State Consumer Disputes Redressal Commission
Virpal Nagar vs Hdfc Standard Life Insu.Co. Ltd. on 14 March, 2019
IN THE STATE COMMISSION: DELHI (Constituted under section 9 of the Consumer Protection Act, 1986) Date of Hearing: 27.02.2019 Date of decision:14.03.2019 Complaint No. 05/2011 IN THE MATTER OF Virpal Nagar S/o Late Sh. Ramphal Nagar R/o Village & Post Tigaon District Faridabad (Haryana) ....Complainant VERSUS HDFC Standard Life Insurance Co. Ltd. Having its Branch Office At:- HDFC SL Delhi-Bikaji Cama Place 131/140, Ansal Chamber-1 Bikaji Cama Place, Delhi-110066 Through its Manager ....Opposite Party HON'BLE SH. ANIL SRIVASTAVA, MEMBER 1. Whether reporters of local newspaper be allowed to see the judgment? Yes 2. To be referred to the reporter or not? Yes Present: Mr. Jalaj Aggarwal, Counsel for the Complainant Mr. Rajiv Anuja, Counsel for the OPs ANIL SRIVASTAVA, MEMBER 1 JUDGEMENT
1. This complaint has been filed by Sh. Virpal Nagar, resident of Faridabad, under Section 17 of the Consumer Protection Act 1986, (the Act) against HDFC Standard Life Insurance Company Ltd., hereinafter referred to as OPs, alleging unfair trade practice and deficiency of service on their part, they having repudiated their just claim without any foundation and praying for the relief as under:
It is therefore, most respectfully prayed that in view of above submissions and in the interest of justice this Hon'ble Commission may be pleased:-
a. Order and direct the respondent to pay a sum of Rs. 50,00,000/- on account of claim in respect of death of sh. Pratap singh brother of the complainant under the HDFC Term Assurance Policy;
b. Order and direct the respondent to pay upto date interest @ 18% per annum on the claim amount of Rs. 50,00,000/- w.e.f. 23.01.2009 till the full realization of the claim amount;
c. Order and direct the respondent to pay a sum of Rs. 5,00,000/- as compensation for harassing, humiliation the complainant and further for mental agony, tension, suffered by him;
d. Order and direct the respondent to further pay a sum of Rs. 35,000/- as expenses towards the litigation; e. Grant any other or such relief as this Hon'ble Court may deem fit and proper in the facts and circumstances of the present case.
2. Facts of the case necessary for the adjudication of the complaint are these.
3. One Sh. Pratap Singh since deceased during his life time had taken a HDFC Term Assurance Policy of the value of Rs. 50 lakhs from the OPs on 05.12.2008, paying the premium of Rs. 24,046/-. The OPs on receipt of the premium and after getting him medically examined from the Apex Diagnostics and Polyclinic and finding him fit issued a HDFC Term Assurance Policy bearing number 12265498 commencing from 05.12.2008 for a term of 20yrs. The premium of the policy was fixed on yearly basis. The complainant was the nominee of the policy holder. The said policy holder however had passed away on 23.01.2009 and as a consequence thereof the complainant had filed a claim, submitting the necessary and required documents, which claim was repudiated by the 2 OPs on 19.04.2010 leading to filing of the complaint before this Commission for the redressal of his grievances. The relevant extracts of the repudiation of the claim is reproduced below:
Section D: Personal and Family history of life to be assured Details of Occupation:
Present Occupation Unemployed
Designation General Store
Yearly Income from all 2,50,000/-
source(Rs):
Name of the present employer Deepak General Store
Address of present employer or Village Post Office
business premises if self Tigaon Faridabad,
employed (Address of your place Haryana
of work) PIN No: 121101
Please provide in details the General Store exact nature of work performed by you in connection with your present employment or business (for e.g. clerical, mechanical, supervisory, job, etc.) Please provide details, if any Non Hazardous regarding your occupation or business, which may render you susceptible to injury or illness.
(e.g. exposure to chemical
substances/hazardous
materials/harmful dust or
gasses/explosive/working at
heights/handing heavy
machinery etc.)
Industry to which your company General Store or business belongs (Cement, banking etc.) Personal Medical Details Are you currently suffering from any illness, impairment, or taking any medication or pills or drugs? No 3 Have you ever suffered from any of the following conditions?
a. Respiratory disorders No
b. Paralysis or multiple sclerosis No
However, our investigations have established that Mr. Pratap Singh Nagar was not having any such occupation as Deepak General Store as stated in the proposal form. Besides he was also suffering from Asthma and Paralysis even prior to his application for insurance and hence the aforesaid replied are false. Had the above questions been replied truthfully and correctly, we would have declined to offer the life insurance cover.
We do understand the trauma that you have undergone at the loss of the deceased. However, since this vital information was not provided to us that the time of applying for the insurance policy, we regret our inability to accept your claim under the Policy No. 12265498.
4. The OPs were noticed and in response thereto they have filed reply resisting the complaint both on technical ground and on merit. Their technical objection is that the complainant is not a consumer and thus not entitled to raise a consumer dispute. But no cogent or tangible evidence was led to this effect. Their objection on merit is that there has been concealment of material fact inasmuch as the life assured did not specify the ailment he was suffering from and, secondly, the life assured did not detail about his occupation. The averment that the life assured was working with Deepak General Store having annual income of Rs.
2,50,000/- is disputed by the OPs as on investigation it was found that this averment suffers from inconsistency.
5. The complainant had later filed rejoinder rebutting the contentions raised by the OPs and reiterating the averments made in the complaint. Evidence by way of affidavit emphasizing the points raised in their respective pleadings has been filed by both sides. Written arguments have also been filed. This matter was listed before this Commission for final hearing on 27.02.2019 when the counsel from both sides appeared and advanced their arguments in support of their pleadings.
6. Short question for adjudication in this complaint is whether the repudiation of the claim was justified keeping in view the alleged concealment of the material fact regarding pre-existing disease and, secondly, non-disclosure of the information with respect to his occupation, as argued by the counsel for the OPs or in the alternate the 4 claim preferred is payable as emphasized by the ld. Counsel for the complainant, the policy having been issued only after the medical examination of the insured and, secondly, the returns of his income having been filed as evidence.
7. Issue in the given case hinges on the point whether the claim can be repudiated on the ground of undeclared pre-existing disease. I have read and re-read the records of the case. I have given a careful consideration to the subject matter.
8. Insurance documents are invariably on standard form contracts and usually the insured person signs on the dotted line. It would be extremely tenuous to expect a layman to read each and every clause of an insurance document before signing it. On most occasions, a person who intends to obtain insurance has no choice to say NO to a clause in an insurance policy. Medical insurance is primarily obtained for the purpose of unforeseen medical conditions which may affect a person and so long as there has been no fraud, concealment or suppression, at the time of obtaining insurance, policies ought to be honoured. It is usual to see claimants running from pillar to post in order to get medical reimbursement from insurance companies. This case is no different. The insurance policy issued to the complainant was only after medical examination. This obviously means that the exclusion clause was applied by the Insurance Company mechanically and not on the basis of a specific test. Such application of exclusion lacks the foundation itself and is untenable.
9. On the concept, meaning and import of word disease, pre-existing disease in reference to medical insurance policy, this commission has drawn following ten conclusions in a highly extensive, dissecting manner in their decision in the matter of Pradeep Kumar Garg versus National Insurance Co. Ltd., FA-482/2005 decided on 01.08.2008. These are as under:
a. Disease means a serious derangement of health or chronic deep-seated disease frequently one that is ultimately fatal for which an insured must have been hospitalized or operated upon in the near proximity of obtaining the mediclaim policy.
b. Such a disease should not only be existing at the time of taking the policy but also should have existed in the near proximity. If the insured had been hospitalized or operated upon for the said disease in the near past, say, six months or a year he is supposed to disclose the said fact to rule 5 out the failure of his claim on the ground of concealment of information as to pre-existing disease. c. Malaise of hypertension, diabetes, occasional pain, cold, headache, arthritis and the like in the body are normal wear and tear of modern day life which is full of tension at the place of work, in or out of the house and are controllable on day to day basis by standard medication and cannot be used as concealment of pre-existing disease for repudiation of the insurance claim unless an insured in the near proximity of taking of the policy is hospitalized or operated upon for the treatment of these diseases or any other disease.
d. If insured had been even otherwise living normal and healthy life and attending to his duties and daily chores like any other person and is not declared as a diseased person as referred above he cannot be held guilty for concealment of any disease, the medical terminology of which is even not known to an educated person unless he is hospitalized and operated upon for a particular disease in the near proximity of date of insurance policy say few days or months.
e. Disease that can be easily detected by subjecting the insured to basic tests like blood tests, ECG etc. the insured is not supposed to disclose such disease because of otherwise leading a normal and healthy life and cannot be branded as diseased person.
f. Insurance company cannot take advantage of its act of omission and commission as it is under obligation to ensure before issuing medi-claim policy whether a person is fit to be insured or not. It appears that insurance companies don't discharge this obligation as half of the population is suffering from such malaises and they would be left with no or very little business.
Thus any attempt on the part of the insurer to repudiate the claim for such non-disclosure is not permissible, nor is exclusion clause invokable.
g. Claim of any insured should not be cannot be repudiated by taking a clue or remote reference to any so called disease from the discharge summary of the insured had concealed his hospitalisation or operation for the said disease undertaken in the reasonable near proximity as referred above.
h. Day to day history or history of several years of some or the other physical problem one may face occasionally without having landed for hospitalisation or operation for the disease cannot be used for repudiating the claim. For 6 instance an insured had suffered from a particular disease for which he was hospitalised or operated upon 5, 10 to 20 years ago and since then had been living healthy and normal life cannot be accused of concealment of pre- existing disease while taking mediclaim policy as after being cured of the disease, he does not suffer from any disease much less the pre-existing disease while taking mediclaim policy as after being cured of the disease, he does not suffer from any disease much less the pre-existing disease.
i. For instance to pay that insured has concealed the fact that he was having pain in the chest off and on for years but has never diagnosed or operated upon for heart disease but suddenly lands up in the hospital for the said purpose and therefore is disentitled for claim bares dubious design of the insurer to defeat the rightful claim of the insured on flimsy ground. Instances are not rare where people suffer a massive attack without having even been hospitalised or operated upon at any age say for 20 years or so.
j. Non-instance of hospitalisation/or operation for disease that too in the reasonable proximity of the date of mediclaim policy is the only ground on which insured claim can be repudiated and on no other ground.
10. This Commission has taken a view in that case that unless and until a person is hospitalised or undergoes operation for a particular disease in the near proximity of obtaining insurance policy or any disease for which he has never been hospitalised or undergone operation is not a pre-existing disease. If a person conceals the factum of his hospitalisation of a particular disease or operation undergone by him in the near proximity of obtaining the insurance policy, only then it can be termed a concealment of factum of disease and doctrine of good faith under Section 45 of the Insurance Act can then alone be pressed in by Insurance company and not otherwise. Doctrine of good faith is two way traffic and not a one way traffic. If the Insurance Company take benefit of doctrine of good faith then they have to accept whatever the insured declares and should not subject the insured to medical test and get certificate from the doctor on the panel that the insured possesses sound and good health and is entitled to mediclaim insurance policy. Such a certificate will be meaningless and of no relevance as to the state of health of a person.
711. The issue of pre-existing disease has been dealt with by the Hon'ble NCDRC in the matter of Tarlok Chand Khanna vs. United India Insurance Co. Ltd. RP-686/2007 decided on 16.08.2001 holding as under:
Infact, the onus to prove that she had a pre-existing disease was on the respondent who failed to file any expert medical or credible evidence in support of its case. Further, the deceased had been taking he mediclaim insurance policy from the respondent right from 1996 and she had also as per the practice, been examined by the doctor of the respondent/insurance company who has nowhere recorded that she had any medical problem relating to the knees.
12. The Hon'ble NCDRC is yet another judgement in National Insurance co. Ltd. vs. Rai Narain-2008 NCT 559 (NC)- the Hon'ble NCDRC held as under:
Most of the people are totally unaware of the symptoms of the disease that they suffer and hence they cannot be made liable to suffer because the Insurance Company relies on their clause 4.1 of the policy in a mala-fide manner to repudiate all the claims. No claim is payable under the medi-claim policy as every human being is born to die and diseases are perhaps pre-existing in the system totally unknown to him which he is genuinely unaware of them. Hindsight everyone relies much later that he should have known from some symptom. If this is so every person should do medical studies and further not take any insurance policy.
13. The Hon'ble NCDRC in the matter of Praveen Damani versus Oriental Insurance Company Ltd. as reported in IV [2006] CPJ 189 (NC) has held as under:
"....If this interpretation is upheld, the Insurance Company is not liable to pay any claim, whatsoever, because every person suffers from symptoms of any disease without the knowledge of the same. This policy is not a policy at all, as it is just a contract entered only for the purpose of accepting the premium without the bonafide intention of giving any benefit to the insured under the garb of pre-8
existing disease. Most of the people are totally unaware of the symptoms of the disease that they suffer and hence they cannot be made liable to suffer because the Insurance Company relies on their clause 4.1 of the policy in a malafide manner to repudiate all the claims. No claim is payable under the mediclaim policy as every human being is born to die and diseases are perhaps pre-existing in the system totally unknown to him which he is genuinely unaware of them. Hindsight everyone relies much alter than he would have known from some symptom. If this is so every person should do medical studies and further not take any insurance policy. Even on the facts on record, there is no material to show that the petitioner had any symptoms like chest pain etc. prior to 11.08.2000."
14. The Hon'ble NCDRC in the matter of Life Insurance Corporation of India versus Gurvinder Kaur as reported in III [2012] CPJ 597 (NC) is pleased to hold as under:
The State Commission held that the report of the handwriting expert was not reliable. In exercise of powers vested in it under Section 73 of the Indian Evidence Act, the State Commission itself compared the signatures on the proposal form, medical examiners confidential reports, the ECG form and came to the conclusion that the signatures on the three documents are of one and the same person. Contention of the learned counsel for the petitioner that the opinion given by the handwriting expert was binding on the State Commission and the State Commission could not evaluate the evidence itself cannot be accepted. The opinion given by an expert is a piece of evidence which could be evaluated by the Court. It is for the Court to accept or not to accept the opinion of the expert. Opinion of the expert is not binding. It has been held in innumerable cases by the Supreme Court of India that the opinion of the expert is not binding. The State Commission is well within its right to accept or not to accept the evidence given by the handwriting expert. In view of Section 73 of the Indian Evidence Act the Commission itself could compare the admitted and the disputed signatures.
15. The fact that the onus to prove that insured was suffering from pre-existing disease is on the Insurance Company is fortified by the orders of the Hon'ble NCDRC in the matter of LIC of India versus Priya Sharma and ors as reported in IV [2012] CPJ 646 (NC). Secondly, if the 9 policy was issued by the insurance company without proper verification, they cannot be liable to repudiate the claim at the later stage, as per the view held by the Hon'ble NCDRC in the matter of Oriental Insurance Co. Ltd. versus Dipender Kaur as reported in I [2016] CPJ 603 (NC).
16. The ld. Counsel for OP has also argued that this case is a case of insurance fraud inasmuch as the policy holder had passed away soonafter obtaining the policy. However in the absence of any cogent or tangible evidence to this effect, this argument cannot sustain. The evidence led of the sister of deceased is not a conclusive evidence. Secondly, the ld. Counsel for the OP argued that the issues in the case being complicated, cannot be disposed of by a Consumer Forum in summary proceedings. However on perusal of the facts of the case deficiency of service being the allegation, and there does not appear to be any question complicated in nature, the issues are adjudicable in the forum in summary procedure.
17. In view of the discussion done and the legal position as settled I am of the considered view that the repudiation done by the Insurance Company on the ground of pre-existing disease or on the ground of non- furnishing of the details of the occupation cannot sustain. Having regard to this the inevitable conclusion is that, the complaint deserves to be accepted and the grounds taken by the OPs since not sustainable are sequentially rejected. The core question that remains to be answered is as to how the complainant can be compensated for the harassment caused to him at the hands of the OPs.
18. After analyzing the legal position I am of the view that the ends of justice would be met if a direction is issued to the OPs to allow the claim preferred within a period of two months from the date of receipt of certified copy of the order with simple interest at the rate of 6% from the date the claim was payable. Ordered accordingly.
19. A copy of this order be forwarded to the parties to the case free of cost as is statutorily required.
20. File be consigned to records.
(ANIL SRIVASTAVA) MEMBER sl 10