Case Law Details
Manjula Vs PNB Metlife India Insurance Co. Ltd. & Anr. (NCDRC Delhi)
Conclusion: In present facts of the case, the NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI (NCDRC) observed that if there was no nexus between the material fact / disease, which was not disclosed, and the cause of death, the insurance company’s action of repudiating the claim on the ground of suppression of material facts / non disclosure of pre-existing ailment is not correct.
Facts: In present facts of the case, the present Revision Petition was filed by the Petitioner against Respondents as detailed above, under section 58 (b) of Consumer Protection Act 2019, against the order dated 28.07.2021 of the State Consumer Disputes Redressal Commission, Karnataka.
Brief facts of the case were that the complainant’s husband Mr. Raju Malladihali had obtained the Met Family Income Protect Plus Policy for a sum assured of Rs.12,00,000/- on 09.02.2015 with a premium of Rs.15,846/- per annum. The complainant was the nominee to the insurance policy. On 08.03.2016 the insured passed away. The complainant, being the nominee of the insurance policy, submitted a claim on 20.06.2016 along with death certificate and other relevant documents to the OP, as the Policy was still in force. The Respondents neither responded nor paid the claim to the complainant despite repeated requests. The complainant sent a legal notice to the Respondents on 21.07.2018. The Respondent did not respond to the legal notice. On 23.07.2018, the complainant sent reminders on 23.07.2018 and 24.08.2018 for disbursement of the claim.
Respondent sent a very cryptic and ambiguous reply to the Petitioner stating that claim has been rejected. On 21.11.2018 the complainant approached the Insurance Regulatory Development Authority (IRDA), after being aggrieved by the conduct of the Respondent and also with the intent of avoiding cumbersome court proceedings. The IRDA after communicating with the Respondent replied to the complainant through mail that her claim is rejected on the ground that the deceased husband of the complainant had not disclosed a pre-existing medical condition of having chronic alcohol dependency and delirium tremens. Thus, he suppressed material information at the time of buying the insurance policy. Hence, the complainant filed a complaint before the District forum on 11.01.2019.
The District Forum allowed the complaint and directed the OPs jointly and severally to pay insurance claim of Rs.12,00,000/- with interest @7% from the date of legal notice dated 21.07.2018 till realization.
The State Commission allowed the appeal filed by the OP and set aside the order passed by the District Forum and dismissed the complaint filed by the complainant.
The Petitioner submitted that the State Commission had not gone into any evidence to determine as to how delirium tremens was the cause of death of the deceased. The deceased died due to heart attack as per his death certificate produced by the Petitioner.
The National Commission observed that the main reason for repudiation of claim is that deceased has suppressed the material facts that at the time of taking the insurance policy, deceased was suffering from Delirium Tremens. In this case, as per the death certificate, the cause of death is heart attack. There was nothing on record that could establish a link between the heart attack and Delirium Tremens. Reliance was placed on the case of Sulbha Prakash Motogaonkar and Others Vs. Life Insurance Corporation of India and Others 2021 13 SCC 561 decided on 05.10.2015, wherein it was observed as under:
“6…….. The death of the insured due to ischaemic heart disease and myocardial infarction had nothing to do with his lumbar spondylitis with PID with sciatica. In our considered opinion, since the alleged concealment was not of such a nature as would disentitle the deceased from getting his life insured, the repudiation of the claim was incorrect and not justified”.
Subsequent to the above judgment of Hon’ble Supreme Court, this Commission in various cases, relying on the judgment of Sulbha Prakash Matogaonkar and Others (supra) have observed that if there is no nexus between the material fact / disease, which was not disclosed, and the cause of death, the insurance company’s action of repudiating the claim on the ground of suppression of material facts / non disclosure of pre-existing ailment is not correct.
On basis of the above it was held that there was no nexus between the material fact / information relating to pre-existing ailment alleged to have been suppressed and the cause of death, keeping in view the decision of Hon’ble Supreme Court in Sulbha Prakash Matogaonkar (supra). Further, it was held that State Commission committed a material irregularity in allowing the appeal of Respondents herein and was of the view that repudiation of the claim by OP Insurance Company was not correct.
Therefore, the order of the State Commission was set aside and order of the District Forum is restored.
FULL TEXT OF THE ORDER OF NCDRC DELHI
1. The present Revision Petition (RP) has been filed by the Petitioner against Respondents as detailed above, under section 58 (b) of Consumer Protection Act 2019, against the order dated 28.07.2021 of the State Consumer Disputes Redressal Commission, Karnataka (hereinafter referred to as the ‘State Commission’), in First Appeal (FA) No.1564 of 2019 in which order dated 16.10.2019 of District Consumer Disputes Redressal Forum, Dharwad (hereinafter referred to as District Forum) in Consumer Complaint (CC) No. 12/2019 was challenged, inter alia praying for setting aside the order dated 28.07.2021 passed by the State Commission in FA No. 1564/2019.
2. While the Revision Petitioner (hereinafter also referred to as complainant) was Respondent and the Respondents (hereinafter also referred to as OPs) were Appellants in the said FA/1564/2019 before the State Commission, the Revision Petitioner was Complainant and Respondents were OPs before the District Forum in the CC No. 12 of 2019. Notice was issued to the Respondents on 22.12.2021. Parties filed Written Arguments/Synopsis on 08.12.2022 (Petitioner) and 31.07.2023 (Respondents) respectively.
3. Brief facts of the case, as emerged from the RP, Order of the State Commission, Order of the District Forum and other case records are that:-
(i) the complainant’s husband Mr. Raju Malladihali had obtained the Met Family Income Protect Plus Policy bearing No. 21492022 for a sum assured of Rs.12,00,000/- on 09.02.2015 with a premium of Rs.15,846/- per annum. The complainant was the nominee to the insurance policy. On 08.03.2016 the insured passed away. The complainant, being the nominee of the insurance policy, submitted a claim on 20.06.2016 along with death certificate and other relevant documents to the OP, as the Policy was still in force. The Respondents neither responded nor paid the claim to the complainant despite repeated requests. The complainant sent a legal notice to the Respondents on 21.07.2018. The Respondent did not respond to the legal notice. On 23.07.2018, the complainant sent reminders on 23.07.2018 and 24.08.2018 for disbursement of the claim. On 22.08.2018, the Respondent replied to the notices, contending that they have not received the claim form. They informed the complainant to submit the claim form to the nearest branch. The complainant brought it to the notice of the Respondents that she had submitted the claim form, a fact that was admitted by the Respondents.
ii) Respondent sent a very cryptic and ambiguous reply to the Petitioner stating that claim has been rejected and denied the averments made in the reply and after being approached by the Petitioner several times for disbursement of claim amount, the respondents neither responded nor disbursed the claim amount and compensation and rejected the claim of the petitioner through their reply dated 26.09.2018.
iii) On 21.11.2018 the complainant approached the Insurance Regulatory Development Authority (IRDA), after being aggrieved by the conduct of the Respondent and also with the intent of avoiding cumbersome court proceedings. IRDA directed the Respondents to furnish details as sought by the complainant, which was avoided and postponed by the Respondents. However, the IRDA after communicating with the Respondent replied to the complainant through mail that her claim is rejected on the ground that the deceased husband of the complainant had not disclosed a pre-existing medical condition of having chronic alcohol dependency and delirium tremens. Thus, he suppressed material information at the time of buying the insurance policy. Hence, the complainant filed a complaint before the District forum on 11.01.2019.
4. Vide Order dated 16.10.2019, in the CC No. 12 of 2019 the District Forum allowed the complaint and directed the OPs jointly and severally to pay insurance claim of Rs.12,00,000/- with interest @7% from the date of legal notice dated 21.07.2018 till realization. The District Forum also directed the OPs jointly and severally to pay Rs.5,000/-towards mental agony and Rs.4,000/- towards cost of the proceedings and also directed to comply the order within 30 days from the date of receipt of copy of the order.
5. Aggrieved by the said Order dated16.10.2019 of District Forum, the OPs/Insurance Company appealed in State Commission and the State Commission vide order dated 28.07.2021 in FA No. 1564 of 2019 allowed the appeal filed by the OP. Set aside the order passed by the District Forum and dismissed the complaint filed by the complainant. The State Commission also ordered that the amount in deposit shall be transmitted to the concerned District Commission to pay the same to the appellants/OPs.
6. Petitioner has challenged the said Order dated 28.07.2021 of the State Commission mainly on following grounds:-
i) that the impugned order passed by the State Commission is illegal, unjust, unreasonable, arbitrary, without proper appreciation of facts and not sustainable in law and hence liable to be set aside. The State Commission ought to have appreciated that the death of the insured took place due a heart attack and not due to any of the illnesses claimed by the Respondent, which has been proved by the Petitioner by way of documentary evidences in the form of medical certificate and death certificate of the insured.
ii) The State Commission ought to have appreciated that the complainant had made timely and regular payments of the insurance premium, without any dues, a fact which was admitted by the Respondent.
iii) The State Commission ought to have appreciated that the Respondents kept on evading the requests of the Petitioner for disbursing the claim compensation amount, even after repeated communications, reminders and follow ups. The State Commission ought to have appreciated that when the Petitioner approached the IRDA after being aggrieved by the conduct of the Respondent, they followed the same behavior of ignoring and evading the directions of the authorities before finally issuing a letter dated 26.09.2018 wherein the Respondent sent reply rejecting the claim of the Petitioner without specifying the grounds and the investigations carried out before rejecting the claim. The State Commission ought to have appreciated that the Respondents failed to discharge their burden of proving that the claim of the Petitioner was barred by limitation, as they had not produced any documentary evidence that they had sent to the Petitioner, a fact that was rightly observed by the Consumer Disputes Redressal Forum. The State Commission ought to have appreciated that the Respondents have not proved that the death of the insured took place due to delirium tremens or abdominal pain There was nothing on record that could establish a link between the heart attack and the above mentioned illnesses.
(iv) The State Commission ought to have appreciated that the Respondents did not examine the investigator assigned to the claim case of the Petitioner in order to substantiate their claims. They have only produced xerox copies of the discharge and admission summary issued by Chigateri District Hospital, Devanagare and Bapuji Hospital, Devanagare where the insured was allegedly treated for delirium tremens and abdominal pain respectively. The Respondents made no efforts to call for the original records from such hospitals to produce during the proceedings. The Respondents did not even examine the doctors and authorities from the said hospitals to corroborate their claims, and actually prove before the forum that the insured was indeed suffering from such illnesses. The order passed by the State Commission is bad in law, illegal, improper, erroneous and calls for interference by this Commission to secure ends of justice.
7. Heard counsels of both sides. Contentions/pleas of the parties, on various issues raised in the RP, Written Arguments, and Oral Arguments advanced during the hearing, are summed up below.
7.1 During the arguments, the Petitioner in addition to repeating what has been stated under the grounds, under para (6) above, contended that the present Revision Petition is a matter of divergent findings whereby the State Commission has mechanically set aside the order passed by the District Forum, without assigning any cogent reasons for the same. The judgment passed by the State Commission deserves to be set aside on this relevant point here that the State Commission had not gone into any evidence to determine as to how delirium tremens was the cause of death of the deceased. The deceased died due to heart attack as per his death certificate produced by the Petitioner. It is contended that the alleged suppression of the deceased suffering from delirium Tremens should be fraudulent and material so as to amount to a fundamental breach of the Insurance Policy, and hence the State Commission ought not to have dealt with the same in a mechanical manner as has been held by the Hon’ble Supreme Court in its decision in Life Insurance Corporation of India and Ors. Vs. Smt. Asha Goel AIR 2001 SC 549. The State Commission failed to observe the principle of law laid down by the Hon’ble Supreme Court in P.Venkat Naidu V. LIC of India and Anr. in Civil Appeal No. 7437/2011, wherein the Hon’ble Court held as follows:-
“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. 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.”
7.2. In support of its contention, the Petitioner has also relied upon the judgment passed by the this Commission in the case of Reliance Life Insurance Co. Vs. Krishan Kumar 2018 SCC Online NCDRC 950, it was held in para 8 that “The nondisclosure of hypertension in the proposal form does not amount to an intentional or fraudulent concealment of material fact about health condition of a person. Moreover, it is pertinent to note that in the instant case, there is no co-relation between death due to electrocution and hypertension.”
7.3 It is contended by the Respondents that Mr. Raju Siddappa Malladihalli, the predecessor in interest of the Nominee/Petitioner herein, suffering from Delirium Tremens (alcohol withdrawal seizures) and hospitalized for the same in hospital from 02.12.2014 till 06.12.2014. For the said treatment, he was admitted in Chigeteri District Hospital, Davangere, Karnataka from 02.12.2014 till 06.12.2014 prior to dates of proposal i.e. 06.02.2015. The Discharge summary discloses his final diagnosis as Delirium Tremens, alcohol withdrawal seizures. Respondents also came to know during investigation that OPD booklet bearing OP Card No. 764290 issued by Bapuji Hospital, Dhavengere in the name of deceased/life assured on 28.11.2013. The said OPD Booklet shows that the life assured was suffering from abdominal pain the last 1 month and his appetite had decreased. The said treatment taken at Bapuji Hospital, Dhavengere by deceased on 28.11.2013 is also prior to proposal of subject policy, thus the same was very well within the knowledge of complainant. However, the deceased/life assured deliberately and intentionally chose to suppress the same thereby misleading insurance company to issue subject policy in his name. Despite having undergone the above mentioned treatment and having been admitted in hospital from 02.12.2014 till 06.12.2014, the deceased/life assured did not disclose the said fact in the proposal forms dated 06.02.2015. Apart from the above, the life assured also signed a declaration in the proposal form with respect to complete, true and accurate disclosure of all the facts and circumstances as may be relevant for the acceptability of the Proposal Forms about his health. Section 45 of the Insurance Act, 1938 crystalizes the Respondents, rejection to the claim of the Respondent. The Consumer Protection Act, 1986 is not applicable to the facts of the instant case. The concept of ‘deficiency’ as defined under Section 2(g) of the C.P.Act does not apply to a Policy of Life Insurance in view of Section 45 of the Insurance Act, 1938. The avoidance of a Policy of Life Insurance is limited to the extent as specified in Section 45 of the Insurance Act, 1938.
7.4 It is further contended that it was apparent from the documents submitted by the Respondents that the insured had not disclosed the fact that he had treatment for Delirium Tremens, alcohol withdrawal seizures in Chigeteri District Hospital and he had also taken treatment at Bapuji Hospital, Dhavengere on 28.11.2013. In view of the fact that in terms of the policy, he was not entitled to the claim made by the Nominee, hence the Respondents repudiated the claim on 26.06.2016. In the facts and circumstances , it is submitted by the Respondents that in the terms of the provisions of sections of Section 45 of the Insurance Act 1938 and the law laid down by the Hon’ble Supreme Court in the case of Reliance Life Insurance Company Limited & Anr. Vs. Rekhaben Nareshbhai Rathod reported in (2019) 6 SCC 175, the repudiation of claim was legal and valid. The relevant paragraph of the judgement is quoted below:-
“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.”
8. The main reason for repudiation of claim is that deceased has suppressed the material facts that at the time of taking the insurance policy, deceased was suffering from Delirium Tremens. In this case, as per the death certificate, the cause of death is heart attack. There was nothing on record that could establish a link between the heart attack and Delirium Tremens. Hon’ble Supreme Court in the case of Sulbha Prakash Motogaonkar and Others Vs. Life Insurance Corporation of India and Others 2021 13 SCC 561 decided on 05.10.2015 observed as under:
“6…….. The death of the insured due to ischaemic heart disease and myocardial infarction had nothing to do with his lumbar spondylitis with PID with sciatica. In our considered opinion, since the alleged concealment was not of such a nature as would disentitle the deceased from getting his life insured, the repudiation of the claim was incorrect and not justified”.
9. Subsequent to the above judgment of Hon’ble Supreme Court, this Commission in various cases, relying on the judgment of Sulbha Prakash Matogaonkar and Others (supra) have observed that if there is no nexus between the material fact / disease, which was not disclosed, and the cause of death, the insurance company’s action of repudiating the claim on the ground of suppression of material facts / non disclosure of pre-existing ailment is not correct. Some of these cases are listed below:
10. In Life Insurance Corporation of India Vs. Jyotsna Rawal, Revision Petition No. 864 of 2018 decided on 08.05.2018, this Commission held as under :
8. In this context, I would like to rely upon the decision of Hon’ble Supreme Court in Civil Appeal No.8254 of 2015 in the case of Sulbha Prakash Motegaonkar & Ors. Vs. Life Insurance Corporation of India, decided on 0510-2015. This was the case where the deceased died due to Ischemic Heart disease and myocardial infarction. There was a concealment of lumbar spondylitis with PID with sciatica and, therefore, the insurance company repudiated the claim. Hon’ble Supreme Court held that it was not the case of insurance company that the deceased was suffering from life threatening disease which could or did cause death of the insured. The Court observed as below:
“We are of the opinion that the National Commission was in error in denying to the appellants the insurance claim and accepting the repudiation of the claim by the respondent. The death of the insured due to ischemic heart disease and myocardial infarction had nothing to do with his lumbar spondylitis with PID with sciatica. In our considered opinion, since the alleged concealment was not of such a nature as would disentitle the deceased from getting his life insured, the repudiation of the claim was incorrect and not justified.
11. In Neelam Chopra Vs. Life Insurance Corporation of India and Ors, Revision Petition No. 4461 of 2012 decided on 08.10.2018, this Commission held as under :
“13. From the above observations of the Hon’ble Supreme Court, it is clear that suppression of any information relating to pre-existing disease if it has not resulted in death or has no direct relationship to cause of death, would not completely disentitle the claimant for the claim.”
12. In Lachman Sarup Vs. LIC of India, Revision Petition No. 42 of 2012 decided on 04.02.2019, this Commission held as under :
7………Even if it is presumed for the sake of arguments that she had not succumbed to the injuries which she sustained when she fell from the stairs, the fact remains that the claim could not have been denied unless it was shown that she had died on account of suffering from Kochi’s Chest. No material has been placed before this Commission to show that Kochi’s Chest by itself was a life threating disease even at the time when the deceased insured is alleged to have died. The onus was upon the insurer to prove either that the deceased insured had died on account of she suffering from Kochi’s Chest or that Kochi’s Chest was by itself a life threating disease. Therefore, relying upon the decision of the Hon’ble Supreme Court in Sulbha Prakash (supra), I hold that the repudiation of the claim was not justified.
13. In Bajaj Allianz General Insurance Co. Ltd. Vs. Usha P Joshi and Ors., First Appeal No. 48 of 2012 decided on 01.12.2019, this Commission observed as under:
“13. The Appellant has failed to show that diabetes, hypertension and angina had any nexus with ‘SYNCOPE’ for which the respondent was treated and the claim put up.”
18. The appellant, however, has failed to bring to my notice any proved fact in support of the contention that there was suppression of any material information or concealment of a pre-existing disease which had the nexus with the disease for which the respondent/complainant was treated in USA and for which she had put up her claim. It is noteworthy that the present claim is under ‘travel secure policy’ to redeem the insured for the expenses for the treatment of an ailments abroad. The appellant has failed to prove that the ailment with which the respondent/complainant had taken treatment while in USA had any nexus with her earlier condition of diabetes or two/three fainting episodes or hypertension etc. and that she had deliberately concealed her condition of “SYNCOPE” for which she was treated in USA.
14. In Pratibha Bevinal Vs. Metlife India Insurance Co. Ltd., Consumer Complaint No. 88 of 2011 decided on 07.10.2022, this Commission held as under :
7………This Commission in Revision Petitions (supra) has also been guided by this judgement of the Hon’ble Supreme Court and these orders have attained finality. In the instant case, the opposite party’s ground for repudiation of the policy is the concealment of a heart condition and diabetes mellitus. However, the cause of death of the DLA is a road accident due to rash and negligent driving by a motor cyclist. I am, therefore, of the view that the matter is squarely covered by Sulbha Prakash Motegaonkar (supra) and therefore the complaint is liable to succeed.
15. We have carefully gone through the facts and circumstances of the case, orders of the State Commission, other relevant records, case laws relied upon by the parties / State Commission and written arguments of the petitioner and respondent. Considering that there was no nexus between the material fact / information relating to pre-existing ailment alleged to have been suppressed and the cause of death, keeping in view the decision of Hon’ble Supreme Court in Sulbha Prakash Matogaonkar (supra) and other judgments of this Commission cited , we find that State Commission committed a material irregularity in allowing the appeal of Respondents herein and are of the view that repudiation of the claim by OP Insurance Company is not correct.
16. In view of the foregoing, the order of the State Commission is set aside and order of the District Forum is restored.
17. The pending IAs in the case, if any, also stand disposed off.
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