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DELHI STATE CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
ANIL SRIVASTAVA, MEMBER
Virpal Nagar – Appellant
Versus
HDFC Standard Life Insurance Co. Ltd. – Appellant
Complaint No. 05 of 2011
Decided on : 14-03-2019
Advocate Appeared:
For the Appellant :Mr. Jalaj Aggarwal, Advocate.
For the Respondent:Mr. Rajiv Anuja, Advocate.
The main legal point established in the judgment is that insurance policies should be honored unless there has been fraud, concealment, or suppression at the time of obtaining insurance. The onus of proving pre-existing disease is on the Insurance Company, and insurance companies are obligated to ensure the fitness of the insured before issuing a policy.
Headnote:
Consumer Protection Act - Insurance Claim - Section 17 of the Consumer Protection Act 1986 - [SUMMARY OF ACT SECTIONS REFERENCED: Section 17 of the Consumer Protection Act 1986] - The court analyzed the repudiation of an insurance claim under the Consumer Protection Act. The key legal provisions discussed include the concept of pre-existing disease in reference to medical insurance policy, the onus of proving pre-existing disease on the Insurance Company, and the obligation of insurance companies to ensure the fitness of the insured before issuing a policy. The court found that the repudiation of the claim on the ground of pre-existing disease or non-furnishing of occupation details was not sustainable, and ordered the respondent to allow the claim with interest at the rate of 6% from the date the claim was payable.
Fact of the Case:
The complaint was filed under Section 17 of the Consumer Protection Act 1986 against an insurance company for repudiating an insurance claim. The deceased had taken a HDFC Term Assurance Policy, and the claim was repudiated by the insurance company on the grounds of alleged concealment of material facts regarding pre-existing disease and non-disclosure of occupation details.
Finding of the Court:
The court found that the repudiation of the claim on the ground of pre-existing disease or non-furnishing of occupation details was not sustainable. It also rejected the argument that the case was a case of insurance fraud and that the issues were too complicated to be disposed of in summary proceedings.
Issues: The key issue was whether the repudiation of the claim was justified based on the alleged concealment of material facts regarding pre-existing disease and non-disclosure of occupation details.
Ratio Decidendi: The court emphasized that insurance policies should be honored as long as there has been no fraud, concealment, or suppression at the time of obtaining insurance. It also highlighted the onus of proving pre-existing disease on the Insurance Company and the obligation of insurance companies to ensure the fitness of the insured before issuing a policy.
Final Decision: The court ordered the respondent to allow the claim within a period of two months from the date of receipt of the order with simple interest at the rate of 6% from the date the claim was payable.
ORDER :
Mr. Anil Srivastava, Member-This complaint has been filed by Sh. Virpal Nagar, resident of Faridabad, under Section 17 of the Consumer Protection Act 1986, (the Act) against HDFC Standard Life Insurance Company Ltd., hereinafter referred to as OPs, alleging unfair trade practice and deficiency of service on their part, they having repudiated their just claim without any foundation and praying for the relief as under:
It is therefore, most respectfully prayed that in view of above submissions and in the interest of justice this Hon’ble Commission may be pleased:
(a) Order and direct the respondent to pay a sum of Rs. 50,00,000 on account of claim in respect of death of Sh. Pratap Singh brother of the complainant under the HDFC Term Assurance Policy;
(b) Order and direct the respondent to pay upto date interest @ 18% per annum on the claim amount of Rs. 50,00,000 w.e.f. 23.1.2009 till the full realization of the claim amount;
(c) Order and direct the respondent to pay a sum of Rs. 5,00,000 as compensation for harassing, humiliation the complainant and further for mental agony, tension, suffered by him;
(d) Order and direct the respondent to further pay a sum of Rs. 35,000 as expenses towards the litigation;
(e) Grant any other or such relief as this Hon’ble Court may deem fit and proper in the facts and circumstances of the present case.
2. Facts of the case necessary for the adjudication of the complaint are these.
3. One Sh. Pratap Singh since deceased during his life-time had taken a HDFC Term Assurance Policy of the value of Rs. 50 lakh from the OPs on 5.12.2008, paying the premium of Rs. 24,046. The OPs on receipt of the premium and after getting him medically examined from the Apex Diagnostics and Polyclinic and finding him fit issued a HDFC Term Assurance Policy bearing No. 12265498 commencing from 5.12.2008 for a term of 20 yrs. The premium of the policy was fixed on yearly basis. The complainant was the nominee of the policy holder. The said policy holder however had passed away on 23.1.2009 and as a consequence thereof the complainant had filed a claim, submitting the necessary and required documents, which claim was repudiated by the OPs on 19.4.2010 leading to filing of the complaint before this Commission for the redressal of his grievances. The relevant extracts of the repudiation of the claim is reproduced below:
Section D: Personal and Family history of life to be assured
Details of Occupation:
| Present Occupation | Unemployed |
| Designation | General Store |
| Yearly Income from all source | 2,50,000 (Rs): |
| Name of the present employer | Deepak General Store |
| Address of present employer or business premises if self employed(Address of your place of work) | Village Post Office Tigaon, Faridabad Haryana PIN No: 121101 |
| Please provide in details the exact nature of work performed by you in connection with your present employment or business (for e.g. clerical, mechanical, supervisory, job, etc.) | General Store |
| Please provide details, if any regarding your occupation or business, which may render you susceptible to injury or illness. (e.g. exposure to chemical substances/hazardous materials/harmful dust or gasses/explosive/working at heights/handing heavy machinery etc.) | Non Hazardous |
| Industry to which your Company or business belongs (Cement, banking etc.) | General Store |
Personal Medical Details
| Are you currently suffering from any illness, impairment, or taking any medication or pills or drugs? | No |
Have you ever suffered from any of the following conditions?
| (a) | Respiratory disorders | No |
| (b) | Paralysis or multiple sclerosis | No |
However, our investigations have established that Mr. Pratap Singh Nagar was not having any such occupation as Deepak General Store as stated in the proposal form. Besides he was also suffering from Asthma and Paraly
