Order by:

Sh.Amrinder Singh Sidhu, President

1.       The  complainants  have filed the instant complaint under section 12 of the Consumer Protection Act, 1986 (now section 35 of Consumer Protection Act, 2019) on the allegations that as per the allurement of the agent of the Opposite Parties, the complainant has been purchasing the family health insurance medi claim policies since the year 2017 by paying hefty amount of premiums and till date, no amount has ever been claimed by the complainant. Further alleges that on 09.03.2020 again the complainant purchased the cashless policy  namely Family health Optima Insurance Plan bearing  No.P/21/1222/01/2020/005266 for sum assured of Rs.5 lakhs valid for the period w.e.f. 09.03.2020 to 08.03.2021 for the complainant himself and his spouse Smt.Banita Bansal against paid up premium of Rs.24,142/-.  Further alleges that during the policy period i.e. on 09.08.2020, Smt.Banita Bansal insured  felt some body aches associated with legs pain and running fever of past 4-5 days and finally, she was admitted in Orison Super Speciality Hospital Infertility & Trauma Centre, Ludhiana where she was found of Covid-19 Positive and remained admitted  from 09.08.2022 to 13.08.2020 from where she was referred to Verma Multi specialty Hospital where she remained admitted upto 22.08.2020. After discharge, the insured lodged the claim with the Opposite Parties for  the reimbursement of her claim amounting to Rs.3,46,888/- and also completed all the formalities, but the Opposite Parties repudiated the claim of the complainant on the ground of pre existing disease whereas the complainant No.2 was never diagnosed  for such disease before the proposal of the policy.  As such, there is deficiency in service on the part of the Opposite Parties. Vide instant complaint, the complainant has sought the following reliefs.

a)       The Opposite Parties may be directed to reimburse the  claim amounting to Rs.3,46,888/- alongwith interest @ 12% per annum and also to pay  Rs.1 lakh on account of compensation due to mental tension and harassment caused by the complainant besides Rs.22,000/- as litigation expenses.

b)      And any other relief to which this Hon’ble Consumer Commission, Moga may deem fit be granted in the interest of justice and equity.       

2.       Opposite Parties-Insurance Company  appeared through counsel and contested the complaint by filing  the written version taking preliminary objections therein inter alia that the complaint filed by the complainant is not maintainable and is liable to be dismissed as the complainant has attempted to misguide and mislead this District Consumer Commission.  Brief facts are that the complainant has concealed the material facts regarding her past health history before procuring the policy and hence violated the policy document/ contract and also the core principle of insurance. It is however, admitted that the complainant No.1 was  issued policy  namely Family health Optima Insurance Plan bearing  No.P/21/1222/01/2020/005266 for sum assured of Rs.5 lakhs valid for the period w.e.f. 09.03.2020 to 08.03.2021 for himself and his spouse Smt.Banita Bansal (complainant No.2) subject to the terms and conditions. Further alleges that as per the claim documents as provided by the insured,  the patient was suffering  from ulcerative Colitis since six months prior to the inception of the policy, but the insured has failed to disclose this PED in the proposal form, amounting to concealment of the PED, hence cashless claim was rejected vide letter dated 13.08.2020. On merits, the Opposite Parties took  up almost same and similar pleas as taken up by them in the preliminary objections and hence no illegality has been committed by the Opposite parties while repudiating the claim of the complainant and the complaint may be dismissed with costs. 

3.       In order to  prove  their  case, the complainants have tendered into  evidence affidavit Ex.C1 alongwith copies of documents Ex.C2 to Ex.C69 and  closed the evidence on behalf of the complainants.

4.       On the other hand,  to rebut the evidence of the complainant,  Opposite Parties also tendered into evidence the affidavit of Sh. Sumit Kumar Sharma Ex.OP1,2/A alongwith copies of documents Ex.Ops 1, 2/1 to Ex.OP1,2/22 and CD Ex.OP1,2/21A and closed the evidence.

5.       We have heard the ld.counsel for the parties, perused the written submissions of  the complainant and  also  gone through the documents placed  on record.

6.       During the course of arguments, ld.counsel for the Complainant as well as ld.counsel for Opposite Parties   have mainly reiterated the facts as narrated in the complaint as well as in the written statements respectively. We have perused the rival contentions of  the parties and also gone through the record on file. The main contention of the complainant is that at the time of proposal the life assured complainant was not suffering any  disease, but the opposite parties intentionally and knowingly  repudiated the lawful and genuine claim of the complainant for the hospitalization of his medical treatment without application of mind. Ld.counsel for the complainant further contended that no such terms or conditions were ever  supplied to the complainant at the time of  issuing the policy in question. On the other hand, ld.counsel for the Opposite Parties has repelled the aforesaid contention of the complainant on the ground that on scrutiny of the claim documents, it is observed  that as per the claim documents as provided by the insured,  the patient was suffering  from ulcerative Colitis since six months prior to the inception of the policy, but the insured has failed to disclose this PED in the proposal form, amounting to concealment of the PED, hence cashless claim was rejected vide letter dated 13.08.2020. But we do not agree with the aforesaid contention of the ld.counsel for the Opposite Parties. First of all, the bare perusal of the record shows that  Opposite Parties No-Insurance Company could not produce  any evidence to prove that such terms and conditions of the policy were ever supplied to  the complainant insured, when and through which mode? It has been held by Hon’ble National Commission, New Delhi in case titled as The Oriental Insurance Company Limited Vs. Satpal Singh & Others 2014(2) CLT page 305 that the insured is not bound by the terms and conditions of the insurance policy unless it is proved that policy was supplied to the insured by the insurance company. Onus to prove that terms and conditions of the policy were supplied to the insured lies upon the insurance company. From the perusal of the entire evidence produced on record by the Opposite Party,  it is clear that Opposite Party  has failed to prove on record that they did supply the terms and conditions of the policy to  the complainant insured. As such, these terms and conditions, particularly the exclusion clause of the policy is not binding upon the insured. Reliance in this connection can be had on Modern Insulators Ltd.Vs. Oriental Insurance Company Limited (2000) 2 SCC 734, wherein it is held that “In view of the above settled position of law, we are of the opinion that the view expressed by the National Commission is not correct. As the above terms and conditions of the standard policy wherein the exclusion clause was included, were neither a part of the contract of insurance nor disclosed to the appellant, the respondent can not claim the benefit of the said exclusion clause. Therefore, the finding of the National Commission is untenable in law.”  Our own Hon’ble State Commission, Punjab, Chandigarh in First Appeal No.871 of 2014 decided on 03.02.2017 in case titled as Veena Mahajan (Widow) and others Vs. Aegon Religare Life Insurance Company Limited in para No.5 has held so.

7.       Further main contention of the Opposite Parties is that as per the claim documents as provided by the insured,  the patient was suffering  from ulcerative Colitis since six months prior to the inception of the policy, but the insured has failed to disclose this PED in the proposal form, amounting to concealment of the PED, but  the complainant has placed on record the  Certificate Ex.C67 of Treating Hospital Orison Hospital, Ludhiana in which it has been specifically mentioned that the patient (Banita Bansal) was not admtited for Ulcerative Colitis. She was treated for Covid-19 Infection.  In further Certified issued by Dr.B.L.Bansal, MBBS, MD of Verma Multispeciality Hospital & Scan Centre, Ludhiana Ex.C68 the treating doctor also certified that  their hospital does not have any record of any treatment given for ulcerative colitis as the patient had no symptoms for disease in last 18 years and no treatment was done for ulcerative colitis in the last 18 years.  To rebut these certificates, the Opposite Parties has failed to produce on record any iota of evidence or  any counter certificate or documents to disprove these factum of ailment of the insured.  However, the onus to establish this fact is upon the Opposite Parties in this case.  We have perused the copies of  medical record placed by Opposite Parties of the treating hospital, but there is neither any affidavit nor  complete particulars of the investigator recorded in them. Even the original certificate has not been placed on the record. There is no affidavit of doctor of the treating hospital to establish this fact on the record regarding previous disease of insured. He is a private doctor and not posted in any recognized health institute or government hospital. We are unable to rely upon the above referred investigation report appended with the Photostat copy of  medical record of complainant. In the absence of any affidavit of investigator and the affidavit of treating doctor of the hospital, we do not place any reliance upon these documents, as pressed into service by the Opposite Parties in this case. Consequently, we are of this view that Opposite Parties have failed to discharge the onus solemnly laid upon it to prove this fact that life assured was suffering from above pre-existing disease before taking the policy and he deliberately and fraudulently concealed this material fact from Opposite Parties. We, thus, conclude that there is no substantive evidence on the record to prove this fact that life assured was suffering from any disease before she took the insurance policy and she willfully suppressed this fact fraudulently from the Opposite Parties. Moreover, if the life assured was suffering from any diseases prior to issuance of the policy, in question, the same must not have escaped the notice of the empanelled doctors of the Insurance Company. However, no such investigation record has been produced by the opposite parties. In case Bajaj Allianz Life Insurance Co. Ltd. & Ors. Vs. Raj Kumar III (2014) CPJ 221 (NC), it was held by the Hon’ble National Commission that “usually, the authorized doctor of the Insurance Company examines the insured to assess the fitness and after complete satisfaction, the policy is issued. It was held that the Insurance Company wrongly repudiated the claim of the complainant.”

8.       Furthermore,  as per the Customer Identity card Ex.C9,  attached with the policy document,   at the time of obtaining the policy, the life assured Banita Bansal has duly mentioned her date of birth as 27.11.1964 (meaning thereby which is  more than 45 years, so it was the bounden duty of the Opposite Parties-Insurance Company to get the life assured medically examined before issuing the policy in his name who was above 45 years of age. In support of his contention Ld.counsel for the complainant placed reliance upon I.R.D.A.I Rules and Instructions with regard to thorough medical examination if the insured is more than 45 years which is reproduced as under:-

“As per instructions issued by the Insurance Regulatory and Development Authority of India (IRDAI), it was bounded duty of the insurer to put insured to thorough medical examination in case Mediclaim insured was more than 45 years and if insurance company failed to do so then insurance company has no right to decline the insurance claim on account of non disclosure of the facts of pre existing disease when the policy was taken. The above observations is supported by law cited in SBI General Insurance Company Limited Vs. Balwinder Singh Jolly” 2016(4) CLT 372 of the Hon’ble State Commission, Chandigarh.”

However, the Opposite Parties-Insurance Company has not placed on record any evidence that before issuing the policy they ever got medically examined the insured. So the abovesaid law squarely covers the case of the complainant that it was the duty of the insurer to get medically examined while issuing the policy and once the policy was issued the insurer cannot take the plea of pre-existing disease of the insured.

9.       It also needs to be mentioned that Section 19 of the General Insurance Business (Nationalization) Act, 1972 states that it shall be the duty of every Insurance Company to carry on general insurance business so as to develop it to the best advantage of the community. The denial of medical expenses reimbursement is utterly arbitrary on the ground that disease in question was pre-existing disease. It is mere an excuse to escape liability and is not bona fide intention of the insurance company. Fairness and non-arbitrariness are considered as two immutable pillars supporting the equity principle, an unshakable threshold of State and public behavior. Any policy in the realm of insurance company should be informed, fair and non-arbitrary. When the insurance policy has exclusions/conditions to repudiate the claim or limit the liability, the same must be specifically brought to the notice of the insured and are required to be got signed to show that such exclusions and conditions have been brought to his/her notice.  Recently, our own Hon’ble State Consumer Disputes Redressal Commission, Chandigarh in  First Appeal No. 50 of 2019 titled as Bajaj Alliance General Vs. Arjan Singh decided on 04.03.2021 also held so.

10.     The need for interpreting a contract always arises in two situations, (i) when a gap is needed to be filled in the contract and (ii) an ambiguity is needed to be resolved in the contract, then to find out correct intention of the contract, spirit behind it is required to be considered. Normally, the insurance policy is a contract of adhesion in which other party is left with hardly any bargaining power as compared to the insurer. Insurance contracts are standard form contracts and are drafted by the insurance company and as such, insurance company is at higher footing than the insured. The benefit of such clause, as exclusion clause, would go to the insured unless the same is explained in clear terms by the insurer. In such circumstances, the tribunal would be more oriented towards the interpretation which goes against the party who has inserted/drafted the disputed clause in the agreement/contract. The adjudicating authority is required to look into whether the intention of the party is to exclude or limit liability has been appropriately explained to the other party or not. This Commission while interpreting insurance agreement is to honour the intention of the parties, who have signed the agreement. Even if the agreement had general exclusion/condition for misrepresentation still fraudulent misrepresentation and non-disclosure may not be there. The innocent and negligent misrepresentations are to be ignored.  On the other hand, the rulings (i) Satwant Kaur Sandhu Vs. New India Assurance Company Limited, (ii) Murti Devi Vs. Birla Sun Life Insurance and (iii) Mamohan nanda Vs. United India Insurance Company Limited,   cited by the ld.counsel for the Opposite Parties  are not applicable and relevant  to the facts of the present case.  The insurance companies are in haste to charge the premium, but when the time to pay the insurance claim comes, they generally take up one excuse or the other to avoid their liability. The reliance of counsel for the appellant on law laid down in “Life Insurance Corporation of India Vs. Priya Sharma & others” 2012(4)CPJ-646, “Life Insurance Corporation of India & others Vs. Harbans Kaur” 2009(3)CPC-677, and “Life Insurance Corporation of India & another Vs. Ashok Manocha” 2011(3)CPC-285, would have been applicable, had this fact been established that life assured suffered from pre-existing ailment of kidney and he deliberately suppressed this fact fraudulently from the Opposite Parties, when he took the insurance policy. In view of our finding recorded above that Opposite Parties had failed to prove this fact that complainant was suffering from any pre-existing ailment and hence these authorities would not be attracted in this case. In this regard, on the same and similar facts and circumstances of the case, Hon’ble State Consumer Disputes Redressal Commission, in First Appeal No.62 of 2015  decided on 02.02.2017 in case India First Life Insurance Vs. Ms.Sudesh Rani also held so.   

11.     In such a situation the repudiation made by Opposite Parties-Insurance Company regarding genuine claim of the complainant have been made without application of mind. It is usual with the insurance company to show all types of green pasters to the customer at the time of selling insurance policies, and when it comes to payment of the insurance claim, they invent all sort of excuses to deny the claim. In the facts of this case, ratio of the decision of Hon’ble Apex Court in case of Dharmendra Goel Vs. Oriental Insurance Co. Ltd., III (2008) CPJ 63 (SC) is fully attracted, wherein it was held that, Insurance Company being in a dominant position, often acts in an unreasonable manner and after having accepted the value of a particular insured goods, disowns that very figure on one pretext or the other, when they are called upon to pay compensation.  This ‘take it or leave it’, attitude is clearly unwarranted not only as being bad in law, but ethically indefensible.  It is generally seen that the insurance companies are only interested in earning the premiums and find ways and means to decline claims. In similar set of facts the Hon’ble Punjab & Haryana High Court in case titled as New India Assurance Company Limited Vs. Smt.Usha Yadav & Others 2008(3) RCR (Civil) Page 111 went on to hold as under:-

“It seems that the insurance companies are only interested in earning the premiums and find ways and means to decline claims. All conditions which generally are hidden, need to be simplified so that these are easily understood by a person at the time of buying any policy.  The Insurance Companies in such cases rely upon clauses of the agreement, which a person is generally made to sign on dotted lines at the time of obtaining policy. Insurance Company also directed to pay costs of Rs.5000/- for luxury litigation, being rich.

12.     In view of the above discussion, we hold that the Opposite Party-Insurance Company have  wrongly and illegally rejected the claim of the complainant.

13.     Now come to the quantum of compensation.  The complainant has claimed the amount of Rs.3,46,888/- spent on the medical treatment, and on the other hand, the Opposite Parties have not denied these expenses by filing any iota of evidence regarding the claim amount   and hence we hold that the complainant is entitled to the reimbursement of this amount.   

14.     In view of the aforesaid facts and circumstances of the case,  we partly allow the complaint of the Complainant and direct Opposite Parties-Insurance Company to pay Rs.3,46,888/- (Rupees three lakh forty six thousands eight hundred eighty eight only) to the complainant.   The compliance of this order be made by the Opposite Parties within 60 days from the date of receipt of copy of this order, failing which the complainant shall be at liberty to get the order enforced through the indulgence of this District Consumer Commission.  Copies of the order be furnished to the parties free of costs. File is ordered to be consigned to the record room.

Announced in Open Commission.