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2025 Supreme(Online)(SCDRC) 38806
STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Harinderpal Singh Mahal, Presiding Judicial Member, Kiran Sibal, Member
SBI Life Insurance Co. Ltd. – Appellant
Versus
Manjit Kaur – Respondent
First Appeal No.461 of 2023
For the Appellants/Petitioners: Rajneesh Malhotra
For the Respondents: Vishal Gupta
An insurance claim cannot be repudiated on grounds of pre-existing disease without cogent medical evidence of intentional suppression, and benefits must be strictly calculated according to the specific terms and conditions of the insurance contract rather than extraneously perceived liabilities.
Headnote:(A) Consumer Protection Act, 1986 - Section 15 - Appeal against District Forum order - Repudiation of life insurance claim on grounds of pre-existing disease and non-disclosure - Absence of cogent medical evidence to prove intentional suppression - Necessity of adhering to policy terms regarding death benefits.
Facts of the case:
The deceased insured had availed a personal loan and obtained an insurance policy. Upon his death, his legal heirs sought payment of the outstanding loan balance from the insurer based on the policy. The insurer repudiated the claim alleging suppression of material health facts (cirrhosis/alcoholism). The District Commission allowed the complaint, directing the insurer to pay the outstanding loan amount as compensation.
Findings of Court:
Evidence failed to establish the deceased knowingly suppressed pre-existing diseases. However, the policy in question was found to be a unit-linked investment plan, not a loan-redemption insurance product. Accordingly, the court modified the lower commission's order, directing the insurer to settle the claim as per the specific death benefit clauses of the policy.
Issues: Whether the insurer was justified in repudiating the death claim based on alleged concealment of pre-existing diseases and whether the policy terms covered the outstanding loan liability.
Ratio Decidendi: Where no medical documentation is produced to establish the insured's prior knowledge of a chronic ailment, mere mention of an antecedent cause of death in a certificate is insufficient to prove fraud or intentional suppression. Further, liability must be determined strictly according to the death benefit provisions of the specific policy contract, regardless of the complainant's expectation of loan coverage.
Result: Appeal partly allowed in terms of the policy death benefit clauses.
| Table of Content |
|---|
| 1. procedural history and factual background of the insurance claim dispute. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8) |
| 2. assessment of evidence regarding pre-existing diseases and medical suppression in insurance contracts. (Para 9 , 10 , 11 , 12 , 13 , 14) |
| 3. interpretation of policy terms and conditions to determine the liability for death benefits. (Para 15 , 16 , 17 , 18 , 19 , 20) |
ADDITIONAL BENCH
First Appeal under Section 15 of the Consumer Protection Act, 1986 against the order dated 15.06.2023 of the District Consumer Disputes Redressal Commission, Tarn Taran.
HARINDERPAL SINGH MAHAL, PRESIDING JUDICIAL MEMBER
This appeal has been preferred by the appellant/opposite party No.2 – SBI Life Insurance Co. Ltd. against the order dated 15.06.2023 passed by District Consumer Disputes Redressal Commission, Tarn Taran, whereby the complaint filed by the respondents/complainants under the Consumer Protection Act, was partly allowed by passing the following order:
“11) In view of above discussion, we partly allow the present complaint and the opposite party No.2 is directed to make the payment of entire balance loan amount of Rs.2,86,496/- to the opposite party No.1. Amount, if any, deducted by the opposite party No.1 in the shape of installments of above said loan after the death of Gurmej Singh either to refund to the complainant or adjusted in the loan account. The complainant has been harassed by the opposite party No.2 unnecessarily for a long time. The complainant is also entitled to Rs.15,000/- as compensation on account of harassment and mental agony and 10,000/- as litigation expenses. The opposite party No.2 is directed to comply with the order within one month from the date of receipt of copy of the order, failing which the complainant is entitled to interest @9% per annum, on the awarded amount, from the date of complaint till its realization. The main complaint has been disposed of, as such, application if any pending stands disposed of.”
It would be apposite to mention that hereinafter the parties will be referred, as have been arrayed before the District Commission.
2. Brief facts of the complaint are that Sh.Gurmej Singh son of Swaran Singh was serving in PSPCL and availed the loan facility of Rs.3,00,000/- from opposite party No.1. Along with that he also availed an Insurance Policy, vide Policy No.SBILF50309201727903993856 regarding the said loan, after paying the premium of Rs.25,000/- on 06.10.2017 from his Bank account No.55082309990. It is submitted that opposite party No.1 used to debit monthly installment of Rs.11,000/- each per month from the Bank account of Gurmej Singh but even after the death of the loanee, the opposite party No.1 wrongly debited a sum of Rs.11,000/- on 06.02.2018, Rs.11,000/- on 28.02.2018, Rs.11,000/- on 31.03.2017 and Rs.4,700/- on 01.01.2019 in the Bank account of deceased Gurmej Singh. In March, 2019, the complainants received a legal notice dated 13.03.2019 from opposite party No.1, they were asked to make the outstanding amount of Rs.2,86,496/- along with interest upto 12.03.2019 within a period of 15 days. Upon which, they approached the opposite parties with a request that Sh.Gurmej Singh availed an Insurance facility as per which the outstanding loan amount was to be paid by opposite party No.2 to opposite party No.1, in case of death of loanee. Even the complainants provided the requisite documents to the opposite parties but they did not put ears to the requests of the complainants and have been putting off the matter on one pretext or the other. This act and conduct of the opposite parties amount to deficiency in service and unfair trade practice, which compelled the complainants to approach the District Commission seeking following reliefs:
i) to make the payment of entire balance loan amount of Rs.2,86,496/- upto 12.03.2019 along with interst upto date to opposite party No.1 and opposite party No.1 may also be directed to refund/return back the amount of loan i
