Karnataka

Chitradurga

CC/350/2019

Sri Siddesh, S/o Jogappa - Complainant(s)

Versus

The Manager, Kotak Mahindra Life Insurance Company Ltd - Opp.Party(s)

Sri.R.M.Thippeswamy

15 Feb 2020

ORDER

COMPLAINT FILED ON:11/06/2019

DISPOSED  ON:15/02/2020

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, CHITRADURGA.

CC.NO:350/2019

DATED: 15^th February 2020

PRESENT :-     Smt. C.M.Chanchala.                           . President

                                B.A.L.,,LL.B.,            

                            

                        SRI. SHIVAKUMAR.K.N    :              MEMBER

                     M.Com., LL.B.,

 

……COMPLAINANT/S	1.Sri. Siddesh S/o Jogappa, Aged about 33 years, Agriculturist, R/o Honnenahally Village, Hosadurga Taluk,Chitradurga District. (Rep., by Sri. R.M. Thippeswamy Advocate)
V/S
…..OPPOSITE PARTY	The Manager, Kotak Mahindra Life Insurance, Near Railway Station, Chitradurga. The Manager Kotak Mahindra Life Insurance Company Limited, Registered, 2nd Floor, Plot No.C-12, G-Block, BKC Bandre (E) Mumbai-400 0051. (Rep., by Sri. N. Lokesh for OP.1 and 2 Advocate) The Manager, Mahindra Finance Company Limited, Near Railway Station, Chitradurga. (Ex-parte)

 

Pronounced on 15^th February 2020.

Written by C.M.Chanchala, President.

//ORDER//

1.This is a complaint filed under section 12 of the Consumer Protection Act 1986 by Sri.Siddesh the complainant, against Opposite party/parties (for short ‘OPs’ ) praying to pay assured amount of  policy with interest pertaining to deceased and Rs.50,000/- as compensation for agony suffered by the complainant etc,.

The Complaint:

2.       The brief facts of the case of the complaint are that, his mother Sulochanamma, during her life time purchased the Mahidra Tractor for agriculture purpose with the financial assistance of OP 3, at the time of granting the loan the 3^rd  OP  put the compulsory prior condition  to obtain policy from OP-1. Accordingly she obtained policy from OP-1 under the credit term group plan by paying premium of Rs. 4,680-34/- with an assured amount of Rs. 4,50,000/-.  Due to the illehealth the policy holder Sulochanamma died on 19-11-2018.      After the death of the policyholder, the complainant as a nominee has approached the OPs with claim and fairly submitted all the relevant documents, seeking settlement of his insurance claim. After receiving the required information, the  OPs have illegally repudiated the complainant’s claim by its letter dated: 14-03-2019, on the false ground that the policyholder while applying for policy had signed  ‘Declaration  of Good Health’ which mentions that she was of sound health and was not suffering or had never suffered from any illness or any condition requiring medical treatment for illness, as on date of proposal, but as the deceased Life assured had given a false Good health Declaration and had not disclosed material fact at the time of entry into the proposal, the claim has been repudiated’.  The complainant further stated that the policyholder was in good state of health at the time of making the proposal, therefore, insurer has committed a serious lapse in repudiating the claim based of ill heath, which amounts to deficiency in service on the part of the insurer.

3.      After hearing on admission the complaint was admitted and  notices were ordered to be issued to the opponents to file their written versions under section 13(2) of the Consumer Protection Act,1986 (  in short “the Act) . The OPs 1 and 2 entered appearance through their advocates and denied the allegations of deficiency in service. Inspite of service of Notice OP-3 did not appear and hence he placed exparte.

Defense:

4.   OP No.1 and 2 contended that  the LIC is a contract of Utmost Good Faith where in the proponent is duty bound to disclose everything concerning his/her health, habits and other related matters which are within his/her knowledge at the time of making the proposal for insurance cover, failing which the Insurer has every right to repudiate the claim. In the instant case, the deceased Life Assured committed a breach of the principle of Utmost Good faith by suppressing the material fact that she was treated for Carcinoma Esophagus with trans hiatal esophagectomy with resection anastomosis with feeding ejunostomy prier to filing the proposal forum. Further it is recorded in the hospital discharge summery that

Name	Age	Sex	IP NO.	Hospital No.
Sulochanamma	55 Years	F	00231475	03113687
Address: Jogappa Honnenahalli, Hosadurga TQ Chitradurga District	Date admitted 13/11/2017		Date Discharged 30/12/2017

hence there is nexus between the deceased and the cause of death. Hence OPs justification the repudiated of the claim of the complainant. They further contended that the suppression of material information is fatal to the contract of insurance, which is based on the principle of Utmost Good Faith. Thus, any contract of insurance procured by breach of the principle of Utmost Good Faith is a nullity and void ab-initio. Therefore the complaint is not maintainable and hence deserves to be dismissed.

Evidence:

5.   Respective parties have filed their affidavits of evidence and examined themselves. The complainant got himself examined as AW-1 by filing his affidavit as a part of examination in chief and also got Ex.A-1 to A8 marked and closed the evidence.

6.      On behalf of the OPs 1 and 2 one Shakil Ahmad, Deputy vice president, legal,  got himself examined as RW-1 by filing his affidavit as a part of his examination in chief and also got Ex.R-1 to R8 marked and closed the evidence.

Arguments:

7.      We have heard the learned advocates for both the sides.

          The points that arise for our determination are:

1. Whether the complainant  proves that there is any deficiency in service on the part the opponents?

 

2. Whether the complainant is entitled for the reliefs sought?

 

3. What order?

8.  Our findings on the above points are:-

          Point No.1: In the Affirmative.

 

          Point No.2: In the Affirmative.

 

          Point No.3: As per the final order.

 

For the following ;

Discussion and Reasoning:

Point No.1:-.

9.  The grievance of the complainant is that his mother Sulochanamma, during his life time purchased the Mahidra Tractor for agriculture purpose with the financial assistance of OP 3, at the time of granting the loan the 3^rd  OP  put the compulsory prior condition  to obtain policy from OP-1, accordingly she obtained policy from OP-1 under the credit term group plan by paying premium of Rs. 4,680-34/- with an assured amount of Rs. 4,50,000/-, due to the ill health the policy holder Sulochanamma died on 19-11-2018, later when he submitted the claim form with relevant documents to opponents, they illegally repudiated his claim on 14-03-2019,on the ground of pre-existence disease.

10. The onus to prove that there was materials concealment of any disease, which directly proved  fatal was on the OP No.1and 2 insurance company. In addition to above the OP No.1 and 2 were supposed to prove that at the time of submitting proposal the person who gave the information, know about such a disease and he withhold it with an intention to defraud the insurance company. In LIC and others v/s Asha God    I (2001)SLT 89= 2001 (2) SCC 160, the judgment of Mithoolal Nayak was considered “in this connection , we may notice the decision of the Hon’ble Court in Mithoolal Nayak Vs/ LIC of India, in which the position of law was stated thus:-

The three conditions for the application of the second part of Section 45 are

1. The statement must be on a material mater or must suppress facts which it was material to disclose.

 

2. the suppression must be fraudulently made by the policy holder and

 

3. The policy holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose”.

   But one thing was further observed in para-12 as under:-

   “For determination of the question whether there has been suppression of any material facts may be necessary to also examine whether the suppression relates to a fact which is in the exclusive knowledge of the person intending to take the policy and it cloud not be ascertained by reasonable inquiry by a prudent person”.

11.  In the present case, the OP have relied on hospital records issued by KMC, Manipal. On perusal of this document it shows that the DLA was admitted to the hospital on 13-11-2017 and their diagnosed as final Diagnosis:  “Locally Advance Carcinoma Oesophagus (Lower 1/3^RD) For Neo adjuvant CT-RT (According to Cross Trial Protocol)”, further it is also mentioned in the past history of DLA that ‘Complaints on Reporting: C/o  Difficulty Swallowing  (Solids Semisolids and Liquids) X 2 months: Past History: K/C/O 12DM on Medication. Further another discharge summery shows that the DLA was admitted to 19-11-2018 and discharged on the same day with the complaint of altered mental status since two days and final diagnosed as “Severe sepsis with septic shock with septic encephalopathy carcinoma esophagus with trans hiatal esophegectomy with resection anastomosis with feeding jejunostomy.”

12.  It is evident that information collected from the records of KMC,Manipal are not primary piece of evidence, but the primary evidence would be of the doctors who recorded the information in discharge summary. Admittedly, the OP No.1 and 2 have not examined the doctors who wrote the discharge summery of the patient. In view of the observation made in the judgment passed by National Commission in Life Insurance Corporation Vs Dr.P.S Aggarwal discharge summery of the patient cannot be taken into consideration until the insurer examined the doctors who wrote the discharge summery. The OPs have not produced any relevant documents to show that at the time of making the policy/declaration of good health or prior to that the DLA was suffering from ill health. 

13.   Now we advert to the meaning of word pre-existing. As the word pre-existing suggests, a disease should not only be existing at the time of taking of policy but also should have been existing and continuing to exist prior to the date of policy. The OPs did not file any document which indicates or shows that deceased was continuously suffering from the diseases as mentioned in the question asked in the proposal form from 2017 till obtaining insurance. The OPs did not produce any evidence to prove that deceased was continuously suffering from the diseases as mentioned in the medical report.

14. 45 days exclusion period: The exclusion period starts from member policy commencement date and would apply for a fixed period of 45 days. On death of the life assured within exclusion period, the policy benefits are not payable unless the death is caused by an accident. For deaths due to causes other than accident, the premiums paid (not of taxes and cess) would be refunded without interest after deducting the cost of stamp duty, if any, already incurred by the insurance company. In case the life assured has undergone medical examination in connection with this policy, the 45 days exclusion period would not apply.

15.   Admittedly the DLA died on 19-11-2019 that too after 1 year 2 months after obtaining the policy.  Hence as per the Term & Condition of policy the OPs are liable to honor the claim of complainant.

16. Experience shows that Insurance companies lay trap for the poor and gullible consumers to sell their product and once they are in their net they start wriggling out from their obligation. This is not the way to become rich by taking huge premium against policies of thousands of consumers and when one or two of them files a claim they start taking one excuse or the other and find out the ways to defeat the rightful claim of the insured by picking a stray reference from the discharge summary. This is not a consumer friendly practice and does not augur well even for the interest of the Insurance Companies. Half of the population suffers from such malaises and the other half is on medication in one form or the other. If Insurance Companies start denying policies on medical tests of the consumers they will be out of business sooner or later. If the consumers at large get such an impression of the Insurance Company, the Insurance Company will loose its customer in these competitive times. It appears that because of such an approach of monolithic public sector Insurance Companies that this sector was opened to private and international players. To cap it all the insurance companies always take precaution in subjecting their basic medical tests so as to rule out the possibility of a person suffering from such diseases which may not entitle him to insurance policy and once they give certificate of insurance that person concerned is having sound healthy, they cannot repudiate the claim on the basis of pre-existing disease particularly in view of the concept of non-disclosure of any such disease.

17. In the present complaint, the documents filed by the opposite parties are not sufficient to prove the pre-existing disease of mother of the complainant, therefore, repudiation of the claim on the ground of not disclosing the material information is erroneous and thus the OPs No.1 and 2 have committed deficiency in service by repudiating the claim on the ground of suppression of material facts is not justified. Accordingly, we pass the following order.  

     

      // ORDER //

 

The complaint filed by the complainant is allowed. 

The Opposite parties 1 and 2 are jointly and severally directed to pay Rs.4,50,000( Four Lakhsfifty thousand rupees only)  assured amount with respect to the policy bearing No. CR000020&CC000023 ALCR000001 & CC000013-PL  to the complainant with 9 % from the date of death of life assured till its realization.  Further it is also directed to the Opposite parties No. 1 and 2 to pay Rs.25,000/-( twenty five thousand)  towards compensation for deficiency in service, towards compensation for mental agony and cost of the proceedings, within 6 weeks from the date of receipt of this order. In case of non-compliance of the order the entire amount shall carry interest @ 10% per annum till its realization.

The present complaint is dismissed against 3^rd OP.

The assistant registrar is directed to send free copies of this order to the all the parties free of cost within a week from today.

(Typed directly on the computer to the dictation given to stenographer, the transcript corrected, revised and then pronounced by us on 15th February 2020)                (SHIVAKUMAR)                                                   (C.M.CHANCHALA)     -:Witnesses examined on behalf of Complainant: PW-1:-Complainant by filing affidavit evidence. Documents marked on behalf of Complainant: 01 Ex-A-1:- Copy of the Board resolution dated 28/07/2015 02 Ex-A-2:- Copy of the declaration of good health 03 Ex-A-3:- Copy of the Certificate of insurance 04 Ex.A-4:- Copy of the Death claim intimation 05 Ex.A-5:- Copy of the investigation report and affidavit 06 Ex.A-6:- Copy of Discharge summary 07 Ex.A-7:- Copy of the death Summary 08 Ex.A-8:- Copy of the repudiation letter dated 14/03/2019   DW-1: Sri. Shakil ahmad . by way of affidavit evidence of OP.1 and 2.   Documents marked on behalf of OP No.1 & 2 Nil           MEMBER                                                      PRESIDENT