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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
AVM J. Rajendra, AVSM VSM (Retd.),
Presiding Member
DHFL Pramerica Life Insurance
Company Ltd. – Appellant
versus
Sohan Singh and Anr. – Respondents
First Appeal No.863 of 2019
(Against the Order dated 13/03/2019 in Complaint No. 650/2018 of the State Commission Punjab)
Decided on 22.3.2024
For the Appellant:Mr. Sanjay K. Chandha and Mr. Tauseef Ahmed, Advocates
For the Respondents:Mr. Digvijay Singh Raghav, Advocate for R-1, Mr. Hemant Gupta, Advocate for R-2
IMPORTANT POINTS
(1) Contract of Insurance – The contract of insurance is liable to be avoided, as the DLA intentionally failed to bring on record his medical history.
(2) Repudiation of insurance claim of the individual was due to concealment of his medical conditions and misleading the insurer and thus obtained the insurance policy.
Headnote:
Consumer Protection Act, 1986 – Section 19 [Consumer Protection Act, 2019 – Section 51] – Appeal – Services – Insurance – Repudiation of Claim – The contract of insurance is liable to be avoided, as the DLA intentionally failed to bring on record his medical history. The repudiation of insurance claim of the individual was due to concealment of his medical conditions and misleading the insurer and thus obtained the insurance policy – It is evident from the record that in the proposal form, the DLA had answered all the health-related questions in negative and stated that he does not suffer from any of the stated medical conditions. It is also a fact that that the insured suddenly died due to heart attack. In his affidavit the Complainant denied any pre-existing medical condition with respect to the insured. While repudiating the claim vide letter dated 15.12.2017, OP-3 and 4 did not bring out any evidence with respect to the history and seizure disorder and Diabetes Mellitus suffered by the insured prior to the date of application other than certain photocopies of treatment/clinical information with respect to certain treatment the DLA had undergone. The same were not filed in the form of an affidavit of the investigator or the doctors or other staff who treated the DLA, so as to ascertain the factual accuracy of the same at any stage, thereby affording opportunity to the Complainant to rebut the same and render his version. The claim was repudiated by the Appellant and the same was challenged by the Complainant who is a nominee for the DLA. It was incumbent upon the insurer to bring on record speci-fically stating the scope of treatment and other associated medical aspects, if any, which are violative of the proposal per-forma and establish the same by leading evidence rather than merely filing photocopies of the certain clinical information alleged to have been taken by the DLA – On facts, The Opposite Party No. 3 4 are directed to pay OP- 1&2 Bank Rs. 21,72,207/- along with simple interest, impugned order affirmed, petition dismissed. [Paras 10 to 22].
Result: Appeal dismissed.
ORDER
The present First Appeal has been filed under Section 19 of the Consumer Protection Act, 1986 (“the Act”) against the Order dated 13.03.2019 passed by the State Consumer Disputes Redressal Commission, Punjab at Chandigarh (“the State Commission”), in Consumer Complaint No. 650 of 2018, wherein the Complaint filed by the Complainant (Respondent No. 1 herein) was allowed.
2. For clarity, the parties involved in this matter are referred to as mentioned in the Complaint before the State Commission. “Sohan Singh” identified as Complainant (“Respondent No. 1”), who is the nominee of his son Sarabjit Singh (Since Deceased or DLA for short). Conversely, Dewan Housing Finance Corporation Ltd. (DHFL), represented by its Managing Director in Mumbai, is denoted as OP-1 (Respondent No. 2 Proforma party herein). DHFL, managed by its Manager in Pathankot, is denoted as OP-2, DHFL Pramerica Life Insurance Company Ltd., represented by its Manager, and Managing Director is referred to as OP-3 and OP-4 respectively.
3. Brief facts of the case, as per the Complainant, are that Sarabjit Singh, the son of the Complainant (now deceased/DLA), had obtained a housing loan from OP Nos.1&2, with loan account No.16500002721, for construction of a house on his property at VPO Ghot Pokhar Tehsil and District Gurdaspur. OP Nos.1 and 2 disbursed Rs.21,72,206/- as the loan amount to Sarabjit Singh, with repayment scheduled over 228 months through monthly installments of Rs.21,455/-. This home loan was insured under DHFL Pramerica Group Credit Life policy by OP Nos.3&4, the sister concerns of OP-1&2, commencing on 30.04.2017 and maturity date of 29.04.2036, providing total sum assured of Rs.21,72,207/-. Sarabjit Singh, the insured, paid Rs.2,19,927.27 as a lump sum premium for the policy and designated his father, Complainant Sohan Singh, as the nominee. The DLA, who was in good health and employed with the Punjab Police, died on 06.08.2017 due to heart attack, as confirmed by DDR No.014 dated 06.08.2017. There was no prior history of disease or ongoing treatment. Despite DLA demise, the Complainant continued to make loan installments to OP Nos.1 & 2. He subsequently filed a claim with OP Nos.3 & 4, who vide letter dated 15.12.2017, denied the claim alleging non-disclosure of pre-existing medical conditions, specifically seizure disorder and diabetes mellitus. However, the postmortem of the DLA that was conducted at Civil Hospital Gurdaspur on 06.08.2017 concluded that the cause of death was ‘Myocardial Infarction’ leading to a massive heart attack, a natural disease process. He contended that repudiation of the claim by OP Nos.3 & 4 constitutes deficiency in service and unfair trade practice.
4. Being aggrieved, the Complainant filed CC No. 650/2018 before the learned State Commission and sought relief by directing OPs No. 3 & 4 to pay the full insured amount of Rs.21,72,207/- along with interest @ 18% per annum from the date of DLA’s death, Rs.1 lakh as compensation for mental harassment, and Rs.10,000/- as costs.
5. In their joint reply, OP-1&2 contested the complaint and asserted that OP-1&2 are distinct entities from OP-3&4, operating in separate fields. OP-1&2 claimed no involvement in the repudiated claim by OP-3&4, emphasizing their role solely as a housing finance company and that they are not in the insurance business. They refuted any claim of master agent relationship between them and OP-3&4. On the merits, OP-1&2 acknowledged that the son of the Complainant was granted home loan and his subsequent insurance with OP-3&4 but they denied any affiliation between the two sets of entities. They further denied pressurizing the Complainant to continue paying EMIs following the death of his son on 06.08.2017. Asserting that the matter regarding the insurance claim solely concerns the Complainant and OP-3&4, OP-1&2 prayed for dismissal of the complaint, refuting any claim of deficiency in their service.
6. In their separate replies, OP-3&4 vehemently c
