ORDER

SRI.H.R. SRINIVAS.  PRESIDENT

1.     This is the Complaint filed by the Complainant against the Opposite Party (herein referred to as OP) under section 35 of the Consumer Protection Act 2019 for the deficiency in service in repudiating the insurance policy and for payment of Rs.3,00,000/- as compensation in respect of the policy along with interest at 24% per annum till the payment of entire amount and for such other reliefs as the Hon’ble District Commission deems fit.

2.     The brief facts of the complaint are that; complainant is the wife of deceased Uday Kumar. While Uday Kumar was alive, he obtained loan from Karnataka State Cooperative Bank Limited, Public Utility branch, MG road, Bangalore. At the time of availing the loan, he obtained the insurance policy for the benefit of death and PTD and he was assured a sum of Rs.3,00,000/- by paying the premium of Rs.389.40.

3.     The said Uday Kumar died due to COVID 19 on 24.09.2020 at Artyem Hospital, RR Nagar, BBMP, Bangalore, during subsistence of the insurance i.e. (23.04.2020 to 22.03.2021).  When the complainant after the death of her husband, made claim with OP, the same was rejected on the ground that it is accidental insurance and not a life insurance and hence she had to issue legal notice dated 25.11.2020 which was not replied and also complied. Hence the complaint.

4.     Upon the service of notice, OP appeared before the commission and filed the version, contended that,   the complaint is false, vexatious, frivolous and not maintainable in law or on facts and filed to harass the insurer. The insurance policy issued is subject to various terms and conditions exceptions limitations. The policy issued to the deceased was individual personal accident policy and not issued to meet the death contingency. The policy obtained by Karnataka State Cooperative Bank Ltd., for Individual Personal Accident Policy on behalf of the account holder.  Only accidental death is covered but not the health risk.  As the deceased died to COVID-19 the said death do not cover the said contingency and hence they are not liable to pay Rs.3,00,000/- or any amount claimed by the complainant and there is no deficiency and prayed the commission to dismiss the same.

5.     In order to prove the case, complainant filed her affidavit evidence and produced documents. Whereas, inspite of giving sufficient opportunity OP did not adduce any evidence. Arguments Heard. The following points arise for our consideration:-

1) Whether the complainant has proved deficiency in service on the part of the Opposite Party?

2) Whether the complainant is entitled to the relief prayed for in the complaint?

6.     Our answers to the above points are:-

POINT NO.1:            In the Affirmative

POINT NO.2:            Partly in the affirmative.

                                For the following.

REASONS

POINT No.1:-

7.     On perusing the complaint, version, documents, evidence filed by the both the parties, it becomes clear that, complainant’s husband was issued individual personal accident policy for Rs.3,00,000/-.  He died due to COVID-19 as per the death summary issued by Artyem Hospital.  Due to “Generalize weakness, cough had a bradicardia at 8:30 pm on 24.09.2020 CPR initiated as per AHA protocol or Rhythm.  Asystole definitive airways established. Despite the best efforts of the team the patient could not revived and was declared dead at 8:50 pm on 24.09.2020, Cause of death – COVID 19, Pneumonia ARDS Aspirational  Pneumonia, Cardio-Pulmonary Arrest.”

8.     As per Ex P2: “Accident means: sudden, unforeseen and involuntary event caused by external, visible and violent means. Injury means: Accidental physical bodily harm excluding illness or disease, solely and directly caused by external, violent and visible and evident means which is verified and certified by medical practitioner.” 

9.     However it is to be noted here the background of issuing insurance policy to the borrower of the loan. As per the IRDI rules and regulations the lendor cannot and shall not insist for the insurance of the borrower for its due security. Inspite of it, the lending bank/financial institution in various cases have a sister concern doing business in insurance and to augment the business mutually, provide business to each other and hence the lending bank insists the borrowers to purchase the insurance, so that the sister concern get the business. In a hurry to get the loan to meet the purpose, the borrower without seeking any explanation or clarification or and not knowing the terms and conditions of the insurance, not reading the contents of the policy i.e., going to be issued, and even not knowing that what type of insurance that the insurance company would/has provide/provided merely agreed to get the insurance without verifying the nature of the insurance given to him or her and the consequences thereof.  He/she is only interested in getting the loan released. The rosy picture given by the agents or officers of the insurance lures the borrower. Mainly the agents and the officers inform the borrower that in the event of death of the original borrower, the entire loan amount would be cleared from the insurance coverage, for which even the lending bank/financial institution provides loan to meet the exigencies of paying the insurance premium which they recover along with EMIs by adding the same to the principal amount. Believing the sweet words of the officer/agents the borrower and his legal representatives/heirs would be under the impression that in case any death is caused to the borrower the burden of discharging the loan would be taken care of by the insurance policy and believe that it is a policy issued for the life of the borrower.

10.   We have come across in so many cases including this case that the complainant and the borrower believed that it is a life insurance policy, whereas, the OPs have provided a accident policy. Even we have come across in many cases that the borrower was given Fire Peril Policy along with personal accidental policy, which according to us is a miss selling of the insurance by adopting, deceiving, decepting means, in order to attract the business of insurance without looking into the welfare and requirement of the policy holders.  The policy holders/borrowers were and usually under the impression that their life and the loan is secured by obtaining the insurance policy and in case of death happening to them, the policy would take care of the loan amount, which will not be a burden to his /her LRs. In view of this, we have to treat this selling of Ex.P2 the insurance policies termed as Individual Personal Accident Policy is a clear misleading and deceptive trade of the insurance company in selling the insurance policy under the guice that in the event of death happening to the borrower, the entire loan amount would be paid by the insurance company.

11.   Having sold the said insurance policy by misrepresenting or in our view misleading and not informing the insured as well as his family members, OPs have adopted dubious method of selling the insurance policy thereby practicing unfair trade practice.  Hence even if the policy Ex.P2 is termed as Individual Personal Accident policy, under the circumstance in which the said policy is sold, has to be considered as Life Insurance policy and hence even though the husband of the complainant died due to COVID -19, we are of the firm view that the same covers under the deemed life insurance policy.  Hence repudiation of the claim of the complainant amounts to unfair trade practice, misrepresentation, misselling the insurance policy and denying the claim of the complainant on the ground that the death of the complainant’s husband is out of the purview of the terms and conditions of the policy issued, amounts to deficiency in service.

12.   OPs have not at all placed any material documents to show that the complainant’s husband has opted for group accident policy.  If at all he had opted for the same, OP ought to have produced the proposal form duly signed by him to establish that the sale of the insurance policy to the husband of the complainant under personal accident is not a mis-selling or under misguidance, whereas, it is insided issue by of the insurer. Hence we answer POINT NO.1 IN THE AFFIRMATIVE.

POINT NO.2:

13.   In the result since the death of the complainant’s husband took place on 24.09.2020 which is within the policy coverage period and the sum assured is Rs.3,00,000/- and the claim has been made by the legal heir/wife of the deceased, for the said amount, OP is bound to pay the said amount along with interest at 12% per annum, from the date of the death of the complainant i.e., 24.09.2020 till payment of the entire amount.  Further act of OPs made the complainant to suffer physically, mentally and financially that to when her husband had died which added fuel to the fire. Hence we direct OPs to pay a sum of Rs.50,000/- as compensation for the sufferance caused by the OPs and Rs.5,000/- towards litigation expenses.   Hence we answer POINT NO.2 PARTLY IN THE AFFIRMATIVE and pass the following:

ORDER

1. The complaint is partly allowed with cost.
2. OPs i.e. “M/s. IFFCO TOKIO GENERAL INSURANCE COMPANY LIMITED” jointly and severally represented by its Authorized officer /Authorized Signatory are hereby directed to pay a sum of Rs.3,00,000/- to the complainant along with interest at 12% per annum from the date of death of husband of the complainant i.e. on 24.09.2020 till payment of the entire amount.
3. Further OPs are also jointly and severally directed to pay Rs.50,000/- towards damages for causing mental agony, physical hardship and financial loss to the complainant and Rs.5,000/- towards the litigation expenses to the complainant.
4. OPs are hereby directed to comply the above order within 30 days from the date of receipt of this order and submit the compliance report to this Commission within 15 days thereafter.
5. Send a copy of this order to both parties free of cost.

Note: You are hereby directed to take back the extra copies of the Complaints/version, documents and records filed by you within one month from the date of receipt of this order.

(Dictated to the Stenographer over the computer, typed by him, corrected and then pronounced by us in the Open Commission on this day the 29^th day of MARCH 2022)

MEMBER         MEMBER       PRESIDENT

ANNEXURES

1. Witness examined on behalf of the Complainant/s by way of affidavit:

Copies of Documents produced on behalf of Complainant/s:

Ex P1: Copy of the Aadhaar Card.

Ex P2: Copy of the Tax invoice

Ex. P3: Copy of the  death summary

Ex P4: Copy of the Consent letter for admitting to ICU.

Ex P5: Copy of the Hospital records.

Ex P6: Copy of the death certificate.

Ex P7: Copy of the Legal notice.

Ex P8: Postal acknowledgment.

2. Witness examined on behalf of the Opposite party/s by way of affidavit:

RW-1: - Nil -

Copies of Documents produced on behalf of Opposite Party/s

- Nil -

MEMBER         MEMBER       PRESIDENT

RAK*