KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

VAZHUTHACAUD, THIRUVANANTHAPURAM

APPEAL No. 22/2018

JUDGMENT DATED: 17.11.2022

(Against the Order in C.C. 496/2016 of CDRF, Malappuram)

PRESENT:

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

SRI.RANJIT. R                                                                               : MEMBER

APPELLANT:

Branch Manager, United India Insurance Co. Ltd., Parapurath Shopping Complex, Thazhepalam, Tirur, Malappuram-679 329.

                                       (By Adv. T.J. Lakshmanan)

                                                Vs.

RESPONDENTS:

1. Somajan M.P., S/o Kesavanunni Nair, Madathil House, Mangattiri P.O., Tirur-676 105.

2. Pankaja Valli, Madathil House, Mangattiri P.O., Tirur-676 105.

JUDGMENT

SRI.RANJIT. R: MEMBER

            This appeal is filed against an order dated 31.10.2017 of the Consumer Disputes Redressal Forum, Malappuram (District Forum for short) in C.C. No. 496/2016.  The appellant herein is the opposite party before the District Forum.  Respondents 1 & 2 are the complainants before the District Forum.  The District Forum by its order allowed the complaint and directed the opposite party to pay a sum of Rs. 32,817/- to the complainants and also directed to pay Rs. 10,000/- as compensation and Rs. 5,000/- as costs.

            2.  For the sake of convenience, the parties are referred to herein in accordance with their status before the District Forum.

3.  The case of the complainants who are husband and wife, in brief, is that they had taken a Mediclaim policy from the opposite party.  It was taken in 2010 and they regularly renewed the policy.  While so the 1^st complainant was admitted in PKM Memorial hospital with fever and he was referred to MIMS Hospital, Kottakkal.  He was treated there from 13.07.2016 to 22.07.2016. He had incurred an amount of Rs. 45,117/- at MIMS Hospital and Rs. 2,025/- at PKM Hospital.  The 1^st complainant lodged a claim before the opposite party for the total expenses he had incurred in both the hospitals.  But the opposite party paid only an amount of Rs. 29,309/-.  Further the 2^nd complainant was admitted in Puthalath Eye Hospital and has undergone a cataract surgery.  She had incurred a total expense of Rs. 24,984/- and this amount was claimed by the 2^nd complainant with the opposite party.  But the opposite party allowed only an amount of Rs. 10,000/- to the 2^nd complainant.  The complainants have filed the complaint for getting the balance amount totalling to Rs. 32,817/- from the opposite party with compensation and costs.

4.  Opposite party entered appearance and filed version contending that the claims of the complainants were duly considered and settled as per the terms and conditions of the policy.  They have acted only in accordance with the policy conditions.  Hence the opposite party prayed for dismissal of the complaint. 

5.  The District Forum on the basis of the evidence let in by the parties and after hearing both parties concluded that the denial of claim amount by a third-party administrator was deficiency in service on the part of the opposite party.  The District Forum on the basis of such conclusion allowed the complaint and passed the impugned order under challenge. 

6.  The learned counsel for the appellant contended that the dispute involved in this case is with regard to the quantum since the complainants have prayed for the balance amount.  He would contend that as per the decision of the National Commission reported in 2003 CCJ 1389 that the complaint regarding quantum dispute after settling the dispute was not maintainable under the Consumer Protection Act.  Further he would contend that the finding of the District Forum that the complainants did not agree for appointing a third party administrator, is without perusing Ext. B1 policy.  In Ext. B1 policy it is clearly mentioned that the settlement would be made by the third party administrator.  The third party administrator’s name is also specifically mentioned in the policy issued to the complainants.  The further contention is that the District Forum failed to consider the cardinal aspect that the opposite party had acted only in accordance with the terms and conditions of the policy and passed the impugned order which is quite illegal.  The District Forum granted exorbitant amount as compensation and costs which is 50% of the amount awarded.  Since all the amounts payable under the policy have been paid, the complaint is liable to be dismissed. 

7.  We have considered the contentions advanced before us by both parties.  We have also perused the records and order under challenge. 

8.  One of the main contentions of the learned counsel for the opposite party is that complaint itself is not maintainable as it is a quantum dispute and all the amounts payable as per the policy have been paid and claiming of balance amount is barred as per the judgment produced by the opposite party.  The facts described in the judgment cited by the opposite party are different from the present case.  Therefore the decision is not applicable to this case as it is distinguishable on facts.  Moreover, IRDA circular dated 24.09.2015 to all insurance companies reads as follows:

“The Insurance Companies are using ‘discharge voucher’ or ‘settlement intimation voucher’ or in some other name, so that the claim is closed and does not remain outstanding in their books.  However, of late, the Authority has been receiving complaints from aggrieved policy holders that the said instrument of discharge voucher is being used by the insurers in the judicial fora with the plea that the full and final discharge given by the policyholders extinguish their rights to contest the claim before the Courts. 

While the Authority notes that the insurers need to keep their books of accounts in order, it is also necessary to note that insurer shall not use the instrument of discharge voucher as a means of estoppels against the aggrieved policy holders when such policy holder approaches judicial fora. 

Accordingly insurers are hereby advised as under:

Where the liability and quantum of claim under a policy is established, the insurers shall not withhold claim amounts.  However, it would be clearly understood that execution of such vouchers does not foreclose the rights of policy holder to seek higher compensation before any judicial fora or any other fora established by law”.

The Hon’ble Supreme Court in a plethora of judgments has also reiterated that mere execution of the discharge voucher would not always deprive the consumer from preferring claim with respect to the deficiency in service or consequential benefits arising out of the amount paid in default of the service rendered.   Here the complainants have not given any discharge voucher.  Hence the complaint is maintainable before this Commission.

9.  On merits, it can be seen in the policy documents itself that every notice or communication regarding hospitalization or claim under the policy shall be delivered on the address of the TPA (Third Party Administrator) and the name and address of the TPA is mentioned in the policy details as Medi Assist TPA Private Limited which can be seen under the conditions of the policy.  The complainants cannot state that they have not given any consent to the TPA to issue the claim amounts.

10.  Now the only question that arises is as to whether the opposite party has allowed the claim as per the terms and conditions of the policy.  It is settled position that the policy is a contract between the parties and both parties are bound by the terms of the contract.  The coverage clause under the terms and conditions of Ext. B1 policy explains the limit of room rent, nursing charge, ICU Charge, consultant charges etc.  Since as per the policy, the 1^st complainant is insured for Rs. 1,00,000/- he is eligible for 1% of the sum insured towards room rent per day, 2% towards ICU charges as per clause 1.2 A & B of the policy.  The limit specified for cataract surgery as per clause 1.2 is 10% of the sum insured.  The 2^nd complainant had insured for an amount of Rs. 1,00,000/- and hence she is eligible only for Rs. 10,000/- which the opposite parties have paid. 

11.  As regards to the 1^st complainant he was hospitalized for 9 days out of which 8 days were spent in the room and one day in ICU.  So he is eligible for room rent of Rs. 8,000/- (for 8 days 8x1000) and ICU Charges of Rs. 2,000/- (for one day) only.  Since he has used room with higher rent the claim for Rs. 12,985/- was not allowed in full and paid only Rs. 10,000/- which is as per the terms and conditions of the policy.  The opposite party as per Ext. B2 Claim Settlement Advice has disallowed Rs. 2,119/- against the claim amount of Rs. 10,807/-under the head ‘non-taxable pharmacy’ and medicine charges.  As per clause 1.2 A,B,C,D and E they should have allowed full charges since all hospitalization expenses including surgeon and anaesthesia, laboratory tests, X-ray and all similar expenses that are medically necessary should be given to the policy holders.  Similarly the opposite party has illegally disallowed under the head miscellaneous charges of Rs. 6,065/- and consultant charges of Rs. 3,348/- which is against the terms of the policy.  They should not have disallowed any amount under miscellaneous charge and consultant charge, since all incidental medical charges are payable including registration, record charge, dietician charge, critical care charge etc. all of which are expenses that are medically necessary.  Deduction of these charges is illegal, except food charges of Rs. 1,065/-.  The opposite party can deduct 10% of the total amount payable as per the terms of the policy since 1^st complainant is aged above 60. The total amount payable will come to Rs. 43,022/- out of which 10% is to be deducted as the 1^st complainant is aged more than 60 years.  Thus the total amount payable to the insurer comes to Rs. 38,720/-.  The opposite parties have paid only an amount of Rs. 29,309/-.  There is a short payment of Rs. 9,491/-. The opposite party is liable to pay the balance amount of Rs. 9,491- since this amount claimed is towards incidental medical charges only.  The opposite party has illegally without any justification disallowed the amount of Rs. 9,491/-, which is out of the scope of the policy and reduced the amount to Rs. 29,309/-.  The illegal deduction of the amount of Rs. 9,491/- from the eligible claim amount is unjustifiable and that amounts to clear unfair trade practice and deficiency of service.  The complainant is to be adequately compensated for the same.  We feel an amount of Rs. 7,500/- is a just and reasonable compensation to be awarded to the complainants.  However the District Forum without considering the above aspects granted an amount of Rs. 32,817/-, the full amount claimed, to be paid to the complainants and also directed the opposite parties to pay Rs. 10,000/- as compensation and Rs. 5,000/- as costs.  In these circumstances we are of the opinion that the order of the District Forum allowing the claim in full is against the policy conditions and hence liable to be set aside.  We do so.

In the result, the appeal is partly allowed and the order of the District Forum is modified as follows:

1. Opposite party is directed to refund an amount of Rs. 9,491/- with 9% interest from the date of complaint till realisation within one month from date of receipt of this order, failing which the interest will be enhanced @ 12% per annum. 
2. Opposite party is directed to pay an amount of Rs. 7,500/- as compensation and costs to the complainants.

The complainant can realize the amount awarded as refund, compensation and costs from the statutory amount of Rs. 24,000/- deposited by the appellant/opposite party before this Commission, on filing proper application. 

The appellant had deposited an amount of Rs. 10,000/- before the District Forum as condition for the grant of stay.  The appellant/opposite party can get release of the amount of Rs. 10,000/- deposited by them before the District Forum on filing proper application.  

JUSTICE K. SURENDRA MOHAN  : PRESIDENT

                RANJIT. R            : MEMBER

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