ICICI Lombard Gic Ltd. vs Neema Saini & Ors.

< > two Appeals, First Appeal No. 509 / 2016 and First Appeal No. 516 / 2020, have been filed by ICICI Lombard General Insurance Company Ltd. (hereinafter referred to as the Appellant Insurance Company) and ICICI Bank Limited (hereinafter referred to as the Appellant ICICI Bank) respectively against the Order dated 26.06.2020 passed by the State Consumer Disputes Redressal Commission Delhi (hereinafter to be referred to as "State Commission"), whereby the Complaint filed by Ms. Neema Saini (hereinafter referred to as the Complainant) was allowed and the Appellant Insurance Company and the Appellant ICICI Bank were directed to allow the claim preferred by the Complainant within two months from the date of receiving of the certified copy of the Impugned Order. They were also directed to pay Rs. 25,000/- towards costs for causing harassment to the Complainant.

Brief facts of the case as narrated in the Complaint are that the Complainant's husband Sh. Dharamvir Saini obtained a Home Loan No. LBDEL00002032769 for Rs. 75,00,000/- from the Appellant ICICI Bank.It was alleged that after insisting by the Appellant ICICI Bank, her husband obtained Insurance Cover for Rs. 75,00,000/- from the Appellant Insurance Company to safeguard the Housing Loan and it was told that in the event of his unfortunate death, his legal heirs would not be required to pay any loan and the entire loan would be paid off from the amount received from the Appellant Insurance Company.The Appellant ICICI Bank charged a sum of Rs. 3,43,980/- towards premium of the said Insurance Policy which was adjusted in the Home Loan and it was required to be paid by Shri Dharamvir Saini alongwith EMI of Home Loan.It was alleged that Insurance Policy was collected by the Appellant ICICI Bank and was not issued to the Complainant on the ground that he may cancel it in which event the loan would remain unrecovered.After two years from obtaining the Policy, i.e., on 20.10.2015 Shri Dharamvir Saini had fallen sick and was admitted in Max Healthcare Super Specialty Hospital.He could not survive and expired on 25.10.2015 due to septic shock with MODS.The Hospital issued the death summary.The Appellant ICICI Bank asked the Complainant to sign some documents for lodging claim with the Appellant Insurance Company.The Complainant received letter dated 23.11.2015 from the Appellant Insurance Company for submission of relevant documents, which were duly submitted.Despite repeated visits to the Appellant Insurance Company and the Appellant ICICI Bank, claim was not processed.Ultimately, the Appellant Insurance Company vide letter dated 07.03.2016 repudiated the claim on the ground that the claim do not fall within the purview of terms and conditions of the Insurance Policy.Alleging deficiency of service and Unfair Trade Practice on the part of the Appellant Insurance Company and the Appellant ICICI Bank for not providing Insurance Policy and repudiating the genuine claim, the Complainant has filed a Consumer Complaint before the State Commission seeking following directions to the Opposite Parties:-

a) To pay Rs. 75,00,000/- to the Complainant alongwith interest 18% per annum from the date of death of Sh. Dharamvir Saini, i.e., 25.10.2015 to till realization;

b) To pay Rs. 20 lakh as compensation against mental agony pain suffered by the Complainant;

c) To award litigation cost of Rs. 1,00,000/- to the Complainant.

The Appellant Insurance Company contested the Complaint by filing its Written Statement and denied the contents of the Complaint suffering from factual inconsistency and submitted that the Insured suppressed the material information regarding pre-existing disease due to which they were not liable to approve the claim of the Complainant.The Appellant ICICI Bank also contested the Complaint and raised preliminary objections that the Complainant is not a Consumer; Complaint is barred by limitation; no cause of action has been disclosed against them, therefore, they should be discharged from the array of Parties and complicated questions of facts and law are involved in the present Complaint, therefore, the same cannot be adjudicated by the Consumer Commission.

After hearing learned Counsels for the Complainant and the Appellant Insurance Company through video conferencing and perusal of material on record, the State Commission rejected the plea regarding the Complainant not a consumer in the absence of any cogent or tangible evidence proving that the Complainant is not a consumer.The State Commission held that the Complaint is filed within time as the cause of action in the matter arose on 25.10.2015, the date on which the Insured passed away and the Complaint had been filed in the year 2016.Relying upon the Judgment of 'Hon'ble Supreme Court in "J. J. Merchant versus Shrinath Chaturvedi [(2002) 6 SCC 635], the State Commission rejected the plea of Appellants that the complicated question of facts and law cannot be adjudicated by the Consumer Commission.The State Commission allowed the Complaint in afore-noted terms by observing as under:-

"19. The fact that the onus to prove that insured was suffering from pre-existing disease is on the Insurance Company is fortified by the orders of the Hon'ble NCDRC in the matter of LIC of India versus Priya Sharma and ors as reported in IV [2012] CPJ 646 (NC). Secondly, if the policy was issued by the insurance company without proper verification, they cannot be liable to repudiate the claim at the later stage, as per the view held by the Hon'ble NCDRC in the matter of Oriental Insurance Co. Ltd. versus Dipender Kaur as reported in I [2016] CPJ 603 (NC). It is trite law that the word existing means disease which exists at the time of taking the policy. Policy in the given case was obtained in 2013 but ailment visited the deceased in 2015.

Secondly an averment has been made by the Complainant that the policy obtained by the deceased was never served. This fact has not effectively denied. No evidence has been led by the OP-1 disputing this fact, which means the averments of the complainant to this effect are to be accepted.

The Hon'ble Apex Court in the matter of Modern Insulator Ltd. Versus Oriental Insurance Co. Ltd. as reported in (2000) 2 SCC 734 is pleased to hold that insurance claim has to be allowed in the event terms and conditions of the policy were not furnished to him."

Aggrieved by the Order dated 26.06.2020 passed by the State Commission, both the Opposite Parties, i.e., ICICI Lombard General Insurance Company Ltd. and ICICI Bank Limited have filed two separate Appeals being First Appeal No. 509 / 2020 and First Appeal No. 516 / 2020 respectively, before this Commission.

Since both the Appeals arise of common Order and facts and question of law involved in the Appeals are similar, these Appeals are being disposed of by this common Order.

Ms. Apoorva Saxena, the learned Counsel appearing on behalf of the Appellant Insurance Company submitted that the State Commission arbitrarily allowed the Complaint by ignoring the fact that the claim of the Complainant falls within exclusion clause as the insured/deceased has suppressed the material fact about his pre-existing disease and due to non-disclosure of pre-existing disease they have rightly repudiated the claim of the Complainant and, therefore, there is no deficiency in service on their part and prayed that the Impugned Order dated 26.06.2020 passed by the State Commission be set aside and the Complaint be dismissed.

Mr. Hemant Gupta, the learned Counsel appearing on behalf of the Appellant ICICI Bank submitted that they had filed separate Written Version and were represented through a separate Counsel throughout the Proceedings before the State Commission.In March 2020 the regular functioning of the Hon'ble State Commission was suspended due to Covid 19 pandemic and in June 2020, the State Commission started hearing through video conferencing with the prior consent of the Parties.The Hon'ble State Commission heard the final arguments and reserved the Order without giving any information or opportunity to them to present their case, which is against the principle of natural justice.He further submitted that no cause of action has been arisen against the Appellant ICICI Bank and they have been wrongly arrayed in the Memo of Parties by the Complainant and prayed that the Impugned Order dated 26.06.2020 passed by the State Commission be quashed and set aside.

Per contra, Mr. Deepak Jain, learned Counsel appearing on behalf of the Complainant Ms. Neema Saini, supported the order passed by the State Commission as according to him the State Commission had passed a well-reasoned order which is based on a correct and rightful appreciation of evidence and material available on record and does not call for any interference. He, however, in all fairness submitted that the learned Counsel appearing for the Appellant ICICI Bank was not given sufficient notice for hearing through video conferencing before the State Commission.

We have heard the learned Counsel for the Parties, perused the Impugned Order passed by the State Commission, the Complaint, the Written Statement and all the documents on Record.

In Paragraphs 16, 17 and 18 of the Memo of Appeal, the Appellant ICICI Bank had stated as follows:-

"16. That rejoinder/replication was filed by the Complainant thereby countering the averments of the Opposite Parties in the replies. The OP-2 / Appellant Bank filed its written arguments on 08.03.2017 before the Hon'ble State Commission and since then the matter was pending for final arguments but every time the Hon'ble State Commission either on its own motion or at the request of the other parties adjourned the matter for exploring settlement.

That in March, 2020, the regular functioning of the Hon'ble State Commission was suspended due to Covid-19 pandemic and in June 2020 only, the State Commission could start hearing about 2-3 matters a day with the prior consent of the parties through Video Conferencing and for which a circular dated 19.06.2020 was issued by the ld. Registrar, State Commission, Delhi. It is worth noting that as per the said circular dated 19.06.2020, prior consent of parties was very much required for the purpose of taking up case for argument purpose.

That however, on 17.06.2020, the Hon'ble State Commission fixed the matter for final hearing and the orders were reserved without prior informing or taking consent of the Appellant bank/OP-2 therein for final hearing in violation of the principles of natural justice. Even the link for video conference which is the basic and most fundamental step for initiation of video conferencing was never shared with the appellant's counsel. The Hon'ble State Commission even did not take pains to check the previous order sheets in which the appearance of the appellant's counsel was always recorded separately but in a cyclostyle manner marked the appearance of the counsel for OP1 / Respondent No. 2 herein for all the OPs (including the appellant herein) and passed the impugned judgment. The Hon'ble State Commission vide judgment dated 26.06.2020 was pleased to allow the Complaint and directed the Opposite Parties to allow the claim preferred by the Complainant / Respondent No. 1 herein within a period of two months from the date of receipt of certified copy of the impugned judgment."

Mr. Deepak Jain, learned Counsel appearing for the Complainant, Respondent herein, had fairly stated that sufficient notice for hearing through video conferencing was not given to the learned Counsel appearing for the Appellant ICICI Bank before the State Commission.

In view of the statement given by Mr. Deepak Jain, learned Counsel for the Complainant/Respondent, we deem it appropriate and in the interest of Justice that the Impugned Order dated 26.06.2016 passed by the State Commission is liable to be set aside and the Complaint is to be decided afresh in accordance with law.

As both the Appeals have been decided on a short issue and in concurrence with learned counsel for both the Parties, we have not gone into the merits of the Complaint.

Consequently, we set aside the Order dated 26.06.2020 passed by the State Commission in Complaint No. 512 / 2016 and restore the Complaint to its original number before the State Commission.We request the State Commission to decide the Complaint expeditiously in accordance with law preferably, if possible, within three months from today.

As the Impugned Order dated 26.06.2020 passed by the State Commission has been set aside, the Appeal preferred by the Appellant Insurance Company is also liable to be allowed because the Appellant Insurance Company and the Appellant ICICI Bank had been arrayed as Opposite Party No. 1 & 2 respectively in the Complaint before the State Commission.

The Registry is directed to refund the statutory amount deposited by each of the Appellants alongwith accrued interest, if any, to the respective Appellants within two weeks.

Keeping in view the facts and circumstances of the case, Parties shall their own costs.