State Consumer Disputes Redressal Commission
Smt. Mamta Negi vs Aditya Birla Capital Sun Life Insurance ... on 27 June, 2023
REPORTABLE
STATE CONSUMER DISPUTES REDRESSAL COMMISSION UTTARAKHAND
DEHRADUN
CONSUMER COMPLAINT NO. 01 / 2020
1. Smt. Mamta Negi W/o late Dinkar Negi
2. Karan Negi aged about 14 years' (minor)
3. Parth Negi aged about 12 years' (minor)
Nos. 2 & 3 both S/o late Dinkar Negi
through their mother and natural guardian Smt. Mamta Negi
All R/o Nathuakhan, Tehsil and District Nainital
...... Complainants
Versus
1. Aditya Birla Capital Sun Life Insurance Company Limited
One Indiabulls Centre, Tower 1
16th Floor, Jupiter Mill Compound, 841, Senapati Bapat Marg
Elphinstone Road, Mumbai - 400 013
2. Branch Manager, Aditya Birla Sun Life Insurance Company Limited
Durga City Centre, Haldwani
Nainital
...... Opposite Parties
Sh. Suresh Gautam, Learned Counsel for the Complainants
Sh. Aman Kumar, Advocate, holding brief of Sh. Mukesh Nautiyal,
Learned Counsel for the Opposite Parties
Coram: Hon'ble Mr. Justice D.S. Tripathi, President
Mr. Udai Singh Tolia, Member-II
Dated: 27/06/2023
ORDER
(Per: Justice D.S. Tripathi, President):
This consumer complaint under Section 12 read with Section 18 of the Consumer Protection Act, 1986 has been filed by Smt. Mamta Negi along with her minor children - Karan Negi and Parth Negi (hereinafter to be referred to as "complainants") against Aditya Birla Capital Sun Life Insurance Company Limited and Branch Manager, 2 Aditya Birla Sun Life Insurance Company Limited - opposite parties, alleging deficiency in service on their part in repudiating the insurance claim in question.
2. Briefly stated the facts of the case, as mentioned in the consumer complaint, are that the complainants are widow and children respectively of late Dinkar Negi (life assured), the deceased husband of complainant No. 1 and deceased father of complainant Nos. 2 & 3, who had unfortunately passed away on 07.05.2019. On the asking and assurance of agent of opposite party No. 1, during his lifetime, life assured had obtained three life insurance policies bearing policy No. 007665979 dated 29.09.2018 (wrongly mentioned as 29.08.2018) for assured sum of Rs. 2,25,000/-; policy No. 007673237 dated 22.10.2018 for assured sum of Rs. 65,00,000/- and policy No. 007684552 dated 05.11.2018 for assured sum of Rs. 30,00,000/-, upon payment of requisite premium in respect of the above-mentioned insurance policies. Before receipt of first premium in regard to the aforesaid insurance policies, health check-up of the life assured was done at the instance of the opposite parties - insurance company and medical certificate was issued by the panel doctor of the insurance company in regard to the state of health of the life assured. Looking into the fact that the life assured was not suffering from any disease / ailment and after issuance of medical certificate to the above effect, the premium amount was received by the insurance company. Thereafter, the policy bonds were issued by the insurance company. Unfortunately, the life assured suddenly breathed his last on 07.05.2019, intimation whereof was conveyed to the insurance company, who in turn, asked the complainants to submit the original policy bonds along with required documents, which were duly submitted with the insurance company, so that the sum assured under the subject policies could be paid to the nominee. However, the 3 insurance company through their letter dated 18.10.2019 addressed to complainant No. 1, informed that the life assured was suffering from critical disease / illness, which was concealed / suppressed by him, hence the insurance company is unable to honour the insurance claim. The claim was illegally repudiated by the insurance company. With the above allegations, the consumer complaint was set in motion, thereby seeking relief regarding payment of assured sum under the policies together with interest besides litigation expenses and other reliefs.
3. The opposite parties - insurance company filed written statement, pleading therein that the life assured has suppressed material information relating to his past medical history of chronic kidney disease and hypertension. Since the insurance policies have been obtained by the life assured by suppression of material facts in regard to his health, the contract of insurance is invalid; void-ab-initio; inoperative and unenforceable. The contract of insurance is based on a rocky foundation of utmost good faith. The doctrine of utmost good faith requires the party seeking insurance, to disclose all relevant personal information. The suppression of correct facts violated the fundamental principle of "Uberrima fides", thereby vitiating the contract of insurance. The proposal form for the first insurance policy was submitted by the life assured on 29.09.2018 and the ultrasound report dated 04.09.2018 clearly shows that the life assured was diagnosed with chronic kidney disease and he was well aware of his medical condition, which was deliberately concealed by the life assured. The ultrasound report dated 04.09.2018 of Sir Ganga Ram Hospital, New Delhi states both kidneys show increased parenchymal echotexture with reduced cortico medullary differentiation with cortical scaring and parenchymal atrophy. Left renal cortical cysts are seen. As there was breach of fundamental 4 conditions of the insurance policies, the insurance company was justified in repudiating the claim. The life assured had suppressed his past ailment and gave incorrect / wrong answers to the questions mentioned in the proposal form.
4. It is further pleaded in the written statement that the subject insurance policies were issued on 29.09.2018, 22.10.2018 and 05.11.2018 respectively on the basis of application form and documents received from the life assured. On 21.06.2019, the insurance company received a claim form, thereby informing that the life assured had died on 07.05.2019 due to heart attack. As the death of the life assured took place within 10 months' from the date of commencement of risk under the policy, investigation was carried out at the instance of the insurance company. During investigation, it was revealed that the life assured was suffering from chronic kidney disease and hypertension from prior to issuance of policy. The ultrasound report dated 04.09.2018 of the life assured issued by Sir Ganga Ram Hospital, New Delhi shows that both kidneys show increased parenchymal echotexture with reduced cortico medullary differentiation with cortical scaring and parenchymal atrophy, indicating medical renal disease, a precursor of chronic kidney disease. It was also found that the life assured was admitted in Central Hospital, Trauma & Heart Care Centre, Haldwani from 14.02.2019 to 21.02.2019 for seizures with gasping and Hypotension Grade III, Medico Renal Disease. In the discharge summary of the life assured, medical history of CKD and Hypertension has been mentioned. The life assured was again admitted in Central Hospital, Trauma & Heart Care Centre, Haldwani from 03.05.2019 to 04.05.2019 for seizures, Bilateral Grade II Medico Renal Disease and generalized weakness. Thus, it is proved that the life assured has not disclosed his past medical history.
55. It is also stated that the insurance company has sought expert opinion in the matter, in pursuance whereof, Dr. C.H. Asrani, DNB, MBBS; Advanced Diploma in Forensic Medicine and Toxicology and a Post Graduate Diploma in Medico Legal Systems, who per his opinion dated 21.10.2019 has concluded that the life assured had knowledge of his surgery undergone and diagnosis of medical renal disease much before applying for the first policy issued on 29.09.2018 and the life assured was also a hypertensive. All these significant medical facts were not disclosed by the life assured at proposal stage. Thus, on the basis of above facts, the claim has rightly been repudiated by the insurance company through letter dated 18.10.2019 and by doing so, no deficiency in service has been committed by the insurance company.
6. Against the written statement, replication was filed by the complainants, thereby denying the defence set up by the opposite parties.
7. In evidence, the complainants have filed the affidavit of complainant No. 1 - Smt. Mamta Negi, whereas the opposite parties have filed evidence by way of affidavit of Sh. Chandan Singh, Authorised Signatory, Aditya Birla Sun Life Insurance Company Limited. Against the evidence filed by the opposite parties, the complainant No. 1 has filed rejoinder affidavit on behalf of the complainants. Both the parties have also filed their respective written arguments.
8. We have heard arguments advanced by learned counsel for the complainants and perused the record. Learned counsel appearing on behalf of the opposite parties submitted that written arguments have 6 already been filed on behalf of the opposite parties and he has not to advance any oral arguments.
9. There is no dispute with regard to the fact that the above-mentioned three life insurance policies were obtained by the life assured during his lifetime on 29.09.2018; 22.10.2018 and 05.11.2018 and further that the life assured breathed his last on 07.05.2019 during the subsistence of the aforesaid insurance policies, pursuant to which, claim for payment of sum assured under the policies was lodged, which was repudiated by the insurance company through letter dated 18.10.2019, legible copy whereof is Paper Nos. 218 to 220. Relevant portion of the claim repudiation letter is reproduced below:
"The above policies were issued on September 29, 2018, October 22, 2018 and November 5, 2018 respectively on the basis of the proposal for insurance dated September 29, 2018, October 6, 2018 and October 24, 2018 signed by Late Mr. Dinkar Negi (the "Life Assured") on his own life.
As per the "Claimant's Statement" and "Death Certificate" Life Assured expired on May 7, 2019 (7 months and 6 months respectively since policy issuance date) due to Cardiac Arrest.
In the said proposals, the Life Assured, in reply to Q. No. 13(C) II, III (g), (j) had replied in negative. For your reference, we are reproducing below the aforesaid questions and the reply thereto in the proposal for insurance.
13. LIFESTYLE, PERSONAL AND MEDICAL DETAILS OF THE LIFE to be INSURED 7 C. MEDICAL HISTORY II) In the past five years, have you ever undergone any surgical operation at a hospital or clinic or undergone any investigations with other than normal or negative results (including X-rays, ECG, blood tests, biopsies etc.)? -
NO.
III) Have you ever sought advice or suffered from any of the following?
(g) Kidney, urinary, bladder, reproductive organ, prostate or any genitourinary disorders? -
NO.
(j) Any other illness, surgery, ailment or injury which is specifically not mentioned above? - NO.
Similarly, in his statement to the Medical Examiner in the Medical Examiner's Report dated September 30, 2018 submitted under Policy No. 007673237 and also considered as part of the application for insurance under Policy No. 007684552, the Life Assured had replied partially to question numbered Part I 4(k) and negative to question numbered Part I 4(i) of the Medical Examiner's Report (the "MER"). For your reference, we are reproducing below the aforesaid questions and the replies thereto in the MER:
Part I
4. Have you ever had or sought advice for:
i) Urine, kidney, bladder, reproductive organ or prostate disorder? - NO.
k) Any other illness, surgery or injury? -
YES.8
Undergone surgery for Appendix in 1998 and other for Gallbladder Stone in 2018. Gallbladder removed.
However, our investigations have established that the Life Assured was suffering from Chronic Kidney Disease and was under treatment for the same prior to the proposal for insurance. Hence, we are satisfied that the true and correct reply in the proposal for insurance and MER was deliberately concealed and falsified.
Had the true and correct facts and details pertaining to Life Assured's prior medical history been disclosed at the proposal stage, Life Assured would have been subjected to detailed underwriting procedure and the Company would not have issued the aforesaid life insurance policy at all.
From the evidence and information available with the Company, it is established that there has been willful intent to deceive the Company by not disclosing true facts which were material for the purpose of underwriting the risk before the issuance of policies.
The above facts clearly indicate an active concealment of material facts and information by the insured with a malafide intent to deceive the Company for issuing the life insurance policy leading to issuance of aforesaid policy based on false disclosure and untrue statement which was well within the knowledge of the Life Assured.
Hence there has been a breach of one of the basic principles of Life Insurance Contract, which is "Utmost Good Faith". It results into a situation as an attempt to defraud the Company.
Accordingly for the reasons and facts mentioned hereinabove, we are hereby 9 repudiating your claim for the benefits under the policy and premium paid thereunder stands forfeited."
10. From the claim repudiation letter, it is clear that the claim has been repudiated on the ground of concealment of material facts by the life assured in the proposal form, i.e., to say that the life assured was suffering from chronic kidney disease from before submitting the proposal form for insurance, which was willfully suppressed by him, while submitting the proposal form. It is pertinent to mention here that, as is also admitted to the insurance company, that in the Medical Examiner's Report dated 30.09.2018, copy whereof is Paper Nos. 76 to 77, the life assured had clearly mentioned that he had undergone to surgery 1st for Appendix in 1998 and other II for Gallbladder stone in 2018 and the Gallbladder was removed. The 1st insurance policy was obtained by the life assured on 29.09.2018 and the life assured was put to medical examination by panel doctor of the insurance company, namely, Dr. Mohd. Akbar Khan, M.B.B.S. on 30.09.2018, the very next date of obtaining the insurance policy, as is duly mentioned in the aforesaid report dated 30.09.2018. Thus, the life assured had clearly stated that he had undergone surgery for Appendix in 1998 and another for stone in gallbladder in 2018 and his gallbladder has been removed. In the claim repudiation letter, there is no mention of any such investigation made at the instance of the insurance company, which transpired that the life assured was suffering from chronic kidney disease and he was under treatment for the same since prior to submitting the proposal for insurance. Admittedly, the insurance company has not placed on record the proposal form submitted by the life assured for the very first policy dated 29.09.2018 to show that the life assured had deliberately / knowingly given false answers therein to the questions relating to his health etc. The proposal forms dated 08.10.2018 and 24.10.2018 for the other two policies, copies whereof 10 are on record, do not contain the signatures of the life assured and the life assured had only signed Customer Declaration Form I E - Application Submission dated 08.10.2018 and 24.10.2018. Hence, it can not be said that the life assured had given incorrect / false answer to the relevant questions regarding his state of health etc. asked for in the proposal forms for the insurance policies in question. For proving willful suppression of material fact on the part of the life assured, it was incumbent upon the insurance company to place on record the proposal form for the very first insurance policy dated 29.09.2018, which the insurance company for the reasons best known to them, has not done.
11. Learned counsel for the complainants submitted that the ultrasound report dated 04.09.2018 of the life assured, copy whereof is Paper No. 185, issued by Sir Ganga Ram Hospital, New Delhi, was duly given by the life assured to the medical examiner at the time of medical examination dated 30.09.2018 and further that the said report nowhere says that the life assured was suffering from chronic kidney disease. The said ultrasound report further says "Prostate appears normal in size and echotexture. It measures 4.1x2.7x2.7cms (volume 14cc). In the discharge summary dated 21.02.2019 of the life assured issued by Central Hospital Trauma & Heart Care Centre, Haldwani (Paper Nos. 201 to 204) as well as investigation report dated 11.07.2019 submitted by Mete Detective Management Services (Paper Nos. 205 to 2013), it is stated that Lap Cholecystectomy of the life assured was done at Sir Ganga Ram Hospital, New Delhi on 14.06.2018. Laparoscopic Cholecystectomy is a minimally invasive surgical procedure used for the removal of a diseased gallbladder. The factor regarding undergone surgery relating to gallbladder stone in 2018, was duly mentioned by the life assured at the time of his medical examination dated 30.09.2018 before the panel doctor of the 11 insurance company. In case the ultrasound report dated 04.09.2018 would have been withheld by the life assured and not submitted to the medical examiner (medical practitioner), there was no occasion for him to mention the said fact in the medical examiner's report dated 30.09.2018 on record. Thus, the mentioning of the factor regarding having undergone surgery relating to gallbladder stone in 2018 in the medical examiner's report dated 30.09.2018, rules out suppression of any material fact by the life assured in regard to his health. Even otherwise, there can be no gain saying that the ultrasound report dated 04.09.2018 does not specifically say that the life assured was suffering from chronic kidney disease. There is also no medical paper on record to show that the life assured had ever taken treatment regarding alleged kidney ailment or was hospitalized prior to submitting the proposal form for the first insurance policy dated 29.09.2018, proposal form whereof has not been placed on record by the insurance company.
12. It would not be out of place to mention here that it is not the case of the insurance company, nor there is anything on record to show that before issuing the 2nd and 3rd insurance policy, the life assured was put to medical examination. Thus, all the three insurance policies were issued on the basis of one and only medical examination dated 30.09.2018 of the life assured by the panel doctor of the insurance company. When the life assured had duly mentioned factor regarding his undergone surgery relating to stone in gallbladder in 2018, in the medical examiner's report dated 30.09.2018 and there was any doubt on the part of the insurance company regarding the health status of the life assured, the insurance company was obliged to put the life assured to further medical examination by their panel doctor before issuing subsequent insurance policies, but the same was not done. A fantastic plea has been taken by the insurance company 12 in paragraph No. 2 of the reply to each paragraph of the consumer complaint (reply to paragraph Nos. 3 & 4 of the consumer complaint) that the life assured was aware that disclosure of appendix surgery and gallbladder removal will have no impact on the decision of underwriters while issuing the policy. The source of such knowledge on the part of the life assured has not been disclosed by the insurance company. Even otherwise, it was the duty of the insurance company having coming to know about appendix surgery and gallbladder removal of the life assured, on the basis of ultrasound report in question, whether to accept the risk of providing insurance coverage to the life assured or not and after accepting the risk and receiving the requisite premium under the policies and the life assured having died due to cardiac arrest, as is admitted to the insurance company, the insurance company can not be allowed to shift entire burden upon the life assured and in the given facts and circumstances of the case coupled with documentary evidence available on record, no suppression of any material fact on the part of the life assured is borne out from the evidence available on record. A number of decisions have been referred by the insurance company in their written statement as well as written arguments on the issue of suppression of material fact on the part of the proposer (life assured), while submitting the proposal form for the insurance policy. The said decisions have no applicability in the instant case, for the simple reason that no suppression of any material fact on the part of the life assured while submitting the proposal forms for the insurance policies, is proved. Hence, it can not be said that the contract of insurance entered into between the parties has been vitiated by any act of the life assured, i.e., to say by not disclosing true and correct information with regard to his health in the proposal forms so submitted.
1313. On behalf of the insurance company, reliance has also been placed on the medical opinion submitted by Dr. C.H. Asrani, DNB, MBBS, Advanced Diploma in Forensic Medicine and Toxicology and a Post Graduate Diploma in Medico Legal Systems (from Symbiosis Centre of Health Care, copy whereof is Paper Nos. 186 to 200, to show that the said medical practitioner has concluded in his report dated 21.10.2019 that the life assured had knowledge of his surgery undergone and diagnosis of medical renal disease much before applying for the first policy to be issued on 29.09.2018. He was also a hypertensive. All these significant medical facts were not disclosed at proposal stage. It would not be out of place to mention here that the aforesaid opinion / short affidavit of Dr. C.H. Asrani is dated 21.10.2019, i.e., after the claim was repudiated by the insurance company through letter dated 18.10.2019. It has been argued by learned counsel for the complainants that the aforesaid medical opinion is based upon claim repudiation letter dated 18.10.2019 and has been procured by the insurance company to give weightage to repudiation of the claim. We find substance in the aforesaid argument advanced by learned counsel for the complainants.
14. There is no dispute that the life assured died due to cardiac arrest on 07.05.2019, as is also mentioned in the claim repudiation letter dated 18.10.2019. Thus, the alleged pre-existing kidney disease of the life assured, though not established on record, had no nexus with the death of the life assured. In the judgment dated 12.03.2020 rendered by Hon'ble National Commission in Revision Petition No. 54 of 2018; Life Insurance Corporation of India Vs. Sunita and others reported in 2020 3 CPR (NC) 301, the death of the life assured was due to cardiac arrest and the deceased - life assured was suffering from diabetes mellitus and chronic liver disease, when he was brought to hospital. It was held by Hon'ble National Commission 14 that cause of death of the life assured was nowhere connected to his pre-existing disease. Relevant portion of paragraph No. 9 of the said judgment is reproduced below:
"9. In the present case, the deceased assured was suffering from diabetes mellitus and chronic liver disease when brought 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 Civil Appeal No. 8245 of 2015 titled Sulbha Prakash Motegaoneker and Ors. 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 from the claim."
15. According to facts and circumstances of this case, evidence available on record and principle laid down by Hon'ble National Commission in the aforesaid case of Life Insurance Corporation of India (supra), we are of the considered opinion that the alleged pre-existing disease of the life assured had no nexus / was not co-related with his death, which took place on account of cardiac arrest.
16. Learned counsel for the complainants submitted that the life assured had also obtained one insurance policy No. 2843063 dated 24.10.2018 from ICICI Prudential Life Insurance Company Limited for assured sum of Rs. 5,00,000/-. The claim as against the aforesaid insurance policy, was duly honoured by the said insurer and claim 15 amount was paid. This fact has been mentioned in paragraph No. 5 of the written arguments filed on behalf of the complainants, which has not been disputed by the opposite parties.
17. The result of the above discussion is that it is not proved on record that there was suppression of any material fact on the part of the life assured while submitting the proposal forms for the subject insurance policies and the claim submitted for payment of the sum assured under the policies, was wrongly and illegally repudiated by the insurance company, thereby committing deficiency in service on their part.
18. Learned counsel for the complainants cited judgment dated 06.12.2021 of Hon'ble Apex Court passed in Civil Appeal No. 8386 of 2015; Manmohan Nanda Vs. United India Insurance Company Limited. In the said case, the appellant had obtained an Overseas Mediclaim Business and Holiday Policy. The claim lodged was repudiated by the insurance company, on the ground that as the appellant had a history of hyperlipidaemia and diabetes and the policy did not cover pre-existing conditions and complications arising therefrom. The consumer complaint filed by the appellant before Hon'ble National Commission, was dismissed, holding that concealment or non-disclosure of material facts regarding pre-existing heart ailment was a valid ground for repudiation of the insurance claim by the insurer. It was held by Hon'ble Apex Court in paragraph No. 66 that the insurer was informed about the pre-existing condition of the appellant, namely, diabetes mellitus-II and it was for the insurer to gauge a related complication under the policy as a prudent insurer and then issue the policy, when satisfied. In paragraph No. 68, it was held that the fact that the appellant had diabetes mellitus-II was made known to the insurance company. Therefore, it is observed that any 16 complication which would arise from diabetes mellitus-II was also within the consideration of the insurer. Despite the aforesaid facts regarding the medical record of the insured, the insurance company decided to issue the policy to the appellant. Under such circumstances, it was held by Hon'ble Apex Court that repudiation of the claim by the insurance company was illegal and not in accordance with law and the appeal was allowed, directing the insurer to indemnify the appellant regarding the expenses incurred by him towards his medical treatment together with interest and costs. In the instant case also, as is stated above, the fact regarding previous surgeries undergone by the life assured in 1998 and 2018 respectively as well as findings of ultrasound report dated 04.09.2018, were duly disclosed by the life assured before the medical examiner of the insurer and after considering the same, the policies were issued.
19. For the reasons aforesaid, we are of the considered opinion that there was no justification on the part of the insurance company in repudiating the legitimate claim in question and there has certainly been deficiency in service on the part of the insurance company in repudiating the claim. The complainants are entitled to the sum assured under the three insurance policies, i.e., Rs. 97,25,000/-. As the claim has wrongly been repudiated and the complainants have been made to run from pillar to post to get the sum assured under the policies and the complainant No. 1 having lost her husband and complainant Nos. 2 & 3 having lost their father, this had added to the grief of the complainants, hence they are entitled to interest @7% p.a. on the aforesaid amount, payable from the date of filing of the consumer complaint till payment. In all fairness, the complainants are further entitled to litigation expenses, which we quantify at Rs. 25,000/-.
1720. Consumer complaint is allowed. The opposite parties are directed to pay to the complainants sum assured of the three policies amounting to Rs. 97,25,000/- (Rupees Ninety Seven Lacs Twenty Five Thousand Only) along with interest @7% p.a. from 07.01.2020, i.e., the date of filing of the consumer complaint till payment and Rs. 25,000/- (Rupees Twenty Five Thousand Only) towards litigation expenses.
21. A copy of this Order be provided to all the parties free of cost as mandated by the Consumer Protection Act, 1986 / 2019. The Order be uploaded forthwith on the website of the Commission for the perusal of the parties.
(U.S. TOLIA) (JUSTICE D.S. TRIPATHI)
Member-II President
K