State Consumer Disputes Redressal Commission
Rajinder Kumar vs Bharti Axa Life Insurance Company on 11 January, 2022
ADDITIONAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH.
Consumer Complaint No.478 of 2019
Date of Institution : 04.06.2019
Date of Reserve : 13.12.2021
Date of Decision : 11.01.2022
1. Rajinder Kumar son of Sh. Radha Sham.
2. Smt. Suman Gupta, wife of Rajinder Kumar,
Both residents of House No.535, Basant Avenue,
Amritsar(Punjab).
.....Complainants
Versus
1. Bharti Axa, Life Insurance Company, SCO No.32, Pal Plaza,
B Block, District Shopping Centre, Ranjit Avenue, Amritsar,
through its Manager/Office Incharge. Email:-claims@bharti-
axalife.com.
....Opposite Party No.1
2. Smt. Nidhi Bansal, widow of Sh. Keshav Aggarwal, daughter
of Sh. Pawan Bansal, resident of H.No.81/3, Dharampura
Colony, Near Water Tank, Batala, District
Gurdaspur.(Deleted vide order dated 03.09.2019)
.....Proforma/Opposite Party No.2.
Consumer Complaint under Section 12
of the Consumer Protection Act, 1986.
Quorum:-
Mr. Rajinder Kumar Goyal, Presiding Member
Mrs. Kiran Sibal, Member Present:-
For the complainant : Sh. V.K. Arya, Advocate For Opposite party No.1 : Sh. K.S.Cheema,Advocate For Opposite Party No.2 : Deleted vide order dated 03.09.2019 Consumer Complaint No.478 of 2019 2 KIRAN SIBAL, MEMBER:-
The complainants have filed this complaint under Section 12 of the Consumer Protection Act, 1986 (in short "the Act"), against the opposite parties (in short "OPs") seeking following directions:-
i) The OP No.1 be directed to release the amount of Rs.50 lacs, along with interest, on the insurance claim in favour of complainant No.2, only;
ii) The OP No.1 be further directed to pay compensation of Rs.5 lacs for harassment and mental torture in wrongly repudiating the genuine claim of the complainants;
iii) Award litigation expenses to the tune of Rs.50,000/- for dragging the complainant into this unnecessary litigation and harassment;
iv) Any other relief which this Commission may consider appropriate may also be awarded in favour of the complainants.
2. Brief facts, as set out in the complaint, are that Keshav Aggarwal, since deceased(hereinafter referred as DLA), son of complainants, obtained a Life Term Insurance Policy i.e. "Bharti Axa Life E Protect Policy" from OP No.1, bearing No.5011021580 for a sum of Rs.50 lacs as sum assured. The date of commencement of the policy was 18th of July, 2013. The DLA was paying all the premium regularly and even the policy was re-issued by OP No.1 in February 2017 on the basis of good health declaration form and thereafter paid all the premium till his death. On 11.12.2018 at about 12 P.M., when the DLA was going from his factory to some other business place by his own car, suffered sudden attack and was found lying un-conscious on the seat of his locked car. On receiving information, complainant No.1 and his other friends immediately took him out of car and brought him to Consumer Complaint No.478 of 2019 3 Fortis Escort Hospital, Amritsar, where he was declared "brought dead" by the said hospital. Thereafter, being father and nominee of the DLA, complainant No.1 lodged claim with OP No.1 and submitted all relevant documents for release of insurance claim of Rs.50 lacs, but the OP No.1 repudiated the genuine and valid insurance claim, vide its letter dated 20.02.2019(wrongly stated as 20.02.2018), on the grounds that the DLA was hospitalized for treatment of Syncope/Seizure, generalized weakness and disorder in June, 2016. The DLA died due to a natural death and till his death, he was not suffering from any disease or disorder of any kind. The alleged hospitalization was for a minor treatment and all the test reports of the DLA were found to be OK. The DLA had also purchased another Life Insurance Policy from HDFC Life Insurance Co. and the said company has already disbursed the insurance claim after thorough investigation. The widow of DLA has already relinquished all her rights in the claim of Term Life Insurance of her husband in favour of complainant No.2 and further vide writing dated 03.05.2019, has received her share from complainant No.2 in the prospective claim of impugned insurance policy. She is being impleaded as Proforma-Opposite party only. The complainants so many time requested OP No.1 for release of the genuine claim of their son but all in vain. The act and conduct of the OP No.1 amounts to deficiency in service on its part. Hence, this complaint.
3. Notice of the complaint was issued to the OPs and OP No.1 was appeared through counsel. But OP No.2 was deleted Consumer Complaint No.478 of 2019 4 from the array of parties, vide order dated 03.09.2019, as the complainants sought no relief against OP No.2.
4. OP No.1 filed written reply raising preliminary objections that the complaint is not maintainable and is liable to be dismissed as the complainant has attempted to misguide and mislead this Commission. The complainant has suppressed the material facts from this Commission. The complaint is devoid of any material particulars, and has been filed merely to harass and gain undue advantage and unjustified monies from OP No.1. On merits, OP No.1 stated that on receiving the proposal form duly filled and signed by the DLA, the policy in question i.e Bharti Axa Life E-Protect Plan was issued on 18.07.2013. The Policy documents for subject policy were dispatched on 23.07.2013 via speed post bearing AWB No.8291495752, which was duly received by the DLA on 26.07.2013. The DLA had ample opportunity to approach the company after receipt of the policy documents, if he is not satisfied with the policy or its terms and conditions. He had the option to return/cancel the policy within the free look period i.e. within 15 days from the date of receipt of the policy documents. But he did not raise any objection towards the policy or with respect to the material facts stated in the proposal form. The policy in question was lapsed in the year 2015 due to non payment of premiums. The policy was in lapsed mode of 19 months and thereafter the DLA reinstated the same by paying the pending premiums and submitted a Declaration of Good Health (DOGH). On receipt of intimation regarding death of DLA on Consumer Complaint No.478 of 2019 5 11.12.2018, OP No.1 conducted the investigation as per Section 45 of the Insurance Amendment Act, 2015, as the death of DLA was within 24 months i.e. less than two years from the date of reinstatement of the policy. The complainant did not provide any document or certificate of doctor showing reason/cause of death of the DLA. During the claim evaluation process, it was found that the DLA was hospitalized for the treatment of Syncope/Seizure, generalized anxiety disorder in June 2016, which is prior to signing the Declaration of Good Health. The DLA suffered from loss of consciousness regularly and generalized weakness. It also came to the knowledge of the company that the DLA had history of Vertigo, which was not disclosed. The said medical history was prior to the reinstatement of the policy, which was not disclosed in the DOGH. The contract of the insurance is based on the principle of utmost good faith and the company relies on the information provided by the Life Assured in the application for insurance. The claim of the complainants has been rightly rejected, vide repudiation letter dated 20.02.2019, purely on the basis of documentary evidence of suppression of material facts by the Life Assured in the proposals for insurance. After denying the other averments made in the complaint, OP No.1 prayed for dismissal of the complaint.
5. To prove their claim, the complainants, along with the complaint filed their joint affidavit along with copies of documents Annexure C-1 to C-9. On the other hand, OP No.1 filed on record Consumer Complaint No.478 of 2019 6 affidavit of Snehal Sawant, Associate Manager Legal along with copies of documents Ex. OP-1/1 to OP-1/6.
6. We have heard learned counsel for the parties and have carefully gone through written submission filed by the parties and record of the case.
7. Learned counsel for the complainants vehemently contended that DLA Keshav Aggarwal died on 11.12.2018, during the subsistence of the policy, due to sudden attack and was found lying un-conscious on the seat of his locked car. The DLA was not suffering from any disease or disorder of any kind. The complainant No.1, being nominee of the DLA, lodged the claim with OP No.1 and submitted all relevant documents for release of the claim amount i.e. Rs.50 lacs. But OP No.1 wrongly repudiated the genuine claim, vide letter dated 20.02.2019 on some false and frivolous grounds of hospitalization in June, 2016 for some treatment of alleged Syncope/seizure, generalized weakness disorder, which otherwise has no linking with the actual death of the DLA. The alleged hospitalization was for a minor treatment and all the test reports of the DLA were found OK. Alleging deficiency in service on the part of the OP No.1, the Ld.counsel prayed for acceptance of the complaint.
8. Learned counsel for OP No.1 argued to the contrary that the DLA reinstated the lapsed policy and submitted a Declaration of Good Health(DOGH), wherein he stated that he was in good health and not undergone any treatment. However, the information provided by the DLA was established to be incorrect, Consumer Complaint No.478 of 2019 7 therefore the insurance company was well within its rights to repudiate the claim of the complainants. The repudiation of the claim under the subject policy was on the grounds of mis- statement of information, suppression of material information and furnishing of false information in the DOGH. During the claim evaluation process and investigation, it was highlighted that the DLA was hospitalized for the treatment of Syncope/Seizure, generalized anxiety disorder in June 2016, which is prior to signing the Declaration of Good Health. In support of his contentions, the Ld. Counsel has relied upon the following citations:
a) Life Insurance Corporation of India & Ors. Vs. Smt. Asha Goel & Anr. (2001)ACJ 806.
b) P.C.Chacko and another Vs.Chairman, Life Insurance Corporation of India and others AIR 2008 (SC) 424.
The DLA has concealed material facts, which were necessary to be disclosed at the time of reinstating the insurance policy, thereby rendering the contract of insurance void-ab-initio and inoperative, which is the reason for the claim being repudiation. There is no deficiency in service on the part of OP No.1. The learned counsel prayed for dismissal of the complaint.
9. We have given thoughtful consideration to the contentions raised by the learned counsel for the parties.
10. Admitted facts of the case are that Keshav Aggarwal, (DLA), son of complainants, obtained a Life Term Insurance Policy i.e. "Bharti Axa Life E Protect Policy"(Ex. OP1/2) from OP No.1, bearing No.5011021580 for a sum assured of Rs.50 lacs, which was lapsed in the year 2015 and the DLA got reinstated the same Consumer Complaint No.478 of 2019 8 in the month of February 2017 after paying the due premium amount along with interest. The DLA died on 11.12.2018 and the claim was lodged by complainant No.1 with OP No.1, which was repudiated by OP No.1 vide letter dated 20.02.2019(wrongly stated as 20.02.2018), Ex. C-4. The grievance of the complainants is that OP No.1 repudiated the genuine claim on the ground that the DLA was hospitalized for the treatment of Syncope/seizure, generalized weakness disorder in June 2016, which is prior to the signing of Declaration of Good Health for Insurance. A perusal of repudiation letter dated 20.02.2019 issued by the OP No.1, Ex. C- 4 shows that the insurance company repudiated the claim on the grounds, which are reproduced as under:-
"The policy was re-issued to the Life Insured on the basis of the Declaration of Good Health dated 01.02.2017 provided for reinstatement of the policy. In the said declaration, the life insured had replied in negative to question No.4 g.
Further, investigations have established that the life insured was hospitalized for the treatment of syncope/seizure, generalized weakness disorder in June 2016, which is prior to the signing Declaration of Good Health for insurance and that all the replies were false.
In view of the above, it is clear that the Life Insured has given false and misleading information to the company and had the Life Insured replied to the questions truthfully and correctly in the proposal form, the company would not have issued the above mentioned policy at all. It is evident that the company has been led to issue the policy by suppressing material facts regarding past medical history.
In the said circumstances, the company is therefore repudiating the claim for non disclosure of material information at the time of making the proposal".
11. Now question arises that whether the complainants are entitled for the claim amount on account of non-disclosure of material information by the DLA in DOGH form at the time of reinstatement of the policy or not? To determine this issue we Consumer Complaint No.478 of 2019 9 have examined the pleadings and evidence on record. From the perusal of proposal form attached by OP No.1 as Ex. OP1/1, it reveals that the DLA submitted the online proposal form for issuance of policy. Ex. OP1/2 i.e. welcome letter issued by OP No.1 shows that the proposal form was accepted and policy was issued on July 18, 2013. Ex. OP1/3 is the Declaration of Good Health Form(DOGH) dated 01.02.2017 submitted by the DLA at the time of reinstatement of the policy, in which the DLA mentioned that he was in good health at that time. The plea of the OP No.1 is that the DLA has given false and misleading information in DOGH as he stated that he was in good health and not undergone any treatment but the information provided by the DLA in DOGH was established to be incorrect as he was hospitalized for the treatment of syncope/seizure, generalized weakness disorder in June 2016 .
12. The policy in question was lapsed in the year 2015 and was reinstated by the DLA on 01.02.2017 by paying the requisite premiums. It would be relevant to discuss the terms and conditions with regard to the reinstatement of the policy. As per clause 4 of the policy bond, Ex. OP1/2, a lapsed policy can be reinstated as under:-
4.Reinstatement of the Lapsed Policy.
If the premium is not paid on the due date or during the grace period, the policy shall lapse with effect from the date of such unpaid premium ('lapse date'). The Company shall notify you of the lapse of the Policy. Lapsation of the Policy shall extinguish all your rights and benefits under the policy.
A policy which has lapsed may be reinstated for full benefits subject to the following conditions; Consumer Complaint No.478 of 2019 10
a) The application for reinstatement is made within five (5) years from the date of first unpaid premium.
b) Satisfactory evidence of insurability of the Life Insured is produced.
c) Payment of an amount equal to all unpaid premiums together with interest at such rate as the Company may charge for such Reinstatement, as decided by the Company from time to time.
The effective date of reinstatement is the date on which the above conditions are met and approved by the Company. In case of death during the reinstatement period, no Death Benefit will be payable. If the Policy which has lapsed is not reinstated within the period allowed for reinstatement, the Policy shall be terminated on the completion of the period allowed for reinstatement and no benefits shall be payable. It is not in dispute that the DLA had reinstated the policy for full benefits on 01.02.2017 according to the above said terms and conditions of Clause 4 of the policy bond. The DLA has paid the entire pending premiums along with interest to the Insurance Company and the Insurance company allowed the policy to restart the coverage for future claims. As per above terms, no death benefit would be payable in case death occurred during reinstatement period. The DLA expired on 11.12.2018 due to heart attack, as per claim form Ex.OP-1/1 i.e. after the period of reinstatement. The OPs mainly relied upon Triage History and Physical Sheet, Ex. OP1/5, issued by Fortis Escorts Hospital dated 01.06.2016, where under the DLA had taken the treatment for unconsciousness and Vertigo, only for one day. Nothing has been mentioned in the history that unconsciousness relates to any mental disease or due to any nervous disorder and under the diagnosis head, it was written as Anxiety/Neuroses, which is not a mental disease and has been referred as a case of Vertigo. It is Consumer Complaint No.478 of 2019 11 also relevant to mention that the reports of the DLA were normal. The EEG report of DLA dated 01.06.2016 attached with Ex. OP1/5 was normal and the same is reproduced as under:-
"EEG Report:
Awake/Drowsy/Unconscious/EEG Record 8-11 Hz 30-40 uV PO Maximum Eye Opening and Closure Response Present Photic and Hyperventilation- Not Contributory Eye and body movement artifacts Present + Impression- Normal awake EEG Record"
The report of MRI or brain of DLA was also normal and the same is reproduced as under:-
"MRI of Brain "The cerebral Parenchyma shows normal signal intensity appearances in all sequences. Grey-white matter differentiation is maintained. No focal lesion is detected. There is no restriction of diffusion on diffusion weighted images.
Third and both lateral ventricles are defined and appear normal. Subarachnoid spaces are normally visualized. Fourth ventricle is normal in shape and size. Brainstem is defined and shows normal signal intensity. Internal auditory meatus is normal on both sides. Cerebellar parenchyma is normal in appearance.
Major vascular flow voids appear normal. Incidental note is made of mucosal hypertrophy in the both ethmoid sinuses.
IMPRESSION : No significant abnormality detected".
In view of this, we are of the considered opinion that the DLA had not concealed the fact regarding any nervous disorder or mental condition, depression or psychiatric disorder. Accordingly, the Judgments relied upon by the learned counsel for OP No.1 in the case of Life Insurance Corporation of India & Ors. Vs. Smt. Asha Goel & Anr. and in the case of P.C.Chacko and another Consumer Complaint No.478 of 2019 12 Vs.Chairman, Life Insurance Corporation of India and others (Supra) are not applicable in the present case.
13. It is further relevant to mention that the DLA died due to heart attack as claimed in claim form and OP got duly investigated the matter and never denied the version of the complainants. It has also pertinent to mention here that similar claim of the DLA has already been disbursed by the HDFC Life Insurance Company and the same is accepted after thorough investigation, which is duly proved vide NEFT receipts Ex. C-7 & C-8. This supports the version of the complainants that the DLA was in good health at the relevant time. Therefore, the present insurance company is only adopting the hyper technical approach to reject the genuine claim of the complainants. In the present case, the DLA died due to heart attack and not due to any mental disorder and any nervous disorder.
14. A sequel of our above discussion, we are of the view that the claim of the complainants has been wrongly and illegally repudiated. Since, OP No.1 had reinstated the policy after duly acceptance of the premiums, therefore this policy is to be treated as a continuous policy and accordingly the claim is payable. The claimants/complainants are held entitled to the benefits under the insurance policy, which was issued in the year 2013.
15. Accordingly, we allow the complaint filed by the complainants against OP No.1 and following directions are given to OP No.1.
Consumer Complaint No.478 of 2019 13
a) To release the claim amount of Rs.50,00,000/-(Fifty Lakh) being sum assured on account of death of DLA, as per terms and conditions of the insurance policy, to the complainants within a period of 60 days from the receipt of certified copy of the order.
b) To pay Rs.20,000/- towards litigation expenses to the complainants.
In case, the payment of claim is not made within the aforesaid period, the claimants/complainants shall be entitled to interest at the rate of 7% per annum with effect from expiry of aforesaid period of 60 days till realization.
16. The complaint could not be decided within the stipulated period due to heavy pendency of Court cases and non- sitting of this Commission due to pandemic of Covid-19.
(RAJINDER KUMAR GOYAL) PRESIDING MEMBER (MRS. KIRAN SIBAL) MEMBER January 11th, 2022.
(Dv)