Versus
- PNB Metlife Insurance Company Ltd., First Floor, Lodhi Tower, Ludhiana, through its Branch Manager.
- J&K Bank Ltd., Old Sabji Mandi, G.T. Road, Khanna, Distt. Ludhiana through its Branch Manager. …..Opposite party
Complaint under Section 35 of Consumer Protect Act.
QUORUM:
SH. SANJEEV BATRA, PRESIDENT
MS. MONIKA BHAGAT, MEMBER
COUNSEL FOR THE PARTIES:
For complainant : Sh. Vishal Kumar Dua, Advocate.
For OP1 : Sh. Anmol Jindal, Advocate.
For OP2 : Complaint against OP2 not admitted vide order dated 10.11.2022
ORDER
PER SANJEEV BATRA, PRESIDENT
1. Shorn of unnecessary details, the facts of the case are that Late Sh. Raj Kumar (hereinafter called as DLA), husband of the complainant availed loan of Rs.6,00,000/- from OP2 against EMI of Rs.11,000/- per month. The deceased paid Rs.2,00,000/- in installment to OP2 and at that time he was also insured by OP1 vide policy No.23419799. According to the complainant, deceased Raj Kumar was working in Municipal Council Khanna as Seawerman and he never taken any leave since three years as per letter No.1062 dated 07.08.2022 issued from the office of MC Khanna. The complainant stated that unfortunately, Raj Kumar died on 18.02.2022 and thereafter, she filed claim from the OPs but the OPs instead of paying her claim, rejected the claim vide letter dated 30.04.2022 and even pressurized her to get cleared the loan amount dues. Whereas the loan of deceased Raj Kumar was covered with OP1 insurance company. The complainant claimed to have suffered great pain, agony and undue harassment due to illegal acts on the part of the OPs for which she is entitled to compensation of Rs.2,00,000/-. In the end, the complainant prayed for issuing direction to the OPs to pass the policy claim and to release the claim amount by exempting to recover the loan amount due from her. She also prayed for granting compensation of Rs.2,00,000/-.
2. The complaint as against OP2 was not admitted vide order dated 10.1.2022.
3. Upon notice, OP1 appeared and filed written statement and assailed the complaint by taking preliminary objections on the grounds of maintainability; the complaint being misconceived and devoid of any merits; lack of cause of action; concealment of material fasts; OP1 has been unnecessary dragged in this complaint etc. OP1 stated that on the basis of the information given in Proposal Form/Application Form no. 821543726, insurance coverage certificate bearing no. 23419799 under the PNB MetLife Loan & Life Suraksha Certificate of Insurance Policy bearing no.00000617 was issued by them to The Jammu & Kashmir Bank Ltd (Group Policy Holder), Branch JKC-Khanna-Upper North, Khanna for loan account number Personal Loan 0376265300000959 availed by Raj Kumar son of Sham Lal. OP1 further stated that the coverage shall be subject to the salient terms, conditions and exceptions as outlined in the Certificate of Insurance and detailed under the Group Policy. Further in case Policyholder/Insured member is not satisfied with the features or the terms and conditions of the policy/coverage he can withdraw/return the policy within 15 days i.e. under the "Free Look period" provision. The Insured Member has a period of 15 days from the date of receipt of the Certificate of Insurance to review the terms and conditions of the Insurance Coverage and further if the insured member has any objections to any of the terms and conditions, then he/she has the option to return the Certificate of Insurance stating the reasons for the objections and the company shall be entitled to a refund of the premium paid subject to only a deduction of stamp duty charges and expenses towards medical examination. Moreover, all rights of the member under this policy shall immediately stand extinguished at the cancellation of the Certificate of Insurance. OP1 further stated that since the information provided by insured in the proposal application form was established to be incorrect by it and as such, OP1 was well within its right to repudiate the claim of the Complainant. According to OP1, it has acted within the four corners of the statutory provisions, therefore, the present complaint is liable to be dismissed.
OP1 further stated that the claim was investigated under section 45 of the Insurance Act, 1956 to verify the veracity of the claim. During the investigation & claim evaluation process it was found that the DLA at the time of filling up the proposal form, did not disclose the correct information about his health & life style. It is relevant to mention here that Late Raj Kumar (DLA) has concealed the fact of consumption of liquor despite the specific question asked on the Page 1, Section 4 Health & Life Style in the application form seeking the insurance cover under the policy was answered "No" by the deceased. Even as per investigation report, the deceased was suffering from Diabetes Mellitus (k/c/o T2DM), chronic alcoholic, Chronic smoker & Chronic Liver Disease (CLD) too. Thus, based on abovementioned observations, it clearly reflects that these material details affecting the decision of the Insurer for the acceptance or rejection of the contract of insurance were willfully suppressed by the DLA as the same was not disclosed by him in the Proposal Form at the time of availing the said Policy, in spite of specific questions in the Proposal Form. Hence the claim dated 24.03.2022 of the complainant was rightly repudiated and same was informed to the Complainant vide letter dated 30.04.2022. According to OP1, the DLA has taken the policy with malafide intention, knowing fully aware that he is not keeping good health, but despite that he did not disclosed the said facts to OP1 which clearly shows that the policy in question has been taken only to play fraud, cheat and to gain wrongfully from it. Even the complicated question of law and facts are involved in the present case which required detailed evidence which is not possible in summary proceedings before this Commission and only the Civil Court has jurisdiction to try and decide the present complaint.
On merits, OP1 reiterated the crux of averments made in column brief facts of the case. OP1 has denied that there is any deficiency of service and has also prayed for dismissal of the complaint.
3. In evidence, the complainant tendered her affidavit as Ex. CA and reiterated the averments of the complaint. The complainant also placed on record documents i.e. Ex. C1 is the copy of proposal form, Ex C2 is the copy of death certificate of Raj Kumar, Ex. C3 is the copy of ID card of Raj Kumar issued by Municipal Council, Khanna, Ex. C4 is the copy of Aadhar Card of Raj Kumar, Ex. C5 is the copy of statement of the complainant dated 02.04.2022, Ex. C6 is the copy of KYC Verification Form, Ex. C7 is the copy of certificate issued by Municipal Council, Khanna, Ex. C8 is the copy of account statement w.e.f. 09.03.2022 to 29.07.2022 of J&K Bank, Ex. C9 is the copy of Aadhar Card of the complainant, Ex. C10 is the copy of Voter ID Card of the complainant, Ex. C11 is the copy of passbook of the complainant with J&K Bank, Ex. C12 is the copy of letter dated 02.07.2022 of the OP1, Ex. C13 is the copy of rejection letter dated 30.04.2022 and closed the evidence.
4. On the other hand, the counsel for OP1 tendered affidavit Ex. RA of Sh. Sanchit Gupta, Manager, Legal of OP branch at Gurugram along with documents i.e. Ex. OP1/1 is the copy of proposal form, Ex. OP1/2 is the copy of insurance policy, Ex. OP1/3 is the copy of investigation report dated 06.04.2022, Ex. OP1/4 is the copy of Simplified Claim Form, Ex. OP1/5 is the copy of rejection letter dated 30.04.2022 and closed the evidence.
5. We have heard the arguments of the counsel for the parties and also gone through the complaint, affidavit and annexed documents as well as written statement, affidavit and documents produced on record by both parties. We have also gone through written arguments submitted by OP1.
6. Admittedly, Sh. Raj Kumar, husband of the complainant obtained personal loan of Rs.6,00,000/- from Jammu and Kashmir Bank, branch Khanna and in order to secure the said loan, Sh. Raj Kumar DLA by submitting proposal form Ex. C1, obtained PNB MetLife Loan & Life Suraksha Certificate of Insurance (Decreasing Cover) No.23419799 in Group Policy No.00000617 (Ex. OP1/2) issued by OP1 to the Group Policy Holder i.e. OP2 The Jammu & Kashmir Bank Ltd. The validity of the said policy cover was w.e.f. 26.08.2020 to 26.08.2027 on payment of single premium of Rs.18,267/- along with taxes of Rs.2841.48. The complainant has been shown as nominee in the said policy cover to the extent of 100% proportion of benefit. Annexure-1 is the schedule of outstanding loan amount in relation to coverage period depicted in months. Also there is a note appended at the end of schedule which reads as under:-
- “The death benefit payable under this policy shall be applied firstly to offset any Outstanding Loan Amount of the Insured Member(s) to the Group Policy holder. Where the actual Outstanding Loan amount on the date of death of the Insured Member is less than the Scheduled Outstanding Loan Amount the difference between the Scheduled Outstanding Loan Amount and the actual Outstanding Loan Amount shall be paid by the Group Policy Holder to the nominee/legal heir of the Insured Member.
- The surrender value is payable in the event of the Insured member prepaying fully the outstanding amount of the loan covered under the policy or in the event of the Group Policy Holder cancelling the Group Policy under circumstances such as winding up or any other form of corporate restructuring.
- The Scheduled Loan Amount during the first month is equal to the initial coverage amount.”
Unfortunately, the insured Sh. Raj Kumar died on 18.02.2022. The complainant preferred death claim with OP1 vide Simplified Claim Form Ex. OP1/4. OP1 appointed Lancers Network Limited to investigate into the matter who vide its report dated 06.04.2022 Ex. OP1/3 in which the Investigator Mr. Prabhjot Singh Bedi made the following observations:-
“Based on the information gathered during investigation it has been confirmed about LA being resident of the area and residing along with his family. He was working as sewer man at Municipal Council Khanna. During discreet check in the vicinity of the residence address, it has been found that the area is Balmiki community dominated area. Though the locals are confirming LA being unhealthy since approx. 2 years and undergoing treatment for his sufferings but most of them are reluctant to provide details about his sufferings or treating doctors/hospitals. Some of the locals confirmed LA being healthy and never having suffered from any chronic disease or having undergone treatment anywhere. Some of the hospitals around the area have been searched but the record keepers ongoing through their records, confirmed of not having any entry with details of LA in the hospital IP records.
A visit has been initiated to Municipal Council Khanna in order to get the employer details but the office clerk confirmed that the employer details can be shared with the family only.
On visit to Rajendra Hospital Patiala, the record keeper asked to submit application for the requirement and re-visit after one week for details. Application has been submitted and details shall be shared on getting from the authority.”
The said investigator Sh. Prabhjot Singh Bedi also annexed his affidavit along with his report and in para No.6 of his affidavit, the investigator deposed that during investigation it has been confirmed about Life Assured working as sewer man at Municipal Council Khanna. Some of the locals verbally confirmed Life Assured confirmed his suffering from liver problems since approx. 2 years but for further details, they asked to meet the family. But the family is confirming on Life Assured being healthy and never having suffered from any chronic disease or having undergone treatment anywhere. On the basis of said investigation report, OP1 rejected the claim vide letter dated 30.04.2022 Ex. C13 = Ex. OP1/5, the operative part of same reads as under:-
“This is with reference to the claim made under the above- mentioned policy on the life of Late Mr. Raj Kumar.
We have reviewed and evaluated the claim and wish to bring to your attention that, during reviewing the claim, we have received medical records which indicate that Late Mr. Raj Kumar was suffering from chronic alcoholism before the policy was issued. However, the concerned question in the application form dated 26/08/2020, seeking insurance cover under this policy was answered as “No” by Late Mr. Raj Kumar.
We want to state that if aforesaid mentioned facts had been correctly disclosed to us in the application form, we would not have issued the policy at all.
As you may be aware, Insurance contracts are based on the principle of “utmost good faith” and the policies are issued based on the representations made in the application form and any non-disclosure or misrepresentation in the application form, which are essential for providing the risk cover, makes a contract invalid at the insurer’s choice.
Therefore, through this letter, we regret to inform you that we cannot accept any responsibility for the above claim due to non-disclosure of essential facts as per the terms and conditions of the insurance policy as highlighted above.”
7. Now the question arise whether the rejection of claim on the ground mentioned therein is valid or not?
8. The rejection of the claim of the complainant was effected by OP1 by invoking the reason that the DLA had not disclosed about the pre-existing disease of Diabetes Mellitus (k/c/o T2DM), chronic alcoholic, Chronic smoker & Chronic Liver Disease (CLD) prior to obtaining the insurance policy. In the proposal form Ex. C1 = Ex. OP1/1 under the column No.4 Health & Lifestyle Particulars, the DLA has answered all the questions in ‘Negative’, which is reproduced as under:-
“4.1 Height 5 ft 3 inches, 60 Kgs.
4.2. Do you currently smoke or used to smoke more than 10 cigarattes per day/beedes/5 pouches of gukta or chewable tobacco per day. NO.
4.3 Do you consume or used to consume any form of alcohol/liquor exceeding 90ml or 3 pegs of hard liquor or 2 glasses of beer/wine per day? NO
4.4 Do you consume Narcotic substance or Addictive drugs.
NO
The claim of the complainant is sought to be rejected on the ground that the DLA was suffering from chronic alcoholism prior to issuance of the insurance policy. This fact has been also mentioned in their written statement by OP1. It is a matter of common knowledge that as a normal practice the form is filled by the insurance agent. In addition to this, despite being of age of about 51 years at the time of issuance of the policy, the DLA Raj Kumar was not got medically examined and moreover, the insurance company may have additional questions for the insured or may ask him to undergo medical tests to complete full medical assessment. No evidence has been lead by OP1 as to whether any additional questions were put to the complainant or not nor any evidence has been adduced that the complainant was subjected to some medical tests at the time of issuance of the policy on 3108.2020. Even no medical opinion of any medical expert has been produced on record by OP1.
9. OP1 has mainly based the grounds of repudiation of the claim of the complainant on the ground of report of investigator Ex. OP1/3 in which the investigator has only expressed his view on the basis of information gathered from some neighbours of the DLA. Although some neighbours stated that DLA was not having any health issues and was healthy at the time of his death. Further the investigator visited nearby hospitals but he was unable to conclude that the patient had actually cured or not. The investigation report does not mention the fact that the DLA was under treatment for such diseases at the time of obtaining the policy. Even the affidavit submitted by the investigator does not prove this fact that the DLA was actually suffering from liver problems since approximately 2 years. The report of the investigator is vague, inconclusive and incoherent and cannot be made basis to deny the otherwise a genuine claim. As per Claim form Ex. OP1/4 the reason of death of DLA was mentioned as ‘Cardio Pulmonary’ on 18.02.2022 at Rajendra Hospital, Patiala. Therefore, the alleged pre-existing medical condition of Diabetes Mellitus (k/c/o T2DM), chronic alcoholic, Chronic smoker etc. has no connection or nexus with Heart Attack. Therefore, the rejection of the claim on the ground that the DLA was suffering from any such pre-existing disease at the time of issuance of the policy. Reference can be made to Tarlok Chand Khanna Vs United India Insurance Co. Ltd. 2012(1) C.P.J. 84 whereby it has been held by Hon’ble National Consumer Disputes Redressal Commission, New Delhi that the onus to prove that the insured was suffering from pre-existing disease was on the insurer and if the insurer has not produced the expert opinion, the reasons for repudiation of the claim were held to be unjustified.
10. Further in a case titled as Manmohan Nanda Vs United India Assurance Co. Ltd. and others 2022(I) CPJ 20 (SC) wherein the Hon’ble Supreme Court of India has observed as under:-
“(6) The appellant’s argument that there is no hard and fast rule that every person with DM-II will necessarily have a cardiac disease merely because it is a risk factor holds water. A person who does not suffer from DM-II can also suffer from a cardiac ailment. He had disclosed his DM-II status for which he was under treatment. The ECG report and other tests also indicated normal parameters. Further, statins were a preventive prescription to prevent development of cardiac issues as DM-II is a risk factor, not because he had a cardiac ailment or hyperlipidaemia. Further, the examining physician was informed of the same before the policy was taken. Accordingly, there was no suppression of any material fact by the appellant to the insurer.
(7) It was for the insurer to gauge related complications based on the information provided. The insurance company did not think that the medical and health condition of the appellant was such which did not warrant issuance of a medical policy. The insurance company therefore did not decline the proposal of the assured as a prudent insurer.”
Therefore, in our considered view, the rejection of the claim on the basis of non-disclosure of pre-existing diseases could not have been made a ground to reject the claim and this ground cannot be sustained in the eyes of law. The insurance companies are required to be more liberal in their approach without being too technical. In the given set of above said facts and circumstances, it would be just and appropriate if OP1 are directed to settle and reimburse the death claim submitted by the complainant regarding death of DLA Sh. Raj Kumar within 30 days from the date of receipt of copy of order. OP1 is further burdened with composite costs of Rs.10,000/-.
11. As a result of above discussion, the complaint is partly allowed with an order that the complaint is partly allowed with an order that OP1 is directed to settle and reimburse the death claim submitted by the complainant regarding death of DLA Sh. Raj Kumar within 30 days from the date of receipt of copy of order. OP1 shall further pay a composite cost of Rs.10,000/- (Rupees Ten Thousand only) to the complainant. Payment of costs shall be made within a period of 30 days from the date of the receipt of the copy of this order. Copies of order be supplied to parties free of costs as per rules. File be indexed and consigned to record room.
12. Due to huge pendency of cases, the complaint could not be decided within statutory period.
(Monika Bhagat) (Sanjeev Batra) Member President
Announced in Open Commission.
Dated:16.12.2024.
Gobind Ram.
