National Consumer Disputes Redressal
Seema Begum vs Hdfc Standard Life Insurance Company ... on 15 January, 2020
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 323 OF 2019 (Against the Order dated 29/11/2018 in Complaint No. 1047/2017 of the State Commission Punjab) 1. SEEMA BEGUM W/O. LATE SHREEF MOHAMMAD , RESIDENT WARD NO 1, NEAR BUS STAND PAYAL LUDHIANA PUNJAB ...........Appellant(s) Versus 1. HDFC STANDARD LIFE INSURANCE COMPANY LIMITED & 2 ORS. THROUGH ITS AUTHORIZED MANAGER, LODHA EXCELUS, 13 FLOOR, APOLLO MILLS COMPOUND, N.M. JOSHI MARG, MAHALAXMI MUMBAI 2. HDFC STANDARD LIFE INSURANCE COMPANY LIMITED THROUGH ITS MANAGER, LUDHIANA PUNJAB 3. HDFC BANK LTD THROUGH ITS BRANCH MANAGER, PAYAL LUDHIANA PUNJAB ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE V.K. JAIN,PRESIDING MEMBER
For the Appellant : Mr. Naeem Ilyas, Advocate For the Respondent : Mr. Joydip Bhattacharya, Advocate and
Mr. Hitesh Kumar, Advocate for R-1 & R-2
Mr. U.K. Jain, Advocate and
Mr. Aman Leekha, Advocate for R-3
Dated : 15 Jan 2020 ORDER
JUSTICE V.K.JAIN, PRESIDING MEMBER (ORAL)
Late Mr. Shreef Mohammad, husband of the complainant/appellant took an insurance policy from the respondent HDFC Standard Life Insurance Company Limited for a sum insured of Rs.50 lacs on 29.10.2016. He having died on 20.02.2017, due to cardiorespiratory arrest, a claim in terms of the insurance policy was lodged by the complainant/appellant, she being his wife. The claim however, was repudiated by the insurer vide letter dated 06.07.2017, which, to the extent it is relevant, reads as under:
Personal Details of Life to be Assured:
12Have you ever suffered from: Diabetes/High Blood Sugar/Sugar in Urine, High Blood Pressure/Hypertension, Heart Disease, Stroke No 21 During last 5 years have you undergone or been recommended to undergo hospitalization?
No 22 During last 5 years have you undergone or been recommended to undergo Operation?
No 23 During last 5 years have you undergone or been recommended to undergo X-ray any other investigation (excluding check-ups for employment/insurance/foreign visit)?
No
2. Being aggrieved from the repudiation of the claim, the complainant/appellant approached the concerned State Commission by way of a Consumer Complaint.
3. The complaint was resisted by the insurer primarily on the ground on which the claim had been repudiated. It was also pointed out in the written version filed by the respondent that the deceased had died within 12 days of the issuance of the insurance policy. It was also stated in the written version that he was a heart patient prior to taking insurance policy and had died due to some heart ailment.
4. The State Commission, vide impugned order dated 29.11.2018, dismissed the Consumer Complaint. Being aggrieved, the complainant is before this Commission by way of this appeal.
5. It is an admitted position that an Echo Test of Mr. Shreef Mohammad was done by one Dr. Ranjeet Khanna on 18.01.2016 at Khanna Nursing Home. The Echo report, to the extent it is relevant, reads as under:
IMPRESSION GLOBAL HYPOKINESIA WITH AKINESIA OF MID ANTERIOR, APICAL & APICAL LATERAL SEGMENTS SEEN.
GRADE II LEFT VENTRICULAR DIASTOLIC DYSFUNCTION (PSEUDO NORMALIZATION) MILD MR Note is made of multiple Ectopics.
It would thus be seen that the deceased insured was suffering from a heart ailment, at the time the proposal was submitted by him to the insurer for taking a life insurance cover on his policy.
6. The proposal by the insured was submitted online. The proposal contained all the personal details of the deceased including that he was an under-matriculate. However, though he was required to disclose in case he had ever suffered from a heart ailment, the answer given by him was in negative. He was also required to disclose if he had ever undergone X-ray or any other investigation in last five years. He was therefore, duty bound to disclose that he had undergone an Echo test at Khanna Nursing Home. The said information however, was concealed by him, he having replied in negative to the question which required him to disclose any X-ray or other investigation during last five years.
7. The first submission of the learned counsel for the appellant is that since the deceased had undergone medical check-up at Khanna Nursing Home where the Echo test was done, the ailment of the deceased was in the knowledge of insurer. There is absolutely no evidence of Dr. Ranjeet Khanna of Khanna Nursing Home having disclosed to the insurer that the deceased was subjected to an Echo test at his nursing home and was found suffering from a heart ailment. Neither Dr. Khanna was examined as a witness nor was his affidavit filed by way of evidence. Therefore, it appears that Dr. Khanna was acting in concert with the insured when he withheld the information with respect to the Echo test of the deceased, provided that at the time he examined the deceased for the purpose of insurance policy, he remembered that he was the same person who had undergone Echo test in his nursing home on 18.01.2016. The report of Echo test done on 18.01.2016 was shown to him by the insured at the time he was examined by Dr. Khanna. A large number of persons undergo Echo test at a particular establishment and it would be difficult to expect that the doctor performing the Echo test would remember the particulars of all such persons. Therefore, there is a reasonable possibility of Dr. Ranjeet Khanna not knowing, at the time the deceased was examined at Khanna Nursing Home, that he was the same person who had undergone an Echo test in his nursing home on 18.01.2016. Moreover, there is no evidence or even allegation of the deceased having been examined only by Dr. Ranjeet Khanna and not by any other doctor of Khanna Nursing Home at the time he visited the said nursing home for the purpose of medical check-up in connection with the insurance policy. If he was examined by a doctor other than Dr. Ranjeet Khanna who performed the Echo test on 18.01.2016, the doctor examining him at Khanna Nursing Home might not be aware of the Echo test that had been done on 18.01.2016.
8. Be that as it may, what is important is that a contract of insurance being based on utmost good faith, it was the bounden duty of the insured to disclose the ailment from which he was suffering at the time the proposal was submitted by him. A reference in this regard can be made to the recent decision of the Hon'ble Supreme Court in LIC of India Vs. Manish Gupta - Civil Appeal No.3944 of 2019, decided on 15.04.2019. In Manish Gupta (supra), the proposal form required a disclosure as to whether the proposer had suffered from cardiovascular disease, he responded in negative to the said question. The complainant underwent a surgery, submitted a claim which was repudiated on the ground that he was suffering from a pre-existing illness. Upholding the repudiation of the claim, the Hon'ble Supreme Court interalia held as under:-
"Moreover, non-disclosure of any health event is specifically set out as a ground for excluding the liability of the insurer."
"A contract of insurance involves utmost good faith. In Satwant Kaur Sandhu Vs. New India Assurance Company Ltd., this Court has held thus:
"...Thus, it needs little emphasis that when an information on a specific aspect is asked for in the proposal form, an assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge. It is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not. Of course, obligation to disclose extends only to facts which are known to the applicant and not to what he ought to have known. The obligation to disclose necessarily depends upon the knowledge one possesses. His opinion of the materiality of that knowledge is of no moment."
In Reliance Life Insurance Co. Ltd. & Anr. Vs. Rekhaben Nareshbhai Rathod - Civil Appeal No.4261 of 2019, decided on 24.4.2019, the Hon'ble Supreme Court interalia observed as under:-
"26. ..............It is standard practice for the insurer to set out in the application a series of specific questions regarding the applicant's health history and other matters relevant to insurability. The object of the proposal form is to gather information about a potential client, allowing the insurer to get all information which is material to the insurer to know in order to assess the risk and fix the premium for each potential client. Proposal forms are a significant part of the disclosure procedure and warrant accuracy of statements. Utmost care must be exercised in filling the proposal form. In a proposal form the applicant declares that she/he warrants truth. The contractual duty so imposed is such that any suppression, untruth or inaccuracy in the statement in the proposal form will be considered as a breach of the duty of good faith and will render the policy voidable by the insurer. The system of adequate disclosure helps buyers and sellers of insurance policies to meet at a common point and narrow down the gap of information asymmetries. This allows the parties to serve their interests better and understand the true extent of the contractual agreement.
The finding of a material misrepresentation or concealment in insurance has a significant effect upon both the insured and the insurer in the event of a dispute. The fact it would influence the decision of a prudent insurer in deciding as to whether or not to accept a risk is a material fact. As this Court held in Satwant Kaur (supra) "there is a clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance". Each representation or statement may be material to the risk. The insurance company may still offer insurance protection on altered terms.
29. We are not impressed with the submission that the proposer was unaware of the contents of the form that he was required to fill up or that in assigning such a response to a third party, he was absolved of the consequence of appending his signatures to the proposal. The proposer duly appended his signature to the proposal form and the grant of the insurance cover was on the basis of the statements contained in the proposal form. .............."
9. The learned counsel for the appellant/complainant submits that the online proposal was submitted by the agent and not by the insured himself. The aforesaid contention however, did not find favour in the above referred decision of the Hon'ble Supreme Court and was expressly rejected.
10. The learned counsel for the appellant also submits that additional premium was charged from the deceased considering the state of his health as reflected in the Echo report dated 18.01.2016. However, I find no such averment in the Consumer Complaint. Therefore, no note of the said averment can be taken at this stage.
11. The deceased had died within two years of submitting the proposal form and in fact, within twelve days from the date of the policy. He having withheld a material information with respect to the state of his health and such withholding of information having influenced the decision of the insurer on the question as to whether the insurance cover should be given to him or not, the insurer is not liable to make payment to the complainant in terms of the insurance policy taken by her.
12. For the reasons stated hereinabove, I find no merit in the appeal. The appeal, being devoid of any merits, is hereby dismissed with no order as to costs.
......................J V.K. JAIN PRESIDING MEMBER