State Consumer Disputes Redressal Commission
Narinder Singh vs Managing Director on 24 July, 2015
FIRST ADDITIONAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.
Consumer Complaint No.60 of 2010
Date of Institution: 16.08.2010.
Date of Decision: 24.07.2015.
1. Narinder Singh son of Mahinder Singh, resident of Village and
Post Office Gujjran, Tehsil Sunam, District Sangrur.
2. Balwinder Kaur widow of Mahinder Singh, resident of Village
and Post Office Gujjran, Tehsil Sunam, District Sangrur.
.....Complainants.
Versus
1. Managing Director, Kotak Mahindra Old Mutual Life Insurance
Limited Regd. Office 9th Floor Godrej Coliseum, Behind
Everard Nagar, Sion- East Mumbai-400 022.
2. The Manager, Kotak Mahindra Old Mutual Life Insurance
Limited, Chhoti Baradari, Ist Floor, Patiala.
....Opposite parties
Consumer complaint under Section
17(1)(a) of Consumer Protection Act, 1986
Quorum:-
Shri J. S. Klar, Presiding Judicial Member
Shri H.S. Guram, Member Present:-
For the complainants : Sh. Deepak Bhardwaj, Advocate For the opposite parties : Sh. Mukesh Garg, Advocate .............................................. J. S. KLAR, PRESIDING JUDICIAL MEMBER:-
Complainants Narinder Singh and Balwinder Kaur have filed the complaint under Section 17(1) (a) of Consumer Protection Act 1986 (in short "the Act") against the OPs. The brief facts of the complaint are that Mahinder Singh father of complainant no.1 and Consumer Complaint No.60 of 2010 2 husband of complainant no.2 during his life time purchased two insurance policies bearing nos.01465709 and 01466812 on the inveiglement of officials of OP no.1 and he was allotted client ID no.52434623 under Kotak Smart Advantage Regular UIN-107L043. The premiums of above said policies were paid by the life assured Mahinder Singh (hereinafter referred as 'life assured') to OP and OP confirmed the receipts of premium of Rs.1,80,000/- and Rs.20,000/- of above said policies, vide letter dated 09.03.2009. The life assured, who was quite healthy and active during his life time, was medically checked up at the time of his insurance at the instance of OP no.1. The life assured suffered abdominal pain in February 2009 and he was got admitted in Madhu Nursing Home at Patiala on 01.02.2009 and was discharged on 05.02.2009 in satisfactory condition. The life assured unfortunately fell sick on 16.02.2009 and expired at Village Gujjran. It was further averred that the Insurance Company admitted the acceptance of the premium of the above said policies of Rs.1,80,000/- and Rs.20,000/- from deceased life assured. A duly registered will was also executed by the life assured in favour of Narinder Singh and the mutation of properties left by the Mahinder Singh deceased has been sanctioned in the name of the complainants. The complainant no.1, being nominee of above said policies, supplied all the documents and correct information regarding sudden illness of life assured, admission record with Madhu Nursing Home Patiala and death certificate to OP no.1 to Consumer Complaint No.60 of 2010 3 process the claim. The insurance claim filed by the complainants qua life assured was repudiated, vide letter dated 05.02.2009, without any reasonable ground just on false and flimsy grounds alleging therein dispatch of letters dated 18.11.2009, 08.12.2009, 01.01.2010 and 18.01.2010, which have never been received by the complainants. The complainants, have, thus filed the complaint against the OPs directing them to allow the insurance claim lodged with them by the complainants regarding death of life assured and to pay Rs.60 lakhs alongwith interest @18%. The complainants also prayed for additional compensation for mental harassment and Rs.10,000/- as costs of litigation.
2. Upon notice, OPs filed their joint written reply and contested the complaint of the complainant vehemently. The OPs raised preliminary objections that life assured Mahinder Singh filled in the proposal form, wherein he provided wrong information intentionally regarding his health condition. It was denied that complainants are the consumers. It was further averred that no succession certificate has been placed on record by the complainants. On merits, OPs admitted that on the basis of the information provided by the life assured in the proposal forms dated 14.01.2009, the above said policies were issued to the life assured on 30.01.2009 and 05.02.2009. It was further pleaded that life assured gave specific answer to question no.11.2 to 11.5 in negative by making the misleading statement regarding the point, if he was Consumer Complaint No.60 of 2010 4 addict of alcoholic abuse. It was further averred that life assured had died on 16.02.2009 within 17 days from the date of issuance of policy bearing no.1465709 and within 11 days from the date of issuance of policy bearing no.1466812. Claim intimation form dated 23.07.2009 was received by OPs on 11.08.2009 in this regard. The life assured lived for very short span after taking the above said policies and expired thereafter. Investigator was appointed by the OPs, who submitted interim investigation report on 16.11.2009 that life assured was not keeping good health and was terminally ill for about a period of more than 1 year. The investigator got declaration dated 24.08.2009 issued by Dr. Rakesh Arora of Madhu Clinic Patiala to the effect that life assured had taken the treatment during the time of proposal and the issuance of the insurance policies. The investigation report is dated 16.11.2009 and the said investigator had submitted final investigation report on 28.01.2010. The OPs pleaded that life assured was suffering from Alcoholic Cirrhosis with portal Hypertension with Ascites with Hepato Encephalopathy with Hepato Renal Syndrome during the course of signing the proposal and issuance of the policies. The OPs issued another letter dated 18.01.2010 requesting the complainant to submit certain important documents pertaining to the medical treatment being undertaken by the life assured. It was further averred by the OPs that the disease mentioned in the discharge summary of the life assured was the result of long drawn alcoholism and the habits to that effect and the Consumer Complaint No.60 of 2010 5 same could never be an acute position. The OPs further pleaded that they had taken an external third party medical opinion about the illnesses being suffered by the life assured in order to gauge the actual time period for which the life assured would have been suffering from the same. It was further pleaded by the OPs that life assured concealed information regarding his alcoholic abuse intentionally, when he took the above referred policies and contract of insurance is, thus, liable to be revoked under the provisions of Section 45 of the Insurance Act, 1932. The OPs prayed for the dismissal of the complaint with exemplary costs.
3. The complainants tendered in evidence the affidavit of Narinder Singh Ex.CW-1, affidavit of Major Singh Ex.CW-2, affidavit of Jagjit Singh Ex.CW-3, affidavit of Hardeep Singh Ex.CW-4 and closed the evidence. As against it, OPs tendered in evidence, the affidavit of Cedric Fernandes, Chief Financial Officer Ex.RW-1/A alongwith documents Ex.R-1 to R-23 and closed the evidence thereafter.
4. We have heard the learned counsel for the parties at considerable length and have also examined the record of the case. It is an undisputed fact in this case that life assured was the father of complainant no.1 and husband of complainant no.2. Life assured Mahinder Singh obtained two insurance policies bearing nos. 01465709 and 01466812 with allotment of client ID no.52434623 under Kotak Smart Advantage Regular UIN-107L043. The OPs Consumer Complaint No.60 of 2010 6 received the premiums of above said policies Rs.1,80,000/- and Rs.20,000/- respectively for the above said policies from life assured and confirmed this fact vide letter dated 09.03.2009. The OPs repudiated the contract of insurance on the ground that life assured was suffering from Alcoholic Cirrhosis, which was long drawn out illness and he had concealed this material information deliberately, when he filled up the proposal form and took the above said policies. The submission of the OPs is that the life assured specifically replied in negative to the questionnaire in the proposal form, as he was suffering from Alcoholic Cirrhosis or not. The submission of the OPs is that on account of concealment of material information by life assured, the OPs are justified in repudiating the contract of insurance.
5. We have examined the affidavit of Narinder Singh complainant no.1 Ex.CW-1 on the record. He stated this fact that life assured was medically checked up by the doctors of the OPs, when he took the insurance policies. He further stated that no such ailment was detected in life assured at that time. Ex.CW-2 is the affidavit of Major Singh that life assured suddenly fell sick and he had not suffered from any disease. He stated that he had no history of alcoholic abuse or illness. The affidavit of Jagjit Singh Ex.CW-3 is on the record to the same effect tendered by the complainants on the record. Ex.CW-4 is the affidavit of Hardeep Singh to the same effect. These witnesses have stated that Mahinder Singh life assured was Consumer Complaint No.60 of 2010 7 not alcoholic abuser and he had not suffered from any illness during his life time. The emphasis of counsel for the complainants before us is that life assured was medically checked up by the OPs, when he took the insurance policies and no illness was detected in him. While relying upon the above referred affidavits on the record, the argument of the complainant is that the OPs just invented the excuse of previous ailment of life assured and thereby rejected the insurance claim of the complainants.
6. The OPs placed reliance upon affidavit of Cedric Fernandes Chief Financial Officer of OPs Ex.RW-1/A on the record. We have examined his affidavit on the record. He stated in this affidavit that during investigation, it was found that life assured was admitted in Madhu Nursing Home, Passey Road, Near Gurdwara Dukhniwaran Sahib Patiala from 01.02.2009 to 05.02.2009. Dr. Rakesh Arora of the said Nursing Home handed over the copy discharge summary of life assured duly signed by him showing the provisional diagnosis as an- "advanced case of Alcoholic Cirrhosis with Portal Hypertension with Ascites with Hepatic Encephalopathy". This witness has stated that discharge summary also contains the case summary condition at discharge, investigations and the prescriptions recommended to the patient. This witness has further testified on oath that comprehensive document clearly pointed out that life assured was suffering from the ailment of above disease, when he took the insurance policies in this case. This witness further Consumer Complaint No.60 of 2010 8 maintained in his statement that the contract of insurance is based on utmost good faith and OPs would not have insured life assured in case he had disclosed the fact of above referred ailment at that time. Ex.R-1 is the proposal form on the record. Our attention has been drawn to clause 11 thereof, the medical history of the life to be insured. The life assured gave answers in negative as detailed in it. In proposal form no.115369, life assured also replied in negative regarding his suffering from any such ailment. Ex.R-3 and Ex.R-4 are the policy documents dated 31.01.2009 and 05.02.2009 containing terms and conditions of the policy issued by the OPs in the name of life assured. The contract contained free look period to opt out of the contract of insurance as well. Ex.R-5 is the claim intimation form individual life policies lodged by Narinder Singh with the OPs. Ex.R-6 is the copy of interim investigation report on the record and the final report submitted by this investigator is Ex.R-8 on the record. From perusal of the investigation report Ex.R-8 on the record, it is established on the file that life assured Mahinder Singh was terminally ill prior to his death. Life assured was ill for more than one and half year before his decease. He further disclosed in his report that life assured was suffering from serious kidney problems and was almost confined to bed for about two months before his demise. In the conclusion drawn by the investigator, from the enquiries made from locals, Dr. Arora and the papers sought from complainants for the treatment of life assured, it was revealed that Consumer Complaint No.60 of 2010 9 life assured was suffering from terminal ailment, when he took the insurance policies. Ex.R-9 and R-10 are addressed to complainant no.1 and they have also been examined by us with regard to demand of documents. Ex.R-11 is copy of discharge summary issued by Madhu Nursing Home by Dr. Rakesh Arora. It has proved that life assured was admitted on 01.02.2009 and he was discharged on 05.02.2009 and was treated by Dr. Rakesh Arora and he was found to be a case of Alcoholic Cirrhosis with Portal Hypertension with Ascites with Hepatic Encephalopathy. Ex.R-12 is the final reminder addressed to complainant no.1 by the OPs regarding submission of requisite documents. Ex.R-13 is the medical literature placed by the OPs in this regard. Ex.R-14 is the repudiation letter dated 05.02.2009. Ex.RW-2/A is the affidavit of Dr. C.H. Asrani Medical practitioner-forensic science expert & claim consultant to the effect that life assured Mahinder Singh was suffering from liver cirrhosis, when he took the insurance policies and he had not disclosed this fact and concealed this material information from the OPs intentionally.
7. The counsel for the complainant argued that only photocopy of the discharge summary issued by Madhu Nursing Home has been placed on the record, which is not sufficient to prove any previous ailment of the life assured. The complainant relied upon laid down in "SBI Life Insurance Co. Ltd. Vs. Harvinder Singh and another" in revision petition no.380 of 2013, decided on Consumer Complaint No.60 of 2010 10 18.07.2014 by the National Commission, wherein it has been held that neither the affidavit of doctor, nor the original discharge summary have been placed on the record. We find that the said authority is distinguishable in this case because here is investigation report submitted on the record, as discussed above, which has lent due credence to the discharge summary report issued by Dr. Rakesh Arora. Ex.R-16 is letter from Deputy Medical Superintendent, T.B. Hospital Patiala addressed to complainant no.1, stating that Mahinder Singh S/o Mulla Singh R/o Vill. Gujjran,Tehsil Sunam, District Sangrur remained admitted in the hospital from 25.10.2007 to 03.11.2007. Ex.R-17 is the copy of Bed Head Ticket on the record regarding admission of life assured Mahinder Singh on 25.10.2007 in the T.B. Hospital Patiala. Ex.R-18 is the copy of prescription slip in the name of life assured issued by the T.B. Hospital Patiala. Ex.R-21 is the medical information to the effect that he was treated for pleural effusion right side.
8. The counsel for the complainant then referred to law laid down in "LIC of India and others Vs. Poonam Sharma and another" 2007(2)CLT-686 by the Himachal Pradesh State Consumer Commission, wherein it has been held that mere misstatement or withholding of certain fact does not make every contract like proposal to be fraudulent. In the cited authority, medical report of the doctor was not placed on record before the District Forum. The cited authority is distinguishable from the fact situation of Consumer Complaint No.60 of 2010 11 the case. The complainant then referred to law laid down by the National Commission in "LIC of India Vs. Patel Ganesh Bhai Ramji Bhai" 2007(2)CLT-405 that history record filed by the doctor and relied upon by the appellant neither supported by any corroborative evidence in the form of affidavit nor does it prove that the said treatment has any nexus to the cause of death. We find that this authority is again distinguishable from the fact situation of the case. Herein the investigation report is on the record proving that life assured suffered from Liver Cirrhosis with Portal Hypertension with Ascites with Hepatic Encephalopathy and he was admitted in Madhu Nursing Home Patiala on 01.02.2009 and was discharged therefrom on 05.02.2009. The life assured died on 16.02.2009 within 17 days from the date of issuance of policy bearing no.1465709 and within 11 days from the date of issuance of policy bearing no.1466812 due to above disease. We find that there is adequate corroboration to the discharge summary by Madhu Nursing Home issued by Dr. Rakesh Arora by the report of investigating officer.
9. The submission of the complainants is that the ailment of life assured could be abrupt and not chronic and he could not be aware of the same and hence there was no active concealment of any material fact in this case. In medical literature "cirrhosis (scarring of liver) caused as a result of prolonged consumption of alcohol. It is the final stage of Alcoholic Liver Disease (ALD), viz. a) Fatty Liver, b) Alcohol hepatitis and c) Cirrhosis. It is a consequence of chronic liver Consumer Complaint No.60 of 2010 12 disease characterized by replacement of liver tissue by fibrotic scar tissue as well as regenerative nodules, leading to progressive loss of liver function. Cirrhosis is most commonly caused by alcoholism and hepatitis C, but has many other possible causes. Because of chronic damage to the liver, scar tissue slowly replaces normal functioning liver tissue, progressively diminishing blood flow through the liver. The structural change is likely to take anything from 5 year and above. As the normal liver tissue is lost, nutrients, hormones, drugs and poisons are not processed effectively by the liver. In addition, protein production and other substances produced by the liver are inhibited. CLD causes Portal Hypertension which in turn causes oesophageal varices leading to fresh, large volume blood vomiting from upper GI. Portal HTN - Portal hypertension is an increase in the blood pressure within a system of veins called the portal venous system. Normally, the veins coming from the stomach, intestine, spleen and pancreas, merge into the portal vein, which then branches into smaller vessels and travels through the liver. If the vessels in the liver are blocked, it is hard for the blood to flow causing high pressure in the portal system. - When the pressure becomes too high, the blood backs up and finds other ways to flow back to the heart, where it is pumped to the lungs, to get rid of waste products and pick up oxygen. The blood can travel to the veins in the esophagus and cause esophageal varices, to get around the blockages in the liver. - The most common cause of portal Consumer Complaint No.60 of 2010 13 hypertension is cirrhosis results from scarring of a liver injury caused by hepatitis, alcohol abuse or other causes of liver damage. In cirrhosis, scar tissue blocks the flow of blood through the liver. In alcoholic liver disease, damage to the liver results from excessive and prolonged alocohol use".
It is, thus, evident from medical literature that liver cirrhosis is not abrupt disease and it is chronic and it takes minimum five years for its development. Life assured was suffering from serious liver cirrhosis when he was admitted in Madhu Nursing Home Patiala. He had not disclosed the material information on this point to the OPs, when he took the insurance policies. Alcohol is a very common cause of liver cirrhosis. The life assured also remained admitted in the T.B. Hospital Patiala from 25.10.2007 to 03.11.2007, it also records the poor condition of the health of the life assured. He had also not disclosed this material information, when he took the insurance policies that he suffered from previous ailment of tuberculosis and remained admitted thereat in the year 2007, as per the medical record discussed above. The report of Investigating Agency cannot be discarded on the record by us.
10. We have, thus, come to this conclusion that life assured was suffering from tuberculosis in the year 2007 and he had not disclosed the material information to the OPs, when he entered into the contract of insurance. Life assured was also a case of Liver Cirrhosis with Portal Hypertension with Ascites with Hepatic Consumer Complaint No.60 of 2010 14 Encephalopathy and he had given the reply specifically in negative to the questionnaire regarding the above referred disease. We find that life assured had concealed the material information. The contract of insurance is uberrima fides (utmost good faith) and had the correct information been given to the OPs, the OPs might not had entered into the contract of insurance with complainant. We find support from law laid down by the Apex Court in "P.C. Chacko Vs. Chairman, LIC of India" 2008(1) SCC-321 and subsequent in case "Satwant Kaur Sandhu vs. New India Assurance Co. Ltd." 2009(8) SCC-316, wherein it has been held that "Section 45 of the Insurance Act, 1938 (which prescribes that a life insurance policy cannot be called in question on ground of misstatement after two years) postulates repudiation of insurance policy within a period of two years. There are three conditions for application of the second part of Section 45 of the Insurance Act, which are (a) the statement must be on a material matter or must suppress facts which it was material to disclose; (b) the suppression must be fraudulently made by the policy-holder; and (c) the policy-holder must have known at the time of making the statement that it was false or that it suppresses facts which it was material to disclose." We also refer to law laid down in "Life Insurance Corporation of India Vs. Smt. Kusum Patro" in revision petition no.1585 of 2011 by the National Commission on this point to the effect that "the insurer was within its rights to repudiate the insurance claim of his nominee subsequent to Consumer Complaint No.60 of 2010 15 his death, even though the cause of the death had no medical nexus with the accident that he suffered or the consequential disability. In fact, the latter (i.e. presence or absence of any nexus between pre- insurance status of health of the life to be assured and the cause/s of his post-insurance death) is of no consequence insofar as the observance of the duty of disclosure of all material facts while/before seeking an insurance coverage is concerned." We also rely upon law laid down in "HDFC Standard Life Insurance Co. Ltd. Vs. Smt. Jayalaxmi" in revision petition no.336 of 2007, decided on 04.02.2011 by the National Commission, observing that there are numerous judgment of Apex Court as also of this Commission that since an insurance policy is a contract entered between the two parties in utmost good faith, any violation of its terms and conditions by the insured entitles the Insurance Company to repudiate the claim.
11. In the light of our above discussions, we have, thus, come to the conclusion that whether there is any nexus between the cause of death and previous ailment of disease or not? It hardly matters as held by the National Commission in "Life Insurance Corporation of India Vs. Smt. Kusum Patro" (Supra). Consequently, we have come to this conclusion that life assured concealed the material information regarding his previous ailment when he took the insurance policies. He fraudulently gave wrong answers in the proposal form to the OPs on the material points. He Consumer Complaint No.60 of 2010 16 had also not disclosed this fact that he remained admitted in the year 2007 for his ailment of tuberculosis. Consequently, this cause of active concealment of material fact by the life assured renders the contract of insurance as voidable at the option of the OPs.
12. As a result of our above discussions, we do not find any merit in the complaint of the complainants and the same is hereby dismissed.
13. Arguments in this complaint were heard on 21.07.2015 and the order was reserved. Now the order be communicated to the parties.
14. The complaint could not be decided within the statutory period due to heavy pendency of court cases.
(J. S. KLAR) PRESIDING JUDICIAL MEMBER (H.S. GURAM) MEMBER July 24, 2015.
(MM)