Telangana High Court
Smt. Ellu Sandhya vs State Bank Of Hyderabad And 3 Others on 5 June, 2023
Author: K. Lakshman
Bench: K. Lakshman
HON'BLE SRI JUSTICE K. LAKSHMAN
WRIT PETITION No.10331 OF 2011
ORDER:
Heard Mr. P. Ravi Shanker, learned counsel for the petitioner. None appears for respondents.
2. This writ petition is filed to declare the action of respondent No.3 in repudiating policy of petitioner's late husband, Ellu Srihari, bearing No.93000001610 which was upheld by respondent No.4 in Award No.IO(Hyderabad) L-078/2010-11, dated 21.02.2011, as illegal, and for a consequential direction to respondent No.3 to pay the insurance amount.
3. FACTS:
i) The petitioner and her husband, late Ellu Srihari, availed Housing Finance from respondent Nos.1 and 2. A loan of Rs.5,70,000/- was sanctioned with insurance cover. The premium amount of Rs.30,000/- was included in the said loan amount. The husband of the petitioner has to repay the entire loan amount in 234 equal monthly installments @ Rs.5,600/-. The said loan was sanctioned on 19.05.2009.2
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ii) As per the terms and conditions of the said agreement, the husband of the petitioner has to obtain a Life Insurance Policy as a collateral security. Therefore, the husband of the petitioner had obtained 'Dhana Raksha Plus LPPT Group Insurance Scheme' from respondent No.3. He was covered under Policy bearing No.93000001610 w.e.f. 18.07.2009. Apart from other facilities, the policy provides for payment of outstanding housing loan which would be payable in the event of death of life assured.
iii) The petitioner's husband expired on 14.06.2010 at 5.00 A.M. due to Cardio Respiratory Failure Secondary to Massive Myocardial Infraction and Prostomegaly Grade-I as certified by the Doctor. The said fact was informed to respondent No.2 with a request to adjust the policy amount towards balance loan amount as per the terms and conditions of the loan agreement. The said claim was repudiated by respondent No.3 on the ground that the petitioner's husband was suffering from Grade-I Prostatomegaly prior to the date of commencement of policy and he was under treatment. The said fact was suppressed and relevant medical facts were not filled in the relevant columns of policy form. The said repudiation of the claim of the petitioner by respondent No.3 is illegal and, therefore, she had 3 KL,J W.P. No.10331 of 2011 approached respondent No.4, who in turn, vide Award No.IO (Hyderabad) L-078/2010-11, dated 21.02.2011, rejected the said appeal filed by the petitioner.
iv) Challenging the said orders, the petitioner filed the present writ petition.
4. Contentions of the petitioner:
i) It is contended by the petitioner that her husband was hale and healthy at the time of death. He died due to Massive Cardio Respiratory Failure, but not due to any failure of organ linked to Prostatomegaly Grade-I. He never suffered from any blood pressure or diabetes. Medical reports which were taken on 02.06.2009 and 18.07.2009 clearly goes to show that he was in normal condition and all the tests clearly prove that he is not suffering from any disorders except Grade-I Prostatomegaly with void residual urine. The doctors, who attended the husband of the petitioner, have certified that his death is only due to Massive Cardio Respiratory Failure and the decease he suffered is only Urinary problem which was not related to his sudden death and his other life organs including Kidney function was normal during the said period.4
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ii) Without considering the said aspects, respondent No.3 repudiated the claim of the petitioner and the same was confirmed by respondent No.4.
5. Contentions of respondent Nos.1 and 2:
i) Respondent No.3 filed counter accepting the loan granted by them to the husband of the petitioner and the loan includes the insurance premium amount of Rs.30,000/-. However, it is contended that after the death of the husband of the petitioner, the request of the petitioner to adjust the policy amount towards balance loan amount was forwarded to respondent No.3, but the same was repudiated on the ground of suppression of material facts regarding ailment of the petitioner's husband that he was suffering on the date of commencement of policy.
ii) Since the claim of the petitioner was repudiated by respondent No.3, the bank has no option except to recover the loan amount together with interest either under the provisions of SARFAESI Act or by filing a civil suit before a competent Court having jurisdiction for obtaining a personal decree as well as mortgage decree for recovery of loan amount.5
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6. Contentions of respondent No.3:
i) Respondent No.3 has filed counter contending that respondent No.3 is an autonomous body and it is not discharging any statutory functions. Therefore, the present writ petition is not maintainable.
ii) The lis involved in the present writ petition is hit by res judicata in terms of Section - 11 of the Code of Civil Procedure, 1908.
The petitioner and her husband suppressed material facts that her husband was suffering from ailments. He gave an undertaking concealing his health and medical condition. Thus, the petitioner and her husband suppressed the material facts. The said aspects were considered by respondent No.3 and there is no illegality in repudiation of the claim of the petitioner by respondent No.3 and confirmed by respondent No.4.
7. Analysis and Finding of the Court:
i) There is no dispute that the petitioner and her husband availed the aforesaid loan and obtained policy dated 18.07.2009. The petitioner and her husband had submitted all the documents including Membership form, undertaking etc. while obtaining loan. The 6 KL,J W.P. No.10331 of 2011 husband of the petitioner died on 14.06.2010. As on the date of death of the husband of the petitioner, an amount of Rs.6,04,033/- is due to respondent Nos.1 and 2.
ii) It is also not in dispute that the husband of the petitioner has submitted a declaration for getting insurance cover declaring that he is in sound health and does not suffer from any illness or critical illness.
In fact, he has to disclose every factual information by declaring with regard to his good health. The said declaration of good health is the sole basis to decide the eligibility as to whether a member can be granted insurance cover. According to respondent No.3, such declaration is a very important document wherein, the Life Assured is required to submit full and correct information. Any suppression of material fact in the Declaration of Good Health will constitute a breach of doctrine of utmost good faith. If the Life Assured does not reveal correct information and subsequently the insurer comes to know about the suppression of any material fact, the Insurer is well within his rights to repudiate the claim under any insurance cover so granted on the basis of such proposal.
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iii) The husband of the petitioner has signed the declaration form for 'Dhanaraksha Plus LPPT Group Insurance Scheme' declaring as follows:
"I am presently in sound mental and physical health. I also declare that I do not suffer from any physical defect/ deformity, and perform my routine activities independently. I have never suffered from nor I am currently suffering from diabetes, hypertension (high blood pressure), epilepsy, or tuberculosis, or genetic disorders. I have not been tested positive for Hepatitis B, Hepatitis C, or HIV or have not been treated or hospitalized in connection with alcohol, narcotic drugs or tobacco consumption. During the last 3 years, I have not been hospitalized for any ailment or diseases, I have not taken any treatment nor am I currently receiving any treatment nor have I been advised to undergo medical tests or follow any prescribed line of treatment, for critical illness@in the past or in the present. He further declared that "I hereby declare and agree that the foregoing declaration has been given after fully understanding the same and is true and complete to the best of my knowledge and that I have not withheld any information that may influence my admission into the Group insurance scheme of SBI Life Insurance Co. Ltd. I hereby agree that this form including the declaration shall form the basis of my admission into the Group insurance scheme and if any untrue statement be contained therein, I, my heirs, executors, administrators and assignees 8 KL,J W.P. No.10331 of 2011 shall not be entitled to receive any benefits under the Group insurance scheme. I also agree that the Company shall not be liable for any claim on account of illness, injury or death, the cause of which was known prior to approval of my request for assurance or withheld or concealed in the above statements."
iv) It is also not in dispute that Membership Form, dated 28.05.2009, under point No.8, the following Medical Questionnaires were mentioned and the answer given by the husband of the petitioner thereof are as under:
"(iv) Have you been treated or told that you have cancer, tumor, growth or cyst of any kind, Genitourinary or kidney disorder, hepatitis B, C or any other liver disease, any digestive disorders (e.g. ulcer, colitis etc), disease of the gall bladder or spleen, any musculoskeletal disorders, any blood disorder, or disorder of any gland (e.g. Thyroid), asthma, Tuberculosis, Pneumonia, or any other disease of the lungs, any psychiatric disorder, mental or nervous disorder?
(v) Are you at present taking any medication, or on any special diet or on any treatment?
(viii) Have you had or have been advised to undergo any of the following tests or investigations, Ultra Sonography, CT Scan/MRI, Biopsy, Coronary Angiography?
The Deceased Life Assured replied in the negative." 9
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v) After the death of the husband of the petitioner on 14.06.2010, the policy resulted in an early claim in ten (10) months twenty seven (27) days and, therefore, respondent No.3 had conducted investigation into the cause of death. They came to know that the deceased was suffering from Grade I Prostatomegaly and was having neurogenic bladder prior to the date of submission of declaration of good health-cum- proposal form to obtain the insurance cover. They have also obtained reports from the Nizam's Institute of Medical Sciences, Hyderabad 21.01.2009 and perusal of the same would reveal that the husband of the petitioner was suffering from Grade I Prostatomegaly and was having neurogenic bladder prior to the date of enrollment into insurance cover.
vi) Respondent No.3 has filed the aforesaid reports including investigation report dated 08.09.2010, biochemistry lab report of NIMS, ultrasound scan report of NIMS and medical reports of Medwin Hospital, dated 02.06.2009. Perusal of the same would reveal that the husband of the petitioner was under the treatment for prostatomegaly. Even in the death certificate issued by Dr. R. Sukumar of Surakshitha Clinic, cause of the death is mentioned as 'Cardio Respiratory failure secondary to massive Myocardial 10 KL,J W.P. No.10331 of 2011 Infarction and Prostatomegaly Grade-I." Thus, perusal of the said reports would reveal that the husband of the petitioner was suffering from Grade I Prostatomegaly, Neurogenic bladder and was under
treatment for the same prior to the date of enrollment into the insurance scheme. Even the certificate dated 04.11.2010 filed by the petitioner issued by the NIMS would reveal that the husband of the petitioner was investigated and treated for urinary problem from 21.01.2009. The last occasion he was seen on 04.06.2010. He was suffering from voiding Dysfunction (difficulty in passage of urine).
His kidney function was normal during the said period. The said urinary problem does not cause sudden death.
vii) The petitioner had filed the reports of Medwin Hospital, Hyderabad of her husband, wherein it is mentioned that voiding pressure flow study showed abdominal strain, and the doctor suggested neurological evaluation for a possible cause. Even in the medical examination report of her husband, dated 22.01.2009 of NIMS Hospital, it is mentioned as follows:
a) Mild Hepatomegaly with fatty changes;
b) Grade I prostatomegaly with significant post void residual urine.11
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viii) Thus, the husband of the petitioner was suffering from the aforesaid ailment before coverage under the subject policy. The said facts were suppressed by the husband of the petitioner and he has given a false declaration. Considering the said facts, respondent No.3 repudiated the claim of the petitioner on the ground that her husband was suffering from and was under treatment for Grade I Prostatomegaly prior to the date of commencement of policy. Even in the order dated 21.02.2011considering the entire facts, respondent No.4 held that the insurer was justified in rejecting the claim. Therefore, according to this Court, there is no irregularity in the said order.
ix) It is specifically contended by respondent No.3 that it is an autonomous body and, therefore, there is no violation of any rule or statute by respondent No.3 while repudiating the claim of the petitioner which was confirmed by respondent No.4, therefore, the present writ petition is not maintainable. In paragraph No.7 of the counter affidavit, it is specifically mentioned that respondent No.3 is a Joint Venture between the State Bank of India and the Cardiff (now known as BNPP Assurance), a limited company incorporated under the Companies Act and registered under the IRDA to transact Life 12 KL,J W.P. No.10331 of 2011 Insurance Business and Annuity Business. The Central Government holds 59.41% of issued equity shares in SBI and SBI, in turn, hold only 74% of the shares in the SBI Life. Even just because of it is an autonomous body, it cannot claim that it is not the State or Instrumentality of the State as defined under Article - 12 of the Constitution of India. According to this Court, it is an Instrumentality of the State as defined under Article - 12 of the Constitution of India and, therefore, the present writ petition is maintainable.
x) The contention of respondent No.3 that the lis involved in the present writ petition is hit by doctrine of res judicata in terms of Section - 11 of the CPC is also unsustainable since respondent No.3 repudiated the claim of the petitioner which was confirmed by respondent No.4.
8. Conclusion:
i) In view of the aforesaid discussion, the petitioner failed to make out any case to interfere with the orders passed by respondent Nos.3 and 4 and, therefore, the writ petition is liable to be dismissed.
ii) The present writ petition is accordingly dismissed. In the circumstances of the case, there shall be no order as to costs. 13
KL,J W.P. No.10331 of 2011 As a sequel, the miscellaneous petitions, if any, pending in the writ petition shall stand closed.
_________________ K. LAKSHMAN, J 5th June, 2022 Mgr