BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION AT BANGALORE (URBAN)

DATED 16TH DAY OF DECEMBER 2022

ORDER

SRI.M.SHOBHA, PRESIDENT

1. This  complainant  filed this complaint against the Opposite party  for reliefs

1. To direct to release  approved policy amount of Rs.8,55,524/- along with interest @ 18% p.a. from the date of approval of insurance.
2. To direct to pay a sum of Rs.1,00,000/- towards EMIs paid by the complainant and the interest thereon in pursuance of the loan availed by the complainant in order to settle the hospital bills.
3. Pay a sum of Rs.10,00,000/- towards the physical strain and mental agony suffered by the complainant and his family members as a consequence of the deficient service and the inconvenience caused by the OP and for the breach of trust and confidence that the complainant had vested in the OP brand name
4. and such other reliefs as this Commission deems fit to grant to the complainant.

2.  The case of the complainant:

It is case of the complainant that he is the retired employee of a public limited company, aged about 68 years, residing at Bengaluru. He purchased MY HDFC ERGO HEALTH INSURANCE POLICY and it was valid till 31.08.2020 from 01.09.2017.  The policy was issued by OP-1 through OP-2 to the complainant. At the time of submitting his application the complainant was not insisted upon to submit any good health declaration and accordingly he bought the above policy with a coverage of Rs.5,00,000/- plus Rs.3,00,000/- for critical illness. Further, the complainant has been awarded a bonus of Rs.1,00,000/- and total coverage of Rs.9,00,000/-.

It is further case of the complainant that he had minor medical ailment during early 2005, for which he was admitted to a hospital  on 31.01.2005 and discharged on 04.02.2005 with the following treatment as an inpatient without any surgery had relief of pain with
STK infusion. The complainant stopped smoking  a few years back, otherwise no risk fact. The complainant was subjected to Coronary Angio which revealed  mild MID               LAD disease with  clot and PDA disease integrillin bolus and infusion was given. He also produced discharge summary dt.04.02.2005 issued by the hospital as he underwent laproscopy for reduction of umbilical hernia contents at RMV hospital on 01.04.2014.  From then onwards till now the complainant is managing the same with simple minimal medication without any problem. Since the above ailments had completed more than three years and since no declaration form was insisted upon by the OP on 01.09.2017 while enrolling with HDFC ERGO Health Insurance, the complainant did not submit any declaration form.

It is further case of the complainant that he was admitted to Columbia Asia Referral Hospital,  Bengaluru  on 22.06.2020 for “CA prostate” and underwent a major surgery on 23.06.2020. At the time of admission the complainant had declared the above  ailments and its is well documented by the Hospital authorities in order to sent to insurance company while recommending for cashless provision. The annexed report dt.17.06.2020 deals with above ailments of  2005 and 2014 which was sent by the hospital authorities  through their portal and pre-authorization of Rs.4,00,000/- was obtained followed by another Rs.4,00,000/- on 26.06.2020.

It is further case of the complainant that he was discharged on 26.06.2020 and he was surprised to receive a note from the insurance officer stating “History of CAD not mentioned on pre-authorized Form all authorizations stand cancelled”  the note issued by OP on 26.06.2020 denying the cashless service. The complainant made several efforts to convince the OP that his pre-hospitalization admission letter clearly included about the CAD, but his efforts went in vain. Since, it was late hour, the complainant was forced to borrow a huge sum of money form the relatives to settle the bill of Rs.8,55,524/- on 26.06.2020.

It is further case of the complainant that upon further follow-up, the complainant was asked to submit claim forms A and B along with all original documents/reports/ bills/discharge summary. The complainant sent all scanned copies to the OP through mail and also through speed post on 30.06.2020 and were received by them at Noida office on 06.07.2020.

It is further case of the complainant that on 01.07.2020 the complainant received a mail from OP stating that the claim has been denied for the reason “the submitted claim for the expenses occurred during 22.06.2020 to 26.06.2020 which is beyond the policy period. Hence, we regret to inform you that the claim is repudiated”. The complainant immediately on 01.07.2020 sent a message to OP enclosing the copy of the  policy which is valid till 31.08.2020. He also requested the local HDFC Ergo TPA official Mr.Nithya to take up the matter with their claim department for a review citing the validity date of the policy is 31.08.2020. After several follow ups the complainant received a message that the claim team  shall call over the phone on 07.07.2020 where he can inform them his concerns.

It is further case of the complainant that he has received call from HDFC Ergo, Noida Claim team on 07.07.2020 at 16.30hours and few quires were put forward to the complainant. At the time the policy on 01.09.2017 no physical good health declaration form was insisted upon by the branch or the insurer.  The CAD for heart disease was in early 2005 that is more than 12 years ago, and at the time of availing the policy from Apollo Munich Health Insurance, he was informed that there is no need to declare the same as it was more than three years ago. The CAD in 2005 was not a surgery but was managed with some injections after an angiogram, the fact of which has been shared with HDFC Ergo by sending the discharge summary of 2005.

It is further grievance of the complainant that the OP company is intentionally and deliberately denying the genuine insurance claim of the complainant as it is pretty evident from the lack of homogeneity. The OP have rejected the insurance claim of the complainant on 26.06.2020 on the ground that “Non-disclosure of previous medical conditions amounts to cancellation of insurance ab initio” and on 01.07.2020, the OP have rejected the claim on baseless grounds  that “the submitted claim is for the expenses occurred during 22.06.2020 to 26.06.2020” which is  beyond the policy period and hence the claim is repudiated.  The baseless reasons stated by OP to repudiate a bona fide claim tantamount to deficiency of service, abdication of responsibility and breach of contract.  The OP have also informed the complainant that the existing policy shall not be renewed on 31.08.2020 by the complainant and it is treated as cancelled. The complainant  has paid entire premium on time every time since from the 1^st day of buying insurance policy.  The complainant has also written a letter to the         OP-2 requesting to take up the matter with head office and to guide how to get the health insurance policy renewed with a copy of DGM, Canara Bank, Head office.

It is further case of the complainant that the claim made by the complainant is one and only claim submitted  and it is a shock to the complainant to learn that the same is deliberately declined thereby denying the bona fide insurance claim of the complainant.

It is further case of the complainant that the denial of medical insurance claim has greatly inconvenienced the complainant. The complainant is physically exhausted, mentally harassed and he is also forced to repay the money borrowed to clear his medical bills at the hospital.

It is further case of the complainant that he has made repeated requests and has sent reminders to the OPs to settle the insurance amount, but to no avail. The complainant has also issued legal notice to OPs, but there is no response or reply  even after receipt of the legal notice. The OPs are responsible for  the offence of unfair trade practice, deficiency of service and  liable for damages caused. Hence, complainant filed this complaint.  

3. After service of notice, OPs have appeared before this commission through their counsel and filed their version.

4. It is the case of the OP-1 that the complaint is not maintainable  and liable to be dismissed. The OP has  admitted that the complainant policy holder or the insured herein has suppressed the facts and  has obtained the policy  with false declaration. As per conditions of the insurance policy, the insured ought not be suffering from any pre-existing illness. Further in the event of any information submitted by the insured being found to be false, incorrect, mis-representation, mis-description or non-disclosed in any material particular in the proposal form, personal statement and declaration and connected, the policy shall stand null and void and repudiated by the OP. The same has been mentioned clearly in the policy. After careful perusal of the medical history, it was observed that insured was a known case of Coronary heart disease prior to policy which was not revealed while taking the policy in the proposal form. Hence, the OP rightly repudiated the claim on the ground of non-disclosure and concealment of facts under section-7 of the policy terms and conditions.  As per medical records, it is clearly proved that the complainant suppressed the pre-existing disease.

It is further case of the OP that the complaint is an abuse of process of law and there is no deficiency of service provided by OP nor has the OP indulged  in any unfair trade practices. The repudiation on the part of the OP is valid and in consonance with the terms and conditions of the policy. Hence, the complaint is liable to be dismissed with exemplary costs.

5. The OP-2 has filed separate version  stating that it is merely a banker and is not necessary party. The complaint filed by the complainant even the bank is not at all concerned to any of the alleged liability/obligation  of the banker regarding the insurance claim. There is no insurance contract between the complainant and the banker. Hence, the complaint is not maintainable. Hence, OP-2 prays to dismiss the complaint by imposing exemplary and punitive costs.

6. It is pertinent to note here that during the pendency of this complaint, this commission passed order on the basis of memo filed by the complainant. The OP-2 was discharged from this case.

7. The complainant in order to prove his complaint filed his affidavit evidence and relied on documents P1 to P22. On the other hand in order to contest the matter OP-1, the Exclusive legal manager of OP-1 has filed his affidavit evidence and relied on documents Ex.R1 to R9.

8. The complainant and OP have submitted their written arguments. The complainant has also relied on 03 decisions of Hon’ble Apex court.

9. Perused the complaint, version, evidence and  documents adduced by both the parties. The following points do arise for our consideration are as under:-

1. Whether there is deficiency in service on the part of the OP?
2. Whether the complainant is entitled for the reliefs as sought for?
3. What order?

10. Our answer to the above points are as under:

       Point No.1:-Affirmative

      Point no.2:- Affirmative in part.

      Point No.3:-As per the final order.

REASONS

11. Point Nos.1 and 2:.Perused the complaint, version, affidavit evidence and decisions submitted by both parties and documents relied by both the parties. It is undisputed fact that the complainant has purchased group insurance health plan policy offered by OP with coverage of Rs.5,000,000/- plus Rs.3,00,000/-  for critical illness and the complainant also awarded bonus of Rs.1,00,000/-,  total coverage is  Rs.9,00,000/-. This is continuous  policy and the complainant paid every premium time  during 03 years of the policy period.

12. It is specific contention taken by the complainant that the OP neither took his signature nor digital signature of the complainant with respect to the proposal form nor proposal form  filled by the insured. No good health Declaration form was insisted at the time of enrolment of the policy.

13. It is further case of the complainant that he did not have any problem with the CA prostrate prior to purchase of the health insurance. The episode of CAD of the heart took place in the year 2005, but the policy was bought in the year 2017, which  is after a gap of 12 years. Since the above ailments had completed more than five year and since no  declaration form was insisted upon on 01.09.2017 while enrolling with OP, the complainant cannot be held liable for non-disclosure of material facts. There is no clear express provision in the enrolment form stating that the proposer should disclose each and every medical/health episode  or even since the time of his birth.  Every person to whom a mediclaim policy is offered, would have  at some point of time suffered from some disease or illness, but for the same to be considered as a pre-existing disease, ailment, condition or illness on which ground a claim could be repudiated. There is need for specific definition to be incorporated in the policy. This is because every disease or illness  cannot be considered  as a pre-existing disease or condition so as to exclude the benefit of the policy to the policy holder. The same cannot be vague or non-specific so as to enable the insurer to interpret the policy to its benefit whenever a claim is made under mediclaim policy.

14. It is further grievance of the complainant that he was admitted to the Columbia Asia Referral Hospital,  Bengaluru on 22.06.2020 for CA prostate  and underwent a major surgery on 23.06.2020. At the time of admission, the complainant had declared about ailments and it is well documented by the hospital authorities in their details of report sent to insurance company while recommending for cashless provision. On 22.06.2020 pre-authorization   of Rs.4,00,000/- was obtained followed by another Rs.4,00,000/- on 26.06.2020. The complainant get discharged on 26.06.2020 and he was surprised to receive a note from the insurance officer of OP-1 stating that “History of CAD not mentioned on pre-authorized  form all authorizations stand cancelled” and the claim made by the  complainant has been denied for the reasons that the submitted claim for the expenses occurred during 22.06.2020 to 26.06.2020, which is beyond the policy period. The OP has denied the claim even though the policy was valid till 31.08.2020.

15. It is further grievance of the complainant that as per decision of Hon’ble Apex Court in Sulpa Prakash Motegaonka and other V/s LIC of India held that the assured there in suffered myocardial infarction and succumbed to it. The claim was repudiated by the insurance company on the ground that there was a suppression of pre-existing lumbar syondylitis. It was in this background that the Hon’ble  Apex court held that the alleged concealment was of such a nature that it would not disentitle the deceased from getting his life insured. In other words, the pre-existing ailment was clearly unrelated to the cause of death. Likewise in the present case the complainant is seeking insurance claim for CA prostrate surgery which is not related in any way to the CAD of the heart that happened in 2005.

16. It is further grievance of the complainant that OP-1 has not placed any cogent evidence before  this Commission linking CA prostate to CAD of the heart, but denied the insurance claim based on the sole ground of non-disclosure of past medical history. There is no evidence lead by OP to show that the pre-existing condition of the heart  was the cause for the CA prostrate suffered  by the complainant  or that the complainant had any prostrate-related disease or condition. 

17. On the other hand only contention taken by the OP is that the complainant was under a solemn obligation to make full disclosure of material facts which may relevant for insurer to take into account. In  the instant case it is clear that the insured has failed to do so and suppressed the facts.  The policy bond document is the evidence of the contract. The terms and conditions of the policy bond are binding on the insurer as well as the insured. In the instant case the OP-1  acted as per terms and conditions of the policy, it cannot be termed as deficiency of service.

18. It is further objection raised by the OP that as per condition of the OP health insurance policy, the insured ought not be suffering from any pre-existing ailments. Further in the event of any information submitted by the insured being found to be false, incorrect, misrepresentation, mis-description or non-disclosed in any material particular in the proposal form, personal statement and declaration  connected, the policy shall stand null and void and repudiated by the OP. The same has been mentioned clearly in the policy.

19. As per medical history related to the complainant it is clearly suppressed  pre-existing diseases. Hence, this OP has rightly repudiated the claim made by the complainant and it does not amounts to deficiency of service. This OP no way responsible or liable for any of the alleged claims of the complainant. The complainant has made malafide  attempt to mis lead the commission and he is not able to show any deficiency in service and this OP in no manner liable  for payment claimed by the complainant.  The OP also relied on decision of Hon’ble Apex Court in LIC of India V/s Manish Gupta III(2019)CPJ 31(SC)

20. On this background we have gone through evidence lead by both the parties. The complainant in order to prove his contention  has filed his affidavit evidence and relied on documents Ex.P1 to P19. Ex.P2 is the insurance policy and Ex.P3 is copy of discharge summary. Ex.P4 is the ledger of RMV Vilas hospital. Ex.P5 is the copy of pre-admission declaration. Ex.P6 is the Copy of Anastasia. Ex.P7 is copy of authorization. Ex.P8 is copy of mail correspondence. Ex.P9 is copy of letter, Ex.P10 is copy of claim form, Ex.P11 is letter written by the complainant, Ex.P12 is postal receipt, Ex.P13 & P14 are copy of  e-mail correspondences, Ex.P15 is  copy of terms and conditions, Ex.P16 is complainant letter to OP-2, Ex.P17 is copy of legal notice , Ex.P18 & P19 are bunch of postal receipts and postal acknowledgements. 

21. On the other hand to prove their contention the Exclusive  Legal manager of  OP has filed his affidavit evidence reiterating all the allegation made in the version and he has relied on documents Exhibits R1 to R9. Ex.R1 is certificate of change  of name of the company, Ex.R2 is copy of enrolment form, Ex.R3 is copy of policy period dt.01.09.2017 to 31.08.2018 and also Ex.R4 & R5 are also copy of the policy from 01.09.2018 to 31.08.2019 and 01.09.2019 to 31.08.2020, Ex.R6  is claim form, Ex.R7 is discharge summary issued by Columbia Asia hospital, Ex.R8 is copy of discharge summary  issued by medicity and Ex.R9 is copy of repudiation letter.

22. It is clear from the both evidence of the complainant and OP and also the documents relied by them that the complainant has taken policy from OP. There is no dispute that the complainant has under went surgery for CA prostrate. It is also undisputed fact that after admitted to the hospital the complainant on 22.06.2020 has declared the ailments and before admission by the hospital authorities have sent their detailed report to OP company for recommending for cashless provision. Anastasia report  mentioned about ailment of 2005 and 2014, which was sent to OP by the hospital authorities on 22.06.2020. The OP have given pre-authorization for Rs.4,00,000/- and it was also authorized for Rs.4,00,000/- on 26.06.2020. It is also undisputed fact that the complainant was discharged from the hospital on 26.06.2020. As per hospital bills the complainant was to pay Rs.8,55,524/-. On the background we have gone through the decision cited by the complainant counsel. It is clearly held by the Hon’ble Apex court in the case 2005 Online SC 1880 Sulbha Prakash Motegaonkar and other V/s LIC of India.

23. The Hon’ble Apex court has clearly held that  the Hon’ble National Commission after hearing denied the policy of the insurance company accepting the repudiation of the claim by the respondent.  The death of the insured is due to ischaemic heart disease and also myocardial infarction. The concealment of Lumber Spondilitis with PID with Sciatica. In our opinion, since the alleged concealment was not of such a nature, as would disentitle the deceased from getting his life insured, the repudiation of the claim was incorrect and not justified. On this background the Hon’ble Apex court set-aside the order passed by the National Commission and allowed the appeal.

24. It is clearly held by the Hon’ble Apex court in Manmohan Nanda V/s United India Assurance Co. Ltd. and another. The object of seeking a mediclaim 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 not expressly excluded under the policy, a duty is cast on the insurer to indemnify the appellant for the expenses incurred there under.It is clearly held by the Hon’ble Apex court that repudiation of policy by the respondent United India Assurance Co. is not in accordance with law.

25. The Hon’ble High Court of Delhi is also clearly held in 2007(98)DRJ 246  between Hari Om Agarwal V/s Oriental Insurance Co. Ltd., the Hon’ble High Court clearly held in the decision that the main object of the Insurance policy was to cater medical expenses incurred by the insured. The refusal made by the insurer to reimburse the petitioners claim is arbitratory and unreasonable. The Hon’ble High court directed the Insurance Company for reimbursement of claim of the petitioner with litigation expenses. Hon’ble High Court further clearly held that the mediclaim policy is not an accident cover policy or a like policy. It is universally known that hypertension and diabetes can lead to a host of ailments such as stroke, cardiac diseases, renal failure, liver complications etc., depending upon the varied factors that implies that there is probability of such ailments equally they can arise in non-diabetes or those without hypertension unless the insurer spelt out with sufficient clarity, the purport of its clauses or charge a higher premia at the time of accepting the proposals, the insured would assume and perhaps, reasonably that later unforeseen ailments would be covered. Thus it would be apparent that giving a textual effect to clause-4.1 in most such cases  render the mediclaim cover meaningless. The policy could be reduced to a contract with no content, in the event of the happening of the contingency. The main purpose would have to be pressed into service. The Hon’ble Apex court further directed the Insurance Company to process reimbursement of the petitioner’s claim.

26. It is clear from the document produced by the complainant that the complainant underwent CA prostate surgery. As per report submitted by the hospital authorities, the CAD for heart disease  was in the year 2005. The complainant got the policy in the year 2017 which is after 12 years. Since the above ailment which is completed more than five years  and since no declaration form was insisted on 01.09.2017 while enrolling with HDFC ERGO Insurance company, the complainant cannot held for suppression of material facts.

27. The complainant is  seeking madiclaim for CA prostrate, which is not related to earlier CAD heart that has happened in 2005. The OP have also not produced any evidence  before this commission linking CA prostate with CAD of the heart.  They have denied insurance claim on the sole ground of non-disclosure of past medical history neither in the enrolment form nor  the insurance policy mandates to disclose past medical history beyond 05 years. There is no evidence lead by the company about pre-existing  condition of the heart was the cause for  CA prostate  suffered by the complainant.  It is established principle of law, the object of seeking mediclaim policy to seek  indemnification in respect of sudden illness  or sickness which is not expected or imminent and which may occur  in any point of time. If the insured suffered a sudden illness or ailment which is not excluded under the policy the duty to cast on the insurer to indemnify the complainant only for the expenses incurred there under and same held by Hon’ble Apex court in decision (2022)4SCC 582. Hence, on the other hand repudiation of the claim by the company is illegal and not accordance with law.

28. Therefore, the complainant clearly established the deficiency of service on the part of the OP in repudiating the claim of the complainant. Even though the policy is in force and they have  denied the claim informed the complainant that submitted claim  occurred beyond the  policy period. The complainant was admitted to the hospital on 22.06.2020 and he was discharged on 26.06.2020 and the policy was valid till 31.08.2020. In view of repudiation of the claim made by the OP company the complainant has suffered mental agony and financial loss in his old age.  Under  these circumstance, the complaint to be  is allowed in part. Hence, we answer point no.1 in the affirmative and Point No.2 affirmative in part.  

29. Point no.3:-.  In view of the above discussions, the complaint is liable to be allowed in part. The OP is directed to refund an amount of Rs.8,55,524/- with interest at 10% p.a. from the date of complainant till realization. The complainant is also entitled for compensation of Rs.2,00,000/- for the financial loss and also mental agony suffered by him. The complainant is also entitled for litigation expenses of Rs.10,000/-. Accordingly, we proceed to pass the following 

O R D E R

1. The complaint is allowed in part.
2. The OP is directed to refund Rs.8,55,524/- with 10% p.a. interest from the date of complaint till realization.
3. OP is further directed to pay compensation of Rs.2,00,000/-towards financial loss, mental agony  suffered by the complainant.
4. OP is further directed to pay entire amount within 60 days from the date of this order, if the OP failed to refund the amount, the amount of  Rs.8,55,524/- will carry interest at 12% p.a. after expiry of 60 days  till realization of the amount.
5. Furnish the copy of this order to both the parties, and return the spare pleadings and documents to the parties.

(Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Open Commission on this 16^th  day of December, 2022)

Documents produced by the Complainant-P.W.1 are as follows:

Documents produced by the representative of opposite party – R.W.1 :