Date of filing: 20.05.2022
Date of disposal: 28.02.2023
DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION
THIRUVALLUR
BEFORE TMT. Dr.S.M. LATHA MAHESWARI, M.A.,M.L, Ph.D (Law) .…. PRESIDENT
THIRU.P.MURUGAN,M.Com.,ICWA (Inter), B.L., ....MEMBER-II
CC. No.32/2022
THIS TUESDAY, THE 28th DAY OF FEBRUARY 2023
Mrs.S.Santhi, W/o.Late K.Sundar,
H.No.259-8, Perumal koil Street,
Alapakkam, Porur, Chennai 600 116. ……Complainant.
//Vs//
1.HDFC Standard Life Insurance Company Limited,
Rep by its MD and CEO,
Lodha Excelus, 13th Floor,
Apollo Mills Compound,
N.M.Joshi Marg,
Mahalakshmi, Mumbar 400 011.
2.HDFC Standard Life Insurance Company Limited,
Rep. by its Branch Manager,
Branch Office at 37/38, 2nd Floor,
ASVN Ramana Towers,
Venkatanarayana Road,
T. Nagar, Chennai 600 017. ..........Opposite parties.
Counsel for the complainant : M/s.S.Balaji, Advocate.
Counsel for the opposite parties : Mr.S.Muthukumaravel,Advocate.
This complaint is coming before us on various dates and finally on 20.02.2023 in the presence of M/s.S.Balaji counsel for the complainant and Mr.S.Muthukumaravel counsel for the oppostie paties and upon perusing the documents and evidences of both sides, this Commission delivered the following:
ORDER
PRONOUNCED BY TMT. Dr.S.M. LATHA MAHESWARI, PRESIDENT.
This complaint has been filed by the complainant u/s 35 of the Consumer Protection Act, 2019 alleging deficiency in service in repudiation of the insurance claim along with a prayer to direct the opposite parties to pay a sum of Rs.60,87,085.00/- being the sum assured towards death benefits under the policy subscribed by the complainant’s husband with interest at 12% from the date of death till realization and to pay a sum of Rs.15,00,000/- towards compensation for the mental strain and agony suffered by the complainant due to the act of the opposite parties along with cost of the proceedings to the complainant.
Summary of the facts culminating into complaint:-
Being aggrieved and dissatisfied with the act of the oppostie parties in repudiation of claim the present complaint was filed. It was the case of the complainant that her husband K.Sundar was running a catering service in the name and style of M/s.VKM Caterers at 62/88, Kodambakkam Road, West Mambalam, Chennai for many years. Due to his expertise and efficient service provided, many orders were placed for catering services in marriages, betrothal functions, get-together and other family and religious functions. In the month of April 2018 the complainant’s husband had approached M/s. Indo Star Capital Finance Limited for availing loan to improve his catering business. The loan was to be sanctioned to the complainant’s husband on subscribing to an insurance policy from the opposite party. The complainant’s husband in compliance with the same had agreed to it and the representatives of the 2nd opposite party met the complainant’s husband and had enrolled him as a subscriber to a policy of the opposite party being marketed as HDFC life Group Credit Product Plus Insurance Plain. At the time of subscribing to the said policy the complainant’s husband‘s personal information was sought for and also his health conditions to which the complainant’s husband had provided the requisite information. The details were filed up by the insurance representative of the opposite party and the commencement date of the policy was 07.05.2018 and the cover option was for a period of 4 years. The initial premium for the said policy of Rs.1,91,524.90/- and taxes of Rs.34,474.48/- were paid by the complainant’s husband to the opposite party and the policy certificate was duly issued. Complainant’s husband fell ill suddenly without any prior issues and had to be admitted in the hospital in January 2021 where he breathed his last. Thereafter the complainant contacted the 2nd opposite party with regard to the claim and she was directed to correspond with the 1st opposite party by the officials of the 2nd opposite party as it being their registered office. Based on the directions of the 2nd opposite party the complainant wrote to the 1st opposite party informing of her husband’s death and making a claim under the insurance policy availed by the complainant’s husband from the opposite parties. The 1st opposite party rejected her claim vide letter dated 23.07.2021 stating that investigations done by them had established that the complainant’s husband was on treatment for diabetes with Necrotising Fascitisa and had been diagnosed of Hepatitis B prior to the issuance of the policy. Details of the investigations alleged to have been done were furnished nor any enquiry conducted with the complainant but the 1st opposite party further informed that in case the complainant wished to represent her claims to the company the same can be done within 30 days of receiving the letter to the claims Review Committee whose address was furnished in the said letter dated 23.07.2021. The complainant immediately had written to the Review Committee vide letter dated 13.08.2021 but there was no reply till date. Further on the advice of friends and relatives the complainant sent a letter to the Banking Ombudsman detailing her situation and sought for redressal of her grievance but no reply has been received. The complainant’s husband was not suffering from any disease nor was under any medication at the time of subscribing to the policy of the opposite party. It was submitted that the opposite parties in rejecting the claim of the complainant without any enquiry and by a mere statement that the insured was suffering from prior disease amounts to an unfair trade practice as defined under section 2(47) of the Consumer Protection Act and the opposite parties being service providers as per section 2(38) of the Consumer Protection Act are duty bound to pay the claim. Thus aggrieved by the act of the opposite parties the present complaint was filed to direct the opposite parties to pay a sum of Rs.60,87,085.00/- being the sum assured towards death benefits under the policy subscribed by the complainant’s husband with interest at 12% from the date of death till realization and to pay a sum of Rs.15,00,000/- towards compensation for the mental strain and agony suffered by the complainant due to the act of the opposite parties along with cost of the proceedings to the complainant.
Crux of the defence put forth by the opposite parties:-
The opposite parties filed version disputing the complaint allegations contending interalia that this commission has no territorial jurisdiction to decide the dispute as no cause of action either in whole or in part arose against the opposite parties. As per information, the complainant has Hepatitis B Cirrhosis since November 2016 and type 2 diabetes since November 2018 as per the medical record of SB Diabetes & Skin Care Center of November 2019 before the inception of the policy and the material fact was not disclosed. After proper verification as per the Death Summary received from Dr.Rela Institute and Medical Centre, Life assured was diagnosed with Hepatitis B-related end stage liver disease, Type II diabetes mellitus, Necrotizing Fasciities and multiorgan failure. Background history, life assured was a case of chronic hepatitis B-related end state liver disease for 2 years and was treated with entecavir. He was admitted with developing hypotension, hypoglycemia and tachycardia and severs acidosis. On 22.01.2021 he slipped into sudden bradycardia, which progressed to asystole, CPR was initiated as per ACLS protocol and died during his treatment. The cause of death was septic shock-Necrotising fasciitis, Multiorgan failure, and hepatitis B Cirrhosis. After deep enquiry it had come to know that 40 years old male life assured Mr.Sundar K died on 22.01.2021 with multiorgan failure & hepatitis B Chrrhosis at Dr Rela Institute and Medical Center, Chrompet, Chennai. Life Assured was suffering from Hepatitis B Cirrhosis since November 2016 and Type 2 diabetes since November 2018 as per the medical records of SB Diabetes & Skin Care Center of November 2019. Life Assured was on treatment and medication. Complainant’s husband was suffering from Cirrhosis Hepatitis B since November 2016 and Type 2 diabetes since November 2018. Life Assured was taking treatment SB Diabetes & Skin Care Center and was on medication. Later in January 2021 Life Assured suffered Leg pain and swelling, hence was admitted to VHM hospital on 19.01.2021 at hospital Llife Assured was treated for 2 days and as there was no improvement Life Assured was discharged on 20.01.2021 and referred to a higher center for further management. Hence Life Assured was later admitted to Dr. Rela institute and Medical Center on 21.01.2021 where Life Assured was treated for 2 days, but Life Assured could not be revived and was declared dead with multiorgan failure, hepatitis B related end-stage Liver Disease, Type 2 diabetes & Nocrotising Fasciitis on 22.01.2021 in due course of treatment. There is no allegation or any kind of deficiency of service on the part of the 2nd opposite party. At the time of applying for the insurance policy, the opposite party would have called for further medical tests/questionnaires. Based on the reports only, the opposite party would have decided to offer insurance cover. Since the husband of the complainant was suffering from Pre existing disease, the claim of the complainant could not be covered under the policy. Thus there is no deficiency in service on their part and sought for the complaint to be dismissed.
On the side of complainant proof affidavit was filed and documents Ex.A1 to Ex.A5 were marked. On the side of opposite parties proof affidavit was filed and submitted documents Ex.B1 to Ex.B4 were marked.
Points for consideration:-
Whether the repudiation of insurance claim made by the complainant by the opposite parties on the ground of suppression of material facts i.e. pre-existing decease is justified?
If so to what reliefs the complainant is entitled?
Point No.1:-
On the side of complainant the following documents were filed in proof of complaint allegations;
Certificate of Insurance dated 22.05.2018 was marked as Ex.A1;
Death Certificate of Insured dated 03.02.2021 was marked as Ex.A2;
Legal Heir Certificate dated 09.04.2021 was marked as Ex.A3;
Rejection letter of opposite parties dated 23.07.2021 was marked as Ex.A4;
Representation to claims Review Committee with acknowledgement card dated 13.08.2021 was marked as Ex.A5;
On the side of opposite parties the following documents were filed for proof of their contentions;
Member Enrolment Form (HDFC Life) dated 02.05.2018 was marked as Ex.B1;
Claim repudiation letter dated 23.07.2021 was marked as Ex.B2;
Expert investigation Service dated 13.07.2021 was marked as Ex.B3;
Death summary of Complainant dated 22.01.2021 was marked as Ex.B4;
It is represented by both parties that their respective written arguments filed by them may be treated as oral arguments. Hence this commissinon decided to consider their written arguments to dispose of the complaint on merits.
The crux of the arguments advanced by the complainant is that her husband was running a catering service who took a policy with the opposite parties for the purpose of obtaining loan in the year of 2018 for a period of 4 years. The maturity sum assured was Rs.1,55,71,130/- and the death benefit sum assured was Rs.60,87,085/-. In January 2021 the complainant’s husband breathed his last. When the claim was made the same was rejected by the opposite parties citing the existence of Hepatitis B decease since 2016 and type II diabetes since November 2018 on the life assured. It is submitted that the husband of the complainant was maintaining good health at the time of subscription of the policy. It is for the opposite parties while taking the policy to insist for medical check-up for the insured. The opposite parties ought to have furnished the documents based on which they have rejected the claim. Thus it is stated that only to escape from their liability the opposite parties are citing unreasonable reasons which amounts to clear unfair trade practice.
On the side of the opposite parties it is submitted that as per proper verification of the death summary received from Dr.Rela institute and Medical Centre, Life Assured was diagnosed with Hepatitis B-related end-stage liver disease, Type II diabetes mellitus, Necrotizing fasciities and multiorgan failure. Background history, Life Assured was a case of chronic hepatitis B-related end-state liver disease for 2 years and was treated with entecavir. He was admitted with developing hypotension, hypoglycemia and tachycardia and sever acidosis. On 22.01.2021 at around 01:30am, he slipped into sudden bradycardia, which progressed to asystole, CPR was initiated as per ACLS protocol and died during his treatment. The cause of death was septic shock-Necrotising fasciitis, Multiorgan failure, and hepatitis B Cirrhosis and the life assured was diagnosed with Hepatitis B-related end stage liver disease, Type II diabetes mellitus, Necrotizing Fasciities and multiorgan failure. It is stated that the complainant’s husband was suffering with Hepatitis B cirrhosis since November 2016 and type II diabetes since 2018 as per the medical record of SB Diabetes & Skin Care Center even before inception of the policy. If these information are revealed at the time of taking policy a medical questionnaire would have been called for. The insurance contract being a contract of good faith if good faith is not observed by any of the party the contract may be avoided by the other party. Thus citing the terms and conditions the opposite parties sought for dismissal of the complaint.
On perusal of the materials and pleadings proved by both parties we could find that the complainant had established her case by way of producing the certificate of insurance, death certificate, legal heir certificate, Rejection letter and representation to the review committee. The said facts are admitted by the opposite parties. However, the opposite parties had produced material evidence wherein Ex.B3 the investigation report dated 13.07.2021 it has been clearly provided that “As per our enquiry 40 years old male life assured Mr.Sunder K died on 22.01.2021 at around 02:20am with Multi Organ Failure 7 Hepatitis B Cirrhosis at Dr.Real Institute & Medical Center, Chormpet, Chennai” and also under the head previous Medical history provides as “life assured was suffering Hepatities B Cirrhosis from November 2016 and Type 2 diabetes since November 2018 as per the medical record of SB Diabetes & Skin Care of November 2019 Life Assured was on treatment & medication”. Under the caption circumstances of death “life assured was suffering Cirrhosis hepatitis B from November 2016 and type 2 diabetes since November 2018 Life Assured was taking treatment SB Diabetes & Skin Care Center & was on dmedication. Later in January 2021 Life Assured suffered leg pain in swelling, hence was admitted at VHM hospital on 19.01.2021 at hospital. Life Assured was treated for 2 days and as here there was no improvement Life Assured was discharged on 20.01.2021 and referred to higher center for further management. Hence Life Assured was later admitted at Dr.Rela Institute & Medical Center on 21.01.2021 where Life Assured was treated for two days, but Life Assured could not be revived and declared dead with multi Organ Failur, Hepatitis B related end stage liver disease, type 2 diabetes & Necrotising Fascitiis on 22.01.2021 at around 02:20am in due course of treatment. Thus it is amply proved by the opposite parties that at the time of taking the policy the life assured was suffering with HB, Type 2 diabetes which fact was not disclosed. The opposite parties also had produced a prescription given by one Dr.Dharmarajan in proof of the health by the life assured during 27.11.2019. Even in the death summary it has been provided that the antecedent HBV related Chronic Liver Disease and COVID Pneumonia and Diabetes mellitus. If we perused the member enrollment form 02.05.2018 for the questionnaire, “have you ever suffered or diagnosed for Diabetes, BP, heart Disease, Tuberculosis, liver etc“. the complainant had disclosed in negative. In such circumstances when the contract of insurance was based on the legal principle of Uberrima fidei i.e. at most good faith, when the complainant failed to disclose the true health condition, the same makes the insurance contract void. The decision cited by opposite parties in Satwanth Kaur Vs New India Assurance Company Limited reported in IV (2009) CPJ 8 (SC) has referred the term “Proposal Form” as defined under the Insurance Regulatory and Development Authority, 2002 as the Form to be filled in by the proposer for insurance by furnishing all material information required by the insurer to decide whether to accept or decline to undertake the risk and in the event of acceptance of the risk to determine the rates, terms and conditions of a cover to be granted. Further it is observed that in a contract of insurance any fact which would influence the mind of a prudent insurer in deciding whether to accept or not to accept the risk is a ‘material fact’. Thus we hold that the repudiation of claim made by the complainant when based upon non disclosure of material fact could not be termed as unfair trade practice or deficiency in service. Thus the point is answered accordingly in favour of the oppostie parties and as against the complainant.
Point No.2:-
As we have held above that the complainant had failed to prove any deficiency in service on the part of the opposite parties, she is not entitled to any reliefs as claimed in the complaint from the opposite parties. Thus we answer the point accordingly.
In the result, the complaint is dismissed. No order as to cost.
Dictated by the President to the steno-typist, transcribed and computerized by him, corrected by the President and pronounced by us in the open Commission on this the 28th day of February 2023.
Sd/- Sd/-
MEMBER-II PRESIDENT
List of document filed by the complainant:-
Ex.A1 22.05.2018 Certificate of Insurance. Xerox
Ex.A2 03.02.2021 Death Certificate of Insured. Xerox
Ex.A3 09.04.2021 Legal Heir Certificate. Xerox
Ex.A4 23.07.2021 Rejection Letter of Oppostie parties. Xerox
Ex.A5 13.08.2021 Representation to Claims Review Committee with acknowledgement. Xerox
List of documents filed by the oppostie parties:-
Ex.B 02.05.2018 Member Enrollment Form (HDFC Life). Xerox
Ex.B 23.07.2021 Claim repudiated Letter. Xerox
Ex.B 13.07.2021 Expert investigation service. Xerox
Ex.B 22.01.2021 Death Summary of Complainant. Xerox
Sd/- Sd/-
MEMBER-II PRESIDENT
