Chandigarh

DF-I

CC/839/2021

Veena - Complainant(s)

Versus

Kotak Mohindra Life Insurance Co. Ltd. - Opp.Party(s)

Shiv Charan Bhola

03 Jul 2023

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-I,

U.T. CHANDIGARH

                                     

Consumer Complaint No.	:	CC/839/2021
Date of Institution	:	03/12/2021
Date of Decision	:	03/07/2023

 

Veena widow of late Sh. Rajeev Kumar r/o H.No.1081/A, Dashmesh Nagar, Nayagaon, District SAS Nagar, Mohali, Punjab.

… Complainant

V E R S U S

1. Kotak Mohindra Life Insurance Company Limited, having its registered office : 2^nd Floor, Plot # C-12, G Block, BKC, Bandra (E), Mumbai – 400051, India through its General Manager.
2. Kotak Mohindra Life Insurance Company Limited having its Branch Office at SCO No.141-142, Sector 9-C, Chandigarh through its Branch Manager.
3. Kotak Mohindra Prime Limited, having its Branch Office at Plot No.57, 6^th Floor, Phase I, Industrial Area, Chandigarh through its Branch Manager.

… Opposite Parties

CORAM :	SHRI PAWANJIT SINGH	PRESIDENT
	SHRI SURESH KUMAR SARDANA	MEMBER

 

                                                                               

ARGUED BY	:	Sh. Shiv Charan Bhola, Counsel for complainant
	:	Sh. Mrigank Sharma, Counsel for OPs 1 & 2
	:	Sh. Sukhbir Singh, Counsel for OP-3

 

Per Pawanjit Singh, President

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

1. It transpires from the allegations as projected in the consumer complaint that on 31.8.2020, husband of the complainant namely late Sh. Rajeev Kumar had purchased a car make Kia Seltos from Joshi Ventures Private Limited, Chandigarh by getting the same financed from OP-3, by taking loan of ₹9,10,732/-. At the time of purchase of the subject car, husband of the complainant was allured by the officials of OPs to purchase a health insurance policy and accordingly he purchased the same namely Kotak Complete Cover Group Plan (hereinafter referred to as “subject policy”) by paying single premium of ₹5,381/- covering the risk of ₹4.00 lacs.  At the time of receiving the premium, except the certificate of insurance (Annexure C-1), no other document was issued to the husband of the complainant by the OPs.  Unfortunately, husband of the complainant died on 26.12.2020 and immediately a claim was lodged by the complainant, being his nominee, with OPs 1 & 2.  It was assured to the complainant that the claim amount will be paid to her within a period of one month by the OPs.  However, the complainant was shocked to receive repudiation letter dated 19.7.2021 (Annexure C-3) from OPs 1 & 2 declining the claim on the ground that the insured had declared that he had never suffered from any serious disease. The complainant approached the office of OP-2 at Chandigarh several times with the request to clear her genuine claim, but, with no result, rather the OPs started hurling threats to the complainant that they will take forcible possession of her car in default of loan payment. As per the terms & conditions of insurance policy issued by OP-2, OPs were fully liable to reimburse the whole claim amount on account of death of the insured/husband of the complainant and as they have wrongly repudiated the claim of the complainant, the same amounts to deficiency in service and unfair trade practice on their part. 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 separate written versions.
3. In their written version, OPs 1 & 2, inter alia, took preliminary objections of maintainability and cause of action.  It is admitted that the answering OPs had entered into a contract of insurance under the group policy and as per the subject policy, a group of members, as specified by the policyholder, availing any loan from the policyholder for specific purposes, as specified in the schedule of the policy contract, may be covered by the answering OPs for the period and the amount as specified in the certificate of insurance.  It is further alleged that member has to provide a duly signed declaration of good health thereby assuring the insurer that the member is medically fit for availing the said insurance cover and in the form provided to the insured late Sh.Rajeev Kumar, he had given declaration that he is medically fit to avail the said policy and was not suffering from any ailments/diseases and intended to be covered under the group insurance policy in question.  However, later on, when it was found that the deceased/insured had deliberately failed to disclose that he was suffering from coronary artery disease, diabetes and hypertension prior to obtaining the subject policy and he passed away within three months and 25 days of the commencement of the life cover, the claim was of the complainant was rightly repudiated.  On merits, the facts as stated in the preliminary objections have been reiterated. The cause of action set up by the complainant is denied.  The consumer complaint is sought to be contested.
4. In its written version OP-3, inter alia, took preliminary objections of maintainability, cause of action and concealment of facts. On merits, denied that the answering OP allured the insured to purchase the health insurance policy from OPs 1 & 2, rather it was exclusively the contract between the complainant and OPs 1 & 2.  It is further alleged that the complainant has no cause of action against the answering OP. The cause of action set up by the complainant is denied.  The consumer complaint is sought to be contested.
5. The complainant chose not to file rejoinder.

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. At the very outset, it may be observed that when it is an admitted case of the parties that the deceased Sh.Rajeev Kumar (husband of the complainant) had purchased a car by getting the same financed from OP-3 and at that time he also purchased a health insurance policy (Annexure C-1) from OP-3  by becoming member under the Master policy, by paying one time premium of ₹5,381/- with sum assured of ₹4.00 lacs, as is also evident from copy of subject policy (Annexure C-1) which was valid w.e.f 8.11.2020 to 9.1.2025 and the insured had died on 26.12.2020, the case is reduced to a narrow compass as it is to be determined if OPs 1 & 2 are unjustified in repudiating the claim of the complainant on the ground that the deceased/insured had concealed material facts at the time of purchasing the subject policy and the complainant is entitled for the reliefs prayed for in the consumer complaint, as is the case of the complainant, or if OPs 1 & 2 are justified in repudiating the claim of the complainant and the consumer complaint of the complainant is liable to be dismissed, as is the defence of the OPs.
   2. In the backdrop of the foregoing admitted and disputed facts on record, one thing is clear that the entire case of the parties is revolving around the terms and conditions of the subject policy as well as the medical record of the deceased, having been relied upon by the parties.
   3. Perusal of the subject policy (Annexure C-1) clearly indicates that the same had covered the insured to the tune of ₹4.00 lacs and the same was valid w.e.f 8.11.2020 to 9.1.2025. Member form cum declaration of good health (Annexure R-1), having been relied upon by the OPs, clearly indicates that the insured had made declaration of good health at the time of purchase of the policy qua high blood pressure, diabetes, lung disease etc. Annexure R-2 is the policy schedule which describes the benefits under the policy including that upon death of the Member during Cover Term while the cover for the concerned Member is in force, Insured Benefit shall be payable and the said benefit shall be payable in lump sum and the cover shall cease.  Not only this, clause 1(c) clearly shows no riders are available under the policy and in case of death due to suicide within 12 months from the date of commencement of risk, the nomine or beneficiary of the policyholder shall be entitled to 80% of the total premium paid till the date of death or the surrender value available as on the date of death.
   4. Thus, one thing is clear from the terms & conditions of the subject policy that the insured benefits are made available in case of death of the member during the cover term and further when it is an admitted case of the parties that the subject policy was valid at the time of death of the insured, the claim of the complainant was very much covered under the policy on account of death of the insured (deceased husband of the complainant).
   5. OPs have resisted the claim of the complainant on the sole ground that in his declaration the deceased/ insured had concealed the factum of pre-existing disease like hypertension, diabetes and coronary artery disease.
   6. Annexure C-2 (Colly.) are the copies of death certificate and medical certificate of cause of death which clearly mentions the cause of death as under :-

“(a)  VENTRICULAR ARRHYTHMLA due to (or as a consequences of)

RERACTORY CARDIOGENIC SHOCK.

(b)    ACUTE CORONARY SYNDROME due to (or as a consequences of)

(c)    TYPE II DIABETES MELLITUS

HYPERTENSION

DYSLIPIDEMIA”

7. It has been contended on behalf of the OPs that as it has already been held by the various Courts that where the insured has concealed material facts qua his/her pre-existing disease and has given false declaration before purchasing the subject policy, liability of the insurer cannot be fixed.
8. On the other hand, it has been contended on behalf of the complainant that it has been held by the Hon’ble Apex Court as well as the Hon’ble National Commission that it was for the insurer to produce cogent evidence to prove the allegation that the insured suppressed facts relating to his/her illness. In this regard, reliance has been placed on the judgment in the case of P. Vankat Naidu Vs. Life Insurance Corporation of India & Anr., IV (2011) CPJ 6 (SC) and the relevant paragraphs of the same are reproduced below for ready reference :-

"6. We have heard learned counsel for the parties and carefully perused the record. In our view, the finding recorded by the District Forum and the State Commission that the respondents had failed to prove that the deceased has suppressed information relating to his illness was based on correct appreciation of the oral and documentary evidence produced by the parties and the National Commission committed serious illegality by upsetting the said findings on a wholly unfounded assumption that the deceased has suppressed information relating to hospitalization and treatment.

7. Since the respondents had come out with the case that the deceased did not disclose correct facts relating to his illness, it was for them to produce cogent evidence to prove the allegation. However, as found by the District Forum and the State Commission, the respondents did not produce any tangible evidence to prove that the deceased had withheld information about his hospitalization and treatment. Therefore, the National Commission was not justified in interfering with the concurrent finding recorded by the District Forum and the State Commission by making a wild guesswork that the deceased had suppressed the facts relating to his illness."

9. There is force in the contention on behalf of the complainant.  Otherwise also, it has been held by the Hon’ble State Commission, Delhi, in the case titled S.S. Jaspal Vs. National Insurance Co. Ltd. & Ors., IV (2022) CPJ 26 (Del.) as under :-

“Consumer Protection Act, 1986 - Sections 2(1)(g), 14(1)(d), 15 - Insurance (Mediclaim) -Angioplasty and Stenting - Suppression of pre-existing disease alleged - Repudiation of claim Deficiency in service - District Forum dismissed Complaint - Hence Appeal - Complainant experienced pain in chest and remained admitted in Hospital from 24.6.2004 to 30.6.2004, where he had undergone Angioplasty and Stenting, by incurring Rs.3,20,126 on treatment - Previous medical history is based upon information provided by family of patient - Respondents failed to show any evidence regarding pre-existing disease suffered by insured at time of getting policy - Common lifestyle disease like diabetes and hypertension, cannot be treated as pre existing diseases and cannot be a ground of repudiation of claim by Insurance companies - Respondents failed to show any evidence that any medical tests or examination was done, before issuing said policy in question - Respondents are directed to pay a sum of Rs.3,20,126 (Cost of Medical Expenses) to Appellant along with interest @ 6% p.a.”

10. Similarly, the Hon’ble National Commission in the case titled Sunil Kumar Sharma v. Tata AIG Life Insurance Company and Ors., Revision Petition No.3557 of 2013 decided on 1.3.2021, while dealing with the issue of pre-existing disease, has held as under:-

“10.   We further deem it appropriate to refer to Revision Petition No.3557 of 2013 titled as Sunil Kumar Sharma vs. TATA AIG Life Insurance Company and Ors., decided on 01.03.2021, wherein the Hon’ble National Commission has dealt the issue of pre existing disease and held as follows:

“14.   Moreover the claim had been repudiated only on the ground that the insured was suffering from diabetes for a long time. So far as life style diseases like diabetes and high blood pressure are concerned, Hon'ble High Court of Delhi in Hari Om Agarwal Vs. Oriental Insurance Co. Ltd., W.P.(C) No.656 of 2007, decided on 17.09.2007 held as under:

"Insurance – Mediclaim -Reimbursement-Present Petition filed for appropriate directions to respondent to reimburse
expenses incurred by him for his medical treatment, in accordance with policy of insurance - Held, there is no dispute that diabetes was a condition at time of submission of proposal, so was hyper tension - Petitioner was advised to undergo ECG, which he did - Insurer accepted proposal and issued cover note. It is universally known that hypertension and diabetes can lead to a host of ailments, such as stroke, cardiac disease, renal failure, liver complications depending upon varied factors. That implies that there is probability of such ailments, equally they can arise in non-diabetics or those without hypertension. It would be apparent that giving a textual effect to Clause 4.1 of policy would in most such cases render mediclaim cover meaningless. Policy would be reduced to a contract with no content, in event of happening of contingency. Therefore Clause 4.1 of policy cannot be allowed to override insurer's primary liability. Main purpose rule would have to be pressed into service. Insurer renewed policy after petitioner underwent CABG procedure. Therefore refusal by insurer to process and reimburse petitioner's claim is arbitrary and unreasonable. As a state agency, it has to set standards of model behaviour; its attitude here has displayed a contrary tendency. Therefore direction issued to respondent to process petitioner's claim, and ensure that he is reimbursed for procedure undergone by him according to claim lodged with it, within six weeks and petition allowed."

15. In RP No.4461 of 2012, Neelam Chopra v. Life Insurance Corporation of India & Ors., decided on 08.10.2018, (NC), it
was held that:

"11. From the above, it is clear that the insurance claim cannot be denied on the ground of these life style diseases that are so common. However, it does not give any right to the person insured to suppress information in respect of such diseases. The person insured may suffer consequences in terms of the reduced claims.

14. Moreover, the non-disclosure of information in respect of this life style disease of diabetes, will not totally disentitle the complainant for indemnification of the claim in the light of the judgment of Hon'ble High Court of Delhi in Hari Om Agarwal v. Oriental Insurance Co. Ltd., (supra)."

16. Based on the above discussion, I am of the opinion that the Insurance Company had not been able to prove beyond doubt that the Complainant was suffering from diabetes before filing of the proposal form. It is also to be noted that the Insurance Company had given Insurance to a person of 66 years of age without any preliminary medical examination which could have definitely revealed whether the proposer was suffering from diabetes or not. It is commonly known that a person of 66 years of age has a high probability of suffering from common lifestyle diseases like diabetes and hypertension. If the company is ready to take the risk at this age of the proposer, without any preliminary medical examination, then the company should be ready to honour the claim also because the chances of death of such persons are more during the currency of the Policy.”

11. Moreover, when it has come on record that the deceased/insured was never admitted or treated prior to purchasing of the subject insurance policy for the aforesaid diseases and at the same time OPs 1 & 2 have not produced any tangible evidence to prove that he had withheld information about his hospitalisation and treatment, and it was for them to produce cogent evidence to prove the allegation, it is safe to hold that the deceased had not withheld information of such diseases which were otherwise required to be disclosed except that he was suffering from hypertension and diabetes which are otherwise held to be common lifestyle diseases.
12. In view of the foregoing and the ratio of law laid down in the aforesaid judgments, it is safe to hold that OPs 1 & 2 were unjustified in repudiating the claim of the complainant and said act amounts to deficiency in service on their part and, therefore, the present consumer complaint deserves to succeed qua OPs 1 & 2.
13. Now coming to the quantum of relief to be awarded to the complainant, Annexure R-1 (Colly.) specifically says that liability of the insurer w.e.f. 30.11.2020 to 30.12.2020 was ₹3,87,750/- and admittedly since the deceased/insured had died on 26.12.2020, it is safe to hold that OPs 1 & 2 are liable to pay the said amount to the complainant alongwith interest and compensation etc. for the harassment suffered by her.

4. In the light of the aforesaid discussion, the present consumer complaint succeeds, the same is hereby partly allowed and OPs 1 & 2 are directed as under :-

1. to pay ₹3,87,750/- to the complainant alongwith interest @ 9% per annum from the date of repudiation of the claim i.e. 19.7.2021, till realization of the same.  
2. to pay an amount of ₹20,000/- 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.

However, it is made clear that the financier (OP-3) shall have first charge over the aforesaid awarded amount, to the extent the same is due to be paid by the complainant towards the discharge of loan liability, if any, of the deceased/insured.

5. This order be complied with by OPs 1 & 2 within thirty days from the date of receipt of its certified copy, failing which, they 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. The consumer complaint against OP-3 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 03/07/2023 hg			Sd/- [Pawanjit Singh] President
			Sd/- [Suresh Kumar Sardana] Member