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BOMBAY STATE CONSUMER DISPUTES REDRESSAL COMMISSION
S.P. Tavade, President and S.T. Barne, Judicial Member
Sarbendu Bagchi – Complainant
versus
HDFC ERGO General Insurance
Company Limited – Opponent
Complaint No.CC/20/150
Decided on 5.4.2023
Counsel for the Parties:
For the Complainant:Prakash Karande, Advocate
For the Opponent: None
IMPORTANT POINTS
(1) Proposer - The proposer is under a duty to disclose the insurer all material facts as are within his knowledge. The proposer is presumed to know all the facts and circumstances concerning the proposed insurance.
(2) Material fact - The duty to make full disclosure continues to apply throughout negotiations for the contract but it comes to an end when the contract is concluded, therefore, material facts which come to the proposer’s knowledge subsequently need not be disclosed.
(3) Assured - the assured is not under a duty to disclose facts which he did not know and which he could not reasonably be expected to know at the material time. Full disclosure must be made of all relevant facts and matters that have occurred up to the time at which there is a concluded contract.
(4) Full disclosure - The duty to make full disclosure continues to apply throughout negotiations for the contract but it comes to an end when the contract is concluded, therefore, material facts which come to the proposer’s knowledge subsequently need not be disclosed.
(5) Material fact - the test to determine as to what is a material fact is whether that fact has any bearing on the risk undertaken by the insurer.
(6) Repudiation of Claim - The opponent was not justified in repudiating the insurance claim of the complainant on the ground of suppression of material fact as there was no evidence filed by the opponent on whom there was onus to prove that the opponent had undergone treatment for hypertension related problems which resulted into renal failure.
Headnote:
(A) Consumer Protection Act, 1986 – S.17[Consumer Protection Act, 2019 – S.47(1)] – Services – Insurance – Repudiation of Claim – if Justified – The proposer is under a duty to disclose the insurer all material facts as are within his knowledge. The proposer is presumed to know all the facts and circumstances concerning the proposed insurance. Whilst the proposer can only disclose that is known to him, the proposer’s duty of discloser is not confined to his actual knowledge, it also extends to those material facts which, in the ordinary course of business, he ought to know. However, the assured is not under a duty to disclose facts which he did not know and which he could not reasonably be expected to know at the material time. Full disclosure must be made of all relevant facts and matters that have occurred up to the time at which there is a concluded contract. It follows from the principle that the materiality of a particular fact is determined by the circumstances existing at the time when it ought to have been disclosed, and not by the events which may subsequently transpire. The duty to make full disclosure continues to apply throughout negotiations for the contract but it comes to an end when the contract is concluded, therefore, material facts which come to the proposer’s knowledge subsequently need not be disclosed – Therefore, it appears that at the time of filling the form the complainant was not knowing that he was suffering from diabetes and hypertension which would be resulted in renal failure. [Para 14].
(B) Consumer Protection Act, 1986 – S.17[Consumer Protection Act, 2019 – S.47(1)] – Insurance Act, 1938 - S.45 - Services – Insurance – Repudiation of Claim – if Justified – when the policy was taken on 15/01/2015 for five years. Claim arose in September, 2019, i.e. claim has arisen under the policy after expiry of four years and eight months which cannot be called in question and there is no ground for repudiation of the claim. [Para 15].
(C) Consumer Protection Act, 1986 – S.17[Consumer Protection Act, 2019 – S.47(1)] – Insurance Act, 1938 - S.45 – Material fact – test to determine - the test to determine as to what is a material fact is whether that fact has any bearing on the risk undertaken by the insurer. If the fact has any bearing, it is a material fact and it not, it is not material. In the instant case, the Discharge Summary from St.Joseph Hospital, USA relied upon by the Appellant, merely states that Respondent had been taking medicine for hypertension and for cholesterol which was reportedly normal. Commision was of the view that the fact that the patient was taking medicine for hypertension for some time does not amount to suppression of material fact because as is well known hypertension is usually a lifestyle disease and easily controlled with conservative medication, as in the instant case. [Para 16].
(D) Consumer Protection Act, 1986 – S.17[Consumer Protection Act, 2019 – S.47(1)] – Services – Insurance – Repudiation of Claim – if Justified - No material is produced on record to establish that prior to obtaining the policy the complainant was suffering from kidney related disease which was concealed by him. Therefore, the complainant has established that he had purchased insurance policy from the opponent. The opponent has paid Rs.1,00,000/- to the complainant under other policy, immediately after submission of claim. But, the claim under the Home Suraksha Plus Policy was denied. The opponent was not justified in repudiating the insurance claim of the complainant on the ground of suppression of material fact as there was no evidence filed by the opponent on whom there was onus to prove that the opponent had undergone treatment for hypertension related problems which resulted into renal failure - Complaint is hereby allowed. [Para 17].
Result: Complaint allowed.
ORDER
S.P. Tavade, President—The complainant has filed this complaint under the provisions of Consumer Protection Act.
2. It is contended that the complainant was employee of Raymond India Ltd., in the year 2014. He had booked flat and he wanted housing loan. Accordingly he approached HDFC Ltd. and applied for loan. The representative of the HDFC Bank checked and verified income credentials of the complainant as well as he carried out the valuation of the booked flat and sanctioned housing loan of Rs.50,91,080/- on 26/12/2014 with condition to repay within 17 years.
3. It is contended that while processing housing loan formalities the various Agents of the HDFC Bank, namely Mr. Nandlal Patil – Sales Executive and Nilesh Dhuri - Sales Manager, explained the complainant about ‘Home Suraksha Plus Policy’. Complainant was reluctant to buy the said policy, but, the representative of the HDFC Bank told complainant that if he buys the policy, housing loan will be sanctioned immediately and premium amount will be adjusted in loan amount. The complainant came under pressure and agreed to buy the said policy against the payment of one time single premium of Rs.3,91,080/- covering following risks:—
Fire and allied perils, earthquake and terrorism for building/flat Sum insured Rs.50,91,081/-.
Contents in flat – sum insured Rs.12,72,770/-.
Major Medical Illness and procedure – Sum insured Rs.50,91,080/- (which covers: cancer, end stage renal failure, multiple sclerosis, major organ transplant, heart valve replacement, coronary artery bypass, stroke, paralysis and myocardial infarction).
Personal Accident – Sum Insured Rs.50,91,080/-.
4. Accordingly the opponent’s representative asked the complainant to write his name on the Home Suraksha Plus Proposal form and put signature at the end of the proposal form. Accordingly, the complainant signed the form as per the directives of the representative of the opponent.
5. It is contended that HDFC Ltd., directly paid sum of Rs.3,91,080/- to opponent out of loan amount as one time premium of policy, namely ‘Home Suraksha Plus Policy’. Accordingly Policy No.091820096157500003 to complainant on 15/01/2015 for the term of five years covering the above categories of risks.
6. It is contended that in the month of May, 2018 the complainant faced problem and elevated creatinine. Hence, he underwent treatment with a nephrologist. In the month of August, 2019, the complainant’s creatinine level suddenly shot up and he was admitted in the hospital for check-up and treatment, wherein treating Doctors diagnosed the complainant with acute and chronic renal failure and complainant is undergoing dialysis twice a week. It is contended that the complainant was diagnosed with major medical illness of end stage renal failure. Hence, he preferred claim with the opponent under two policies having same features, viz. 1.Sarva Suraksha Claim No.RRCI19-10733667 for Rs.1,00,000/- and 2. Home Suraksha Plus Policy No.2918200961576500003, Claim No.RR-CI149-10731309 for Rs.50,91,080/-. It is averred that the complainant purchased the said policies from the opponent in the year 2015. The opponent settled the claim under first policy i.e. Sarva Suraksha claim and paid Rs.1,00,000/- but the claim under Home Suraksha Plus Policy was repudiated on vague and irrelevant reasons.
7. It is contended that before taking the policy or at the time of taking the policy the complainant was not aware or was not suffering from any symptoms or had not undergone treatment of any disease mentioned in opponent’s ‘Home Suraksha Plus Policy’ proposal form or kidney failure or any other serious major illness. The complainant is gainfully employed at Senior Manager Level with an employer of repute and very much punctual in attending his duties and never availed any leave for more than two days on medical grounds. It is contended that the complainant had taken policy on 15/01/2015 for five years. At that time the complainant was not suffering from
