Haryana

StateCommission

A/1292/2018

SHRIRAM LIFE INSURANCE CO. LTD. - Complainant(s)

Versus

SUMAN AND OTHERS - Opp.Party(s)

SANDEEP SINGH RANA

04 May 2023

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

 

                                                       First Appeal No.1292 of 2018

                                                Date of Institution: 27.11.2018

                                                               Date of Decision: 04.05.2023

 

1.      Shriram Life Insurance Company Ltd, 2^nd Floor, Ashoka Plaza Civil road, Rohtak through its General Manager.

2.      Shriram Life Insurance Company Ltd., Plot No.31,32, 5^th and 6^th Floor, Ramky Selenium, Besides Andhra Bank Training Center, Financial Distt.Gachibowli, Hyderabad 500032.

…..Appellants

Versus

1.      Suman age about 27 years Wd/o Late Sh.Sumer S/o Krishan

2.      Prince (minor) S/o Sh.Sumer through his mother Smt.Suman being natural guardian and next friend.

3.      Krishan Lal S/o Ami Lal

          All Resident of Village Koyal, Tehsil Narwana, Jind.

…..Respondents

CORAM:    S.P.Sood, Judicial  Member

 

Present:-    Mr.Sandeep Singh Rana, Advocate for theappellant.

                   Mr.Shiv Kumar, Advocate for the respondents.

 

                                                ORDER

S P SOOD, JUDICIAL MEMBER:

          The present appeal No.1292 of 2018 has been filed against the order dated 08.10.2018 of the District Consumer Disputes Redressal Forum, Rohtak (In short “District Commission”) in Consumer Complaint No.37 of 2017, which was allowed.

2.       The brief facts of the case are that on 11.02.2016, husband of the complainant purchased one New Shri Life Plan policy from the opposite parties for the period of 25 years with accidental or incidental benefits.   The complainant got himself assured with a sum of Rs.2,88,000/-. On 19.03.2016, the husband of the complainant suffered pain and had died away. The complainant got performed his last rites. The complainant has one male child namely prince aged about 5 years and after the death of their beloved father there was no one to provide love and affection to him as well as other provisions of life.  After this development complainant visited office of the OP seeking compensation of Rs.2,88,000/- but, OP flatly refused to pay even a single penny to her. Then complainant even made written representation before the Ops but they declined her genuine request of the complainant on the false plea that her husband was having pre existing health ailment of kidney disease, which he did not disclose and thus violated the conditions of policy. Thus there being deficiency in service on the part of the Ops, hence the complaint.

3.      Notice being issued, OPsappeared and filed reply submitting that late Sh.Sumer Singh submitted proposal for issuance of policy on 11.02.2016 and the same was issued on 15.02.2016. The husband of the complainant did not disclose about the pre-existing disease i.e. kidney disease he was suffering from. The life assured had already taken treatment for this problem from BPS Govt. Medical College for Women, Khanpur Kalan (Sonepat). That being so the claim of the complainant was rightly repudiated vide letter dated 02.11.2016. Thus there was no deficiency in service on the part of the Ops and prayed for dismissal of the complaint.

4.      After hearing both the parties, the learned District Commission, Rohtak has allowed the complaint vide order dated 08.10.2018, which is as under:-

“In view of facts and circumstances of the case, complaint is allowed and it is directed that opposite parties shall pay the amount of Rs.2,88,000/- (Rupees Two Lac Eighty Eight Thousand only) alongwith interest @ 9% p.a. from the date of filing the present complaint i.e. 17.01.2017 till its actual realization, other benefits under the policy, if any to the complainants within one month from the date of decision. It is also made clear that out of the awarded amount Rs.80000/- (Rupees eighty thousand only) shall be paid to the father of deceased Sumer Singh namely Krishan i.e. complainant No.1, Rs.108000/- (Rupees one lac eight thousand only) to the wife of L namely Suman i.e. complainant No.1 and Rs.100000/- to the son of complainant namely Prince (minor i.e.  complainant No.2, all the alleged amounts alongwith interest @ 9% p.a. from the date of  filing the present complaint i.e. 17.01.2017 till its actual realization respectively to the complainants. However the amount after disbursement on account of complainant No.2 of minor son Prince should be deposited in any nationalized bank till his majority and will be paid to him on attaining the date of majority.”

5.      Feeling aggrieved therefrom, OPs-appellants have preferred this appeal.

6.      These argumentswere advanced by Sh.Sandeep Singh Rana, learned counsel for the appellants and Mr. Shiv Kumar, learned counsel for the respondents. With their kind assistance the entire record of appeal as well as original record of the District Commission including whatever evidence has been led on behalf of  both the parties has been properly perused and examined.

7.      Learned counsel for the OPs-appellants argued that  the claim of the complainant was rightly repudiated because before issuance of the insurance policy, the complainant was suffering from kidney problem and was having pre existing disease, which fact was duly concealed at the time of buying this policy. The husband of the complainant i.e. life assured had even taken treatment for this ailment from BPS Govt. Medical College for Women, Khanpur Kalan (Sonepat).  So the complainant was not entitled for any benefit under the policy. The learned District commission has erroneously allowed the complaint.

8.      Learned counsel for the respondent on the other hand vehemently argued that claim was wrongly repudiated by the insurance company as during the subsistence of the insurance policy, the husband of the complainant died during the subsistence of the policy and insurance company was liable to pay the insured amount. The learned district Commission has rightly allowed the complaint of the complainant and this appeal deserves to be thrown out.

9.      It is not disputed that during the subsistence of the policy, the husband of the complainant has died away. It is not disputed that progress notes of BPS Govt. Medical College for women, Khanpur Kalan, Sonepat  dated 29.01.2016 related to Sumer Singh age 30 years, whereas LA name was Sumer S/o Krishan Kumar.  Since the claim form shows that the husband of the complainant has expired due to chest pain and not with any renal problem. Moreoverthe OPs did not produce any document to prove that  treatment record placed by Ops were of deceased LA Sumer S/o Krishan. The Ops have wrongly repudiated the claim despite the fact that they were entitled for the claim under the policy.

10.    It is a matter of common experience, insurance companies often repudiate claims on grounds of non-disclosure of material information by the consumer. However they conveniently forget that there is an even greater statutory obligation cast on them to give full information to the consumer about the products they sell.

The responsibilities of the insurer towards full disclosure is even more because (a) the Insurance Regulatory and Development Authority’s (IRDA) Regulation on the protection of Policyholders’ Interests’ specifically mandates this and (b) the contracts of insurance, which are ‘Adhesion Contracts’ or ‘Standard Form Contracts’ are drawn up unilaterally by the dominant party-the insurer. The consumer, being the weaker party has no bargaining power, nor knowledge of the terms of the contract. So, the apex court has often said that these contracts, therefore, demand a very high degree of fairness, good faith and disclousure on the part of the insurer.

          Here are two cases where the Supreme Court has reminded insurers of their obligation in this regard and warned them against violations. The two cases also show-case the kind of unfair practices indulged in by insurers.

          In Texco Marketing Pvt. Ltd. Vs TATA AIG General Insurance (CA No. 8249 of 2022, date of judgment: November, 9, 2022), for example the insurance company insured after due inspection, a shop loacated in a basement under the Standard Fire and Special Perils Policy, despite the fact that the policy specifically excluded basements. Subsequently, following a fire, when the policyholder made a claim, the insurer repudiated it on the basis of the exclusion clause!

          While ruling in favour of the consumer, the apex court observed that first and foremost, the insurer did not bring the exclusion clause to the notice of the consumer. And then, despite having knowledge of the exclusion clause, it insured the basement and received the premium benefits. After this, repudiating the policyholder’s claim on the basis of the exclusion clause was certainly an unfair trade practice. “This view is fortified by the finding that the exclusion clause is an unfair term, going against the very object of the contract, making it otherwise un-executable from its inception,” the apex court said.

          Some of the observations of the court in this case would go a long way in upholding the rights of the policyholders. For example, the court made it clear that an exclusion clause, if not brought to the notice of the consumer by the insurer or agent, would not be binding on the consumer. Similarly, an unfair term in an insurance contact would be un-executable. The Supreme Court also reminded insurers that an exclusion clause “is not a leverage or safeguard for the insurer, but is meant to be pressed into service on a contingency, being a contract of speculation”.

          Said the court: “Before we part with this case, we would like to extend a word of caution to all the insurance companies on the mandatory compliance of Clause (3) and (4) of IRDA Regulation, 2022. Any non-compliance on the part of the insurance companies would take away their right to plead repudiation of contract by placing reliance upon any of the terms and conditions included thereunder.

11.    The learned District Commission has rightly allowed the claim of the complainant. The learned District Commission had committed no illegality while passing the order dated 08.10.2018.  The appeal is also devoid of merits and stands dismissed.

12.    The statutory amount of Rs.25,000/- deposited at the time of filing the appeal be refunded to the respondents-complainants against proper receipt and identification in accordance with rules, after the expiry of period of appeal and revision, if any filed in this case.

13.              Application(s) pending, if any, stand disposed of in terms of the aforesaid Order.

14.              A copy of this order be provided to all the parties free of cost as mandated by the Consumer Protection Act, 1986/2019. The Order be uploaded forthwith on the website of the commission for the perusal of the parties.

15.              File be consigned to record room.                  

 

4^rd MAY, 2023                                                                                   S. P. Sood                                                                                                                            Judicial Member    

S.K

(Pvt. Secy.)