Insurance Claim Dispute: National Commission Upholds Concurrent Orders, Emphasizes Jurisdictional Limits.


14 October 2024 Consumer Law >> Civil & Consumer Law  

The National Consumer Disputes Redressal Commission (NCDRC) recently in the matter of M/s. Bajaj Allianz Life Insurance Company Limited Through Chairman/Md Mrs. Anju Kumari v/s Anju Kumari., dismissed a Revision Petition filed by an insurance company, reaffirming the concurrent orders of the District Forum and the State Commission. The case centered on a rejected insurance claim filed by the widow of the deceased, Sunil Kumar, whose claim was denied due to alleged non-disclosure of pre-existing medical conditions.

The crux of the dispute originated from a loan taken by the late Sunil Kumar in 2007. During the loan process, an insurance policy was procured on his behalf, without his explicit prior knowledge, by the finance company. Following his death, the insurance company rejected the claim, citing that Sunil Kumar had failed to disclose his history of diabetes and heart problems, including a coronary bypass surgery, in the insurance proposal form.


 

 

The District Forum ruled in favor of the complainant, directing the insurance company to pay the insured amount, along with interest and compensation for mental agony and litigation costs. The State Commission upheld this decision, leading the insurance company to file a Revision Petition before the NCDRC.

The insurance company argued that Sunil Kumar had violated the principle of "uberrima fides" (utmost good faith) by suppressing his medical history. However, the complainant's counsel countered this argument, citing Supreme Court and NCDRC precedents that require a direct link between the undisclosed ailment and the cause of death for claim rejection. They also emphasized the insurance company's failure to provide concrete medical evidence or examine relevant witnesses to substantiate their claims.

A significant point of contention arose regarding the identity of the deceased. The NCDRC highlighted discrepancies in the addresses and father's names between the insurance proposal form and the hospital discharge summary, casting doubt on whether the insured and the patient were the same person. The Commission criticized the insurance company for not examining the investigator or providing a doctor's testimony to clarify this discrepancy.

Furthermore, the NCDRC reiterated the limited scope of its revisional jurisdiction, emphasizing that it should only intervene when there is a clear jurisdictional error or material irregularity in the lower fora's orders. The Commission cited Supreme Court rulings, including Rajiv Shukla Vs. Gold Rush Sales and Services Ltd. & Anr. and Mrs. Rubi (Chandra) Dutta Vs. M/s United India Insurance Co. Ltd., which underscore the importance of upholding concurrent findings of fact unless there is a patent jurisdictional error.

In its decision, the NCDRC found no grounds to interfere with the concurrent decisions of the District Forum and the State Commission. The Revision Petition was dismissed, with parties directed to bear their own costs. This ruling reinforces the principle that insurance companies must provide substantial evidence to justify claim rejection and that consumer protection fora should exercise their revisional powers judiciously.


Section 21, Consumer Protection Act - 1986  

Consumer Protection Act, 1986