DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION ERNAKULAM

       Dated this the 30^th day of May 2024.                                                                                             

                           Filed on: 05/05/2018

PRESENT

Shri.D.B.Binu                                                                          President

Shri.V.Ramachandran                                                              Member Smt.Sreevidhia.T.N                                                              Member     

C.C. No. 198/2018

COMPLAINANTS

1. Mathew M.F.,  Mukkath House, Opp. Hotel Mithila, Eramalloor P, O Pin 688 537, Alappuzha.
2. Ms Milan Regina Mathew, D/o Mr. Mathew M F. Mukkath House, Opp. Hotel Mithila, Eramalloor P.O. Pin 688 537, Alappuzha.

(Rep. by Adv. Paul Kuriakose K., Eldo Kuriakose, M/s. Kuriakose & Surendra Mohan Associates, Prabath Buildings, TD Road, Ernakulam, Kochi 682011)

VS

OPPOSITE PARTIES

1. M/s. STAR Health and Allied Insurance Co. Ltd, Reg. Corp. Office No.01, New Tank Street, Valluvarkottam High Road, Nungambakkam, CHENNAI - 600 034 Represented by Its Managing Director.
2. M/s. STAR Health and Allied Insurance Co. Ltd, Branch Office, 2^nd  Floor, Irimpan Shopping Complex,  XXV - 987M, Police Station Road, Chalakkudy. Thrissur - 680 307 Represented by its Manager.

(Rep. by Adv. R.S. Kulkara)

F I N A L   O R D E R

D.B. Binu, President:

1. A brief statement of facts of this complaint is as stated below:

The complaint was filed under Section 12 of the Consumer Protection Act, 1986. This complaint details a dispute between the complainants and an insurance company. The primary issue involves a claim for medical expenses following an accident suffered by Ms Milan Regina Mathew, who fell from the balcony of her residence and sustained injuries. According to the complainants, Ms. Mathew was covered under a family health insurance policy provided by the insurance company, which was supposed to cover all expenses related to medical treatment and hospitalization for the insured persons.

However, the insurance company rejected the claim, citing that the treatment was related to behavioural disorders and intentional self-injury, which are excluded under the policy. The complainants contest this, asserting that the injuries were due to an accidental fall and not related to any behavioural disorder or self-inflicted harm. They provided evidence that Ms Mathew was treated for injuries from the fall and not for psychiatric or behavioural issues. Despite this, their request for reconsideration was also rejected by the insurance company’s Grievance Department.

The insurance company’s refusal to cover the medical expenses caused significant financial loss and mental distress to the family. The complainants are seeking legal intervention to compel the insurance company to reimburse the hospital expenses and to pay additional compensation for what they argue constitutes an unfair trade practice.

The complaint outlines the timeline of the insurance coverage, the accident, the medical treatment, and the subsequent communications and rejections by the insurance company. It concludes with a formal request for specific reliefs, including reimbursement of medical expenses with interest, compensation for unfair trade practice and mental agony, and coverage of legal costs.

2) Notice

The commission sent notices to the opposite parties, who subsequently appeared and submitted their versions.

3) THE VERSIONS OF THE OPPOSITE PARTIES

The opposite parties stated that the complaint lacks merit and is intended to harass them. They contend that the complaint should not be heard in the Ernakulam commission because the policy was taken from their Chalakudy Branch in Thrissur, and no part of the cause of action occurred in Ernakulam.

The insurance company details that the complainant was covered under a Family Health Optima Insurance Policy, which was explained and provided to the complainant with all terms and conditions. These conditions included specific exclusions under which the company would not be liable for payment.

The insurance company asserts that the 2nd complainant, Ms Milan Regina Mathew, was injured due to deliberate self-harm (DSH) and not an accident. They claim that hospital records from Lakeshore Hospital support this assertion, noting that the injuries occurred following a quarrel and were impulsive acts of self-harm. They emphasize that Ms Mathew had been on psychiatric treatment since 2012, which predisposed her to such behaviour.

They stated that the injuries sustained by Ms Mathew fall under the exclusion clause of the policy which precludes coverage for injuries resulting from psychiatric, mental, and behavioural disorders, or intentional self-injury. Therefore, they repudiated the claim based on these terms.

The insurance company denies the complainant's claim that the injuries were accidental, caused by slipping on water. They assert that the medical records indicate the injuries were self-inflicted following a domestic dispute.

They maintain that the policy terms should be strictly interpreted without addition or subtraction by the commission. They stated that there is no deficiency of service or unfair trade practice on their part, hence no compensation or cost should be awarded to the complainant.

They accuse the complainant of vexatious and frivolous litigation, aimed at harassing the insurance company and seeking unlawful enrichment. They also suggest that as a company managing public funds under regulatory oversight, they are obliged to scrutinize claims thoroughly and apply policy conditions strictly.

The insurance company concludes by requesting that the commission consider the maintainability of the complaint, suggesting that the complaint should be dismissed outright and that they should be awarded compensatory costs for being dragged into unwarranted litigation.

4) . Evidence

                   The complainant had filed a proof affidavit and 9 documents that were marked as Exhibits-A-1 to A-9. The 1st complainant has been examined as PW - 1 and he adduced evidence for and on behalf of the 2nd complainant as well.

• Exhibit A1: True copy of Insurance Policy bearing No. P/181217/01/2015/003549 valid from 18/2/2015 to 17/2/2016
• Exhibit A2: True copy of Insurance Policy bearing No. P/181217/01/2016/004386 valid from 18/2/2016 to 17/2/2017
• Exhibit A3: True copy of the Customer Information Sheet of the Opposite Parties, Family Health Optima Insurance Plan
• Exhibit A4: True copy of Letter dated 19.08.2016 issued by the Opposite Parties to the 1st complainant
• Exhibit A5: True copy of Letter dated 25.10.2016 issued by the Opposite Parties to the 1st complainant
• Exhibit A6: True copy of Letter dated 27.03.2017 issued by the 1st complainant to the Grievance Department of the opposite parties
• Exhibit A7: True copy of Letter dated 06.04.2017 issued by the Opposite Parties to the complainant
• Exhibit A8: True copy of Discharge Summary of 2nd complainant issued by Lakeshore Hospital & Research Centre Ltd., Kochi to the 1st complainant
• Exhibit A9: True copy of Detailed Bill No.004085 dated 21.07.2016 of Lakeshore Hospital & Research Centre Ltd., Kochi.

      The Opposite Parties had filed one document that was marked as Exhibits-B-1.

• Exhibit B1: Copy of the Hospital Records from Lakeshore Hospital.

5) The main points to be analysed in this case are as follows:

i)       Whether there is any deficiency in service or unfair trade practice from the side of the opposite party to the complainant?

ii)      If so, whether the complainant is entitled to get any relief from the side of the opposite party?

iii)     Costs of the proceedings if any?

6)      The issues mentioned above are considered together and    answered as follows:

           As per Section 2 (1) (d) of the Consumer Protection Act,1986, a consumer is a person who buys any goods or hires or avails of any services for a consideration that has been paid or promised or partly paid and partly promised, or under any system of deferred payment.  Exhibit A1 is a true copy of the Insurance Policy bearing No. P/181217/01/2015/003549, valid from 18/2/2015 to 17/2/2016, and Exhibit A2 is a true copy of the Insurance Policy bearing No. P/181217/01/2016/004386, valid from 18/2/2016 to 17/2/2017. Hence, the complainants are consumers as defined under the Consumer Protection Act, 1986 (Point No. i) goes against the opposite parties.

The complaint centres around the rejection of a health insurance claim by the opposite parties, who refused to cover medical expenses for injuries sustained by the second complainant. The injuries occurred due to an accidental fall on July 9, 2016, but the insurance company denied the claim citing exclusions for behavioral disorders and intentional self-injury. The complainants assert that the fall was accidental, occurred due to water on the balcony after heavy rain, and was unrelated to any pre-existing psychiatric conditions. The denial by the insurance company is contested as being based on incorrect medical evaluations and irrelevant factors, leading to significant financial loss and mental distress for the complainants. They seek reimbursement for the hospitalization expenses, compensation for unfair trade practice, and legal costs, challenging the insurance company's interpretation of policy terms and the applicability of exclusion clauses.

The counsel for the complainants puts forth a structured argument against the opposite party's rejection of a health insurance claim. The case involves the 1st complainant, a father, and his daughter, the 2nd complainant. They were insured under a Family Health Insurance Policy by the opposite parties, spanning from February 18, 2016, to February 17, 2017, with coverage amounting to Rs. 3,75,000. On July 9, 2016, the 2nd complainant endured injuries from an accidental fall caused by a wet balcony surface, subsequently receiving medical care at Lakeshore Hospital, which discharged her on July 21, 2016.

Despite the evident accident, the opposite party declined the claim, asserting that the injuries stemmed from behavioural disorders and intentional self-injury, as per the exclusion clause No.6 of the policy. This clause exempts the insurer from claims involving psychiatric conditions, self-inflicted injuries, and other specified conditions. Contrary to this assertion, the complainants maintain that the injuries were purely accidental, unrelated to any behavioural disorder or premeditated self-harm, arguing that the opposite party's decision is based on erroneous medical interpretations and irrelevant factors, making the claim denial both legally and contractually unjustifiable.

 Despite numerous opportunities provided by this commission, the opposite parties have failed to present any substantive evidence. However, during the cross-examination of PW-1, they introduced Exhibit B1, alleged to be a report from a Clinical Psychologist at Lakeshore Hospitals. Nevertheless, the authenticity of this report has not been verified by any credible witness.

The complainants are seeking compensation for the medical expenses incurred, amounting to Rs. 2,51,444, along with an additional Rs. 1,00,000 for the distress caused by the unfair trade practices of the insurance company, and reimbursement for all legal costs associated with the case.

The defence argues the claim is inadmissible under jurisdictional technicalities and maintains that the injuries were self-inflicted—a claim the complainants refute, evidenced by the medical records and testimonies favouring their narrative of an accidental fall.

Given the circumstances and evidence provided, the complainants urge the commission to dismiss the insurance company's objections, uphold the validity of their claim, and grant the requested damages for the undue hardship they endured.

The counsel for the opposite party argues that the complainant has no genuine basis for the complaint, suggesting it was filed solely to harass the opposite party. The complaint centers around a Family Health Optima Insurance Policy that was active from February 18, 2015, to February 17, 2018, under which the second complainant was insured. The complaint details that after an accidental fall, the second complainant was admitted to Lakeshore Hospital, Ernakulam and incurred medical expenses which the opposite party refused to cover, alleging this to be a service deficiency and unfair trade practice.

The opposite party refutes these claims in their version and documents marked B1, emphasizing that the hospital records indicate the injury resulted from deliberate self-harm (DSH) following a domestic quarrel, and noting the patient’s history of psychiatric treatment since 2012. They argue this places the injury under the policy’s exclusion clause, which precludes any expenses incurred due to psychiatric or behavioural disorders or intentional self-injury among others.

Furthermore, the opposite party challenges the jurisdiction of the case, stating that the policy was issued from their Chalakudy Branch, and no cause of action occurred in Ernakulam, thus questioning the territorial jurisdiction of the commission based on the Honorable Supreme Court decision.

The opposite party also states that policy was issued from the Chalakudy Branch office in Thrissur, and the complainant resides in Eramalloor, Alappuzha District. There has been no cause of action within the territorial jurisdiction of this Honorable Commission at Ernakulam. Furthermore, the presence of a branch office of the opposite party in Ernakulam does not confer jurisdiction here, as the cause of action did not occur in Ernakulam. This is supported by the ruling in Sony Surgical Vs. National Insurance Co. (2009 KHC 5136), where the Honorable Supreme Court determined that jurisdiction is established at the branch office where the cause of action arises. Therefore, no part of the cause of action in this case has arisen in Ernakulam.

They assert that the medical records demonstrate the injury was due to intentional self-harm, and therefore, not covered under the policy. They claim the complaint is vexatious and frivolous, aiming to harass the opposite party and seek unlawful gains, and argue for compensatory costs due to unnecessary litigation.

In conclusion, the opposite party requests the Commission to dismiss the complaint and award them costs and compensation, asserting there is no policy breach or unfair practice, and the terms of the policy should be strictly followed without modification by the Commission.

The relevant section of the Consumer Protection Act, 1986, is reproduced below:

“11.        Jurisdiction of the District Forum. — (1) Subject to the other provisions of this Act, the District Forum shall have jurisdiction to entertain complaints where the value of the goods or services and the compensation, if any, claimed ''does not exceed rupees twenty lakhs. 

(2)   A complaint shall be instituted in a District Forum within the local limits of whose jurisdiction, —

(a)   the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or carries on business or has a branch office or personally works for gain, or

(b)   any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or carries on business or has a branch office, or personally works for gain, provided that in such case either the permission of the District Forum is given, or the opposite parties who do not reside, or carry on business or

have a branch office, or personally work for gain, as the case may be, acquiesce in such institution; or

(c)   the cause of action, wholly or in part, arises. ”

The following are the points to be considered and evaluated in this case to come to inference of the facts of the complaint.

1. Whether the complaint is maintainable before this Commission/Forum?

The Commission upon going through the course of history of the complaint and also on evaluating the facts finds that the complaint is treated as patient had undergone the treatment at Lakeshore Hospital, Ernakulam and the medical records substantiates and establish the course of treatment undergone by the complaint. Eventhough the said Hospital is not arrayed in the opposite party array, the cause of action, the part of which is happened attributed from this havel and hence part of cause of action arises in the territorial jurisdiction of this Commission. Therefore the complaint is maintainable before this Commission and hence Point No. 1 is found in favour of the complainant.

                               Hon'ble Supreme Court in the case of Alchemist Limited and Anr. v. State Bank of Sikkim and Ors. AIR 2007 Supreme Court 1812 has held as under:

“From the aforesaid discussion and keeping in view the ratio laid down in catena of decisions by this Court, it is clear that for the purpose of deciding whether facts averred by the petitioner/appellant, would or would not constitute a part of cause of action, one has to consider whether such fact constitutes a material, essential, or integral part of the cause of action. It is no doubt true that even if a small fraction of the cause of action arises within the jurisdiction of the Court, the Court would have territorial jurisdiction to entertain the suit/petition. Nevertheless, it must be a 'part of cause of action', nothing less than that.”

                         After considering the submissions made by the complainant, the responses from the opposite parties, and the evidence presented before this Commission, it becomes imperative to address the core issues identified during the proceedings.

The second complainant sustained injuries from a fall from her residence's balcony on July 9, 2016. The family claims these injuries were accidental, resulting from slipping on water accumulated after rain. The insurance company, however, denied the claim, citing exclusions for behavioral disorders and intentional self-injury, stated within their policy terms.

The Honourable Supreme Court in Sangrur Sales Corporation v.United India Insurance Company on 17 January, 2020.2020(2)KHC 244(SC)  held that:

“10. It is well-settled that in the event that the two constructions are possible or in the event of an ambiguity, that construction which is beneficial to the insured should be accepted consistent with the purpose for which the policy was taken, namely to cover the risk on the happening of a certain event. [See in this context, the decision of this Court in United India Insurance Co Ltd v Pushpalaya Printers.’’

In the Revision Petition No. 2513 of 2019 reviewed by the Hon’ble National Consumer Disputes Redressal Commission, referenced a decision by the Hon’ble Supreme Court from the case Canara Bank vs. United India Insurance Co. Ltd. & Ors. [(2020) 3 SCC 455]. Held that:

“9. It was held by the Hon’ble Supreme Court in Canara Bank vs. United India Insurance Co. Ltd. & Ors. (2020) 3 SCC 455 that Insurance Policy must be read holistically so as to give effect to reasonable expectations of all parties, including the insured, coverage clauses to be read broadly, and ambiguity, if any, to be resolved in favour of the Insured, exclusions to be read narrowly. Hence, we do not find any reason to interfere with the order of the State Commission.”

In this cited Supreme Court case, it was held that an insurance policy should be interpreted as a whole to fulfill the reasonable expectations of all parties involved, particularly the insured. This interpretation means that coverage clauses should be construed broadly, while any ambiguities should be resolved in favour of the insured, and exclusion clauses should be interpreted narrowly.

In light of this precedent, the National Consumer Disputes Redressal Commission found no grounds to interfere with the decision of the State Commission of Rajasthan, effectively upholding the earlier ruling.

A. Deficiency in Service and Negligence: The opposite party's refusal to honour the insurance claim constitutes a deficiency in service under Section 2(1)(g) of the Consumer Protection Act, 1986. The evidence provided (Exhibit A8 - Discharge Summary) supports that the injuries were due to an accident, contradicting the insurance company’s assertion that the injuries were self-inflicted.

The second complainant was admitted to the hospital with injuries sustained from a fall at home, affecting the right arm, foot, and pelvis, according to the discharge summary provided as Exhibit A8. The aforementioned discharge summary does not mention any psychiatric consultations during the patient's history and examination. However, Exhibit B1, submitted by the Opposite Party and consisting of hospital records from the same hospital, indicates some psychiatric consultations that were not documented in the discharge summary. Consequently, the burden of proof rests with the Opposite Party to authenticate the veracity of Exhibit B1. The Opposite Party has failed to substantiate Exhibit B1 through cross-examination of the consulting clinical psychologist to establish deliberate self-harm (DSH).

Counsel for the complainant contends that the second complainant received no treatment for any behavioural disorder or intentional self-harm, as corroborated by ExhibitA8. Moreover, reliance on unsubstantiated documents that cast doubts on the patient’s mental health is not only inappropriate but also constitutes an unfair trade practice.

                       The terms of the insurance policy, while including exclusions, must be interpreted in light of the evidence presented. The medical records provided do not substantiate the claims of behavioural disorder or intentional self-injury, which were the basis for the claim’s rejection.

The opposite party has not substantiated their denial of the claim with conclusive evidence. The interpretation of the policy exclusions by the opposite party is found to be overly strict and not in keeping with the principles of natural justice.

B. Liability of the Opposite Parties:

The opposite parties have failed to prove that the exclusion clauses are applicable in this instance as per the evidence provided by the complainants. The policy terms have been interpreted in a manner detrimental to the rights of the consumer, which is contrary to the spirit of the Consumer Protection Act, 1986.

The Commission finds that the opposite party wrongfully denied the health insurance claim of Ms. Milan Regina Mathew, leading to significant financial distress and mental anguish to the complainants.

We determine that issue numbers (i) to (iii) are resolved in the complainant's favour due to the significant service deficiency and the unfair trade practices on the part of the opposite parties. Consequently, the complainant has endured considerable inconvenience, mental distress, hardships, and financial losses as a result of the negligence of the opposite parties.

In view of the above facts and circumstances of the case, we are of the opinion that the opposite parties are liable to compensate the complainant.

Hence the prayer is partly allowed as follows:

2. The opposite parties shall reimburse the complainants the sum of ₹2,51,444 (Rupees Two Lakh Fifty-One Thousand Four Hundred Forty-Four Only) for medical expenses incurred towards the hospitalization and treatment of the second complainant.
3. The opposite parties shall pay ₹50,000 (Rupees Fifty Thousand Only) as compensation for unfair trade practices and the mental agony and hardship suffered by the complainants and their families.
4. The opposite parties shall also pay ₹20,000 (Rupees Twenty Thousand Only) towards the cost of the proceedings.

The opposite parties are jointly and severally liable for the fulfilment of the above orders, which must be executed within 30 days from the date of receiving this order. Should there be a failure to comply within the stipulated period, the amounts detailed in Points I and II will accrue interest at an annual rate of 9% starting from the day after the expiration of the 30-day compliance period, until the date of realization. This interest calculation commences from the date immediately after the 30 days post-receipt of this order if non-compliance occurs and continues until full payment is realized.

Pronounced in the Open Commission on this the 30^th day of May 2024

Sd/-

                                                                             D.B.Binu, President                                                                                              Sd/-

V. Ramachandran, Member

Sd/-

 Sreevidhia.T.N, Member        

Forwarded/By Order

  Assistant Registrar  

Appendix

Complainant’s Evidence

Exhibit A1: True copy of Insurance Policy bearing No. P/181217/01/2015/003549 valid from 18/2/2015 to 17/2/2016

Exhibit A2: True copy of Insurance Policy bearing No. P/181217/01/2016/004386 valid from 18/2/2016 to 17/2/2017

Exhibit A3: True copy of the Customer Information Sheet of the Opposite Parties, Family Health Optima Insurance Plan

Exhibit A4: True copy of Letter dated 19.08.2016 issued by the Opposite Parties to the 1st complainant

Exhibit A5: True copy of Letter dated 25.10.2016 issued by the Opposite Parties to the 1st complainant

Exhibit A6: True copy of Letter dated 27.03.2017 issued by the 1st complainant to the Grievance Department of the opposite parties

Exhibit A7: True copy of Letter dated 06.04.2017 issued by the Opposite Parties to the complainant

Exhibit A8: True copy of Discharge Summary of 2nd complainant issued by Lakeshore Hospital & Research Centre Ltd., Kochi to the 1st complainant

Exhibit A9: True copy of Detailed Bill No.004085 dated 21.07.2016 of Lakeshore Hospital & Research Centre Ltd., Kochi.

Opposite party’s Exhibits

Exhibit B-1: Copy of the Hospital Records from Lakeshore Hospital.

Despatch date:

By hand:     By post                                                  

kp/

CC No. 198/2018

Order Date: 30/05/2024