Order on M.A. 146/2022

PER : Hon. Ms. PREETHI CHAMIKUTTY, Member

1.               Present application is filed by Complainant adopting all averments made in main complaint. The subject matter is a Life Insurance Policy from Opposite Party No.1 (O.P.1) given for Loan Account No. L900106020309726 for period 03.03.2020 till 02.02.2023 for premium Rs.24,942/- for sum assured Rs.13 lakh. Complainant is widow of deceased Deepak J. Mistry, and has filed present complaint as legal heir and also nominee/beneficiary of deceased husband Mr. Deepak J. Mistry. Mr. Deepak Mistry passed away on 15.08.2020, after which Complainant filed the claim with O.P.1 under the said policy, however the said policy was rejected by O.P.1 on 02.12.2020 on grounds of not disclosing pre-existing medical condition. Though Complainant has still not received the claim repudiation letter dt. 02.12.2020, an officer of O.P.1 communicated the same to her through Whatsapp on 17.02.2021. Thereafter Complainant sent a legal notice to O.P.1 on 12.03.2021, and in their reply dt. 24.03.2021, O.P.1 reiterated the same excuse for repudiation.

2.             Complainant’s husband(hereinafter referred to as ‘Insured’) had applied for loan sanctioned by O.P.2, who practically forced Insured to avail the policy, by refusing to disburse loan amount unless insured availed the policy, and he was left with no choice by O.P.2. Further repudiation letter dt. 02.12.2020 was not sent to Complainant but copy of the same was sent only through Whatsapp on 17.02.2021, therefore Complainant states that both O.P.1 & 2 are hand in glove since inception. Complainant states she was present when Insured was made to apply for the insurance policy, and officer of O.P.2 had obtained signature of Insured while assuring him that he will fill in all the appropriate details. O.P.2 had posed several questions to Insured and he had informed them about Diabetes and Hypertension, whereupon he was informed that he will have to undergo several medical tests, and accordingly Insured had undergone those medical tests, and the said insurance policy was issued only after examining the reports of such medical tests. Complainant says that the custody of medical reports are also with either O.P.1 or O.P.2.

3.                 Complainant denies any deliberate suppression by Insured of material facts about his health. She says that she was dependant on Insured for her bread-butter and financial needs, and now has been made to suffer such huge financial burden, apart from emotional trauma because of such sudden demise of insured. Further the claim of Insured is rejected on such false and frivolous grounds, and O.P. is even forcing Complainant to pay the loan installments while threatening adverse action. Complainant states she has received demand notice dt. 20.04.2021 from O.P.2 thereby leading to aggravation of financial crisis. Complainant prays for directions that O.P.2 should not demand Complainant in any manner to pay any installments, penalty or charges towards loan account no. 190010607720309726, and for ad-interim reliefs and further orders.

4.                 Despite successful service of notice, O.P.1 have failed to appear in the complaint, and matter has proceeded ex-parte against them. O.P.2 have adopted the contents of their written statement in reply to this application moved by Complainant, as their oral arguments. It is the case of Complainant that O.P.2 has sold them the insurance policy of O.P.1 as they have taken a group insurance from O.P.1, which was forced upon Complainants, as O.P.2 had threatened not to disburse their loan until such insurance policy was purchased and accordingly Complainants had made the purchase. Further when Insured passed away at that time when Complainants filed a claim which was repudiated on the grounds of pre-existing medical condition. From the documents on record it can be seen that policy effective dt. is 03.02.2020, and loan sanction letter is dt. 30.01.2020, seeing the dates of these two documents, it can be seen that both have been issued within few days of each other, and hence we opine there is substance to Complainant’s averment that the Insurance policy was taken by them due to insistence of O.P.2. Further in charges applicable mentioned in terms & conditions of Sanctioned Loan Facility, it can be seen that O.P.2 have collected life insurance charges of Rs.24,943/-.

5.                    The documents relied upon by O.P.2 in their written statement, show that loan has been disbursed to Royalty Industries, through Deepak Mistry as Borrower and Complainant herein as Co-Borrower. Therefore we cannot completely agree with Complainant that she was dependant on Insured for her bred-butter and financial needs. Complainant being the Co-Borrower has executed all documents of her part and liability independently and with complete knowledge about the same. And from the documents relied upon by O.P.2 it can be understood that relationship of Complainant and O.P.2 with respect to the loan transaction is that of a Borrower and lender, and not that of a Consumer and Service Provider. Therefore we opine that actions taken by O.P.2 with respect to the loan transaction is outside the scope of Consumer Protection Act and cannot lie before this Commission. Be that as it may, in respect to the sale of Life Insurance Policy of O.P.1, we opine that O.P.2 has acted on their behalf and forced Complainant to purchase the policy alongwith the loan transaction, and therefore O.P.2 would also be liable with respect to the Life Insurance policy that has been sold to Complainant by them. Further clause 4.9 in Loan Agreement which discusses the Insurance aspect in detail also gives certain rights and permission to O.P.2 in respect of collection of insurance premium, therefore we opine that O.P.2 would also be answerable in present complaint which relates to repudiation of an insurance claim. In their Written Statement also O.P.2 has not denied the fact that the life insurance policy in dispute has been given to Complainant by them, while O.P.2 has attempted to highlight that Complainant could have chosen ‘any insurance company’ that does not change the fact that, very conveniently O.P.2 gave Complainant the life insurance policy in question and also ensured that they collect Rs.24,943/- towards the policy premium charges.

6.             Complainant has prayed for directions to O.P.2 for not charging any penalty, installment or charges towards loan account No. 190010607720309726, however as stated above as there is no relationship of Consumer and Service Provider between Complainant and O.P.2, we cannot give them such directions. But being the party who sold the said life insurance policy to Complainant, they are answerable to the question of repudiation, which is the subject matter of this dispute.  Under the circumstances, we pass the following order :

                                                                                    ORDER

             1)     M.A./146/2022 is partly allowed

2)        O.P.2 may consider not taking any coercive steps against Complainant, until the question of liability of the life insurance policy in dispute in complaint is decided. We make it clear that this order is not with reference to the loan transaction, but only in respect to the life insurance policy transaction.

3)       Present application is disposed off.

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