Back
2025 Supreme(Online)(SCDRC) 653
STATE CONSUMER DISPUTES REDRESSAL COMMISSION
MRS. PADMA PANDEY, PRESIDING MEMBER, MR. RAJESH KUMAR ARYA, MEMBER
HDFC LIFE INSURANCE CO. LTD – Appellant
Versus
MRS. MOHINDERJIT KAUR – Respondent
FIRST APPEAL NO. SC/4/A/343/2024 | Consumer Complaint No.234 /2021
For the Appellants/Petitioners: Ms.Monika Thatai
For the Respondents: Sh.R.S.Sohi
Insurers cannot repudiate claims without clear evidence of non-disclosure of material facts; the connection between the cause of death and the insurance policy terms must be established.
Headnote:(A) Consumer Protection Act, 2019 - Section 41 - Insurance claim - Appeal against order directing the insurer to pay Rs.55,74,355/- with interest for repudiation of claim due to alleged pre-existing conditions - The insurer's claim of non-disclosure of pre-existing diseases was not substantiated, and the deceased's death was linked to an accident. (Paras 1, 10, 11, 13)
(B) Insurance Contracts - The principle of utmost good faith requires insurers to disclose terms clearly, and failure to conduct medical tests prior to issuing a policy is a breach of duty. (Paras 11, 12)
Facts of the case:
The complainant's husband obtained a housing loan and insurance policy for protection against accidental death. Following his death due to an accident, the insurer repudiated the claim citing non-disclosure of pre-existing conditions. (Paras 2, 3)
Findings of Court:
The court found the insurer liable for the full amount, emphasizing the connection between the accident and the death, and the insurer's failure to prove pre-existing conditions caused the death. (Paras 11, 13)
Issues: The main issues included whether the insurer could repudiate the claim based on alleged non-disclosure of pre-existing conditions and the interpretation of the policy terms regarding accidental death. (Paras 8, 10)
Ratio Decidendi: The court held that the insurer's repudiation was unjustified as the death was caused by an accident, and the insurer failed to demonstrate that pre-existing conditions were the sole cause of death. The court emphasized that the insurer must adhere to the terms of the contract and provide clear disclosures. (Paras 11, 14)
Result: Appeal dismissed; order of the District Commission upheld.
| Table of Content |
|---|
| 1. consumer complaint regarding insurance claim (Para 2 , 3 , 4) |
| 2. appeal against district commission's order (Para 5 , 6) |
| 3. arguments on policy terms and conditions (Para 8 , 9 , 10) |
| 4. court's reliance on legal precedents (Para 11 , 12) |
| 5. justification of awarded compensation (Para 13 , 14) |
| 6. dismissal of appeal and order confirmation (Para 15 , 16 , 17 , 18) |
PER PADMA PANDEY, PRESIDING MEMBER
This appeal is directed against the order dated 05.06.2024, rendered by the District Consumer Disputes Redressal Commission-I, U.T. Chandigarh (hereinafter to be referred as “the Ld. District Commission”), vide which, it partly allowed the complaint bearing No.CC/234/2021 by directing the Opposite Parties No.1 (appellant herein) as under ;
(i) to pay 55,74,355/- to the complainant alongwith interest @ 9% per annum from the date of repudiation of the claim i.e. 19.2.2021 onwards.
(ii) to pay 30,000/- to the complainant as compensation for causing mental agony and harassment;
(iii) to pay 10,000/- to the complainant as costs of litigation.
This order be complied with by OP-1 within forty five days from the date of receipt of its certified copy, failing which, the payable amounts, mentioned at Sr.No.(i) & (ii) above, shall carry interest @ 12% per annum from the date of this order, till realization, apart from compliance of direction at Sr.No.(iii) above. It is, however, made clear that the financier (OPs 2 to 4) shall have first charge over the aforesaid awarded amount, to the extent the same is due to be paid by the complainant towards the discharge of loan liability, if any, of the DLA.
Since no deficiency in service or unfair trade practice has been proved against OPs 2 to 4, the consumer complaint against them stands dismissed with no order as to costs.”
2. Before the Ld. District Commission, it was case of the complainant that her husband late Sh. Harbhajan Singh, during his lifetime was willing to purchase one house in Nabha. After seeing the advertisement given by Opposite Party No.2, late Sh. Harbhajan Singh alongwith the complainant approached Opposite Party No.2 through Opposite Party No.4. After going through the documents as well as financial capacity of late Sh. Harbhajan Singh, Opposite Party No.4 informed him and the complainant that they would refer their case to Opposite Party NO.3 for sanctioning of loan and on being satisfied with the documents, Opposite Party No.3 would refer the loan case to Opposite Party No.2 who would take the final decision. After some time, Opposite Party No.4 contacted the complainant and her husband and informed that after going through the documents, Opposite Party No.2 had agreed to sanction loan for an amount of 17.00 lacs in favour of the husband of complainant. Accordingly, loan agreement was executed between the Opposite Parties and the husband of the complainant. While signing the loan agreement, Opposite Party No.3 had informed Harbhajan Singh and the complainant that there was offer going on in the insurance plans and they could avail one plan namely accidental plan in which the complainant and their family would stay safe as after getting the plan, if anything happened to Harbhajan Singh, then the whole loan amount would be paid by the insurance company. On this, the complainant and her husband fell into the sweet talking of Opposite Party No.3 and asked it to issue the policy upon which they told that there would be additional EMI of 2,277/- per month. Complainant and her husband had agreed to the terms of Opposite Parties and asked the Opposite Parties to sanction loan and issue the insurance policy upon which loan as well as policy was issued/sanctioned. Letter issued to PUDA by Opposite Party No.2 is Ex.C-1. Thereafter, aforesaid Harbhajan Singh and complainant paid the installments of loan as well as insurance policy timely and copy of statement showing the outstanding amount is Ex.C-2. Unfortunately, Harbhajan Singh met with an accident due to which he suffered serious i
