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Judgment
Late Smt. Truptiban Shah, wife of the complainant took a car loan of Rs.7,04,000/- from Kotak Mahindra Prime Ltd. petitioner in R.P. No.2598 of 2015 in the year 2007. She thereafter took another loan of Rs.2,53,884/- from the aforesaid company. Both the loans were payable in instalments. The case of the complainant is that the life of late Smt. Truptiban Shah was insured by the OPs, namely, Kotak Mahindra Prime Ltd. (hereinafter referred to as lender) and Kotak Mahindra Old Mutual Life Insurance Ltd. (hereinafter referred to as insurer). Smt. Truptiban having expired on 7.8.2008, a claim was lodged by the complainant for payment in terms of the insurance policy taken on her life. Vide letter dated 23.1.2009, the death claim was repudiated by the Kotak Mahindra Old Mutual Life Insurance Ltd. on the following grounds:- As per Clause 3 of the said Policy Contract titled ''Cover'', cover shall be subject to the person being in good health and duly completing and submitting the Evidence of Good Health. Here, the member had signed Declaration of Good Health (DOGH) on January 29, 2008. The Cytology report from the Gujarat Cancer & Research Instituted dated December 26, 2007 reveals that the member was diagnosed with Follicular Lymphoma. The Cytology report dated December 16, 2007 from Dr. Ilesh Safi Pathology Laboratory provided the conclusion as "suggestive of Non Hodgkin''s Lymphoma - Follicular Cell Type".
The Bone Marrow examination report of Gujarat Cancer and Research Institute dated 28.12.2007 also states the diagnosis as Acute Myeloid Leukemia. Member was hospitalized on December 2007 and January 2008 for blood transfusion in view of Acute Myeloid Leukemia. Member was under continuous follow up through pathological blood investigations from December 2007 onwards. Member was diagnosed with Acute Myeloid Leukemia on December 2007. The cause of death certificate received from Dr. Kirit Shah confirms that the member died due to Acute Myeloid Leukemia and Hepatitis B. From the above it is evident that member was a known case of Follicular Lymphoma/ Acute Myeloid Leukemia (Blood Cancer) since December 2007. Declaration of Good Health (DOGH) was signed on January 29, 2008 and thus it is evident that member was suffering from cancer (Follicular Lymphoma/ Acute Myeloid Leukemia) before signing the DOGH and in spite of having the complete information of the medical condition, intentionally withheld the material information from the Company and opted not to disclose the true and correct facts in the ''Declaration of good health'' certificate despite there been specific questions asked in the ''Declaration of good health'' certificate despite there been specific questions asked in the ''Declaration of good health'' certificate.
As the material information, Cancer and Previous hospitalization details was not disclosed by the member at the point of signing the Declaration of Good Health (DOGH), the Company was not able to correctly assess the risk that it was asked to undertake under the said proposal. Had the member disclosed the above facts, then the Company would not have accepted the proposal for insurance at that point of time having regards to point No.1 of Declaration of Good Health (DOGH). In view of the cited facts, we are unable to consider the said claim on account of non-disclosure of material information. We hope you would appreciate the fact that we have to consider the interest of policyholders at large and therefore we can admit only those claims that satisfy the terms and conditions specified in the policy contract."
Being aggrieved from the rejection of the claim, the complainant approached the concerned District Forum by way of a complaint impleading both the lender as well as the borrower as the OPs and seeking the following relief:- " A) The Hon''ble Forum be pleased to direct the opponent no.2 to pay Rs.2,66,220/- to opp. No.1, i.e., the balance loan amount.
B) The Hon''ble forum be pleased to direct the opponents to pay back the installments with 12% interest from the death of Truptiben, which are paid to opponent no.1, by the complainant after the death of Truptiben as complainant is not liable to pay the balance installments after the death of Truptiben.
C) Direct the Opponents to pay Rs.50000/- as compensation for mental stress and strain suffered by complainant.
D) Direct the opponents to pay Rs.25,000/- by way of cost for filing this complaint."
Both the parties filed their respective reply opposing the complaint. It was stated in the reply that the complainant had suppressed material facts in the complaint. It was further stated that the lender had not insured the life of the borrower and was not liable to make any payment to the complainant.
In its reply, the insurer inter alia stated that it was loan amount availed by the deceased under loan agreement No.4432673 which was covered by the certificate of insurance and that the deceased had submitted a declaration of good health dated 29.1.2008. It was expressly pleaded in the said reply that the life of the deceased was covered only in respect of loan No.4432673 and not in respect of the previous loan No.3685282. It was stated that on scrutiny of the claim form and other documents, it was revealed that the deceased had died on account of Cardio Respiratory failure due to Hepatitis and acute Myeloid Leukemia for which she had been taking treatment. It was claimed that the deceased was already suffering from the said illness when the declaration of good health was submitted by her. Reliance was placed by the Insurance Co. upon Cytology report from Gujarat Cancer & Research Institute dated 26.12.2007 as well as Cytology report dated 16.12.2007 from Dr. Ilash Safi Pathology Laboratory reporting "Non-Hodgkin''s Lymphoma - Follicular Cell Type". It was also stated in the reply that Bone marrow examination report of Gujarat Cancer & Research Institute had confirmed diagnosis as acute Myeloid Leukemia. It was informed in the said reply that the deceased was hospitalized in December 2007 as well as in January 2008 for blood transfusion in view of her suffering from acute Leukemia. The copies of above-referred record were annexed to the reply filed by the Insurance Co. along with a copy of the declaration dated 29.1.2008.
In his rejoinder, the complainant inter alia stated that as per his knowledge, the declaration of 29.1.2008 was signed by his wife at the time of taking first loan and not on 29.1.2008. The plea taken in the rejoinder, therefore, appears to be that the declaration was signed by the deceased at the time of taking the first loan when she was not suffering from cancer nor had she been hospitalized by that time.
Vide its order dated 15.10.2011, the District Forum dismissed the complaint holding that the deceased had suppressed a material fact with respect to the state of her health by giving a false declaration on 29.1.2008.
Being aggrieved from the order of the District Forum, the complainant approached the concerned State Commission by way of an appeal. Vide impugned order 13.3.2015, the State Commission allowed the appeal and directed both the opposite parties in the complaint, i.e., the lender as well as the insurer to pay a sum of Rs.2,66,220/- to the complainant along with interest on that amount @ 9% p.a. from the date of the complaint, compensation for mental harassment quantified at Rs.5,000/- and the cost of litigation quantified at Rs.2,000/-. Being aggrieved from the order of the State Commission, the insurer and the lender have filed these two separate revision petitions.
It is not in dispute that the declaration of good health of the deceased bears her signature. The only disputed question is as to whether it was signed by her on 29.1.2008 as is claimed by the insurer and the lender or it was signed by her at the time of taking the first claim as is claimed by the complainant.
It has also not been disputed before me that the medical record relied upon by the petitioners pertained to late Smt. Truptiban Shah who was suffering from Leukemia in December 2007 onwards. If it is found that the declaration was submitted before that, no case of suppression of material fact would be made out since there is no evidence of the deceased suffering from cancer or any other disease at that time. On the other hand, if it is found that the declaration was submitted by her on 29.1.2008 as is claimed by the insurer and the lender, it would be a case of suppression of material fact since she clearly stated in the said declaration that she was not suffering from cancer and had not been hospitalized for treatment of any of the diseases specified in the declaration, including the cancer.
The complainant himself placed on record of the District Forum, a copy of the insurance certificate of cover issued by the insurer. Loan agreement number mentioned in the aforesaid document is 4432693. Admittedly, the aforesaid number pertains to the second loan taken by the deceased, number of the first loan agreement being 3685282.
A perusal of the aforesaid certificate would show that a group insurance policy was taken by the lender Kotak Mahindra Prime Ltd. from the insurer Kotak Mahindra Old Mutual Life Insurance Ltd. in respect of the loans which it used to give from time to time. The said certificate was valid for the period from 13.5.2005 to 13.5.2006 and was then got renewed on that date.
Obviously, the lender had been filling up the particulars of the borrowers on the certificates, while giving loan to them and handing over the certificate to the borrower. The very fact that loan agreement No.4432693 was written on the certificate of cover leaves no reasonable doubt that the declaration was submitted on 29.1.2008 and not on or before 16.1.2007 when the first loan was taken vide agreement No.3685282. Had the declaration been given on or before 16.1.2007 at the time of grating the loan of Rs.7,04,000/- to the deceased, the loan agreement No.3685282 and not agreement No.4432693 would have been recorded on the certificate of cover. Since the insurance policy covered only the loan granted vide agreement No.4432693, the number of only that agreement was recorded on the certificate of cover. The loan agreement No.4432693 was not even in existence at the time of the first loan was taken on 16.1.2007. Therefore, it cannot be accepted that the declaration was submitted by the deceased at the time of taking the first loan on 16.1.2007 vide loan agreement No.3685282. Therefore, I have absolutely no hesitation in holding that the declaration in question was submitted by the deceased on 29.1.2008 when she took the second loan vide agreement No.4432693. Since the deceased was already suffering from cancer at that time and had also been hospitalized, she made a suppression with respect to a material fact relating to state of her health. Had she disclosed in the declaration that she was suffering from a deadly disease such as Leukemia obviously the insurance cover would not have been granted to her. Since the insurance cover was obtained by suppression of material fact and in fact by making a false representation with respect to the state of health of the deceased, the Insurance Co. was fully justified in repudiating the claim. As far as the lender is concerned, it nowhere comes in the picture at all. Even if the declaration had been given on 16.1.2007, it is only the insurer, i.e. Kotak Mahindra Old Mutual Life Insurance Ltd. which would have been liable to pay the claim to the complainant.
For the reasons stated hereinabove, the revision petitions are allowed. The impugned orders are set aside and the complaint is dismissed with no order as to cost.