DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, KOZHIKODE
PRESENT : Sri. P.C. PAULACHEN, M.Com, LLB : PRESIDENT
Smt. PRIYA.S, BAL, LLB, MBA (HRM) : MEMBER
Sri.V. BALAKRISHNAN, M Tech, MBA, LL.B, FIE: MEMBER
Friday the 30th day of December, 2022
C.C. 414/2014
Complainant
Muhammed Iqbal. K. P.,
S/o K. T. Saidali,
Puthukulangara House,
Pillassery, Kunnamangalam P.O,
Kozhikode.
(By Adv. Sri. V. Razal Rahiman)
Opposite Parties
- Cholamandalam M S General Insurance Company Ltd.,
Hari Nivas Towers, 2nd Floor 163,
Thambu Chetty Street,
Parry’s Corner, Chennai 600001- Tamil Nadu.
- Cholamandalam M S General Insurance Company Ltd.,
-
Kannur Road, Calicut – 673011.
(By Adv. Sri. Thomas Mathew & Adv. Sri. A.U. Lukose)
ORDER
By Sri. P.C. PAULACHEN – PRESIDENT.
This is a complaint filed under Section 12 of the Consumer Protection Act, 1986.
2. The case of the complainant, in brief, is as follows:
The complainant had availed the insurance facility of the opposite party by purchasing mediclaim policy. As per the terms of the policy, the opposite party had agreed to reimburse all the medical charges including hospital lab and medicine expenses of the complainant during the policy period. The policy period started from 11/10/2012.
3. On 31/08/2013 the complainant felt chest pain and was admitted in Iqraa International Hospital & Research Centre, Kozhikode. He had undergone emergency Coronary Angiogram, treating the same by PTCA and stenting done to Leukocyte adhesion deficiency. He was discharged on 04/09/2013 and continued medication at home.
4. The factum of admission in the hospital was informed to the opposite party on the same day itself. The medical expenses amounted to Rs. 1,02,466/- which was paid by the complainant. Thereafter he preferred a claim before the opposite party. But the claim was repudiated by the opposite party stating that the claim raised was due to the complication which was existing since 3 years prior to the inception of the policy. The opposite party relied on the discharge summary issued from the hospital. In the discharge summary the doctor had noted DM-HTN-3 years. This was noted not on the basis of any diagnosis. It was taken out from the oral statement made by some other persons who had accompanied the complainant at the time of admission. There was no pre-existing DM-HTN for him at the time of his seeking treatment. The complications the complainant met with was not directly or indirectly caused by the said DM-HTN. The claim was wrongly repudiated by the opposite party and it amounts to deficiency of service and unfair trade practice. Hence the complaint claiming an amount of Rs. 1,02,466/- with interest and costs.
5. The second opposite party was impleaded as per IA 49/2015. The opposite parties resisted the complaint by filing written version and additional written version wherein they have denied all the allegations and claims made against them. The policy is admitted. The disease of the complainant was pre-existing before the inception of the policy. The complainant had taken the policy without informing the opposite parties that he was having pre-existing disease. As per the policy conditions, the opposite parties are not liable to honour the claim for pre-existing diseases. The discharge summary shows that the complainant was having the ailment for the last 3 years before taking the policy. So the claim was repudiated based on the discharge summary. There was no deficiency of service on the part of the opposite parties. The complaint is frivolous and vexatious and liable to be dismissed with costs.
6. The points that arise for determination in this complaint are;
(1). Whether there was any deficiency of service or unfair trade practice on the part of the opposite parties, as alleged?
(2). Reliefs and costs.
7. Evidence consists of the oral evidence of PWs1 and 2 and Exts A1 series and A2 series on the side of the complainant. RW1 was examined and Exts B1 to B4 were marked on the side of the opposite parties.
8. We heard both sides.
9. Point No.1 : The complainant has approached this Commission with a grievance that the claim put in by him in connection with his treatment was repudiated by the opposite parties without valid reason and thereby there was deficiency of service and unfair trade practice on their part.
10. In order to substantiate his case, PWs1 and 2 were examined and Exts A1 series and A2 series were marked on the side of the complainant. PW1 is none other than the complainant and he has deposed in terms of the averments in the complaint and in support of the claim. Ext A1 series are the medical bills and Ext A2 series are the medical reports. PW2 is the doctor who treated the complainant in Iqraa Hospital.
11. The stand taken by the opposite parties is that the pre-existing disease and medical history of the complainant were not disclosed to them and thus there was suppression of material facts and thereby there was violation of utmost good faith and the insurance contract has become void ab-initio and no contractual obligation arises. The Deputy Manager of the opposite parties was examined as RW1 and 4 documents were marked through him as Exts B1 to B4. RW1 has deposed supporting and reiterating the averments in the written version. Ext B1 is the copy of the policy with conditions, Ext B2 is the copy of the discharge summary, Ext B3 is the copy of the repudiation letter and Ext B4 is the certificate issued by Dr. Ravisankar.
12. There are some admitted facts in this case. That the complainant is the holder of Group Health Insurance Policy of the opposite parties is admitted. The policy was valid from 11/10/2012 to 10/10/2013. Total sum insured was Rs. 2,00,000/-. The complainant was under treatment as an inpatient from 31/08/2013 to 04/09/2013 in Iqraa International Hospital and Research centre, Kozhikode. The hospitalisation and treatment expenses in the said hospital amounted to Rs. 1,02,466/-. The complainant preferred claim before the opposite parties. But the claim was repudiated by the opposite parties as per Ext B3 letter dated 04/11/2013. There is no serious dispute on the above aspects.
13. Ext B3 shows that the claim was repudiated for the reason that the ailment (CAD – DVD) is a complication of DM- HTN which was existing since 3 years, which is prior to the inception of the policy and hence the ailment is considered as pre-existing disease and claim is inadmissible as per the conditions of the policy. Ext B2 discharge summary shows that the diagnosis was CAD –NONSTEMI/DVD-S/P DES TO LAD on 31/08/2013 - GOOD LV FUNCTION/SR/HTN/OBESITY.
14 . It is well settled that the contract of insurance is a contract uberimmae fidei and every material fact must be disclosed. In Modern Insulators Ltd. Vs. Oriental Insurance Co., Ltd. (2000)2 Supreme Court Cases 734, the Hon’ble Supreme Court has held that the non-disclosure of the terms and conditions is violation of utmost good faith which is the base of insurance contract. In paragraph 8 of the aforesaid decision, it has been held as follows:
“It is the fundamental principle of insurance law that utmost good faith must be observed by the contracting parties and good faith forbids either party from non-disclosure of the facts which the parties know. The insured has a duty to disclose and similarly it is the duty of the insurance company and its agents to disclose all material facts in their knowledge since obligation of good faith applies to both equally”.
15. The Hon’ble Apex Court in 2021 ( 0 ) Supreme (SC) 779- (Manmohan Nanda V/s United India Insurance Company Limited) has observed as follows; (paragraph 52)
“On a consideration of the aforesaid judgments, the following principles would emerge:
(!). There is a duty or obligation of disclosure by the insured regarding any material fact at the time of making the proposal. What constitutes a material fact would depend upon the nature of the insurance policy to be taken, the risk to be covered, as well as the queries that are raised in the proposal form.
(!!). What may be a material fact in a case would also depend upon the health and medical condition of the proposer.
(!!!). If specific queries are made in a proposal form then it is expected that specific answers are given by the insured who is bound by the duty to disclose all material facts.
(!!!!). If any query or column in a proposal form is left blank then the insurance company must ask the insured to fill it up. If in spite of any column being left blank, the insurance company accepts the premium and issues a policy, it cannot at a later stage, when a claim is made under the policy, say that there was a suppression or non-disclosure of a material fact, and seek to repudiate the claim.
(v). The insurance company has the right to seek details regarding medical condition, if any, of the proposed by getting the proposer examined by one of its empanelled doctors. If, on the consideration of the medical report, the insurance company is satisfied about the medical condition of the proposer and that there is no risk of pre-existing illness, and on such satisfaction it has issued the policy, it cannot thereafter, contend that there was a possible pre-existing illness or sickness which has led to the claim being made by the insured and for that reason repudiate the claim.
(vi). The insurer must be able to assess the likely risks that may arise from the status of health and existing disease, if any, disclosed by the insured in the proposal form before issuing the insurance policy. Once the policy has been issued after assessing the medical condition of the insured, the insurer cannot repudiate the claim by citing an existing medical condition which was disclosed by the insured in the proposal form, which condition has led to a particular risk in respect of which the claim has been made by the insured.
(vii). In other words, a prudent insurer has to gauge the possible risk that the policy would have to cover and accordingly decide to either accept the proposal form and issue a policy or decline to do so. Such an exercise is dependent on the queries made in the proposal form and the answer to the said queries given by the proposer.”
16. In this context, it is worthwhile to have a glance at the decision of the Hon’ble National Consumer Disputes Redressal Commission in Arum Kumar vs. New India Assurance Company Ltd., reported in III (2017) (CPJ) 553 (NC) wherein it has been held as follows: “It is not denied that the complainant has been taking the insurance policy since the year 1997. It was the bound duty of the Insurance Company to have verified the information given in the proposal form by obtaining the suitable expert opinion. In case certain column in the proposal form were left blank, it was obligatory on the Insurance Company to ask him to fill the required information, before taking decision to issue the insurance policy. It is a matter of grave concern that the Insurance Companies, whether in the public sector or the private sector, do not make any effort to examine the proposal properly or get the necessary verification done, at the time of issuing the policies in question. However, when the claims are filed, minute scrutiny starts at that stage and the claims are repudiated, even for minor lapses on the part of the proposer. In the present case, the discharge summary of Sitaram Bharatiya Hospital stated that the complainant had difficulty in walking for a long time and history of borderline hypertension, but not on any medication. The District Forum had rightly observed that non-disclosure of such conditions in the proposal form cannot be blown out of proportion, so as to disentitle the complainant from the claim amount from the Insurance Company. We have no reason to differ with the conclusion arrived at by the State Commission, because the conditions so mentioned in the report of the hospital, do not imply that the complainant was suffering from any serious disease. It is held, therefore, that the claim has been wrongly repudiated by the Insurance Company on the ground of non-disclosure of information about the health conditions in the proposal form.”
17. Though the opposite parties have alleged that while applying for the policy the complainant had supressed material facts that he was suffering from such complication, they have not taken any effort to produce the proposal form before this Commission. It is not known whether the query with regard to medical history was not properly filled up/ answered by the complainant. There is absolutely nothing to indicate that the insurance company had verified the information given in the proposal form. Without producing the proposal form, the opposite parties cannot contend at this stage that there was suppression/ non-disclosure of the previous medical condition and repudiate the claim stating that reason.
18. In Ext B2, the history of DM, HTN – 3 years is noted by PW2. This was noted not on the basis of any diagnosis. It is not based on any medical test, but only on oral statement. PW2 has clarified in the cross-examination that in this case HTN is under well control and in his opinion HTN is not the cause for Angiogram and Angioplasty.
19. Further, in paragraph 69 of the aforesaid decision, it has been held by the Hon’ble Apex Court that “The object of seeking a medi claim policy is to seek indemnification in respect of a sudden illness or sickness which is not expected or imminent and which may occur overseas. If the insured suffers a sudden sickness or ailment which is not expressly excluded under the policy, a duty is cast on the insurer to indemnify the appellant for the expenses incurred thereunder.”
20. From the above discussion, what emerges is that the claim was wrongly repudiated by the opposite parties. The act of the opposite parties in wrongly repudiating the claim and thereby denying the legitimate claim amounts to gross deficiency of service and unfair trade practice. The request made by the complainant for the hospitalisation and treatment expenses amounting to Rs. 1,02,466/- is to be honoured by the insurance company. The complainant is also entitled to get Rs. 5,000/- as cost of the proceedings.
21. Point No.2: In the light of the finding on the above points, the complaint is disposed of as follows;
a) CC 414/2014 is allowed in part.
b) The opposite parties are hereby directed to pay the complainant the claim amount of Rs. 1,02,466/- (Rupees one lakh two thousand four hundred and sixty six only) with interest @ 6%p.a from the date of the complaint ie 23/08/2014 till actual payment.
c) The opposite parties are directed to pay a sum of Rs. 5,000/- (Rupees five thousand only) as cost of proceedings to the complainant.
d) The order shall be complied with within 30 days of the receipt of copy of this order.
Pronounced in open Commission on this, the 30th day of December, 2022.
Date of Filing: 23/08/2014.
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APPENDIX
Exhibits for the Complainant :
Ext. A1 series – Medical bills.
Ext. A2 series – Medical reports.
Exhibits for the Opposite Party
Ext. B1 – Copy of the policy with conditions.
Ext. B2 – Copy of the discharge Summary.
Ext. B3 – Copy of the repudiation letter.
Ext. B4 – Certificate issued by Dr. Ravisankar.
Witnesses for the Complainant
PW1 – Muhammed Iqbal (Complainant)
PW2 – Dr. Muhammed Cholakkal.
Witnesses for the opposite parties
RW1 – Vyshakh Menon. T. M.
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PRESIDENT
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Forwarded/By Order
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Assistant Registrar
