KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

VAZHUTHACAUD, THIRUVANANTHAPURAM

APPEAL No. 443/2015

JUDGMENT DATED: 08.11.2019

(Against the Order in C.C. 216/2014 of CDRF, Idukki)

PRESENT : 

HON’BLE JUSTICE SRI. K. SURENDRA MOHAN              : PRESIDENT

SRI. RANJIT. R                                                                              : MEMBER

SMT. BEENA KUMARY. A                                                          : MEMBER

APPELLANT:

The Branch Manager, LIC of India, Branch Office, P.B. No. 12, Adimali, Idukki represented by the Authorized Officer, Manager L&HPF LIC of India, Divisional Office, Thiruvananthapuram.

                    (By Adv. Anitha Aji)

                                                Vs.

RESPONDENT:

P. Thangamani, Santhy Bakery, Parvathi Amman Kovil Street, Moolakadai, Munnar, Idukki District Pin-685 612.

(By Adv. Aji Gopinath)

JUDGMENT

SRI. RANJIT. R: MEMBER

The 1^st opposite party has filed the appeal against the Order dated 30.03.2015 in C.C No. 216/2014 on the file of Consumer Disputes Redressal Forum, Idukki, in short the District Forum, whereby the District Forum directed them to pay an amount of Rs. 78,690/- with 12% interest. They were further directed to pay compensation of Rs. 5,000/-. 

2.  The case of the complainant is that he availed LIC Jeevan Arogya (Table 903) policy, from the 1^st opposite party through its authorized agent 2^nd opposite party. The policy number is 395179889. The policy commenced on 19.08.2011 and expires on 19.08.2045. The sum assured for Accidental Benefits and Term Assurance is Rs. 2 lakhs. The total instalment premium is Rs. 6,810/-. The complainant remitted the instalment without fail. On 10.05.2013, the complainant was admitted in Mithraa Hospital, Madurai, for the treatment of a Pseudo cyst of Pancreas. He had undergone surgery and an amount of Rs.78,690/- was spent for treatment alone. Immediately the matter was intimated to the 1^st opposite party through 2^nd opposite party and submitted proper claim form for medical benefits. As per the policy condition the complainant is entitled to get the entire expended amount promised under the policy.  In the month of January 2014, the 1^st opposite party informed the complainant that the claim was rejected.  Therefore, he approached the 2^nd opposite party and explained matters.  The 2^nd opposite party then assured that he will take endeavour to reconsider the claim. On 12.06.2014, 2^nd opposite party informed him that his efforts were in vain. Complainant alleges that the 1^st opposite party has no manner of right to reject his claim. Moreover the opposite parties convinced him that the surgical benefits were covered in the claim and on getting such assurance only he had availed the policy. He pleaded that the rejection of his claim amounted to defective service on the part of the opposite parties and due to that he suffered much mental agony.  Through the complaint, he prays for granting the relief sought as (1) order the opposite party to pay Rs.78690/- towards hospital expenses (2) to direct the opposite party to pay Rs.10000/- towards mental agony suffered by him and also prayed to pass an order directing to pay Rs.10000/- being the legal expenses from the opposite parties.

3.  Opposite parties 1 & 2 filed their version contending that according to the medical records produced by the complainant, it was disclosed that he had treatment for Cysto Gastromy for Pseudo Cyst of Pancreas since 10.05.2013. The claim for hospitalization mentioned in the petition is considered only for a sum of Rs.74,690/- instead of Rs.78,690/-. The opposite parties further stated that as per the policy condition claim benefits are not directly related to the bill, but as per the declared benefits given in para 3 of claim submitted for health insurance policies and are being processed by Third Party Administrators (TPA), as per direction of IRDA. After verification of the claim papers, it was rejected by the TPA on account of pre-existing illness irrespective of prior treatment of advice. The discharge summary reveals that the petitioner was having pain in abdomen since 4 years, which is directly related to pseudo cyst of pancreas. Though surgical benefits are covered under the policy, the same is not payable for the particular claim due to the same exclusion clause. There was no deficiency of any kind on the part of the opposite parties. The claim was rightly repudiated and the complaint was liable to be dismissed since the contract between the LIC and the complainant was void ab-initio due to suppression of material facts. The complainant's claim is defeated by his own documents. Under the circumstances, there is no deficiency in service from the part of the opposite parties and the complaint is liable to be dismissed with costs.

4.  Evidence in the case consists of oral testimony of complainant as PW1 and Exts. P1 to P3 marked on his side.  The authorized representative of the 1^st opposite party was examined as DW1 and Exts. R1 to R3 were marked on their side.  The District Forum on the basis of the materials produced and after considering the rival contentions found that the appellant/1^st opposite party insurance company failed to provide the insurance amount to the complainant on the ground of pre-existing disease which was not justifiable.  The Forum on the basis of this finding allowed the complaint and directed them to pay the claim amount with compensation.  Aggrieved by this Order, the 1^st opposite party has filed this appeal. 

5.  The learned counsel for the appellant canvassed the contention that the claim of the complainant was rejected due to the reason that the discharge summary shows that the complainant was having pain in the abdomen since 4 years, which is directly related to pseudo cyst of pancreas.  The complainant was also a diabetic patient and he has suppressed these material facts regarding the pre-existing illness which rendered the contract of insurance between the insurer and insured null and void ab-initio.  The counsel further contended that in Ext. P3, i.e; the claim form, the respondent/complainant himself has stated that he was having pseudo cyst of pancreas since the last 4 years and also that he was undergoing treatment for diabetic mellitus.  This fact was not stated by him in the proposal form.  Since the complainant himself has stated about the pre-existing illness at the time of taking the policy the opposite party need not establish it by examining anybody as observed by the District Forum.  From Ext. R3 and Ext. P3 it is very clear that he was suffering from pseudo cyst of pancreas and he fully knew this fact before purchasing the policy.  Hence the opposite party has rightly rejected the claim of the complainant. 

6.  The learned counsel for the respondent on the contrary contended that the complainant was having only pain in the stomach and it will not show that he had knowledge, before taking the policy, that he was having pseudo cyst of pancreas.  He came to know about pseudo cyst of pancreas only when he got admitted in the hospital due to severe pain in his stomach.  The pseudo cyst was not due to the direct consequence of diabetic mellitus.  He further stated that the claim form was not filled up by the complainant.  Complainant is only a coolie and the claim form was filled by the agent/2^nd opposite party.  The appellant/1^st opposite party did not produce the proposal form, a vital document, which shows falsity of the claim of the insurer, that the complainant had pre-existing illness and he suppressed this fact in the proposal form.

7.  We have considered the contentions raised by both the counsels and perused the records.  The fact that the complainant was having a valid policy and that he was treated at Mithraa Hospital on 10.05.2013 and pseudo cyst was removed and the complainant has claimed an amount of Rs. 78,690/- as hospital expense and that the claim was repudiated by the opposite party since the complainant has concealed the previous ailment, are all admitted.  Now the question remains to be decided is whether the repudiation is correct and whether there was any pre-existing disease of pseudo cyst of pancreas.  Clause (xxv) in policy conditions and privileges defines about the pre-existing disease which is as follows: “Pre-existing condition means any medical condition or any related condition (e.g. illnesses, symptoms, treatments, pains) that have arisen at some point prior to the Date of Cover Commencement or Date of Revival (if the policy is revived after discontinuance of the Cover) in respect of each insured, irrespective of whether any medical treatment or advice was sought.  Any such condition or related condition about which the Principal Insured or other Insured knew or could reasonably have been assumed to have known, will be deemed to be pre-existing”.    From the above it is clear that the insured/complainant must know or should be assumed to have known that he was suffering pseudo cyst of pancreas before he first took the policy and the complainant should not have disclosed about this fact in the proposal form before the purchase of the insurance.  What is important is that the insured has knowledge about his illness and that it was not disclosed before the purchase of the policy.  The definite case put forward by the appellant is that the discharge summary (Ext. P3) shows that the complainant was having pain in the abdomen since four years and also that in the claim form (Ext. R3) the respondent/complainant himself has stated that he had pseudo cyst of pancreas since 4 years.  What is stated in the discharge summary is that he was having pain in the abdomen on and off since 4 years.  That does not mean that the complainant/insured had knowledge about the disease for which he was operated upon before 4 years.  There is nothing to indicate that pain in the stomach was direct consequence of pseudo cyst and complainant/insured knew about it prior to taking of the insurance policy.  There is no evidence on record to show that the insured had taken medical treatment for abdomen pain or was admitted for any kind of treatment.  It was also not indicated anywhere, whether any specific disease or problem in abdomen/pancreas was detected/diagnosed before obtaining the policy in question.  Even if he was suffering from stomach pain, there was no need or occasion to mention it before purchasing the policy unless some specific disease is indicated/diagnosed and the treatment for the same was taken.  Ext. R3 (claim form) only indicates that he came to know about the disease during that time i.e; when he filled the claim form and that is the reason why he has mentioned about the same in the claim form.  This disclosure about the pseudo cyst in the claim form does not mean that he knew about the disease before the policy was purchased.  Other contention raised by the appellant is that the respondent/insured suppressed the material fact that he was having diabetic mellitus and he has not disclosed it in the proposal form.  It is pertinent to note that the appellant did not produce this vital document, i.e; the proposal form.  No explanation is given in not producing the proposal form by the appellant.  It is obligatory for the insurer to produce the proposal form to prove their allegations.  In the absence of the proposal form, which is in their custody, adverse inference is to be taken.  Hence the allegation of the appellant that the complainant suppressed the material facts fails and the complainant cannot be charged with the allegation of non-disclosure of material information.  In the absence of any record showing that the complainant has any problem in the pancreas and that the pseudo cyst of pancreas was the direct consequence of stomach pain and diabetic mellitus clubbed together, prior to the date of purchase of the policy, we find that the case of the complainant is not covered under the definition of pre-existing disease. 

8.  In support of the observations we like to refer the ruling of the National Commission in the matter of Future Generalia Insurance Company Vs. Indrajit Singh reported in 2019(2) CPR 623 (NC), wherein the National Commission held that if the diagnosis (of the disease) is after the date of filing the proposal form, that cannot be concealment. 

From the above reasons we find the Order passed by the District Forum is just and proper.  There is no merit in the appeal.  There is no reason to interfere with the view taken by the District Forum. 

In the result, the appeal is dismissed.  Parties to suffer their respective costs.   

JUSTICE K. SURENDRA MOHAN         : PRESIDENT

                                                                                                                                                              RANJIT. R    : MEMBER

                                                              BEENA KUMARY. A         : MEMBER

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