Before the District Consumer Dispute Redressal Commission [Central], 5th Floor ISBT Building, Kashmere Gate, Delhi
Complaint Case No.-307/22.08.2016
Dr. Deepak Kumar s/o Late Bhagwan Prasad
r/o Quarter No. 11, Type-6 IHBAS Campus,
Dilshad Garden, Delhi-110095 …Complainant
Versus
OP1: Apollo Munich Health Insurance Co. Ltd.
I LABS Centre, 2nd & 3rd Floor, Plot no. 405,
Udhyog Vihar Phase-III, Gurgaon, Haryana-122016
OP2: Apollo Munich Health Insurance Co. Limited
Delhi Branch Office, 1st Floor, 6&7, B.K. Roy Court,
Asaf Ali Road, Delhi-110002 ...Opposite Parties
Date of filing: 22.08.2016
Date of Order: 20.09.2023
Coram: Shri Inder Jeet Singh, President
Ms. Shahina, Member -Female
Shri Vyas Muni Rai, Member
ORDER
Inder Jeet Singh , President
1.1. (Introduction to case of parties) - The complainant/Insured filed the complaint against his Insurer/OP by making allegations of deficiency of services & unfair trade practice because of want of reimbursement of medical bills of his wife, firstly - by declining him cashless facility for medical bills and subsequently- by declining part reimbursement of medical bills despite it were covered under Medi-claim Insurance Policy, since an amount of Rs.1,50,000/- was reimbursed out of Rs. 2,91,320/-. It was declined on the pretext of concealment of disease from proposal form. Whereas, the complainant protests and denies these plea of OPs that present ailment treated was different from the previous ailment myomectomy happened in 2002 about 14 years ago, and it has no bearing with the treatment undergone this time.
The complainant seeks reimbursement of balance medical bills of Rs. 1,41,320/-, compensation of Rs. 50,000/- on account of harassment , mental agony and sufferings, apart from litigation costs of Rs. 11,000/- and other appropriate relief under the circumstances.
1.2. The OPs opposed the complainant by denying allegations of deficiency of services & of unfair trade practice, they also justify repudiation of claim. The pre-authorised was rightly declined and then claim was also declined as per terms of policy, since the complainant had suppressed material facts of myomectomy done in 2002 (which revealed from the medical papers of wife of complainant), which was never disclosed in the proposal form despite specific columns seeking information. The complainant had suppressed and failed to disclose this disease and treatment. The policy was obtained by misrepresentation and against the principles of utmost good faith. It cannot be construed deficiency of services. However, as a good-will gesture and keeping in view the tradition of relations of the Insurer and Insured, an ex-gratia of Rs.1,50,000/- was allowed in favour of complainant with the consent of complainant, it was also consented by him that no further claim will be preferred by him. Thus, the complaint is without cause of action, complainant is not entitled for any claim/relief being claimed.
2.1. (Case of complainant) –Succinctly, the complainant has been taking health insurance policy plan since 2010 from OPs, which covers the complainant, his wife and two children for maximum assured amount of Rs. 4,00,000/- being Easy Health Family Floater Standard Cover. The policy is being renewed regularly for the last 6 years and recently in April 2016.
2.2. Complainant’s wife Ms. Preeti Sinha, consulted her gynecological problem with a Gynecologist at Apollo Chennai, during investigation it was discovered Fibroids in her uterus. She was advised medication but the bleeding did not stop, her hemoglobin was falling, thus she was advised surgery for removal of fibroids.
2.3. On 11.05.2016 she consulted doctor at Ganga Ram Hospital, she was advised admission and hysterectomy (laproscopic) and she was admitted in Ganga Ram Hospital on 15.05.2016. Pre-authorisation form was filled in and forwarded through TPA at the Hospital. Complainant’s wife had undergone surgery. The surgery was successful. It was planned to discharge her post surgery, she was discharged on 18.05.2016 afternoon and a final bill of Rs. 2,85,220/- was forwarded along with discharge summary and other documents to the insurance agency, however, the cashless claim was not granted by the OPs on the ground of non-disclosure of material fact of myomectomy in 2022- Fibrous uterus.
The complainant contacted the customer care centre with request to reconsider their stand and to release the cashless amount for payment of medical bills but it was not considered vis-à-vis the hospital was pressuring to clear the bills. The complainant had to arrange the amount at such short notice from his friends, he ended with huge debts.
2.4. The complainant’s wife had no chronic illness like diabetes, asthma or TB which was undisclosed at the time of taking policy. The pre-approval of cashless amount of Rs. 1,50,000/- by OP was after considering the record that surgery of myomectomy was in 2002, which was about 8 years before the policy was taken and it was initially approved but subsequently rejected, which caused undue distress and harassment. Had pre-authorisation not approved, the surgery may not be gone ahead and complainant may have not taken single deluxe room and other escalated hospital charges vis-à-vis the previous surgery of 2002 (which was prior to the marriage of complainant) was different from the surgery performed recently.
2.5. The complainant had submitted all the bills with the OPs for reimbursement of cashless claim which was earlier rejected and after approaching the grievances department as well as considering the matter, the OP reimbursed the claim of Rs. 1,50,000/- through ex-gratia. That is why the present complaint, since the complainant is entitled for the relief being claimed.
3.1 (Case of OPs)- the complaint is opposed by the OPs that there is no cause of action in favour of the complainant and against the OPs. There is concealment of material facts by the complainant as well as violation of conditions of the policy, which does not entitle the complainant for any relief being claimed.
3.2. The OPs opposed the complainant by denying allegations of deficiency of services & of unfair trade practice and also confirming that repudiation of claim was in terms of policy. The pre-authorised was rightly declined since it falls within the permanent exclusion in terms of letter dated 20.05.2016. While considering review of claim, it was revealed from the medical papers of wife of complainant, which the complainant had suppressed material facts of myomectomy in 2002 in Appollo, Chennai. It was never disclosed in the proposal form despite specific columns. The complainant had suppressed and failed to disclose this disease and treatment. The policy was obtained by misrepresentation and against the principles of utmost good faith. It cannot be construed deficiency of services. There was request for cashless facility with estimate cost for three days of Rs.2,00,000/- and immediately revised estimates with other financial documents were called, then initially approval was of Rs.1,50 lakh on the basis of available documents. But, on receiving the final bill with documents, then it was revealed of previous myomectomy in 2002 in Appollo, Chennai, which was suppressed by the complainant. The complainant was advised for filing all previous medical record and insurance policy. Then, as per revised term, the disease Fibroid uterus of spouse of complainant was permanently excluded from the policy effective ab-initio.
However, as a good-will gesture and keeping in view tradition of relations of insurer and insured an ex-gratia of Rs.1,50,000/- was allowed in favour of complainant with the consent of complainant, it was also consented by him that no further claim will be preferred by him. The contract of insurance is based on utmost good faith but it was breached by the complainant by concealing the material facts. Moreover, the complainant has not placed on record letter dated 20.05.2016, when he has consented for permanent exclusion of fibroid uterus for complainant’s wife effective from the inception of the policy as well as the consent given by him towards settlement of claim of Rs. 1,50,000/-. Thus, the complaint is without cause of action, complainant is not entitled for any claim/relief being claimed.
The reply is accompanied with copy of power attorney, proposal forms, and other medical record bills etc. which were collected from the complainant. Moreover, OPs also refer certain case law, it will be reflected subsequently at the stage of submissions of the parties. The OPs request for dismissal of the complaint.
4. (Replication of complainant) –The complainant filed replication in detail and it reiterates the complaint as correct, while emphasizing that there was nothing concealed as the previous surgery was about 14 years back, the exclusion clause of pre-existing ailment does not apply, as there was no such exclusion clause or terms and conditions when policy was taken by the complainant, nor the revised terms of policy by the OPs vide letter dated 20.05.2016 can be made effective retrospectively. The complainant's consent was under duress, since complainant did not have amount at the time of operation. The complainant has provided all relevant information to OPs. The complainant has been maintaining the discipline in obtaining the policy and paying the huge premium regularly and the present episode is covered within the policy contract.
5.1. (Evidence)- The complainant Sh. Deepak Kumar led evidence by filing his detailed affidavit while fortifying with the documentary record of bills, discharge summary, other medical/clinical record and reports, the email exchanged between the parties.
5.2. OPs led evidence by filing detailed affidavit of Ms. Deepti Rustagi, Vice President- Legal & Compliances, it is also fortified with the documentary record filed in support of reply, besides arguments have been introduced in the evidence by reproducing the case law (whereas the case law is not an evidence, the OPs have to avoid it as the reasoning of case law are subject matter of appreciation of evidence or arguments).
6.1 (Final hearing)- Both the parties have filed their written arguments. At the stage of oral submissions, Sh. Saurabh Sachdeva, Advocate for complainant and Ms. Shruti Mishra, Advocate for OP presented the submissions. The OP has fortify its contentions by deriving reasons in its support from the following cases:-
(a) P C Chacko & antr Vs Chairman, LIC Ltd (AIR 2008 SC 424), held that contract of life insurance are contracts of utmost good faith, every material fact must be disclosed, other there is good ground for recession of the contract.
(b) Haji Ahmed Yar Khan vs Abdul Gani Khan (AIR 1937 Nag 207 at 272) and Mithoolal Nayank Vs LIC AIR 1962 SC 814 & LIC Vs Asha 2001 2 SCC 160, while adjudicating on sec. 4 of the Insurance Act, 1938, it was held, three conditions for later part of section 4 are, the statement must be on material matter, or must suppress facts which it was material to disclose, the suppression must have known at the time of making the statement that it was false or that it was false or that it suppressed facts which was material to disclose.
(c) Swan Energy Limited vs New India Assurance Co. Ltd. (OP 131/2001) dod 03.08.2011 by NC- when assured agrees to accept a certain amount in full and final settlement of his claim, then assured is bound by his commitment.
7.1 (Findings)- The submissions of both the side are considered, analyzed and assessed including evidence of parties, the documentary record and precedent/case law. The rival contentions of parties need not to be reproduced, since the case of parties have already been narrated in detail.
7.2. It is manifest from plain reading of case of parties, that the relationship of the complainant and of the OP are of the Insured and of the Insurer, the medi-claim policies issued from time to time inclusive of latest policy, its tenure and premium paid. It is also not disputed that the complainant's wife was given medical treatment as indoor patient in the Sir Ganga Ram Hospital and the complainant had paid the entire medical bills from his own pocket, out of which an amount of Rs.1,50,000/- was reimbursed but OP calls it ex-gratia released with the consent of complainnt.
7.3 However, the core consumer issue is 'whether or not the complainant's wife had pre-existing disease, which was concealed from the OP? Whether or not the complainant is entitled for balance medical bills claim and other reliefs?
For adjudicating them in summary way, the evidence of the parties is to be consider, whether there was pre-existing of disease from the point of obtaining policy and for want of its declaration, what legal consequences would flow.
7.4 From that point of view to appreciate the rival case of parties, it is relevant to refer law laid down in "Jagdish Vs LIC of India [FA no.1055/2003 dod 17.12.2007, decided by Hon'ble State Commission]", in which circumstances and parameters of pre-existing disease were laid down in detail, its paragraph 10 is reproduced -
"Para 10 -Our conclusions on the meaning and import of words disease, pre-existing
disease for the purpose of medi-claim insurance policy, as under:
(i) Disease means a serious derangement of health or chronic deep-seated disease
frequently one that is ultimately fatal for which an insured must have been hospitalized or operated upon in the near proximity of obtaining the medi-claim policy,
(ii) Such a disease should not only be existing at the time of taking the policy but also
should have existed in the near proximity. If the insured had been hospitalized or operated upon for the said disease in the near past, say, six months or a year he is supposed to disclose the said fact to rule out the failure of his claim on the ground of concealment of information as to pre-existing disease,
(iii) Malaise of hypertension, diabetes, occasional pain, cold, headache, arthritis and
the like in the body are normal wear and tear of modern day life which is full of tension at the place of work, in and out of the house and are controllable on day to day basis by standard medication and cannot be used as concealment of pre-existing disease for repudiation of the insurance claim unless an insured in the near proximity of taking of the policy is hospitalized or operated upon for the treatment of these diseases or any other disease,
(iv) If insured had been even otherwise living normal and healthy life and attending to
his duties and daily chores like any other person and is not declared as a diseased person as referred above he cannot be held guilty for concealment of any disease, the medical terminology of which is even not known to an educated person unless he is hospitalized and operated upon for a particular disease in the near proximity of date of insurance policy say few days or months,
(v) Disease that can be easily detected by subjecting the insured to basic tests like
blood test, ECG etc. the insured is not supposed to disclose such disease because of otherwise leading a normal and healthy life and cannot be branded as diseased person,
(vi) Insurance company cannot take advantage of its acts of omission and commission as it is under obligation to ensure before issuing medi-claim policy whether a person is fit to be insured or not. It appears that insurance Companies do not discharge this obligation as half of population is suffering from such malaises and they would be left with no or very little business.
Thus any attempt on the part of the insurer to repudiate the claim for such non-disclosure is not permissible, nor is exclusion clause invoke-able,
(vii) Claim of any insured should not be and cannot be repudiated by taking a clue or
remote reference to any so-called disease from the discharge summary of the insured by invoking the exclusion clause or non-disclosure of pre-existing disease unless the insured had concealed his hospitalization or operation for the said disease undertaken in the reasonable near proximity as referred above,
(viii) Day to day history or history of several years of some or the other physical problem
one may face occasionally without having landed for hospitalization or operation for the disease cannot be used for repudiating the claim. For instance an insured had suffered from a particular disease for which he was hospitalised or operated upon 5, 10 to 20 years ago and since then had been living healthy and normal life cannot be accused of concealment of pre-existing disease while taking medi-claim policy as after being cured of the disease, he does not suffer from any disease much less the pre-existing disease,
(ix) For instance, to say that insured has concealed the fact that he was having pain in
the chest off and on for years but has never been diagnosed or operated upon for heart disease but suddenly lands up in the hospital for the said purpose and therefore is disentitled for claim bares dubious design of the insurer to defeat the rightful claim of the insured on flimsy ground. Instances are not rare where people suffer a massive attack without having even been hospitalised or operated upon at any age say for 20 years or so,
(x) Non-disclosure of hospitalization/or operation for disease that too in the
reasonable proximity of the date of medi-claim policy is the only ground on which insured claim can be repudiated and on no other ground.
7.5 Since there is issue of pre-existing disease and its concealment in the proposal form, they are inter-related, thus both are taken together. By considering facts, features, evidence of parties along-with the settled law, the following conclusions are drawn:-
(a) There is no dispute of insurance cover/medi-claim policy w.e.f. 11.05.2016 to 10.05.2017. OPs have also filed proposal form dated 11.05.2010 and terms & conditions policy. The policy holder is complainant and beneficiaries are also his spouse and two dependent children.
(b) The terms and conditions filed by OPs are in the paper-book of OPs, however, it has not been proved by the OPs that these terms and conditions were provided to the complainant when policy was issued to him. To say, the complainant has proved that he was not provided with the terms and conditions of policy.
Moreover, in Manmohan Nanda Vs United- India Assurance Co. [Civil Appeal no. 8386/2013) decided on 6.12.2021 by Hon'ble Supreme Court of India has also dealt the regulations 'the IRDA (Protection of Policyholder' Interests) Regulations 2002' and it was held (in paragraph 34 thereof) "that just as insured has a duty to disclose all material facts, the insurer must also inform the insured about the terms and conditions of policy that is going to be issued to him and must strictly confirm to the statement in the proposal form or prospectus or those made through its agents. Thus, principle of utmost good faith imposes meaningful reciprocal duties owned by the insured to the insurer and vice-versa".
(c) In Bharat Watch Company (through its partners) vs National Insurance Co. Ltd., Civil Appeal no. 3912/2019 in SLP(C) no. 25468/2016, it was held that in the absence of appellant being made aware of terms of exclusions, it is not open to the insurer to rely upon exclusionary clauses.
(d) The complainant's wife was given admission for treatment at Sir Ganga Ram Hospital and she remained there as an indoor patient. As per discharge summary, she was finally diagnosed and treated for D & C (frozen) followed by total laparoscopic hysterectomy with right salpingo-oophorectomy with adhesiolysis done under GA. [hysterectomy means surgical procedure that removes uterus].
Further, in the discharge summary there is mentioning of history of myomectomy in 2002. There is no record that she has been continuing treatment after myomectomy in 2002. In simple language myomectomy means a surgical procedure to remove uterine fibroid, such non-cancerous growth appears in the uterus, usually during child-bearing years and may occur at any age.
(e) The complainant's wife had myomectomy in the year 2002. As manifesting from evidence, she has been leading of normal after episode of 2002. It was in 2014 when she admitted in the hospital with complained of heavy menstrual bleeding. There is no other contrary evidence or documentary record by the OP that the complainant's wife had been suffering from such disease after myomectomy in 2002. There is a gap of period of about 14 years.
It is settled law, by case of Jagdish Vs LIC of India [FA no.1055/2003], when the complainant has been leading normal life after treatment of previous ailment (here myomectomy), then it cannot be treated as pre-existing disease. At the time of filling in the proposal form, the disease should have been either in continuation or in proximate of time immediately before the proposal form, but it was not so in this case nor it could be construed so pre-existing disease. Had the complainant's wife been under continuous ailment or treatment for such ailment, then it would have to be evaluated from that prospective.
(f) In addition, there is a detailed circular no. IDRA/HLT/REG/CIR/046/2020 dated 10.02.2020 regarding guidelines on standardization of exclusions in Health Insurance Contracts [making comparative table of situation to be covered prior to 10.2.2020 as well as by amendment of 10.02.2020 in respect of definition of pre-existing disease] that when pre-existing disease is diagnosed by a physician within 48 months, prior to effective date of policy issued by the insurer (or its reinstatement) and so on. However, in the present case the proposal form is of 11.05.2010, when initially policy was issued.
(g) In view of settled law and facts discussed hereinabove, the case of complainant's wife is to be construed a case of non-existence of previous disease, consequently the question of concealment/suppression of disease does not arise, therefore, the plea of OP that principle of utmost good faith has been broken by the complainant or there is misrepresentation of complainant to obtain policy, do not apply. The proposal form has been proved by the OPs, however, for the aforementioned conclusion, the already recovered ailment long-back and want of mentioning them does not amount to concealment of disease from the point of obtaining policy as it is not pre-existing disease.
Thus, it is held that complainant had not concealed any fact or information or material information about pre-existing condition of wife of complainant prior to the policy.
(h) The OPs disallowed the claim on ground of "non-disclosure and also permanent exclusions’. Since, it stand established that it is not a case concealment of ailment or of pre-existence of disease, therefore, there was no reason to decline medical claim. The written statement and evidence led by OPs does not depict which permanent exclusion clause does not permit the claim, which was mentioned in letter dated 31.5.2016 of repudiation letter.
(i) The OPs further stand is that the complainant was paid Rs.1,50,000/- an ex-gratia for which complainant had consented but complainant opposed it that his consent was under duress.
However, there is juxtaposition situation. Since ex-gratia payment means that it is just a favour to complainant and OPs were not under legal obligation nor complainant had legal right to ask for ex-gratia. Thus, if OPs voluntarily granted the ex-gratia but then what was the need for consent of complainant and undertaking that no further claim will be raised.
It infers that amount of Rs.1,50,000/- was being granted to complainant and simultaneously a contract was created in the form of undertaking that further amount will not be claimed by the complainant under insurance contract. It does not appear to be reasonable and fair. The OPs have also not proved that amount given was actually ex-gratia and under provision Insurance company can grant ex-gratia.
7.5. By taking into stock of facts, features, material and record proved, the following conclusions are drawn:-
(a) The complainant has proved medical papers of the treatment rendered, reports, discharge summary and other medical bills are in sequence, which proves that the complainant's wife was admitted in Sir Ganga Ram Hospital for three days from 16.05.2016 to 18.05.2016, the medical expenses are pertaining to her hospitalization and her treatment. The complainant has proved valid medical claim covered against risks under the policy.
(b) Since, the circumstances are establishing case of medical treatment and expenses, which are covered within the medical policy as well as during the tenure of policy but OPs reimbursed part claim of Rs.1,50,000/- and it failed to pay that remaining valid claim amount of Rs.1,41,320/-. It is deficiency of services, when valid medical claim is not reimbursed.
(c) The complainant made his all efforts for getting reimbursement of the claim, firstly he could not succeed in cashless facilities, then his claim was declined but later partly amount was reimbursed. Thus, he had faced all kind of harassment/trauma.
7.6. However, the OPs have strongly emphasized amount of Rs.1,50,000/- released was ex-gratia that too with the consent of complainant that he will not file any claim. But OPs have not proved such record of releasing of amount by way of ex-gratia vis a vis complainant has opposed that certain documents were got executed from him under pressure. The OPs have not named any document, which was executed by the complainant nor by the complainant as to what documents were actually executed, however, OPs have been possession of those record/document but it has not specified names of those documents. Generally, at the time of release of claim amount, the insurer gets executed discharge voucher in advance from the insured. It cannot be assumed since OPs maintain that it was ex-gratia. Whereas, the complainant and the OPs have entered into insurance contract to indemnify medical cover and risks, however, grant of ex-gratia is beyond the insurance contract but OP failed to prove that it was actually ex-gratia. It also give rise a question, whether Insurer can grant ex-gratia and if so under what scheme or circumstances, when there is insurance contract between the parties? It is also not proved by the OPs. Therefore, it is manifesting that the OP had determined claim of Rs.1,50,000/- against claim lodged and appropriate papers/vouchers were got signed for release of such amount. Consequently, it is to be construed that amount allowed was partly reimbursed of claim under the insurance cover.
However, there is IDRA circular dated 24.09.2015 in respect of discharge voucher in settlement of the claim, its operating portion reads “accordingly insurers are hereby advised, where the liability and quantum of claim under a policy is established, the insurers shall not withhold claim amounts. However, it should be clearly understood that execution of such vouchers does not foreclose the rights of policy holder to seek higher compensation before any judicial for a or any other for a established by law. All insurers are directed to comply with the above instructions.” Further, in Worldfa Exports Pvt Ltd. Vs United India Insurance Company Ltd (2015) 225 DLT 722- it was held “in cases where such discharge voucher has been already been taken, the insurance companies shall not raise any objection to the maintainability of the claim on the basis of the discharge voucher. Consequently, the complainant does not lose his rights on the balance claim amount nor OPs can absolve its liability to pay the same. Since, the facts on record proves case of complainant that he has valid medical claim but bills were partly reimbursed. Therefore, complainant is held entitled for reimbursement of such balance medical claim bills of Rs.1,41,320/-
7.7. The complainant has also sought damages of Rs.50,000/- towards harassment and agony, therefore, considering totality of circumstances of case of both sides especially concluded in aforementioned paragraph, damages of Rs 15,000/- is allowed in favour of complainant and against OPs. The cost of litigation is also determined as Rs.5,000/-in his favour and against the OPs.
8. Accordingly, the complaint is allowed in favour of complainant and against the OPs to pay/reimburse balance medical bills amount of Rs.1,41,320/- besides to pay damages of Rs.10,000/-, costs of Rs.5,000/- to complainant.
OPs are also directed to pay the amount within 30 days from the date of receipt of this order. In case amount is not paid within 30 days from the date of receipt of order, then interest rate of interest 6% pa on amount of Rs.1,41,320/- will be payable from the date of complaint till realisation of amount..
9. Announced on this 20th September 2023 [भाद्र 29, साका 1945].
10. Copy of this Order be sent/provided forthwith to the parties free of cost as per rules for necessary compliance.
[Vyas Muni Rai] [Shahina] [Inder Jeet Singh]
Member Member (Female) President
