By Sri. A.S. Subhagan, Member:

            This is a complaint preferred under section 35 of the Consumer Protection Act 2019.

            2.  Facts of the complaint:-  The Complainant is the beneficiary of the HDFC Life ProGroth Plus Insurance Policy (hereinafter called the policy) which the Opposite Party has issued in the name of Late Mr.Vijaya Kumaran Nair (hereinafter called the Life Assured) who was the husband of the Complainant.  The Opposite Party is a leading Life Insurance Company.  Believing the promises and assurances circulated by the Opposite Party, regarding the benefits of the policy, the Life Assured had purchased the policy.  The Policy number is 18488208.  The Opposite Party informed the acceptance of the proposal and issuance of the policy to the life insured vide letter dated 02.06.2016.  The sum assured under the policy is Rs.3,50,000/-.  The life assured died on 14.04.2018, within the policy tenure.  On the death of the life assured the Complainant is entitled to the sum assured and other benefits under the policy.  Hence the Complainant submitted the “statement of death claim” dated 23.05.2018 and applied for the sum assured and other benefits under the policy.  Finally, by the letter dated 27.07.2018, the inability in accepting the claim under the policy was communicated by the Opposite Party to the Complainant.  In the said letter the reason stated, for not accepting the claim under the policy, is that relevant questions had been answered ‘No’ and vital information was not provided to the Opposite Party at the time of applying for the insurance policy.  The Complainant had witnessed the purchase of the policy and the Opposite Party had not explained or mentioned anything regarding such questions for vital information.  The only things which the Opposite Party required were the name, address, ID proof and signature of the life assured.  The Opposite Party had neither explained the contents of, nor given sufficient time to go through, the forms in which the life assured had put signature.  The intention of the Opposite Party was to make illegal profit by rejecting the claims.  Here the way in which the claim of the Complainant was rejected is an unfair trade practice.  The illegal and unreasonable rejection of the policy claim by the Opposite Party has caused heavy loss and damages to the Complainant.  The compensation for the loss and damages is limited to Rs.2,00,000/-.  Hence this complaint with prayers to direct the Opposite Party

1. To pay a sum of Rs.3.5 Lakhs to the Complainant.
2. To pay a sum of Rs.2 Lakhs as compensation with the cost of this complaint and
3. To grant such other relief that the Complainant shall pray for and this Commission deems fit to grant.

3.  Upon getting summons, the Opposite Party appeared before the Commission and filed version.

4. Contents of version filed by the Opposite Party:-  The insured had availed HDFC Life Pro Growth Plus Policy from the Opposite Party. The policy was issued to the insured on the basis of the proposal form submitted by the insured. The insured had suppressed material information which was vital in assessing the undertaking of risk by the Opposite Party. The policy was issued to the Complainant based on the declarations in the application form submitted by the insured. The insured was having pancreatitis for 15 years while submitting the application form for issuance of the policy. The insured had the specific question in the application for issuance of policy which was answered in the negative to the specific questions as to whether:-  “Have you ever suffered from: Liver disorder, Kidney disorder. Disorder of the Digestive system, Abnormally of thyroid. Blood disorder?. Are you currently suffering from any illness, impairment or taking any medication or pills or drugs?.  During the last 5 years, have you undergone or been recommended to undergo hospitalization?. During the last 5 years have you undergone or been recommended to undergo operation?.  During last 5 years have you undergone or been recommended to undergo X-ray or any other investigation (excluding check-ups for employment/Insurance/foreign visit)”?.  The non-disclosure of facts relating to pre-existing medical condition of the insured pertaining to pancreatitis is a material fact that had direct bearing on the undertaking of risk by the Opposite Party. Contract of insurance is a contract based on the terms and conditions of the policy and the Opposite Party is liable only according to the conditions of the policy. The allegation in the complaint that the Complainant had witnessed the purchase of the policy and the Opposite Party had not explained or mentioned anything regarding such questions for vital information is false.  The further allegation in the complaint that the Opposite Party had neither explained the contents of, nor given sufficient time to go through, the forms in which the life assured had put signature is false. The insured had declared in the proposal form that “I understand and agree that the replies given and statements made in the Proposal Form together with any documents submitted by me for processing my application for insurance shall be the basis of the contract between me and HDFC Standard Life Insurance Company Limited.  I understand and agree that in case of misrepresentation and suppression of material facts, the policy contract shall be treated in accordance with Sec. 45 of Insurance Act, 1938 as amended from time to time”. The insured by signing the proposal form adopts those answers and makes them his own. The proposer has duly appended his signature to the proposal form and the grant of the insurance cover was on the basis of the statements contained in the proposal form. A person who affixes his signature to a proposal which contains a statement which is not true, cannot ordinarily escape from the consequence arising therefrom by pleading that he chose to sign the proposal containing such statement without either reading or understanding it.  The insured was aware that the information provided by him in the proposal form would form the basis of the insurance policy and that the information provided by him are true and complete to the best of his knowledge. The insured had suppressed material facts and had also made false declarations and hence the policy had become void ab-initio.  The policy was issued to the insured on the basis of the proposal form submitted by him.  When information on a specific aspect is asked for in the proposal form, the assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge. It is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not. Contract of insurance being a contract of uberimmae-fidei, the parties are bound to observe utmost good faith and the insured is duty bound to disclose all existing medical conditions pertaining to the health of the insured. The insured was legally bound to disclose the facts pertaining to his pre-existing medical conditions. The insured had not disclosed true, complete and all correct facts in relation to the policy and had acted in a dishonest and fraudulent manner in relation to the policy. The insured had suppressed material information which was vital in assessing the undertaking of risk by the Opposite Party. The non-disclosure of facts relating to pre-existing medical condition of pancreatitis since 15 years is a material fact that had direct bearing on the underwriting of risk by the Opposite Party. There has been suppression of material fact which was in the exclusive knowledge of the insured and could not be ascertained by reasonable enquiry by a prudent person. Had the insured furnished correct details pertaining to his pre-existing medical ailments, the Opposite Party would have reconsidered the underwriting of risk or decided not to issue any policy to the Complainant.  Contract of insurance is a contract based on the terms, conditions and exclusions of the policy and the Opposite Party is liable only according to the conditions of the policy.  According to the conditions of the policy, it is stated that “(i) Your Policy is based on the application and declaration which you have made to us and other information provided by you/on your behalf. However, if any of the information provided is incomplete or incorrect, notwithstanding any other Provisions under the Policy, we reserve the right to vary the benefits, which may be payable and, further, if there has been non-disclosure of a material fact, then we may treat your Policy as void from commencement and we will not be under contractual or any other obligation to honour such a contract. In such cases we may decide to pay nothing or pay the surrender value or only refund a proportion of the premiums paid. The amount payable will be determined at our sole discretion. In all such cases, the Policy will terminate immediately and no further benefits will be payable”.  The policy was incepted in 2016 and the life assured died on 14.04.2018, within three years from the date of the policy. The life assured having suppressed material facts, the policy had become void under Section 45 of the Insurance Act as amended in 2015. Since there has been non-disclosure of material facts, the policy had become void and the Opposite Party does not have any obligation to honour the contract. The allegation in the complaint that the intention of the Opposite Party is to make illegal profit by rejecting claims is false. The further allegation of the Complainant that the way in which the claim of the Complainant was rejected is an unfair trade practice is false.  The allegation that the illegal and unreasonable rejection of policy claim by the Opposite Party has caused heavy loss and damages to the Complainant is false. There has been no deficiency in service or unfair trade practice on the part of the Opposite Party. The Complainant is not entitled to the amount of Rs.3.5 lakhs or for compensation of Rs.2,00,000/-.  Even assuming without admitting liability, the liability of these Opposite Parties is limited and subject to the terms, conditions, limitations and exclusions of the policy. Therefore. it is prayed to dismiss the complaint with cost.

5.  Chief affidavit was filed by the Complainant, Exts.A1 to A4 and X1 series were marked from her side and she was examined as PW1.  From the side of the Opposite Party, Exts.B1 to B4 marked but they had no oral evidence.  The complaint was finally heard on 23.06.2023.

6.  On perusal of the complaint, version, affidavit of the Complainant, documents marked by the parties as Exts.A1 to A4, X1, B1 to B2 and the arguments of the Counsels appearing for the Complainant and the Opposite Party, Commission raised the following points for consideration.

1. Whether there has been any deficiency in service/unfair trade practice from the part of the Opposite Party…?
2. Relief, Cost and the quantum...?

7.  Point No.1:-  The case of the Complainant is that the Complainant’s husband had an insurance policy for Rs.3,50,000/- with the Opposite Party who was died on 14.04.2018 and consequently the Complainant submitted statement of death claim on 23.05.2018 but the claim was repudiated by the Opposite Party on 27.07.2018 which is unfair trade practice for which this complaint is filed with prayers for claim amount, compensation and cost.  The Opposite Party admitted the insurance policy and the repudiation of the claim application.  The contention of the Opposite Party for the repudiation of the claim is that the insured had the disease of pancreatitis which was not disclosed in the proposal form at the time of taking the policy which is non-disclosure of material facts relating to pre-existing medical condition of the insured, having direct bearing on the underwriting of risk by the Opposite Party and hence the Complainant is not entitled to any benefit under the policy, as per the terms and conditions of the policy.  For substantiating the contention of the Opposite Party, they depend on Ext.B3 which is a photo copy of the Clinical Report of the insured issued from GG Hospital, Thiruvananthapuram, in which it is stated that “pancreatitis since 15 years”.  This Clinical Report is seen dated as 31.03.2018.  No treatment record for pancreatitis is produced by the Opposite party, the treated doctor was not examined for proving that the insured had pancreatitis since 15 years and the insured was aware of the disease pancreatitis at the time of taking the policy.  Generally, an insured may have many diseases which may not be known to him at the time of taking the insurance policy and therefore, under such circumstances, the insured may not be able to disclose such diseases in the proposal form.  So, it is up to the Opposite Party to prove that the insured  had pancreatitis, he was aware of it and had undergone treatment for which the examination of the treated doctor or the production of treatment records for the disease pancreatitis is highly necessary.  This was not done in this case.  So, the mere statement alone in the Clinical Report that “pancreatitis since 15 years” on 31.03.2018 cannot be considered as a valid proof to substantiate that the insured had pancreatitis, undergone treatment and the insured was aware of it at the time of signing the proposal form.  Commission perused in details the questions and answers shown numbered as 15,18,21,22 and 23 of Ext.B4 document.  Nowhere in the above questions, a specific question as to pancreatitis is seen asked and therefore, the insured was not needed or supposed to answer “yes” in the answer column, even though he had pancreatitis at the time of filing the proposal form.  Moreover, in question No.21, 22 and 23 diseases and treatment undergone during the last five years are asked but the Opposite Party has failed to prove the treatment for such diseases mentioned in such questions with corroborating evidences since last five years.  In addition, in Form No.4 of Ext.X1 series which is the Medical Certificate of cause of death, the cause of death of the insured is recorded as “severe sepsis with multi organ failure”.  In the above discussion we are of the view that the Opposite Party has failed to prove their contention for repudiation of the claim, beyond doubt.  In this circumstance it is viewed that the repudiation of the claim under a valid and admitted policy is nothing but unfair trade practice/deficiency in service for which the Opposite Party is liable to pay claim, compensation and cost to the Complainant.  So Point No.1 is proved against the Opposite Party.

8.  Point No.2:-  As point No.1 is proved against the Opposite party, they are liable to pay the amount of insurance claim, compensation and cost of the complaint but the compensation claimed by the Complainant is seen exorbitant.  In our opinion an amount of Rs.50,000/- is fair and reasonable to grant as compensation and to grant Rs.10,000/- towards cost of this complaint.

In the result, the complaint is partly allowed and the Opposite Party is directed to

1. Pay Rs.3,50,000/- (Rupees Three Lakh and Fifty Thousand Only) as the amount of insurance claim,
2. Pay an amount of Rs.50,000/- (Rupees Fifty Thousand Only) towards compensation and
3. Pay Rs.10,000/- (Rupees Ten Thousand Only) towards cost of this complaint.

The above amounts shall be paid to the Complainant within 30 days from the date of this order, failing which the amounts will carry interest @ 8% per annum from the date of this Order.

Dictated to the Confidential Assistant, transcribed by him and corrected by me and pronounced in the Open Commission on this the 20^th day of July 2023.

Date of Filing:-04.05.2021.

PRESIDENT   : Sd/-

MEMBER       : Sd/-

APPENDIX.

Witness for the Complainant:-

PW1.              Omana.                                             Housewife.

Witness for the Opposite Party:-

                        Nil.

Exhibits for the Complainant:

A1.                  Copy of Letter.                                                        Dt:02.06.2016.

A2.                  Death Certificate of Vijaya Kumaran Nair.

A3.                  Copy of Death Claim.                                            Dt:27.07.2018.

A4.                  Letter.                                                                        Dt:01.10.2018.

X1(Series).    In Patient Record of Vijayan produced by GG Hospital,

Murinjapalam, Thiruvananthapuram. (100 Pages)                                    

Exhibits for the Opposite Party:-

B1.                  Copy of Customer Consent Document.          

B2.                  Copy of OPD Initial Assessment Form.

B3.                  Copy of Clinical Report.                                        Dt:31.03.2018.

B4.                  Copy of Death Claim.                                            Dt:27.07.2018.

PRESIDENT   :Sd/-

MEMBER       :Sd/-

/True Copy/

Sd/-

                                                                                             ASSISTANT REGISTRAR

                                                                                                  CDRC, WAYANAD.

Kv/-