Haryana

StateCommission

A/282/2019

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

Versus

DR. JYOTI AND OTHERS - Opp.Party(s)

RAVINDER ARORA

01 May 2023

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

 

                                                      First Appeal No.282 of 2019

                                                Date of Institution: 26.03.2019

                                                          Date of order:01.05.2023

 

M/s Star Health and Allied Insurance Company Limited, through its Branch Manager,  Branch Office No.2, Second Floor, Ganpati Building, Opp. Madhu Hotel, Yamuna Nagar through its duly constituted attorney.

                                                                    .....Appellant

Versus

 

1.      Dr. Jyoti aged31 years, D/o Sh.Ramesh Chand Sharma, R/o H.No.18-19A, Kamla Nagar, Behind Telephone Exchange, Yamuna Nagar, Distt. Yamuna Nagar (presently residing H.No.C-37, Arya Samaj Road, Behind ShagunJewellers, Uttar Nagar, New Delhi).

2.      Mr.Mukesh Kumar Officer, Incharge, Claims Department, M/s Star Health and allied Insurance Co. Ltd., SCO 130-131, Sector 34-A,Chandigarh.

3.      Mr. Jatinder Madan Authorized Agent, (Intermediary Code No.BA0000114949) M/s Star Health and Allied Insurance Co. Ltd, R/o H.No.63, Sharma Garden, Behind Mahindra Petrol Pump, Yamuna Nagar.

                                                                                      .....Respondents

CORAM:    S.P.Sood, Judicial  Member

                  

                  

Present:-    Mr. Rohit Goswami, Advocate for theappellant.

                   Mr.R.C.Sharma, Advocate for the respondents.

 

                                                ORDER

S P SOOD, JUDICIAL MEMBER:

          The brief facts of the case are that the complainant had taken a Medi Classic Insurance Policy (Individual) bearing No.P/211120/01/2013/000769 dated 24.01.2013 to 23.01.2014 and was got renewed by the complainant from time to time i.e. from 24.01.2014 to 23.01.2015, 28.01.2015 to 27.01.2016 and 23.02.2016 to 22.02.2017. The opposite party (OP) No.4 was very well informed that marriage prospectus of the complainant were going on and likely to be finalized her marriage will be performed in the month of April 2015.  The marriage of the complainant was solemnized on 22.04.2015 with Nitesh Sharma of Delhi.  At the time of renewal of policy, the respondent No.4 was quite aware about the marriage of the complainant and the concerned person on behalf of OP No.4 had further assured the complainant that policy covers the pregnancy and also its related treatment if any.  After having some serious complications, the complainant had to be hospitalized for her treatment in Masih Hospital, Yamuna Nagar thrice from 16.06.2016 to 06.09.2016 i.e. firstly from 16.06.2016 to 18.06.2016 (surgery was done), then from 03.08.2016 to 04.08.2016 and then from 02.09.2016 to 06.09.2016 and this is how a sum of Rs.43,539.30 Ps was spent on her treatment.  Thereafter again she for the fourth time was admitted in the Mash Hospital, Yamuna Nagar on 22.10.2016 where she gave birth to a female child through cesarean section and remained admitted over there from 22.10.2016 to 27.10.2016 and spent an amount of Rs.24590/-on her treatment. The father of the complainant informed about the development of hospitalization of the complainant to OP No.1 and 2.  After discharge, complainant submitted all documents and bills with the OP No.1 and requested to reimburse the medical expenses to the tune of Rs.68129.30 ps., but OP No.1 refused to accept the claim of the complainant on false  and frivolous grounds.Thus there being deficiency in service on the part of the Ops, hence the complaint.

2.      Upon notice, OP filed its written version stating therein thatthe complainant had purchased medi classic insurance policy (Individual), but, as per exclusions No.13 “Treatment arising from or traceable to pregnancy, child birth, miscarriage, abortion or complications of any of these”, the complainant was not entitled for the claim amount and same was repudiated  and communicated to the complainant on 07.11.2016. The maximum liability of the respondent under the terms of the policy in question shall be Rs.3669/- vide claim No.148366 and Rs.10025/- vide claim No.84708/-. Thus there was no deficiency in service on the part of the Ops and requested to dismiss the complaint.

3.      After hearing both the parties, the learned District Commission, Yamuna Nagar at Jagadhrihas allowed the complaint vide order dated 07.02.2019, which is as under:-

“Hence, due to reason stated here-in-before, this Forum by its unanimous view accept the complaint of the complainant holding the respondents No.1 and 2 were not justified to repudiate the claim of the complainant vide letter dated 07.11.2016 Annexure R-7 and committed deficiency in service. Respondents No.1 and 2 jointly and severally held liable to make payment of Rs.68129.30 ps rounded Rs.68130/- to the complainant on account of expenses on her treatment and compensation  in the sum of Rs.10,000/- on account of suffering from mental agony and harassment by the complainant. These both the amounts shall carry interest @ 7% p.a. from the date of repudiation of claim i.e. 07.11.2016 till actual realization.  Apart from it, respondents No.1 and 2 jointly and severally held liable to make payment of Rs.2000/- only to the complainant as litigation charges, which shall be the separate component and will not carry on interest. The respondents No.1 and 2 are directed to comply with this order within 30 days from today, in default of it, provisions of section 25 & 27 of the Consumer Protection Act, 1986 may be invoked.”

4.      Feeling aggrieved therefrom, OP-appellant has preferred this appeal before this Commission.

5.      These argumentswere advanced by Sh.Ravinder Arora proxy counsel for Mr.Rohit Goswami,learned counsel for the appellant as well as Sh.R.C.Sharma, learned counsel for the respondent. With their kind assistance the entire record of appealas well as original record of the District Commission including whatever evidence has been led on behalf of  both the parties has also been properly perused and examined.

6.      It is not disputed that the complainant had purchased a Medi Classic Insurance Policy (Individual) bearing No.P/211120/01/2013/000769 commencing from 24.01.2013 to 23.01.2014.  It is also not disputed that the policy was got renewed by the complainant from time to time i.e. from 24.01.2014 to 23.01.2015, 28.01.2015 to 27.01.2016 and 23.02.2016 to 22.02.2017.It is also not disputed that during the subsistence of the policy in question,complainant as well as his wife was hospitalised for treatment.However, the claim was repudiated by the opposite party as per exclusion clause 13 of the policy.  As per terms and conditions of the  insurance policy, the exclusion clause was part of the agreement between the parties. The complainant has not violated any terms and conditions of the insurance policy. The case laws relied upon by counsel for the respondent titled  Star Health & Allied Insurance co. Vs. Haridas C.K. 2017(1) CPR 579 (NC), OIC Vs.VivekRekhan 2014(3) CLT, CWP No.25675 of 2017 titled Oriental Insurance Company Ltd. Vs.Ramesh Lal Nijhara and others decided on 10.11.2017 and Oriental Insurance co. Ltd. Vs. M/s Shraddha Traders 2019(3) CPR 208 (NC)are relevant and applicable in the case in hand because the facts and circumstances of the casesare similar.

7.      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 located 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”.

8.      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 07.02.2019.  The appeal is also devoid of merits and stands dismissed.

9.      The statutory amount of Rs.25,000/- deposited at the time of filing the appeal be refunded to the complainant-respondent NO.1-Dr.Jyoti D/o Sh.Ramesh Chand Sharmaagainst proper receipt and identification in accordance with rules, after the expiry of period of appeal/revision, if any.

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

11.              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.

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

 

1stMay, 2023                                                                        S. P. Sood                                                                                                                            Judicial Member                            

S.K(Pvt. Secy.)