Complainant Sarabjit Singh through the present complaint filed under Section 12 of the Consumer Protection Act, 1986 (for short, ‘the Act’) has sought issuance of necessary directions to the opposite parties to make payment of insurance amount alongwith interest @ 18% P.A. from the due date upto the date of realization and also to pay Rs.50,000/- as compensation for suffering financial loss and mental agony and Rs.10,000/- as cost of litigation, in the interest of justice.  

2.           The case of the complainant in brief is that  his wife Smt.Harjit Kaur  got house building loan of Rs.9,63,445/- from State Bank of India Tibri Gurdaspur and became the member of SBI Life Dhanraksha Plus LPPT Policy and paid amount of Rs.63,445/- as a premium. The account of the insured person i.e. Harjit Kaur deceased is 23866225 and membership form no. is 94594897 and master policy no is 93000000105 and her SBI account no is 321138604870. She was making regular payment of loan and after her death the complainant is also making the payment of loan installment. His wife died on 10.6.2011 due to short sickness in the Escort Hospital, Amritsar and he is the beneficiary of the deceased insured person. Hence, he as per the rule filed the form of claim and lodged the claim within stipulated period before the claim authority. The deceased wife of applicant was healthy and free from any disease and she was properly medically examined before being insured by the agent of the opposite party and a proper fitness certificate was taken by the insurance authority. He has next pleaded that the opposite party has repudiated the claim on false and frivolous and fake grounds and is not till date making the payment of insurance claim as per policy. He has sent so many representations to the opposite party. He is suffering a huge financial loss as well as suffering from mental agony, due to the unwanted and rued behaviour of the opposite party. Hence this complaint.

3.           Upon notice, the opposite party no.1 appeared and filed its written reply through the counsel taking the preliminary objections that the present complaint is not maintainable and the complainant has got no locus standi to file the present complaint. On merits, it was submitted that at the time of taking the policy Harjit Kaur had made wrong declarations that she is physically fit and not suffering from any disease and she died on 10.6.2011 after one year of taking policy and at that time when the inquiry has been conducted by the insurance company it is found that Harjit Kaur was suffering chronic ailments i.e. diabetes, Mellitus, chronic kidney disease and heart disease prior to the date of enrollment of the policy. Therefore, the claim of the complainant was declined on this very ground that Harjit Kaur has supplied wrong information to the insurance company by concealing the fact of her diseases at the time of issuance of the policy. She has also filed wrong declarations to the opposite party no.1 and also the insurance company or getting the insurance in her favour with malafide intentions. The opposite party has rightly repudiated the claim of the complainant on the basis of the reports of Escort Hospital as well as other doctors. Harjit Kaur had supplied wrong information regarding her health in order to cheat the opposite parties. All other averments made in the complaint have been denied and lastly the complaint has been prayed to dismiss with costs.

4.       Upon notice, the opposite party no.2 appeared and filed its written reply through the counsel stating therein that the Deceased Life Assured, Smt.Harjit Kaur had availed Housing Loan from state Bank of India, Tibri, Gurdaspur and had applied for Dhanaraksha Plus LPPT Group Insurance Scheme under Master Policy No.93000000105 issued to State Bank of India, Chandigarh Circle through membership form No.93494897 dated 21.04.2010. The risk commenced on 30.04.2010 for a Sum Assured of Rs.9,63,445/- at inception. The DLA, Smt.Harjit Kaur was also issued Certificate of Insurance as an evidence of her insurance cover. It has been further pleaded that the risk cover under the said group insurance scheme is of diminishing nature and the sum assured tapers down as the EMIs are paid off. As per the Clause C, Death Benefit of Schedule 1 of the Master Policy, “In the event of death of the Member, the Sum Assured will be payable. The Sum Assured is the loan amount outstanding for the month during which the death occurs, as specified in the Certificate of Insurance (COI) issued to each member on his/her admission.” Thus in the instant case, it is clear if the Assured Benefits of the COI, the outstanding loan amount as on the date of death is Rs.9,61,635/- since the DLA is reported to have died on 10.06.2011. For getting the insurance cover, the Life Assured should submit a declaration of good health alongwith other details in the membership form, confirming that he/she is in sound health and does not suffer from any illness or critical illness. The member is duty bound to disclose every factual information in the declaration of good health whether he considers it as material or not. The declaration of good health is the sole basis to decide the eligibility as to whether a member can be granted insurance cover. The declaration of good health (DGH) thus is a very important document where in the Life Assured is required to submit full and correct information. Any suppression of material fact in the DGH will constitute a breach of DOCTRINE OF UTMOST GOOD FAITH. Thus if the Life Assured does not reveal correct information and subsequently the insurer comes to know about the suppression of any material fact, the insurer is well within his rights to repudiate the claim under any insurance cover so granted on the basis of such proposal. All other averments made in the complaint have been denied and lastly the complaint has been prayed to dismiss with costs.

5.       Complainant tendered into evidence his own affidavit Ex.C1, alongwith other documents Ex.C2 to Ex.C10 and closed the evidence.

6.       Opposite party no.2 tendered into evidence affidavit of Neelam Singh w/o Sh.Surinder Pal Singh Ex.OP-2/1, alongwith documents Ex.OP2/2 to Ex.OP-2/17 and closed the evidence.  Evidence of the opposite party no.1 was closed by order vide order dated 15.06.2015.

7.       We have carefully examined the available evidence and its supporting documents on the record file so as to interpret the meaning and purpose of each one and also the scope of the prospective adverse inference for that ignored to be produced by the OP Bank/Insurers. We observe that the complainant had dutifully filed the application for condonation of delay pleading therein that the first consumer complaint (duly withdrawn afterwards on technical grounds with requisite permission to re-file) was within limitation and as such the delay in filing the present complaint be condoned. Somehow, the OP insurers did not contest/oppose the said application and it was deferred/left aside to be decided along with the main complaint. However, the OP insurer’s objection of limitation U/s 24A of the Act would have been (even otherwise) not sustainable since their repudiation Ex.OP2-16 of 26.11.2011 was not final as it was followed by the subsequent repudiation Ex.OP-2/17 of 21.03.2012 and the Ombudsman decision to the complainant’s appeal of 29.04.2012 is still awaited by him. Hence, the application for condonation of delay gets allowed and we proceed further with ‘adjudication’ of the main complaint. We find that the insurance Death Claim has been repudiated for of the other prime reason that the DLA (Deceased Life Assured) suppressed the fact of her continuing ailments (as alleged) in her ‘proposal form’ pertaining to the Policy in question. However, it need be examined against the backdrop that the DLA never herself opted for the Insurance Policy out of her free will (since it was never a routine/standard Life/Health Policy etc) and she had to compulsorily go in for its purchase at the instance/compelling persuasion of the OP1 Bank from whom she had availed ‘Housing Loan’ and thus being in a subservient position she had to join the OP’s Group Insurance as member and to purchase the said Policy that indemnified the Housing Loan Outstanding but only in the remotest event of the sad demise of the borrowing DLA. The Ex.OP2/2 and Ex.OP2/3 duly show the OP2 Bank i.e., SBI as the Proposer/ Master Policy Holder/Lending Institution and that amply proves the aforesaid contention. And, the Additional Declaration and name of the Witness are conspicuously ‘missing/left blank’ for no cogently held/apparent reason and that explains the compulsive ‘consent’ to the Policy in question. Further, the DLA was delivered Ex.C2 (certificate of insurance) COI, Ex.C3 (premium certificate), Ex.C4 (summary features of the Group Insurance Scheme and Ex.C5 (Table of Sum Assured Benefits) only but with no evidence (produced) on record that the copy of the Master Policy with its terms & conditions were ever delivered or even dispatched or even shown to the complainant and its absence coupled with the nature and objective of the related Policy in question, the allegation of ‘suppression’ of continuing and known ailments does not get legally proved so as to award a valid and judicious ‘repudiation’. It need also be understood that the Insurance Policy purchase processing has been in continuation (as a collateral compulsion) to the documentation process of the Housing Loan disbursement and the complainant simply ‘signed’ at the ‘pre-marked’ destinations on the ‘proposal form’ along with the other loan documents. Such acts and omissions do add up to amount to ‘unfair trade practice’ and ‘deficiency in service’ under the Act and thus making them vulnerable to an adverse award. We have carefully studied the consumer law as set out in the OP cited judgments of the superior courts. We respectfully agree with the above settled propositions but are of the considered opinion that the present Policy ratios are decidedly different and the same was sold out to her to cover the Housing Loan outstanding and it was rather forced upon her as a collective network endeavor of the OP Bank with the OP Insurers. We are somehow, unable to admire the voluminous submissions on ‘points of law’ (through citations etc) in the ‘written version’ whereas the procedural law demands it to stay confined to points of ‘fact’ only; and of course the court’s judicial notice can be decidedly drawn to relevant ‘decided law’ on the points of facts in issue. Procedure evolves art (of presentation) in law.                        

8.       In the light of the all above, while partly allowing the present complaint we hold the titled OP service providers as guilty of unfair trade practice/ deficiency in service and thus ORDER them to settle the impugned claim in full in terms of the related Policy (i.e., to liquidate the Housing Loan outstanding) besides to pay Rs.5,000/- as compensation and another Rs. 3,000/- as cost of litigation to the complainant within 30 days of the receipt of the copy of these orders otherwise the aggregate awarded amount shall attract interest @ 9% P.A. from the date of the orders till actually paid.

9.       Copy of the order be communicated to the parties free of charges. After compliance, file be consigned to records.

                                                                                 (Naveen Puri)

                                                                                       President.                                                                                                     

ANNOUNCED:                                                   (Jagdeep Kaur)

October 05, 2015                                                                    Member.

*MK*