HDFC Ergo General Insurance Company Ltd. v. Nisha Rani

FIRST ADDITIONAL BENCH STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB, CHANDIGARH. First Appeal No.143 of 2019 Date of Institution: 13.03.2019 Order reserved on: 18.05.2020 Date of Decision : 03.06.2020 Through its MD/Chairman/Authorized Representatives etc., 1st floor, 165-166, Bacjbay Reclamation, H.T. Parekh Marg, Churchgate, Mumbai through HDFC Ergo General Insurance Company Ltd., 6th Floor, Leela Business Park, Andheri-Kurla Road, Andheri (East) Mumbai and 5th floor, Tower-1 Stellar IT Park, C-25, Sector 62, Noida-201301, through Pankaj Kumar Manager-Legal. .Appellant/Opposite Party no.2 Versus

1. Nisha Rani Wd/o Sh. Harish Kumar son of Sh. Sushil Kumar, R/o B-X-589, Kishanpura, Jalandhar. .....Respondent no.1/Complainant

2. HDFC Bank Ltd., GT Road Branch, Near Narinder Cinema, Jalandhar, through its Branch Manager. ..Respondent no.2/Opposite Party no.3 First Appeal against order dated 16.01.2019 passed by District Forum, Jalandhar. Quorum:- Mr. Rajinder Kumar Goyal, Presiding Member. Ms. Kiran Sibal, Member. First Appeal No.143 of 2019 2 Present:- For the appellant : Sh. Vishal Aggarwal, Advocate For respondent no.1 : Sh. Rajiv Joshi, Advocate For respondent no.2 : Ex-parte KIRAN SIBAL, MEMBER:- This appeal has been preferred by the appellant against order dated 16.01.2019 passed by District Consumer Disputes Redressal Forum, Jalandhar (in short, the District Forum), whereby the complaint filed by respondent no.1/complainant was partly accepted directing appellant/opposite parties no.1 & 2 (in short OPs) to pay the entire loan amount due in the account of the husband of the complainant along with interest till the date of payment to OP no.3 and further to pay compensation of Rs.1,00,000/- for causing un-necessary humiliation, harassment and mental agony alongwith Rs.10,000/- as litigation expenses to the complainant. It would be apposite to mention that hereinafter the parties will be referred, as have been arrayed before the District Forum. Facts of the Complaint

2. Brief facts, as averred in the complaint, are that husband of complainant namely Harish Kumar son of Sushil Kumar expired on 09.07.2015. During his life time, Harish Kumar purchased a car Tata Indica Vista, bearing registration No.PB08-CV-8678 in his name after obtaining a loan for a sum of Rs.3,76,438/- in the month of First Appeal No.143 of 2019 3 November, 2014 from OP no.3. The loan amount was agreed to be repaid in 60 installments of Rs.8091/- each. At the time of advancement of the loan, her husband had got insured with the said loan amount of Rs.3,76,438/- and he paid the total insurance premium of Rs.6438/- under various heads, which included all risk covers i.e. loss of job, accidental death, permanent total disability/permanent partial disability, accidental hospitalization, critical illness, credit shield insurance, garage cash and household coverage, as mentioned in the policy cover note. OPs no.1 and 2 issued policy bearing no.2950200895480500000 under Sarv Suraksha Policy on 05.11.2014, which was valid upto 04.11.2019. The risk of loan amount of Rs.3,76,438/- was also covered under the credit shield insurance cover and for that purpose, Harish Kumar paid Rs.912/-, which covered sum assured of Rs.5,00,000/-. Harish Kumar during his life time had paid 8 installments i.e. EMI of Rs.8091/- each, total sum of Rs.64,728/- out of the loan amount and unfortunately, he got heart attack on 09.07.2015 and was taken to Capitol Hospital, Pathankot Road, Jalandhar, where the doctor declared him brought dead and he was not medically treated thereafter. The intimation regarding the death of husband of the complainant was given to the OPs. After death of Harish Kumar, the complainant also paid two installments of Rs.8091/- each to OP no.3 in the car loan account. The complainant approached OPs no.1 and

2 and submitted the claim form on 12.08.2015 after completing all First Appeal No.143 of 2019 4 the formalities, along with death certificate issued by Municipal Corporation, Jalandhar and other documents, but the claim of the complainant was not settled by the OPs. She approached the office of OP no.1 personally a number of times, but no reasonable answer has been given to her by it. Thereafter, the brother of the complainant namely Kamal Kumar also sent an email message to the OPs to settle the claim of the complainant, but OPs no.1 and 2 did not settle the same. She also served a legal notice upon OPs on 18.12.2015, but to no effect. She filed a consumer complaint on 19.01.2016, but in that complaint, OPs appeared and filed written reply and argued that the claim of the complainant has been already repudiated on 06.11.2015, but the same has not been challenged by her in the said petition and accordingly, the complainant withdrew the said complaint with permission to file a fresh complaint. Accordingly, she filed another fresh complaint challenging the repudiation letter, which was illegal. The act and conduct of the OPs for repudiating the claim of the complainant itself is illegal, negligent and deficiency in service. She prayed for acceptance of the complaint with a direction to OPs to pay Rs.3,31,719.31/- as on 07.08.2015 alongwith future interest to OP no.3 and refund the EMIs of Rs.8091/- with interest, which were paid by her after death of her husband; to pay Rs.Two lakhs for mental harassment and Rs.22,000/- as cost of the complaint. First Appeal No.143 of 2019 5 Defence of OPs:

3. Upon notice, OPs no.1 and 2 appeared and filed joint written reply. OP no.3 filed its separate written reply.

4. OPs no.1 and 2 contested the complaint by raising preliminary objections that the complaint is not maintainable against the answering OPs. The complainant is playing the tactics just to gain the undue advantage from the answering OPs and further to gain the sympathy of the Forum. The complainant through her earlier complaint sought the relief under the coverage of credit shield, though the same was never claimed by the complainant in her earlier claim form. It is further averred that the real and true facts are that the claim under the coverage of critical illness was lodged by the complainant. The answering OPs after scrutinizing and perusal of the medical documents reached to the decision that the claim stands repudiated as per terms and conditions of the insurance policy. The repudiation letter, vide dated 20.08.2015 was addressed to complainant, wherein the complainant was informed about the repudiation of the claim. That as per the policy terms and conditions the company is found liable only when the insured person after the first occurrence of critical illness survives for 30 days. However, in the present case, the Insured/Deceased suffered from Sudden Heart Attack on 09.07.2015, which first occurred on 09.07.2015 and died on the same day. The repudiation letter clearly mentioned that as per the case summary received by the answering OPs no.1 and 2, First Appeal No.143 of 2019 6 insured Late Harish Kumar was brought dead to the hospital with no related complaints prior to this episode and that for critical illness is to be admissible under the policy, the insured person has to survive a period of 30 days from the time he was diagnosed for the illness and that the claim of the complainant falls under Specific Exclusions Applicable to Section 1 of the Insurance Policy. OPs no.1 and 2 denied any deficiency in service, any negligence and any unfair trade practice on their part. On merits, answering OPs admitted the fact of purchase of insurance policy in question by the husband of the complainant. It is also admitted that the insurance claim of the complainant has been already repudiated. OPs no.1 and 2 controverted the other averments of complainant and prayed for dismissal of the complaint.

5. OP no.3 in its separate written reply averred that the complaint is not maintainable against the answering OP and the same is liable to be dismissed with heavy cost. As per insurance policy obtained by the husband of the complainant, answering OP is the beneficiary and in case, any claim/compensation is granted by this Forum, then the benefit of the same is to be received by the OP no.3. Hence, the present complaint is not maintainable qua OP no.3 and the same is liable to be dismissed. On merits, it is admitted that the husband of the complainant obtained a loan from the answering OP, but it denied the other allegations as made in the complaint. OP no.3 prayed for dismissal of the complaint. First Appeal No.143 of 2019 7 Evidence of the parties and finding of the District Forum

6. The complainant tendered in evidence affidavit of complainant Ex.CA along with some documents i.e. birth certificate Ex.C-1, copy of RC Ex.C-2, claim form Ex.C-3, copies of identity proofs of insured Ex.C-4 to Ex.C-6, Ex.C-7 is the policy schedule, Ex.C-8 is the copy of passport of complainant, Ex.C-9 is the certificate issued by Capitol Hospital Jalandhar, Ex.C-10 is the repayment schedule, Ex.C-11 is letter to OPs, Ex.C-12 is the copy of legal notice and C-13 and C-14 are the postal receipts, Ex.C-15 to C-17 are the documents pertaining to previous complaint, Ex.C-18 is the claim form, Ex.C-19 is copy of email from OP to complainant and Ex.C-20 is the repudiation letter dated 06.11.2015.

7. As against it, OPs no.1 and 2 tendered in evidence affidavit of Pankaj Kumar, Manager as Ex.OA along with some documents i.e. Ex.O-1 policy schedule with terms and conditions, Ex.O-2 is the claim form, Ex.O-3 is the certificate, Ex.C-4 and C-5 are the repudiation letters dated 20.08.2015 and 06.11.2015. OP No.3 tendered in evidence affidavit of Steefan Banger, Legal Manager Ex.OPA along with some documents i.e. loan detail and a letter for payment of loan amount Ex.OP-1 and Ex.OP-2.

8. The District Forum, after going through the record and hearing learned counsel on their behalf, partly accepted the complaint of the complainant. Aggrieved by above order of the First Appeal No.143 of 2019 8 District Forum, OPs no.1 and 2 now appellant has directed this appeal. Contentions of the Parties

9. We have heard learned counsel for the appellant and respondent no.1 and also carefully gone through the record of the case. Respondent no.2 is ex-parte in this appeal.

10. Learned counsel for appellant strongly contended that the District Forum has wrongly allowed the complaint on two counts

i.e. critical illness and credit shield. The insured or his family members are not entitled to any benefit in case of any other eventualities other than those mentioned under the policy and in the present respondent no.1 would have become eligible for a sum of Rs.1,00,000/- only in the event of the diagnosis of critical illness and the insured survives for a period of 30 days from the date of such diagnosis. Moreover credit shield cover is only in case of death due to accident and not otherwise. Learned counsel for the appellant relied upon judgment of Supreme Court titled as The Branch Manager National Insurance Co. Limited Vs. Smt. Mousumi Bhattacharjee & others2019(2)RCR(Civil)-667, wherein it has been held that disease which is caused as a result of insect bite in natural course of events cannot be regarded as accident and also relied upon judgment of this Commission titled as HDFC Ergo General Insurance & another Vs. Jaswinder Kaur & others F.A. First Appeal No.143 of 2019 9 No.35 of 2018, decided on 29.05.2018, wherein it has been held that in the present case, it is not first heart attack, therefore it is not covered under the critical illness coverage. The District Forum has covered the claim of the complainants under Credit Shield Insurance Policy without giving any findings whether it was accidental death and set aside the findings of the District Forum by dismissing the complaint of the complainant. Learned counsel for appellant prayed for dismissal of the complaint.

11. On the other hand, learned counsel for respondent no.1/complainant argued to the contrary that the husband of the complainant suffered a heart attack (myocardial infarction) on 09.07.2015 and the complainant, who is unemployed and left shattered due to the sudden death of her husband, sought the repayment of the above said loan amount by raising a claim with the OPs, but they denied the claim on frivolous grounds. District Forum has rightly decided the complaint on merit after considering the pleadings, documents and evidence. He relied upon judgments of the Honble National Commission i.e. (1) titled as Kiranjit Kaur & 3 others Vs. HDFC Standard Life Insurance Co. Ltd. & another 2018(2) CPJ-149, wherein it has been held that it a fit case to accept the interpretation which favours the policy holder as the purpose for which the policy is taken would be in consonance with the object for getting the life assured, (2) titled as Rajendra Singh Vs. Life Insurance Corporation of India & others 2014(2)CPJ-194, First Appeal No.143 of 2019 10 wherein it has been held that when two reasonable interpretations of terms of policy are possible, interpretation which favours insured is to be accepted and not the interpretation which favours insurer. Learned counsel for respondent no.1/complainant prayed for dismissal of the appeal with heavy cost. Consideration of contentions:

12. We have given our thoughtful consideration to the contentions raised by the learned counsel for the appellant and respondent no.1 and also perused the record of the case.

13. It is a matter of record that the insured purchased the Sarv Suraksha Policy, vide Ex.C-1 from OPs no.1 and 2. The period of policy in question was from 05.11.2014 to 04.11.2019. Death of insured took place due to sudden heart attack on 09.07.2015 during the currency period of policy. The complainant lodged the claim with OPs no.1 and 2 and they repudiated the claim of the complainant, vide Ex.O-4 and O-5. The complainant filed the complaint before the District Forum, which was allowed by the District Forum. Now, we have to deal with the point whether the claim of the complainant falls under Credit Shield Insurance Policy or not. Credit Shield Insurance policy of mostly all Insurance Companies provides the financial security to the insured and his/her family members in case of an unfortunate event relating to Loss of life, Permanent Total Disability, First Appeal No.143 of 2019 11 Critical Illness or Loss of employment. Section 5 and 5(4) of Credit Shield Insurance, the policy in question, are reproduced as under:-

5. In the event of accidental death or permanent total disability of the insured person during the policy period, the company will make payment under this policy 5(4) Accident or accidental, means a sudden, unforeseen and involuntary event caused by external, visible and violent means. Under the of Credit Shield Insurance, the OPs explained the accident in Section 5(4) as above and in this case the insured has not caused any injury due to sudden, unforeseen and involuntary event caused by external means. The District Forum has wrongly observed that accident means all of sudden and in its order the District Forum failed to appreciate the word that accident means of sudden, unforeseen and involuntary event caused by external means. We are of the opinion that the death of insured in this case took place due to heart attack, which always happens in the internal part of the body and is not caused by external means. Thus, we are of the view that the case of the complainant is not covered under the Credit Shield Insurance Policy and accordingly we set aside the findings of the District Forum in this regard.

14. The plea of the appellant is that complainant initially lodged the claim under critical illness, which is reproduced as under:- First Appeal No.143 of 2019 12 Section 1. Critical Illness: If the insured person named in the schedule is diagnosed as suffering from a critical illness which first occurs or manifests itself during the policy period, and the insured survives for a minimum of 30 days from the date of diagnosis, the company shall pay the critical illness benefit as shown in the schedule. Under this clause the claim is payable only in the event of the diagnosis of critical illness and the insured survives for a period of 30 days from the date of such diagnosis. Now, we would like to adjudicate whether the claim under this clause is payable or not.

15. At the outset, we would like to observe that the insurance is defined as a contract between two parties, whereby one party called insurer undertakes in exchange for a fixed sum called premium to pay to the other party called insured a fixed amount of money, after happening of a certain event. Insurance policy is a legal contract & its formation is subject to the fulfillment of the requisites of a contract, as defined under Indian Contract Act 1872. What an individual person expects from the insurance company is not very complicated risk management but simple insurance coverage to his person and hard-earned property at an affordable price and timely indemnification without much cumbersome formalities. There is a popular saying What insurance companies give you in a big print, First Appeal No.143 of 2019 13 they take away in small print. The policy contract is crowded with exceptions, exclusions, limitations, conditions and warranties. There are ifs and whiles clauses and sub-clauses, which overpower the so called big print as a policy. The main object of the insurance is dislodged. No one objects to the necessity for limiting insurance within a known boundary, but the domination of these limitations should not blur the very basic objective of insurance. All the ifs and whiles clauses are highlighted and the claimant is asked to prove that the ashes are from his own property. The insurance companies have failed to win the confidence of the general public for its procedural drawbacks. The nobility of the principles of insurance had enough room to accommodate all, but the priests of insurance restrict access. We cannot let these people to imprison insurance. At the operating level, formalities are so rigid and inflexible that often these are impractical. The sticklers to formalities do no good to the idea of insurance, which man formulated to his own use. It is also pertinent to mention here that an insurance contract is a detailed and complex instrument, drafted by expert legal counsel, standardized and presented in mass-produced form and delivered to the applicant for acceptance, normally without benefit of legal counsel on his part.

16. Generally, in some cases first heart attack is severe and fatal and how we can expect that the said person after that severe and fatal heart attack would survive for 30 days. In such cases, these types of clauses are not acceptable, which are formulated and First Appeal No.143 of 2019 14 drafted by the expert legal counsel of the insurance companies for their own use. In the interest of natural justice, we are of the view that claim of the complainant in the instant case falls under the critical illness clause because the insured died due to sudden heart attack, which was a fatal one. Since, the insured did not survive due to the first heart attack and he was brought dead to the hospital on 09.07.2015, itself shows the severity and critical illness due to which he could not survive, as such Insurance Company cannot take this plea and rely on the hyper technical clause of survival of 30 days, as it would defeat the ends of justice.

17. As a result of our above discussion, we set aside the order of the District Forum dated 16.01.2019. We partly accept the appeal of the appellant with a direction to pay a sum of Rs.1,00,000/- to respondent no.1/complainant with interest @ 8% per annum from the date of repudiation of the claim i.e. 20.08.2015 till the date of actual payment. The appellant is further directed to pay Rs.50,000/- to respondent no.1/complainant as compensation for mental harassment and towards litigation expenses.

18. The appellant had deposited an amount of Rs.25,000/- at the time of filing the appeal with this Commission and further deposited an amount of Rs.3,33,829/- on 20.05.2019 in compliance with order dated 24.04.2019 of this Commission. After calculating the interest which has accrued thereon, if any, the amount be remitted by the Registry to the District Forum forthwith. The First Appeal No.143 of 2019 15 complainant/respondent no.1 and appellant may approach the District Forum for the release of the above amounts and the District Forum may pass the appropriate order in this regard after the expiry of limitation period in accordance with law.

19. The appeal could not be decided within the statutory period due to heavy pendency of work and less staff. (RAJINDER KUMAR GOYAL) PRESIDING MEMBER (KIRAN SIBAL) MEMBER June 03, 2020. (MM)