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GUJARAT STATE CONSUMER DISPUTES REDRESSAL COMMISSION, AHMEDABAD
Dr. J.G. Mecwan, Presiding Member
Manager, SBI Life Insurance Co. Ltd. – Appellant
versus
Mandakini Kirti Shalwala and Anr. – Respondents
Appeal No.224 of 2020
Decided on 17.9.2021
(A) Consumer Protection Act, 1986 – Section 15 - First Appeal [Consumer Protection Act, 2019 – Section 41] – First Appeal against the Order dt. 13.03.2020 passed by Distt. Commission – Respondents/Complainant and her husband applied for loan from SBI Bank/Opponent no. 01 - In response to the finance, Opponent no. 01 informed that in case of death of the Complainant/ Respondent for any reason, the loan amt. would be repaid by the insurance co.; hence, policy would have to be taken from Insurance Co./Opponent no. 02 - Stated by Opponent no. 1/Bank that policy will come into existence from the day loan is sanctioned - Opponent no. 01 sanctioned total amt. of Rs. 10,54,000/-, home loan amounting to Rs. 10,00,000/- and Rs. 54,000/- for the insurance – Respondent/Complainant informed by one hospital that he had cancer - During treatment in another hospital, on 12.10.2017, complainant’s husband died - Opponent no. 02/Insurance Co. repudiated claim of complainant/respondent on the ground of suppression of material facts regarding cancer – Respondent filed complaint - Ld. Distt. Commission partly allowed the Complaint – Hence, appeal by Opponent no. 02/Insurance Co. - Insurance coverage taken for security of the loan amt.; therefore, it should commence from the date of the disbursement of the loan amt., i.e., on 21.01.2017 – Respondent’s deceased husband unaware about his cancer disease on dt. 29.12.2016 when he had signed the blank proposal form on dt. 21.01.2017 at the time of disbursement of the loan amt. - No dispute that Sec. 45 of the Insurance Act, 1938 which places restrictions on the right of the insurer to call in question a life insurance policy on the ground of mis-statement after a particular period, has no application on facts at hand, as the said provision applies only in case of life insurance policy - Present case relates to mediclaim policy which is entirely different from a life insurance policy - Mediclaim policy is a non-life insurance policy meant to assure policy holder in respect of certain expenses pertaining to injury, accidents or hospitalizations, is a contract of insurance falling in the category of contract uberrimae fidei, meaning a contract of utmost good faith on the part of the assured - Act of opponent no. 2/Insurance Co. to repudiate the claim of complainant was just and proper - No deficiency in service on part of the Opponent no. 02/SBI Life Insurance Co. - Opponent No. 1/SBI Bank has indulged deficiency in service and unfair trade practice – In opinion of this Commission, order passed by the Ld. Distt. Commission is not just and proper.
Held: As per the said certificate of Kailash Cancer Hospital and Research Centre, it is proved that the DLA was staying at the said hospital campus from 20.03.2017 to 27.03.2017 for post surgery dressing and therefore at the same time to sign proposal form on 25.03.2017 in bank at Pardi, Valsad is not possible. Furthermore the insurance coverage was taken for the security of the loan amount and therefore it should be commenced from the date of the disbursement of the loan amount i.e. on 21.01.2017.
Hon’ble Supreme Court in Civil Appeal no. 2776 of 2002 in the case of Satwant Kaur Sandhu Vs. New India Assurance Company Ltd has observed as under:
“12. There is no dispute that Section 45 of the Insurance Act, 1938 (for short “the Act”), which places restrictions on the right of the insurer to call in question a life insurance policy on the ground of mis-statement after a particular period, has no application on facts at hand, inasmuch as the said provision applies only in a case of life insurance policy. The present case relates to a mediclaim policy, which is entirely different from a life insurance policy. A mediclaim policy is a non-life insurance policy meant to assure the policy holder in respect of certain expenses pertaining to injury, accidents or hospitalizations. Nonetheless, it is a contract of insurance falling in the category of contract uberrimae fidei, meaning a contract of utmost good faith on the part of the assured. Thus, it needs little emphasis that when an information on a specific aspect is asked for in the proposal form, an assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge. It is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not. Of course, obligation to disclose extends only to facts which are known to the applicant and not to what he ought to have known. The obligation to disclose necessarily depends upon the knowledge one possesses. His opinion of the materiality of that knowledge is of no moment. (See: Joel Vs. Law Union & Crown Ins. Co.1)
Considering the above judgment of the Hon’ble Apex Court in the present case also when DLA has declared all his health related information in proposal form which was known to him then opponent Insurance Company cannot repudiate claim on the ground of suppression of material facts.
It is an averment of the opponent no. 02 – SBI Life Insurance Company that on receipt of the proposal form insurance policy was issued on dated 29.03.2017 for the coverage of the loan amount and therefore when DLA was having cancer disease on 25.03.2017/29.03.2017 then act of opponent Insurance Company to repudiate the claim of complainant was just and proper and hence in the present case there is no any deficiency in service on the part of the opponent no. 02 – SBI Life Insurance Company.
In view of the above it is clearly established that the opponent no. 1 –SBI Bank has taken signature of DLA on blank proposal form before 25.03.2017 and proposal form was filled up on later stage i.e. on 25.03.2017and sent it to the opponent no. 02 – SBI Life Insurance Company and therefore in the opinion of this Commission opponent no. 02 – SBI Life Insurance Company has not shown any deficiency in service or unfair trade practices in this case but only opponent no. 01 – SBI Bank has shown deficiency in service and unfair trade practice and hence in the opinion of this Commission order passed by the learned District Commission is not just and proper and it is required to be modified. (Paras 21, 26, 27 & 28)
Result: Present appeal is hereby partly allowed. Serial No. 02 of the final order dt. 13.03.2020 is modified as under:
Opponent no. 01/SBI Bank is directed and ordered to credit claim amount of insurance policy against loan Account of the deceased and after settlement of loan account, it is further ordered to Opponent no. 01/Bank to handover the property documents to the complainant. Further clarified and ordered that for settlement of loan account if claim amt. of insurance is not sufficient then remaining amt. be deposited by respondent/complainant to settle loan account.
JUDGMENT
Dr. J.G. Mecwan, Presiding Member.—Being aggrieved by and dissatisfied with the judgment and order rendered by the learned District Consumer Disputes Redressal Commission, Valsad on 13.03.2020 in Complaint No. 175 of 2018 the original opponent no. 02 has filed the present appeal under Section 15 of the Consumer Protection Act, 1986 before this Commission. For the sake of the convenience, parties are hereinafter referred to by their original nomenclature.
2. The facts given rise to the present appeal in a nutshell are as under: It is the case of the complainant that the complainant and her husband wanted to buy the property for their residence but as the complainant did not have enough money, on dated 26.12.2016, her husband applied for the loan from the opponent no. 01. It is further the case of the complainant that in response to the finance, the Opponent no. 01 informed him that in case of death of the complainant for any reason, the loan amount would be repaid by the insurance company and therefore the policy would have to be taken from the opponent no. 02. It is further submitted by the complainant that opponent no. 01 also stated that the premium amount of the policy would be added to the loan amount and also he was assured that the amount of that premium would be paid to the opponent no. 02 by them on behalf of the complainant. It is further the case of the complainant that it was stated by the opponent no. 01 that the policy will come into existence from the day on which the loan is sanctioned and therefore the husband of the complainant is willing to take the policy of opponent no. 02 through Opponent No. 1 for the purpose of taking the loan from opponent no. 01. It is further the case of the complainant that on dated 29.12.2016, the opponent no. 01 took the signatures of complainant’s husband at the place marked (X) in the blank proposal form of ‘SBI RINN RAKSHA’ - plan of Opponent No. 2 and assures to the complainant’s husband that rest of the details of form will be filled by the opponent no. 01 and they themselves sent the proposal form to opponent No. 2.
3. It is further the case of the complainant that after completion of the above process on dated 21.01.2017 opponent no. 01 has sanctioned total amount of Rs. 10,54,000/- including the Home loan amounting to Rs. 10,00,000/- and Rs. 54,000/- for the insurance. Thereafter the property of the complainant’s husband is mortgaged to the opponent no. 01 and all the original documents and other relevant documents of the mortgaged property are in possession of the opponent No. 1. It is further the case of the complainant that the policy of Rs. 10,53,820/- has been taken from opponent no. 02 and as per the policy, the complainant is the legal nominee of the said policy. It is further the case of the complainant that her husband went to the hospital at Vapi to be diagnosed with toothache but the pain did not improve and then they showed up to another hospital named Om Sai Mexifacial and Dental Clinic, Vapi where the doctor was told to show the patient to 21-Century hospital as he suspected the cancer and thereafter the biopsy was taken to complainant’s husband which was reported to be cancerous but not believing the say of the said Doctor, the patient was taken to the hospital in Surat on dated 22.02.2017 and there also the patient was informed that he had cancer. It is further the case of the complainant that due to the high cost of cancer treatment, the complainant was admitted to Kailash Cancer hospital and Research Centre and Akshar Purshottam Arogya Mandir, Vadodara as per the advice of family members.
4. It is further the case of the complainant that on dated 06.03.2017 the complainant’s husband was admitted to the said hospital and on dated 08.03.2017 he was operated and thereafter he was discharged from the said hospital on 20.03.2017 and during the period of treatment on dated 12.10.2017 he was died. It is further submitted by complainant that opponent no.
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