NCDRC Rejects Bharti AXA Life Insurance Appeal, Directs Payment for Outstanding Loan Repayment with Interest

New Delhi, September 2, 2024 – The National Consumer Disputes Redressal Commission (NCDRC) has dismissed an appeal filed by Bharti AXA Life Insurance Company, upholding the state consumer commission's decision to award ₹37.96 lakh to the family of a deceased policyholder, Hemant Kumar Mishra. The NCDRC found that the insurer had wrongfully repudiated the insurance claim.

Facts of the Case

Hemant Kumar Mishra had taken two insurance policies from Bharti AXA Life Insurance in August 2016, specifically designed to cover a home loan of ₹35,58,263 that he had availed from PNB Housing Finance Ltd. The policies were obtained after a standard process, including a declaration of good health by Mr. Mishra. Four months later, in December 2016, Mr. Mishra passed away due to esophageal cancer. Following his death, his wife, Madhu Mishra, and their children filed a claim with Bharti AXA to cover the outstanding loan amount.

However, in March 2017, Bharti AXA repudiated the claim, alleging that Mr. Mishra had failed to disclose material facts about his health at the time of purchasing the policies. The insurer claimed that the deceased had pre-existing conditions, including hypertension and coronary artery disease, which were not mentioned in the insurance application. Dissatisfied with this decision, the family approached the Uttar Pradesh State Consumer Disputes Redressal Commission, which ruled in their favor. Bharti AXA then appealed this decision before the NCDRC.

Observations of the NCDRC

In its judgment, the NCDRC made several critical observations that led to the dismissal of Bharti AXA’s appeal. The Commission highlighted the insurer's failure to present credible and concrete evidence to substantiate its claims of non-disclosure by the policyholder. The NCDRC found that Bharti AXA heavily relied on a third-party post-claim investigation conducted by ‘Probe India,’ which lacked verifiable proof to support the insurer’s allegations of non-disclosure.

The Commission emphasized that the insurer's assertion that Mr. Mishra had concealed his medical conditions was based on general statements and speculative conclusions, without providing any definitive medical records or evidence indicating that Mr. Mishra was aware of or had been treated for hypertension or coronary artery disease prior to obtaining the insurance policies. 

Furthermore, the NCDRC pointed out that Bharti AXA did not present any medical evidence to demonstrate a direct link between these alleged undisclosed conditions and the cause of death, which was esophageal cancer.

The NCDRC also referred to established legal principles, including rulings from the Supreme Court in Om Prakash Ahuja vs. Reliance General Insurance Co. Ltd. and Sulbha Prakash Motegaonkar vs. LIC, which state that material non-disclosure must be directly related to the insured event—in this case, the death of the policyholder. The Commission concluded that even if there were any undisclosed conditions, they could not form the basis for repudiation of the claim unless they were directly connected to the cause of death.

Conclusion and Award

In its final ruling, the NCDRC upheld the Uttar Pradesh State Consumer Disputes Redressal Commission's decision, ordering Bharti AXA Life Insurance Co. Ltd. to repay the outstanding loan amount of ₹35,58,263 to PNB Housing Finance Ltd. The NCDRC also directed the insurer to cover the applicable interest and ensure that PNB Housing Finance Ltd. issues a No Dues Certificate. The relief granted reflects the Commission’s finding of wrongful denial of the insurance claim by Bharti AXA.

The judgment emphasizes the need for insurers to provide substantial evidence when repudiating claims and reinforces the rights of policyholders by ensuring that claims are handled fairly and transparently.

Case Title: Bharti AXA Life Insurance Co Ltd & Anr vs. Madhu Mishra & 3 Ors FIRST APPEAL NO. 291 OF 2022; Date of Oder 02 September 2024. Read the NCDRC order here.

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