RESERVED

State Consumer Disputes Redressal Commission

U.P., Lucknow.

Appeal No. 1231 of 2013

HDFC Life Insurance Company Ltd.,

Halwasiya Complex, Habibullah Estate,

Mahatma Gandhi Marg, Hazratganj, Lucknow

Through its Legal Manager, Harsh Mishra.     ..Appellant.

Versus

Smt. Vandana Pathak w/o Late Sanjeev Pathak,

R/o A-221/3, Rajendra Nagar, Bareilly.       ...Respondent.

Present:-

1- Hon’ble Sri A.K. Bose, Presiding Member.

2- Hon’ble Sri Raj Kamal Gupta, Member.

Sri R.K. Mishra for the appellant.

Sri Satish Kumar Srivastava for the respondent.

Date  8.7.2016

JUDGMENT

Sri A.K. Bose,  Member- Aggrieved by the judgment and order dated 7.9.2012, passed by the Ld. DCDRF-I, Bareilly in complaint case No.260 of 2011, the appellant  HDFC Life Insurance Company Ltd. has preferred the instant appeal under Section 15 of the Consumer Protection Act, 1986 (Act 68 of 1986) on the ground that the impugned order is arbitrary, perverse and is bad in the eye of law. It was delivered without proper appreciation of law and/or application of mind on the basis of surmises and conjectures and therefore, it has been prayed that the same be set aside in the interest of justice otherwise, the appellant will suffer irreparable financial loss.

          From perusal of the records, it transpires that the husband of the respondent/complainant Shri Sanjeev

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Pathak obtained HDFC SL CREST Plan Insurance  Policy bearing no.14360534 on 16.4.2011 for a sum assured Rs.5,00,000.00. The policy was under Policy – Term: years: 10 and he opted for highest NAV Guarantee. From perusal of the records, it transpires that the life assured expired on 12.5.2011 due to Acute Pancreatitis with  Septicemia with Hypotension. The immediate cause of the death was sudden Cardio Respiratory Failure. The life assured expired at K.K. Hospital, Rajendra Nagar, Bareilly. Accordingly, a Death Certificate bearing no.1105 of 12.5.2011 was issued by the Hospital concerned. Thereafter, a claim was filed for payment of the amount under insurance but the same was repudiated on ground of concealment of the previous diseases and actual status of health in the proposal form.

Aggrieved by this deficiency in service, the respondent/complainant Smt. Vandana Pathak, being nominee, filed complaint case no.260  of 2011 before the Ld. DCDRF-I, Bareilly. The complaint was allowed exparte on 7.9.2012 and the appellant Insurance Company was directed to pay the amount under insurance i.e. Rs.5,00,000.00 with interest @ 7% p.a. from the date of filing the complaint till its full and final payment. The appellant was also directed to pay a sum of Rs.2,000.00 as cost of litigation. Aggrieved by this judgment and order, the instant appeal has been preferred.

Heard both the parties and perused the records. There is no dispute that the life assured was having HDFC SL CREST Plan Insurance  Policy bearing no.14360534

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for a sum assured Rs.5,00,000.00. The policy commenced form 16.4.2011 and the date of maturity was 16.4.2021. There is no dispute that life assured expired on 12.5.2011 at K.K. Hospital, Bareilly due to Acute Pancreatitis with  Septicemia with Hypotension and the immediate cause of the death was sudden Cardio Respiratory Failure. Since the death took place soon-after the commencement of the policy and the amount of insurance was quite high therefore, an investigation was conducted into the matter, upon which, it was revealed that the life assured was suffering from Septicemia with Right Pneumonitis with Encephalopathy with Dyselectrolylaemia prior to the proposal and remained hospitalized from 14.1.2011 to 20.1.2011. He concealed this fact and obtained the policy in a deceitful manner. Had he disclosed the true status of his health then the policy would not have been accepted. Accordingly, the claim was repudiated and intimation of the same was given to the respondent/complainant. There is no dispute that the life assured obtained medical treatment at K.K. Hospital, Rajendra Nagar, Bareilly for Septicemia with Right Pneumonitis with Encephalopathy with Dyselectrolylaemia and remained in the Hospital for 6 days from 14.1.2011 to 20.1.2011. Septicemia is an invasion of the bloodstream by virulent microorganisms and especially bacteria along with their toxins from a local seat of infection accompanied especially by chills, fever and prostration -called also blood poisoning. Pneumonitis or pulmonitis is an

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inflammation of lung tissue. Many factors can cause pnemonitis, including breathing in animal dander, aspiration (inhaling small food particles or vomit “down the wrong pipe”), and receiving radiation therapy to the chest. Encephalopathy is a disease, damage or malfunction of the brain. In general, encephalopathy is manifested by an altered mental state that is sometimes accompanied by physical changes. Although numerous causes of encephalopathy are known, the majority of cases arise from infection, lever damage, anoxia, or kidney failure. The term encephalopathy is very broad and, in most cases, is preceded by various terms that describe the reason, cause or special conditions of the patient that leads to brain malfunction. Whereas, Dyselectrolytemia is electrolyte disorder is an imbalance of certain ionized salts (i.e. bicarbonate, calcium, chloride, magnesium, phosphate, potassium, and sodium) in the blood. Electrolytes are ionized molecules found throughout the blood tissues, and cells of the body. Thus, it would be seen that the insured was suffering from disorder involving  Lungs, Liver and Kidney prior to the proposal and had undergone treatment at K.K. Hospital, Rajendra Nagar, Bareilly where he remained as an Indoor patient from 14.1.2011 and 20.1.2011. The proposal was made on 11.4.2011 in which he was asked as to whether he had ever suffered or received treatment relating to Kidney, Liver, Respiratory disease etc. ? He replied all questions in negative and there by, concealed true status of his health and obtained policy in a deceitful manner. It has been held

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by the Hon'ble Apex Court in Satwant Kaur Sandhu vs. New India Assurance Company Limited, IV (2009) CPJ 8 (SC), that "A policy can be repudiated if any material fact is suppressed and a material fact would mean any fact by that affects the decisions of insurer in accepting the risk. Any fact which goes to the root of the contract of insurance and has bearing on risk involved would be 'material'. It is not for proposer to determine whether the information sought for is material for the purpose of the policy or not".

 It has further been held by the Hon'ble National Commission in Paramjit Kaur vs. LIC of India, IV (2014) CPJ 132 (NC) that "When there is deliberate suppression of material facts pertaining to health on part of life assured, contract of insurance which is based on principle of utmost good faith gets vitiated and cause of death becomes irrelevant". 

Similar views have been expressed in Meenaben Ashok Kumar Patel vs. LIC of India & Ors., I(2012) CPJ 34 (NC), LIC of India and Anr. vs. Surekha Shankar Jadhav & Ors., III(2012) CPJ 651 (NC), Manju Bala vs. LIC of India & Ors., IV (2008) CPJ 253 (NC)  and Maya Devi vs. LIC of India, III (2011) CPJ 43 (NC).

The Forum below failed to consider this aspect of the matter. The judgment and order, being erroneous and against the terms and conditions of the Policy and the rulings laid down by the Hon'ble Appellate Courts, can not be allowed to sustain. Consequently, the appeal is liable to be allowed.

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ORDER

The appeal is allowed and the judgment and order dated 7.9.2012, passed by the Ld. DCDRF-I, Bareilly in complaint case No.260 of 2011 is set aside.  No order as to costs. Certified copy of the judgment be provided to the parties in accordance with rules.

         (A.K. Bose)                            (Raj Kamal Gupta)

    Presiding Member                             Member

Jafri PA II

Court No.3