Lucknow Consumer Commission Directs Bharti AXA To Pay ₹1 Crore With Interest To Deceased Policyholder’s Family For Wrongful Claim Rejection
Pranav B Prem
The District Consumer Disputes Redressal Commission-II, Lucknow, has directed Bharti AXA Life Insurance Company to pay more than ₹1 crore, along with interest, to the family of late Nirendra Kumar Dwivedi, holding that the insurer had wrongfully repudiated their claims under two life insurance policies.
The complaint, filed on 01.04.2022 by Smt. Anupama Dwivedi (wife), her daughter Vaishnayi Dwivedi, and son Brahmansh Nirendra Dwivedi, arose from the rejection of claims relating to two life insurance policies taken by late Nirendra Kumar Dwivedi. One policy (No. 501-3388748), issued on 16.07.2015, carried a sum assured of ₹1 crore. The second policy (No. 501-439072), issued on 23.04.2016, carried a sum assured of ₹81,100. The Commission recorded that both policies were issued only after the insurer’s medical examinations had confirmed the insured’s health status to be normal.
According to the complaint, the insured paid three premiums under the first policy and two under the second. In July 2016, he developed health problems and was later diagnosed with kidney-related issues and diabetes. He underwent treatment at ILBS, New Delhi, and Medanta Hospital, Gurugram, before passing away on 14.12.2017 due to brain haemorrhage. The complainants submitted death claims in February and March 2018.
However, on 31.03.2018, Bharti AXA rejected the claims, alleging suppression of material facts—specifically, that the insured had pre-existing diabetes, hypertension, and chronic kidney disease dating back several years before the policies were issued.
The complainants contended that no such ailments existed at the time of the policy proposals, and that the insurer’s own medical examinations before issuing the policies showed all parameters to be normal. They pointed out that a third policy proposal in April 2016 had been rejected on income grounds, not medical reasons, demonstrating that the insurer had not detected any serious illness. They alleged deficiency in service and sought the policy benefits, additional maturity and death benefits under the second policy, and compensation for mental agony and litigation costs.
Bharti AXA, in its defence, reiterated that the insured had concealed pre-existing diseases and that hospital records from ILBS and Medanta supported its case. It argued there was no deficiency in service. The insurer also raised a procedural objection, contending that a prior complaint on the same matter had been withdrawn, and refiling was impermissible.
Findings of the Commission
Presiding Member Amarjeet Tripathi and Member Pratibha Singh examined the affidavits, discharge summaries, hospital records, and policy documents. They noted that both policies were issued after thorough medical examinations by the insurer, and all test results at the time were within normal limits. They further observed that while the insured was diagnosed with chronic kidney disease, hypertension, and liver disease in late 2016, there was no evidence that these conditions existed before July 2016. The Commission rejected the insurer’s contention that the ailments predated the policies, as the discharge summaries and medical histories did not support such a conclusion.
The Commission referred to the National Consumer Disputes Redressal Commission’s ruling in LIC v. Reena Nanda (2018), which held that when a policy is issued after the insurer’s own medical examination, the insurer cannot subsequently allege non-disclosure of illnesses not detected during that examination. The Commission also held that the Supreme Court decision in Reliance Nippon Life v. M.L. Chaturvedi cited by the insurer was inapplicable due to differing facts. On the procedural objection, it relied on Indian Machinery Co. v. Ansal Housing (2016), where the Supreme Court held that withdrawal of a complaint without adjudication on merits does not bar refiling before a consumer forum.
Order
Holding that Bharti AXA had repudiated the claims on incorrect grounds, amounting to deficiency in service, the Commission partially allowed the complaint. The insurer was directed to:
Pay ₹1 crore under the first policy along with ₹1 lakh under the Family Care Benefit.
Pay all benefits under clause 1.2 of the second policy, including death and maturity benefits.
Pay ₹20,000 as compensation for mental agony and ₹5,000 as litigation costs.
The amounts are to carry interest at 9% per annum from the date of filing the complaint until payment. If payment is not made within 30 days, the interest rate will rise to 12% per annum.
Cause Title: Anupama Diwedi and Ors. V. Bharti AXA Life Insurance and Ors
Case No: CC No. 81/2022
Coram: Amarjeeth Tripati [Chairman], Prathibha Singh [Member]
