State Consumer Disputes Redressal Commission
Hdfc Life Insurance Company Ltd. & Anr. vs Rupinder Singh & Anr. on 11 October, 2023
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH.
First Appeal No.913 of 2022
Date of institution : 27.10.2022
Reserved On : 01.09.2023
Date of decision : 11.10.2023
1. HDFC Life Insurance Company Limited (earlier known as HDFC
Standard Life Insurance Company Ltd.), through its Branch
Manager, 1st & 2nd Floor, Gupta Chambers, Civil Lines,
Jalandhar, Punjab-144001.
2. HDFC Life Insurance Company Limited (earlier known as HDFC
Standard Life Insurance Company Ltd.), through its Managing
Director, 11th Floor, Lodha Excelus, Apollo Mills Compound,
N.M. Joshi Road, Mahalaxmi, Mumbai-400011.
Presently filed through Sh. Arpit Higgins, Senior Manager-Legal,
HDFC Life Insurance Company Limited, SCO Nos.149 to 151, 1st
& 2nd Floor, Sector 43-B, Chandigarh-160022.
....Appellants/OPs No.1 & 2
Versus
1. Rupinder Singh S/o Rattan Singh, R/o Village Surakhpur, District
Kapurthala.
....Respondent/Complainant
2. HDFC Bank Ltd., near Narinder Cinema, G.T. Road, Jalandhar,
through its Manager.
.....Respondent/OP No.3
First Appeal under Section 41 of the
Consumer Protection Act, 2019 against the
order dated 09.08.2022 passed by the
District Consumer Disputes Redressal
Commission, Jalandhar.
First Appeal No.913 of 2022 2
Quorum:-
Hon'ble Mrs. Justice Daya Chaudhary, President
Ms. Simarjot Kaur, Member
1) Whether Reporters of the Newspapers may be allowed to see the Judgment? Yes/No
2) To be referred to the Reporters or not? Yes/No
3) Whether judgment should be reported in the Digest? Yes/No Present:-
For the appellants : Sh. Nitin Thatai, Advocate
For respondent No.1 : Ms. Bhavna Kapur, Advocate
For respondent No.2 : Ms. Niharika Goel, Advocate for
Mr. P.M. Goyal, Advocate.
JUSTICE DAYA CHAUDHARY, PRESIDENT
This order of our shall dispose off four appeals i.e. First Appeal No.913 of 2022, First Appeal No.914 of 2022, First Appeal No.915 of 2022 and First Appeal No.916 of 2022, as the similar questions of law and facts are involved therein and all the appeals have been filed against the similar orders dated 09.08.2022 passed by the District Consumer Disputes Redressal Commission, Jalandhar (in short, "the District Commission"). However, the facts are being extracted from First Appeal No.913 of 2022.
First Appeal No.913 of 2022
2. Appellants/OPs No.1 & 2 i.e. HDFC Life Insurance Company Limited and another have approached this Commission by way of filing the present appeal under Section 41 of the Consumer Protection Act, 2019 to challenge the impugned order dated First Appeal No.913 of 2022 3 09.08.2022 passed by the District Commission, Jalandhar, whereby the complaint filed by respondent No.1/complainant namely Rupinder Singh was partly allowed against OPs No.1 & 2 by issuing directions to them to pay the death insurance claim of insured Rattan Singh of ₹10 lac along with interest @ 9% per annum from the date of repudiation i.e. 24.03.2018 till its realization with further direction to pay compensation including litigation expenses of ₹20,000/- to the complainant. The compliance of the order was directed to be made within a period of one month from the date of receipt of copy of the order.
3. It would be apposite to mention here that hereinafter the parties will be referred, as have been arrayed before the District Commission.
4. Briefly, the facts of the case as made out by respondent No.1/complainant Rupinder Singh in the complaint filed by him before the District Commission are that the father of the complainant had purchased a vehicle i.e. Tata Prima-4023 for a sum of ₹10,20,217/- from Tata Motors, Jalandhar. Said vehicle was financed by OP No.3- Bank on completion of the required formalities. Along with the said vehicle, a life insurance policy No.CP000046 for a sum of assured of ₹10 lac was provided. Said policy was issued by appellants/OPs No.1 & 2 under the Group Insurance Scheme, which was valid for the period w.e.f. 06.03.2017 to 05.03.2019. The complainant was the First Appeal No.913 of 2022 4 nominee under the said policy. It was further mentioned that only the policy schedule was provided to the insured/complainant at the time of issuance of the policy and no terms and conditions were supplied. Further it was mentioned that the father of the complainant had gone to Dubai for his personal work, where he fell ill and remained admitted in Thumbay Hospital, Ajman, UAE from 19.07.2017 (date of admission wrongly mentioned in the complaint as 19.02.2017) to 01.08.2017. Thereafter, he came back to India and took treatment at Premier Gastroenterology Institute, Jalandhar w.e.f. 01.08.2017 to 06.08.2017, where he was advised to consult the higher center for his treatment. Thereafter also, the insured had taken treatment from Mannat Super Specialty Hospital and was discharged on 11.08.2017 and his condition was stated to be 'Hemodynamically Stable'. Thereafter, he got himself admitted in PGIMER, Chandigarh on 12.08.2017, where he was diagnosed with the condition 'Abdominal Distension and Jaundice'. Further it was mentioned that the insured was having complaint of high fever on 04.09.2017 and on the same day, he was taken to PGIMER, Chandigarh for his treatment and ultimately he took the last breath on 21.09.2017. The complainant being the nominee of the insured had lodged the death claim of his father with the appellants but it was rejected vide letter dated 24.03.2018 on the ground of concealment of material facts. First Appeal No.913 of 2022 5
5. The complaint was filed before the District Commission with the prayer that OPs No.1 & 2 be directed to pay the insurance claim of ₹10 lac along with interest at the rate of 18% and also to pay an amount of ₹20,000/- towards litigation expenses. A further direction was sought to be issued by restraining OP No.3 from taking the possession of the insured vehicle till the disposal of the complaint.
6. Upon issuance of notice, OPs No.1 & 2 appeared before the District Commission and filed written version. All the averments made in the complaint were controverted/denied by stating that baseless allegations were made in the complaint.
7. OP No.3 had also filed separate written reply, wherein it was admitted that OP No.3 had financed the vehicle in dispute. It was also mentioned that the complainant had stood as guarantor in the loan agreement but after the death of the insured, his LRs including the complainant were not repaying the loan amount regularly.
8. Initially, the complaint was decided/accepted by the District Commission vide order dated 10.12.2019 by issuing certain directions to the OPs. Being aggrieved by the said order, the appellants/OPs No.1 & 2 had filed First Appeal No.107 of 2020, which was disposed off along with other connected appeals vide common order dated 28.01.2021 and the order passed by the District Commission was set aside. The case was remanded to the District Commission. The relevant portion of said order dated 28.10.2021 First Appeal No.913 of 2022 6 passed by this Commission as mentioned in Para-23 is reproduced as under:
"23. In view of the reasons and discussions held in First Appeal No.106 of 202, this appeal is disposed of by setting aside the impugned order of the District Commission and case is remanded back with a direction to give an opportunity to the appellants- Company to place on record the documents, as prayed in the above applications only before the District Commission as additional evidence and also to give to the complainant an opportunity to rebut the same and thereafter the District Commission shall record a specific finding. The parties are directed to appear before the District Commission on 08.03.2021."
9. After remand of the case, the complainant had filed an application for issuance of directions to the OPs to place on record the original Commercial Loan Application Form to lead evidence in rebuttal and the appellant Company also filed an application for summoning the medical record of the DLA Rattan Singh from the Department of Hepatology, PGIMER, Chandigarh. The complainant had also filed another application to allow any expert to take the photographs of the original agreement for comparison with the signatures of DLA Rattan Singh on the loan agreement. The District Commission vide order dated 10.08.2021 had allowed the complainant to take the photographs of the Commercial Loan Agreement Form in original in the presence of the Superintendent of the District Commission within a period of two days and also to submit the report of Expert on or before the next date of hearing i.e. 17.08.2021.
10. Aggrieved by the order dated 10.08.2021 passed by the District Commission, the appellants had filed Revision Petitions First Appeal No.913 of 2022 7 (Revision Petitions No.14 of 2021 Revision Petitions No.15 of 2021, Revision Petitions No.16 of 2021 and Revision Petitions No.17 of 2021) before this Commission. Said Revision Petition(s) were allowed vide common order dated 15.11.2021 and the appellants were granted an opportunity to file reply to the said application filed by the complainant. Thereafter, the District Commission had dismissed the application filed by the complainant vide order dated 29.12.2021. The relevant portion of said order is reproduced as under:
"10. The present complaint has been filed by the complainant seeking the direction to the insurance company to make the payment of Rs.10,00,000/- and the OP No.3 be restrained from taking possession of the loaned vehicle till the complaint is decided by the Commission. In Para No.11 of the complaint, it has been alleged that the life insurance was done at the instance of OP No.3, who assured the father of the complainant that in case of any mis-happening, the amount of the loan shall be adjusted from the insurance money received from the OPS No.1 and 2. This averment of the complainant itself shows that the complainant himself has admitted that there was a loan taken by his father namely Rattan Singh from OP No.3, which was to be adjusted from the insurance money in case of any mis- happening. OP No.3 is allegedly a beneficiary and the dispute is between the complainant and OPs No.1 & 2. Now the complainant wants to prove the signatures of Rattan Singh on the last page of application form with the signatures on other pages as the same is alleged to be forged one. The taking of loan is not disputed. Even if the expert is allowed to take the photographs, this will not serve any purpose as there are no admitted signatures on the record. The comparison cannot be interse the signatures on the photocopy of the application form and the original form or interse on the different pages of same document. Even otherwise since the loan is not disputed, therefore, for the purpose of deciding this fact, the comparison is not required. If at all, it has any effect on the merits of the case, the Commission can observe the signatures on all the pages while deciding the main complaint. As per submission of counsel for OP No.3 the loan has also been settled. In such circumstances when the loan has been settled between OP N.3 and complainant and there are no admitted signatures on the record of deceased Rattan Singh, therefore no comparison can be done, therefore, this comparison is not required for the purpose of adjudication of the present complaint and accordingly, there is no merits in the application and the same is hereby dismissed."First Appeal No.913 of 2022 8
11. Vide the same order dated 29.12.2021 passed by the District Commission, the application filed by appellants/OPs No.1 & 2 for adducing additional evidence was also dismissed. The relevant portion of said order is reproduced as under:
"As per the order passed by the Hon'ble State Commission dated 28.01.2021, the order passed by the District Commission dated 10.12.2019 accepting the complaint was set-aside. The OPs No.1 and 2 filed application for additional evidence by way of filing Commercial Loan Application Form dated 22.02.2017 and additional affidavit of Sh. Arpit Higgins were allowed and the District Commission was directed to decide the complaint afresh after giving the opportunity to the OPs No. 1 and 2 to place on record the above said documents in additional evidence and giving an opportunity to the complainant to rebut the same. As per the contents of the complaint filed by the complainant, the complainant has specifically alleged in Para No.6 that Rattan Singh took the treatment at PGI, Chandigarh from 12.08.2017 to 25.08.2017 and in reply to this para, the OPs No.1 and 2 had admitted that the deceased, the life assured had taken treatment from the PGI, Chandigarh, meaning thereby that the OPs No. 1 and 2 were well within the knowledge of the fact that he took treatment from the PGI, Chandigarh, but they did not produce the medical record of the treatment of Rattan Singh while adducing their evidence in the complaint nor they have filed any such application before the Hon'ble State Commission for leading additional evidence to prove the medical record of the deceased when they filed applications for additional evidence to produce the loan application form and affidavit. No reason has been given by the applicants/OPs No. 1 and 2 for not adducing the same at that time and what circumstances have prevented him from proving the same at the time of adducing the evidence. Moreso as alleged by the complainant, the entire record has already been produced by the complainant at the time of adducing his evidence. Even otherwise the OPs No.1 and 2 have never been allowed to adduce additional evidence in the shape of placing on record the loan application form of Rattan Singh and of filing affidavit of Arpit Higgins by the Hon'ble State Commission. Thus, there is no merits in the application, hence the same is also dismissed."
12. Thereafter, the District Commission after going through the contents of the complaint and reply filed by the OPs had partly allowed the complaint vide impugned order dated 09.08.2022. The relevant portion of said order as mentioned in Para-21 is reproduced as under:
First Appeal No.913 of 2022 9
"...accordingly, the complaint of the complainant is partly allowed and OPs No.1 and 2 are directed to pay death insurance claim of insured Rattan Singh of Rs.10,00,000/- to the complainant alongwith interest @ 9% per annum from the date of repudiation i.e. 24.03.2018, till realization and further, OPs No.1 and 2 are directed to pay a compensation including litigation expenses of Rs.20,000/- to the complainant. The entire compliance be made within one month from the date of receipt of the copy of order. This complaint could not be decided within stipulated time frame due to rush of work."
13. Said order dated 09.08.2022 passed by the District Commission has been challenged by the appellants/OPs No.1 & 2 by way of filing the present appeal by raising a number of arguments.
14. Mr. Nitin Thatai, learned counsel for the appellants/OPs No.1 & 2 has submitted that the District Commission while passing the impugned order has not appreciated the material facts and circumstances of the case in the right perspective. The impugned order was passed without giving any reasoning as the complainant had twisted the facts with malafide intention. The insured had purchased the commercial vehicle by taking loan from OP No.3 and nowhere it was pleaded that the loan was availed for earning livelihood by way of self employment and as such the complainant was not falling under the definition of 'consumer' in view of the provisions of Section 2 (1) (d) of the Consumer Protection Act, 1986. Learned counsel has further submitted that the loan application was accepted on the standard rates basis only on the basis of information submitted in the Application Form and thereafter the policy was accordingly issued. The District Commission has also failed to appreciate a material fact that the appellant Company had received a Group Claim First Appeal No.913 of 2022 10 Form dated 18.10.2017 whereby it was informed that the DLA had expired on 21.09.2017 while admitted in PGI, Chandigarh due to liver failure. The investigation was conducted by Investigator i.e. Zenith Groups Investigation Agency with regard to death claim of the DLA and it was found that the DLA was suffering from Diabetes Mellitus for the last 6 years and was a known case of Chronic Liver Disease with Portal Hypertension prior to date of issuance of the policy. These facts were not disclosed at time of signing the Commercial Loan Application Form, on the basis of which the policy was issued. Learned counsel has also submitted that medical record of the DLA had revealed that he was suffering from Diabetes Mellitus for the last 6 years and it was a known case of Chronic Liver Disease and the DLA was alcoholic as he used to consume liquor on daily basis for the last 20 years. At the end, learned counsel has submitted that the appellant Company while repudiating the claim of the complainant has not committed any illegality and irregularity and the claim was rightly repudiated by taking into consideration the provisions of Section 45 of the Insurance Act, 1938 and the impugned order is liable to be set aside. Learned counsel for the appellants/OPs No.1 & 2 has also relied upon the following judgments in support of his contentions:
i) P.C. Chacko & Anr. v. Chairman, LIC of India & Ors. 2008 (1) RCR (Civil) 127 (SC);
ii) LIC v. Manish Gupta 2019 (2) RCR (Civil) 906 (SC);First Appeal No.913 of 2022 11
iii) Suraj Mal Ram Nivas Oil Mills v. United India Insurance Co.
Ltd. 2010 (10) SCC 567 (SC);
iv) Grasim Industries Ltd. v. Aggarwal Steel (2010) 1 SCC 83 (SC);
v) LIC of India v. Anupama 2012 (2) CPJ 672 (NC);
vi) LIC v. Ramamani Patra 2015 (3) CLT 487;
vii) Sunita Goyal v. Bajan Allianz Life Ins. Co. Ltd. 2017 (4) CPJ
54 (NC); and
viii) Sunita Rani v. PNB Metlife India Insurance Co. Ltd. 2017 (2) CPR 489 (NC).
15. Ms. Bhavna Kapur, learned counsel for respondent No.1/complainant has submitted that the District Commission has passed a detailed order by considering the averments made in the complaint and also the reply filed by the OPs. No evidence was produced by the OPs to show that the DLA had concealed any material information at the time of taking the policy and the appeal is also liable to be dismissed. Learned counsel for respondent No.1/complainant has relied upon the following judgments in support of her contentions:
i) P. Vankat Naidu v. Life Insurance Corporation of India 2011(4) CPJ 6 (SC);
ii) Aviva Life Insurance Co. India v. T. Umavathi 2007 (10) RCR (Civil) 133 (NC);
iii) Senior Divisional Manager, LIC of India v. Smt. J. Vinaya 2003(1) CPJ 50 (NC);
iv) LIC of India v. Joginder Kaur 2005(2) CPJ 78 (NC);
v) Arun Kumar v. New India Assurance Co. Ltd. 2016 (4) CPJ 33 (NC);First Appeal No.913 of 2022 12
vi) Sushil KumarJain v. United India Insurance Co. Ltd. 2012(1) CPJ 204 (NC); and
vii) Shanti Devi v. Tata AIG Life Insurance Co. Ltd. 2016 (2) CPR
265.
16. Ms. Niharika Goel, proxy for Mr. P.M. Goyal, learned counsel for respondent No.2/OP No.3 has submitted that the complaint against OP No.3 was dismissed by the District Commission and as such the appeal against OP No.3 is also liable to be dismissed.
17. Heard the arguments raised by learned counsel for the parties. We have also carefully perused the impugned order passed by the District Commission and all other documents available on the file.
18. Facts regarding filing of the complaint by the complainant before the District Commission, reply thereto filed by the OPs and partly allowing of said complaint and thereafter filing of the present appeal by the appellants/OPs No.1 & 2 before this Commission are not in dispute.
19. Firstly, we would like to deal with/dispose off the preliminary objection raised by the appellants that the DLA had submitted the Commercial Loan Application to OP No.3-Bank for availing the loan for purchasing the vehicle and the complainant was not falling under the definition of 'consumer' as defined in the Act.
20. Admittedly, the life insurance policy i.e. "HDFC Life Group Credit Protect Insurance Plan' bearing No.CP000046 was issued to the father of the complainant by OPs No.1 & 2-Insurance Company First Appeal No.913 of 2022 13 through OP No.3-HDFC Bank in order to protect the loan amount advanced to him. As per Clause-16(3) of the policy, out of the claim amount, the outstanding amount was to paid to the master policyholder and the balance amount was to be paid to the nominee of the Member.
21. The Hon'ble Apex Court in the judgment of case titled as National Insurance Company Ltd. v. Harsolia Motors & Ors. Civil Appeal No.5352-5353 of 2007 decided on 13.04.2023 had held that the purpose of taking an Insurance Policy is only to indemnify the actual loss suffered by the insured person and it is not intended to generate any profit. The relevant portion of said judgment is reproduced as under:
"43. Applying the above principles in the present case, what needs to be determined is whether the insurance service had a close and direct nexus with the profit generating activity and whether the dominant intention or dominant purpose of the transaction was to facilitate some kind of profit generation for the insured or to the beneficiary and our answer is in the negative and accordingly we are of the view that the complaint filed by the respondent insured herein has no close or direct nexus with the profit generating activity and the claim of insurance is to indemnify the loss which the respondent insured had suffered and the Commission has rightly held that the respondent is a "consumer"
under Section 2(1)(d) of the Act, 1986.
44. We further reiterate that ordinarily the nature of the insurance contract is always to indemnify the losses. Insurance contracts are contracts of indemnity whereby one undertakes to indemnify another against loss/damage or liability arising from an unknown or contingent event and is applicable only to some contingency or act likely to come in future."
22. Therefore, it is held that the complainant falls under the definition of 'consumer' as defined in the Act and the objection raised by the appellants in this regard stands rejected. First Appeal No.913 of 2022 14
23. Now, coming to merits of the case, admittedly, Mr. Rattan Singh, the father of the complainant had purchased a vehicle make Tata Prima-4023 from Tata Motors, Jalandhar for a sum of ₹10,20,217/-. Said vehicle was financed by OP No.3-Bank. Along with the said vehicle, Life Insurance Policy i.e. "HDFC Life Group Credit Protect Insurance Plan' bearing No.CP000046 for a sum of assured of ₹10 lac was provided, which was issued by appellants/OPs No.1 & 2 under the Group Insurance Scheme, which was valid for the period w.e.f. 06.03.2017 to 05.03.2019. The insured went to Dubai for his personal work, where he fell ill and remained admitted in Thumbay Hospital, Ajman, UAE from 19.07.2017 to 01.08.2017. On coming back to India, he took treatment from various Hospitals as mentioned above while narrating the facts of the complaint. Ultimately, on 04.09.2017, the insured was having complaint of high fever and he was taken to PGIMER, Chandigarh for his treatment and ultimately he expired on 21.09.2017. The complainant being the nominee of the insured had lodged the death claim of his father with the Insurance Company but it was rejected vide letter dated 24.03.2018 on the ground that as per the investigation so conducted by the Insurance Company, it was found that the deceased life assured (DLA) was suffering from Diabetes Mellitus for the last 6 years and Chronic Liver Disease with Portal Hypertension prior to the issuance of the policy but said facts First Appeal No.913 of 2022 15 were not disclosed by the DLA at the time of filling up the Member Enrolment Form.
24. The question for determination for disposal of the present appeal is as to whether the repudiation of the claim of the complainant by the appellants/OPs No.1 & 2 on the above referred ground is legal/valid or not?
25. As far as the stand taken by the appellants that the DLA was suffering from Diabetes and Hypertension is concerned, it is relevant to mention that on perusal of Medical Certificate of Cause of Death (Annexure A-4 Page-63), it is apparent that the DLA had died due to Sepsis Shock, Acute Chronic Liver Failure, Acute Severe Alcoholic etc. However, the appellants have failed to produce any cogent and convincing evidence that the cause of death of the DLA had any direct/close nexus with the disease of Diabetes Mellitus. The Hon'ble National Commission in the case titled as Life Insurance Corporation of India Vs. Sunita & Others 2020 SCC OnLine NCDRC 710 has held in Para-9 to 11 as under:
"8. In the present case, the deceased assured was suffering from diabetes mellitus and chronic liver disease when bought to the hospital. But, the death was due to cardiac arrest. In our view the cause of death is nowhere connected to his pre- existing disease. Our view dovetails from the decision of Hon'ble Supreme Court in the Civil Appeal No. 8245 of 2015 titled Sulbha Prakash Motegaoneker v. Life Insurance Corporation of India, decided on 05.10.2015, wherein it was observed that suppression of information regarding any pre-existing disease, if it has not resulted in death or has no connection to cause of death, would not disentitle the claimant for the claim.First Appeal No.913 of 2022 16
10. We find the Orders of the District Forum and the State Commission to be well appraised and well-reasoned. The State Commission concurred with the findings of the District Forum. We note in particular the extracts of the respective observations made by the two fora, quoted in paras 4 and 5 above. Within the meaning and scope of section 21(b), we find no grave error in appreciating the evidence by the two for a below, as may necessitate re- appreciation of the evidence in revision. We find the award made by the District Forum (quoted in para 4 above), and as affirmed by the State Commission, to be just and appropriate. We find no jurisdictional error, or a legal principle ignored, or miscarriage of justice, as may necessitate interference in the exercise of the revisional jurisdiction of this Commission.
11. The revision petition, being misconceived and devoid of merit, is dismissed. "
26. In another case titled as Neelam Chopra Vs. Life Insurance Corporation of India & Ors. R.P. No.4461 of 2012 decided on 08.10.2018, the Hon'ble National Commission has held that the claim cannot be denied on the ground of life style diseases such as diabetes and hypertension etc. The relevant portion of said judgment is reproduced as under:
"So far as the life style diseases like diabetes and high blood pressure are concerned, Hon'ble High Court of Delhi has taken the following view in Hari Om Agarwal Vs. Oriental Insurance Co. Ltd., W.P.(C) No.656 of 2007, decided on 17.09.2007 :
"Insurance- Mediclaim-Reimbursement- Present Petition filed for appropriate directions to respondent to reimburse expenses incurred by him for his medical treatment, in accordance with policy of insurance- Held, there is no dispute that diabetes was a condition at time of submission of proposal, so was hyper tension-Petitioner was advised to undergo ECG, which he did- Insurer accepted proposal and issued cover note- It is universally known that hypertension and diabetes can lead to a host of ailments, such as stroke, cardiac disease, renal failure, liver complications depending upon varied factors- That implies that there is probability of such ailments, equally they can arise in non-diabetics or those without hypertension- It would be apparent that giving a textual effect to Clause 4.1 of policy would in most such cases render mediclaim cover meaningless- Policy would be reduced to a contract with no content, in event of First Appeal No.913 of 2022 17 happening of contingency- Therefore Clause 4.1 of policy cannot be allowed to override insurer's primary liability- Main purpose rule would have to be pressed into service- Insurer renewed policy after petitioner underwent CABG procedure- Therefore refusal by insurer to process and reimburse petitioner's claim is arbitrary and unreasonable- As a state agency, it has to set standards of model behaviour; its attitude here has displayed a contrary tendency- Therefore direction issued to respondent to process petitioner's claim, and ensure that he is reimbursed for procedure undergone by him according to claim lodged with it, within six weeks and petition allowed."
11. From the above, it is clear that the insurance claim cannot be denied on the ground of these life style diseases that are so common. "
27. As far as the other ground/stand of the appellants that the DLA had not disclosed that he was suffering from Chronic Liver Disease is concerned, it is relevant to mention that no past history of the DLA has been produced on record by the appellants to show that he was suffering from said disease prior to issuance of the policy. The medical record relied upon by the appellants/OPs pertains only to the period after issuance of the policy. The observations recorded by the Investigator in the Investigation Report have not been supported by any documentary evidence pertaining to the period prior to the date of issuance of the insurance policy. The alleged statements of the neighbourers etc. have not been annexed with the Investigation Report, so the same cannot be relied upon.
28. In the case of New India Assurance Company Limited Vs Smt. Usha Yadav & Ors.", 2008(3)RCR(Civil)-111(P&H), the Hon'ble Punjab & Haryana High Court held as under:-
"5. While rejecting the plea raised by the Insurance Company, the Lok Adalat has found that late Ramesh Chand Yadav was found suffering from First Appeal No.913 of 2022 18 several diseases and all those diseases could not be as a result of alcohol consumption alone. It has also been noticed that there is no specific finding by any medical expert that any disease with which the deceased was found suffering had developed on account of alcohol consumption. It is a case of death of a young man aged 41 years. He has left behind his young wife and two minor daughters. A reference has been made to the findings recorded by the panel of doctors as seen from the summary made at Sir Ganga Ram Hospital, New Delhi. It is noticed that the investigation had revealed increased TLC and deranged liver and renal functions. Despite treatment, the ascetic fluid cell count was not decreasing while urine progressively decreased. The deceased had also developed respiratory distress. He was shifted to ICU, but suffered a massive upper GI bleeding and went into shock. He expired on 28.8.2006. It is accordingly noticed that alcohol consumption could not be the only cause for all those complicated diseases which led to the death of the deceased.......
6. Before parting, I wish to express anguish over the method and mode adopted by Insurance Companies in somehow declining the claim of claimants, be it under such type of policy or other life insurance claims or those arising out of insurance of vehicles etc. It seems that the Insurance Companies are only interested in earning the premiums, which are rather too stiff now a days, but are not keen and are found to be evasive to discharge their liability. In large number of cases, the Insurance Companies make the effected people to fight for getting their genuine claims. The insurance Companies in such cases rely upon clauses of the agreements, which a person is generally made to sign on dotted lines at the time of obtaining policy. This is, thus, pressed into service to either repudiate the claim or to reject the same. The Insurance Companies normally build their case on such clauses of the policy, but would adopt methods which would not be governed by the strict conditions contained in the policy."
29. Another important aspect of the matter is that it is the specific stand of the complainant that only the policy schedule was provided at the time of issuance of the policy and no terms and conditions were supplied to him. It is relevant to mention that no evidence has been produced by the appellants either before the District Commission or before this Commission to prove that the terms and conditions of the policy were ever supplied to the complainants. No evidence such as dispatch number, postal receipts etc., has been produced on record to prove this fact.
First Appeal No.913 of 2022 19
30. Hon'ble Supreme Court in case Modern Insulators Ltd. v. Oriental Insurance Co. Ltd. (2000) 2 SCC 734 had reversed the order of the Hon'ble National, observing that it had failed to consider the fact that the terms and conditions of the Insurance Policy were not supplied to the insured and the order of the State Commission, while allowing the claim, was upheld.
31. In another case titled as Manmohan Nanda v. United Insurance Co. Ltd. (2022) 4 SCC 582, the Hon'ble Supreme Court has emphasized upon the duty of the insurer and the insured to disclose any material facts. The relevant portion of said judgment as mentioned in Para-34 is reproduced as under:
"34. Just as the insured has a duty to disclose all material facts, the insurer must also inform the insured about the terms and conditions of the policy that is going to be issued to him and must strictly conform to the statements in the proposal form or prospectus, or those made through his agents. Thus, the principle of utmost good faith imposes meaningful reciprocal duties owed by the insured to the insurer and vice versa. This inherent duty of disclosure was a common law duty of good faith originally founded in equity but has later been statutorily recognised as noted above. It is also open to the parties entering into a contract to extend the duty or restrict it by the terms of the contract."
32. It is also relevant to mention that the Insurance Company while relying upon the Exclusion Clause is required to bring it to the knowledge of the insured and failure to do so would estop the Insurance Company from placing reliance upon it. The Hon'ble Supreme Court in the case titled as Bharat Watch Company v. National Insurance Co. Ltd. 2019 (6) SCC 212 has held in Paras No.7 to 10 as under:
First Appeal No.913 of 2022 20
"7. The basic issue which has been canvassed on behalf of the appellant before this Court is that the conditions of exclusion under the policy document were not handed over to the appellant by the insurer and in the absence of the appellant being made aware of the terms of the exclusion, it is not open to the insurer to rely upon the exclusionary clauses. Hence, it was urged that the decision in United India Insurance Co. Ltd. v. Harchand Rai Chandan Lal, (2004) 8 SCC 644, will have no application since there was no dispute in that case that the policy document was issued to the insured.
8. This submission is sought to be answered by the learned counsel appearing on behalf of the insurer by adverting to the fact that SCDRC construed the terms of the exclusion. SCDRC, however, did not notice the decision of this Court, and hence, NCDRC was (it was urged) justified in correcting the error having regard to the law laid down by this Court. The learned counsel urged that the appellant has been insuring its goods for nearly ten years and it is improbable that the appellant was not aware of the exclusion.
9. We find from the judgment of the District Forum that it was the specific contention of the appellant that the exclusionary conditions in the policy document had not been communicated by the insurer as a result of which the terms and conditions of the exclusion were never communicated. The fact that there was a contract of insurance is not in dispute and has never been in dispute. The only issue is whether the exclusionary conditions were communicated to the appellant. The District Forum came to a specific finding of fact that the insurer did not furnish the terms and conditions of the exclusion and special conditions to the appellant and hence, they were not binding. When the case travelled to SCDRC, there was a finding of fact again that the conditions of exclusion were not supplied to the complainant.
10. Having held this, SCDRC also came to the conclusion that the exclusion would in any event not be attracted. The finding of SCDRC in regard to the interpretation of such an exclusionary clause is evidently contrary to the law laid down by this Court in Harchand Rai (supra). However, the relevance of that interpretation would have arisen provided the conditions of exclusion were provided to the insured. NCDRC missed the concurrent findings of both the District Forum and SCDRC that the terms of exclusion were not made known to the insured. If those conditions were not made known to the insured, as is the concurrent finding, there was no occasion for NCDRC to render a decision on the effect of such an exclusion."
33. Clause 3(2) of the Insurance Regulatory and Development Authority (Protection of Policy Holder's Interests, First Appeal No.913 of 2022 21 Regulation 2002) Regulations, 2002 is also relevant in the present context, which is reproduced as under:
"3. Point of Sale:
(2) An insurer or its agent or other intermediary shall provide all material information in respect of a proposed cover to the prospect to enable the prospect to decide on the best cover that would be in his or her interest."
34. By relying upon said Clause 3(2) of the Regulations, 2002 issued by the Insurance Regulatory and Development Authority (IRDA), the Hon'ble Supreme Court in the case titled as M/s Texco Marketing Pvt. Ltd. v. Tata AIG General Insurance Co. Ltd. & Ors. Civil Appeal No.8249 of 2022 decided on 09.11.2022, has held in Para-21 as under:
"21. On a discussion of the aforesaid principle, we would conclude that there is an onerous responsibility on the part of the insurer while dealing with an exclusion 13 clause. We may only add that the insurer is statutorily mandated as per Clause 3(ii) of the Insurance Regulatory and Development Authority (Protection of Policy Holder's Interests, Regulation 2002) Act dated 16.10.2002 (hereinafter referred to as IRDA Regulation, 2002) to the effect that the insurer and his agent are duty bound to provide all material information in respect of a policy to the insured to enable him to decide on the best cover that would be in his interest. Further, sub-clause (iv) of Clause 3 mandates that if proposal form is not filled by the insured, a certificate has to be incorporated at the end of the said form that all the contents of the form and documents have been fully explained to the insured and made him to understand. Similarly, Clause 4 enjoins a duty upon the insurer to furnish a copy of the proposal form within thirty days of the acceptance, free of charge. Any non-compliance, obviously would lead to the irresistible conclusion that the offending clause, be it an exclusion clause, cannot be pressed into service by the First Appeal No.913 of 2022 22 insurer against the insured as he may not be in knowhow of the same."
35. In view of the above discussion as well as the law as laid down in the above noted judgments, it is apparent that in case the terms and conditions, including the Exclusion Clause, were not supplied to the insured, the same cannot be enforced upon.
36. Similarly, in other appeals i.e. First Appeal No.914 of 2022, First Appeal No.915 of 2022 and First Appeal No.916 of 2022, the facts of the complaints were similar as all the complaint were filed by same complainant Rupinder Singh qua to insurance claim of his father Rattan Singh, DLA. Initially, all the complaints were accepted by the District Commission vide orders dated 10.12.2019. Said orders passed by the District Commission were challenged by the appellants by way of filing appeals i.e. First Appeals No.106 of 2020, First Appeal No.108 of 2020 and First Appeal No.109 of 2020, which were disposed off vide common order dated 28.01.2021 and the orders passed by the District Commission were set aside on the grounds as mentioned above and the cases were remanded to the District Commission. After remand of the cases, the complainant had also filed application for issuance of directions to the OPs to place on record the original Commercial Loan Application Form. The complainant thereafter had also filed another application for allowing the expert to take the photographs of the original agreement for comparison with the First Appeal No.913 of 2022 23 signatures of DLA Rattan Singh on the loan agreement. The District Commission vide orders dated 10.08.2021 had allowed the complainant to take the photographs of the Commercial Loan Agreement Form in original.
37. Aggrieved by the orders dated 10.08.2021 passed by the District Commission, the appellants had filed four Revision Petitions i.e. Revision Petitions No.14 of 2021 Revision Petitions No.15 of 2021, Revision Petitions No.16 of 2021 and Revision Petitions No.17 of 2021 before this Commission. Said Revision Petition(s) were allowed vide common order dated 15.11.2021 and the appellants were granted an opportunity to file reply to the application filed by the complainant. Thereafter, the District Commission had dismissed the applications i.e. one filed by the complainant for allowing the expert to take photographs of the original loan agreement and the other filed by OPs No.1 & 2 for adducing additional evidence vide orders dated 29.12.2021 on the grounds as mentioned above.
38. Thereafter, on going through the contents of the complaints and replies filed by the OPs, the District Commission had partly allowed the complaints vide impugned order dated 09.08.2022 on the similar grounds/observations. Similar type of directions were issued to the appellants/OPs No.1 & 2 as mentioned in First Appeal No.913 of 2022.
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39. In view of the discussion as held above as well as the law as laid down in the above noted judgments, it is apparent that the claim of the complainant was wrongly and illegally repudiated by the appellants in all the cases. The orders passed by the District Commission are based on proper appreciation of the evidence available on the record. No interference is required. The judgments relied upon by learned counsel for the appellants are distinguishable and are not applicable to the facts and circumstances of the present cases.
40. Accordingly, finding no force in the arguments raised by learned counsel for the appellants, all the four appeals i.e. First Appeal No.913 of 2022, First Appeal No.914 of 2022, First Appeal No.915 of 2022 and First Appeal No.916 of 2022 are dismissed and the impugned orders dated 09.08.2022 passed by the District Commission are upheld.
41. Since the main cases have been disposed of, so all the pending Miscellaneous Applications, if any, are accordingly disposed of.
42. The amount(s) deposited by the appellant(s) in all the appeals at the time of filing thereof or in connection with grant of stay as per order(s) passed by this Commission, if any, along with interest which has accrued thereon, if any, shall be remitted by the Registry to the District Commission forthwith separately in each appeal. First Appeal No.913 of 2022 25 Respondent No.1/complainant may approach the District Commission for the release of the said amount and the District Commission may pass appropriate order in this regard in accordance with law.
43. The appeals could not be decided and pronounced within the statutory period due to heavy pendency of court cases.
(JUSTICE DAYA CHAUDHARY) PRESIDENT (SIMARJOT KAUR) MEMBER October 11, 2023.
(Gurmeet S)