State Consumer Disputes Redressal Commission
Rashmeet Kaur vs Hdfc Standard Life Insurance Co. Ltd. on 11 September, 2018
Daily Order STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH Complaint Case No. : 609 of 2017 Date of Institution : 16.08.2018 Date of Decision : 11.09.2018 Rashmeet Kaur widow of Gurshinder Singh, House No.233 BX, Model Town, Ludhiana - 141375. Sanchit Singh (minor) through his mother & natural guardian, Rashmeet Kaur widow of Gurshinder Singh, House No.233 BX, Model Town, Ludhiana - 141375. Gursheen Kaur (minor) through her mother & natural guardian, Rashmeet Kaur widow of Gurshinder Singh, House No.233 BX, Model Town, Ludhiana - 141375. ......Complainants V e r s u s HDFC STANDARD LIFE INSURANCE COMPANY LIMITED, Office and care of Housing Development Finance Corporation Limited, SCO 153-155, Sector 8-C, Chandigarh through its Deputy Manager and Branch Head. HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED, SCO 153-155, Sector 8-C, Chandigarh through its Deputy Manager and Branch Head. ....Opposite Parties. Complaint under Section 17 of the Consumer Protection Act, 1986. BEFORE: JUSTICE JASBIR SINGH (RETD.), PRESIDENT. MRS. PADMA PANDEY, MEMBER
Argued by: Sh. Atul Sharma, Advocate for the complainants.
Sh. Munish Gupta, Advocate for Opposite Party No.1.
Ms. Daizy Sharma, Advocate, Proxy for Ms. Anjali Moudgil, Advocate for Opposite Party No.2.
PER PADMA PANDEY, MEMBER The facts, in brief, are that husband of complainant No.1 took a housing loan of Rs.53.50 Lakhs and he was sanctioned the said amount by Opposite Party No.2, which was to be repaid in 240 monthly equated installments of Rs.51,452/-, alongwith interest @9.95% p.a. and the terms of repayment was 240 months. Since Opposite Party No.2 wanted to secure the payment of aforementioned loan amount, it further parted yet another loan amount of Rs.3,61,961/- under category and head "top up loan for insurance". This loan for life insurance was granted in favour of the complainants being the beneficiary, which was to be repaid in 240 equal monthly installments of Rs.3,386/- each alongwith interest @9.55% p.a. In this manner, loan amount of Rs.53.50 Lakhs alongwith interest was secured by the Insurance Policy, to the tune of Rs.73,61,961/- towards benefits in favour of the complainants in case of death of the husband of complainant No.1.
2. During operation and validity of Life Insurance Policy (Annexure C-2), husband of complainant No.1 died on 06.08.2016 at the age of 41 years only. The complainants filed claim with Opposite Party No.1 for reimbursement under insurance cover, which was repudiated vide letter dated 12.01.2016. As per the complainants, this letter was drafted in January 2016 prior to the death of husband of complainant No.1 with the intention to repudiate the claim. It was stated that opposite parties cannot run away from their duties to give the benefit of the policy to the beneficiary on account of death of the insured person. It was further stated that since the Insurance Company had already taken premium on regular basis and the police was also active and alive, they cannot now run away from their duties and not provide the benefit of the same. It was further stated that by repudiating the claim, the complainants have been put to monetary losses and figurative losses.
3. It was further stated that the aforesaid acts and conduct of the opposite parties, amounted to deficiency in providing service and adoption of unfair trade practice. Hence this complaint seeking directions to the opposite parties to pay an amount of Rs.73,61,961/- to the complainants; Rs.50,000/- on account of indirect expenses incurred by the complainants; Rs.50,000/- on account of expenses to be suffered in future; grant interest @18% p.a. on the amount; pay compensation of Rs.50,000/- for inconvenience and mental harassment and damages suffered due to deficiency of service on the part of the opposite parties.
4. Opposite Party No.1 filed written statement, wherein, it took certain preliminary objections, to the effect, that this Commission does not have the territorial jurisdiction to entertain the complaint as the loan was advanced at Ludhiana and Policy was also issued from Mumbai Office.
5. On merits, it was stated that the contract of insurance is a contract of utmost good faith and is entered interse the parties by treating the disclosures made by the insured to be genuine and correct on the face of it. It was further stated that in the instant case, the Policy, in question, was obtained by the complainants by concealing factum of pre-existing disease, disclosure of which would have led to non-issuance of the policy of insurance. It was further stated that the loan, in question, was obtained by the deceased by non-disclosure of the pre-existing disease. It was further stated that the deceased did not disclose that he was suffering from disease namely "Hepatitis C Virus (HCV) and GI Bleed with large Esophageal Varices and for the same, had undergone medical treatment prior to issuance of policy. It was further stated that the discharge summary (Annexure R-1/2) issued by Apollo Hospital dated 31.07.2016 clearly mentioned the history of HCV Infection in 2011 and GI Bleed in 2013, as disclosed by the deceased/attendant to the hospital. It was further stated that the loan is insured only if a genuine claim is made and in the instant case, since there was non-disclosure, question of accepting the claim did not arise and therefore, no benefit could be advanced to the complainants under the insurance, in question. It was further stated that neither there was any deficiency, in rendering service, on the part of Opposite Party No.1, nor it indulged into any unfair trade practice. The remaining averments, were denied, being wrong.
6. Opposite Party No.2, in its written statement, stated that complainant No.1 alongwith her husband availed loan of Rs.70 Lakhs and Rs.3,61,961/- vide Loan Account No.615157927 and 618649937 and monthly EMI was fixed as per the terms and conditions of the loan agreements (Annexures R-2/1 (colly.) and Annexure R-2/2). It was further stated that the borrower himself opted for insured housing loan and availed finance facility for the said purpose also. It was further stated that opposite party No.2 has no role in fixing the amount of insurance cover or the premium as the same is outside its purview. It was further stated that the opposite parties are different entities in law and function independently. It was further stated that Opposite Party No.2 had no role in sanctioning of insurance policy or its subsequent repudiation by opposite party No.1. It was further stated that neither there was any deficiency, in rendering service, on the part of Opposite Party No.2, nor it indulged into any unfair trade practice. The remaining averments, were denied, being wrong.
7. The parties concerned, led evidence in support of their cases.
8. We have heard the contesting parties, and have gone through the evidence, and record of all the cases, carefully.
9. It may be stated here that the applicant/Opposite Party No.1 moved a Miscellaneous Application bearing No.400 of 2018 for placing on record Declaration submitted by the deceased Gurshinder Singh at the time of availing Insurance Policy, by way of additional evidence, as Annexure R-1/15. Arguments in the said application were heard alongwith the main complaint. We feel that the document sought to be placed on record is necessary for just decision of this complaint. Accordingly, the miscellaneous application No.400 of 2018 is allowed and the document (Annexure R-1/15) i.e. Declaration submitted by deceased Gurshinder Singh is taken on record.
10. First, we will deal with the objection, raised by the opposite party No.1 that this Commission does not have the territorial jurisdiction to entertain the complaint as the loan was advanced at Ludhiana and Policy was also issued from Mumbai Office. Though, admittedly, Member Enrollment Forum-SMQ (Annexure R1/15) filled up by the husband of the complainant at Ludhiana; both the Loan Agreements (Annexures C-1 & C-2) were executed at Ludhiana and further repudiation letter dated 12.01.2016 ( should be 12.01.2017) was issued from Mumbai office of the opposite parties, yet it cannot be ignored that the loan was sanctioned by the opposite parties from Chandigarh and as on 03.10.2017, an amount of Rs.71,01,242/- was outstanding against the complainants as is apparent from letter dated 03.10.2017 (Annexure OP-2/3). As such part of cause of action accrued to the complainants at Chandigarh and the complaint filed is well within the territorial jurisdiction of this Commission. Thus, the objection raised by opposite party No.1, in this regard, being devoid of merit, is rejected.
11. The averment of the complainants that the repudiation letter (Annexure C-4) was already drafted in January 2016 with an intention to repudiate their claim cannot be accepted. The year of the date of repudiation letter i.e. 2016 seems to be a typographical mistake and it should have been 2017 as in this letter, in the opening line of first paragraph, reference to Death Claim under Policy, was made, which was submitted by the complainants on 26.08.2016 vide Claim Form (Annexure R-1/1).
12. Coming to the merits of the case, the core question which falls for consideration is, as to whether, the death claim of the husband of complainant No.1 was rightly repudiated by opposite party no.1 on the ground of concealment of pre-existing disease by the life assured.
13. The answer to this question is in affirmative. The first document to be taken into consideration is the Declaration i.e. Member Enrollment Form -SMQ Regulated Entity filled by the husband of complainant No.1, wherein complainant no.1 was the nominee. In this declaration, the life assured (Sh. Gurshinder Singh), had answered in negative i.e. 'No' to all the questions posed in this document, specifically, at No.2, which reads as under:-
"2. During the last 5 years have you undergone any major surgery or been hospitalized for more than one week?"
14. To the aforesaid specific question, Sh. Gurshinder Singh answered in negative. This declaration is dated 23.01.2016, on the basis of which, the Policy, in question, was issued. The next document to establish the case of the opposite parties is Discharge Summary issued by the Department of Surgical Gastroenterology, Apollo Hospital, Chennai (Annexure R-1/2). Perusal of this document clearly reveals that Sh. Gurshinder Singh (since deceased) remained admitted in the said Hospital from 25.07.2016 to 31.07.2016, where he was diagnosed as HCV related DCLD for Liver Transplant evaluation & Gilbert's Syndrome. He was got admitted for the liver transplant workup as a known case of HCV induced DCLD. The relevant portion reads thus:-
"Incidentally diagnosed to have HCV Infection in 2011 during master health checkup hemophilia treatment GI blood in June 2013, large esophageal varice, EVL done started on LADR regim (RVR-, EVR-, ETR-), however had DVR + 36th week completed at 42nd week completed at 42nd week Peg IFN and riba at 48th week relapse on DAS sofosubuvir and ribavarin April 2015 R VR (+)-> relapsed December 2015, sofosbuvir and ribavarian added - RNA (Negative) June 2016, treatment stopped.
Jaundice since 1 month progressive, associated with encephalopathy.
Decompensation: UGI blood, HE+, jaundice +, ascites+.
No history of HRS, HPS, hydrothorax."
15. The Ultrasound (Whole Abdomen) of Sh. Gurshinder Singh (since deceased) gave impression of Coarse contracted liver, Portal vein flow was sluggish, splenomegaly, Ascities and Gall bladder calculi.
16. Further the detail given under the head " Course in the Hospital & Discussion", reads thus:-
"This 41 years old gentleman Mr. Gurushinder Singh diagnosed as HCV genotype 1 related DCLD admitted for transplant evaluation. He underwent investigations for liver transplant surgery which are attached herewith. Cardiologist, Pulmonologist, Infectious disease specialist, psychologist, dentist, hepatologist, hematologist and anesthetist consultation done and clearance for surgery taken. Vaccination given as per advise by ID specialist. He underwent DSE and while procedure he developed bradycardia for which procedure was abandoned and he received CPR and injection atropine. He also underwent Coronary angiogram and clearance taken from cardiologist side. He also underwent PFT, CECT abdomen, OGD and DTPA. After confirming all clearances and vaccination and all other procedures, he was discharged on 31-07-2016 in stable condition."
17. Further the procedure followed on specific dates is given under the heading "Name of the Procedure", which reads thus:-
"CAG on 30-07-2016 PFT DSE CECT abdomen OGD on 29-07-2016 DTPA on 29-07-2016"
18. Further in the Claim Form - Credit Protect, dated 26.08.2016, placed on record by Opposite Party No.1, as Annexure R-1/1 the Exact/Immediate Cause of Death of Sh. Gurshinder Singh, husband of complainant No.1, was mentioned as Multi Organ Dysfunction Syndrome.
19. Clearly, Sh. Gurshinder Singh (since deceased), prior to taking of the policy, in question, was admitted in Apollo Hospital, Chennai for transplant evaluation as he was diagnosed as HCV genotype 1 related DCLD and he undergone major treatment for HCV related DCLD for Liver Transplant evaluation & Gilbert's Syndrome, in the year 2011 and 2013, as has been crystal clear from Discharge Summary (Annexure R-1/2) issued by Apollo Hospital, Chennai. However, in Member Enrollment Form -SMQ Regulated Entity (Annexure R-1/15), while making declaration regarding his health details, he did not disclose the factum of his having undergone such a major treatment at Apollo Hospital. He also did not disclose his being diagnosed to have HCV Infection in the year 2011 during master health check up and GI bleed in June 2013 while filling the declaration. Sh. Gurshinder Singh (since deceased), while concealing the treatment taken, went on to given answers in negative i.e. "No" to all the questions posed in Annexure R-1/15. He could have disclosed the treatment undergone by him at Apollo Hospital but he chose not to do so, with clear intention to have benefit of the policy, in question.
20. It may also be stated here that the claim of the complainants was rejected on the ground of non-disclosure of vital information at the time of applying for the policy, in question. Therefore, the Discharge Summary (Annexure R-1/2) detailing the treatment underwent by Sh. Gurshinder Singh, cannot be overlooked/ignored when the fact is that he despite having undergone major treatment for HCV related DCLD for Liver Transplant evaluation & Gilbert's Syndrome, concealed this material fact in the proposal form and also made a wrong declaration. It is a significant non-disclosure and revelation of this fact at the time of opting for the policy, in question. Since Sh. Gurshinder Singh underwent procedure at Apollo Hospital, he must have been aware of his disease but he did not intentionally disclose the history of his ailment and the treatment/procedures undergone and the current surgery being related to the non disclosure, the claim was rightly rejected. As held by the Hon'ble Apex Court, the endeavour of the Court must always be to interpret the words in which the contract is expressed by the parties. The Court while construing the terms of policy is not expected to venture into extra liberalism that may result in re-writing the contract or substituting the terms which were not intended by the parties. As the document like the proposal form is a commercial document and being an integral part of the policy, reference to the proposal form is essential. We are of the opinion that since the relationship between the insured and insurer was of utmost faith and was based on uberimma fides, it was the duty of the insured to disclose, before the contract was made, every material fact which he knew. Utmost good faith is a common law principle and the principle means that every person who enters into a contract of insurance has a legal obligation to act with utmost good faith towards the company offering the insurance. The insurer is within its rights to repudiate the claim, arising after the death of the insured, on the ground that the insured did not disclose material facts at the time of entering the contract. The life assured or proposer is under solemn obligation to make full, complete, true and correct disclosure of the material facts, which may be relevant for the insurer to take into account while deciding whether the proposal should be accepted. If the life assured or proposer failed to disclose the true and correct material facts to the insurer, then the policy obtained by the life assured or proposer stands vitiated and the life assured or any person claiming under the policy is not entitled for any benefits under the said policy. The Hon'ble Supreme Court of India in United India Insurance Co.Ltd vs M/S.Harchand Rai Chandan Lal, Appeal (civil) 6277 of 2004 decided on 24/09/2004 and in Vikram Greentech (I) Ltd. & Anr vs New India Assurance Co. Ltd., CIVIL APPEAL NO. 2080 OF 2002 decided on 01.04.2009 held that an insurance policy is to be construed strictly as per the terms and conditions of the policy document which is a binding contract between the parties and nothing can be added or subtracted by giving a different meaning to the words mentioned therein. Therefore, violation of any terms and conditions mentioned in the policy document by the insured (such as suppression of material facts or intentional non-disclosure or rendering of wrong and misguiding statements by the insured) lead to discharge of the insurer from his liability to approve the claim.
21. In the instant case, it emerges from the record that a material fact was not disclosed, therefore, the insurer had the right to avoid the contract. Since there has been significant non-disclosure by Sh. Gurshinder Singh, husband of complainant No.1, in the proposal form, the claim was rightly rejected. Accordingly, the complainants cannot be given any benefit under the policy of insurance and their complaint is liable to be dismissed.
22. The judgments relied upon by the Counsel for the complainants, during arguments, are of no help to the complainants as in the instant case, clear non-disclosure of vital and material information by Sh. Gurshinder Singh (since deceased) husband of complainant No.1 has been established.
23. No other point was urged by the Counsel for the parties.
24. For the reasons, recorded above, this complaint is dismissed with no order as to costs.
25. Certified Copies of this order be sent to the parties, free of charge.
26. The file be consigned to Record Room, after completion.
Pronounced.
11.09.2018 .
[JUSTICE JASBIR SINGH (RETD.)] PRESIDENT [PADMA PANDEY] MEMBER Ad