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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, 1986 – Section 15 [Consumer Protection Act, 2019 – Section 41] – Appeal – Services – Insurance – Mediclaim – The insurance policy issued to the complainant was only after medical examination. This obviously means clause was applied by the Insurance Company mechanically and not on the basis of a specific test –Furthermore, the insurance company is responsible for conducting a medical examination of the policyholder in advance. This examination is essential to determine whether the policyholder has any pre-existing medical conditions. By performing this assessment, the insurance company ensures that any existing health issues are identified and appropriately addressed before the policy is finalized. Moreso, the Doctrine of good faith is two-way traffic and not a one-way traffic. If the Insurance benefit of doctrine of good faith, then they have to accept whatever the insured declares and should not subject medical test and get certificate from the doctor on the panel that the insured possesses sound and good health mediclaim insurance policy. Such a certificate will be meaningless and of no relevance as to the state of health – Appellant failed to conduct a proper medical examination, and it was only after the insured’s death that the Appellant began investigating the deceased’s medical history. This clearly indicates that at the time of issuing the policy, the Appellant was merely focused on issuing the policy, despite being aware that the insured was 57 years old and potentially suffering from lifestyle-related diseases – Appeal dismissed. [Paras 14 to 28]
Result: Appeal dismissed.
Key Points: - The District Commission held that OP2 failed to prove pre-existing disease as a ground to repudiation and that there was deficiency in service by OP2; OP2 was ordered to pay Rs.19,06,191/- plus interest and other costs to the Complainant, and damages Rs.50,000/- and legal costs Rs.25,000/-. (!) (!) (!) - The appeal was dismissed; the District Commission’s findings that medical examination should have been conducted, especially given the age of the insured (57), and that mere good health declaration is insufficient, were upheld. (!) (!) (!) - The court noted that non-disclosure of lifestyle diseases like diabetes/hypertension cannot by itself justify repudiation; the death was due to sudden cardiac arrest, and there was no clear evidence linking pre-existing diseases to the cause of death. (!) (!) (!) - The appellent insurer’s obligation to conduct a pre-policy medical examination for an older insured was emphasized; and New India Assurance Co. Ltd. v. Hilli Multipurpose Cold Storage and Neelam Chopra line of authority were cited regarding assessment of lifestyle diseases and genuineness of claims. (!) (!) (!) (!) - The appellate court upheld that the insurer cannot rely solely on post-issuance medical history and must consider the terms of the policy and the obligation of good faith. (!) (!) - The policy in question was for a reducing cover plan; the appellate court found no basis to limit the claim to a lesser amount absent policy terms showing such reduction. (!) (!) - The written statement delay issue was resolved by not condoning the delay beyond 45 days; the District Commission had properly rejected the written statement on record. (!) (!) - Section 38(2)(a) and 49(1) of the Consumer Protection Act, 2019 guided procedural aspects of admitting copies and timing for written statements. (!) (!) (!) - The judgment reaffirms that concealment of pre-existing conditions does not automatically bar claims, and insurers should avoid overly technical repudiation. (!) (!) (!)
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.0KRM20-11000005031846). 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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