2nd ADDITIONAL BENCH STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB DAKSHIN MARG, SECTOR 37-A, CHANDIGARH. First Appeal No.118 of 2017 Date of institution : 17.02.2017 Date of decision : 08.03.2017
1. Max New York Life Insurance, First Floor, near International Hotel, Udham Singh Market, Ferozepur, through its Branch Manager at Ferozepur.
2. Max New York Life Insurance Company Limited, 3rd Floor, Dr. Jha Marg, Okhla, New Delhi, through its Authorized Signatory/Representative. .Appellants/Opposite Parties No.1 & 2 Versus
1. Veero wife of Gurnam Singh, resident of House No.1202, Village Rukne Begu, Tehsil and District Ferozepur. .Respondent/Complainant
2. Mr. Sandeep Chawla R/o H.No.37-B, Gali No.2, Model Town, near Mata Mandir, Amritsar. .Respondent/Opposite Party No.3 First Appeal against the order dated 11.11.2016 of the District Consumer Disputes Redressal Forum, Ferozepur. Quorum:- Honble Mr. Justice Paramjeet Singh Dhaliwal, President Mr. Gurcharan Singh Saran, Judicial Member. Present:- For the appellants : Shri Nitesh Singhi, Advocate JUSTICE PARAMJEET SINGH DHALIWAL, PRESIDENT M.A. No.400 of 2017 (Delay) For the reasons given in the application, the delay of 35 days in filing the appeal is condoned. First Appeal No.118 of 2017 Main Appeal The instant appeal has been filed by the appellants/opposite parties No.1 & 2 against the order dated 11.11.2016 passed by District Consumer Disputes Redressal Forum, Ferozepur (in short, the District Forum), whereby the complaint filed by respondent No.1/complainant, under Section 12 of the Consumer Protection Act, 1986, was allowed with 3,000/- as consolidated compensation and opposite party No.2 was directed to pay 4,84,089/- to the complainant, along with interest at the rate of 9% per annum with effect from 20.08.2014 till realization, within 30 days of the receipt of the copy of the order. Opposite party no.1 was given up and the complaint against opposite party No.3 was dismissed.
2. It would be apposite to mention that hereinafter the parties will be referred, as have been arrayed before the District Forum.
3. Brief facts, as averred in the complaint, are that Sh. Gurnam Singh, late husband of the complainant, got insured his life from opposite parties No.1 & 2 for a sum of 4,84,089/- under the Insurance Policy Max Life Whole Life Policy bearing No.889009882 by paying the requisite premium. The complainant was nominated under the policy. During the continuance of the said policy, husband of the complainant died due to heart attack on 02.08.2013 and death claim was got registered with the opposite parties, vide Reference No.13989954. Information, along First Appeal No.118 of 2017 with necessary documents, was given to opposite parties No.1 & 2 through their representative, who visited the house of the complainant and he assured that the claim would be settled at the earliest. In the beginning, the officials of the opposite parties delayed the claim for one reason or other and ultimately the complainant received letter dated 30.09.2014, whereby her claim was repudiated on flimsy, illegal and non-substantial grounds. The factum of death and cause of death of the deceased life assured (in short, DLA) was inquired into, but the claim was wrongly rejected with malafide motives. The investigator also visited the house of the complainant and demanded his palm to be greased, in order to pass the claim, but when the complainant refused to do, he threatened to repudiate the claim. The act and conduct of the opposite parties, in illegally repudiating the claim of the complainant, amounted to deficiency in service and unfair trade practice, due to which the complainant suffered harassment. Accordingly, the complainant sought issuance of the following directions to the opposite parties:
i) to pay 4,84,089/- as the insured amount; ii) to pay 50,000/-, as compensation for mental torture and agony; iii) to pay 12,000/-, as litigation expenses; and iv) to pay interest from the date of lodging of the complaint.
4. Opposite party No.1 was given up before the District Forum, vide order dated 27.06.2016. First Appeal No.118 of 2017
5. Opposite party No.2 filed reply, raising certain preliminary objections that there is no deficiency in service on the part of the opposite parties. No cause of action has arisen in favour of the complainant to file this complaint and the complainant is estopped from filing the same by her act and conduct. Disputed and complicated questions of fact and law are involved in the complaint, which cannot be decided in summary procedure. The complaint is false, frivolous and vexatious. The complainant is not a consumer of the opposite parties and that the District Forum has no jurisdiction to entertain the complaint. On merits, it was admitted that the DLA had submitted the proposal form on 16.07.2013 and purchased the policy from the opposite parties, as mentioned in the complaint, with his own sweet will without any pressure after thorough examination of the terms and conditions of the policy. The claim of the complainant was rightly repudiated on 20.08.2014, as per the terms and conditions of the policy, on the ground that the DLA had not disclosed the true and material facts related to his health issues in the proposal form. The DLA was suffering from heart disease, hypertension with diabetes mellitus prior to the inception of the policy. Other allegations of the complaint were also denied and dismissal of the same was prayed.
6. Opposite party No.3 in his reply raised similar preliminary objections as taken by opposite party No.2. On merits, he pleaded that the nominee is just a trustee of the property of the First Appeal No.118 of 2017 deceased. No intimation was ever given to opposite party No.3 and he has no knowledge that the claim of the complainant was repudiated on 30.09.2014. The report of investigator is recommendatory in nature. He further pleaded that the DLA had suppressed material fact that he was suffering from heart disease, hypertension and diabetes mellitus, prior to signing of the proposal form.
7. The parties produced evidence in support of their respective averments before the District Forum, which after going through the same and hearing learned counsel on their behalf, allowed the complaint, vide impugned order. Hence, this appeal.
8. We have heard learned counsel for the appellants/opposite parties No.1 & 2 and have carefully gone through the record.
9. Learned counsel for the appellants has contended that the District Forum has passed the impugned order, without considering the evidence on the record in the right earnest. It failed to consider the medical record of the DLA, issued by the Punjab Health Systems Corporation. In the admission record Annexure A-4, it is clearly mentioned that the DLA was suffering from heart block, DM, hypertension, but the District Forum lost sight of all these diseases, which were pre-existing. The DLA intentionally suppressed the material facts, relating to his health and aforesaid diseases, while filling up the proposal form. The impugned order is erroneous and is liable to be set aside. First Appeal No.118 of 2017
10. We have given thoughtful consideration to the contentions raised by the learned counsel for the appellants and have minutely scanned the entire record.
11. Admittedly, the husband of the complainant (DLA) obtained life insurance policy from the opposite parties for a sum insured of 4,84,089/- and during the subsistence of the said policy, the DLA died on 02.08.2013. The claim lodged by the complainant, being nominee, was repudiated by the opposite parties, vide letter dated 20.08.2014 Annexure A-3, on the ground that the DLA had not disclosed the true and material facts related to his health in the proposal form and he was suffering from heart disease, hypertension with diabetes mellitus prior to inception of the policy.
12. The question to be decided is, whether the claim of the complainant was legally and validly repudiated by the opposite parties on the above referred grounds?
13. The point is no more res-integra. In the case Bajaj Allianz Life Insurance Co. Ltd. & Ors. Vs. Raj Kumar III (2014) CPJ 221 (NC), it was held by the Honble National Commission that usually, the authorized doctor of the Insurance Company examines the insured to assess the fitness and only after complete satisfaction, the policy is issued. It was held that the Insurance Company wrongly repudiated the claim of the complainant. First Appeal No.118 of 2017
14. Honble Supreme Court in case P. Vankat Naidu Vs. Life Insurance Corporation of India & Anr. IV (2011) CPJ 6 (SC) 6 held in Paras No.6 and 7 as follows:
6. We have heard learned counsel for the parties and carefully perused the record. In our view, the finding recorded by the District Forum and the State Commission that the respondents had failed to prove that the deceased has suppressed information relating to his illness was based on correct appreciation of the oral and documentary evidence produced by the parties and the National Commission committed serious illegality by upsetting the said findings on a wholly unfounded assumption that the deceased has suppressed information relating to hospitalization and treatment.
7. Since the respondents had come out with the case that the deceased did not disclose correct facts relating to his illness, it was for them to produce cogent evidence to prove the allegation. However, as found by the District Forum and the State Commission, the respondents did not produce any tangible evidence to prove that the deceased had withheld information about his hospitalization and treatment. Therefore, the National Commission was not justified in interfering with the concurrent finding recorded by the District Forum and the State Commission by making a wild guesswork that the deceased had suppressed the facts relating to his illness.
15. Honble National Commission in Satish Chander Madan Vs. Bajaj Allianz General Insurance Co. Ltd. I (2016) CPJ 613 (NC) held that hypertension is common ailment and it can First Appeal No.118 of 2017 be controlled by medication and it is not necessary that a person suffering from hypertension would always suffer a heart attack. In paras No.8 to 10 it was held as follows:
8. Learned Counsel for the respondent has contended that as per the terms and conditions of the insurance contract, the Insurance Company was not required to reimburse the petitioner complainant for expenses incurred by him on pre-existing disease. Learned Counsel has argued that from the medical report of the petitioner, it is clear that the petitioner was suffering from hypertension prior to the purchase of the insurance policy and since hypertension has a direct nexus with heart ailment, the respondent Insurance Company was justified in repudiating the insurance claim in view of the exclusion clause which excluded the expenses incurred on pre-existing disease.
9. We do not find merit in the above contention. On perusal of the copy of the medical report of the petitioner dated 4.6.2010 issued by Dr. David P. Lipkin as also the letter of the doctor dated 7.6.2010 addressed to Dr. M. Fertleman of Wellington Hospital would show that as per the observations of Dr. David P. Lipkin, the petitioner had a previous history of hypertension and he was on BP medicine Telmisartan. The above referred reports do not mention that the petitioner disclosed any previous history of heart problem. Therefore, the only fact established by the above reports is that the petitioner prior to obtaining insurance policy was having history of hypertension. This, however, does not lead to conclusion that petitioner was also having previous history of heart problem. Therefore, the insurance claim submitted by the First Appeal No.118 of 2017 complainant for treatment of his heart problem cannot be termed as a claim in respect of a pre existing disease. Thus, repudiation of insurance claim by the respondent opposite party is not justified.
10. Learned Counsel for the respondent has contended that it is established on record that the petitioner was having a previous history of hypertension and since hypertension can lead to heart problem, the respondent was justified in repudiating the claim on the ground that the heart problem suffered by the petitioner was caused by pre existing hypertension. There is no merit in this contention. Hypertension is a common ailment and it can be controlled by medication and it is not necessary that a person suffering from hypertension would always suffer a heart attack. Therefore, the argument advanced by respondent is far fetched and is liable to be rejected.
16. Further in Civil Writ Petition No.20040 of 2008 decided on 17.12.2008 (Max New York Life Ins. Co. Ltd. Vs Insurance Ombudsman, Chandigarh & Anr.), our own High Court held that hypertension is a disease, which could escape attention of a person and is required to be diagnosed by experts.
17. Further in case Veena Sharma Vs. Life Insurance Corporation of India 1999 (1) R.C.R. (Civil) 646, Honble Punjab & Haryana High Court held that mere non-mentioning of insured being a patient of hypertension did not amount to suppression of material facts, so as to entitle the respondent to repudiate the claim. First Appeal No.118 of 2017
18. Honble Delhi State Consumer Disputes Redressal Commission, New Delhi in case Life Insurance Corporation of India Vs. Sudha Jain 2007(2) CLT 423 has drawn conclusions in para 9 of the order and the relevant clause is 9(iii), which is reproduced as under:- 9(iii) Malaise of hypertension, diabetes occasional pain, cold, headache, arthritis and the like in the body are normal wear and tear of modern day life which is full of tension at the place of work, in and out of the house and are controllable on day-to-day basis by standard medication and cannot be used as concealment of pre- existing disease for repudiation of the insurance claim unless an insured in the near proximity of taking of the policy is hospitalized or operated upon for the treatment of these diseases or any other disease.
19. In case New India Assurance Company Limited Versus Smt. Usha Yadav & others 2008(3) R.C.R. (Civil) 111, the Honble Punjab & Haryana High Court expressed its anguish and observed as follows:- It seems that the Insurance Companies are only interested in earning the premiums, which are rather too stiff now a days, but are not keen and are found to be evasive to discharge their liability. In large number of cases, the Insurance Companies make the effected people to fight for getting their genuine claims. The insurance Companies in such cases rely upon clauses of the agreements, which a person is generally made to sign on dotted lines at the time of obtaining policy. This is, thus, pressed into service to either repudiate the claim or to reject the same. The Insurance Companies normally First Appeal No.118 of 2017 build their case on such clauses of the policy, but would adopt methods which would not be governed by the strict conditions contained in the policy.
20. It is also relevant to mention here that Section 19 of the General Insurance Business Nationalization Act, 1972 states that it shall be the duty of every Insurance Company to carry on general insurance business so as to develop it to the best advantage of the community. The denial of medical expenses reimbursement is utterly arbitrary on the ground that disease in question was pre- existing disease. It is mere an excuse to escape liability and is not bona fide intention of the insurance company. Fairness and non- arbitrariness are considered as two immutable pillars supporting the equity principle, an unshakable threshold of State and public behavior. Any policy in the realm of insurance company should be informed, fair and non-arbitrary. When the insurance policy has exclusions/conditions to repudiate the claim or limit the liability, the same must be specifically brought to the notice of the insured and are required to be got signed to show that such exclusions and conditions have been brought to his/her notice.
21. The need for interpreting a contract always arises in two situations, (i) when a gap is needed to be filled in the contract and (ii) an ambiguity is needed to be resolved in the contract, then to find out correct intention of the contract, spirit behind is required to be considered. Normally, the insurance policy is a contract of adhesion in which other party is left with hardly any bargaining First Appeal No.118 of 2017 power as compared to the insurer. Insurance contracts are standard form contracts and are drafted by the insurance company and as such, insurance company is at higher footing than the insured. The benefit of such clause, as exclusion clause, would go to the insured unless the same is explained in clear terms by the insurer. In such circumstances, the tribunal would be more oriented towards the interpretation which goes against the party who has inserted/drafted the disputed clause in the agreement/contract. The adjudicating authority is required to look into whether the intention of the party is to exclude or limit liability has been appropriately explained to the other party or not. This Commission while interpreting insurance agreement is to honour the intention of the parties, who have signed the agreement. Even if the agreement had general exclusion/condition for misrepresentation still fraudulent misrepresentation and non- disclosure may not be there. The innocent and negligent misrepresentations are to be ignored.
22. It is also pertinent to mention here that as per investigation report Ex.OP-2/11, as mentioned in the impugned order, the DLA was a healthy man and was not treated for any chronic ailment.
23. Besides this, some ailments can spend decades lurking in the body of an individual, until they suddenly spring up in life. Many persons have diseases that they are already having without knowing. The diseases remain dormant in the body for First Appeal No.118 of 2017 years. Some illnesses have incubation period of anywhere from years to decades. Some diseases wait in the body for decades before striking. Heart disease can remain dormant for many years (silent Coronary Artery disease). At any time and at any age, it can strike without warning, changing life forever. In these circumstances, it cannot be said that the DLA was having notice of this disease before taking the policy. The Insurance Company was required to prove this fact by cogent evidence. However, no evidence worth name has been led by it in this regard.
24. The admission record Annexure A-4, which has been relied upon by learned counsel for the opposite parties, cannot be said to be an authentic document. In this document, date of admission is given as 04.10.2012 and date of discharge as 09.10.2012, but the columns Name of the Hospital, Ward, Admitted through Emergency, etc. are left blank. At the bottom, there is stamp of Medical Officer, Civil Hospital, Ferozepur with date 17/01/14. Admittedly, the DLA died on 02.08.2013, whereas the Admission No. is mentioned as 5261/4.10.14. All these dates do not co-relate with each other. Even the diseases like heart block, DM and hypertension are mentioned in the column of Provisional Diagnosis. It is not mentioned therein that the diagnosis was made on the basis of the requisite tests reports, CT Scan etc. and it was only the provisional diagnosis.
25. In view of above discussion as well the ratio of above cited rulings, we hold that the opposite parties have failed to First Appeal No.118 of 2017 prove, by way of any cogent evidence, that the DLA was suffering from any pre-existing ailment or that he suppressed the same intentionally and knowingly at the time of taking the policy in question. The repudiation of the claim of the complainant by the opposite parties was illegal, null and void. The order passed by the District Forum is legal and valid and we do not find any ground to interfere with the same.
26. Accordingly, the appeal filed by the appellants/opposite parties No.1 & 2, being devoid of any merit, is dismissed in limine.
27. The appellants had deposited a sum of 25,000/- at the time of filing of the appeal. This amount, along with interest which has accrued thereon, if any, shall be remitted by the registry to respondent No.1/complainant, by way of a crossed cheque/demand draft after the expiry of 45 days of the sending of certified copy of the order to them. (JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT (GURCHARAN SINGH SARAN) JUDICIAL MEMBER March 08, 2017. (Gurmeet S)