Observing that insurance claim repudiation citing evidence of pre-existing diseases which are also not related to the cause of death cannot be sustained, the national consumer disputes redressal commission (NCDRC) directed Bharti Axa Life Insurance Co Ltd to repay the home loan under the terms of the insurance policy.
In
an order last week, the NCDRC bench of Subhash Chandra (presiding member) and Dr Sadhna Shanker (member) said, "In the absence of admissible documentary evidence being brought on record by the appellant, the grounds of repudiation citing evidence of pre-existing diseases which are also not related to the cause of death cannot be sustained. The contention of the appellant (Bharti Axa Life Insurance) that there was suppression of material information has also been rightly held by the state commission to be unsustainable. We, therefore, do not find any reason that warrants interference to disturb the finding of the state commission."
In its order on 24 December 2021, the Uttar Pradesh state consumer disputes redressal commission had directed Bharti Axa Life Insurance to repay the loan under the terms of the insurance policy within two months along with interest. It also directed PNB Housing Finance Ltd to provide a no-dues certificate on the home loan. Bharti Axa Life Insurance challenged the order before NDCRC.
The case is related to a mortgage home loan of Rs35.58 lakh obtained by Meerut-based Hemant Mishra. To secure the loan, he was issued a Bharti Axa Life loan secure and a Bharti Axa Life group accidental death benefit rider, a group insurance policy, by the insurer. The policies were issued on 31 August 2016 for 84 months.
On 15 December 2016, Mr Mishra, the deceased life assured (DLA), expired. Bharti Axa Life Insurance repudiated the insurance claim filed by his wife and heirs on 10 March 2017 based on an enquiry conducted through an investigative agency, Probe India. The investigative agency found that the DLA had been admitted in May 2015 to Metro Hospital and Heart Institute for hypertension, coronary heart disease, acute coronary syndrome, inferior wall myocardial infarction and cerebra-vascular accident. In view of the incorrect disclosure of these diseases in the proposal form, Bharti Axa Life Insurance did not consider the claim for insurance.
Madhu Mishra, the wife of Mr Mishra and her two children, approached the state commission which ruled in their favour.
Aggrieved by the state commission order, Bharti Axa Life Insurance filed its first appeal before NCDRC. It contended that the cause of death had been mentioned 'cardio respiratory arrest' as the immediate cause of death and 'oesophagal cancer (CA oesophagus)' as the secondary cause and the former had a direct nexus with the diseases for which the DLA was hospitalised in May 2015. "Mr Mishra, the DLA had violated the principle of uberrimae fidei or utmost good faith and not disclosed full details at the time of obtaining the policy," it argued.
The counsel for Ms Mishra contended that the insurer had failed to prove that Mr Mishra was treated in 2015 at the Metro Hospital and Heart Institute for the same disease alleged in the 10 March 2017 letter of the claim repudiation. The counsel argued that the appeal was liable to fail on the ground that the certificate of the treating doctor brought on record by Bharti Axa Life Insurance clearly indicated that Mr Mishra was not suffering from diabetes, hypertension, angina, ischemic heart disease (IHD) or coronary artery disease (CAD), lung disease or any other disease except cancer. "...the cause of death was cancer and not the diseases for which the claim was repudiated and hence the appeal was not maintainable and liable to be dismissed."
The NCDRC bench observed that the case of Ms Mishra is that the evidence submitted by the insurer is not admissible as the documents are only photo copies and are not supported by affidavits. It says, "The state commission has come to the same finding and held that the DLA cannot be held to have misrepresented or suppressed material information at the time of the policy proposal. Therefore, it has held that the repudiation on the grounds of suppression of information regarding pre-existing diseases, which renders the policy void, cannot be accepted. It has also, therefore, held that the cause of death as per the death certificate should have been considered by Bharti Axa Life Insurance and the claim allowed since Mr Mishra expired due to cancer of the oesophagus leading to cardiorespiratory failure."
While upholding the state commission's order, NCDRC dismissed the appeal, saying it 'lack merits'.
(First Appeal No291 of 2022 Date: 2 September 2024)
