Tamil Nadu

South Chennai

CC/165/2021

Mrs. Vidhya - Complainant(s)

Versus

The Manager Claims, Max Life Insurance Company Ltd. and another - Opp.Party(s)

Thyagarajan

10 Apr 2023

ORDER

Date of Complaint Filed : 20.09.2021

Date of Reservation      : 07.03.2023

Date of Order               : 10.04.2023

 

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION,

CHENNAI (SOUTH), CHENNAI-3.

 

PRESENT:    TMT. B. JIJAA, M.L.,                                           : PRESIDENT

                       THIRU. T.R. SIVAKUMHAR, B.A., B.L.,           :  MEMBER  I 

                       THIRU. S. NANDAGOPALAN., B.Sc., MBA.,    : MEMBER II

 

CONSUMER COMPLAINT No. 165/2021

MONDAY, THE 10^th DAY OF APRIL 2023

Mrs. Vidhya,

W/o Late Sathish Kumar V R,

No. 11/7, Bharathi Street,

Ramapuram, Ambattur,

Chennai - 600 053.                                                           ... Complainant

               

..Vs..

1.The Manager-Claims,

   Max Life Insurance Company Ltd.

   Operations Centre, 2^nd Floor,

   90 A Sector-18,

   Udyogvihar, Gurugram, 122015, Haryana

 

2.The Manager- Claims,

   Max Life Insurance Company Ltd.

   Millennium Centre, No. 85, 1^st  Floor,

   Kutchery Road,

   Mylapore, Chennai - 600 004.                                  ...  Opposite Parties

 

******

 

Counsel for the Complainant          : M/s. Thyagarajan

Counsel for the Opposite Parties     : M/s. V. Samuthiravijayan

 

On perusal of records and after having heard the oral arguments of the Counsel for the Complainant and the Counsel for the Opposite Parties, we delivered the following:

 

ORDER

Pronounced by the President Tmt. B. Jijaa, M.L.,

(i)    The Complainant has filed this complaint as against the Opposite Parties under section 35 of the Consumer Protection Act, 2019 and prays to direct the Opposite Parties to pay the amount of Rs.1,06,19,001/- with 18% interest from the date of death of her husband to till the date of realization and to compensate the Complainant for the physical and mental stress caused to her for making her for making her run pillar to post and rejecting her reasonable claim as a nominee and to pay a sum of Rs.25,000/- towards cost of legal proceeding.

I.     The averments of Complaint in brief are as follows:-

1.     The Complainant submitted that her husband has paid premium for insurance policies from the Opposite Party's Insurance Company vide Policy No.568828271 dated 11.01.2019 and Policy No. 597586262 dated 22.02.2019 for a term of 12 years, wherein the annual premium is Rs.2,87,000.06 for each policy. The guaranteed sum assured in case of death of the insured is Rs.53,09,501.11 each. The guaranteed sum assured on maturity is Rs. 45,95,818.00 each. She is the nominee of deceased Mr. Sathish Kumar VR, and she is presently residing in the above said address along with her son Master Siddharth aged 5 years old. She is claiming the full Death benefits of her deceased husband Mr.Sathish Kumar aged about 32 years, who died on 27.11.2019 due to heart attack. The Complainant submitted that her husband Mr.Sathish Kumar was a Proprietor in Jaiwin Export and also Partner in RR Metals, Chennai. He was doing his business Chennai, Bangalore and Sri Lanka, and he used to fly very often. Her husband died all of a sudden on 27.11.2019 due to heart attack. He does not have any disease prior to taking the policy in the company of Opposite Party. After her husband's death, the Opposite Party demanded discharge summary and post-mortem report etc. The whole family was under the grief while so, the documents pertaining to the insurance company was handed over to them. When she has a sent a request letter on 27.01.2020 to the Opposite Party that she is being the nominee of her husband and is claiming death benefits of him, to her shock and surprise, a rejection letter sent from the Opposite Party dated 21.03.2020 negativating the request made by the Complainant. The Complainant submitted that having no other option, the Complainant has issued a legal notice to the Opposite Party on 06.10.2020 claiming the death benefits of her husband Mr. Sathish Kumar V R for the Policies vide Policy No.568828271 dated 11.01.2019 and Policy No. 597586262 dated 22.02.2019, she being the nominee of her husband who has left his wife and minor child of 5 years old. Whereas even after receipt of the legal notice, there is no communication from the end of the Opposite Party as of date. Because of the activities of the Opposite Party, the Complainant had undergone severe stress and strain both physically and mentally apart from the distress caused to her by the sudden death of her husband. She is totally dependent on her parents in their old age and she does not have any support to bring her child, pamper him, and give education. The Complainant is in the middle of the road, not knowing her destiny in her life. She is in dire need of the money for the educational expenses of her minor son. Hence the complaint.

II. Written Version filed by the Opposite Parties are as follows:-

2.     That the present complaint is baseless and flagrant abuse of process of law to harass the Opposite Party as the Complainant has suppressed the material information to the Hon'ble Commission pertaining to suppression of past medical history of the Life Assured of Right Sided Chest Pain with Gastritis and Left Leg Varicose Vein surgery prior to signing the proposal forms. The Complainant has also twisted and distorted the same to suit her own convenience and to mislead this Hon'ble Commission in order to grab unjustified monies from the Answering Opposite Party which is a Company of high repute. Therefore, the Complainant has not approached the Hon'ble Commission with clean hands. That this Hon’ble Commission has no                                                                                                                                                                                                                                                                                                                                                                                       jurisdiction to entertain the present Complaint. Since the policies have been obtained by the Life Assured by suppressing his past medical history of Right Sided Chest Pain with Gastritis and Left Leg Varicose Vein surgery prior to signing the proposal forms, the Insurance Contract, which culminated into the policy forming subject matter of the complaint, is invalid, void- ab-initio, inoperative and unenforceable.  It is stated that the Contract of Insurance is based on a Rocky Foundation of utmost good faith, which is its Latin form as "uberrimae fidei." That the parties involved in a transaction are being truthful and acting in an ethical way. If the Life Assured failed to disclose the true and correct material facts to the insurer then the policy obtained by the Life Assured stand vitiated and the Life Assured or any person claiming under it, is not entitled for any benefits under the said policy. In the present case, the Life Assured had knowingly, willfully and fraudulently suppressed his past medical history Right Sided Chest Pain with Gastritis and Left Leg Varicose Vein surgery prior to signing the proposal forms. As per the documents obtained from Apollo Hospitals during investigation it is evident that the Life Assured was suffering from Right Sided Chest Pain with Gastritis and underwent Left Leg Varicose Vein surgery prior to issuance of the subject policy. However, the said past medical history was deliberately concealed by the Life Assured in the proposal forms. The said suppression of correct facts violates the fundamental principle of "Uberrimafides" thereby vitiating the Contract of Insurance. The said intentional non-disclosure of at proposal stage clearly indicates that the Life Assured had obtained the subject policies only with an intention to induce the Answering Opposite Party to issue the Insurance policies on his life. It is stated that the said material fact regarding non-disclosure in the proposal Forms was critical for the Answering Opposite Party to evaluate the financial risk and the moral hazard involved in the proposal and to allow the Answering Opposite Party to issue the subject policy and assess the risk in a prudent manner. Had the Life Assured disclosed the information sought in a truthful manner, the Answering Opposite Party would not have issued the subject policies to the Life Assured. The said intentional non-disclosure of the material facts goes to the root of the matter vitiating the subject policies and rendered it invalid, void ab-initio and unenforceable. That under section 45 of Insurance Act, 1938, the Insurance Company can challenge the policy on the ground of concealment of material fact by the Insured within three years from the date of commencement of the policy. In the present case, the subject policies were issued in Jan'19 and Feb'19 and the Life Assured was reported to have been expired on 27.11.2019, ie within three years from the date of commencement of the subject policy. Thus in view of the provision of section 45 of Insurance Act, the Answering Opposite Party has rightly, legally and in accordance with the terms and conditions of the policies repudiated the claim of the Complainant on the ground of intentional non-disclosure of material facts by the Life Assured. In the present case there was a breach of policy conditions done by the Life Assured by suppressing his past medical history of Right Sided Chest Pain with Gastritis and Left Leg Varicose Vein surgery diagnosed and treated prior to issuance of the policy. It is submitted that by not disclosing his medical adversities the Life Assured has played Fraud and misrepresented the material facts thereby denying an Opportunity to the Company to access the risk in a prudent manner. Thus the Claim was rightly rejected as per the above terms of the policies and the premium paid under the policies were refunded.

3.     That the Life Assured (Late Satish Kumar V.R.) approached the Answering Opposite Party for issuance of Insurance policy in 2019 and had submitted two proposal forms online along with other documents to obtain the subject Insurance policies. Upon his instructions and the declaration made there under, the Answering Opposite Party considering the same to be true and correct in all aspect, issued the policy. It is submitted that the Answering Opposite Party had precisely explained the standard terms and conditions and handed over the proposal form along with standard terms and conditions and key features of the policy. It is further submitted that the Proposal forms were received at the office of the Answering Opposite Party, which was duly filled and signed by the policyholder after going through the "Key Features" and understanding the scope, meaning and contents of the Proposal Forms. That the Answering Opposite Party received the claim intimation form dated 23.01.2020, from the Complainant informing that the Life Assured died on 27.11.2019. Since, the death of the Life Assured occurred within 3 years from the risk commencement date of the subject policy, the Answering Opposite Party had conducted a statutory investigation under the IRDAI (Protection of Policyholder's Interest) Regulations, 2017 after receiving the claim from the Complainant.   That the Life Assured had not disclosed his past medical history diagnosed prior to issuance of the policy which was material for the Answering Opposite Party to underwrite the risk before the issuance of the subject policy. Further, the physical condition of the Life Assured is relevant for the premiums to be fixed and the insurability of the policyholder. Hence, the Life Assured had intentionally concealed the facts pertaining to his past medical history. Thus the claim of the Complainant was rejected by the Answering Opposite Party legally, validly, properly and on justifiable grounds. Hence to dismiss the complaint of the Complainant with exemplary cost.

III. The Complainant submitted his Proof Affidavit and Written Arguments. On the side of the Complainant, documents were marked as  Ex.A-1 to Ex.A-7. The Opposite Parties submitted their Proof Affidavit and Written Arguments. On the side of Opposite Parties documents were marked as Ex.B-1 to    Ex.B-5.

IV.   Points for Consideration

1. Whether there is deficiency in service on the part of the Opposite Parties?

2. Whether the Complainant is entitled for the reliefs claimed?

3. To what other reliefs the Complainant is entitled to?

Point No.1:

4.     The undisputed facts are that the husband of the Complainant deceased Mr.Sathish Kumar had taken two Insurance Policies from the Opposite Party vide Policy No.568828271 dated 11.01.2019 and Policy No.597586262 dated 22.02.2019 for a term of 12 years, where the annual premium is Rs.2,87,000.06 for each policy and the guaranteed sum assured in case of death of the insured is Rs.53,09,501.11 each. The guaranteed sum assured on maturity is Rs.45,95,818.00 each. It is also not in dispute that the Complainant’s husband had paid the premium amount and the Complainant is the nominee of her deceased husband Mr.Sathish Kumar. The dispute arose when the Complainant’s  claim for the death benefits of her husband was rejected by the Opposite Party on 21.03.2020.

5.     The Complainant’s husband had paid annual premium at Rs.2,87,000.06 each for two Insurance Policies taken from the Opposite Party vide Policy No.568828271 dated 11.01.2019 and Policy No.597586262 dated 22.02.2019 as per Ex.A-1 and Ex.A-2. During the subsistence of the Insurance Policy the Complainant’s husband had died on 27.11.2019 due to heart attack as evidenced from Ex.A-3. The Complainant being the nominee  had submitted claim to the Opposite Party on 27.01.2020, as per Ex.A-4. However the claim of the Complainant was rejected by the Opposite party on 21.03.2020 as seen from Ex.A-5.

6.     The contention of the Opposite Party is that the Life Assured had suppressed his medical history of Right Sided Chest Pain with Gastritis and Left Leg Varicose vein surgery prior to signing of the proposal form, thereby violating the fundamental principle of “Uberimafide”. Further contended that had the Life Assured disclosed the information sought in a truthful manner, the Opposite Party would not have issued the subject policies to the Life Assured. Further contended that under Section 45 of the Insurance Act, 1938, the Insurance Company can challenge the policy on the ground of concealment of material fact by the Insured within three years from the date of commencement of policy. In the present case, the policies were issued in January 2019 and February 2019 and the Life Assured reported to have been expired on 27.11.2019 which is within three years from the date of commencement of the policy. Thus the Opposite Party has rightly in accordance with the terms and conditions of the policies repudiated the claim of the Complainant on the ground of non-disclosure of material facts by the Life Assured. Further submitted that the Life Assured had taken policy by concealing the material information from the Opposite Party with an intention to induce the Opposite Party to issue the Insurance Policy. Further contended that the above mentioned information was material for the Opposite Party to evaluate the financial risk and the moral hazard involved in the proposal and to allow the Opposite Party to take prudent decision. Therefore the claim of the Complainant was rejected vide letter dated 21.03.2020 and refunded the premium paid under the policy.

7.     On perusal of records the Complainant’s husband had availed two Life Insurance Policies the details whereof is given below:

i)  Policy particulars	Policy Details
Name of the Policyholder	Sathish Kumar V R
Product Name	Max Life Guaranteed Income Plan
Proposal Form No,	568828271
Premium amount	Rs.2,87,000.06
Premium payment mode	Annual
Sum Assured	Rs.53,09,501.11
Proposal Form date	11-Jan-19
Policy enforcement date	11-Jan-19
Policy Issue Date	23-Jan-19

 

Policy particulars	Policy Details
Name of the Policyholder	Sathish Kumar V R
Product Name	Max Life Guaranteed Income Plan
Proposal Form No.	597586262
Premium amount	Rs.2,87,000.06
Premium payment mode	Annual
Sum Assured	Rs.53,09,501.11
Proposal Form date	25-Feb-19
Policy enforcement date	22-Feb-19
Policy Issue Date	16-Mar-19

 

8.     The sum Assured on the death of the Life Assured i.e., V.R.Sathish Kumar, the Complainant’s husband is Rs.53,09,501.11 each for two policies. Since the death of the Life Assured occurred within 3 years of the commencement of risk, the Opposite Party on receipt of claim form the Opposite Party had conducted investigation and found that the Life Assured had wilfully suppressed his past medical history of Right Sided Chest Pain with Gastritis and Left Leg Varicose Vein Surgery prior to signing the proposal forms as per Ex.B-3, the Medical Records. Further contended that the Complainant’s husband had underwent Master Health Check Up in Apollo Hospital, Greams Road, Chennai on 19.07.2018, which revealed that he had Right side chest pain, Obesity Vitamin D Deficiency, Dyslipidemia, Borderline High TSH and Fatty Liver. Further prior to the purchase of the 2^nd Policy the Complainant’s husband had underwent surgery for varicose vein in Apollo Hospital on 22.01.2020. Further contended that as the Complainant’s husband intentionally concealed the facts pertaining to the past medical history, the claim of the Complainant was rejected on 21.03.2020, the rejection letter is Ex.B-4 and contended to have repaid the premium paid under the policy.

9.     Though the contention of the Opposite Party that the Complainant’s husband had supressed his medical history of Right side chest pain and surgery of varicose vein as evident  from Ex.B-3,  the point to be considered is whether the said suppression of such information relating to pre-existing disease had caused death of the Complainant’s husband. The cause of death is “heart attack” as per Ex.A-3, Page No.21. The alleged suppression is regarding the suppression of Right side chest pain is admittedly due to gastritis which has no direct connection to the cause of the death of the husband of the Complainant. Similarly the surgery of varicose vein has no direct relation to the heart attack and heart attack are related to arterial system and not the venous system. Hence suppression of fact if any by the Complainant’s husband as alleged by the Opposite Party as to the past history of right sided chest pain of gastritis and varicose vein surgery of left leg of the Complainant had not resulted in death or has no direct relationship to cause of death, and hence would not disentitle the claimant for the claim. Hence rejection of claim made by the Complainant on the ground of suppression of pre-existing disease at the time of availing Policy when the cause of death is due to heart attack having no nexus with the alleged pre- existing disease of right side chest pain of gastritis and the varicose vein surgery on left leg, would amount to deficiency in service. Accordingly, Point No.1 is answered in favour of the Complainant.

Point Nos. 2 and 3:-

10.    As discussed and decided in Point No.1 against the Opposite Parties, the Opposite Parties are liable to pay a sum of Rs.1,06,19,001.00 (being the total sum assured at Rs.53,09,501.11 vide Policy No. 568828271 dated 11.01.2019 and the sum of Rs.53,09,501.11 vide Policy No.597586262 dated 22.02.2019 on death of the husband of the Complainant)  and to pay a sum of Rs.5000/- towards cost of the litigation. Accordingly Point Nos.2 and 3 are answered.

In the result, the Complaint is allowed in part. The 1^st and 2^nd Opposite Parties are jointly and severally directed to pay a sum of Rs.1,06,19,001.00 (Rupees One Crore Six Lakhs Nineteen Thousand and One Only) (being the total sum assured at Rs.53,09,501.11 vide Policy No. 568828271 dated 11.01.2019 and the sum of Rs.53,09,501.11 vide Policy No.597586262 dated 22.02.2019 on death of the husband of the Complainant)  and to pay a sum of Rs.5000/- (Rupees Five Thousand Only) towards cost of the litigation within 8 weeks from the date of receipt the order failing which the sum of Rs.1,06,19,001.00 shall carry interest at the rate of 6% from the date of rejection of the claim till date of realization.

 

Dictated to Steno-Typist, transcribed and typed by her, corrected and pronounced by us in the Open Commission, on 10^th of April 2023.

 

 

S. NANDAGOPALAN               T.R. SIVAKUMHAR                 B.JIJAA

         MEMBER II                       MEMBER I                        PRESIDENT

 

List of documents filed on the side of the Complainant:-

 

Ex.A1	11.01.2019	Policy No.568828271
Ex.A2	22.02.2019	policy No.597586262
Ex.A3	27.11.2019	Death certificate of Sathish Kumar VR
Ex.A4	27.01.2020	Claims request letter sent by the Complainant
Ex.A5	21.03.2020	Claims rejection letter sent by the Opposite Party
Ex.A6	06.10.2020	Legal notice sent by the Complainant with tracking consignment
Ex.A7		ID proof of the Complainant

List of documents filed on the side of the Opposite Parties:-

Ex.B1		Copy of Proposal Forms and Terms and Conditions
Ex.B2		Copy of Claim Form
Ex.B3		Copy of Medical documents
Ex.B4		Copy of Repudiation letter
Ex.B5		Copy of Investigation Report

 

 

 

S. NANDAGOPALAN               T.R. SIVAKUMHAR                    B.JIJAA

         MEMBER II                       MEMBER I                         PRESIDENT