COMPLAINT NO. 1716 OF 2009

Chandrakant Davda

93, I Cross, K.C.Road,

Bangalore – 09.

…. Complainant.

V/s

Star Health and Allied Insurance

Company Limited, Zonal Office,

No.1, 3rd Floor, RNG Plaza,

South End Street,

Behind Shivannada Circle

Kumara Park East,

Bangalore-1.


…. Opposite Party

-: ORDER:-


This complaint is for a direction to the Opposite Party to pay Rs.2,27,084/- towards reimbursement of the medical expenses and compensation of Rs.10,000/- towards mental agony, on the following grounds:-

The complainant had purchased a medical insurance policy under the Senior Citizen Red Carpet Insurance Plan by paying a huge premium of Rs.10,000/-. During May – 2009 he was not keeping well and moved to the hospital where they diagnosed him with CAD/LVF and subsequently he had to go through angioplasty at NARAYANA HRUDAYALAYA and a bill for Rs.2,27,084/- was paid by him as the insurance company did not respond to the request made by the hospital for pre-approval. He was suggested to send the bills and other details for clearance of the claim. Now he understands that the insurance company has inserted the clause saying that the claim cannot be processed due to pre-existence of the disease. As per the medical records once a person goes through CABG (by pass surgery) it is not possible for him to suffer CAD/LVF and hence cannot be termed as a pre-existing ailment. It has been confirmed by leading expert cardiologists. In the medical certificate issued by the Doctor, in the claim form it is certified as a new disease WRCA (CABG 2007) in answer to the question ‘whether the present ailment is a complication of pre-existing disease’. In answer to point No.9 whether the disease/disorder is congenital in nature” it is mentioned as “No”. As per the terms of the policy all pre-existing ailment are covered under the senior citizen red carpet health insurance. Under no circumstances the claim could be rejected as it falls under the terms. CABG was done in 2007 and it is more than 12 months and the Doctor did not envisage any further requirement of procedure during-2007. Despite explaining the above facts, the insurance company has rejected the claim which led him into lot of financial and physical difficulties. Hence, the complaint.

2. In the version, the contention of the Opposite Party is as under:-

The insurance policy in question was obtained by the complainant by paying the premium covering the risk up-to the extent of Rs.1,00,000/- subject to sub limit of Rs.75,000/- for himself and his spouse. Suppressing that fact the complainant has made a false claim for Rs.2,27,084/- contrary to the coverage of risk. Thus, the complainant has not approached this Forum with clean hands and therefore the complaint is liable to be dismissed on this ground alone. The claim of the complainant has been repudiated as per the terms of the contract of insurance and after following due procedures. Therefore there is no deficiency of service on the part of Opposite Party. The rights and obligations of the parties are governed by the contract and no extra liberal approach or construction can be given and the contract cannot be interpreted differently. The contract of insurance is a good faith transaction and comes into existence in utmost good faith. As the insurer will not be aware about the ailments or health problems of the proposers, it is both moral and legal obligation of the proposer to state every fact which is within his knowledge, corresponding to his health. The complainant was supposed to disclose all the true facts at the time of seeking the policy by stating every thing about the previous ailments, but he has suppressed the fact of long existing heart disease and obtained the policy. The ailment is pre-existing and it was not notified about the ailment and treatment he was taking. The alleged ailment is excluded under the policy as the complainant has been suffering the same even prior to 12 months of the proceeding year to the policy commencement and it is a non-disclosed ailment. In the schedule, the coverage of risk and the necessary attention required to be paid by the proposer are very clearly stated. AS per the medical reports, the complainant had past history of “OLD ASMI, S/P CAGB-LIMA RI (March, 2007) and the policy has been obtained for the first time for the period from 20/09/2008 to 19/09/2009. The said ailment is pre-existing since one year before obtaining the policy. In case of pre-existing disease, the insured has to bear the ratable proportion of expenses as per the exclusion clause. Unless the insured obtained the policy continuously for two years, he will not be entitled for seeking the claim, as per the policy terms and conditions stated under the head “Major Product Features”. The complainant has not acted as required of him while entering into contract and subsequently and therefore his claim has been repudiated for valid and tenable reasons. As such no deficiency of service is rendered at the end of the Opposite Party. The policy was obtained by suppressing the facts which would influence the decision of the Opposite Party either to accept or to reject the proposal and the fact came to the knowledge of the Opposite Party only when the claim was made and as such the repudiation is legal and valid. On these grounds, the Opposite Party has prayed for dismissal of the complaint.

3. In support of the respective contentions both parties have filed affidavits and have produced copies of documents. We have heard the arguments on both side.



4. The points for consideration are:-

1. Whether in the facts and circumstances of the case, the repudiation of the claim of the complainant by the Opposite Party justified?



2. Whether the complainant entitled to the relief prayed for in the complaint?



5. Our findings to the above points is in the NEGATIVE for the following:-

-:REASONS:-

6. At the outset we may point out that if at all the complainant is entitled to any amount from the Opposite Party towards reimbursement of the medical expenses he is not entitled to Rs.2,27,084/- as claimed in the complaint. From the copy of the insurance policy produced by the complainant it is seen that the sum insured is Rs.1,00,000/- each in respect of the complainant and his wife. Therefore, towards reimbursement of medical expenses the complainant is not entitled to claim anything more than Rs.1,00,000/-. That apart as per the terms and conditions, the liability of the insurance company for the treatment of Cardio-Vascular Diseases is limited to Rs.75,000/-. In this view of the matter and having regard to the sum insured and the amount payable as per the terms and conditions of the policy, the complainant is not entitled to claim reimbursement of Rs.2,27,084/- as has been claimed. As per the letter dated 22/06/2009 the insurance company repudiated the claim made by the complainant for non-disclosure of the material facts. The reasons given by the insurance company in the said letter for repudiating the claim are as under:-

“According to discharge summary, patient is suffering acute coronary syndrome since 1996, CAG done on 16/02/2007 revealed CAD, this fact had not been disclosed at the time of inception of cover. Since the present ailment had been existing even before commencement of insurance, the claim is not tenable under the policy”.

It is the contention of the Opposite Party that during March-2007 the complainant had undergone Coronary Artery Bypass surgery, but that fact was suppressed in the proposal form while submitted for obtaining the insurance policy for the period from 20/09/2008 to 19/09/2009. Admittedly the policy obtained by the complainant with the Opposite Party for the above period was the first policy. The Opposite Party has produced the proposal form submitted by the complainant in which against the column “Has the proposed person/s suffered from any disease/illness irrespective of whether hospitalized or not or sustained any accidents, if yes give details, the complainant has answered as ‘NO’. In the same column against the question “in the past 12 months”, he has recorded the answer as ‘NO’ and against column “before 12 months”, he has marked the answer ‘YES’, which means that the complainant was suffering from some diseases 12 months before submitting the proposal form. But the details of the diseases or ailments suffered 12 months before the proposal is not disclosed in the proposal form in spite of the specific direction to give the details if the answer is ‘YES’. In the proposal form the complainant has not disclosed that he had undergone bypass surgery during March-2007. Non-disclosure of the treatment taken in March-2007 clearly amounts to suppression of the material facts. In such circumstances, the insurance company is entitled to repudiate the claim and this view finds support from the decision of the Hon’ble High Court of Punjab and Haryana in the case of United Indian Insurance Co., Ltd., V/s Rajinder Pal Sood reported in 2004 ACJ 1301, the decision of the Hon’ble Rajasthan State Consumer Disputes Redressal Commission, Jaipur, in the case of of Rajendra Kumari V. Oriental Insurance Co., Ltd., reported in IV (2003) CPJ 63, so also the decision of the Hon’ble National Commission in the case of Floran Infotech Pvt., Ltd., V/s National Insurance Co., Ltd., reported in IV (2005) CPJ 35, on which the learned counsel for the Opposite Party relied upon. “Had the complainant disclosed in the proposal form about the treatment he had taken in March-2007, it would have provided an opportunity to the insurance company either to accept the proposal or to reject the same”. The insurance contract being the contract on good faith, it was necessary for the complainant to disclose all the material facts with regard to the treatment he had taken before submitting the proposal form. The Opposite Party repudiated the claim for non disclosure of the material facts and as such the repudiation cannot be said to be unjustified. Thus, we find no deficiency in service on the part of Opposite Party and therefore hold that the complainant is not entitled to the relief prayed for. In the result, we pass the following:- -:ORDER:-

1. The complaint is DISMISSED. However there is no order as to costs.
2. Send a copy of this order to both parties free of costs, immediately.
3. Pronounced in the Open Forum on this the 03rd Day of NOVEMBER 2009.

DATED THIS THE 18th DAY OF DECEMBER 2009.

COMPLAINANT

BY-SRI. R.SANDEEP,

SRI. M. K. SRIHARI,

ADVOCATES, BELLARY.


//VS//


SMT. Y. KOLLAPURI,

W/O T.VENKATESHALU,

R/O AT D.NO.54, WARD NO.19,

GADANG STREET, COWL BAZAAR,

BELLARY.


RESPONDENTS



BY-SRI. AZEEZ SAB.K.,

ADVOCATE, BELLARY.

1. STAR HEALTH & ALLIED INSURANCE

CO. LTD., AT 1, NEW TANK STREET,

VALLUVARKOTTAM, HIGH ROAD,

CHENNAI- 600 034.



2. MANAGER,

STAR HEALTH & ALLIED INSURANCE

CO. LTD., AT 17/C, “SHIVA-PARVATHI”

OPP: ING VYSYA BANK,

PARVATHI NAGAR, MAIN ROAD,

BELLARY.
//JUDGEMENT//



Sri.S.M.Reddy, President.

This is the complaint filed by above named Complainant under Sec-12 of C.P.Act, 1986 against the Respondents Insurance Company for to refund premium amount of Rs.2,749/- with interest @ 24% p.a. and to award damages of Rs.50,000/- and cost of the litigation with other reliefs as deems fit under the circumstances of the case.

2. The brief facts of the Complainant’s case are that;

The Respondent No.1 is Insurance Company with its registered Office at Chennai and 2nd Respondent is Branch Office at Bellary. For the purpose of soliciting business it also appointed agents who solicit business from prospective customers. 1st Respondent has appointed an agent at Bellary for developing business the agent approached the Complainant. They were induced by the agent to purchase a health policy known as “Medi classic Policy”. The Complainant paid Rs.2,749/- on 28/06/2007 and sent proposal form bearing No.235953 after filing the particulars and Policy was to be valid for one year. After payment of premium amount, the 1st Respondent having accepted the proposal form never sent the Policy covering for that year. When he did not to do so the Complainant wrote a letter on 16/11/2007 asking it to reimburse the Policy amount. The Respondent No.1 with an intention avoid to refund of amount sent a letter to the Complainant after 16/11/2007 asking her to undergo certain tests. The Respondents have not paid the premium amount nor send the Policy bond. The efforts of the Complainant in getting a valid Policy for the period were futile as such, she filed this complaint against Respondents for reliefs as prayed in this complaint.

3. The Respondents appeared in this case through an advocate. The Respondent No.2 filed detail Written Version, the Respondent No.1 filed a Memo by adopting the Written Version filed by the Respondent No.2.

In the Written Version of Respondents, it is contended that complaint is bad in law and false one. The Respondents denied the averments made in the complaint. But they admitted their Branch Office at various places including Bellary and also they admitted appointment of agents at Bellary for developing business. The Respondents have submitted that at no point of time the Complainant has not approached, nor has paid any amount towards the Policy. Therefore, the question of to send Policy cover and refund of Policy amount does not arise. Lastly prays for to dismiss the complaint with costs.


4. In view of the facts and circumstances, the points that would arise for our consideration are;

//POINTS//



1.
Whether the Complainant has proved that she is paid premium amount of Rs.2,749/- through an agent of Respondents Insurance Company?

2.

Whether Complainant is entitled for reliefs as prayed in this complaint?
3.

To what relief the Complainant is entitled for?
5. Sworn to affidavit of Complainant is filed as P.W.1 and documents Ex.P.1 to Ex.P.4 are marked and closed her side. Sworn to affidavit Respondent No.2 is filed as R.W.1 and closed their side. No documents filed. Both parties have filed their written arguments and submitted their oral arguments.



6. Our findings on the above points are as under.
Point No.1:


In Affirmative.

Point No.2:


In Affirmative.

Point No.3:


In view of findings on Point No.1 and 2, we pass the final order for the following;


//REASONS//

Point No.1 & 2: -

7. Among the documents of Complainant, Ex.P.1 is Xerox copy of challan of Canara Bank for having remitted the amount of Rs.2,749/- to the account of Respondents. Ex.P.2 is the Xerox copy of statement of account of Respondent in which there is entry of deposit of Rs.2,749/- on 28/06/2007 by way of cash. Ex.P.3 is the Xerox copy of proposal form. Ex.P.4 is the office Xerox copy of letter dated: 16/11/2007 written by the Complainant to the Respondent No.2.



8. Though the Respondents have totally denied that the agent of the Respondents had approached the Complainant to purchase Health Policy and that she has paid Rs.2,749/- after filling the particulars in the proposal form the Xerox copy of which was given to her, the Complainant has produced Ex.P.3 Xerox copy of proposal form and she has also produced the Bank challan marked at Ex.P.1 for having deposited a cash of Rs.2,749/- to the account of the Respondents bearing Current Account No.3476 and it bears the seal of the Bank for having received the said amount and apart from that the Complainant has produced the statement of account of Respondents in the said Canara Bank having C/A No.3476 in which there is correspondence entry of deposit of Rs.2,749/- on 28/06/2007 which refers to Ex.P.1. So mere denial of Respondents that the Complainant has not paid any premium amount towards obtaining the Policy cannot be accepted. If Complainant had not paid the said amount towards premium for obtaining the Policy, the Respondents ought to have explained as to in what regard the Complainant has deposited the said amount of Rs.2,749/- to the account of these Respondents on 28/06/2007. But no such explanation is forthcoming from the Respondents, on the other hand, they have totally denied the said payment which cannot be accepted in the light of documents marked Ex.P.1 to Ex.P.3. It is important to note that, when Complainant did not receive the Insurance Policy inspite of receiving proposal form taking premium amount ultimately she has written a letter on 16/11/2007 as per Ex.P.4 requesting to refund at least the said premium amount of Rs.2,749/-. If really the Respondents have not received the said amount they could have very well given reply to the said letter to that effect, but they have not done so. So this conduct on the part of Respondent amounts to an admission on the part of Respondents for having received the amount. Therefore, when the evidence placed on record clearly establishes that the Respondents have collected the premium amount from the Complainant by obtaining the proposal form have not issued Policy which amounts to deficiency of service. Hence, the Respondents are liable to refund the said premium amount together with interest and compensation towards deficiency of service and cost of this proceedings. Though the Complainant has claimed Rs.50,000/- towards deficiency of service, it is imaginary one and it has no basis. But, however, the Complainant is entitled to recover the said premium amount of Rs.2,749/- with interest @ 9% p.a. from the date of deposit i.e. 28/06/2007 till realization along with compensation of Rs.3,000/- towards deficiency of service and Rs.1,000/- towards cost of this litigation from the Respondents jointly and severally. Hence, we answer Point Nos.1 and 2 in affirmative.


Point No.3: -



9. In view of findings on Point No.1 and 2, we pass the following;



//ORDER//

The Complaint filed by the Complainant under Sec-12 of C.P.Act is partly allowed with cost.


The Complainant is entitled to recover a sum of Rs.2,749/- (rupees two thousand seven hundred and forty nine only) with interest @ 9% p.a. from 28/06/2007 till realization from the Respondents jointly and severally.

The Complainant is also entitled to recover a sum of Rs.3,000/- (rupees three thousand only) towards deficiency of service and Rs.1,000/- (rupees one thousand only) towards cost of litigation from the Respondents jointly and severally.

The Respondents are hereby granted two months time from the date of this Judgment to make the payment of total amount and interest as stated above to the Complainant.

Dear Sir,

My Mummy is Working in Government aided School as a Mid-meal Cook,As per the latest Announcement by the kalaingar Life insurance Scheme in tamilnadu for Govt.Employees.Based on that My mother is also a Policy Holder in Star health allied insurance .My mother was admitted in Madurai meenakshi Mission hospital for getting treatment to Oncology.From the beginning onwards we have paid room rent,Diagnostic charges,Medicine charges and etc.These expenses are as per G.O Included in the cover.But they have denied to pay those expenses,But They have accepted only for treatment charges.But our eligible amount is Rs2,00,000.00.Till we are under treatment from 02.9.2009 to till 03.04.10. Till from our end we have already made the expenses up to Rs70000.00.,My mother ID is -1081355/policy Id.
Kindly do the arrangement for retaking my spent amount to us.

Regards,
Thirukumaran.E S/o E.Perumayee(patient)