State Consumer Disputes Redressal Commission
Hdfc Bank Ltd vs Smt.K.S.Kamakshi & Ors. on 28 July, 2017
CHHATTISGARH STATE
CONSUMER DISPUTES REDRESSAL COMMISSION
PANDRI, RAIPUR (C.G.)
Appeal No.FA/2017/301
Instituted on : 04.05.2017
H.D.F.C. Bank Limited,
Office : Gurudwara / Station Road,
Near Rajendra Park,
Durg (C.G.) ... Appellant (O.P.) No.3
Vs.
01. Smt. K. S. Kamakshi, Aged 46 years,
W/o : Late Ramesh Kawad
R/o : Lalita Niwas, House No.12,
New Adarsh Nagar,
Durg (C.G.) ... Respondent No.1 (Complainant)
02. H.D.F.C. Ergo General Insurance Co. Ltd.,
Office - H.D.F.C. Bank Limited,
122, Chauhan Dream House Commercial Complex,
Main Road, Smriti Nagar,
Bhilai, District Durg (C.G.) ... Respondent No.2 (O.P. No.1)
03. H.D.F.C. Ergo General Insurance Co. Ltd.,
Office : Raman House, H.T. Parekh Marg,
169, Backway Reclamation,
Mumbai (Maharashtra) ... Respondent No.3 (O.P. No.2))
Appeal No.FA/2017/353
Instituted on : 16.05.2017
1. HDFC Ergo General Insurance Company Limited,
Through : HDFC Bank,
122, Chauhan Dream House, Commercial Complex,
Main Road, Smriti Nagar,
Bhilai, District Durg (C.G.)
2. H.D.F.C. Ergo General Insurance Company Limited,
Registered Office : Raman House, H.T. Parekh Marg,
169, Backway Reclamation,
Mumbai (M.H.) 400 020
Through : Manager, HDFC Ergo General Insurance Co. Ltd.,
205-206, DM Tower, 2nd Floor, New Paresiya,
Indore (M.P.) Pin 452001 ... Appellants (OPs)
Vs.
// 2 //
1. Smt. K.S. Kamakshi Wd/o Late Ramesh Kawad,
Aged 46 years, R/o Lalita Niwas,
Quarter No.52, New Adarsh Nagar,
Durg (C.G.) ... Respondent No.1 (Complainant)
2. H.D.F.C. Limited,
Office : Gurudwara / Station Road,
Near Rajendra Park Chowk,
Durg, District Durg (C.G.) ...Respondent No.2 (O.P.No.3)
PRESENT: -
HON'BLE JUSTICE SHRI R.S. SHARMA, PRESIDENT
HON'BLE SHRI D.K. PODDAR, MEMBER
COUNSEL FOR THE PARTIES IN BOTH THE APPEALS:-
Shri S. Mandal, Advocate for H.D.F.C. Bank Limited, Durg, District Durg (C.G.) (O.P. No.3).
Shri Manoj Prasad, Advocate for H.D.F.C. Ergo General Insurance Company Limited, Bhilai, District Durg (C.G.) (O.P. No.1) and H.D.F.C. Ergo General Insurance Company Limited, Registered Office Mumbai (M.H), Through Manager, Indore (M.P.) (O.P. No.2) Shri Anurag Thakar, Advocate for the complainant - Smt. K.S. Kamakshi.
O RDER Dated : 28/07/2017 PER: - HON'BLE JUSTICE SHRI R.S. SHARMA, PRESIDENT This order will govern disposal of Appeal No.FA/2017/301 and Appeal No.FA/2017/353, which have been preferred respectively by the O.P. No.3 - H.D.F.C. Bank Limited and H.D.F.C. Ergo General Insurance Company Limited, (O.P.No.1) & H.D.F.C. Ergo General Insurance Company Limited, Registered Office, Mumbai (M.H.) Through Manager, Indore (M.P.) (O.P. No.2), in Complaint Case No.C.C./2016/49 against the order dated 13.02.2017, passed by District Consumer Disputes Redressal Forum, Durg (C.G.) (henceforth // 3 // "District Forum"). By the impugned order, the learned District Forum, has allowed the complaint of the complainant and directed that :-
(1) The O.P. No.1 & O.P. No.2 will deposit Loan Security amount with the O.P. No.3 within a period of one month and the O.P. No.3 will pay total amount of Rs.2,48,084/- (Rs. Two Lakhs Forty Eight Thousand and Eighty Four) (Rs.28,084 + Rs.2,20,000/-) to the complainant.
(2) The O.P. No.1, 2 and 3 will jointly and severally pay interest @ 12% p.a. on the above amount from 19.01.2016 i.e. the date of filing of the complaint till realization, to the complainant.
(3) The O.P. No1, 2 and 3 will jointly and severally pay a sum of Rs.50,000/- (Rupees Fifty Thousand) towards compensation for mental agony to the complainant.
(4) The O.P. No.1, 2 and 3 will jointly and severally pay a sum of Rs.10,000/- (Rupees Ten Thousand) towards cost of litigation to the complainant.
2. The OPs have filed their respective appeals for setting side the impugned order passed by the District Forum. The original of this order be retained in the file of Appeal No. FA/2017/301 and it's copy be placed in the file of Appeal No. FA/2017/353.
3. Briefly stated the facts of the complaint of the complainant are that the husband of the complainant Late Ramesh Kawad obtained // 4 // personal loan of Rs.5,00,000/- from the O.P. No.3 Bank in the month of January, 2014. The loan account number is 26955217 and the complainant was nominee in the said account. At the time of providing loan, the employees of the O.P. No.3 imposed a condition on husband of the that in case of death or physical disablement of the principal person i.e. husband of the complainant, who obtained loan, for ensuring payment of loan, Sarv Suraksha Policy (Critical Illness) , is compulsorily required to be taken from H.D.F.C. Ergo General Insurance , as the O.P. No.3 has a tie-up with the O.P. No.1 & O.P. No.2. For the insurance, the O.P. No.3 Bank has directly paid a sum of Rs.3,911/- to H.D.F.C. Ergo General Insurance Company Limited from the loan account of husband of the complainant. The above insurance policy was issued for the period from 03.02.2014 to 02.02.2018. At the time of obtaining insurance policy, the husband of the complainant and the complainant were assured that in case of death, critical illness or physical disablement, the entire outstanding amount of the loan would be paid by H.D.F.C. Ergo General Insurance Company Limited (O.P. No.1 & O.P. No.2). The complainant and her husband believed the version of the O.P. No.3 and obtained insurance Policy No.291820023440500000. The husband of the complainant was an employee of H.P.C.L. (Hindustan Petroleum Corporation Limited) and was posted at Raipur. H.P.C.L. was conducting compulsory medical checkup of its employees every year. As per the prescribed norms, on 11.09.2014, the medical checkup of the husband of the complainant was // 5 // conducted. In the report, for the first time it was found that the quantity of creatinine has been increased. The doctors expressed doubt that the husband of the complainant is having problem in kidney On the advice of the doctors, on 03.11.2014, the husband of the complainant was examined at Apollo Hospitals, Vishakhapatnam. On 22.11.2014, for the first time, he was admitted in Apollo BSR Hospitals, Bhilai and his treatment was started. Thereafter, again on 09.12.2014, the husband of the complainant came to Apollo BSR Hospitals, Bhilai for examination. The husband of the complainant was got admitted on 10.05.2015 in Apollo BSR Hospitals, Bhilai, where for the first time his dialysis was done. From 28.05.2015 to 02.06.2015, the husband of the complainant had taken treatment in Apollo Hospitals, Chennai and Sparsh Hospital, Bhilai and dialysis was conducted. On 17.09.2015, the husband of the complainant died. The intimation regarding the death of the life assured was given to the OPs by the complainant. The O.P. No.3 Bank assured the complainant that on submitting claim before the Insurance Company (O.P. No.1 & O.P. No.2), the payable loan amount as on date of death of the husband of the complainant would be paid by the O.P. No.1 & O.P. No.2. The O.P. No.3 advised the complainant to deposit the installments for 1-2 months and assured that after settlement of her claim, the same would be returned. After completion of religious rites, the complainant submitted claim along with all relevant original documents before H.D.F.C. Ergo General Insurance Company Limited (O.P. No.1 & 2) and as per advice of the // 6 // O.P. No.3, the complainant regularly paid the installment till November, 2015. The complainant submitted claim form under Critical Medical Illness. H.D.F.C. Ergo General Insurance Company Limited (O.P. No.1 and O.P. No.2) demanded all relevant documents relating to death of husband of the complainant, which were provided by the complainant to the O.P. No.1 & O.P. No.2. On 27.10.2015, the O.P. No.1 & O.P. No.2 malafidely repudiated the claim of the complainant on the ground that the husband of the complainant was suffering from Diabetes since last 25 years, therefore, the claim of the complainant is not payable because the life assured was suffering from pre-existing diseases. The O.P. No.1 & O.P. No.2 without any legal ground, with malafide intention to escape from their liability to pay outstanding loan amount, repudiated the claim of the complainant. The husband of the complainant died due to kidney disease. The husband of the complainant, for the first time, came to know regarding kidney disease when medical checkup was done. The husband of the complainant had taken policy on 03.02.2014. Prior to issuing insurance policy, information regarding the previous existing disease was not sought and test regarding health was not conducted. It is clear that the husband of the complainant suffered from kidney disease after 7 months from the date of obtaining insurance policy, which is payable under the insurance policy in critical illness. To escape to pay the balance loan amount, with malafide intention, the O.P. No.1 & O.P. No.2 did not pay the claim amount. Due to act of the OPs, the complainant is suffering // 7 // from financial problem and mental agony. After death of the husband of the complainant on 17.09.2015, the O.P. No.3 Bank received the two instalments amounting to Rs.28,084/- (Rs.14,042 x 2) from the complainant and during pendency of the complainant on being pressure given by the O.P. No.3, the complainant paid the remaining loan amount Rs.2,20,000/- on 25.02.2016 to the O.P. No.3 Bank. Thus after death of her husband, the complainant paid total amount of Rs.2,48,084/- to the O.P. No.3 and closed the account. The OPs have committed deficiency in service, therefore, the complainant has filed the instant complaint before the District Forum and prayed for granting reliefs, as mentioned in relief clause of the complaint.
4. The O.P. No.1 & O.P. No.2 have filed their written statement and averred that from the documents filed by the complainant, it is clear that the deceased life assured was suffering from Diabetes since last 25 years which is pre-existing disease and the deceased life assured was suffering from Diabetes prior to issuance of the insurance policy. The deceased life assured obtained the insurance policy by suppressing the fact of sufferance of above disease. The Insurance Company bonafidely considered the claim of the complainant, but according to the application of Clause 1, no payment will be made by the Insurance Company when material fact is suppressed by the life assured. In the instant case also, the deceased life assured suppressed material facts and obtained insurance policy. The life assured was suffering from // 8 // Diabetes since last 25 years, therefore, the complainant is not entitled to get any relief from the O.P. No.1 and O.P. No.2. The complaint is liable to be dismissed.
5. The O.P. No.3 Bank filed its written statement in the form of affidavit and averred that Ramesh Kawad, who was husband of the complainant had obtained personal loss to the tune of Rs. 5,00,000/- from the O.P. No.3 and his loan account No. is 26955217. At the time of sanctioning the loan, the O.P. No.3 did not imposed condition on the life assured regarding obtaining insurance policy from the O.P. No.1 & O.P. No.2. The life assured himself expressed his intention to obtain insurance policy for security of above loan. On being request made by the life assured, the premium amount was deducted from the loan account of the life assured. In the loan agreement, there is arbitration clause and according to Clause 28, only remedy available to the complainant is to refer the matter to the Arbitrator as per provisions of Arbitration and Conciliation Act, 1996, therefore, learned District Forum has no jurisdiction to decide the matter. In the instant case, complainant has not made party Shri Kovadda Krishna Chaitanya, who is son of life assured Late Ramesh Kawad, therefore, the complaint is liable to be dismissed.
6. The complainant has filed documents. Annexure A-1 is account statement of Ramesh Kovved issued by HDFC Bank for the period from 15.01.2014 to 30.11.2015, Annexure A-2 is Sarv Suraksha Policy (Sarv // 9 // Suraksha PRO) issued by HDFC Ergo General Insurance Company Limited, Annexure A-3 is letter dated 05.02.2014 sent by the H.D.F.C. Ergo General Insurance Company Limited to Ramesh Kovved, Annexure A-4 is report of Apollo BSR Hospitals, Annexure A-4(1) is Laboratory Investigation Report, A-4(2) is Laboratory Investigation Report, A-4(3) is Glycohemoglobin Estimation, Annexure A-4 (4) is Laboratory Investigation Report, Annexure A-4 (5) is prescription slip dated 03.11.2014 issued by Dr. Anil Kumar Patro, Apollo Hospitals, Visakhapatnam, Annexure A-4 (6) and 4(7) is General Discharge Summary, Annexure A-4(8) is Report issued by Apollo BSR Hospitals, Annexure A-4(9) to 4(14) is Discharge Summary issued by Ramkrishna Care Hospitals, Annexure A-4(15) to 4(19) is Discharge Summary issued by Apollo Hospitals, Annexure A-4(20) is Ultrasound Report issued by Apollo Hospitals, Annexure A-4(21) are invoices, Annexure A-4(22) is OPD Procedure Invoice, Annexure A-4 (23) is OPD Procedure Invoice and Invoice, Annexure A-4(24) is invoices issued by Sparsh Multispecialty Hospital, Annexure A-4 (25) is OPD Procedure Invoices, Annexure A-4 (26) is OPD Procedure Invoice and Invoice, Annexure A-4 (27) are OPD Procedure Invoices, Annexure - 4(28) is OPD Procedure Invoice, Annexure A-4(29) is prescription slip dated 17.07.2015 issued by Kidney Care Clinic, Annexure A-4(30) is prescription slip dated 31.07.2015 issued by Apollo BSR Hospitals, Bhilai, Annexure A-4(31) is prescription slip issued by Apollo BSR Hospitals, Annexure A-4(32) is report issued by Apollo BSR Hospitals, // 10 // Annexure A-4(33) is OP Consultant Prescription issued by Queen's NRI Hospital, Annexure A-4(34) is OP Consultant Prescription issued by Queens Hospital, Annexure A-4(35) is Laboratory Investigations Report issued by Queen's NRI Hospital, Annexure A-4(36) is Certificate issued by Apollo BSR Hospital, Bhilai, Annexure A-5 is Claim Repudiation Letter dated 27.10.2015 sent by HDFC General Insurance Company Limited to the complainant, Annexure A-6 is payment receipt, Annexure A-7 is Account statement.
7. The O.P. No.1 & 2 have filed documents which are Sarv Suraksha Policy (Sarv Suraksha PRO) and Sarv Suraksha Policy Wording.
8. The O.P. No.3 has filed documents. Annexure NA-3(1) is Power of Attorney, Annexure NA-3-2 is Sarv Suraksha Pro - Proposal Form, Annexure NA-3-3 is Loan Agreement, Annexure NA-4 is receipt.
9. Learned District Forum, after having considered the material placed before it by the parties, has allowed the complaint of the complainant and directed the OPs to jointly and severally pay amounts to the complainant.
10. Shri S. Mandal, learned counsel appearing for H.D.F.C. Bank Limited (O.P. No.3) (In Appeal No.FA/2017/301) has argued that that Ramesh Kawad, who was husband of the complainant had obtained personal loan to the tune of Rs. 5,00,000/- from the O.P. No.3 and his // 11 // loan account No. is 26955217. At the time of sanctioning the loan, the O.P. No.3 did not imposed condition on the life assured regarding obtaining insurance policy from the O.P. No.1 & O.P. No.2. The life assured himself expressed his intention to obtain insurance policy for security of above loan. On being request made by the life assured, the premium amount was deducted from the loan account of the life assured. In the loan agreement, there is arbitration clause and according to Clause 28, only remedy available to the complainant is to refer the matter to the Arbitrator as per provisions of Arbitration and Conciliation Act, 1996, therefore, learned District Forum has no jurisdiction to decide the matter. In the instant case, complainant has not made party Shri Kovadda Krishna Chaitanya, who is son of life assured Late Ramesh Kawad. The impugned order passed by the District Forum is erroneous and is liable to be set aside. The appeal filed by the O.P. No.3 be allowed and impugned order may be set aside.
11. Shri Manoj Prasad, learned counsel appearing for the O.P. No.1 & 2 (In Appeal No.FA/2017/353) has argued that from the documents filed by the complainant, it is clear that the deceased life assured was suffering from Diabetes since last 25 years which is pre-existing disease and the deceased life assured was suffering from Diabetes prior to issuance of the insurance policy. The deceased life assured obtained the insurance policy by suppressing the fact of sufferance of above disease.
// 12 // The Insurance Company bonafidely considered the claim of the complainant, but according to the application of Clause 1, no payment will be made by the Insurance Company when material fact is suppressed by the life assured. In the instant case also, the deceased life assured suppressed material facts and obtained insurance policy. The life assured was suffering from Diabetes since last 25 years, therefore, the complainant, is not entitled to get any relief from the O.P. No.1 and O.P. No.2. . The impugned order passed by the District Forum is erroneous and is liable to be set aside. The appeal filed by the O.P. No.1 & O.P. No.2 be allowed and impugned order maybe set aside.
12. Shri Anurag Thakar, learned counsel appearing for the complainant (respondent No.1 in both the appeals) has argued that life assured Ramesh Kawad, who was husband of the complainant had obtained personal loan from the O.P. No.3 and the O.P. No.3 imposed condition on him that before sanctioning loan it is necessary for the life assured to obtain Sarv Suraksha Policy (Critical Illness) from the O.P. No.1 and O.P. No.2. On being orally imposing above condition by the O.P. No.3 on the life assured, the life assured obtained insurance policy from the O.P. No.1 & O.P. No.2 for the period from 03.02.2014 to 02.02.2018. A sum of Rs.3,911/- was deducted by the O.P. No.3 from the loan account of the life assured towards premium and Sarv Suraksha Policy was issued by the O.P. No.1 & O.P. No.2. The life assurede made the complainant nominee in the insurance policy.
// 13 // Prior to issuing insurance policy or after issuing insurance policy, the OPs have neither sought any information from the life assured regarding his diseases nor his necessary tests were got conducted by them. The OPs have not rebutted the above facts in their written statement. The Insurance Company made allegation that the life assured obtained the insurance policy by suppressing material facts, but the proposal form has not been filed by the O.P. No.1 & O.P. No.2. The husband of the complainant was an employee of Hindustan Petroleum Corporation Limited (H.P.C.L.) and was posted at Raipur. The employer of the deceased had regularly done check up of its employees. On 11.09.2014, when the check up of the life assured was done, for the first time he came to know regarding kidney problem. As no information was sought by the OPs from the life assured regarding his illness / diseases, therefore, information in that regard was not given by the life assured. Prior to issuance of the policy, proposal form was filled up by the life assured, in which no question was asked regarding the previous or present diseases suffered by the husband of the complainant. The Insurance Company has erroneously repudiated the claim of the complainant. The impugned order passed by the District Forum, is just and proper and does not suffer from any infirmity, irregularity or illegality, hence does not call for any interference by this Commission. Both the appeals respectively filed by the OPs are liable to be dismissed.
// 14 //
13. We have heard learned counsel appearing for the parties and have also perused the record of the District Forum as well as the impugned order passed by the District Forum.
14. It is not disputed that the husband of the complainant obtained personal loan of Rs.5,00,000/- from the O.P. No.3. Loan Agreement (Annexure NA-3-3) has been filed by the O.P. No.3. The above loan agreement was executed between the life assured and O.P. No.3. The O.P. No.3 also filed Loan Application Form. In the Loan Agreement and Loan Application Form, it is not mentioned that it is compulsory for the life assured to obtain insurance policy from the O.P. No.1 & O.P. No.2., before sanctioning loan. It appears that the life assured himself obtained insurance policy from the O.P. No.1 & O.P. No.2, therefore, the allegation of the complainant that her husband was forced by the O.P. No.3 for obtaining Sarv Suraksha Policy, is not acceptable. On the contrary, it is established that the life assured himself obtained insurance policy from the O.P. No.1 & O.P. No.2.
15. The O.P. No.1 & O.P. No.2 have filed copy of terms and conditions of Sarv Suraksha Policy. In the above document, there is specific exclusions applicable to Section 1, which reads thus :-
"SPECIFIC EXCLUSIONS APPLICABLE TO SECTION 1 :
No payment will be made by the Company for any claim directly or indirectly caused by based on, arising out of or howsoever attributable to any of the following :-
// 15 //
1. Any Critical illness for which, care treatment, or advice was recommended by or received from a Physician, or which first manifested itself or was contracted before the start of the Policy Period, or for which a claim has or could have been made under any earlier insurance policy."
16. The complainant herself filed Medical Report of deceased life assured Ramesh Kawad, dated 11.09.2014 issued by Apollo BSR Hospitals, Bhilai, District Durg, which is marked as Annexure A-4. In the above document, in the column of "Physical Examination" it is mentioned that the patent is suffering from DMF2 since last 25 years. Annexure A-4 (5) is prescription dated 03.11.2014, issued by Dr. Anil Kumar Patro, M.D., DNB, Apollo Hospitals, Visakhapatnam, in which it is mentioned that Mr. K. Ramesh was suffering from D.M. since last 25 years. Annexure A-4 (6) is General Discharge Summary issued by Apollo BSR Hospitals, Bhilai, in which under the head Diagnosis it is mentioned that "Known case of DM with HT with CKD with hyponatremia with anemia with left sides minimal plural effusion."
17. In written arguments, the complainant took a ground that the OPs have not sought any information regarding previous illness / diseases of the life assured and the O.P. No.1 & O.P. No.2 did not file proposal form, therefore, information was not given by the life assured and in the proposal form there was no column for mentioning previous diseases / illness of the life assured. The above contention of the // 16 // complainant is not acceptable. The complainant herself pleaded that the life assured was employee of Hindustan Petroleum Corporation Limited and his regular check up was conducted by the employer. The life assured was an educated person and he was knowing regarding terms and conditions of the insurance policy. In the written arguments, it is also mentioned that life assured had not given information regarding diseases suffered by him.
18. In Revision Petition No.2877 of 2013 - M/s. Aviva Life Insurance Company India Pvt. Ltd. vs. Smt. Phool Kunwar, vide order dated 04.08.2015, Hon'ble National Commission, has observed thus :-
"15. As apparent from the record of Apollo Hospital, the deceased was suffering from diabetes mellitus and hypertension for last two years prior to his death. So, it stands clearly proved that deceased life assured had concealed and suppressed material facts at the time of obtaining the insurance policy.
16. In this regard, observations made by Hon'ble Supreme Court in "Satwant Kaur Sandhu Vs. New India Assurance Company Ltd. (2009) 8 SCC 316" which are quite relevant to the present case, are quoted as under :-
"Thus, when an information on a specific aspect is asked for in the proposal form, an assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge. It is not for the proposer to determine whether the information sought for is material for the // 17 // purpose of the policy or not. Of course, obligation to disclose extends only to facts which are known to the applicant and not to what he ought to have known. The obligation to disclose necessarily depends upon the knowledge one possesses. His opinion of the materiality of that knowledge is of no moment."
In para 29 of Satwant Kaur Sandhu's case (Supra), the Hon'ble Apex Court has held that :
"29. Judged from any angle, we have no hesitation in coming to the conclusion that the statement made by the life assured in the proposal form as to the state of his health was probably untrue to his knowledge. There was clear suppression of material facts in regard to the health of the life assured and, therefore, the respondent - insurer was fully justified in repudiating the insurance contract. We do not find any substance in the contention of learned counsel for the appellant that reliance could not be placed on the certificate obtained by the respondent from the hospital, where the life assured was treated.
17. This Commission in Life Insurance Corporation of India Vs. Smt. Minu Kalita, R.P. No.1167 of 1997 decided on 19.03.2012"
has held that :-
"It is settled law that the contract of insurance is based on good faith. The information as to the life assured having suffered from Cancer before the policy was taken and the hospitalization for the same came to light afterwards and the petitioner is not to know this by an examination of their medical officer. It is for the respondent to give the correct information on his health which he did not disclose at that time. This ground of incorrect information and false statements regarding age of the life assured and income make the insurance contract null and // 18 // void. We find there is no deficiency of service by the petitioner Life Insurance Corporation of India. Both the District Forum and the State Commission have not appreciated the facts brought out by the petitioner in repudiating the claim."
19. In Gurmeet Kaur @ Meeto & Anr. vs. Life Insurance Corporation of India, III (2015) CPJ 246 (NC), Hon'ble National Commission has observed that "Deceased had been suffering from diabetes for the last 14-15 years and suffered from chronic renal failure for last 4-5 years. No evidence on record to prove that information given by Doctor regarding health status of life assured was incorrect. Violation of conditions of policy established. Repudiation justified."
20. In Life Insurance Corporation of India v. Shahida Khatoon & Anr., IV (2013) CPJ 370 (NC), Hon'ble National Commission observed thus :-
"12. We have relied upon several judgments of Hon'ble Supreme Court in cases Satwant Kaur Sandhu v. New India Assurance Co. Ltd., IV (2009) CPJ 8 (SC) = VI (2009) SLT 338 = (2009) 8 SCC 316, P.C. Chacko and Anr. v. Chairman, LIC of India, III (2008) CPJ 78 (SC) = IX (2007) SLT 533 = IV (2007) ACC 773 (SC) = (2008) 1 SCC 321, LIC of India v. Smt. Asha Goel, I (2001) SLT 89 = (2001) 2 SCC 160, have discussed the term "Material Fact" as fact which goes to the root of the contract of insurance and has a bearing on the risk involved would be material. The term material fact is not defined in the Act and, therefore, it has been understood and explained in general terms to mean as any fact which influence the judgment of a prudent insurer in fixing the premium or determine whether he would like to accept the risk.
// 19 //
13. Therefore, we do not find any force in the arguments of Counsel for complainant/respondent. Both the Fora below have erred in not considering the non-disclosure of material facts by the deceased and filled the proposal form. Accordingly, we set aside the orders passed by Fora below and allow this revision petition by dismissing the complaint. No order as to cost".
21. In L.I.C. of India v. Pratima Mishra, IV (2013) CPJ 161 (Chha.), this Commission observed thus :-
"8. Even if we presume that the deceased was required to notify anything to the Insurance Corporation as per terms and conditions of the acceptance, as per printed material available in the bottom of receipt of deposit of premium, even then requirement was only this that if there is any change in the occupation of the life assured, then it was required to be notified and if there is any adverse circumstances connected with financial position or the general health of the proposer or that of any members of his family then if that circumstance may be very much unimportant, but the same if occurred between the date of proposal and date of this receipt or if on a proposal for assurance or an application for revival of a policy on the life made to any office of the Corporation, then it was required to be notified. Thus, what was required to be notified was any change in the occupation of the life assured or any adverse circumstances affecting the life assured or his family members. If deceased life assured suffered a road accident, but immediately after treatment it was found that he was not having any bony injury. When no adverse circumstances relating to his health was stated by any of the doctors to the deceased life assured, then it was not required for him to notify anything to the Insurance Corporation. Even in the receipt, which was obtained by the deceased after deposit of the premium, only such terms and conditions were printed.
9. Documents in respect of treatment of deceased life assured, which have been brought on record by the appellant before the District // 20 // Forum are photocopies of the treatment of the deceased life assured in Ramkrishna Care Hospital, Raipur as well as Chandulal Chandrakar Memorial Hospital, Bhilai. From these documents, it appears that as per noting of Ramkrishna Care Hospital, Raiapur on C.T. Scan, it was found that there was no bony injury and all four limbs could be raised by him. Pupil of both eyes were normal. Thus, nothing substantial was noted by the Hospital for which it can be said that it was a circumstance which had adversely affected the health of the life assured and was required to be notified by him to the Insurance Corporation. Later on he was treated with Chandulal Chandrakar Memorial Hospital, Bhilai from 15.03.2008, where ultimately he died on 16.03.2008. Thus, from record of the treatment given in Ramkrishna Care Hospital, it appears that it is not containing any such information which can be said to be relating to circumstance adversely affected the health of the deceased life assured and was required to be notified by him to the Insurance Corporation."
22. In L.I.C. of India v. MU Jakia, IV (2013) CPJ 129 (NC), Hon'ble National Commission observed thus :-
"15. It is an undisputed fact that Shri Akhil Khan the deceased had taken LIC policy from the respondent for a sum of Rs.51,000/- on 1.1.2004. It is also an admitted fact that as per the bed head ticket of Maharana Bhopal Hospital, Udaipur the deceased was admitted to the hospital on 3.6.2003 for the treatment of chronic renal failure, hypertension, septicaemia, nephritis and was discharged from the hospital on 6.6.2003. While the State Commission has correctly come to the conclusion that the petitioner were justified in repudiating the claim of the respondents on the ground of suppression of material fact regarding health and that the finding of the District Forum rejecting the claim of the respondents were based on correct appreciation of entire material evidence available on record and they do not suffer from any basic infirmity or illegality or perversity and hence, no interference // 21 // is called for with the same and appeal was dismissed. The State Commission erroneously went on to award an ex gratia payment on humanitarian consideration of Rs.15,000/-. This is beyond the pleadings of the respondents. Further, in P.C. Chacko and Anr. v. Chairman Life Insurance Corportion of India and Ors., IV (2007) ACC 773 (SC) = IV (2007) CLT 229 (SC) = IX (2007) SLT 533 = III (2008) CPJ 78 (SC) = 2007 XAD (SC) 429, in which paragraph 20 which is relevant to us in this case reads as under :
"We are not unmindful of the fact that Life Insurance Corporation being a state within the meaning of Article 12 of the Constitution of India, its action must be fair, just and equitable but the same would not mean that it shall be asked to make a charity of public money, although the contract of insurance is found to be vitiated by reasons of an act of the life assured. This is not a case where the contract of insurance or a clause thereof is unreasonable, unfair or irrational which could make the Court carried the bargaining powers of the contracting parties. It is also not the case of the appellants that in framing the aforesaid questionnaire in the application/proposal form, the respondents had acted unjustifiably or the conditions imposed are unconstitutional."[See also Life Insurance Corporation of India & Anr. v. Vinod Devi, IV (2013) CPJ 142 (NC)].
16. The National Commission in RP Nos. 858, 894, 995, 1435, 1446, 1503, 1504, 1505, 1553, 1554, 1679, 1680, 1722, 1723, 3631 of 2009, 1504 of 2006, 3147, 3789, 3855, 3858 to 3860, 3917, 3918, 4662, 4663, 4726, 4727, 4836, 4837, 5009, 5010, 5030 of 2008, 23, 164, 331, 359, 1909, 1926, 2945, 2946, 3094, 3097 of 2009 decided on 17.12.2009 have stated as under :-
"We are afraid in terms of provisions of Consumer Protection Act 1986, we are not free to do a 'favour' to a party. As, far as the moral obligation is concerned, that has to be done 'voluntarily' by the authority concerned. The Consumer Fora // 22 // cannot pass or give direction or order to give a 'favour' otherwise the word more grounds are voluntarily will lose its very meaning.
While going through the aim and objectives of the Consumer Protection Act, 1986, as highlighted by the learned Counsel for the respondent we are of the view that a distinction needs to be made between justice - natural or otherwise and 'favour'. There is no room for favouritism while dispensing justice. The word ' ex gratia' has been interpreted / understood to mean favour', rendered 'voluntarily' and on 'moral grounds', thus, clearly ousting the jurisdiction of quasi-judicial bodies like ours to direct a party to show favour. If we do this, this will not only run counter to the letter and spirit of Consumer Protection Act but also assume / confer powers which are not conferred upon us by Law / mandate. Any direction by Consumer Fora to the party concerned to grant ex gratia payment will defeat the very purpose and meaning of 'ex gratia', i.e., favour, grace shown voluntarily on moral grounds.
However, this order would not deter directing payment of ex gratia' basis by the Consumer Forums, provided, the concurrence of the sanctioning authority of insurance company, is obtained through their Counsel (Counsel for the Insurance Company) for making the payment on 'ex gratia' basis."
23. In Revision Petition No.2511 of 2016 - Siddhant Khare (Minor), Through Natural Guardian Mother Smt. Neeti Khare Vs. Branch Manager, SBI Life Insurance Co. Ltd. & Another, vide order dated 11.07.2017, Honble National Commission, has observed thus :-
"4. A perusal of the prescriptions issued by Arthritis Clinic Centre for Rheumatic Diseases on 22.4.2005 and 15.7.2005 to late Smt. Leelawati would show that she was suffering from certain ailments // 23 // including Thyroid and Hypertension in April/July, 2005. A perusal of the proposal form submitted to the insurer would show that while responding to Question No.14 (iv) the life assured was required to declare, in case she had been advised any medical treatment during last 10 years. In response to Question 14 (xv), she was required to disclose if she had in the past suffered from Thyroid or Arthritis. The proposal form shows that negative answers were given to both the aforesaid questions. Thus, it was clearly represented to the insurer that the life assured had not been under any medical treatment for last 10 years and was not suffering from Thyroid or Arthritis. The proposal form having been submitted in the year 2013, the aforesaid information was clearly false. Thus, the insurance policy was obtained by misrepresentation and concealment of material facts from the insurer."
24. It is settled principle of law that the contract of insurance is a contract uberrima fides and there must be complete good faith on the part of the life assured at the time of submitting proposal form for obtaining the policy and the assured is under a solemn obligation to make full disclosure of material facts with regard to his state of health because the same was relevant for the insurer to decide as to whether the Insurance Policy is to be issued to the proposer or not.
25. In the instant case, the deceased life assured Ramesh Kawad obtained Sarv Suraksha Policy from the O.P. No.1 & O.P. No.2 in the month of February, 2014. According to the O.P. No.1 and O.P. No.2, the life assured Ramesh Kawad submitted proposal form for insurance on his life, but in the proposal form he did not disclose the fact that he was suffering from Diabetes Mellitus. The complainant has filed // 24 // medical report in which it is mentioned that the life assured was suffering from Diabetes Mellitus Type 1 & Type 2 since last 25 years. The past history of the patient was mentioned in the medical report and on the basis of information given by the patient or his relatives. Looking to the documents filed by the complainant, it appears that the life assured was suffering from DM Type 1 & Type 2 since last 25 Years, which was within knowledge of the life assured, therefore it was essential for the life assured to declare the above facts in the proposal form, but the life assured had not disclosed the above facts while making proposal statement and has violated the terms and conditions of the insurance policy, therefore, the O.P. No.1 & O.P. No.2 have rightly disallowed the claim of the complainant. The complainant, is not entitled for insurable benefit under the insurance policy, therefore, the complainant is also not entitled to get any amount from the O.P. No.1 & O.P. No.2 under Sarv Suraksha Policy.
26. On the basis of above discussions, it appears that the finding recorded by the District Forum, is erroneous and not sustainable in eye of law, and is liable to be set aside.
27. Hence the appeal No.FA/2017/301 filed by the O.P. No.3 H.D.F.C. Bank Limited and appeal No.FA/2017/353 filed by the O.P. No.1 & O.P. No.2 H.D.F.C. Ergo General Insurance Company Limited, are allowed and the impugned order dated 13.02.2017, is set aside.
// 25 // Consequently, the complaint stands dismissed. No order as to the cost of both the appeals.
(Justice R.S. Sharma) (D.K. Poddar)
President Member
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