JYOTHI MADHAVAN U. Vs. INSURANCE OMBUDSMAN

JUDGEMENT

(1.) The above writ petition is filed challenging Ext.P4 award passed by the 1st respondent and for a declaration that the 1st respondent has pecuniary jurisdiction to entertain and resolve all complaints relating to insurance policies issued by the insurance companies. The petitioner has also sought other consequential reliefs.

(2.) The petitioner's husband died on 11/4/2021 due to Covid. The petitioner's late husband availed a housing loan to the tune of Rs.1,73,00,000.00 in November 2018 from the 4th respondent. In order to secure the aforesaid loan from the 4th respondent, the petitioner's late husband had taken two insurance policies apart from the immovable properties owned by him as security for the loan availed of by him. The two policies were taken by the petitioner's husband as insisted by the 4th respondent as a mandatory condition for granting the loan. For the sole purpose of insurance premium funding, the petitioner's late husband opened an account bearing No.637607046 with the 4 th respondent. The two insurance policies were subscribed by the petitioner's late husband on 30/11/2018. The Policy bearing No.20910176 has a maturity value of Rs.30.00 Lakhs and Policy No.20924808 has a maturity value of Rs.1.40 Crores. The premium amount with regard to Policy No.20910176 was also paid on 30/11/2018 by the 4th respondent directly to the 3rd respondent Insurance Company from the loan account No.637607046. The premium amount of Rs.57,931.00 was paid on 30/11/2018 by the 4th respondent directly to HDFC Life Insurance Company from loan account No.637607046. It is seen from the transaction history of the aforesaid account with the 4th respondent that the EMI has been collected by the 4th respondent from the account of the petitioner's husband till May 2021. Though the policy as per proposal No.20924808 was taken in November 2018, the Insurance Company for reasons best known to them delayed the issue of a policy against this proposal though the premium was collected. It is the contention that if medical examination was a requirement to be fulfilled for the acceptance of the policy proposal and the issue of the policy, it is beyond comprehension as to the insistence for payment of the premium along with the proposal and the rejection of the same after 2 1/2 years and that too after the death of the assured, and when a claim is made for payment of the amount covered by the policy. The petitioner, on 26/5/2021, went to the office of the 3rd respondent and submitted the claim forms with all proofs for policy No.20910176 and also furnished the details about the second policy in respect of proposal No.20924808. It is only at this juncture that the petitioner was informed that the Insurance Company has not issued the second policy even though the factum of acceptance of the premium amount in 2018 was acknowledged. It is an admitted fact that proposal No.20924808 was for the purpose of covering all the housing loans in case of happening of any unforeseen events. Moreover, it is submitted by the counsel for the petitioner that the Insurance Company did not require the fulfillment of any medical examination with respect to policy No.20910176 and both the policies were proposed on the same date and the premium also was accepted by the Insurance Company on the same date. The policies to which the deceased subscribed were not Health Insurance policies and the death of the assured was due to Covid and not due to any other ailments. On 5/6/2021, as requested by the Insurance Company, all the relevant documents with regard to the above-stated two policies were submitted. On 17/6/2021, the Insurance Company issued an online communication to the petitioner stating that, as per the confirmation received by their team, the application relating to the above proposal No.20924808 was withdrawn, since the requirements were not submitted within the time limit and the Insurance Company offered to initiate steps for refunding the premium, based on updated NEFT details and the same will be credited within 9 to 14 working days. The petitioner feeling aggrieved about the conduct of the Insurance Company, sought the intervention of the grievance officer of the 2nd respondent informing about the unwillingness to accept the proposal of the refund of the premium and demanded the assured sum to be credited to the loan account, so that the uncleared liabilities towards the loan availed of by the deceased could be cleared. On 25/6/2021, the 2nd and 3rd respondents rejected the claim made by the petitioner and informed her to approach the Insurance Ombudsman. Thereupon, the petitioner approached the Insurance Ombudsman, Kochi on 23/7/2021. It appears that on receipt of the complaint filed by the petitioner, the Insurance Company has filed a written reply to the complaint. However, a copy of the said reply was never made available to the petitioner. Accordingly, as per Ext.P1 communication to the Registrar of the Insurance Ombudsman, the petitioner requested for a copy of the statement and documents filed by the Insurance Company. As the said statements and documents were not furnished to the petitioner, Exts.P2 & P3 e-mails were sent to the 2 nd respondent Insurance Company. The 1st respondent Ombudsman heard the matter online on 13/9/2021. The Ombudsman by Ext.P4 award dtd. 16/9/2021 found that there was no communication from the Insurance Company regarding any requirement in connection with the policy. It was also found that there was no intimation by the insurer regarding the non-issuance of the second policy and the corporate agent of the HDFC Life themselves have procured the policy while granting the housing loan and that the policy has been assigned to them against the loan as security. Though findings were entered into in favour of the petitioner, the Ombudsman came to the conclusion that the complaint cannot be entertained by the Ombudsman, as the claim under consideration is above Rs.30.00 lakhs and hence, beyond the pecuniary jurisdiction of the Ombudsman and the Ombudsman has no authority to decide on such a complaint. It is aggrieved by Ext.P4 that the petitioner has approached this Court.

(3.) The 2nd and 3rd respondents filed a detailed counter affidavit wherein it is admitted that the petitioner's late husband submitted a proposal for an insurance policy as is evident from Ext.R2(a) proposal form. The learned counsel, based on Ext.R2(a) submitted that the petitioner has deposited the first premium along with the proposal form and in the said proposal form it is specifically mandated that the company will be at risk in pursuance of this proposal for insurance only after the risk under the proposal form is accepted by the company and such acceptance is communicated to the petitioner in writing by the company and further that the company has the right either to accept or reject the proposal without giving reasons thereto. It is also mandated that if the proposal of insurance is not accepted by the company, the aforesaid deposit shall be refunded without interest. The respondents as per Ext.R2(b) letter requested the petitioner's husband to appear for a medical examination, which is mandatory for issuance of the policy under proposal No.20924808, but he did not turn up for the same. Since the petitioner's husband has not satisfactorily furnished the necessary declarations as required by the insurer, including the underwriting requirements, the proposal was not accepted. It is admitted that the 4th respondent has deposited an amount of Rs.57,931.00 with these respondents and these respondents have not appropriated the said amount towards premium. The said amount could be appropriated towards the premium only after medical examination and after determining the premium based on the medical report of the petitioner's husband. The proposal was not considered as the Medical Examination Report was a prerequisite for considering the proposal. The amount of Rs.57,931.00 is still lying in a suspense account and was not adjusted towards the premium, since the proposal was not considered. It is also stated that the said respondent has refunded the amount of Rs.57,931.00 which was lying in the suspense account to the petitioner through NEFT. The stand taken by respondents 2 and 3 in the counter affidavit is that only because of the reason that the petitioner's husband did not turn up for medical examination, no decision has been taken on the proposal for insurance and the premium amount paid by the petitioner was refunded to him.