Andhra Pradesh

Chittoor-II at triputi

CC/15/2017

M.Varalakshmi, W/o Late M.Srinivasulu Reddy - Complainant(s)

Versus

The Branch Manager, M/S Bajaj Finance Ltd., - Opp.Party(s)

K.Chakravarthy and P.sireesha

09 Nov 2018

ORDER

Filing Date: 16.03.2017

Order Date:09.11.2018

 

 

 

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II,

CHITTOOR AT TIRUPATI

 

 

      PRESENT: Sri.T.Anand, President (FAC)

               Smt. T.Anitha, Member

 

 

 

FRIDAY THE NINTH DAY OF NOVEMBER, TWO THOUSAND AND EIGHTEEN

 

 

 

C.C.No.15/2017

 

 

Between

 

 

Smt.M.Varalakshmi,

W/o. late. M.Sreenivasulu Reddy,

Hindu, aged about 51 years,

D.No.3-34, Thummalagunta Village,

Chandragiri Road,

Tirupati – 517 502.                                                                          … Complainant.

 

And

 

 

1.         The Branch Manger,

            M/s. Bajaj Finance Ltd.,

            D.No.19-8-112/5, 1^st Floor,

            Opp. To Unlimited Mart,

            Pasuparthy Towers,

            AIR Bye-pass Road,

            Tirupati – 517 501.

 

2.         The General Manager,

            M/s. Bajaj Allianz Life Insurance Company Ltd.,

            Head Office, 5^th Floor, GE Plaza,

            Airport Road,

            Yerwada,

            Pune – 411 006.                                                                    …  Opposite parties.

 

 

 

 

            This complaint coming on before us for final hearing on 26.10.18 and upon perusing the complaint and other relevant material papers on record and on hearing Sri.K.Chakravarthy, counsel for complainant, and Sri.V.Upendra, counsel for opposite party No.1, and Sri.Prem Kumar Karanam, counsel for opposite party No.2,  and having stood over till this day for consideration, this Forum makes the following:-

ORDER

DELIVERED BY SRI. T.ANAND, PRESIDENT (FAC)

ON BEHALF OF THE BENCH

           

            This complaint is filed under Section –12 of C.P.Act 1986, by the complainant with the following allegations:

2.  Mekala Hari Babu, who is son of the complainant obtained personal loan for a sum of Rs.61,000/- from opposite party No.1 on 22.11.2015 under ID No.8962332 agreeing to pay the amount in 36 equal monthly installments at the rate of Rs.2,691/-. In that connection, opposite parties have issued group insurance coverage scheme administered by opposite party No.1, under Group Master Policy No.0324165041, under the caption ‘Bajaj Term Life’ policy (UIN No.16N021V02). The same was issued by opposite party No.2. The policy holder died on 07.12.2015 at Thummalagunta village, Tirupati, during the period covered by insurance. The renewal date of master policy is on 22.11.2016. The complainant paid 3 monthly installments to the opposite parties to prove her reliability. On 05.02.2016 claim statement was submitted by complainant to opposite party No.1 along with original copies and opposite party No.1 inturn forwarded the same to opposite party No.2, but to her surprise on 22.05.2016, she received reply letter from opposite party No.2 to the effect that her claim under policy No.0324165041 was rejected due to unknown reasons. As on the date of obtaining personal loan and insurance policy from opposite parties, the complainant’s son was hale and healthy, and was aged only 29 years.  He was not suffering from any chronic disease. His death was natural and occurred on 07.12.2015. On the basis of prospectus, complainant filled the proposal form and accordingly opposite parties issued policy to the deceased. Policy documents along with terms and conditions were issued to the deceased. Rejection of claim was on the ground that the deceased had treatment for ‘Alcoholic Liver Disease’ and ‘Hepatitis’ and that the deceased was suffering from ailment prior to taking policy and thus the deceased suppressed the facts and obtained the policy. The insurance company i.e. opposite party No.2 failed to honour its contract by repudiating the claim unjustly. It is the obligation on the part of opposite parties to pay the sum assured under the policy on the death of the policy holder. The insurance company acted in bad faith and refused to settle the claim. The insurance company is duty bound to order investigation to determine the legitimate claim of the complainant. It is settled legal proposition that construing the terms of the contract of insurance, the words used therein must be given paramount importance and the terms have to be strictly construed in order to determine the extent of liability of the insurer. The repudiation of claim of the complainant without giving valid reasons amounts to deficiency in service on the part of opposite parties and as such it is prayed to allow the complaint.

3.   Opposite party No.1 contended as follows – Bajaj Finance Limited is a company incorporated under the provisions of Indian Companies Act 1956. The complainant had availed personal loan vide loan No.4420PL17342289 for an amount of Rs.61,000/- dt:22.11.2015 agreeing to repay the loan at the rate of Rs.2,691/- in 36 months. The complainant has issued ECS mandates for the repayment of the installments. But the mandates have got dishonoured due to reason of insufficient funds. As a result of which Rs.52,933/- remains to be paid by the complainant. The complainant had also availed insurance under Group Term Life Insurance for an amount of Rs.5,00,000/- and the claim was rejected by opposite party No.2 for the reason ‘non disclosure of information’ and the reason was informed to complainant.  “Hospitalization / Treatment of the deceased during 23.04.2014 to 21.07.2014 is a diagnosed case of Alcoholic liver disease, Hepatitis and it was pre-proposal. This fact was deliberately and fraudulently suppressed in the proposal form with an intention to deceive the insurer and induce the insurer to issue the policy. Material non-disclosure amounting to fraud, on the basis of which the policy is obtained, as the life assured is proved to be beyond insurable criteria as per the underwriting norms of the company otherwise claim is repudiated”. Opposite party No.1 further stated that as per Clause.32 of terms and conditions signed by the complainant, all claims will be referred to Sole Arbitrator appointed by opposite party No.1 and arbitration proceedings will be conducted at Pune. Thus, the courts are debarred from entertaining such complaints. In case the complainant is not satisfied with rejection of claim by opposite party No.2, the complainant has got all rights to investigate the incident of claim. In case the nominee is not satisfied on the decision of insurer, he / she can approach claims review committee, whose address given on claim rejection letter issued by insurer. The allegation of deficiency in service on their part is wholly misconceived and untenable in law. The opposite party No.1 is not liable to pay any compensation and interest as claimed by the complainant in the complaint. The complainant made an attempt to get relief by giving misleading information to Hon’ble Forum and thus abused the process of law. The complaint is frivolous and vexatious and liable to be dismissed under Section-26 of the C.P.Act. Hence, it is prayed to dismiss the complaint by directing the complainant to pay the outstanding dues of Rs.52,933/-.

4.  Opposite party No.2 contended as follows – At the outset, complaint averments are denied.  Present complaint is misconceived and contrary to the contract between the parties and therefore untenable in law and deserves to be dismissed. The deceased life assured has not disclosed the earlier treatment undergone by him during the period 23.04.2014 to 21.07.2014 in the proposal form and obtained policy fraudulently on 22.11.2015. The deceased life assured was under an obligation to mention the actual illness or disease suffered by him in the proposal form at the time of applying for insurance policy. Had he disclosed the same, the company would not have insured the life under the said policy. Providing false information by the assured entitles the insurer to avoid the contract of insurance so long as the non-disclosure induced the making of the contract on the relevant terms. The proposer who intends to procure an insurance policy has to fill in the material details in the proposal form, about the medical, income details, as well as nomination details have to be provided. On receipt of the proposal form, the insurance company will issue the policy as per the requirement of the proposer. The policy holder and the company are bound by the terms and conditions of the insurance policy. This opposite party had covered the risk solely on the basis of facts as mentioned in the proposal form. The proposal of the life assured could not have been accepted, had he revealed the fact of earlier treatment for Alcoholic liver disease. Opposite party No.2 made investigation after receipt of death claim and found that the life assured had received treatment for Alcoholic liver disease, Hepatitis at SVIMS, Tirupati, under Rajiv Aarogyasri Insurance Scheme under MRD No.7801/09. He was treated in the hospital from 23.04.2014 to 21.07.2014. The proposal form for the policy was submitted on 22.11.2015, as per which policy was issued in the name of life assured M. Hari Babu. The medical condition of the life assured was not disclosed in the proposal form submitted on 22.11.2015, and the said non-disclosure amounts to playing fraud on the opposite parties and that was the basis for repudiating his claim. The life assured had knowledge that he was suffering from liver disease at the time of making proposal to opposite parties for policy. The complaint therefore is not bonafide one and deserves to be dismissed on the principle of “Allegatio contra factum non est admittenda”, and also on the principle of “Nullus commodum capere potest ex sua injuria propria”. The policy was issued on the principle of utmost good faith, as per the declaration made in the proposal form. It was not the complainant, who filled the proposal form but the life assured Hari Babu filled the proposal form. The averments mentioned in para.4 of the complaint are completely false and therefore denied. The complainant is put to strict proof of the same. The opposite party has got right to see whether any material non-disclosure has been made by the life assured and if yes, the policy can be repudiated as per Section-45 of Insurance Act 1938. The complainant has approached the Forum with unclean hands. The insurance company has repudiated the claim after due application of its mind to the facts and circumstances of the case. In the written version a decision of Hon’ble Supreme Court reported in (2000) 1 SCC 66 between Ravneet Singh Bagga Vs. KLM Royal Dutch Airlines was referred in support of their contention that there is no deficiency in service on the part of opposite party No.2.  The burden of proving deficiency in service is upon the person, who alleges it. The complainant is failed to prove the same in this case. The complainant, who is the mother of the policy holder, is well aware that his son was suffering from pre-existing disease and also about the treatment he had undergone, but failed to disclose this fact in her claim form. Only on investigation made by opposite party No.2, material facts came into light. Hence, it is prayed to dismiss the complaint.

            5.  The complainant filed chief evidence affidavit as P.W.1 and marked Exs.A1 to A8. On behalf of opposite parties R.W.1 and R.W.2 are examined and Exs.B1 to B12 are marked.

6.  On filing of I.A.No.65/2017 by opposite party No.2, my predecessor had issued summons to the Director, SVIMS, to cause production of medical records pertaining to the deceased / insured Sri.M.Hari Babu, and to give evidence on behalf of the petitioner, and accordingly in obedience to the summons issued by the Forum, Dr.D.Katyarmal, Associate Professor of Medicine, SVIMS, Tirupati, filed chief evidence affidavit as 3^rd party, who produced the medical records pertaining to the deceased M.Hari Babu, with regard to the treatment taken by him in SVIMS hospital during the period from 24.04.2014 to 17.07.2015.  

7.  The point for consideration is whether there is deficiency in service on the part of opposite parties 1 and 2? If so, to what extent the complainant is entitled for the reliefs sought in the complaint?

8. Point:-  Ex.A1 is office copy of legal notice dt:23.06.2016 issued by complainant counsel to reconsider the repudiation of claim by the complainant. Ex.A2 is postal acknowledgement of opposite parties 1 and 2 for receiving original of Ex.A1. Ex.A3 is reply notice dt:02.09.2016 given by opposite party counsel to the complainant, wherein the complainant was requested to provide correct membership number or in the alternative provide the documents in support of her claim. Ex.A4 is another legal notice dt:27.09.2016 issued by complainant counsel to opposite parties 1 and 2 again asking to reconsider the repudiation of claim. Ex.A5 is insurance certificate issued by opposite party No.2, which shows that opposite parties confirmed about the insurance coverage by enrolling the deceased as a member under group insurance scheme administered by Bajaj Finance Limited under Group Master Policy No.0324165041 of Bajaj Allianz Group Term Life Policy (UIN No.16N021V02) issued by Bajaj Allianz Life Insurance Company Limited. Ex.A6 is claimant statement of complainant wherein column No.4 under the caption Medical Attendant’s Addendum  is kept blank. Declaration Form of the complainant for confirming the name in order to process the Direct Credit / NEFT request is also enclosed with claimant statement and forms part of Ex.A6. Ex.A7 is letter dt:22.05.2016 issued by opposite party No.2 rejecting the claim of the complainant in respect of policy No.324165041 on the life of late M.Hari Babu. Ex.A8 is Death Certificate of late M.Hari Babu, which shows that the deceased died on 07.12.2015. As against the documents filed by the complainant, opposite parties have filed Exs.B1 to B12. Ex.B1 is the statement of account of the deceased Hari Babu. Ex.B2 is personal loan agreement accepted by the deceased Hari Babu in favour of opposite party No.1. Ex.B3 is equivalent to Ex.A7 rejection of claim letter. Ex.B4 is attested copy of promissory note and schedules dt:22.11.2015 pertaining to the deceased M.Hari Babu. Ex.B5 is special power of attorney executed by opposite party No.1 in favour of one Shaik Chand Basha, Assistant Manager of their company to prosecute the case. Ex.B6 is policy enrollment form executed by the deceased in favour of opposite parties on 22.11.2015. Ex.B7 is attested true copy of certificate of insurance issued by the opposite parties. Ex.B8 is attested true copy of outpatient card dt:23.04.2014 pertaining to deceased Hari Babu issued by SVIMS hospital, Tirupati, filed by the opposite parties. Ex.B9 is attested true copy of investigation report pertaining to the claim of the deceased Hari Babu filed by the opposite parties dt:05.05.2016. Ex.B10 is attested true copy of consent letter executed by the complainant filed by the opposite parties dt:28.03.2015. Ex.B11 is attested true copy of the notarized sworn affidavit of complainant filed by the opposite parties dt:28.12.2015. Ex.B12 is attested true copy of rejection of the claim addressed to the complainant by the opposite parties on 22.05.2016. Apart from that Ex.X1 medical record is marked through Dr.D.Katyarmal, which relates to the case record of deceased Hari Babu, in SVIMS hospital, vide Case Record No.497395.

9.  The contention of counsel for complainant is that she being the nominee of deceased Hari Babu is entitled to claim the amount covered by insurance, since her son Hari Babu died during the validity period of the insurance. There is no dispute that Hari Babu is member of group insurance as on the date of his death. As per Ex.A7 letter, the reason for rejecting the claim of the complainant is mentioned as follows – “it is the contention of the opposite parties that the deceased deliberately suppressed material facts relating to the treatment taken in SVIMS hospital for Alcoholic liver disease and Hepatitis, and obtained the policy from opposite party No.2. It is further contended by the counsel for opposite parties that had the facts relating to the earlier treatment been disclosed by the deceased, the company would not have covered the risk for the above said policy under the same terms and conditions”. Finally, it is argued that the claim has been repudiated due to non-disclosure of material facts and therefore the insurance company is justified in rejecting the claim of the complainant. On the other hand, the complainant counsel argued that once the deceased has become member of group insurance by entering into agreement with opposite party No.2, the opposite parties are bound by the terms and conditions of the insurance policy and as such opposite party No.2 has to honour the terms and conditions of the policy and has to settle the claim in favour of the complainant, since the complainant died during the validity period of the policy. It is further contended that the deceased was hale and healthy and was only 29 years old as on the date of obtaining policy and he was not suffering from any chronic disease and he died naturally on 07.12.2015. She denied that her son took treatment for Alcoholic liver disease and Hepatitis earlier in SVIMS hospital and the deceased never suppressed any fact relating to any medical treatment prior to obtaining policy. It is further argued that if death occurs during the policy period, although her son’s policy legally covered, opposite party No.2 has no option to reject complainant’s claim as nominee of her son. It is argued that opposite parties utterly failed to investigate the case promptly and thoroughly.

10.  As far as opposite party No.1 is concerned, they extended the loan facility to the deceased on his agreeing to repay the loan amount of Rs.61,000/- in equal monthly installments at the rate of Rs.2,691/- within 36 months. ECS mandates were given by the complainant for repayment of the installments, but unfortunately they were dishonoured due to insufficient funds, as a result of which balance of Rs.52,933/- remained outstanding as on date. Opposite party No.1 further stated that complainant availed insurance under group term life insurance for an amount of Rs.5,00,000/- and the same insurance claim got rejected by opposite party No.2 and opposite party No.1 has nothing to do with the same. It is submitted by opposite party No.1 that since the dispute is mainly between complainant and opposite party No.2 with regard to insurance claim, and opposite party No.1 being the finance company does not have to say anything about the dispute. As rightly contended by opposite party No.2, contract is between complainant and opposite party No.2. The counsel for opposite party No.2 vehemently argued that rejection of claim of the complainant is justified since the deceased obtained the policy fraudulently by suppressing the material facts relating to earlier treatment taken in SVIMS hospital for Alcoholic liver disease.

11.  In order to prove that the deceased has suppressed the material facts relating to earlier treatment taken in SVIMS hospital, Dr.D.Katyarmal, Associate Professor of SVIMS was summoned, who filed chief affidavit stating that M.Hari Babu (deceased), son of the complainant, approached SVIMS hospital on 24.04.2014 with hospital NO.497395 / UHD No.497395 in Medical Gastroenterology with history of dyspepsia for 10 days, vomiting, alcoholism since 7 years and on examination hepatomegaly was present, liver function test done outside suggestive of elevated bilerubin. USG abdomen was suggestive of CLD with chronic liver disease, and he was advised to get UGI scopy and viral markers done and he was started on supportive treatment. It is further stated that again the patient was reviewed on 26.04.2014 with UGI scopy which was suggestive of GERD, Duodenal erosions. On 10.05.2014 he was reviewed in MGE OPD and was found symptomatically better, and was advised to get LFT done. Again the patient was reviewed on 17.05.2014 with LFT report and it was suggestive of mild improvement as compared to report dt:18.04.2014. On 29.05.2014 deceased again approached SVIMS hospital with history of consumption of alcohol again and was given conservative management. It is further stated that again on 13.07.2015 deceased approached SVIMS hospital with history of burning sensation in stomach since 4 days, abdomen pain and loss of appetite. He had history of jaundice since one year. He was known alcoholic since 10 years. He was treated by Medical Gastro Enterologist, and thereafter again he approached SVIMS hospital on 14.07.2015 for review and supportive care continued. On 17.07.2015 Dr.Shivanandh, Asst. Professor of Psychiatry reviewed the deceased. It was documented as patient consumed 1 full bottle of whisky per day for 5 years. Patient was asked to stop alcohol during the day in hospital. It is further stated that again on 21.07.2015 the deceased approached SVIMS hospital and was reviewed by the same doctor. It was documented as alcohol abuse disorder with no signs of alcohol withdrawal and no history of psychosis / behavioral disturbances. Thereafter the patient did not turn-up to SVIMS hospital, Tirupati. So, as per the affidavit by Dr.D.Katyarmal, it is clear that the deceased had been under treatment in SVIMS hospital from 24.04.2014 to 21.07.2015. The date of the policy is 22.11.2015, so much prior to obtaining the policy, deceased had been suffering from alcoholic liver disease and hepatitis and was taking regular treatment in SVIMS hospital. The proposal form submitted by the deceased did not disclose about the treatment taken by him in SVIMS hospital in respect of liver disease. The contention of counsel for opposite party No.2 that had the deceased disclosed about the liver disease and previous treatment taken in SVIMS hospital, the insurance company would not have entered into insurance agreement with the deceased, has to be accepted in view of the medical record, which is marked as Ex.X1 through Dr.D.Katyarmal. The citations referred by the complainant in the written arguments are not applicable to the facts of the present case on hand. On the basis of material supplied by the opposite parties, it is clear that the deceased had been alcoholic for several years before taking policy and was chronic patient of liver disease.

12.  The counsel for opposite party No.2 placed reliance on a decision reported in IV (2009) CPJ 8 (SC) between Satwant Kaur Sandhu Vs. New India Assurance Company Ltd. wherein it is held as follows – “Insurance – Mediclaim policy – Suppression of material facts – Policy holder suffering from chronic diabetes and renal failure not disclosed – Claim repudiated by insurer – Section.45, Insurance Act, applicable in Life Insurance Policy, has no application in case related to mediclaim policy – Contract of insurance, contract of uberrimae fidei – Insured under obligation to make true and full disclosure of information, within his knowledge – Insured on regular haemodialysis, fully aware of state of health – Statement made in proposed form as to state of health palpably untrue to his knowledge – Suppression of material facts proved – Repudiation of claim justified”.  In another decision reported in III (1996) CPJ 8 (SC) between United India Insurance Co. Ltd. Vs. M.K.J. Corporation, it is held as follows – “It is a fundamental principle of Insurance Law that utmost good faith must be observed by the contracting parties. Good faith forbids either party from concealing (non-disclosure) what he privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary. Just as the insured has a duty to disclose, similarly, it is the duty of the insurers and their agents to disclose all material facts within their knowledge, since obligation of good faith applies to them equally with the assured”.

13.  After going through the evidence on record and the citations submitted by both parties, we hold that opposite party No.2 is justified in repudiating the claim of the complainant, for the reason that the deceased has suppressed material facts pertaining to the previous treatment taken in SVIMS hospital for alcoholic liver disease. Hence, we have no other option except to dismiss the complaint.

 

14.  In the result, complaint is dismissed. No costs.                           

Dictated to the stenographer, transcribed and typed by him, corrected and pronounced by me in the Open Forum this the 9^th day of November, 2018.

 

        Sd/-                                                                                                                     Sd/-                                      

Lady Member                                                                                               President (FAC)

 

 

APPENDIX OF EVIDENCE

 

Witnesses Examined on behalf of Complainant/s.

 

PW-1: Smt. M. Varlakshmi(Chief Affidavit filed).

 

Witnesses Examined on behalf of Opposite PartY/S.

 

RW-1: Shaik Chand Basha (Chief Affidavit filed).

RW-2: R. Krishna Kumar (Chief Affidavit filed).

 

Witnesses Examined on behalf of THIRD PartY/S.

 

Third Party:  Dr. D. Katyarmal (Chief Affidavit filed).

 

EXHIBITS MARKED ON BEHALF OF THE COMPLAINANT/s

Exhibits (Ex.A)	Description of Documents
	Office copy of Legal Notice filed by the Complainant. Dt: 23.06.2016.
	Postal Acknowledgements 2 in number in original filed by the Complainant.
	Reply Notice filed by the Complainant. Dt: 02.09.2016.
	Office copy Legal Notice filed by the Complainant. Dt: 27.09.2016.
	Photo copy of Certificate of Insurance filed by the Complainant.
	Photo copy of Claimant Statement filed by the Complainant. Dt: 05.02.2016.
	Original copy of Rejection of claim under policy No.324165041 on the life of Late Mr. Haribabu, filed by the Complainant. Dt: 22.05.2016.
	Original copy of Death Certificate filed by the Complainant. Date of Death: 07.12.2015. Dt: 10.12.2015.

 

EXHIBITS MARKED ON BEHALF OF THE OPPOSITE PARTY/s

Exhibits (Ex.B)	Description of Documents
	Attested copies of Statement of Account of the deceased M.Hari Babu.
	Attested copy of Personal Loan Cross Sell Loan Agreement.
	Attested copy of Claim rejection notice to the complainant by the opposite party No.2. Dt: 22.05.2016.
	Attested copy of Promissory Note and Schedules pertaining to the deceased M. Hari Babu. Dt: 22.11.2015.
	Attested copy of Special Power of Attorney issued by the company infavour of the Opposite party No.1. Dt: 12.06.2015.
	Attested true copy of the Policy enrollment form executed by the deceased Hari Babu in favour of opposite parties filed by the opposite parties. Dt: 22.11.2015.
	Attested true copy of Certificate of Insurance issued by the opposite parties.
	Attested true copy of the outpatient card Dt: 23.04.2014 pertaining to deceased Hari Babu issued by the SVIMS Hospital, Tirupati filed by the opposite parties.
	Attested true copy of Investigation Report pertaining to the claim of the deceased Hari Babu filed by the opposite parties. Dt: 05.05.2016.
	Attested true copy of Consent letter executed by the complainant filed by the opposite parties. Dt: 28.03.2016.
	Attested true copy of the notarized sworn affidavit of complainant filed by the opposite parties. Dt: 28.12.2015.
	Attested true copy of the Rejection of the claim addressed to the complainant herein by the opposite parties filed by the opposite parties. Dt: 22.05.2016.

 

EXHIBITS MARKED ON BEHALF OF THE THIRD PARTY

Exhibits (Ex.X)	Description of Documents
	Original Case Record of Sri. Mekala Hari Babu Reddy, SVIMS Hospital Case Record No.497395.

 

 

 

                                                                                                                         Sd/- 

                                                                                                                President (FAC)

   

     // TRUE COPY //

// BY ORDER //

 

Head Clerk/Sheristadar,

          Dist. Consumer Forum-II, Tirupati.

       

    

   Copies to:- 1.  The complainant.

                        2.  The opposite parties.