State Consumer Disputes Redressal Commission
Ms Sbi General Insurance Co Ltd vs Rama Rani on 28 October, 2024
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH
First Appeal No.706 of 2023
Date of institution : 05.11.2023
Date of Reserve : 07.10.2024
Date of Decision : 28.10.2024
M/s SBI General Insurance Co. Ltd., Corporate & Registered Office:
9th Floor, A&B Wing, Fulcrum Building, Sahar Road, Andhgeri (East),
Mumbai-400 099 through Sh.Sukhesh P. Bhave, Head- Accident &
Health Claim.
Now through their Authorized Signatory, Jitendra Dhabhai, Chief
Manager (Legal), Zonal Office, 46, 3rd Floor, Karol Bagh, Pusa Road,
Opp. Metro Pillar No.129, New Delhi-110005.
.......Appellant/Opposite Party No.1
Versus
1. Rama Rani, aged about 62 years wife of Shri Shiv Kumar
(deceased), Resident of H.No.287, Village : Kanchera, Tehsil
Nangal, Distt. Rupnagar.
......Respondent No.1/Complainant
2. State Bank of India, Adda Market, Nangal Township - 140124,
through its Branch Manager.
......Respondent No.2/Opposite Party No.2
First Appeal under Section 41 of the
Consumer Protection Act, 2019
against the Order dated 31.07.2023
passed by the District Consumer
Disputes Redressal Commission
Ropar in CC No.24 of 2023.
Quorum:-
Hon'ble Mrs. Justice Daya Chaudhary, President
Ms. Simarjot Kaur, Member
1) Whether Reporters of the Newspapers may be allowed to see the Judgment? Yes/No
2) To be referred to the Reporters or not? Yes/No
3) Whether judgment should be reported in the Digest? Yes/No Present :-
For the appellant : Sh.J.P.Nahar, Advocate
For respondent No.1 : Sh.Pankaj Sharma, Advocate
For respondent No.2 : Sh.Chandeep Singh, Advocate
F.A.No.706 of 2023
2
SIMARJOT KAUR, MEMBER
This Appeal has been filed by the Appellant/Opposite Party No.1 under Section 41 of the Consumer Protection Act, 2019 (in short 'The Act') being aggrieved by the impugned Order dated 31.07.2023 passed by the District Consumer Disputes Redressal Commission Ropar (in short 'the District Commission') whereby the Complaint of the Complainant had been partly allowed.
2. It would be apposite to mention that hereinafter the parties will be referred, as had been arrayed before the District Commission.
3. Briefly, the facts of the case as made out by the Complainant before the District Commission are that the husband of the Complainant namely Sh.Shiv Kumar, was working as Lineman in Punjab State Power Corporation Ltd. He retired from service on 30.04.2017. After his retirement, he obtained a personal loan of Rs.4,76,000/- from OP No.2 for his business. After completing all the required formalities, the said amount of loan was credited to his account on 03.09.2021. The monthly installment was fixed as Rs.8,879/-. The husband of the Complainant had got the said loan insured/secured from OP No.1 vide Insurance Policy No.24211166 which was valid w.e.f. from 04.09.2021 to 03.09.2026. The amount of the Insurance was equal to the loan amount. A premium of Rs. 26,177/- was to be paid by him which was deducted by OP No.2 through bank transfer and was paid to the insurer i.e. OP No. 1. The husband of the Complainant fell ill on 19.11.2021 and was referred to Fortis Hospital, Mohali on 24.11.2021 for intensive investigation and treatment. He was diagnosed with critical stage of cancer. He remained admitted and F.A.No.706 of 2023 3 under treatment. Unfortunately, Sh.Shiv Kumar had expired on 06.03.2022. The Hospital authorities had enquired about the insurance policy from the Complainant and had accordingly informed to OP No.1. Thereafter, the Complainant- Rama Rani had applied for the Insurance claim in the prescribed form along with the required documents as desired by OP No.1 vide letter reference No: SBI General Claim No:
CL-0011775 dated 05.04.2022. The OP No.1 had repudiated the claim vide letter dated 30.05.2022 on the ground mentioned as "the diagnosis fall within purview of critical illness but the diagnosis was made within first 90 days waiting period as defined under the policy". The said Clause, in the policy, was illegal, arbitrary, against the law and principal of natural justice and clearly an unfair trade practice adopted by the OP No.1. After getting the loan, OP No.2 had got transferred six installments from the account of the deceased. A total amount of Rs.53,274/- had been recovered towards the loan amount. After the death of the insured, the OP No.2 had recovered entire balance amount of the borrower on 02.07.2022. Thereafter, the account was closed on 08.07.2022. The Complaint had been filed by the Complainant by seeking directions against OP No.1 to pay the Insurance claim along with the interest @ 18% on account of damages as well as litigation expenses.
4. Upon issuance of notice OP No.1 had appeared and filed its written statement by raising certain preliminary objections that the Complaint was not maintainable as there was no 'deficiency of service' or 'unfair trade practice' on the part of OP No.1. The claim of the Complainant was repudiated as per terms and conditions of the Policy.
The Complaint was frivolous, vague and vexatious in nature. There F.A.No.706 of 2023 4 was no 'Unfair Trade Practice" or "deficiency of service" on the part of Opposite Party. The Complaint was filed only to effect the reputation of the answering OP.
5. It has been mentioned in the written reply that a Group Loan Insurance policy bearing No.0000000024211166 was issued to the Insured Mr.Shiv Kumar valid w.e.f. 04.09.2021 to 03.09.2026. This policy had covered critical illness of the insured for an amount of Rs.2,38,000/- subject to certain terms, conditions, exclusions. The liability of OP No.1 was limited to the expenses incurred on the treatment of the insured occurring within the policy period subject to terms, conditions and exceptions of the Policy. On receipt of claim intimation on 16.03.2022, OP No.1 had sought required documents vide letter dated 16.03.2022. However, OP No.1 had rejected the claim on 30.05.2022 on the ground as reproduced below:-
"We have carefully perused claim documents and noted that you have submitted claim documents for insured Mr. Shiv Kumar who expired on 6th March 2022 due to complications of cancer. Treatment records submitted by you confirmed that the insured suffered from right parietal space occupying lesion with lung metastasis since 19th November 2021. Though diagnosis falls within the purview of critical illness, the diagnosis was made within the first 90 days waiting period as defined under the policy. Therefore, the claim did not fall under the policy and the same was repudiated."
On merits, the stand taken in the preliminary objections has been reiterated. It denied the other allegations levelled by the Complainant and had prayed for dismissal of the Complaint.
F.A.No.706 of 20235
6. OP No.2 was proceeded ex-parte by the District Commission vide order dated 26.05.2023.
7. By considering the averments made in the Complaint as well as in the reply thereof, the Complaint filed by the Complainant was partly allowed vide order dated 31.07.2023 passed by the District Commission. The relevant part of said order is reproduced as under:-
10. In view of the above discussion, issue no. 1 of para 5 is decided in favour of complainant is entitled for the claim and we allow the complaint partly and direct the O.P1, who shall be liable, in the following manner:-
i. To pay a sum of Rs. 2,38,000/- along with interest @ 9% per annum from the date of repudiation of claim i.e. 30.05.2022 till actual realization but on the production of the legal heir certificate of the deceased by the complainant from the competent authority. If there are more than one legal heirs the amount will be divided equally amongst them.
ii. To pay a sum of Rs. 10,000/- as compensation. iii. To pay Rs. 11,000/- as litigation expenses. iv. The OP is further directed to comply with the order within the period of 45 days from the date of receipt of certified copy of this order.
8. The Appellant/OP No.1 has filed the present Appeal being aggrieved by the order dated 31.07.2023 passed by the District Commission by raising a number of arguments.
9. Mr.J.P.Nahar, Advocate, learned Counsel for the Appellant/OP No.1 has argued on the similar lines as per the written reply filed before the District Commission. Learned Counsel has submitted that the claim of the Complainant had rightly been repudiated and there was no deficiency on the part of OP. The District F.A.No.706 of 2023 6 Commission had wrongly partly allowed the Complaint. Learned Counsel has further submitted that the District Commission had wrongly held that the exclusion clauses would not be applicable, relying upon a judgment of Hon'ble Supreme Court in case of M/s Texco Marketing Pvt. Ltd., Vs. TATA AIG General Insurance Co. Ltd., the facts of the said judgment are different as the case pertains to loss under Fire Policy. In para No.3 of the Complaint, the Complainant had given the policy number, the premium amount and the policy period, and the same are reflected in page 1 of 29 of the policy. If the policy was not issued to the insured, from where did the Complainant obtained the particulars which had been mentioned in the Complaint. As a matter of fact, the Complainant is trying to wriggle out of the terms of the policy and otherwise also, how could the Complainant vouch for her husband that no terms and conditions were supplied. If her husband had not received any terms and conditions of the policy, he could have requested for the same as he was alive for many months after he had obtained said Insurance Policy. Therefore, the impugned order passed by the District Commission is liable to be set aside.
10. It was also wrongly held by the District Commission that the Complainant did not ask benefit under critical illness but asked benefit towards death claim. The District Commission had failed to understand that the policy had three Sections, Section I Personal Accident, Section II Critical illness and Section III Admission Benefit- Accidental Hospitalization. It is clear from theses Sections, that Section I and III would be applicable only if there is accident. Section II deals F.A.No.706 of 2023 7 with critical illness, thus the claim has been lodged under Critical illness. In para No.8 of the Complaint there was no mention of accident rather there was an averment that the husband of the Complainant was of sound health before taking the loan. The District Commission had awarded an amount of Rs.2,38,000/- which was applicable to Section II Critical Illness. Therefore, the District Commission had wrongly held that Complainant is entitled for the death claim of her husband from the Appellant/OP No.1. Moreover, the District Commission had not given any finding as to how the repudiation letter dated 30.05.2022 was wrong or illegal. Learned Counsel has also submitted that the Insurance Policy started from 04.09.2021 and as averred in para No.4 of the Complaint, the patient fell ill on 19.11.2021. The symptoms of the critical illness emerged within 78 days only i.e. before 90 days. Learned Counsel has relied upon the judgments i.e. 1) "Vikram Greentech Vs. New India Assurance Co. Ltd.", II (2009) CPJ 34 (SC), 2) "General Assurance Society Ltd. Vs. Chandumull Jain & Anr.", AIR 1996 SC 644, 3) "United India Insurance Co. Ltd. Vs. Harchand Rai Chandra Lal", IV (2004) CPJ 15 (SC), in support of his oral arguments.
11. Mr.Pankaj Sharma, Advocate, learned Counsel for Respondent No.1/Complainant has submitted that the District Commission had passed the award by considering the exclusion clause should not be cover ride the main purport of the policy. The Respondent No.1/Complainant was not asking for compensation regarding the illness but for she had lodged a death claim for her husband.
F.A.No.706 of 20238
12. Respondent No.1/Complainant had specifically mentioned in the Complaint that Appellant Company had not supplied any documents including policy to them and in reply to this para the Appellant Company had mentioned therein that it was denied for want of knowledge it shows that the Appellant Company has not issued the policy documents to the Respondent and her deceased husband Late Sh.Shiv Kumar and during the pendency of the Complaint the Respondent No.1/Complainant had given the Application for obtaining the policy documents then the Appellant Company provided the policy documents to the Respondent.
13. The District Commission had passed the award on the basis of M/s Texco Marketing Company Ltd., Vs. Tata AIG General Insurance Company Ltd. It was mentioned by the District Commission that on the basis of General rule discussed by the Hon'ble Supreme Court of India, which is applicable to all the policies. Learned Counsel has further submitted that the Appellant all the citations referred by the Appellant were not applicable to Group Loan Insurance Policy. In fact they all pertained to fire policy, shipmen etc. Learned Counsel for Respondent No.1 has relied upon judgment of Hon'ble Supreme Court in Case "M/s Texco Marketing Pvt. Ltd. Vs. TATA AIG General Insurance Co. Ltd. & Ors.", 2022 LiveLaw (SC) 937, in support of his oral arguments.
14. Mr.Chandeep Singh, Advocate, learned Counsel for Respondent No.2 has submitted that no claim has been passed against Respondent No.2 by the District Commission. F.A.No.706 of 2023 9
15. We have heard the oral arguments raised by learned Counsel for the parties. We have also perused the order dated 31.07.2023 as well as all the relevant documents available on the file.
16. Facts relating to the filing of the Complaint by the Complainant before the District Commission, reply thereof, the oral arguments raised by learned counsel for the parties and passing of impugned order dated 31.07.2023 by the District Commission, thereafter filing of present appeal before this Commission by the Appellant/OP No.1 are not in dispute.
17. Admittedly, the deceased/husband of the Complainant had obtained a personal loan of Rs.4,76,000/- from OP No.2 for his business. The said amount of loan was credited to his account on 03.09.2021. The monthly installment was fixed as Rs.8,879/-. The husband of the Complainant had got the said loan insured/secured from OP No.1 vide Insurance Policy No.24211166 which was valid w.e.f. from 04.09.2021 to 03.09.2026. The amount of the Insurance was equal to the loan amount. A premium of Rs.26,177/- was to be paid by him which was deducted by OP No.2 and was paid to the insurer i.e. OP No. 1. The husband of the Complainant fell ill on 19.11.2021 and was diagnosed with critical stage of cancer. Unfortunately, Sh.Shiv Kumar-insured had expired on 06.03.2022. Thereafter, the Complainant wife of the insured had lodged death claim with the OP No.1, but OP No.1 had repudiated the claim vide letter dated 30.05.2022 on the ground mentioned as "the diagnosis fall within purview of critical illness but the diagnosis was made within first 90 days waiting period as defined under the policy". F.A.No.706 of 2023 10
18. The main controversy involved in the present case is as to whether the OPs had rightly repudiated the claim of the Complainant with regard to waiting period as mentioned in terms and condition of said Insurance Policy issued to the husband of the Complainant by OPs.
19. We have gone through the documents i.e. zimini orders, terms and conditions of the Insurance Policy, medical record of the deceased and other relevant documents available on record. A thorough perusal of the aforesaid documents has clearly established that OPs had only supplied the cover note of the Insurance Policy. However, the complete Insurance Policy along with terms and conditions were not supplied. The said policy had been handed over to the Complainant during the proceedings before the District Commission. In this respect, the zimini order dated 26.05.2023 passed by the District Commission has been perused and the same is reproduced as under:-
26.05.2023 The learned counsel for the O.P.No.1 is produce the copy of Insurance policy to the complainant. Therefore, the application filed by the complainant stands in fructuous. It is pertinent to mention here that since 02.05.2023, O.P No.2 has not appeared. Today, the case called several times since morning. It is already 01.30. It appears that OP No.2 is not interested to contest the claim of the complainant. Therefore, the OP No.2 is proceeded against exparte Case is listed for 01.06.2023 for leading evidence by both the parties From the above said zimini order, it is apparent that the complete policy along with terms and conditions were not supplied to the insured. They F.A.No.706 of 2023 11 were supplied during the course of proceedings before the District Commission. In light above, the submission made by the Respondent No.1/Complainant is accepted.
20. Moreover, the Appellant/OP No.1 in its evidence failed to produce any receipt of insured to show that the terms and conditions of the policy had been supplied/delivered to him. The onus to prove this fact is on the Appellant/OP No.1. It is the duty of the Insurance Company to explain all the terms and conditions of the Insurance Policy to the insured. It is settled principle of law that the insured is not bound by the terms and conditions of the Insurance Policy in case the same are not supplied to them. We are fortified with the judgment passed by the Hon'ble Supreme Court in the case titled as "Modern Insulators Ltd. Vs. Oriental Insurance Co. Ltd.", (2000) 2 SCC (734), wherein it has been specifically held that the Exclusion Clauses, which are not explained to the insured, are not binding to the insured and are required to be ignored. We are of the view that unexplained or unnoticed exclusion clauses would not be binding upon the insured.
21. With regard to repudiation of the genuine claim of the insured, the District Commission had explicitly dealt in its findings by relying upon the judgment of Hon'ble Supreme Court in case "M/s Texco Marketing Pvt. Ltd. Vs. TATA AIG General Insurance Company ltd. & Ors.", Civil Appeal No.8249 of 2022, decided on 09.11.2022, wherein it has been held in para No.39 "Non-compliance of Clauses (3) and (4) of the IRDA Regulation, 2002 preceded by unilateral inclusion, and thereafter followed by the execution of the contract, receiving benefits, and repudiation after knowing F.A.No.706 of 2023 12 that it was entered into for a basement, would certainly be an act of unfair trade practice. This view is fortified by the finding that the exclusion clause is an unfair term, going against the very object of the contract, making it otherwise un-executable from its inception."
22. As per the observations and discussion, it has been established that the husband of the Complainant was diagnosed with Cancer by Fortis Hospital Mohali (Ex.OP-4). Therefore, she entitled to a claim for an amount of Rs.2,38,000/- as prescribed in Section II Critical Illness with reference to the diagnosis of Cancer of Specific Severity of Group Loan Insurance Policy (Ex.OP-1) as it has emerged that the terms and conditions of the said policy were not supplied to the insured (deceased).
23. In view of judgments of Hon'ble Supreme Court, facts and reasons mentioned above, we find no merit in the present Appeal and the same is hereby dismissed. The order dated 31.07.2023 passed by the District Commission is upheld.
24. The Appellant had deposited an amount of Rs.1,44,641/- at the time of filing the appeal with this Commission. Said amount, along with interest, which has accrued on the amount deposited by the appellants, if any, shall be remitted by the Registry to the District Commission after the expiry of 45 days of sending of certified copy of the order to the parties. The concerned party(s) may approach the District Commission for release of the same and the District F.A.No.706 of 2023 13 Commission may pass the appropriate order in this regard, in accordance with law.
25. Since the main case has been disposed off, so all the pending miscellaneous applications, if any, are accordingly, disposed off.
26. The Appeal could not be decided within the statutory period due to heavy pendency of court cases.
(JUSTICE DAYA CHAUDHARY) PRESIDENT (SIMARJOT KAUR) MEMBER October 28, 2024 (Rupinder 2)