Delhi

East Delhi

CC/190/2020

PRAMOD KR. SRIVASTAV - Complainant(s)

Versus

M/S STAR HEALTH & ALLIED INS. - Opp.Party(s)

11 May 2023

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION (EAST)

GOVT. OF NCT OF DELHI

CONVENIENT SHOPPING CENTRE, FIRST FLOOR,

SAINI ENCLAVE, DELHI – 110 092

 

C.C. NO. 190/2020

 

 

1.     2. 3. 4.	Pramod Kumar Srivastava (Through Legal Heirs) Smt. Usha Rani(Wife) W/o Lt. Sh. Pramod Kumar Srivastava   Sh.Shobhit Srivastava(Son) Sh. Tushar Srivastava(Son) Smt. Rashi Srivastava(Daughter)   R/o:- 51, 2nd Floor, Silver Park, Krishna Nagar, Delhi-110051.	….Complainant
Versus
	Star Health & Allied Insurance Company Ltd. Through its Director Regd. & Corp. Office At:- 1, New Tank Street, Valluvarkottam High Road, Nungambakkam, Chennai-600034.	……OP

 

Date of Institution: 12.10.2020

Judgment Reserved on: 20.04.2023

Judgment Passed on: 11.05.2023

               

QUORUM:

Sh. S.S. Malhotra (President)

Sh. Ravi Kumar (Member)

Ms. Rashmi Bansal (Member)

 

Judgment By: Ms. Rashmi Bansal (Member)

 

JUDGMENT

 

The present complaint is filed by the complainant against repudiation of his insurance claim by OP alleging deficiency in services on its part and praying for payment of the insurance claim, compensation for mental agony and harassment and litigation costs along with interest.

During the proceedings, the complainant unfortunately left for heavenly abode on 26.04.2021 and therefore the case has been proceeded by the legal heirs of the complainant & the same is being reflected in the cause title.

1. It is the case of the complainant that he purchased a health policy from OP, bearing number P/161,100/01/2020/009034, on 21.07.2019, valid till 20.07.2020. The complainant was admitted to Khandelwal Hospital and Urology Centre, Krishna Nagar, Delhi, on 21.11.2019 with the complaint of severe weakness, Ghabraahat,heart, vomiting etc. where he was given initial treatment but due to further complaints of abdominal discomfort with pain, the complainant was referred to Metro Hospital, Preet Vihar, Delhi for further treatment. A bill of Rs.2,56,000/- was generated by the Metro hospital for which the complainant has filed his claim with the OP vide claim number CLMG/2020/16110/0678436along with all documents as required by OP, however, the claim of the complainant was repudiated by OP vide repudiation letter dated 10.02.2020 on the ground of pre-existing disease i.e. chronic liver disease at the time of taking the policy.
2. The complainant submits that OP has rejected his claim on a false plea with the mala-fide intention of not clearing the claim of the complainant, which is totally unjust, unreasonable and illegal and OP is deficient in its services and harassed the complainant by defaulting in rendering its services. The complainant further submits that he purchased the policy from OP only because it is a reputed Health Insurance Company. However, he was cheated and misrepresented by the OP in selling the policy and when the claim was raised OP neglected its obligation to clear the claim deliberately and intentionally. The legal notice dated 24.02.2020 sent to the OP was also not replied and the name of the complainant was deleted from the Mediclaim policy with effect from 21.03.2020 due to non-disclosure of pre-existing disease. The complainant submits that he was not suffering from any such disease & in any case he was not aware of the disease at the time of taking the policy and the same came to his knowledge only on 22.11.2019,when USG was done. As per medical reports dated 07.04.2019 and 18.02.2020, there was no such type of disease detected as mentioned by the OP in its rejection letter dated 10.02.2020.
3. The complainant also submits that the treating doctor also issued a certificate dated 26.09.2020 confirming that there was no history of chronic liver disease or alcohol in the medical history of the complainant suggestive of Hepatitis B or C infection at the time of admission to the Metro Hospital. The complainant was not diagnosed with chronic liver disease in Khandelwal Hospital and Urology Centre. The ultrasound report dated 22.11.2019 was suggestive of chronic liver but at the time of admission there was no history or record suggestive of chronic liver disease. The complainant has relied upon various judgments in support of his claim.
4. OP has filed his reply stating that there is no deficiency in service on its part and the complainant has presented wrong facts and suppressed the material facts with mala-fide intention to mislead this commission and the present complaint is nothing but an attempt to harass and illegally extract money from OP and the allegations of the complainant were completely false, frivolous and baseless. The OP admitted issuance of the above-stated policy, however, it is stated that the terms and conditions of the said policy were explained and given in writing to the complainant along with the policy schedule, wherein it was clearly stated that the insurance policy is subject to various exclusions, i.e. the exclusion against pre-existing diseases as mentioned in the policy.
5. OP submits that within four months of the policy on 21.11.2019, the complainant submitted a pre-authorization request for cashless hospitalization in Metro Hospital and Cancer Institute in New Delhi for treatment of acute abdomen problem along with upper gastrointestinal bleed, chronic liver disease, oesophageal varices with portal hypertension, uncontrolled diabetes mellitus. Upon perusal of the pre-authorization claim document, it was observed that as per the medical records, the claim was inter alia for a disease/condition, i.e. diabetes mellitus that was a pre-existing disease, therefore, the cashless hospitalization request was denied vide letter dated 22.11.2019 and the complainant was advised to file a claim for final reimbursement along with complete medical documents and bills. Subsequently, the complainant submitted his claim along with supporting documents, which upon scrutiny were found that the complainant had chronic, long-standing liver disease, existing prior to the inception of the first medical insurance policy as per the USG abdomen report dated 22.11.2019 and the said fact was deliberately suppressed by the complainant.
6. OP submits that the contract of the insurance is based upon the principle of utmost good faith and the insured is expected to declare in the proposal form all material facts like the details of all his ailment, sickness, and past medical history so that the insurer can evaluate and decide whether to accept the proposal or not. However, the complainant in response to the questions pertaining to the health history has only admitted the fact that he had been suffering from diabetes mellitus and for all other diseases he had specifically replied ‘No’. On account of the non-disclosure of medical history, the OP was deprived of the opportunity to evaluate the risk and reject the proposal. The OP relied upon clause/condition 6 of the policy, which clearly stipulates that the company shall not be liable to make any payment under the policy in respect of any claim if the information furnished at the time of proposal is found to be incorrect or false, or such claim is in any manner, fraudulent or supported by any fraudulent means or device, misrepresentation whether by the insured person or by any other person acting on his behalf. OP has also relied upon the gastroscopy report dated 22.11.2019.
7. The Complainant has filed its rejoinder refuting the allegation of OP and reiterated his version mentioned in the complaint. Both parties have filed their respective evidence and documents in support of their case.
8. The complainant has filed following documents in support of his claim,:-

1. Copy of discharge summary, Ex. CW1/1;
2. Copy of provisional report, Ex. CW1/2;
3. Copy of medical bill Ex. CW1/3;
4. Copy of lab report, Ex. CW1/4;
5. Copy of consultation letter dated 10.02.2020, Ex. CW1/5;
6. Copy of endorsement letter dated 20.07.2020, Ex. CW1/6;
7. Copy of letter dated 26.09.2020 issued by Metro Hospital, Ex. CW1/7;
8. Copy of discharge summary Ex. CW1/8;
9. Copy of bill, Ex. CW1/9;
10. Copy of card issued by OP, Ex. CW1/10;
11. Copy of voter card of the complainant, Ex. CW1/11;
12. Copy of legal notice, Ex. CW1/12;
13. Postal receipt, Ex. CW1/13.
14. A certificate dated 26.09.2020issued by the treating doctor of Metro Hospital

9. The OP has filed the following documents:-

1. Copy of the power of attorney dated 08.05.2021, Ex. R/1;
2. Copy of the proposal for Ex. R/2;
3. Copy of the policy schedule, Ex. R/3;
4. Copy of policy terms and conditions, Ex. R/4;
5. Copy of pre-authorization request, Ex. R/5;
6. Copy of the field visit report, Ex. R/6;
7. Copy of the query letter dated 21.11.2019, Ex. R/7;
8. Copies of anesthesia record, Ex. R/8, (colly);
9. Copy of denial letter dated 22.11.2019, Ex. R/9;
10. Copy of claim form, Ex. R/10;
11. Copy of discharge summary of Metro Hospital, Ex. R/11;
12. Copy of treatment record at Khandelwal Hospital, Ex. R/12;
13. Copy of USG report dated 22.11.2019, and 25.11.2019 Ex. R/13 (colly) ;
14. Copy of final bill issued by Metro Hospital, Ex. R/14;
15. Repudiation letter dated 14.02.2020, Ex. R/15;
16. Copy of letter dated 10.02.2020 pertaining to non-disclosure of pre-existing disease, Ex. R/16;
17. Copy of endorsement schedule dated 21.03.2020, Ex. R/17;

 

10. The Commission has heard the Ld.  Counsel for the parties and perused the documents placed on record by them. The policy taken by the complainant is not in dispute. At the time of taking the policy, the complainant has given the requisite information as sought by OP and OP has issued the insurance policy to the complainant.
11. The question for consideration is whether at the time of entering into the contract dated 21.07.2019 with OP the complainant had suppressed material facts in the proposal form, which could have led OP to form its opinion if the policy can be issued or not .
12. The OP has filed many documents in support of its defence, but none of the documents sufficiently prove that the complainant was suffering from a pre-existing disease of chronic liver disease at the time of taking of the policy or that complainant was well aware of its disease, at the time of taking policy. The query letter dated 21.11.2019 was related to queries of severe acute gastritis and does not mention anything with respect to liver Disease, on the basis of which the claim of the complainant was rejected.
13. The discharge summary dated 21.11.2019 from Khandelwal Hospital and Urology Centre Private Limited shows that the complainant was admitted with complaints of severe weakness, Ghabarahat, vomiting, hematemesis, Malena and that there is no mention of liver disease or chronic liver disease. It only has a mention of ketosis with sepsis, severe anaemia with hematemesis with Malena evolution. The complainant was discharged on the same day from the Khandelwal Hospital and referred to the Metro Hospital, where he was admitted with complaints of abdominal discomfort with pain, blood mixed with vomiting, nausea, loss of appetite, black colour stool, cough, constipation, vertigo and generalized weakness but no mention of liver disease or chronic liver disease was mentioned here either. The USG of the whole abdomen was advised and done on dated 22.11.2019, i.e. one day after the admission to the Metro Hospital, which for the first time mentioned the liver was mildly  enlarged, with some other observations by the radiologist with respect to other organs, which gives the impression chronic liver parenchymal disease the portal hypertension (splenomegaly with ascites). The preliminary observations made by the doctors at both hospitals have also not mentioned any disease relating to the liver. Therefore, submission of the complainant that he was not aware about the disease, stands established that at the time of taking of the policy the complainant was not suffering from any lever disease or at least was not in his knowledge that he was suffering from any such disease & therefore there was no suppression of any material fact by the complainant in the proposal form.
14. Hon'ble Supreme Court of India in civil appeal no. 8386/2015 Manmohan Nanda Vs.  United India Assurance Co Ltd vide, its order dated 06.12.20 has held: “Though it is the duty of the proposer to disclose to the insurer, all material facts as are within his knowledge. The proposer is presumed to know all the facts and circumstances concerning the proposed insurance. But the proposer can only disclose what is known to him, the proposer’s duty of disclosure of his actual knowledge, it also extends to those material facts which in the ordinary course of business, he ought to know. However, the assured is not under a duty to disclose facts which he did not know, and which he could not reasonably be expected to know at the material time.”
15. The Hon'ble Madras High Court in G.MuthuPackiam versus the zonal manager vide its order dated 31.01.2012 has held – “…..…. this being the well acknowledged the legal proposition, the insurance company cannot be permitted to raise a plea that the deceased insured had not disclosed about his illness at the time of taking of the policy when it was also duty of the insurance company to verify the correctness of the information furnished by the insured. This duty of the insurance company is akin to, the application of the insured, who is legally bound to pay the insurance premium regularly and well within time and in the event of failure to do so, the insurance company may refuse to pay the maturity amount, therefore, the insurance company cannot be permitted to raise a plea regarding non-furnishing of information to the company after the death of the insured.”

It is therefore presumed that OP must have issued the policy to the complainant only after being satisfied with the particulars given by him, as its (OP’s) liability to pay the claim, if any, when filed by the complainant. In fact, the proposal form itself stipulates that it should be completed to the best of the insured’s “knowledge”.

16. In view of the above judgments and considering the facts and circumstances of the case and the entire evidence brought on record by both parties, this commission is of the view that there is an obligation upon the assured to disclose all material facts which may be relevant to the insurer for granting the policy but after issuing a policy, the burden of proving that the insured had made false representations and suppressed material facts is on the Insurer. The OP failed to prove that the complainant was suffering from chronic liver disease at the time of filling up the proposal form for the policies or that he had given any false answer in his statements or suppressed any material fact that he was under a duty to disclose. The hospital discharge summaries of Khandelwal Hospital and Metro Hospital and the admission document at the Metro Hospital also did not lead to a conclusion that the complainant was suffering from any liver disease for a long time or having any pre-existing liver disease. Therefore, it cannot be said that the complainant has concealed the facts or that the same was in his knowledge at the time of taking the policy. Therefore, the OP was not justified in repudiating the claim of the complainant and was liable for deficient service by rejecting the claim of the complainant.

 

17. The OP is, therefore, directed to pay the claim of Rs. 2,56,000/- to the complainant along with interest @ 9% per annum from the date of institution of the complaint i.e. 12.10.2020, a compensation of Rs. 25,000/- towards deficient services and 10,000/- towards litigation cost within 30 days from the date of receiving the order, failing which the entire amount shall carry interest @ 12% p.a. till the date of actual realization by the complainant.
18. The file be consigned to the Record room after uploading the order to the website and a copy of the order be given to the parties as per CPA rules 2019.
19. The order contains 10 pages, each bearing our signature.

Pronounced on 11.05.2023.