While refusing to accept IndiaFirst Life Insurance Company Ltd's contention that the deceased life assured (DLA) suppressed pre-existing diseases while obtaining the life insurance policy, the national consumer disputes redressal commission (NCDRC) directed the insurer to pay Rs9.75 lakh for repaying home loan instalments.
In
an order last month, the NCDRC bench of air vice-marshal (AVM) J Rajendra (retd) (presiding member) says, "The Andhra Pradesh state consumer disputes redressal commission, after due consideration of the pleadings and arguments, determined that no intervention is warranted on the Vishakhapatnam district consumer disputes redressal forum's order. This was primarily because the grounds relied upon in the repudiation letter are not supported by leading any cogent and convincing evidence with regard to the life assured suppressed the pre-existing diseases and obtained the policy."
However, the bench modified the order passed by the district forum to set aside Rs10,000 compensation, stating that multiple compensations for singular deficiency are not justifiable.
Korada Kasulamma's husband had obtained a home loan from Andhra Bank on 28 August 2011. As suggested by the Bank, he also bought an insurance policy from IndiaFirst Life Insurance Company, for which Andhra Bank paid the premium on his behalf. When he died on 4 July 2014, his wife Kasulamma filed an insurance claim with the insurer. However, IndiaFirst Life Insurance rejected the claim, citing the concealment of a pre-existing disease.
Ms Kasulamma then filed a complaint before the district forum. While allowing the complaint, the district forum directed IndiaFirst Life Insurance to pay Rs9.75 lakh towards loan-due instalments directly in the home loan account of Ms Kasulamma's husband. It also asked the insurer to pay Rs10,000 compensation and Rs2,500 litigation cost to Ms Kasulamma.
Aggrieved by the order, IndiaFirst Life Insurance filed an appeal before the state commission. The state commission reiterated that the burden lies on the insurer to establish that the life assured suppressed the pre-existing disease and induced it to issue the insurance policy.
Tearing into the medical documents submitted by IndiaFirst Life Insurance, the state commission says, "Exhibit B-5 (discharge summary) and B-6 (health card issued under the Aarogya Sree scheme) are not the authenticated documents. Viewed from any angle, no credence or credibility can be attached to exhibits B-5 and B-6. There is no material much less cogent and convincing material, to establish the stand taken by the insurer. In the light of the foregoing discussion, we have no hesitation to hold that the insurance company failed to establish that the life assured suppressed the pre-existing disease and obtained the policy. The insurer repudiated the claim of the complainant without any foundation or basis. The act done by the insurer amounts to 'deficiency' in service as contemplated under Section 2(1)(g) of the Consumer Protection Act."
When the matter reached NCDRC, the bench noted that despite serving notices, nobody appeared for Ms Kasulamma and thus, she was placed as ex-parte. Also, Andhra Bank is a proforma party and has no liability in the case, the bench stated.
After hearing arguments by the counsels for IndiaFirst Life Insurance, AVM Rajendra observed that in the case, there are concurrent findings of the facts, and the revisional jurisdiction of NCDRC is limited.
"After due consideration of the entire material, I do not find any illegality, material irregularity or jurisdictional error in the order passed by the state commission warranting our interference in revisional jurisdiction under the Act," he says, while dismissing the revision petition filed by IndiaFirst Life Insurance.
(Revision Petition No627 of 2020 Date: 16 February 2024)
