MR LAXMI NARAYAN PADHI, PRESIDENT…           The description in brief as per the Complaint is that, the Complainant is an account holder in the branch O.P.1,Bank of Baroda and on request of the O.P.1 he had subscribed to a health policy of OP.2, for his family namely Toofan Hiran, himself, Kalpana Hiran, his wife, Subham Sawan Hiran, his son of 12 years and Pragyan Paritosh Hiran his daughter of seven years, by paying an annual premium of Rs.5,906/- vide D.D.No. 209698 dtd. 07.05.2015, the policy being valid from 11.05.2015 to 10.05.2015.That on 22.o9.2015,the son Subham Sawan Hiran while playing in School, suddenly fell ill with chest pain and on information, the Complainant rushed the boy to local Christian Hospital vide O.P.D.No. 14474, where after preliminary checkup the doctors suspected it to be Acyanotic heart Disease of  Patent Ductus Arteriosus  and referred the case to the Christian Medical College of Vellore where the Complainant on payment of Rs.630/- got appointment of the concerned doctor, paid Rs.3915 for lab tests and the illness was detected to the Acyanotic heart Disease of  Patent Ductus Arteriosus  and surgery for Patent Ductus Arteriosus device closure was done on dt.13.10.2015.For the surgery and the treatment he had to incur Rs.1,00,700/- for boarding Rs.10,160/-,for travelling to the hospital an amount of Rs.8,310/-. The Complainant  submitted his claim for medical reimbursement under the policy before the O.P.s vide Claim No. DHS15Z126977, but the O.P.s repudiated the claim on the pretext that, the boy was suffering from dyspnea, and the present treatment being congenital, comes under the exclusion clause. Thus aggrieved by the repudiation has filed this Complaint praying for direction to the O.P.s to reimburse the medi claim with compensation of Rs.50,000/- and litigation cost of Rs.5,000/-.

02.       The Complainant has filed, the copy of  Policy Certificate of the O.P.2 (Ext-C-1)TPA Guideline(  Ext-C-2),Certificate/referral letter of Christian Hospital, Nabarangpur (Ext-C-3), Discharge summary of Chrstian Medical College of Vellore(Ext-C-4 ),bills of treatment ,travelling and boarding in 24 pages(Ext-C-5  ) and Repudiation letter of DHS, the TPA of O.P.2.( Ext-C-6).

03.       The O.P.2 filed his counter on dt.10.03.2016,contending that, the Complainant had been issued a health policy vide No. 163202/48/15/8500000017 and after going through the discharge report of Christian Medical College, Vellore, it was discovered that the son of the complainant was suffering from dyspnea on exertion and exertional palpitations since his childhood. Thus as per the policy condition 4.1, benefit for preexisting diseases will not be available until 36 months of continuous coverage of the policy and as per 4.3 of the policy conditions during the period of 12 months from the date of inception of the policy. As the claim arose within one year of the insurance of the policy, and that suppression of material facts by not disclosing the disease in the proposal form has been made by the Complainant the repudiation is rightly made and thus prayed dismiss the Complaint.

04.       The O.P.2 filed the copy of the policy certificate and prospects of the policy.

05.       The O.P.1 submitted his oral argument that, he being the agent of the O.P.2, has no role except forwarding the proposal form of the proposed insured persons to the O.P.2, hence for repudiation he is not responsible, as thus the complaint against him is bad and prayed for dismissal of Complaint against him. However, he refrained from filing any written version.

06.       Considering the pleadings of the parties, and after perusal of all the papers in record, this forum restricted its adjudication to the following points:

(i)        Is repudiation of the claim of Complainant as per shall stand as per conditions under 4.1 and 4.3 of the policy and the contract of insurance is void of suppression of material facts?

(ii)       What order?

07.       The facts which are not in dispute are that the Complainant obtained mediclaim policy of O.P.No. 1 designed for customers of Bank of Baroda bearing No.163202/48/15/8500000017 which covers the Complainant and his family. The said policy was commenced on 11.05.2015 and valid from 11.05.2015 to 10.5.2015 (as per Ex C-1),The O.P.1 being the agent for the policy.
08.       The dispute between the parties are that the Complainant’s Son Subham sawan Hiran hospitalized on 12.10.2015 for Acyanotic heart Disease of Patent Ductus Arteriosus  and he was hospitalized in Christian Medical College,Vellore-4,of Tamilnadu in India,  from 12.10.2015 to 14.10.2015 and underwent Patent Ductus Arteriosus device closure, a typical surgery and had to incur an expenditure of Rs. spent Rs.1,23,085/-. Thereafter the Complainant submitted the claim form to the Opposite Party vide Claim No. DHS15Z126977 but the Opposite Party repudiated the claim stating that the disease/ailments are falling within the exclusion clause of 4.3 of the policy. It

is contended that the same is arbitrary and not valid.
09.       On the contrary, the O.Parties contended that the claim of the Complainant falls within the purview of exclusion clause 4.3 of the policy and the Complainant is not entitled to get the benefit of the policy.

10.       Now the point for consideration is that, whether the O.P.2 proves that the policy holder i.e. the son of the Complainant had pre-existing disease at the time of obtaining the policy and which excludes under the terms and conditions of the policy ? In a case of like this nature the entire burden lies upon the Opposite Party Company to prove before the forum that the claim falls under the exclusion clause.

11.       It is worthwhile to refer policy condition before discussing the points on merits. The exclusion caluse 4.3 reads thus-

            “The company shall not be liable to make any payment under this policy in respect of any expenses whatsoever incurred by any insured person in connection with or in respect of:-

            During the first one year of the operation of the policy the expenses on treatment of Benign ENT disorders & surgeries like tonsillectomy/Adenoidectomy/ Mastoidectomy/ Tympoanoplasty, treatment of diseases such as Cataract, Benign Prostatic Hypertrophy, Hysterectomy, Hernia, Hydrocele, Congenital Internal Diseases, Fissures/Fistula in anus, Piles, sinusitis and related disorders, Polycystic ovarian diseases, Non-infective arthritis, Un descended testis, Surgery of gall bladder & bile duct excluding malignancy, surgery of Genito-urinary system excluding malignancy, Pilonidal Sinus, Gout & Rheumatism, Hypertension, Diabetes, Calculus diseases, surgery for prolapsed inter vertebral disc unless arising from accident, surgery of varicose veins are not payable for the first two years of operation of the policy.
Treatment for Joint replacement due to degenerative conditions, Age related osteoarthritis and osteoporosis are not payable for first four years of operation of the policy.
If these diseases are pre-existing at the time of proposal, will be covered only after four continuous Claim free policy years.
12.       While dyspnea is common, it has various causes. The most common reasons for dyspnea are asthma, chronic obstructive pulmonary disease, myocardial ischemia, pneumonia and physical de conditioning. Some of the less common reasons for dyspnea are congestive heart failure or foreign body aspiration. The sign being short of breath after running and being short of breath due to being out of good physical condition are common and generally do not require intervention. It is a sign of physical deconditioning, and the body can be improved with exercise.

13.       No one, ordinarily, thinks of ordinary illnesses to be so fundamental and material to be disclosed before an insurance company, when he himself is not bothered of the disease so seriously.The insured's answer to the question in the personal statement, if he had any illness in past 3-4 years, may therefore be 'No'. Can it be said that the insured has made an untrue statement? The statement is untrue in a strict sense but true in a fair sense. If the insurer wants to avoid the policy of insurance because of such a statement, the insurer  must  establish by clear and cogent evidence that the question was properly explained to the insured. If the insurer does not establish these facts by clear and cogent evidence he cannot be permitted to take advantage of the 'basis' clause in the contract of insurance. The doctrine of uberima fide applies to both the parties in contract, equally. And Courts may well take judicial notice of the fact that insurance agents often run after prospective customers to persuade them to take out policies of insurance and tell them 'you just sign on the dotted line, Sir, I will take care of the rest'. This is an everyday experience. And here a situation can be presumed, the Bank of Baroda, of which the O.P.1 is a branch, has floated an health insurance policy, and being an agent he has persuaded the Complainant who had two accounts in the branch, to have one policy, and it would be beyond any reasonable imagine that, the bank officials demurring their busy hours has explained all the pros and cons of the policy to the Complainants,hence, this forum is not convinced  to apply the strict rule of construction flowing out of the 'basis' clause in all its rigour  without being satisfied that the insured was made to understand by proper explanation what the clause meant and what the questions implied, and when they have not, atleast without any cogent evidence placed before us by the O.P.s to have being done so, as per the guidelines of IRDA Regulations 2002(protection of interest of policy holders),the contentions of the O.P.s repudiating the claim of the Complainants, can not hold to valid and legal, and courts can not extend support to hold such contentions. Under Art. 12, of the Constitution. State and its instrumentalities are required to enjoinder with obligations to act with fairness taking consideration of relevant materials. Arbitrariness must not appear in their actions or in decisions.

14.       Insurance contracts can be considered as contracts of adhesion since there is little or no actual bargaining at all relating to the terms and conditions of the contract. The proposer may set conditions to suit his needs but the terms in the printed form of the contract are the only conditions that the insurer is prepared to contract upon. A standard-form contract prepared by one party, to be signed by the party in a weaker position, usually a consumer, who has little choice about the terms. Also termed Contract of adhesion; adhesory contract; adhesionary contract; take it or leave it contract; leonire contract.

15.       The doctrine of fundamental breach of contracts states that the party commits a breach of the contract that is so fundamental that it deprives the innocent or the weaker party of substantially the whole of the contract’s benefits, in addition to, entitling the distressed party to sue for damages. There is usually an exclusion of liability clause in insurance contracts which is taken up by the insurance companies as a defense in case of a breach. The fundamental breach of contracts such as insurance policies has to be examined on case-to-case basis since such contracts are used for a large number of participants. The interpretation of such contracts should be in a manner that is favourable to the insured since the policy is in a standard form contract and is prepared by the insurer alone.

16.       “ The law was settled by the Hon'ble Supreme Court in the judgment reported as “Mithoolal Nayak Vs. Life Insurance Corporation of India”, AIR 1962 in Para 8 as under : “ The three conditions of the application of the second part of Section 45 are : (a) the statement must be on material matter or must suppress facts which it was material to disclose ; (b) the suppression must be fraudulently made by the policy-holder ; and (c) the policy holder must have known at the time of making the statement that it was false or that it suppressed the facts which it was material to disclose.”

17.       A mediclaim policy is a non-life insurance policy meant to assure the policy holder in respect of certain expenses pertaining to injury, accidents or hospitalizations. Nonetheless, it is a contract of insurance falling in the category of contract uberrimae fidei, meaning a contract of utmost good faith on the part of the assured. Thus, when an information on a specific aspect is asked for in the proposal form, an assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge. It is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not. Of course, obligation to disclose extends only to facts which are known to the applicant and not to what he ought to have known. The obligation to disclose necessarily depends upon the knowledge one possesses.

18.       In our view, the patient subham Sawan Hiran was leading all normal life, continuing to go school, play, study, there is no known medical based leave from the school, were the dyspnea could be felt so serious as it require immediate medical attention, the parents could have done it, as the disease was existing since birth, nor that previously it was discovered to be congenital Acyanotic Heart Disease with Patent Ductus Arteriosus, and was leading a normal life. In the discharge summary of the Christian Medical College, Velore, it is stated thus” Mast.Subham Svan Hiran, a `3 year old boy presented with history of dyspnea on exertion and exertional palpitations since childhood. There was no history of giddiness or syncope,. There was no history of cyanotic spell, squatting episodes or recurrent lower respiratory tract infections in childhood. ……”

19.       Hence, the occasional symptoms of dyspnea in the boy was considered to be  normal wear and tear of life which was, according to the Complainant, was expected to be cured with advancement of age of the boy 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 disease or any other disease. If insured had been even otherwise living normal and healthy life and attending to his daily chores like any other child of his age and is not declared as a diseased, for any claim on sudden onset of hospitalization, the proposer cannot be held guilty for concealment of any disease, the medical terminology which is a special knowledge commonly confined to the knowledge of persons in the line and  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 or years. In our opinion, Insurance Company cannot take advantage of its act of omission and commission as it is under obligation to ensure before issuing mediclaim policy whether a person is fit to be insured or not. It appears that, Insurance Companies do not discharge this obligation as half of the 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’. 
20.       We find that claim of the insured should not be repudiated by taking a clue or remote reference to any so called disease from the discharge summary or the case sheets 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 to the date of underwriting the policy, as referred above. 

            With these discussions, we hold the O.P.2 is liable to pay the claim amount hence the Complaint is allowed with cost and compensation against O.P.2.

                                                         ORDER

i.          The O.P.2 is directed to pay off the claim of 1,23,715/-(Rupees one lakh twenty three thousand seven hundred fifteen) to the Complainant.

ii.         The O.P.2 is further directed to pay an amount of Rs.10,000/- as Compensation and Rs.3,000/- as cost of litigation to the Complainant.

iii.       The above orders shall be complied within 30 days hence receipt of the order, failing which the total awarded sum will carry 12% interest p.a. till its realization.

            Supply free copies of the order to the parties concerned.

                        Sd/                                                             Sd/-

                  MEMBER                                        PRESIDENT, DCDRF,

                                                                                 NABARANGPUR.