22 & 23, Qutub Institutional Area
(Behind Qutub Hotel), New Delhi-110016.
Case No. 518/2006
Sh. Sushil Kumar,
S/o Late Sh. Rajinder Singh
R/o H.No. 357, Gali No. 7,
Shalimar Gaon, Delhi - 110008 -Complainant
Vs
1. State Bank of Patiala
Personal Banking (Specialized Branch),
E-4, Defence Colony, Ring Road,
New Delhi – 110024
(Through Its Chief Manager)
2. SBI Life Insurance Company Ltd.
2nd Floor, Turner Morrison Building,
G.N. Vaidya Marg,
Fort, Mumbai - 400023 -Opposite Parties
Date of Institution: 12.09.2006 Date of Order: 30.07.2016
Coram:
N.K. Goel, President
Naina Bakshi, Member
S.S. Fonia, Member
O R D E R
The case of the complainant, in short, is that while giving a loan of Rs. 5,55,000/- under TL(PER)HOMELOANFLOAT Scheme to him and his father Sh. Rajinder Singh for finishing/renovation of their house vide account No. 10004230775 OP-1 had also given insurance cover under SBI Life, Super Suraksha for Housing Loan Borrowers of State Bank of India Group and Regional Rural (RRB’s) sponsored by State Bank of India Group vide account No. 0159N005862 against a premium of Rs. 51,550/- under the aegis of OP-2. Group Insurance Cover also stipulated that in the event of death of the insured housing loan borrower due to any cause, the sum assured would become payable to the Group Administrator and the sum assured will be equivalent to the outstanding amount including interest as per the original EMI schedule. It is, however, stated that Sh. Rajinder Singh fell ill and was admitted in ESI Hospital, Basai Darapur, New Delhi-110015 on 20.11.2005 where he remained hospitalized till 23.11.2005 but since his condition could not improve he was referred to RBTB Hospital, Kingsway Camp, New Delhi for further management where he ultimately died on 24.11.2005. It is stated that his medical record which has been submitted to the OPs revealed his cause of death as category-II Pulmonary Tuberculosis and the duration of his illness was disclosed as six months and even the symptoms of illness have been deducted as per the medical record in six months. After his death the claim was lodged with the OPs who investigated the claim, collected the medical records from the hospital and a certificate of hospital treatment dated 17.5.2006 issued by RBTB Hospital had been furnished to the OPs which corroborate the averments of the complainant. It is stated that OP-1 vide letter dated 22.8.2006 informed that OP-2 has repudiated the claim of the complainant on the ground that while applying for insurance cover the deceased insured had signed the declaration of good health and that he had given a false good health declaration and, hence, the claim was repudiated. It is stated that the good health declaration contained in Clause 3 of the cover note reads as under:
“GOOD HEALTH DECLARATION: All the borrower joining the Scheme will be required to give a Declaration of Good Health in a prescribed format containing in the Consent-cum-Authority letter. The Declaration should be made in a truthful manner required under the Insurance Act.
CRITICAL ILLNESS shall mean that the borrower should not have suffered or suffering from cancer, condition requiring open chest surgery, history of typical chest pain, kidney failure, brain stroke or paralysis or having undergone major organ transplantation such as heart, lung, liver or kidney.”
It is stated that the deceased Rajinder Singh had not suffered with any critical illness and was maintaining good health at the time he took the insurance cover in question on 18.3.2004 but, however, during the course of investigation, the officials of the OPs had contacted the family members of the deceased who revealed that the deceased Rajinder Singh had been ill during the period of April 2003 and had suffered from the disease Herpes Simplex of Palate and was admitted in ESI Hospital, Basai Darapur, New Delhi-110015 for the period 2.4.2003 to 25.4.2003 and presumably from the said documents the OPs wrongly inferred that Sh. Rajinder Singh had made a false declaration at the time of taking the scheme in question. It is further inter-alia stated that the OP-1 in the letter dated 22.8.06 threatened the complainant to regularise the loan account or the action under SRESI Act will be initiated which threat is uncalled for and illegal. Hence, this complaint for issuing following directions to the OPs:
“a) grant the benefit of the insurance policy as contained in term No. 5 of the cover note to the complainant and other family members of late Sh. Rajinder Singh;
- pay Rs. 1,00,000/- by way of damages/compensation to the complainant;
- not to enforce the liability arising out of the loan account 10004230775 standing in the name of Sh. Rajinder Singh and Sushil Kumar till the disposal of the present complaint and in this regard not to take any coercive measures;
- pay the cost of proceedings to the complainant.”
In its written statement, OP-1 has inter-alia stated that the complaint is barred under Section 13(2) of the Securitisation & Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002 (in short, 2002 Act) and this forum has no jurisdiction to stay/stop the enforcement of liability against the complainant which has been commenced under the 2002 Act. It is further stated that in view of the non-payment of the overdue installments of term loan disbursed to the complainants, OP-1 issued the notice under Section 13(2) of the 2002 Act on 26.9.2006 directing them to pay the outstanding alongwith interest within 60 days from the date of receipt of the notice failing which appropriate proceedings would be initiated by taking the possession of the mortgaged property and subsequent sale thereof by way of public auction for recovery of outstanding dues; that OP-1 has already served the possession notice dated 16.12.2006 upon the complainant as well as the mortgaged property. It is pleaded that no courts including civil/consumer have jurisdiction to interfere with or stay the proceedings under the said Act except the Debt Recovery Tribunals constituted under the provisions of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 which are competent to entertain such matter. It is submitted that after doing thorough investigation, OP-2 has rightly repudiated the alleged claim of the complainant which was duly communicated by OP-1 to the complainant vide letter dated 22.8.2006. Denying other averments made in the complaint, it is prayed that the complaint be dismissed.
In the reply, OP-2 has inter-alia stated that the life assured Sh. Rajinder Singh became a member of the Master policy issued to OP-1 w.e.f. 18.3.2004 on the basis of a DGH submitted by him on 17.3.2004; that the life assured was reported to have died of Pulmonary Tuberculosis on 24.11.2005 after the insurance coverage under the SBI Life Super Suraksha Scheme was in force for just 1 year and 8 months out of the term of 15 years for the repayment of the housing loan. It is stated that in view of the fact that life assured Sh. Rajinder Singh had died of Pulmonary Tuberculosis within a very short period of being covered by the Group Scheme, investigations were carried out which revealed that he was suffering from serious lung ailments for more than 1 year before he was covered under the Group Scheme and his medical papers were collected as detailed in Para 8 of the reply. It is stated that the investigations carried out by SBI Life clearly established that the life assured Sh. Rajinder Singh had been suffering from serious lung ailments including Tuberculosis for more than one year prior to the joining of the Group Scheme and it was obvious that the DGH submitted by him on 17.3.2004 was false and that SBI life had been induced to extend insurance coverage to him on the basis of the said false DGH and, hence, OP-2 repudiated the claim under Master Policy as respects the coverage of Sh. Rajinder Singh vide letter dated 18.8.2006 addressed to the Group Policyholder. It submitted that the complainant’s claim was repudiated on legally valid and justifiabale grounds. It is stated that the documents collected by the OPs established that life assured was a chronic alcoholic and chronic smoker; that the biggest cause of Pulmonary Tuberculosis is smoking and there are documents on record which clearly show that the life assured was treated for Asthma. The major symptoms of the Asthma and Pulmonary Tuberculosis are shortness of breath, wheezing, cough which were existent in life assured at the time of opting for group insurance scheme of SBI Life. Other averments made in the complaint have been denied. It is prayed that the complaint be dismissed.
Complainant has filed rejoinders to the replies of the OP-1 & 2 wherein he has reiterated the averments made in the complaint.
Complainant has filed his own affidavit in evidence and has relied on documents Ex. CW1/1 (copy of SBI Life Policy in the name of late Sh. Rajinder Singh), Copy of discharge slip dated 23.11.2005 issued by RBTB Hospital, Kingsway Camp, New Delhi for further management (Ex. CW1/3), copy of death certificate of late Sh. Rajinder Singh (Ex. CW1/4), Certificate of Hospital treatment issued by RBTB Hospital dated 17.5.2006 (Ex. CW1/5), copy of discharge slip dated 25.4.2003 (Ex. CW1/6) and OPD slips [Ex. CW1/7 (colly)]. He has also filed copy of letter dated 22.8.06 as Ex. CW1/8.
On the other hand, affidavit of Sh. Surinder Sareen, Manager of OP-1 and of Sh. Parind Badshah, Company Secretary and Compliance Officer on behalf of OP-2 have been filed in evidence. OP-1’s witness has relied on notice dated 26.9.2006 issued under Section 13 (2) of 2002 Act as Ex. OP1/1 and the proof of service of notice as Ex. OP1/2. OP-2’s witness has relied on documents Annexure A (colly) to Annexure I.
Written arguments have been filed on behalf of the parties.
We have heard the complainant in person and the Proxy counsel on behalf of OPs and have also carefully perused the file.
Copy of certificate of insurance (SBI Life and Super Suraksha) in question of Sh. Rajinder Singh is marked as Annexure A (Ex. CW1/1 though not marked on the document). They differ from each other inasmuch as the copy filed by the complainant contains “Summary of Terms and Conditions of the Scheme” (Group Insurance for Housing Loan Borrowers of SBI Group) on its back side. Thus, OP-2 has filed an incomplete document. Rather, the complainant has shown honesty and filed a complete copy of the document despite the fact that the claim in question has been rejected by the OPs by taking recourse to term and condition No. 3 printed overleaf the Certificate of Insurance and reproduced hereinabove.
A bare perusal of term and condition No. 3 would reveal that the life assured should not have suffered or suffering from the diseases mentioned therein which have been termed as ‘critical illness’. The same does not specifically name the Tuberculosis. Moreover, it is now a matter of common knowledge that Tuberculosis is no more a non-curable disease. In other words, Tuberculosis is now a curable disease. In the present case, we have perused the medical papers filed on behalf of the complainant as well as on behalf of OP-2. They are sets of different papers and have been marked as Annex. C to Annx. H by OP-2. From a perusal of these papers, it transpires that the deceased Rajinder Singh had got some treatment from ESI Hospital, Basai Darapur, New Delhi – 110015 for bronchial Asthma and in the months of April and May 2005. They further reveal that he had also got treatment from some dispensary in August 2004. Suffering from Asthma is not a critical illness as stipulated in term and condition No. 3. Copies of slips issued by ESI Hospital, Basai Darapur, New Delhi in respect of the deceased have been placed on the file which show that he was admitted to this Hospital on 2.4.2003 and discharged on 25.4.2003 and that he was diagnosed as a case of “LRTI with Herpes Simplex of Palate”. It is a matter of common knowledge that Herpes Simplex of Palate has nothing to do with Tuberculosis and it is a separate disease and it is one of a group of infectious diseases, caused by a virus that causes painful spots on the skin, especially on the face and sexual organs. Therefore, even this document does not show that the deceased had been suffering from a critical illness. The language employed in clause No. 3 of the summary of terms and conditions of the scheme is very clear and, therefore, it should be given its plain meaning. It inter-alia provides that the borrower should have undergone major organ transplantation such as heart, lung, liver or kidney. Thus, it is the transplantation of lung which has been considered as critical illness for the purposes of clause 3 ibid. However, in the present case, the deceased had not undergone lung transplantation and, hence, his disease could not be considered as critical illness.
In view of the above discussion, we allow the complaint. The sum assured would be equivalent to the outstanding amount including interest as per the original EMI schedule. Deceased Rajinder Singh died on 24.11.2005. Thus, the sum assured as on 24.11.2005 would have been equivalent to the outstanding amount including interest as per the original EMI schedule which the OP-1 was required to adjust against the loan amount. Therefore, the OP-2 shall now calculate the said amount as on 24.11.2005 and would adjust the same against the outstanding loan amount including interest. In case, the complainant has already cleared the loan amount along with up-to-date interest or the matter has been disposed off otherwise by any other Tribunal or authority, the amount so calculated shall be paid to the complainant who is the nominee of the deceased Rajinder Singh (Annexure C) along with interest @ 6% p.a. from the date of repayment till the date of realization within 30 days from the date of receipt of copy of this order.
Let a copy of this order be sent to the parties as per regulation 21 of the Consumer Protection Regulations. Thereafter file be consigned to record room.
(S.S. FONIA) (NAINA BAKSHI) (N. K. GOEL) MEMBER MEMBER PRESIDENT
Announced on 30.07.2016
Case No. 518/06
30.7.2016
Present – None.
Vide our separate order of even date pronounced, the complaint is allowed. The sum assured would be equivalent to the outstanding amount including interest as per the original EMI schedule. Deceased Rajinder Singh died on 24.11.2005. Thus, the sum assured as on 24.11.2005 would have been equivalent to the outstanding amount including interest as per the original EMI schedule which the OP-1 was required to adjust against the loan amount. Therefore, the OP-2 shall now calculate the said amount as on 24.11.2005 and would adjust the same against the outstanding loan amount including interest. In case, the complainant has already cleared the loan amount along with up-to-date interest or the matter has been disposed off otherwise by any other Tribunal or authority, the amount so calculated shall be paid to the complainant who is the nominee of the deceased Rajinder Singh (Annexure C) along with interest @ 6% p.a. from the date of repayment till the date of realization within 30 days from the date of receipt of copy of this order. Let the file be consigned to record room.
(S.S. FONIA) (NAINA BAKSHI) (N. K. GOEL) MEMBER MEMBER PRESIDENT
