Chandigarh

DF-I

CC/222/2021

Manju Bala - Complainant(s)

Versus

Housing Development Finance Corporation Ltd. (HDFC) - Opp.Party(s)

Parkash Chand

13 Jan 2023

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-I,

U.T. CHANDIGARH

                                     

Consumer Complaint No.	:	CC/222/2021
Date of Institution	:	05/04/2021
Date of Decision	:	13/01/2023

 

Manju Bala wife of late Sh. Naresh Kumar, aged 51 years, resident of H.No.2438, Sector 20-C, Chandigarh, now resident of H.No.204, Rosewood GBP Enclave, Phase-I, Derabassi, District Mohali, Punjab.

… Complainant

V E R S U S

1. Housing Development Finance Corporation Ltd. (HDFC) through its Regional/General Manager, SCO No.153-154-155, Sector 8-C, Madhya Marg, Chandigarh.

2^nd Add : Registered office at Ramon House, H.T. Parekh Marg, 169, Backbay Reclamation Churchgate, Mumbai-400020.

2. DHFL Pramerica Life Insurance through its Regional Manager/General Manager/Authorised Signatory, SCO No.2941-42, First and Second Floor, Sector 22-C, Chandigarh.

2^nd Add : Registered Office at 4^th Floor, Building No.9, Cyber City, DLF Phase-III, Gurgaon, Haryana 122002.

… Opposite Parties

CORAM :	SHRI PAWANJIT SINGH	PRESIDENT
	MRS. SURJEET KAUR	MEMBER

 

                                                                               

ARGUED BY	:	Ms.Jyoti Mehta, Counsel for complainant
	:	Ms.Neetu Singh, Counsel for OP-1
	:	Sh.Harvinder Singh & Sh.Abhay Josan, Counsels for OP-2

 

Per Pawanjit Singh, President

1. The present consumer complaint has been filed by Smt.Manju Bala, complainant against the opposite parties (hereinafter referred to as the OPs).  The brief facts of the case are as under :-

1. It transpires from the allegations as projected in the consumer complaint that the husband of the complainant namely Sh. Naresh Kumar had applied for home loan to OP-1 which was sanctioned by it for the sum of ₹9,50,000/- vide acceptance letter dated 25.4.2019 (Annexure C-2).  Thereafter, a Group Credit Life Insurance Policy was purchased by the husband of the complainant from OP-2 through OP-1 in order to secure the home loan of ₹9,75,708/- and the premium amount of the same was also paid by the husband of the complainant by obtaining another loan from OP-1.  It was agreed through the policy that in case the installment of the home loan is not paid by the husband of the complainant in time, then OP-2/ Insurance Company shall be liable to pay the same.  In addition to this, it was also assured that in case of any casualty to the insured, the entire loan amount shall be borne by OP-2.  During his life time, husband of the complainant had paid the installments of OP-1, but, later on he fell ill and was admitted in the hospital and ultimately died on 18.8.2019.  On the demise of her husband, complainant had submitted insurance claim with OP-2, but, the same was repudiated vide letter dated 24.1.2020 (Annexure C-8), on the ground that the cause of death of Sh. Naresh Kumar was due to heart disease prior to the date of purchase of the policy and the said fact was concealed by him to OP-2.  In this manner, the said act of OP-2 amounts to deficiency in service, mal practice and unfair trade practice as at the time of giving the policy, both the OPs had allured the deceased to purchase the policy as the same will secure the future of the insured and his family.  A complaint was also filed before the Ombudsman, but, nothing has been done. OPs were requested several times to admit the claim, but, with no result. Hence, the present consumer complaint.
2. OPs resisted the consumer complaint and filed their written replies.  In its written reply, OP-1, inter alia, took preliminary objection of maintainability.  It is alleged that the husband of the complainant and the complainant had availed two loans from the answering OP i.e. home loan and loan to fund insurance premium, the consumer complaint is not maintainable against the answering OP.  It is further alleged that till date, an amount of ₹8,65,610/- and ₹82,488/- is due towards the total disbursed amount to the complainant and her husband.  It is further alleged that the parties are bound by the terms and conditions of the loan agreement. The cause of action set up by the complainant is denied.  The consumer complaint is sought to be contested.
3. In its separate written reply, OP-2, inter alia, took preliminary objections of maintainability, cause of action and concealment of facts.  It is also alleged that all the allegations made by the complainant in the consumer complaint are wrong and baseless.  However, it is admitted that the deceased/life insured had availed a loan from OP-1 and based on the said loan, deceased had purchased the policy in question from the answering OP and at the time of purchase of the policy, all the terms and conditions of the same were explained to the deceased who, after admitting the same, had accepted the policy. The said policy was w.e.f. 30.4.2019 for 11 years and the premium of ₹96,214.42 was paid by the insured for the sum insured of ₹10,20,505/-.  It is further alleged that the deceased under the head of medical questionnaire in the proposal form dated 30.4.2019 had declared that he was neither suffering from any disease or disorder nor he had suffered from such disease in the past.  It is further alleged that in fact the deceased was diagnosed with blood cancer and body ache which fact has also been reflected in the medical records (Annexure 4), but, the said fact was never disclosed by the deceased in the proposal form as well as while filling the health declaration of the proposal form. Even during investigation, investigator had discovered that the deceased died on account of chronic kidney disease, chronic liver disease and sugar from which the deceased was suffering since the last many years.  It is further alleged that even while passing the order, the Insurance Ombudsman had held that the complaint of the complainant be treated as closed.  It is further alleged that the answering OP had decided the claim of the complainant in accordance with the terms and conditions of the policy.  On merits the answering OP has reasserted the facts alleged in the preliminary objections by alleging that the complainant has filed a false consumer complaint against the answering OP. The cause of action set up by the complainant is denied.  The consumer complaint is sought to be contested.
4. In her separate replications, complainant re-asserted the claim put forth in the consumer complaint and prayer has been made that the consumer complaint be allowed as prayed for.

2. In order to prove their case, parties have tendered/proved their evidence by way of respective affidavits and supporting documents.
3. We have heard the learned counsel for the parties and also gone through the file carefully, including the written arguments.
   1. Admittedly, home loan of ₹9,50,000/- was sanctioned by OP-1 in favour of the complainant and her husband Sh. Naresh Kumar, as is evident from copy of acceptance letter dated 25.4.2019 (Annexure OP-1/1).  It further an admitted case of the parties that the said loan was secured by the complainant and her husband by purchasing the insurance policy (Annexure 3) from OP-2 and OP-1 had also sanctioned second loan of ₹96,215/- in favour of deceased and his wife (complainant) in order to pay the same to OP-2, as is also evident from page 13 (Annexure OP-1/1).  It is further an admitted case of the parties that OP-2 had issued the policy in favour of deceased, Sh. Naresh Kumar on 30.4.2019 and the said policy was valid w.e.f. 30.4.2019 for 11 years and the premium amount of ₹96,214.42 was paid by the deceased to OP-1 for the sum insured of ₹10,20,505/- which fact has also been admitted by OP-2 in para No.5 of its written reply.  It is further an admitted case of the parties that the deceased, Sh. Naresh Kumar had died on 18.8.2019 i.e. after about 3 ½ months of the issuance of the policy, as is also evident from the copy of death certificate (Annexure C-6) and insurance policy (Annexure 3). The case of the complainant is that as the entire home loan amount was insured by OP-2 and even the premium of the policy was paid by the husband of the complainant after taking second loan from OP-1 and during his life time, the deceased husband of the complainant was not suffering from any disease, and as the insurance claim of the complainant has wrongly been repudiated by OP-2, complainant is entitled for the reliefs as prayed for in the consumer complaint, especially when OP-2 was duty bound to repay the outstanding loan amount at the time of death of her husband.
   2. On the other hand, the defence of OP-2 is that since the deceased husband of the complainant had not disclosed that he was suffering from any kidney, liver ailment at the time of purchase of the insurance policy in question and even when it has come on record that the deceased had died immediately after the purchase of the said policy due to pre-existing disease, there is violation of the terms and conditions of the insurance policy and the claim of the complainant was rightly repudiated by the OPs and the consumer complaint of the complainant be dismissed with costs. 
   3. In the backdrop of the foregoing admitted and disputed facts on record, it is to be determined if OP-2 is unjustified in repudiating the claim of the complainant on the false ground that the deceased husband of the complainant was suffering from pre-existing disease and the complainant is entitled for the reliefs prayed for, as is the case of the complainant, or if OP-2 has rightly repudiated the claim of the complainant due to fundamental breach of the terms and conditions of the insurance policy, as is the defence of OP-2.
   4. In the light of the foregoing facts on record, one thing is clear that the entire case of the parties is revolving around the terms and conditions of the insurance policy and for that purpose the same are required to be scanned carefully.  Annexure C-5 is the copy of the welcome letter with which abstract of terms and conditions and benefits of the policy are annexed and the relevant portion of the same is reproduced below for convenience :-

“Benefits under Plan A:

a)      Death Benefit: If an Insured Member dies when his Insurance coverage under the Policy is in force, the Coverage in-force will be payable to the Claimant.

xxx                       xxx                       xxx

Benefits under Plan B:

1. Death Benefit: If an Insured Member dies when his Insurance coverage under the Policy is in force, the Coverage in-force will be payable to the claimant.

          xxx                       xxx                       xxx

Exclusions

a)      Suicide : If the Insured Member commits suicide, whether sane or insane at the time, within one year from the Coverage Commencement Date as stated in the Schedule, then the liability of the Company shall be limited to a refund of 80% of the premium received.

b)      Accelerated Accidental Total and Permanent Disability arising directly or indirectly from any of the following are specifically excluded :

a)      The life Assured taking part in any hazardous sport or pastimes (including hunting, mountaineering, racing, steeple chasing, bungee jumping, etc.)

b)      The Life Assured flying in any kind of aircraft, other than as a bonafide passenger (whether fare-paying or not) on an aircraft of a licensed airline

c)      HIV or antibodies to such a virus.

d)      Self-inflicted injury, suicide or attempted suicide whether sane or insane

e)      Under the influence or abuse of drugs, alcohol, narcotics or psychotropic substance not prescribed by a registered medical practitioner

f)       Service in any military, airforce, naval or paramilitary

g)      War, civil commotion, invasion, terrorism, hostilities (whether war be declared or not)

h)      The Life Assured taking part in any strike, industrial dispute, riot, etc.

i)       The Life Assured taking part in any criminal or illegal activity with criminal intent

j)       Nuclear reaction, radiation or nuclear or chemical contamination.”

 

5. Thus, one thing is clear from the afore-extracted abstract of the terms and conditions and benefits of the policy that nothing has been contained therein that in case of any pre-existing disease of the insured, he will not be entitled for the insurance claim, rather it contains if an insured member dies when his insurance coverage under the policy is in force, the coverage in force will be payable to the claimant and similarly the exclusion clause does not contain that in case the insured dies due to some pre-existing disease after the purchase of the policy, he shall not be entitled for any claim.
6. Moreover, the medical evidence (Annexure 4), having been relied upon by OP-2 (at page 40-41 of its written reply) indicates that the deceased Sh. Naresh Kumar was found recently diagnosed with multiple myeloma, P\W\C\O LBA X 3 months first time on 16.8.2019, after the issuance of the policy which was admittedly issued on 30.4.2019, making it further clear that the deceased was not suffering from the aforesaid diseased at the time of issuance of the policy.  Not only this, the welcome letter sent by OP-2 to the deceased, Sh.Naresh Kumar clearly indicates that he was requested to take his nominee through the benefits as well and he will have a period of 15 days from the date of the receipt of certificate of insurance to review the terms & conditions of the same and where he disagrees to any of these terms and conditions, he has an option to return the certificate of insurance stating the reasons for objection.  It further indicates that on the receipt of the letter alongwith certificate of insurance by the insured, the company will refund the premium received for the same, subject to deduction of the proportionate risk premium for the period of cover and expenses incurred by the company on his medical examination and the related stamp fee. Thus, one thing is further clear from this welcome letter that it implies that the medical examination of the insured was to take place prior to the premium being paid by the insured.  Not only this, the welcome letter further makes it clear that the medical examination of the insured was compulsory which was to be got conducted by OP-2 as OP-2 had already deducted/received the expenses for the medical examination of the insured.  Thus, it is further clear that if the medical examination of insured has not been got conducted by OP-2, it cannot come with the plea that the deceased was suffering from any pre-existing disease which was not noticed by OP-2 or disclosed by deceased at the time of purchase of the policy by him.
7. OP-2 otherwise also cannot read something more into the terms & conditions of the policy and come to the inference that one disease is relatable to other disease as a result of which the claim of the insured was rejected. 
8. Learned counsel for the complainant has relied upon the judgment of the Hon’ble Madras High Court in the case titled Manivasagam Vs.  The Branch Manager, National Insurance Company Ltd. & Anr., W.A (MD) No.956 of 2011 decided on 30.1.2014 in which it was held :

“If the disease for which the appellant/writ petitioner was treated, is not stated as pre-existing disease in the policy and there are no supporting documents to show that it was a pre-existing disease on the date of issuance of the policy, the Insurance Company is bound to honour the policy.”

 

9. The learned counsel for the complainant has further relied upon the judgment of the Hon’ble Punjab and Haryana High Court in the case titled as Star Health and Allied Insurance Company Limited Vs. Permanent Lok Adalat (Public Utility Services) and Anr., 2021 (3) PLR 517 in which it was held :-

“Legal Service Authorities Act, 1987 - Medical claim policy with interest - Challenged - Family Health Optima Insurance Plan - No question of concealment of facts by application - Wife of applicant admittedly discharged in healthy condition on 07.10.2017 and it is only on 11.10.2017 that her disease came to light - Thus, it cannot be said that there was any concealment by applicant on 07.10.2017 at time of renewal of policy - As per clause 7 of the policy, grace period up to 120 days from date of expiry of the policy is available for renewal and if renewal is made within this period, continuity benefits would be available - Clause that any disease/illness contracted or injury sustained during grace period would be deemed as pre-existing and would be subject to waiting period as existing under Clause 3(iii) not applicable - Hence, order of permanent Lok Adalat upheld”.

 

10. In the case in hand, as it has also come on record that the policy in question was purchased by the deceased Sh. Naresh Kumar and his wife on 30.4.2019 and the disease from which the deceased Sh. Naresh Kumar was suffering i.e. multiple myeloma, P\W\C\O LBA X 3 months  came to light only in the month of August, 2019, though he was diagnosed with back ache some time in the month of June 2019, that too after the issuance of the policy, OP-2 was unjustified in repudiating the claim of the complainant on the ground of concealment of facts, especially when it has come on record that there is no iota of any evidence on record showing that prior to the issuance of the policy, deceased was suffering from the ailment which resulted in causing his death.
11. As it has come on record that it was the bounden duty of OP-2 to get the insured/deceased medically examined, as OP-2 had already received expenses from the deceased for his medical examination, and the same was not done by it, OP-2 now cannot escape from its liability on the ground that the deceased had concealed facts about his pre-existing disease.
12. It was also held by the Hon’ble Apex Court in the case of D.Srinivas Vs. SBI Life Insurance Co. Ltd. & Ors., Civil Appeal No.226 of 2018 decided on 16.2.2018 that where the insurance clause provided that the condition precedent for acceptance of the premium was the medical examination, it would be logical for an underwriter to accept the premium based on the medical examination and not otherwise and by the very fact that the insurer accepted the premium, waived the condition precedent of medical examination.
13. Similarly the application form (Annexure 2 at page 16), annexed with the written reply of OP-2, indicating the medical questionnaire where the deceased had replied in “No” about the disease, is of no help to OP-2 as it has otherwise been proved on record from the medical record, having been relied upon by both the parties, that the deceased was not suffering from any disease at the time of purchasing the policy, rather he had suffered from the disease which resulted in causing his death after 3 ½ month of the purchase of the policy. 
14. It is further clear from the certificate of insurance (Annexure 3 at page 20) that the coverage amount of the policy was ₹10,07,168.16 in the 4^th month of the purchase of the policy.  As it is an admitted case of the parties that the deceased/insured Sh. Naresh Kumar had died on 18.8.2019 i.e. in the 4^th month of purchase of the policy, therefore, OP-2 is liable to that extent.  Hence, the act of OP-2 in repudiating the claim of the complainant certainly amounts to deficiency in service and unfair trade practice on its part and the present consumer complaint deserves to be allowed.

4. In the light of the aforesaid discussion, the present consumer complaint succeeds, the same is hereby partly allowed and OP-2 is directed as under :-

1. To pay to the complainant ₹10,07,168.16, as mentioned above, alongwith interest @ 9% per annum w.e.f. the date of death of the insured i.e. 18.8.2019, till its realisation.  However, OP-2 is further directed first to pay an amount of ₹7,88,754/-  to OP-1, out of the aforesaid amount, towards the outstanding amount in the home loan account, who will issue the NOC to the complainant on receipt of the said amount, and the remaining amount shall be paid to the complainant since OP-1 has already deducted some amount towards the loan account after the demise of her husband in order to discharge the liability of the deceased.
2. to pay an amount of ₹50,000/- to the complainant as compensation for causing mental agony and harassment to her;
3. to pay ₹10,000/- to the complainant as costs of litigation.

5. This order be complied with by OP-2 within thirty days from the date of receipt of its certified copy, failing which, it shall make the payment of the amounts mentioned at Sr.No.(i) & (ii) above, with interest @ 12% per annum from the date of this order, till realization, apart from compliance of direction at Sr.No.(iii) above.
6. Since no deficiency in service or unfair trade practice has been proved against OP-1, therefore, the consumer complaint qua it stands dismissed with no order as to costs.
7. Certified copies of this order be sent to the parties free of charge. The file be consigned.

Announced 13/01/2023 hg			Sd/- [Pawanjit Singh] President
			Sd/- [Surjeet Kaur] Member