State Consumer Disputes Redressal Commission
Balwinder Kaur vs Sbi Life Insurance Company Limited And ... on 17 February, 2017
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB
DAKSHIN MARG, SECTOR 37-A, CHANDIGARH
Consumer Complaint No.143 of 2013
Date of institution: 05.12.2013.
Date of Decision: 17.02.2017.
Balwinder Kaur widow of late Manjit Singh Rattan resident of House No.32,
Ajit Nagar, Near ICICI Bank, Patiala Punjab-147002.
...Complainant.
Versus
1. SBI Life Insurance Company Limited Corporate & Registered Office
Natraj MV Road & Western Express High Way Junction Andheri E,
Mumbai-400069 through its Chairman/Managing Director.
2. Chief Manager, Claims SBI Life Insurance Company Limited, Central
Processing Centre Kapas Bhawan Plot No.3A Sector No.10 CBD
Belapur Navi Mumbai - 400614.
3. Head - Claims SBI Life Insurance Company Limited Central
Processing Centre Kapas Bhawan Plot No.3A Sector No.10 CBD
Belapur Navi Mumbai -400614.
4. State Bank of Patiala, The Mall, Patiala through its
Chairman/Managing Director.
5. State Bank of Patiala, Theri, Patiala Branch 257 Ph.I Arun Estate
District Patiala Punjab-147002 through its Branch Manager.
....Opposite Parties.
Consumer Complaint under Sections 2,17 and
18 of the Consumer Protection Act, 1986.
Quorum:-
Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President
Mr. Vinod Kumar Gupta, Member
Mr. Harcharan Singh Guram, Member Present:-
For the complainant : Sh.Deepak Arora, Advocate For opposite parties No.1,2&3: Sh.Rajneesh Malhotra, Advocate For opposite parties No.4&5 : None Consumer Complaint No. 143 of 2013 2 HARCHARAN SINGH GURAM, MEMBER :
The complainant has filed this complaint under section 2, 17 & 18 of the Consumer Protection Act, 1986 (in short 'Act').
2. The relevant brief facts as averred in the complaint are that the complainant is the wife and nominee of late Shri Manjit Singh Rattan and he was insured under the SBI Life Insurance Policy No.70000001609 under State Bank of Patiala - Rinn Raksha Home Loan Scheme and another policy vide insurance policy No.65141649814 for a sum of `12,63,646/- and `20,18,880/- respectively. These policies commenced from 05.10.2012 with a sum assured of `20,18,880/- under the house loan scheme and he also obtained the other policy of SBI Life Rinn Raksha Home Loan Scheme for his loan account No.65141661693 through his employer State Bank of Patiala commencing from 05.10.2012 with an initial sum assured of `12,63,646/-. It was averred that the insured died on 24.02.2013 while on duty at Pauri Garhwal (Uttrakhand). It was pleaded that at the time of his death, necessary post mortem examination was conducted by the Senior Medical Officer, Pauri Garhwal (Uttrakhand) on 24.02.2013 and cause of death was opined due to Myocardial infarction with cardiogenic shock and main cause of death was heart failure. It was averred that the above twin insurance policies obtained by the deceased through his employer State Bank of Patiala and the amount of insurance policy was required to be credited in the loan account of the deceased. It was pleaded that the clause No.21 pertains to policy benefits and as per this clause, benefits under the policy would increase the amount of Consumer Complaint No. 143 of 2013 3 value to be paid by the insurance company on the passage of time. As such on the date of death, the amount liable to be paid under the said policies was to the tune of `20,73,258/- against the insured value of `20,18,880/- and similarly a sum of `13,12,787/- against the sum assured `12,63,646/-. The matter regarding insurance claim was taken-up through his employer State Bank of Patiala, Theri Patiala Branch and a letter received from the opposite parties was endorsed to the complainant, wherein it was mentioned that on the eve of obtaining aforesaid insurance policy, the deceased had signed declaration of good health. But, as per the records available with opposite parties No.1,2&3, wherein it stated that he was suffering from kidney disease prior to the date of enrollment of policy. He had given a false good health declaration and did not disclose material facts regarding his health before entering into the scheme, the claim under the aforesaid policies stand repudiated. It has been averred that the relevant facts and circumstances of the case have not been properly appreciated by opposite parties No.1,2&3 while repudiating the claim. The complainant being widow of the deceased is entitled to the aforesaid amount of `33,86,045/-. It is averred that at the time of obtaining the aforesaid policies, the insured was posted as Chief Manager in State Bank of Patiala. It is averred that the aforesaid policies were obtained by him through his employer and he was enjoying good health at the time of obtaining the policies. The insured died due to Cardiac Arrest, while he was on duty to Pauri Garhwal and not due to any kidney problem as mentioned by opposite parties in the repudiation letter. The averments in the Consumer Complaint No. 143 of 2013 4 complaint are to the effect that life assured did not in anyway suppressed the material facts at the time of obtaining the policies. The opposite parties are not justified under any circumstances upon his death to repudiate the claim amount to be paid under the said policies. On failure to receive any suitable reply from opposite parties, consumer complaint has been filed seeking directions be issued against opposite parties No.1,2&3, to pay a sum of `33,86,045/- along with interest @ 12% from the date of repudiation, to pay `5,00,000/- by way of damages on deficiency of service on the part of opposite parties, to pay `50,000/- as litigation expenses.
3. The complaint has been contested by opposite parties No.1,2&3 who filed their joint written reply in which they have disputed averments in the complaint. It has been averred that the declaration of good health should be signed by the healthy persons who are not suffering from any of the disease mentioned therein, thus who suffered from any of the ailment are not eligible to be covered under the group insurance scheme. The insured is well within its rights to repudiate the claim arising under the insurance cover if it is found that there was suppression of material facts. In the group insurance scheme, the privity of the contract is between the Master Policy holder and the insurance company. As an evidence of the contract, a Master Policy containing of the terms and conditions of the insurance coverage is issued to the Master Policy Holder. The terms and conditions of the Master Policy are binding on all the insured members. The individual members of the Master Policy are issued "Certificate of Insurance"(hereinafter referred to as "COI") as Consumer Complaint No. 143 of 2013 5 evidence of their membership in the Group Scheme. It is admitted that opposite parties SBI Life Insurance Company has issued a group housing scheme for the borrowers of the loan of the different categories like Housing Loan, Vehicle Loan, Tractor loan etc. availed from State Bank of Patiala and its group banks, where under the borrower-member is offered insurance subject to the terms and conditions incorporated in the Master Policy. The privity of contract is between the Master Policyholder i.e. State Bank of Patiala and the insurer namely SBI Life. The deceased life assured Sh.Manjit Singh Rattan was issued certificate of insurance for both the loan accounts availed by him. The opposite parties took preliminary objections and contested that the complainant has filed a complaint before Ombudsman Chandigarh and as such, he was not permitted to file consumer complaint in this Commission as he had already availed one option of being heard before a quasi judicial body established by Central Government's notification under Redressal of Public Grievance Rules, 1998. It is averred that the complaint filed before Commission is hit by Section 11 of Civil Procedure Code under the principle of Res Judicata. As per this section it reads as "No court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or under the same title, in a court competent to try such subsequent suit or the suit in which such issue has been subsequently raised and has been heard and finally decided by such court." It is averred that the life insurance contract is a contract of utmost good faith. In the Consumer Complaint No. 143 of 2013 6 instant case, the deceased life assured committed a breach of the principle of utmost good faith by suppressing material facts of his pre- existing illness and committed a breach of doctrine of utmost good faith by suppressing the material facts. Deceased-Manjit Singh suppressed the material of its disease prior to the commencement of risk from 05.10.2012 and 07.11.2012 and did not disclose that he was suffering from heart disease and kidney disease. In the medical and history record, he specifically declared in the form that he was of a sound mental and of good physical health and he was not suffering from any disease. He was not been hospitalized for last three years for any disease and has not been advised or treating for any critical illness. It has been pleaded that the documents placed on record clearly shows that he was suffering from heart disease and kidney disease. Thus, he had suppressed material facts deliberately.
4. On merits, it is admitted that deceased life assured Sh.Manjit Singh Rattan availed housing loan from State Bank of Patiala under loan accounts Nos.65141649814 and 65141661693 and had availed Rinn Raksha Group Insurance Scheme under the Master Policy No.70000001609 issued to State Bank of Patiala through Membership Form Nos.700274203 and 700274205 both dated 04.10.2012. The risk of insurance commenced under loan account No.65141649814 from 07.11.2012 for a sum insured of `20,18,880/- and risk commenced under loan account No.65141661693 from 05.10.2012 for a sum insured of `12,63,646/- as per the certificate of insurance, the amount outstanding in loan accounts is required to be paid by them as the life assured expired on Consumer Complaint No. 143 of 2013 7 24.02.2013 and the amount of loan outstanding was to the extent of `20,73,258/- and `13,12,787/- respectively. It is pleaded that under point No.7 of medical questionnaire, it was written "(i) Have you consulted any doctor for surgical operations or have been hospitalised for any disorder other than minor cough, cold or flu during the last five years?" Under para (iii) "Have you ever been treated for or told that you have diabetes or raised blood sugar, high blood pressure, heart attack, chest pain or any heart disease, stroke/paralysis or any other disorder of the circulatory system etc.? To all these questions, the DLA replied in a negative. It is pleaded that the DLA died on 24.02.2013 and a claim arose in just 3 months 17 days and 4 months 19 days respectively pertaining to two policies. As per the investigation conducted by their agents and who enquired into the matter, it was found that the DLA was suffering from heart disease and kidney disease prior to the date of enrolment under the insurance cover note. It was averred that deceased Manjit Singh had undergone Echo Cardiography and Colour Doppler on 01.01.2010. It was further submitted that a prescription slip dated 26.01.2010 given by Dr.Manmohan Singh, wherein Manjit Singh underwent investigation at the Department of Cardiology of Punjab Institute of Heart Diseases. As per ultrasonography report dated 16.04.2010 of Alpha Radiological Centre, Patiala provides the clear picture that DLA had undergone ultrasonography on 16.04.2010. As per prescription slip dated 14.04.2012 of Patiala Dialysis & Kidney Center, it is clear that the DLA was taking treatment for Membraneous Glomerulonephritis (in partial remission).
Consumer Complaint No. 143 of 2013 8
5. The leave record was obtained from State Bank of Patiala, from which it revealed that he availed leave on medical grounds from 08.10.2010 to 30.10.2010. From this leave record, it is clear that he had taken medical treatment from various places and availed medical reimbursement facility from its employer. It is clearly established that DLA was suffering from pre-existing illness on 05.10.2012 and 07.11.2012 respectively on the dates of signing the membership forms/DGH on 04.10.2012. From perusal of these records, it is clear that the DLA was suffering form heart disease and kidney disease prior to the enrolment in the insurance schemes. It is further pleaded that an insurance policy is to be construed as per the policy terms and conditions of the documents which is basic contract between the parties and nothing can be added or subtracted by giving different meanings to the words mentioned therein and reiterated their averments that the repudiation of the claim is a valid repudiation and DLA was not entitled for any relief as prayed in the complaint and it needs to be dismissed.
6. To substantiate her claim, the complainant tendered in evidence her affidavit along with documents Ex.C-1/A to Ex.C-7 and closed the evidence. On the other hand, opposite parties tendered affidavit of their authorised representative along with documents Ex.OPA to OP-28 and closed the evidence.
7. We have heard learned counsel for the parties and have perused the record carefully.
Consumer Complaint No. 143 of 2013 9
8. Learned counsel for the complainant contended that all the allegations made in the complaint stands proved from the affidavit of the complainant and documents placed on the record. It is proved on the record that the complainant agreed to purchase the insurance policy cover through State Bank of Patiala from opposite parties No.1,2,3 in order to secure his loan accounts availed from his employer vide Ex.C-1. He argued that as per Ex.C-1 first premium receipt of `1,68,880/- for the sum assured of `20,18,880/- by opposite parties which was paid by the DLA, and he was covered under Master Policy No.70000001609 for initial sum assured of `20,18,880/-. From this exhibit, it is clear that this policy has been issued through his employer State Bank of Patiala having its Branch at Theri, Patiala. His record of medical leave was duly within the knowledge of his employer. It was the duty of SBOP also to check the record of the member of the Master Policy being loanee of State Bank of Patiala instead of repudiating the genuine claims after submission of the same. He argued that cause of action as alleged in the medical records produced by opposite parties does not pertain to the cause of death of the deceased but as per post-mortem report, the cause of death is that of cardiac arrest. Counsel for the complainant argued that prima-facie the premium for floater policies obtained by the DLA was paid by him alone and not by the bank and once, they accepted the premium then they cannot wriggle out from their responsibility of making good insurance amount at a later date by way of claiming that the deceased was having pre-existing disease and suppressed the material facts from it about his good health. Consumer Complaint No. 143 of 2013 10
9. The learned counsel for the opposite parties argued that as per the record obtained from the insured employer, it reveals that the complainant was having pre-existing disease and gave wrong information at the time of filling-up of a proposal form and argued that his case is fully covered by judgement of Hon'ble National Commission on the ground of suppression of material facts while obtaining insurance policy on the ground of utmost good health.
10. The learned counsel for the OPs further argued that usually, master policies are issued in favour of the banks, who remits the insurance premium and they do not have any concern to the fact that any amount of premium, which was remitted to them under these policies was remitted by the husband of the complainant or by the bank.
11. It was not in their purview to look into who has paid the premium to them. It was prima-facie the duty of the bank who has out-sourced insurance policy. He further argued that the National Commission has also decided the case on the averments of concealment of material facts at the time of filling-up of the proposal form had upheld the decision of repudiation of the insurance claim. The learned counsel for OPs argued that though as per the certificate of insurance, it is correct that the amount of insurance cover was `20,18,880/- pertaining to the loan amount outstanding at the time of advance and also a second loan insurance for `12,63,646/- was given to the deceased at the request of the outsourcing branch of State Bank of Patiala. It was prima-facie the duty of the bank, who Consumer Complaint No. 143 of 2013 11 has out sourced insurance policy, to inform about the true picture of health of its employee.
12. In order to decide the controversy at hand, we find that he has already availed opportunity in front of Ombudsman. We do not agree with the contentions raised by the opposite parties that once a consumer appeals before Bank Ombudsman or Insurance Ombudsman, he/she stands debarred from approaching the Consumer Forums. Under Ombudsman scheme, the matter is taken- up due to omission and commission of the insurance companies in repudiating the claim whereas under Consumer Forums, the cases are taken for deficiency in service and unfair trade practice as such consumer is entitled to approach Consumer Foras even if one has earlier approached the office of Ombudsman to look into his or her grievances.
13. We find that the DLA was an employee of State Bank of Patiala and floater policy was issued by State Bank of India. We are of the opinion that the insurance companies are not doing any exercise of finding out whether the insured concealed any material facts about ones health at the time of issuance of policies. The companies are only trying to repudiate the claim when an insured dies or try to repudiate the claim whenever any eventuality arises when an insurance claim is raised. At that time, the insurance companies wake-up and try to wriggle out of their responsibilities in order to avoid to pay out genuine insurance claims. In the instant case also, we are of the view that insurance company was having all Consumer Complaint No. 143 of 2013 12 the leave record of the husband of the complainant at their disposal at the time of filling up of the proposal form. They could have examined all the documents at the initial stage and may have refused to cover the amount of housing loan under the floaters policies of State Bank of Patiala, once they accepted the huge amount of premium i.e. `1,68,880/- and `1,13,646/- from the complainant, then it is not right on their part to repudiate the claim of insurance when the same arose.
14. We are of the opinion that some ailments can spread after decades lurking in the body of an individual, until they suddenly spring to life. Many people have diseases that one already have, without knowing. The disease remains dormant in the body for years. Some illness have incubation period of anywhere from years to decades. Some diseases wait in the body for decades before striking. Moreover, Coronary Artery disease can remain dormant for many years (silent Coronary Artery disease). At any time and at any age, it can strike without warning, thus changing one's life forever. During the course of arguments, counsel for the complainant argued that Hon'ble Supreme Court has decided a case titled as "Balwinder Kaur (D) Thr. LRs. & others Vs. Life Insurance Corporation of India & others", decided in Civil Appeal No.7969 of 2010 wherein it has been stated that after taking the premium of insurance for covering the loan amounts of the husband of the complainant, they have now come up with the plea that the DLA had given false declaration for availing the insurance cover from their agency. As such, when there is no nexus between the cause of death and the Consumer Complaint No. 143 of 2013 13 disease, then the claim cannot be repudiated. In that case Hon'ble Supreme Court allowed the claim of DLA.
15. In order to decide the controversy, we have perused Ex.OP-2 and Ex.OP-3 from which, the date of birth of the DLA is shown as 10.10.1954 meaning thereby that on 04.10.2012, he was of 58 years of age. We have also perused investigation report Ex.OP-7, wherein the investigator had appended certificates pertaining to medical treatment obtained from Gandhi Heart Clinic, by Mr.Manjit Singh as on 01.01.2010 in this certificate, the age of the patient is shown as 54 years. However, this record does not provide any address of the patient as such we are of the opinion that as per their own record, the patient was of 58 years of age as on 05.10.2012, then how he can be of an age of 54 years on 01.01.2010. He should be a patient of 56 years instead of 54 years. In view of the discrepancy in the Ex.OP-7, the same cannot be held to be that of the DLA. Similarly documents to Ex.OP-8, Ex.OP-9, Ex.OP-10, Ex.OP- 11, Ex.OP-12, Ex.OP-14 are of different dates of the year of 2010 showing the age of the patient examined by different doctors having the name as Manjit Singh of an age of 54 or 55 years on the dates of examination without mentioning the address of patient in these exhibits, thus, the identity of DLA is not established from these exhibits. These documents cannot be said to be pertaining to the DLA.
16. We have examined Ex.OP-22 pertaining to leave certificate issued by employer of the DLA for having availed leave from 08.10.2010 to 30.10.2010 and the same does not state for which Consumer Complaint No. 143 of 2013 14 reason this leave was taken whether for getting himself admitted in a hospital or for general run down condition and thus, is silent as to the cause for which he had availed this leave.
17. We have looked into Ex.OP-13 of Columbia Asia, as per the exhibit, date of admission and discharge is of the same date i.e. 04.08.2010 and this was for getting a biopsy done for his kidney and no kidney ailment is shown in this exhibit, wherein it is written that follow-up with prior appointment after kidney biopsy report be availed.
18. It has been held by Himachal Pradesh State Consumer Disputes Redressal Commission, Shimla in case "ICICI Lombard General Insurance Company Ltd. Vs. Jasbir Singh", reported in 2014(1) CLT 220, in the modern day to day wear and tear of the body every person performing serious types of daily chores gets affected and suffers from blood pressure and mellitus diabetes and same can be cured by taking medicines. The record which has now been produced by the surveyor for having taken medical reimbursement by the husband of the complainant issued by Dr.R.K.Sharma, doctor on the panel of State Bank of Patiala vide Ex.OP-17, Ex.OP-18, Ex.OP- 19, Ex.OP-20, Ex.OP-21, Ex.OP-22, pertains to reimbursement of medicine charges of diabetes by State Bank of Patiala. These facts were in the knowledge of the OPs before covering him as a member under master policy issued to State Bank of Patiala.
19. OP could have easily declined to cover the DLA if the investigations were conducted before allowing him to be a member under master policy issued to State Bank of Patiala. The amount of Consumer Complaint No. 143 of 2013 15 premium of `1,68,880/- under policy No.70000001609 vide membership form No.700274203 was paid by the DLA as shown under Ex.OP-2. Similarly, sum of `1,13,646/- was paid by the DLA for having covered his loan amount of `12,63,646/- under the floater policy No.70000001609 vide membership form No.700274205. From the perusal of these exhibits, these certificates were issued in the name of DLA showing the amount of premium received by OPs for covering the loan amount of the DLA. Thus, it cannot be presumed that OPs were not aware that the premium for covering the DLA for his loan outstanding were not recovered from the DLA and that it was given by the bank in whose favour the master policy was issued.
20. Sequel to the above, we find merit in the complaint and the same is allowed to the extent of 75% of the claim amount on non- standard basis. The complaint is allowed on non-standard basis as we find that though the DLA was taking domiciliary treatment for kidney. He was to inform the full details about his health at the time of filling-up the proposal form. We also hold that insurance company being a subsidiary of State Bank of India and State Bank of Patiala being an associate of State Bank of India was having all the privilege to go through the records of employees of the associates of State Bank of India. As such, it cannot be presumed that they were not given the opportunity to go through the records especially of all the employees of these banks when they covered members under master floater policy issued by SBI Life Insurance Company in favour of State Bank of Patiala.
Consumer Complaint No. 143 of 2013 16
21. The complainant is further allowed the amount of `40,000/- as lumpsum compensation on account of harassment and mental agony suffered by him alongwith litigation cost of `20,000/-. Opposite parties are directed to pay the amount of policies and credit in the loan account of DLA held with State Bank of Patiala within 30 days from the date of receipt of copy of the order. On their failure to pay the directed amount within the stipulated period, interest @ 12% p.a. shall be paid on the directed amount including compensation till its credit from the date of repudiating the claim. Opposite parties No.4&5 are directed to liaison with the opposite parties No.1,2&3 in order to get the amount from them in order to close the account of the DLA at their end. They are further directed not to charge any interest on the loan amounts of two loan accounts of DLA from the date of his death and are further directed to recover the balance amount from the complainant, in order to close the account.
22. The case could not be decided within the statutory period due to heavy pendency of court cases.
(Justice Paramjeet Singh Dhaliwal)
President
(Vinod Kumar Gupta)
Member
February 17, 2017 (Harcharan Singh Guram)
Lb/- Member