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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
D.K. Jain, President and M. Shreesha, Member
Met Life India Insurance
Company Ltd. —Appellant
versus
Urvashi Goyal and Anr. —Respondents
First Appeal No.163 of 2012
Decided 4.5.2017
Counsel for the Parties:
For the Appellant:Mr. Ritesh Khare, Advocate
For the Respondents:Mr. Rajiv Agnihotri, Advocate
IMPORTANT POINT
Insurance Company cannot refuse to settle death claim after retaining premium amount for long period.
Headnote:Consumer Protection Act, 1986—Sections 17, 19 and 21—IRDA Regulation, 2002—Regulations 4(6)—Insurance—Non-settlement of death claim—State Commission allowed Complaint directing Insurance Company to pay claim amount of Rs. 20,00,000/- with 9% interest together with costs of Rs. 10,000/- and additional amount of Rs. 20,000/- as compensation for adopting unfair trade practice—Insurance Company has not brought an iota of evidence to prove that they had ever conveyed to Life Assured that his medical test report was questionable and that they had taken a decision to defer issuance of policy by six months—If assured amount was considered high, Insurance Company should have insisted on Income Tax Returns at threshold even prior to asking Life Assured to subject himself to medical examination—Insurance Company maintained a stoic silence for 45 days after receipt of premium—Inaction on its part is clearly in breach of statutory Regulations 4(6) of IRDA Regulation, 2002, which is binding on Insurance Company and per se tantamounts to deficiency of service—Award of State Commission upheld but rate of interest reduced to 6%. (Paras 14 to 21)
Result: Appeal Partly allowed.
M. Shreesha, Member—Aggrieved by the order dated 11.1.2012 in CC/46/2009 passed by the State Consumer Disputes Redressal Commission, Punjab, Chandigarh (in short. The State Commission’). The Insurance Company preferred this Appeal under Section 19 of the Consumer Protection Act (in short. The Act’). By the impugned order, the State Commission has allowed the Complaint directing the Opposite Party (hereinafter referred to as the Insurance Company) to pay the claim amount of Rs. 20,00,000 with interest @ 9% per annum from 20.6.2007 till the date of realization, together with compensation of Rs. 20,000 and costs of Rs. 10,000.
2. The brief facts material to the Complaint are that the Complainant’s husband (hereinafter referred to as the Life Assured) was advised by Mr. Ashish Garg, Sales Manager of the Insurance Company to take Met Life Small Premier Plan for a sum of Rs. 20,00,000. It was averred that the Life Assured signed the blank proposal form, at the instance of Mr. Ashish Garg, and paid a sum of Rs. 1,00,000 towards premium on 26.3.2007, for which a receipt was also issued.
3. It was pleaded that a medical examination was conducted by Dr. Gaurav Sachdeva of Ludhiana Mediciti Hospital on 7.4.2007 and the report was given on the same day. As the policy was not received, the Life Assured had written to the Insurance Company on 11.4.2007 requesting for issuance: of the policy, but there was no reply. Once again, on 25.4.2007, the Life Assured sent a reminder for expediting the issuance of the life insurance policy as he required it for income tax purpose, but his request was disregarded.
4. While so, unfortunately, the Life Assured fell ill and was admitted in Sat Guru Partap Singh Apollo Hospital, Ludhiana where Gamma-Glutamyl Transferase (G.G.T.) test was conducted on 8.6.2007 and also on 12.6.2007, However, the Life Assured died on 13.6.2007. The first Complainant, who is the nominee, lodged the insurance claim on 15.6.2007 and thereafter, sent a letter on 30.7.2007 through registered post requesting the Insurance Company to settle the claim, but there was no response.
5. It was averred that the first Complainant approached the Insurance Ombudsman on 26.9.2007 alleging deficiency of service. It was submitted by the Insurance Company before the Ombudsman that the G.G.T. report of the Life Assured, received on 10.4.2007, showed 512 U/L against the normal range of 11-49 U/L and that this high range of G.G.T. was reconfirmed on 14.6.2007. It was asserted that the proposal form of the Life Assured was kept in abeyance for a period of six months on 20.6.2007 and the premium amount of Rs. 1,00,000 was returned to the first Complainant. It was pleaded that the amount of premium was received by the Insurance Company on 26.3.2007 and after retaining the amount for almost three months, their stand that it was returned in June 2007 cannot be justified as it was after the factum of death of the Life Assured was intimated by the first Complainant to the Insurance Company vide letter dated 15.6.2007. As per IRDA Guidelines, the Insurance Company was duty bound to process the proposal form and communicate the decision thereof within a period of 15 days, after the lapse of Which, there was a deemed acceptance of the said proposal form. It was further pleaded that once Dr. Gaurav Sachdeva of Ludhiana Mediciti Hospital, the approved doctor of the Insurance Company, after medical examination of the Life Assured had certified that he was fit for taking insurance, there was no occasion for the Insurance Company to turn around and keep the proposal form pending on a baseless ground that the confirmation report of G.G.T. test was required which is alleged to have been received by them on 14.6.2007. Even otherwise, the report dated 7.4.2007 showed normal L.F.T. and the test reports of 8.6.2007 and 12.6.2007 at Sat Guru Pratap Singh Apollo Hospital show normal G.G.T. levels below 50 U/L.
6. It was asserted that there was no occasion for Dr. Gaurav
