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DELHI STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Sangita Dhingra Sehgal, President and Pinki, Member (Judicial)
Kotak Mahindra Life Insuraance Co. Ltd. – Appellant
versus
Anu Lamba and Anr. – Respondents
First Appeal No.673 of 2023
Decided on 19.12.2024
Consumer Protection Act, 2019 – Section 38(2) – Insurance Policy – Deficiency in service – Repudiation of claim – Housing Loan – Death of husband of complainant due to heart attack – Claim of Insurance amount by complainant-wife of deceased – District Commission not erred in not taking WS filed by appellant on record after 45 days of period of limitation – OP-2 acted differently at the time of issuing Insurance Policy & no such medical problem of husband of complainant was noticed by them nor any medical test of husband of complainant was done & when claim was submitted by Complainant as nominee w.r.t. that policy then upon their investigation objections were taken viz.; Diabetes, Hypertension, chronic obstructive pulmonary diseases to repudiate claim & OP-2 scrutinised previous Medical record of husband of complainant of 7 years from 2015 – Insurance company is responsible for conducting medical examination of policy holder in advance to determine whether policy holder has any pre-existing medical conditions – Repudiation of claim cannot be made on ground that existence of common life style disease like diabetes & Hypertension etc. – Insured being 57 years of age at the time of purchasing insurance policy from appellant, appellant should have conducted medical examination rather than relying solely on insured’s declaration of ‘good health’ – Reducing cover plan & life cover schedule, respondent No.1 is entitled to Rs.18,04,194/- & not Rs.19,06,191/- – There is no evidence, term or condition in policy that indicates that respondent No.1 is not entitled to total sum insured in event of death of policy holder – No infirmity if judgment of Forum. (Paras 9, 10, 11, 12, 13,
14, 15, 18, 20 to 24)
Result: Appeal dismissed.
Based on the provided legal document, the key points are as follows:
The District Consumer Disputes Redressal Commission dismissed the appeal filed by the Kotak Mahindra Life Insurance Company Ltd., upholding the original order in favor of the respondent, who was the nominee of the insured deceased (!) (!) .
The case involved a claim for insurance benefits following the death of the insured, who was covered under a life insurance policy issued in connection with a housing loan. The insurer repudiated the claim on the grounds of non-disclosure of pre-existing medical conditions, specifically diabetes, hypertension, and obstructive pulmonary diseases, which the insurer alleged were present at the time of policy issuance (!) (!) (!) .
The insurer argued that the policyholder had concealed material facts regarding his health status, which violated the principle of utmost good faith and justified repudiation of the claim (!) (!) .
The consumer forum, however, found that the insurer had not conclusively proven that the insured was suffering from the pre-existing conditions at the time of obtaining the policy. The forum emphasized that the insured's sudden death was due to cardiac arrest and was not directly attributable to the alleged pre-existing diseases (!) (!) .
The forum also highlighted that the insurer failed to conduct a medical examination given the age of the insured (57 years) at the time of policy issuance. Instead, the insurer relied on the insured’s declaration of good health and subsequent medical records only after the claim was filed, which was deemed improper (!) (!) (!) .
The legal principles discussed include the importance of the doctrine of utmost good faith, which is mutual, and that non-disclosure alone does not automatically entitle the insurer to deny a claim, especially if the cause of death is not linked to the pre-existing conditions (!) (!) .
The appeal was dismissed because the appellate authority agreed that the insurer’s repudiation lacked sufficient justification and that the original order rightly held the insurer responsible for paying the claim amount along with interest, as well as damages for mental agony and legal costs (!) (!) (!) .
The court reaffirmed that the insurer's failure to conduct a proper medical examination, especially considering the age and health profile of the insured, was a significant oversight, and the insurer could not rely solely on the declaration of good health to deny the claim (!) (!) .
The court also clarified that the policy terms did not specify that the insured would only be entitled to a reduced sum insured in the event of a claim, and thus, the full sum insured was payable (!) .
Ultimately, the judgment upheld the original decision, dismissing the insurer’s appeal and confirming the insurance company’s liability to pay the claim amount along with interest and damages, while also noting that there was no infirmity in the consumer forum’s original order (!) .
No costs were awarded, and the judgment was ordered to be uploaded and communicated accordingly (!) (!) (!) (!) (!) .
JUDGMENT
Sangita Dhingra Sehgal, President.—The facts of the case as per the District Commission record are under:—
“The Complainant has alleged deficiency in service on the part of OPs in not settling the insurance claim for the Insurance Policy taken by her husband late Sh. Jitender Lamba at the time of availing Housing Loan.
1. The facts as narrated in the complaint are that the husband of the Complainant Sh. Jitender Lamba availed a Housing Loan from OP1 (Account No.0KRM-2011000005031846). At the time of sanction of the said Housing Loan, OP1 also got issued one Life Insurance Policy of the husband of the Complainant through OP2 and the premium amount of Rs.87094/- was also deducted from the Loan Account and Policy No.GA000172 was issued by OP2. This Insurance Policy was for the period of 60 months i.e. from 30.11.2020 to 29.11.2025 and the sum assured was Rs.19,80,000/-. As per the Insurance Policy, in case of death of the insured, the Insurance Company shall be liable to pay the full sum assured either to the Nominee of the insured which is the Complainant or directly to the OP1.
2. Unfortunately, the husband of the Complainant, Sh. Jitender Lamba expired on 18.09.2021 and intimation to this effect was sent by the Complainant to both the Ops. Relevant documents with regard to the claim settlement were submitted by the Complainant to OP2 and a claim No.AA173408 was assigned. However, despite this OP1 insisted the Complainant to deposit the EMI of the loan amount whereas she had already submitted her claim papers to OP2.
3. Subsequently, on 05.01.2022, OP2 repudiated the claim for the reason that the husband of the Complainant late Sh. Jitender Lamba at the time of insurance being taken had claimed himself of good health whereas upon their investigation and assessment the husband of Complainant was found suffering from Diabetes Mellitus, Hypertension and Chronic Obstructive Pulmonary Diseases and OP2 refunded the premium amount of Rs.73809/- to the Complainant stating that their liability was limited to refund of the premium amount only. The Husband of the Complainant had relied upon his medical test reports dated 03.11.2020 of Sri Anandpur Trust Charitable Diagnostic Centre which were done before taking the loan and issuance of the Insurance Policy and has stated that there was no serious ailment detected in the said report.
4. Alleging deficiency in service on the part of OP1 & OP2, the Complainant has made following prayers in her complaint:
i. To pay the full claim amount i.e. Rs.19,80,000/- alongwith interest @18% p.a. to the Complainant.
ii. To adjust the claim amount with the pending loan amount of the husband of the Complainant and pay the balance amount alongwith interest @18% p.a. to the Complainant.
and
iii. To pay a sum of Rs.1,00,000/- as damages/ compensation towards the mental pain, agony & harassment and loss of physical and mental comforts suffered by the Complainant due to negligence and deficiency in service on the part of the OPs.
iv. Award the costs of the proceedings in favour of the Complainant
v. Pass any other relief/s in favour of the Complainant and against the OPs, which this Forum may deem fit and proper under the facts and circumstances of the case as well as in the interest of justice, equity and fair play.”
2. The District Commission after taking into consideration the material available on record passed the order dated 19.09.2023, whereby it held as under:
“The case of the Complainant is that her husband late Sh. Jitender Lamba, was holding valid Insurance Policy (Exhibit CW-1/2) issued by OP2 for the period 30.11.2020 to 29.11.2025 for total sum assured of Rs.19,80,000/- for which premium of Rs.87,094/- was also deducted by OP1 while granting the Housing Loan to her husband.
9. The husband of the Complainant expired on 18.09.2021 due to heart attack and at Max Hospital it was observed as ‘brought dead’. Thereafter the Complainant submitted all relevant documents t
Medical Examination – Insurance company is responsible for conducting a medical examination of the policyholder in advance.
(1) Proof of delivery - In the absence of proof of delivery, therefore, Commission cannot rely solely on the Respondent’s statement before the District Commission that it had duly supplied the terms ....
Insurance—Repudiation of death claim on the ground of concealment of disease must be supported with reliable and cogent evidence.
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