State Consumer Disputes Redressal Commission
Kalawati Sahu vs Branch Manager, Kotak Mahindra Life ... on 9 October, 2023
Complaint Nos.: Kalawati Sahu Date of
CC/20/05 Vs. Pronouncement:
Branch Manager, Kotak Mahindra Life Insurance Co. Ltd. & Ors. 09/10/2023
AFR / NAFR
CHHATTISGARH STATE
CONSUMER DISPUTES REDRESSAL COMMISSION
PANDRI, RAIPUR
Date of Institution: 11/02/2020
Date of Final Hearing: 25/09/2023
Date of Pronouncement: 09/10/2023
Complaint Case No.- CC/20/05
IN THE MATTER OF :
Kalawati Sahu
W/o. Shri Balak Ram
All R/o. Vill. Pandavpara, P.S. Patna, Tah. Baikunthpur,
Dist. KORIYA (C.G.)
... Complainant.
Through: Shri P. K. Shukl, Advocate
Vs.
1. Manager,
Kotak Mahindra Life Insurance Co. Ltd.,
7th Floor, Kotak Infinity Building No.21,
Infinity Park, Off Western Express Highway,
General A.K. Vaidya Marg, Malad (East),
MUMBAI - 400 097.
2. Manager
Kotal Mahindra Life Insurance Co. Ltd.,
2nd Floor, Plot No.-12, G Block, BKC Bandra,
MUMBAI - 400 097.
3. Branch Manager,
Kotal Mahindra Life Insurance Co. Ltd., Surajpur,
P.O., Tah. & Dist. SURAJPUR (C.G.)
... Opposite Party Nos.1 to 3
Through: Shri D. Dutta & Shri G.V.K. Rao, Advocates
4. Mahindra & Mahindra Financial Service Ltd.,
Mahindra Towers, 4th Floor, 570 P.B. Marg, Warli,
MUMBAI (M.S.) - 400 018
... Opposite Party No.4
Through: Shri M.L. Yadav, Advocate
5. Tiwari Motors,
Authorized Seller- Mahindra & Mahindra Motors
M.G. Road, Ambikapur,
SURGUJA - 497 001.
... Opposite Party No.5
Through: None appeared.
CORAM: -
HON'BLE SHRI JUSTICE GAUTAM CHOURDIYA, PRESIDENT
HON'BLE SHRI PRAMOD KUMAR VARMA, MEMBER
PRESENT IN BOTH CASES: -
Shri P.K. Shukl, Advocate for the complainant.
Shri GVK Rao, Advocate for opposite party Nos.1 to 3.
Shri M.L. Yadav, Advocate for the opposite party No.4.
None appeared for the opposite party No.5
Dismissed Page 1 of 8
Complaint Nos.: Kalawati Sahu Date of
CC/20/05 Vs. Pronouncement:
Branch Manager, Kotak Mahindra Life Insurance Co. Ltd. & Ors. 09/10/2023
J U DGE M E NT
PER: - JUSTICE GAUTAM CHOURDIYA, PRESIDENT
This complaint, under Section 17 of the Consumer Protection Act, 1986 (hereinafter referred to as "the Act" for short) has been filed by the complainant alleging deficiency in service on the part of the opposite parties on the ground that life insurance claim of her husband was repudiated and seeking directions to the opposite parties for payment of total amount of Rs.30,70,000/- (Thirty Lacs Seventy Thousand) jointly and severally on different heads i.e. amount of insurance cover Rs.29,20,000/- (Twenty Nine Lacs Twenty Thousand), compensation for mental harassment Rs.1,00,000/- (One Lac) and Rs.50,000/- (Fifty Thousand) as cost of litigation.
2. Briefly stated the necessary facts of the case for its disposal are that the husband of the complainant Late Shri Balak Ram during his lifetime purchased a Mahindra truck for Rs.30,97,708.00 from opposite party No.5 on 31.12.2018 with the help of finance of Rs.29,20,000/- obtained from opposite party No.4. The opposite party Nos.2 & 3 are the insurance companies who provided life insurance cover to the owner of the vehicle for the financed amount of Rs.29,20,000/- for the period between 31.12.2018 to 30.12.2019 vide policy No.CR000020 (Load A/c. No.5927099) under Kotak Credit Term Group Plan. As per the policy terms in the event of death of the policyholder during subsistence of the policy the entire loan amount was to be deposited by the opposite party Nos.1 to 3 insurance company. During subsistence of the policy the policyholder husband of the complainant died on 13.05.2019. Insurance claim was submitted before the opposite party No.3 along with all necessary documents and opposite party No.4 was also intimated. But vide letter 05.09.2019 the claim was repudiated by the opposite party No.1 on the ground that on the date of issuance of policy 31.12.2018, Declaration of Good Health (DOGH) was given by the policyholder, whereas he was patient of alcoholic hepatitis, pancreatitis and acute kidney injury and these facts were Dismissed Page 2 of 8 Complaint Nos.: Kalawati Sahu Date of CC/20/05 Vs. Pronouncement:
Branch Manager, Kotak Mahindra Life Insurance Co. Ltd. & Ors. 09/10/2023 concealed at the time of obtaining insurance and false DOGH was given. Legal notice was given to the opposite parties but even then the insured amount was not paid to the finance company hence this complaint is filed seeking relief as aforesaid in paragraph No.1.
3. The opposite party Nos. 1 to 3 in their joint written version except the admitted facts have denied all the adverse allegations leveled against them in the complaint and averred that the complainant does not have locus standie to file the present complaint as the complainant is not the nominee in the subject policy. As per records the father of the life assured namely Niranjan Sahu was the nominee in the subject policy. Even the complainant is claiming herself to be the wife of the life assured but has not impleaded all the legal heirs of the life assured in the complaint, hence the complaint is not maintainable. It is further averred that the insurance claim was repudiated as per the terms and conditions of the subject policy and in accordance with law as the life assured had intentionally concealed his past medical history that he was suffering from alcoholic hepatitis, pancreatitis and acute kidney injury prior to the date of signing the DOGH i.e. 31.12.2018. It is further averred that on the basis of medical documents received during investigation and assessment of the claim it has been established that life assured was suffering from alcoholic hepatitis, pancreatic and acute kidney injury. The life assured was undergoing treatment for the said ailments prior to the date of signing of DOGH. The life assured did not disclose this material information at the proposal stage and thereby rendered the life cover void and unenforceable as the life assured did not observe the principle of uberrima fides i.e. utmost good faith while filling information in the proposal form and giving DOGH. On the basis of above facts it is prayed that the complaint be dismissed.
4. The opposite party No.4 also in its written version except the admitted facts has denied all the allegations leveled against them and mainly taken Dismissed Page 3 of 8 Complaint Nos.: Kalawati Sahu Date of CC/20/05 Vs. Pronouncement:
Branch Manager, Kotak Mahindra Life Insurance Co. Ltd. & Ors. 09/10/2023 defence that the present dispute is regarding the amount of insurance cover which was done by the insurance company whereas the opposite party No.4 is a financial company who provided finance facility to the deceased husband of the complainant, hence it is not liable in any way regarding the dispute involved in the present case. Therefore it is prayed that the complaint be dismissed against the opposite party No.4.
5. The opposite party No.5 remained unrepresented in the matter even after service of notice, hence the matter is heard and decided ex-parte in absence of the opposite party No.5.
6. In support of the complaint, the complainant has filed her own affidavit dated 26.12.2019 and documents as per list which are marked as Annexure C-1 to C-11 which includes copy of death certificate of the deceased Balak Ram, copy of insurance policy, repudiation letter, legal notice and its reply etc. whereas the opposite party Nos.1 to 3 in support of their written version have filed affidavit of Mr. Shakil Ahmad, DVP - Legal at Kotak Mahindra Life Insurance Company Ltd. along with documents as per list referred as Annexure-A to Annexure-K (however they are not marked as per the index), which includes copy of membership form cum DOGH, certificate of insurance, claim intimation form, medical records of Ram Krishna Care Hospital for the period 02.02.2018 to 07.02.2018, discharge summary, referral slip, death report issued by Dr. B. R. Ambedkar Memorial Hospital, medical questionnaire verified and authenticated by Dr. B.R. Ambedkar Memorial Hospital, investigation report dated 07.08.2019 by Copper Cross Solutions, repudiation letter etc. The opposite party No.4 in support of its written version has filed affidavit of Mr. Satish Sharma, Legal Officer of the opposite party No.4.
Dismissed Page 4 of 8
Complaint Nos.: Kalawati Sahu Date of
CC/20/05 Vs. Pronouncement:
Branch Manager, Kotak Mahindra Life Insurance Co. Ltd. & Ors. 09/10/2023
7. We have heard the final arguments advanced by all parties and minutely perused the record as well as written arguments of learned counsel for the complainant and that of opposite party Nos.1 to 3.
8. The opposite party Nos.1 to 3 in the complaint and in its written arguments also has raised objection regarding maintainability of the complaint on the saying that the complainant does not have locus standi on the ground that the father of the life assured namely Niranjan Sahu was nominated as nominee in the subject policy. The opposite party Nos.1 to 3 have brought on record the Group Insurance Death Claim Intimation Form (Credit Policies) along with Declaration and Authorization Forms. From these documents it clearly appears that Niranjan Ram Badan, father of the life assured was made nominee under the policy, who submitted the claim from before the insurance company, but at the same time it is also true that the complainant is the natural legal heir/ representative of the deceased insured Balak Ram being her widow and can very well file consumer complaint in that capacity and it cannot be said that this complaint filed by the complainant widow of the life assured is not maintainable. Hence, this objection raised by the opposite party Nos.1 to 3 is not sustainable.
9. The ground of repudiation of insurance claim by the insurance company is also the main defence taken by them is the written version i.e. false declaration of good health was given by the life assured at the time of making proposal for insurance that is why he breached the principle of uberrima fides i.e. utmost good faith. The insurance company has brought on record the investigation report of the investigator Copper and Cross Solutions along with the treatment record and death certificate issued by Dr. B. R. Ambedkar Memorial Hospital etc. In the investigation report investigation at the end it is mentioned that "hence, pre-ailment is detected and the medical record confirms chronic alcoholism with alcohol abuse". Medical record of Dismissed Page 5 of 8 Complaint Nos.: Kalawati Sahu Date of CC/20/05 Vs. Pronouncement:
Branch Manager, Kotak Mahindra Life Insurance Co. Ltd. & Ors. 09/10/2023 the life assured of different hospitals i.e. Ram Krishna Care Hospital, Raipur, Shri Balaji Institute of Medical Science Pvt. Ltd., AIIMS Raipur and death report issued by Dr. Bheem Rao Ambedkar Memorial Hospital Raipur have been brought on record. In the discharge summary of Shri Balaji Institute of Medial Science Pvt. Ltd. it is mentioned that the patient remained admitted in that hospital from 05.04.2019 to 03.05.2019 he was diagnosed as patient of "CLD WITH ALCOHOLIC HEPATITIS WITH ESOPHAGEAL VARICES WITH AKI WITH ? PHT" past history is mentioned as "CHRONIC ALCOHOLIC, ALCOHOLIC HEPATITIS WITH ACUTE PANCREATITIS". In the letter of repudiation dated 05.09.2019, Annexure C-4, reply dated 06.01.2020 of the legal notice and in the written version also the insurance company opposite party Nos.1 to 3 have mentioned that the life assured was suffering from alcoholic hepatitis, pancreatitis and acute kidney injury prior to the date of signing the DOGH i.e. on 31.12.2018 and has also undergone treatment in pursuance to the said ailment. In the reply of legal notice the contents of DOGH signed by the life assured has been reproduced and it is stated that the life assured intentionally withheld the material information, the company was not able to correctly assess the risk and had such information been disclosed, the insurance company would not have issued the cover at the existing terms and conditions. The insurance company has also mentioned in the repudiation letter that the said nondisclosure amounts to fraud as per Section 45 of the Insurance Act 1938.
10. We have minutely gone through the above documents brought on record and Section 45 of the Insurance Act also. From the entire medical record it is abundantly clear that the life assured was patient of CHRONIC ALCOHOLIC, ALCOHOLIC HEPATITIS WITH ACUTE PANCREATITIS and was suffering from alcoholic hepatitis, pancreatitis and acute kidney injury prior to the date of signing the DOGH i.e. on 31.12.2018 and has also undergone Dismissed Page 6 of 8 Complaint Nos.: Kalawati Sahu Date of CC/20/05 Vs. Pronouncement:
Branch Manager, Kotak Mahindra Life Insurance Co. Ltd. & Ors. 09/10/2023 treatment in pursuance to the said ailment. It is also appears that from the date of signing DOGH on 31.12.2018 the life assured died on 13.05.2019 i.e. within a short span of four months and thirteen days only. Looking to the given situation of the case, it cannot be said that repudiation of claim, on the ground of misrepresentation of facts regarding health and previous history of ailments of the life assured, nondisclosure of material information in the proposal and resultantly breach of doctrine of utmost good faith in insurance contract, is illegal and unlawful.
11. The Hon'ble Apex Court in Branch Manager, Bajaj Allianz Life Insurance Co. Ltd. Vs. Dalbir Kaur, 2020 SCC Online SC 848 has discussed its previous judgement in Satwant Kaur Sandhu Vs. New India Assurance Company Ltd., (2009) 8 SCC 316 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 liability under the policy"
The above principle of law settled by the Hon'ble Apex Court was relied by 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. and in para No.11 it was held that : -
"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.----"
In the instant case also the insured had concealed the information regarding his general condition of health, the ailments being suffered by him and his personal history and obtained the insurance policy on the basis of Dismissed Page 7 of 8 Complaint Nos.: Kalawati Sahu Date of CC/20/05 Vs. Pronouncement:
Branch Manager, Kotak Mahindra Life Insurance Co. Ltd. & Ors. 09/10/2023 such concealment of material facts. Therefore, the appellants/ opposite parties were having right to repudiate the insurance claim on account of suppression of material facts in the proposal form and in doing so they have not committed any deficiency in service.
12. So far as role of opposite party No.4 & 5 in the present scenario of the case involving the dispute of insurance claim only is concerned the opposite party No.4 is financial institution who provided finance for purchase of the vehicle and opposite party No.5 is the authorized seller who sold the vehicle to the husband of the complainant and they are having no role to play in the question of settlement of insurance claim. However the insurance cover was provided to the life assured in connection with the loan account and cover was provided for the financed amount but even then the settlement of claim is to be decided solely by the insurance company and not by the financial institution or the seller of vehicle. Hence, no liability regarding payment of insurance claim can be fixed upon the opposite party Nos..4 & 5 also.
13. Therefore, on the basis of foregoing discussion, we are of the considered view that the insurance company opposite party Nos.1 to 3 has not committed any deficiency in service in repudiating the claim of the complainant. The opposite party Nos.4 & 5 are also not liable for settlement of insurance claim or payment of any amount being merely the financer and authorized seller of the vehicle respectively and having no role to play in settlement of insurance claim. Consequently, for the foregoing reasons this complaint being devoid of any merits is dismissed. Parties are left to bear their own cost.
(Justice Gautam Chourdiya) (Pramod Kumar Varma)
President Member
/10/2023 /10/2023
Pronounced On: 9th October 2023
Dismissed Page 8 of 8