Tamil Nadu

StateCommission

CC/57/2011

M/s. P.S.Jothiammal - Complainant(s)

Versus

The Manager HDFC Standard Life Insurance Company Ltd. - Opp.Party(s)

P.Ramaraj

23 Jul 2015

ORDER

 

BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI

                         Present: Thiru J. Jayaram,                                PRESIDING JUDICIAL MEMBER

                                       Tmt.  P. Bakiyavathi                            MEMBER

C.C. No. 57 / 2011

                                                                               Dated this the  23^rd day of JULY, 2015

  Mrs. P.S. Jothiammal,                                  ]

w/o Subramania Raja,                                  ]

# 24, G1, Gundoormoorthy Raja Street,         ]         .. Complainant

Rajapalayam                                               ]                                                        

                   Vs.

Manager,                                                     ]

HDFC Standard Life Insurance Co. Ltd,         ]

2^nd Floor Ramana Towers,                            ]

# 37 & 38, Venkatnarayana Road,                 ]         ..  Opposite Party

T. Nagar, Chennai – 600 017                        ]

       

This case coming up before us for final hearing on 16-07-2015 and on hearing the arguments of both sides and upon perusing the material records, this Commission made the following Order:

Counsel for Complainant:          -        M/s P. Ramaraj

Counsel for Opposite Party:       -        Mr. Namasivayam

J. JAYARAM, JUDICIAL MEMBER

          The case of the complainant is as follows:

          The complainant’s son P.S. Ramkumar was a young businessman dealing in Electrical contracts. He had taken a policy with the opposite party for Rs.46 Lac and the policy term was 15 years, and Rs.2 Lac annual premium payable and the policy commenced from 31-04-2009. The premium of Rs.2 Lac was paid by the complainant’s son as per the policy. The complainant’s son underwent Master Health Check Up for various ailments as seen from the records dated 02-08-2001. Thereafter, bio-chemistry and other tests were done on 18-10-2004. The AHC medical summary dated    05-03-2008 disclosed low fat diabetic diet for his blood sugar besides other things. The complainant’s son / insured had given the aforesaid medical details and did not suppress any material information as per Sec 45, for he underwent medical examination by the opposite party’s doctor. The panel doctor discloses pre-medicals done and in column ‘Diseases’ all questions are ticked with a observation on the earlier surgeries done. Even the medical examiner’s report discloses no abnormality found after the check up.  

2.       The insured died on 25-02-2010 due to cardiac arrest which was reported to the opposite party. The opposite party by letter dated 23-07-2010 repudiated the claim stating that there was non-disclosure and withholding of material information regarding the life assured at the time of effecting insurance.

3.       The complainant sent a letter to the opposite party on   29-07-2010, which was repudiated by the opposite party in the reply dated 09-08-2010 reiterating repudiation of the claim on the grounds of suppression of material information.

4.       The opposite party’s doctor while examining the life assured at the time of proposal had recorded the earlier treatment for his heart only after clearly verifying his earlier medical records, but the said doctor even after testing him had not remarked anything about the hypertension or diabetic. The repudiation of the genuine claim of the complainant by the opposite party amounts to deficiency in service and hence the complaint, praying for direction to the opposite party to pay to the complainant the sum assured of Rs.46 Lac as per the terms of the proposal with all the benefits and interest under the policy and to pay a sum of Rs.10 Lac for the deficiency in service on the part of the opposite party, and a further sum of Rs.5 Lac for unfair trade practice, and to pay a sum of Rs.10 Lac for mental agony, and costs of Rs.50,000/-.

5.       The opposite party filed version stating as follows: The complainant’s son Ramkumar gave a proposal for Plan & Term HDFC Unit Linked Young Star Plus II Policy on 22-04-2009 and the sum assured is Rs.46 Lac, and the term of the policy is 15 years, and the annual premium is Rs.2 Lac. Based on the information furnished by the insured, the policy was issued commencing from 31-04-2009. The insured was aged 43 years, and died on 25-02-2010. It was found that there had been serious and deliberate non-disclosure and suppression of material information. Investigations by the opposite party after the death of the policy holder clearly revealed that there had been crucial non-disclosures in Sec.6, Clause 13 relating to personal medical history regarding diabetic and high blood pressure and hospitalization during the preceding 5 years. Having deliberately suppressed vital information which are the pre-requisites for acceptance or rejection of the policy, the complainant is not entitled to any relief. Non-disclosure and suppression of material facts tantamount to fraud under Sec 45 of the Insurance Act, and the policy of insurance makes the contract of insurance void ab initio even after completion of two years, from the issuance of the policy, whereas in the present case, the policy had not even completed two years, and the complainant is not entitled to any relief under the policy. There is no deficiency in service on their part.

6.       The complainant filed her proof affidavit and 12 documents have been filed and marked as Ex.A1 to A12 on the side of the complainant. Proof affidavit was filed by the opposite party and 5 documents were filed and marked as Ex.B1 to B5 on the side of the opposite party.          

7.       The Points for consideration are:-

i)        Whether, there is non-disclosure and suppression of material facts by the complainant in the proposal form for obtaining the policy as alleged in the complaint.

ii)       Whether there is deficiency in service on the part of the opposite party;

iii)      To what relief the complainant is entitled.

8.       Points i & ii: The case of the complainant is that her son had taken a policy from the opposite party on 31-04-2009 for a term of 15 years, the annual premium payable being Rs.2 Lac and the sum assured being Rs.46 Lac. The complainant’s son died on 25-02-2010 and she submitted her claim form to the opposite party, but the opposite party repudiated her claim without assigning proper reasons, which amounts to deficiency in service on the part of the opposite party.

9.       Per contra, the contention of the opposite party would be that the insured did not disclose certain essential material facts and there is non-disclosure and suppression of material facts, and as such the policy has become invalid and the claim is inadmissible and the complainant is not entitled to claim the benefits under the policy.

10.     On perusal of Ex.A2 which is the medical examiner’s report, the questions asked and the answers furnished by the insured are as follows:

“1.      Personal History: (Page 8)

“b. Are you currently or have you recently been taking medicines, pills or drugs?  The answer is “No”.

“13.   Personal Medical Details: (Page 10)

“1a. Have you ever suffered from any of the following conditions”?.

a) Diabetes – “No”

b) High Blood Pressure – “No”.

Ex. A4 – is the Medical Summary, dated 02-08-2001 - Opinion and Advice by the Consultant Physician - issued by the Apollo Clinic / Hospitals, Chennai in which at page No.19, we find the following:

                      “1) Hyper Tension

2) ECG : Incomplete right bundle branch block

3) Total cholesterol mildly elevated

4) Impaired glucose tolerance;

5) SGPT elevated”.

Ex.A4 – goes to show that the insured had been suffering from Hyper Tension, Diabetes (impaired glucose tolerance), and has been taking medicines from 2001 onwards.

Ex.A6 – is the medical checkup report issued by Apollo Hospital - AHC Medical Summary, dated 05-03-2008 (Page 32), where we find as follows:

Chief Complaints:    

1.       Border line blood sugar values – 3 months ago –

was on medicine for 2 months,

2.       Hyper Tension – 10 Years on regular medication;

3.       Right Atrial Myxoma – operated in 2002.

Impression: (Page 38)

1.       History of Right Atrial myxoma excision in 2002.

2.       Hyper Tension – on treatment

3.       Diabetes Mellitus – Poor control.

Ex.B4: Is the AHC Medical Summary, dated 19-11-2008 issued by Apollo AHC – in which at page 57 - it is stated as follows:

Chief Complaints:   

 1.      Diabetes Mellitus detected in March, 2008 – on regular

          Medication,

 2.      Hyper Tension – since 1996 – on regular medication

 3.      Surgery for Myxoma - 2001.

11.     Though the opposite party has restricted the period of non-disclosure of material facts to only for the past five years, it is abundantly clear that the insured had been suffering from Hyper Tension and Diabetes right from the year 2001, which is contra to what have been stated by the complainant in the proposal form and the Medical Examiner’s Report for obtaining the policy.

12.     From the above, it is patently evident that essential material facts have not been disclosed in the proposal form and the medical examiner’s report and there is suppression of material facts which vitiates the contract and invalidates the policy.

13.     As contended by the opposite party, suppression of material facts tantamount to fraud and Sec.45 of the Insurance Act makes the contract of insurance void ab initio, even after completion of 2 years from the issuance of the policy, whereas in the present case, the policy has not even completed 2 years.

14.     It is submitted by the complainant that her son died of Cardiac arrest which is a peril covered under the policy, and that the cause of death is not Hyper Tension or Diabetes, and there is no nexus. There is no force in this submission, and this contention is untenable.

15.     For the aforesaid reasons, we hold that there is non-disclosure and suppression of material facts by the complainant in the proposal form for obtaining the policy, and therefore we hold that there is no deficiency in service on the part of the opposite party, and the points are answered accordingly.

16.     Point No.iii.: In view of the findings on Point Nos. 1 and 2, we hold that the complainant is not entitled to any relief in the complaint, and the point is answered accordingly.

17.     However, having regard to the fact that the insured had paid One Time annual premium of Rs.2 Lac and that he died within 1 year of taking the policy and that he died at the age of 43, on grounds of equity and in the interests of justice we feel that the premium paid by him could be returned / refunded with minimal interest.

18.     In the result, the complaint is partly allowed directing the opposite party to pay a sum of Rs.2,00,000/- (Rupees Two Lakhs only) to the complainant Ex-gratia with interest at the rate of 9% p.a. from the date of payment of premium by the complainant i.e. from 31-03-2009 till payment. No order as to costs. Time for compliance: Two months from the date of receipt of copy of this order.

 

P. BAKIYAVATHI                                      J. JAYARAM           

          MEMBER                                PRESIDING JUDICIAL MEMBER

 

List of Documents filed by the Complainant

Ex.A1          -                  Unit linked proposal form

Ex.A2          -                  Medical Examiner’s report

Ex.A3          -                  Premium Notice

Ex.A4          02-08-2001  Master Health Checkup

Ex.A5          18-02-2004  Test Reports

Ex.A6          05-03-2008  AHC Medical Summary

Ex.A7          -                 Death Certificate

Ex.A8          23-07-2010 Repudiation letter

Ex.A9          29-07-2010 Letter

Ex.A10        09-08-2010 Letter upholding repudiation      

Ex.A11        16-08-2010 Letter

Ex.A12        -                 Ombudsman’s letter

List of Documents filed by the Opposite Party   

Ex.B1          -                  Copy of Letter of Authority

Ex.B2          -                  Proposal form

Ex.B3          -                  Insurance policy

Ex.B4          -                  Past medical history of complainant

Ex.B5          -                  Repudiation letter by Opposite Party

P. BAKIYAVATHI                              J. JAYARAM            

MEMBER                                PRESIDING JUDICIAL MEMBER