MAX NEW YORK LIFE INSURANCE CO. LTD. vs GURMEET KAUR W/o Late Mr Jalaur Singh

This revision petition has been filed under section 21(b) of the Consumer Protection Act, 1986, against the impugned order dated 29.03.2012, passed by the Punjab State Consumer Disputes Redressal Commission, Chandigarh (hereinafter referred to as "the State Commission") in First Appeal No. 49/2007, Max New York Life Insurance Co. Ltd. vs. Gurmeet Kaur, vide which, while dismissing the appeal, the order passed by the District Consumer Disputes Redressal Forum, Sangrur, dated 06.12.2006, in Consumer Complaint No. 303 dated 30.05.2006, filed by the complainant Gurmeet Kaur, allowing the said complaint, was upheld.

Briefly stated, the facts of the case are that Gurmeet Kaur filed the consumer complaint in question before the District Forum, saying that her late husband Jalaur Singh purchased insurance policy from the opposite party (OP), Max New York Life Insurance Co. Ltd. called Endow20, PAB & DD amounting to Rs. 1,52,728.00, Rs. 1 lakh and Rs. 1 lakh respectively on 22.03.2004 and nominated the complainant for the insured amount. The said Jalaur Singh died on 26.07.2004 at Dayanand Medical College & Hospital, Ludhiana due to liver damage. At the time of obtaining the policy, the deceased did not suffer from any disease. He was examined by the approved doctors of the OP Insurance Company as well, and found to be not suffering from any health problems. The said Jalaur Singh was admitted in DMC Ludhiana on 22.06.2004, when he suffered from fever, cough, lungs problem etc. It was found that his liver was in damaged condition. He underwent treatment at the said hospital, but ultimately died on 26.07.2004. The complainant filed claim with the OP Insurance Company in terms of the policy in question, but the same was repudiated by them vide letter dated 20.09.2005, on grounds of material medical non-disclosure. The complainant filed the consumer complaint in question, seeking directions to the OP to pay an amount of Rs. 3,52,728.00 alongwith interest w.e.f. the date of death i.e. 26.07.2004 till realisation alongwith Rs. 50,000/- as compensation for mental harassment and Rs. 5,500/- as litigation expenses.

The complaint was resisted by the OP Insurance Company by filing a written statement before the District Forum, in which they stated that material information about the health condition of the insured had been concealed and suppressed by the policy-holder from the OP Insurance Company. There was, therefore, a violation of the terms and conditions of the policy and breach of utmost good faith between the parties. The OPs stated that in response to all 17 questions regarding his health condition, the insured gave the answers as ''NO'', indicating that he was not suffering from any of these medical problems. He specifically stated that he was not suffering from hypertension or high blood pressure. The Insurance Company, acting in good faith, issued a 20 years Endowment Participating Insurance Policy, bearing no. 243679834 on 23.03.2004 for a sum insured of Rs. 1,52,728/- with accrued bonus and with the riders, (1) personal accident benefit and (2) dreaded disease for a sum assured of Rs. 1 lakh each. After the death of the insured, the Insurance Company received the claim documents including the Attending Physician''s Statement in form ''C'' and Hospital Treatment Certificate in form ''D'', in which, it was stated that the deceased suffered from hypertension for the last one year. It was also stated that as per the diagnosis at the Hospital, he was a chronic alcoholic with hypertension, ALD Cirrhosis, ARF, Hepatitis, UGI Bleed, with Cardiorespiratory Arrest''. Since the insured had not disclosed material information about his health condition to the Insurance Company, they repudiated his claim vide their letter dated 20.10.2005, a copy of which is on record. Before that, they had sent another letter dated 06.09.2005 to the complainant, indicating their inclination to deny the death claim due to the non-disclosure of true facts therein.

The District Forum, after taking into account the averments of the parties, allowed the consumer complaint and directed the OP Insurance Company to pay a sum of Rs. 3,52,728/- alongwith interest @ 9% per annum w.e.f. the date of death including the amount on account of accidental death and dreaded disease claimed. Being aggrieved against the order of the District Forum, the OP Insurance Company challenged the same by way of an appeal before the State Commission. The said appeal having been dismissed vide impugned order, the OP Insurance Company is before this Commission by way of the present Revision Petition.

Notice of the Revision Petition was issued to the respondent/complainant, who put in appearance through counsel. The said counsel appeared till hearings held on 09.09.2015, but thereafter, there was no appearance for the respondent. In the interest of justice, notice was issued to the learned counsel for the respondent for appearance on the next date of hearing, but due to her failure to put in appearance despite service, the respondent was proceeded against ex-parte.

At the time of hearing before us, the learned counsel for the petitioner Insurance Company has drawn attention to the Attending Physician''s Statement for death claim on form ''C'' and Hospital Treatment Certificate on form ''D'', stating that as per the information contained therein, the deceased was suffering from hypertension for the last one year. Moreover, the conditions referred in the said documents could not have developed within a short span of about 8 months. The insured died only 3 to 4 months after obtaining the policy in question. It was evident, therefore, that there had been concealment of material information on the part of the insured from the Insurance Company and hence, the claim had been rightly repudiated by the Insurance Company. The learned counsel has drawn attention to the entries made in the proposal form, in which the insured had given answers to all questions as ''no'', indicating that he had not been suffering from any previous disease. The learned counsel further argued that the insured was not entitled to any accidental benefit or dreaded disease benefit at all. The consumer fora below, therefore, had taken an erroneous view in allowing the claim of Rs. 3,52,728/- to the complainant. The learned counsel has also filed his written submissions alongwith copies of the following judgments in support of his arguments:- (1) Mithoo Lal Nayak vs LIC, AIR 1962 SC 814

(2) P.C. Chacko vs. Chairman, LIC & Ors., (2008) 1 SCC 321

(3) Satwant Kaur Sandhu vs. New India Assurance Co. Ltd., (2009) 3 UC 1718

The learned counsel argued that keeping in view the above judgments, the consumer complaint in question deserved to be dismissed.

We have examined the entire material on record and given a thoughtful consideration to the arguments advanced before us.

From the material on record, it is clear that the insured had taken an Endowment Participating Insurance Policy from the OP Insurance Company on 23.03.2004 for a sum insured of Rs. 1,52,728/- with riders of personal accident benefit and dreaded disease for a sum insured of Rs. 1 lakh each. In the grounds of Revision Petition, the petitioner Insurance Company has stated that the sum assured was an amount of Rs. 1,52,728/- only and under no circumstances, the personal accident benefit or dreaded disease rider clause of Rs. 1 lakh each could come into play in the present case. A perusal of the orders passed by the District Forum as well as the State Commission reveals that they have not given any justification as to how the personal accident benefit or dreaded disease rider could be awarded to the complainant. The orders passed by these consumer fora are, therefore, perverse in the eyes of law, as these fora failed to take into account this material aspect, regarding the policy in question.

The main issue for consideration in the matter is whether there has been any concealment or non-disclosure of material information on the part of the insured from the Insurance Company. It has been stated by the complainant that the deceased had no health problem at the time of obtaining the insurance policy in question. There is no evidence on record to belie the version of the complainant. It is true that as stated in the medical documents after his death, he was reported to be a chronic alcoholic with hypertension, ALD, Cirrhosis etc., but there is no material to establish that any of these conditions were occurring at the time of issuance of the policy. It has also been stated in the said documents that the deceased was suffering from hypertension for the last one year. However, any basis for mentioning this period of one year, has not been indicated. The basic issue for consideration is whether at the time of submitting the proposal form, the deceased was aware that he was suffering from hypertension. In the absence of any evidence to the contrary, it cannot be stated that there was deliberate non-disclosure of information on this issue on the part of the deceased.

A perusal of the proposal form indicates that the insured disclosed in the same that he used to take 100 ml of alcohol per week for the last 15 years. It has not been clarified anywhere if such an intake shall qualify him to be called a ''chronic alcoholic''. In any case, the deceased disclosed the fact about his intake of alcohol in the proposal form and hence, it was upon the Insurance Company to decide whether to issue the policy to him or not. The insured could not be accused of providing any misinformation.

From the facts and circumstances of the case, it is, therefore, evident that the allegation of concealment of material information about the health condition on the part of the deceased is not established from record. The judgements cited by the learned counsel for the petitioner do not have any application in the present case, as the charge of suppression of material information from the Insurance Company does not stand proved.

In the given facts of the case, it is abundantly clear, therefore, that the complainant is entitled only to get the sum insured under the policy i.e. Rs. 1,52,728/- and not the sum insured under the riders i.e. accident benefit cover and dreaded disease. The orders passed by the consumer fora below are, therefore, modified to say that the complainant shall be entitled for a sum of Rs. 1,52,728/- from the Insurance Company alongwith interest @ 9% per annum from the date of death till realisation. The said payment shall be made by the Insurance Company within a period of four weeks from today. The present Revision Petition is, therefore, partly allowed and the orders of the consumer fora below are modified as stated above. There shall be no order as to costs.