Haryana

StateCommission

A/815/2019

STAR HEALTH AND ALLIED INSURANCE CO. LTD. AND ANOTHER - Complainant(s)

Versus

ASHOK KUMAR - Opp.Party(s)

RAVINDER ARORA

28 Apr 2023

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

 

                                                      First Appeal No.815 of 2019

                                                Date of Institution: 17.09.2019

                                                          Date of order:28.04.2023

 

1.      Star Health and Allied Insurance Company Limited, Branch Office, Ground floor, Opp. Shakti Motors, Near IDBI Bank, Sirsa, tehsil and Distt. Sirsa through its Branch Manager.

2.      Star Health and Allied Insurance Company Limited
Regd. Office 1, New Tank Street, ValluyerKotram High Road, Nungmbakkam,  Chennai 600034 through its Branch Manager having office at Ground Floor, Opp. Shakti Motors, Near IDBI Bank, Sirsa, Tehsil and Distt. Sirsa.

                                                                             ....Appellants

Versus

 

Ashok Kumar, aged 49 years, S/o Sh.Anjani Kumar, R/o Near Idea Tower, Ward No.5, Ellenabad, Tehsil Ellenabad, Distt. Sirsa, Haryana.

                                                                                           ...Respondent

CORAM:    S.P.Sood, Judicial  Member

                  

Present:-    Mr. Ravinder Arora, Advocate alongwithMr.Sudhir Gupta, Advocate for theappellants.

                   Mr.Dheeraj Narula, Advocate for the respondent.

 

                                                ORDER

S P SOOD, JUDICIAL MEMBER:

          The present appeal No.815 of 2019 has been filed against the order dated 29.07.2019 of the District Consumer Disputes Redressal Forum, Sirsa(In short now “District Commission”) in complaint case No.302 of 2018, which was allowed.

2.      The brief facts of the case are that complainant purchased a Family Health Optima Insurance plan from the opposite parties for the period from 24.10.2016 to 23.10.2017 and got insured his family for the floater sum insured of Rs.10,00,000/- and paid a sum of Rs.21,735/- as insurance premium. Before issuance of the policy, the Ops had got the complainant medically examined from their approved doctors. In 2017, he suffered heart ailment and was medically checked up by MedantaMedicity Hospital, Sukhrali, where he was admitted and remained there as indoor patient  from 27.01.2017 to 04.02.2017.  He spent Rs.5,51,000/- on his treatment and surgery.While he was under treatment, officials of the Ops visited the hospital and obtained his signatures on certain papers for  lodging and consequent settlement of claim. The complainant submitted all the relevant papers to the OP but instead of settling the claim, the Ops have illegally repudiated the claim of the complainant on the ground that infactthe complainant was having pre existingdisease  evenbefore inception of the policy i.e. from 24.10.2016 which he failed to disclose so his claim was rejected. Faced with this situation, on 17.05.2017 he got issued a legal notice to the Ops, which was replied on 24.06.2017. Thus there was deficiency in service on the part of the Ops, hence the complaint.

3.      Upon notice, OPs filed its written version stating therein that  the claim was reported in the 3^rd month of inception of the policy and an amount of Rs.5,15,000/- was claimed. The complainant remained admitted in MedantaTheMedicityfrom 27.01.2017 onwards and was discharged on 04.02.2017 and insured submitted pre authorization request for cashless treatment. The documents submitted by hospital observed that Echo shows evidence of concentric LVH (Left ventricle hypertrophy) indicating long standing  hypertension and the onset of the illness cannot be ascertained from the available record. The statement of Dr. Madan Lal shows that insured was taking treatment of hypertension and has been consulting the doctor on and off since two years, the statement of owner of Ashish Laboratory & x ray centre dated 08.03.2017 brings out that insured used to undergo investigation in his lab since 4-5 years and has remained under regular treatment of Dr. Madan Jain. Therefore due to concealment of this pre existing disease, his claim was rightly repudiated on the ground of two years exclusion as the insured patient has undergone treatment primarily for disease due to bicuspid aortic valve i.e. for Congenital InternalDisease which was not payable during the two years of continuous coverage for insurance policy as per exclusion No.3 of the policy. Further submitted that if the OP was held liable to pay the claims of the complainant, the liability of the OP as per the terms and conditions shall be limited to Rs.4,62,283/-.     Rest of the contents of complaint are denied being incorrect and prayed for dismissal of the complaint.

4.      After hearing both the parties, the learned District Commission, Sirsahas allowed the complaint vide order dated 29.07.2019, which is as under:-

“In view of the above discussion, we allow this complaint and direct the opposite party to settle and pay the claim of the complainant within a period of 45 days from the date of receipt of copy of this order, failing which the complainant will be entitled to interest @ 7% per annum on the claim amount from the date of this order till actual payment. We further direct the Ops to pay a sum of Rs.5000/- as compensation for harassment and Rs.2000/- as litigation expenses to the complainant.”

5.      Feeling aggrieved therefrom, OPs-appellants have preferred this appeal before this Commission.

6.      Arguments heard. File perused.

7.      It is not disputed that the complainant had purchased a Family Health Optima Insurance Plan covering Mr.Ashok Kumar-Self, Smt.Sarla-Spouse, Daughter Riya and son Himanshu for a sum assured of Rs.10,00,000/- from the opposite parties.  It is also not disputed that during the subsistence of the policy in question,complainant was hospitalised for heart problem and spent Rs.5,51,000/- on his treatment. It is not disputed that the complainant suffered heart ailment in January 2017 and the period of 48 months had not elapsed since the inception of the policy.  The claim was repudiated by the opposite partieson the ground that complainant was having pre existing disease and the insured has categorically concealed this fact and did not disclose the same at the time of inception of policy. But there is no record on the file to prove that the insured was having pre existing disease. It was observed in the discharge summary the insured patient was 47 years old hypertensive diabetic male, presented with complaints of breathlessness on exertion since 10-15 days associated with headache since 10 days and as per the findings noted in discharge summary, the echo report evident of congenital bicuspid aortic value and biopsy report suggestive of myxoid degeneration of aorta. The perusal of the file shows that the Ops have not furnished affidavit of Dr.Madan Jain  who was allegedly giving treatment  of heart ailment to the complainant.  Learned counsel for the appellants have relied upon judgement of Hon’ble Supreme Court  in civil appeal No.3359 of 2019 titled Oriental Insurance Company Limited Vs. Mahendra Construction decided on 01.04.2019 is not applicable in the case in hand because the facts and circumstances of the case are different from that of the present case.The case law relied upon by counsel for the respondent titled  LIC vs Priya Sharma 2012(4) CPJ 646 *NC), New India Vs. Rakesh Kumar,m 2014(3) CPJ 340 (NC), LIC Vs. Kunari Devi in RP No.2733 of 2008 i.e.484729(NC), Manish Goyal Vs. Max Bupa Health Ins. Co. 2018(2) CLT 205 (CSCDRC) and M/s Royal  Sundram Alliance Insurance Co. Ltd. And Anr. Vs. Melanie Das 2018 (1) CPR 720are relevant and applicable in the case in hand because the facts and circumstances of the casesare similar to the present case.

8.      It is a matter of common experience, insurance companies often repudiate claims on grounds of non-disclosure of material information by the consumer. However they conveniently forget that there is an even greater statutory obligation cast on them to give full information to the consumer about the products they sell.

The responsibilities of the insurer towards full disclosure is even more because (a) the Insurance Regulatory and Development Authority’s (IRDA) Regulation on the protection of Policyholders’ Interests’ specifically mandates this and (b) the contracts of insurance, which are ‘Adhesion Contracts’ or ‘Standard Form Contracts’ are drawn up unilaterally by the dominant party-the insurer. The consumer, being the weaker party has no bargaining power, nor knowledge of the terms of the contract. So, the apex court has often said that these contracts, therefore, demand a very high degree of fairness, good faith and disclousure on the part of the insurer.

          Here are two cases where the Supreme Court has reminded insurers of their obligation in this regard and warned them against violations. The two cases also show-case the kind of unfair practices indulged in by insurers.

          In Texco Marketing Pvt. Ltd. Vs TATA AIG General Insurance (CA No. 8249 of 2022, date of judgment: November, 9, 2022), for example the insurance company insured after due inspection, a shop loacated in a basement under the Standard Fire and Special Perils Policy, despite the fact that the policy specifically excluded basements. Subsequently, following a fire, when the policyholder made a claim, the insurer repudiated it on the basis of the exclusion clause!

          While ruling in favour of the consumer, the apex court observed that first and foremost, the insurer did not bring the exclusion clause to the notice of the consumer. And then, despite having knowledge of the exclusion clause, it insured the basement and received the premium benefits. After this, repudiating the policyholder’s claim on the basis of the exclusion clause was certainly an unfair trade practice. “This view is fortified by the finding that the exclusion clause is an unfair term, going against the very object of the contract, making it otherwise un-executable from its inception,” the apex court said.

          Some of the observations of the court in this case would go a long way in upholding the rights of the policyholders. For example, the court made it clear that an exclusion clause, if not brought to the notice of the consumer by the insurer or agent, would not be binding on the consumer. Similarly, an unfair term in an insurance contact would be un-executable. The Supreme Court also reminded insurers that an exclusion clause “is not a leverage or safeguard for the insurer, but is meant to be pressed into service on a contingency, being a contract of speculation”.

          Said the court: “Before we part with this case, we would like to extend a word of caution to all the insurance companies on the mandatory compliance of Clause (3) and (4) of IRDA Regulation, 2022. Any non-compliance on the part of the insurance companies would take away their right to plead repudiation of contract by placing reliance upon any of the terms and conditions included thereunder”.

9.      The repudiation of the claim was bad in the eyes of law and was not justified. The OP has illegally repudiated the claim of the complainant. The learned District Commissionhas rightly allowed the claim of the complainant. The learned District Commission had committed no illegality while passing the order dated 29.07.2019.  The appeal is also devoid of merits and stands dismissed.

10.    The statutory amount of Rs.25,000/- deposited at the time of filing the appeal be refunded to the appellantsagainst proper receipt and identification in accordance with rules, after the expiry of period of appeal/revision, if any.

11.              Applications pending, if any stand disposed of in terms of the aforesaid order.

12.              A copy of this order be provided to all the parties free of cost as mandated by the Consumer Protection Act, 1986/2019. The order be uploaded forthwith on the website of the commission for the perusal of the parties.

13.              File be consigned to record room after due compliance.

 

28th April, 2023                                                                   S. P. Sood                                                                                                                            Judicial Member                            

 

S.K(Pvt. Secy.)