State Consumer Disputes Redressal Commission
Icici Prudential Life Insurance Co. Ltd vs Sarita Chauhan & Anr. on 10 May, 2023
Appeal Nos.: ICICI Prudential Life Insurance Co. Ltd. Date of Pronouncement:
FA/22/155 Vs. 10/05/2023
Sarita Chauhan & Anr.
AFR / NAFR
CHHATTISGARH STATE
CONSUMER DISPUTES REDRESSAL COMMISSION
PANDRI, RAIPUR
Date of Institution: 13/06/2022
Date of Final Hearing: 10/05/2023
Date of Pronouncement: 10/05/2023
APPEAL No.- FA/22/155
IN THE MATTER OF :
ICICI Prudential Life Insurance Co. Ltd.,
Shop No.26/27, Third Floor, Krishna Shopping Mall,
Ward No.4, Chaitanya Nagar Jagatpur, Chaitanya Nagar,
RAIGARH - 496 001
Through: Shri Lokesh Kumar Singh, Advocate,
... Appellant.
Vs.
1. Sarita Chauhan, W/o. Late Sohan Ram,
Hall Mukam- Opp. Bilaitanger Veterinary Hospital, Patthalgaon,
Tah. Patthalgaon, Dist. JASHPUR (C.G.)
Through : Shri Abhijeet Sarkar, Advocate
... Respondent No.1.
2. ICICI Bank Limited,
Near State Bank, Raigarh Road, Dharamjaigarh,
Tah. Dharamjaigarh, Dist. RAIGARH (C.G.)
Through: Shri Pankaj Khedkar, Advocate
... Respondent No.2.
CORAM: -
HON'BLE SHRI JUSTICE GAUTAM CHOURDIYA, PRESIDENT
HON'BLE SHRI PRAMOD KUMAR VARMA, MEMBER
PRESENT: -
Shri Lokesh Kumar Singh, Advocate for the appellant. Shri Abhijeet Sarkar, Advocate for respondent No.1 Miss Pratibha Chakradhari, Advocate for respondent No.2.
O R A L O R DE R PER: - JUSTICE GAUTAM CHOURDIYA, PRESIDENT This appeal, filed under Section 41 of the Consumer Protection Act 2019 (hereinafter called ―the Act‖ for short) is directed against order dated 24/12/2021 passed by District Consumer Disputes Redressal Commission, Jashpur (hereinafter referred to as ―District Commission‖ for short), in Complaint Case No.CC/20/23, whereby the complaint filed by the respondent No.1 herein alleging deficiency in service against the appellant and respondent No.2 herein in repudiating her insurance claim was partly allowed and the appellant and respondent No.2 herein were Allowed Page 1 of 10 Appeal Nos.: ICICI Prudential Life Insurance Co. Ltd. Date of Pronouncement:
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Sarita Chauhan & Anr.
directed to pay within 45 days the insured sum of Rs.30,00,000/- (Thirty Lacs), compensation for physical and mental agony Rs.5,000/- (Five Thousand) and cost of litigation Rs.1,000/- (One Thousand) failing which the entire amount was directed to be paid along with interest @ 6% p.a. from the date of order till its realization. Feeling aggrieved, the opposite party No.2 insurance company has preferred this appeal.
2. In nutshell the facts of the case as per the complaint are that the husband of respondent No.1/ complainant during his lifetime on 09.01.2019 obtained an life insurance policy ICICI Pro Iprotect Smart for sum assured of Rs.30,00,000/- with benefit options life plus death benefit pay-out option and paid premium of Rs.21,908/-. The respondent No.1 / complainant was made nominee in that policy. Husband of the respondent No.1 / complainant obtained the policy from ICICI Bank Limited and at the time of insurance medical certificate of the insured was also taken as per terms and conditions of the policy and premium were being paid regularly. During the policy period the policyholder died on 09.03.2019. Being nominee in the insurance policy the respondent No.1/ complainant submitted her claim along with original documents before the appellant & respondent No.2/ the opposite parties but the claim application was repudiated by them and thus deficiency in service was committed by them. Legal notice dated 28.11.2019 was sent through registered post but even thereafter the sum assured Rs.30,00,000/- was not paid. Hence complaint was filed seeking direction to the appellant & respondent No.2/opposite parties for payment of claim amount Rs.30,00,000/- along with interest @ 18% p.a., Rs.3,00,000/- as compensation for physical and mental agony and any other relief as the District Commission deems fit.
Allowed Page 2 of 10 Appeal Nos.: ICICI Prudential Life Insurance Co. Ltd. Date of Pronouncement:
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Sarita Chauhan & Anr.
3. The respondent No.2 / opposite party No.1 remained
unrepresented before the District Commission and the matter was proceeded ex-parte against them.
4. The appellant / opposite party No.1 in its written version except the admitted facts has denied the other facts and stated that the insured died due to jaundice on 09.03.2019 within three months from the date of commencement of the policy. As the death of the deceased life assured occurred within three years of commencement of the policy, discrete investigation was conducted in the insurance claim. On such investigation it revealed that the deceased life assured had suppressed material facts and obtained the insurance policy through concealment of material facts. It was revealed that the deceased life assured was hospitalized on 22/06/2018 i.e. prior to issuance of subject policy and was suffering from diabetes mellitus, chronic kidney disease, chronic liver disease and he failed to disclose the same in the proposal form despite having knowledge of the fact and thus the insurance contract was obtained on the basis of misrepresentation of material facts in breach of the doctrine of utmost good faith. It was prayed that the complaint is liable to be dismissed on this ground as the decision of insurance company was in accordance with the provisions of Section 45 of the Insurance Act. It was also averred that in the proposal form all the questions regarding health details of life assured were answered in ‗No', whereas he was suffering from diabetes, mellitus, chronic kidney disease and chronic liver disease. On investigation, many documents were procured to prove that material facts were suppressed by the deceases life assured. The said documents are treatment record of the deceased policyholder in Medanta Hospital, Sneha Hridayalaya, consultation paper of Dr. Ashok Kumar Baidya and Prakash Allowed Page 3 of 10 Appeal Nos.: ICICI Prudential Life Insurance Co. Ltd. Date of Pronouncement:
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Eye & Health Care which clearly shows that the deceased life assured was suffering from ‗DM, HTN, CKD-10 years', therefore on the ground of non- disclosure of medical history in the proposal form, the claim was repudiated and in doing so no deficiency in service was committed and prayed that the complaint be dismissed with costs.
5. Learned District Commission after consideration of rival contentions of both parties partly allowed the complaint and directed the appellant and respondent No.2/ the opposite parties to pay the sum assured as aforesaid in paragraph No.1.
6. We have heard arguments of all parties, perused the record and the written arguments submitted by the appellant and the respondent No.2.
7. Before us the appellant/ respondent No.1 has reiterated the facts stated and grounds taken in the written version and argued that the learned District Commission has erred in appreciating the terms of the policy, information filled in the proposal form by the deceased life assured and his treatment records in the light of Section 45 of the Insurance Act, 1938 and has passed an erroneous order, hence this appeal needs to be allowed and impugned order be set aside. In support of his arguments he has filed various case-laws as per list including judgement of Hon'ble Apex Court in Satwant Kaur Sandhu Vs. New India Assurance Company Ltd., (2009) 8 SCC 316. Whereas the learned counsel for the respondent No.1/ complainant has supported the impugned order and argued that the learned District Commission has rightly held the appellant and respondent No.2/opposite parties deficient in service in repudiating the genuine claim of the respondent No.1/ complainant and passed the Allowed Page 4 of 10 Appeal Nos.: ICICI Prudential Life Insurance Co. Ltd. Date of Pronouncement:
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impugned order which is just and proper and needs not to be interfered with.
8. Learned counsel for the respondent No.2/ opposite party No.1 has argued that this respondent is a Bank which had neither provided insurance service nor received any fee for issuance of insurance policy, even though contrary to the facts and record of the case learned District Commission has passed the impugned order imposing joint liability upon the Bank respondent No.2 / opposite party No.1. In the written arguments submitted by the learned counsel for the respondent No.2/ opposite party No.1 it is argued that in the insurance policy issued in the name of husband of the respondent No.1/ complainant it was clearly mentioned that if the policy is obtained by concealment of any information by the policyholder then the insurance company will not be liable for payment of insurance claim, but even after mention of these clear facts the learned District Commission has passed the impugned order imposing joint liability on this respondent Bank also. The impugned order is not a speaking order and is erroneous it be set aside, so far as the respondent No.2/ opposite party No.1 is concerned.
9. We have considered the arguments advanced by all parties and gone through the record as well as the impugned order. In the impugned order we find that learned District Commission has based its conclusion on contention of the respondent No.1/ complainant that a medical certificate was obtained by the appellant and respondent No.2/ opposite parties from policyholder at the time of issuance of insurance policy but at the same time the District Commission has ignored the treatment records and the fact that the deceased insured had concealed material facts regarding his health in the proposal form. For determination of liability of Allowed Page 5 of 10 Appeal Nos.: ICICI Prudential Life Insurance Co. Ltd. Date of Pronouncement:
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Sarita Chauhan & Anr.
insurance company in this matter two important points which needs to be considered are whether the insured died within three years of commencement of insurance and being so it is a matter of early death claim and second whether the insurance policy was obtained on concealment of material facts in the proposal form.
10. It is not in dispute in this matter that the commencement date of policy in question was 19.01.2019 and the deceased life assured Sohan Ram Chauhan died on 09.03.2019 i.e. within less than three months from the date of commencement of the policy hence, it was a case of early death claim, as argued by the appellant/opposite party No.2 and was necessary to be investigated and to call the policy in question as per Section 45 of the Insurance Act 1938 as amended by Insurance Laws (Amendment) Act, 2015 which envisaged as follows : -
―45. (1) No policy of life insurance shall be called in question on any ground whatsoever after the expiry of three years from the date of the policy, i.e., from the date of issuance of the policy or the date of commencement of risk or the date of revival of the policy or the date of the rider to the policy, whichever is later.
(2) A policy of life insurance may be called in question at any time within three years from the date of issuance of the policy or the date of commencement of risk or the date of revival of the policy or the date of the rider to the policy, whichever is later, on the ground of fraud:
Provided that the insurer shall have to communicate in writing to the insured or the legal representatives or nominees or assignees of the insured the grounds and materials on which such decision is based.
Explanation I.--For the purposes of this sub-section, the expression "fraud" means any of the following acts committed by the insured or by his agent, with intent to deceive the insurer or to induce the insurer to issue a life insurance policy:--
(a) the suggestion, as a fact of that which is not true and which the insured does not believe to be true;
(b) the active concealment of a fact by the insured having knowledge or belief of the fact;
(c) any other act fitted to deceive; and
(d) any such act or omission as the law specially declares to be fraudulent.‖ Allowed Page 6 of 10 Appeal Nos.: ICICI Prudential Life Insurance Co. Ltd. Date of Pronouncement:
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Sarita Chauhan & Anr.
As per the above Section 45 of the Insurance Act 1938 as amended by Insurance Laws (Amendment) Act, 2015, the insurance company investigated the matter being a case of early death claim. Investigation report of Vision Investigation Services is placed on record as Annexure-4 which at page No.76 to 84 of the record of District Commission. Treatment history of the insured and treatment record of Medanta Hospital, Ranchi in June 2018 and Sneha Hridayalaya, consultation paper of Dr. Ashok Kumar Baidya and Prakash Eye & Health Care are also filed along with the investigation report.
11. In the treatment papers of the Medanta Hospital at many places it has been mentioned that the patient was diagnosed as known case of HTN/ DM/ Hypothyroidism/CKD/CLD/BPH. In the OPD prescription of Prakash Eye & Health Care dated 11.06.2018 also it was mentioned that the patient was known case of DM type-2, with HTH and CKD from past 10 years. In consultation paper of Dr. Ashok Kumar Baidya of Nephron Kidney Kare Clinic also it was mentioned that the patient Sohan Ram Chouhan was suffering from DM with HTN and CKD and hypothyroidism. The above facts are mentioned in the report of the investigator and copy of treatment record has also been filed along with his report. These all treatment and consultation record of the deceased insured was of June 2018 which was before the issuance of the policy in question.
12. The insurance company has brought on record the proposal form for insurance with customer declaration and direct debit form, Annexure- 1, which is at page No.60 to 65 of the record of the District Commission. In the ‗Health Details of Life Assured' the deceased insured had given information regarding his health and had uniformly answered all the Allowed Page 7 of 10 Appeal Nos.: ICICI Prudential Life Insurance Co. Ltd. Date of Pronouncement:
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questions in ‗No'. The specific question of Diabetes/ High Sugar/Sugar in urine, live disorder / jaundice hepatitis B or C, hypertension/ High BP/ High cholesterol and the question regarding any surgery or hospitalization have also been answered in ‗No'. These documents are sufficient to prove that the deceased life assured had suppressed material facts regarding his health history and his previous treatments at the time of filling proposal form for issuance of the policy in question. So far as argument of learned counsel for the respondent No.1/ complainant that at the time of issuance of insurance policy medical certificate of the insured was also taken is concerned, no such certificate is brought on record and if for the sake of arguments if for the time being it is accepted that any such medical certificate was obtained then also it is not clear that whether the previous history regarding his health and treatment taken were disclosed correctly and completely by the proposed life assured, looking to the suppression of facts in the proposal form and after consideration of his previous treatments such report would have been issued.
13. The contract of insurance is based on utmost confidence and good faith between the parties, in respect of the facts stated in the proposal form, as well as in the insurance policy and the parties mutually believe on the version of each other in respect of those facts. If the agreement of insurance is made on the basis of the facts, which were incorrect, then definitely the Insurance Company was having right to avoid it's liability, on the ground of fraud and suppression of material facts at the time of making proposal for the contract of insurance. This fact was considered in detail by this Commission in its judgement dated 06.12.2022 passed in Appeal No. FA/22/13 between Pramerica Life Insurance Limited Vs. Smt. Allowed Page 8 of 10 Appeal Nos.: ICICI Prudential Life Insurance Co. Ltd. Date of Pronouncement:
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Vijay Lakshmi Sharma & Anr. and it was held in paragraph No.19 as under : -
―19. The proposal form also has declaration of the deceased insured, duly signed, to the effect that in case any of the statement made in the proposal form, is found false or incorrect or untrue, then the contract of insurance shall be invalidated. He also declared that the content of the form and document has been fully explained to him and he had fully understood the significance of the proposed contract. These declarations authorize the insurance company to avoid its liability under the insurance policy as it absolutely became null and void on the basis of deliberate suppression of material facts by the deceased insured for obtaining the insurance cover. ----‖
14. This Commission in its recent judgement dated 21.04.2023 in Complaint No. CC/19/09 in the matter between Smt. Sarita Panda Vs. Branch Manager, Life Insurance Corporation of India & Anr., in para No.11 has held as under : -
―11. ------. Had there been the case that all the correct information regarding personal history was given, then the opposite parties would have an opportunity to take decision accordingly or to underwrite in perspective of those facts. But by concealing material facts regarding personal history of the proposed insured, the opposite parties were deprived of taking appropriate decision as per the actual state of health of the proposed insured.----‖ The principle laid down by the Hon'ble Apex Court in Branch Manager, Bajaj Allianz Life Insurance Co. Ltd. Vs. Dalbir Kaur, 2020 SCC Online SC 848 discussing its previous judgement in Satwant Kaur Sandhu (supra) which is relied by learned counsel for the appellant / insurance company also, wherein it was held that ―In a contract of insurance, any fact which would influence the mind of a prudent insurer in deciding whether to accept or not to accept the risk is a ―material fact‖ -
If the proposer has knowledge of such fact, he is obliged to disclose it to insurer particularly while answering questions in the proposal form - Any inaccurate answer to said questions will entitle the insurer to repudiate its Allowed Page 9 of 10 Appeal Nos.: ICICI Prudential Life Insurance Co. Ltd. Date of Pronouncement:
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liability under the policy‖ was relied by this Commission in its judgement in the case of Smt. Sarita Panda (supra).
15. In view of the above discussion we are of the considered view that the appellant/ opposite party No.1 were having right to repudiate the insurance claim on account of suppression of material facts in the proposal form and learned District Commission committed an error in directing payment of amount of insurance claim.
16. So far as joint liability imposed upon the Bank in the impugned order is concerned, it is also erroneous looking to the fact that the premium receipt and the insurance policy both are issued by the insurance company and for payment of premium only cheque of ICICI Bank Ltd was used. It appears from the entire record, pleadings and written version of the insurance company that the Bank had no role to play in the entire case since issuance of policy till repudiation of claim except the deceased life assured used the cheque of the ICICI Bank for payment of premium amount as is evident from entire record.
17. Therefore, for the foregoing discussion, we are of the considered view that District Commission has erred in coming to the conclusion that the respondent No.1/ complainant was entitled to get the amount of insurance claim and that too imposing the liability jointly on the Bank also. The impugned order is liable to be and is hereby set aside. We allow this appeal. The complaint of complainant/ respondent No.1 herein stands dismissed accordingly. No order as to cost.
(Justice Gautam Chourdiya) (Pramod Kumar Varma)
President Member
/05/2023 /05/2023
Pronounced On: 10th May 2023
Allowed Page 10 of 10