Punjab

Ludhiana

CC/20/91

Manoj Kumar - Complainant(s)

Versus

Star Health & Allied Ins.Co.ltd. - Opp.Party(s)

S.K.Uppal

20 Jul 2023

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, LUDHIANA.

                                                Complaint No:91 dated 23.03.2020.                                                 Date of decision: 20.07.2023.

 

1. Manoj Kumar aged 40 years
2. Kapil Dev Chitkara aged 37 years, both sons of Late Sh. Haqeeqat Rai, resident of B-1, 523, Grain Market, Sahnewal, Tehsil and district Ludhiana.                                                                                                                                                                         ..…Complainants

                                                Versus

Star Health and Allied Insurance Company Limited, Registered Office: 1, New Tank Street, Valluvar Kottam, High Road, Nungambalkan, Chennai-600034.

IInd Address: 2716, Ist Floor, Gagan Complex, Backside Majestic Park Plaza Hotel, Gurdev Nagar, Pakhowal Road, Ludhiana.                                                                                                                                 …..Opposite parties 

Complaint Under Section 12 of the Consumer Protection Act, 1986.

QUORUM:

SH. SANJEEV BATRA, PRESIDENT

SH. JASWINDER SINGH, MEMBER

MS. MONIKA BHAGAT, MEMBER

 

COUNSEL FOR THE PARTIES:

For complainants            :         Sh. S.K. Uppal, Advocate.

For OP                           :         Sh. Rajeev Abhi, Advocate.

 

ORDER

PER SANJEEV BATRA, PRESIDENT

1.                Shorn of unnecessary details, the facts of the complaint are that Smt. Sushil Kumari Chitkara widow of Late Sh. Haqeeqat Rai, R/o.B-1, 523, Grain Market, Sahnewal, District Ludhiana expired on 24.03.2018 and the complainants are her only sons and there is no other legal heir of Smt. Sushil Kumar, Shri Haqeeqat Rai died on 22.10.1993. The complainants stated that Smt. Sushil Kumari Chitkara got herself insured for a sum of Rs.2 Lac under Senior Citizen Red Carpet Insurance Policy with opposite party vide policy No.P/161114/2015/002430 having validity from 24.07.2014 to 23.07.2015 by paying a premium of Rs.9500/-. She got renewed her Ist policy vide policy No.P/161114/2016/003139 w.e.f. 24.07.2015 to 23.07.2016 by paying premium of Rs.9639/- vide receipt No.1116004327 dated 23.07.2015. Smt. Sushil Kumari Chitkara further renewed the policy vide Policy No.P/161114./01/2017/004341 w.e.f. 06.08.2016 to 05.08.2017 vide receipt No.1116005435 dated 27.06.2016 and she further renewed the third policy vide policy No.P/161114/01/2018/002206 w.e.f. 06.08.2017 to 05.08.2018 vide receipt No.1116002894 dated 05.08.2018 for a premium of Rs.9978/- with the opposite party.

                   The complainants further stated that Smt. Sushil  Kumari Chitkara remained admitted in SPS Apollo Hospital, Sherpur Chowk, Ludhiana as indoor patient for the periods, reproduced as under:-

          i.        23.10.2017 to 28.10.2017 (Total bill Rs.75,121/-)

ii.       18.11.2017 to 23.11.2017 (Total bill Rs.1,71,808/-)

iii.      25.11.2017 to 29.11.2017 (Total bill Rs.47,185/-)

iv.      11.01.2018 to 13.01.2018 (Total bill Rs.41,253/-)

v.       22.03.2018 to 24.03.2018 (Total bill Rs.1,23,043/-)

A total sum of Rs.4,58,410/- was paid to the SPS Apollo Hospitals from 23.10.2017 to 24.03.2018. She died on 24.03.2018 during subsistence of fourth insurance policy effective from 06.08.2017 to 05.08.2018. According to the complainants, every time, opposite party was informed about her admission in SPS Apollo Hospital and the demise of Smt. Sushil Kumari Chitkara on time. The complainants approached opposite party to pay the hospital bills as per policy but they did not pay any insured amount as per policy/contract entered into by the opposite party. All the facts related to the prevailing diseases were disclosed to the opposite party by the insured person at the time of Ist policy which were also verified by the officials of opposite party and got her medically examined before insuring her for the Ist time and also renewed the policy for three times by receiving the premium amount. However, the opposite party has repudiated the claim and refused to pay the insured amount. Thus, by this act, the opposite party has committed deficiency in service to the complainants by not making the insured amount of Rs.2,00,000/- for which it was bound to pay the same to the complainants in time. The complainants requested the officials of opposite party to pay the insured amount but they refused to pay the same without any sufficient reason or cause. In the end, the complainant prayed for issuing direction to the opposite party to pay Rs.4,00,000/- along with interest @12% per annum along with litigation expenses of Rs.33,000/-.

2.                Upon notice, the opposite party appeared and filed written statement by taking preliminary objections that the complaint is not maintainable, the complaint is bad for non-joinder of necessary parties, the complainant is estopped by his own act and conduct etc. The opposite party stated that immediately on the receipt of cashless authorization/claim, it was duly registered, entertained and processed. The complainant had obtained Senior Citizen Red Carpet Policy covering Mrs. Sushil Kumari Chitkara vide policy No.P/161114/01/2018/00206 for the period 6.8.2017 to 5.8.2018 for the sum insured of Rs.2,00,000/-. The said policy is renewal of previous policies bearing No.P/161114/01/2015/002430 valid from 24.7.2014 to 23.7.2015, policy No.P/161114/01/2016/003139 valid from 24.7.2015 to 23.7.2016 and policy No.P/161114/01/2017/004341 valid from 6.8.2016 to 5.8.2017. Insurance policy is issued on the principles uberrimae fides. Utmost good faith is a cardinal principle of insurance. This means that all the parties to an insurance contract must deal in good faith, making a full declaration of all material facts in the insurance proposal. Material facts are those that would influence an underwriter as to whether he should or should not accept the risk. If a party fails to adhere to the principles of utmost good faith, the outcome of the claim may be affected. According to the opposite party, the insurance policy was issued on the basis of the proposal form. The insurance policy is a contract in itself and the parties are bound by the terms and conditions of the policy. One of the conditions No.9 in the policy is reproduced as under:

“(9) The company shall not be liable to make any payment under the policy in respect of any claim if 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."

At the time of availing the policy the complainant was supplied with the terms and conditions of the policy. The opposite party further stated that in case of Senior Citizen Red Carpet Insurance Policy medical examination is not required as the entry age must be above 60 years of age. As per terms and conditions of the Senior Citizen Red Carpet policy issued to the complainant by the opposite party, only those pre-existing diseases which are specifically declared by the proposer in the proposal form are covered under the policy. So, it is compulsory that the information regarding the health must be provided in the proposal form, for the opposite party to provide coverage with suitable co-payment, i.e. 50% of each and every claim arising out of all pre-existing diseases as defined and 30% in case of all other claims which are to be borne by the insured.

                   The opposite party further stated that the terms and conditions of the policy were explained to the complainant at the time of proposing policy and the same was served to the complainant along with the policy schedule in which it was stated, "Please check whether the details given by you about the insured persons in the proposal form are incorporated correctly in the policy schedule. If you find any discrepancy, please inform us within 15 days from the date of receipt of the policy, failing which the details relating to the insured person given in the policy schedule are deemed to have been accepted by you"

"THE INSURANCE UNDER THIS POLICY IS SUBJECT TO CONDITIONS, CLAUSES, WARRANTIES, EXCLUSIONS ETC. ATTACHED.”

The opposite party further stated that as per the terms and conditions of the policy, the insurance company is not liable to pay in respect of any claim, if there is any misrepresentation and non-disclosure of material fact by the insured to the insurer. The complainant has accepted the policy agreeing and being fully aware of such terms and conditions. and executed the proposal form. The proposal form contains the questionnaires and it is one of the questionnaires in the proposal form that have you ever suffered or suffering from any of the following:-

Cancer disease - yes or no - the answer marked is No.

According to the opposite party the claim/cashless authorization were reported in the 4th year of policy for reimbursement of expenses incurred on the treatment of Mrs.Sushil Kumari Chitkara. The insured Mrs. Sushil Kumari Chitkara was admitted at Satguru Partap Singh Hospital, Ludhiana on 23.10.2017 and was diagnosed with compression fracture B12-L2, DM (diabetic mellitus) and HTN (hypertension) for a claim amount of (Rs.42,691/- as per the claim form), however the insured submitted bills for Rs.76,711/-. The complainant/hospital has supplied the medical record of insured Mrs. Sushil Kumari Chitkara to the opposite party for processing the claim for reimbursement of medical expenses incurred on the treatment of the insured Mrs. Sushil Kumari Chitkara with SPS Hospital, Ludhiana after the receipt of query on pre-authorization letter dated 22.10.2017 vide their letter dated 23.10.2017. It is observed from the letter dated 23.10.2017 of Department of Emergency Medicine, SPS Hospital, Ludhiana that the insured. patient is diagnosed to have cancer uterus in 2011 and was a known case of DM2/HTN since 12 years and had a history of hysterectomy 2011 (Malignancy) which confirms the patient was suffering uterus cancer and diabetic mellitus 2 and hypertension prior to inception of medical insurance policy obtained by the insured Mrs. Sushil Kumari Chitkara. The factum of above said diseases are mentioned in the letter dated 23.10.2017 of the SPS Hospital, which is reproduced as under:-

Past Medical/Surgical History:-

K/c/o DM2/HTN (since 12 years)

H/o Hysterectomy (2011) (Malignancy)

It was also certified by Dr. Anureet Gill, MD Medicine (DMC & Hospital, Ludhiana) Senior Consultant Medicine of SPS Hospital, Ludhiana that the complainant was diagnosed as cancer in uterus in 2011 and was suffering from diabetics and hypertension for last 12 years and was admitted for evaluation, which is reproduced as under:-

Name - Sushil Kumari Chitkara

She was diagnosed as cancer of uterus in 2011

Diabetes - 12 years

Hypertension - 12 years

Diagnosis - She is under evaluation.

Plan of management - according to diagnosis.

The opposite parties further stated that at the time of inception of the policy which was effective from 24.07.2014 to 23.07.2015, Mrs. Sushil Kumari Chitkara has not disclosed the above mentioned medical history/health details in the proposal form which amounts to misrepresentation/non-disclosure of material facts. As per condition No.9 of the insurance policy obtained by Mrs. Sushil Kumari Chitkara, it is clearly stated that if there is any misrepresentation/non-disclosure of material facts whether by the insured person or any other person acting on his behalf the insurance company is not liable to make any payment in respect of any claim. After the receipt of the medical record and after scrutinizing the documents placed in the claim file and after due application of mind by the official of the opposite party in accordance with the terms and conditions of the policy the cashless authorization/claim of Mrs. Sushil Kumari Chitkara was rejected vide letter dated 25.11.2017 on the grounds that Mrs. Sushil Kumari Chitkara was suffering from cancer uterus in 2011 prior to the inception of the medical insurance policy which is valid from 24.07.2014 to 23.07.2015 but the insured has not disclosed the above said medical history and health details in her proposal form which amounts to misrepresentation/non-disclosure of material facts and as such the claim was repudiated as no claim as per condition No.9 of the insurance policy obtained by the complainant on account of misrepresentation / non-disclosure of material facts of her health in the proposal form. The policy in question was also cancelled on account of the above said facts as per condition No.13 of the said policy which is reproduced as under:-

"13. The company may cancel this policy on grounds of misrepresentation/non-disclosure of material fact as declared in proposal form/at the time of claim."

As such, the policy in question was cancelled with effect from 05.12.2017 due to non-disclosure of cancer in uterus after serving the notice. In consequence thereof the policy was cancelled and refunded the premium amounting to Rs.9,978/- vide DD No.721710 dated 27.11.2017 drawn on HDFC Bank, vide letter dated 27.11.2017.  The opposite party further stated that it shows that the insured was well aware of her past medical history and failed to disclose the same in the proposal form during the porting of policy, amounting to non-disclosure of material facts thus violating the cardinal principle of the insurance, making the contract of insurance voidable and unenforceable. Further the insured has a duty to disclose all material facts in proposal while buying an insurance policy. 19(2) of Protection of Policy Holder Regulations 2017, which reads as under:-

“The requirements of 'disclosure of material information' regarding a proposal or policy apply, under these regulations, both to the insurer and insured.”

The insured has omitted to disclose the material facts at the time of porting of policy, which amount to non-disclosure of material facts. The opposite party further stated that the grounds of repudiation of the cashless authorization/claim of Mr. Sushil Kumari Chitkara and cancellation of her policy is legal, valid and enforceable and are in accordance with the terms and conditions of the policy.  

                   On merits, the opposite party reiterated the crux of averments made in the preliminary objections. However, the opposite party averred that the complete insurance policy are not produced on record and the complainant had withhold the production of terms and conditions of the policy. Even no documents of treatment of claim form has ever been submitted by the complainant or by the insured till date. Moreover, the alleged bills are for Rs.4,58,410/- whereas the sum insured under the policy is only Rs.2,00,000/- and the same is subject to copay as per condition No.5, which may be limited to Rs.37,147/- under 30% copay and as such, the claims cannot be lodged and are not admissible under the policy for such amount. The opposite party has denied that there is any deficiency of service and has also prayed for dismissal of the complaint.

3.                In support of their claim, complainant No.1 Sh. Manoj Kumar tendered his affidavit Ex. CA in which he reiterated the allegations and the claim of compensation as stated in the complaint. The complainant also tendered documents Ex. C1 to Ex. C8 are the receipts of payment of premiums, Ex. C9 to Ex. C11 are the copies of discharge summary, Ex. C12 to Ex. C17 are the copies of duplicate bills summary issued by SPS Apollo Hospitals and closed the evidence.

                   The complainant summoned and examined Sh. Sukhjinder Singh, Co-ordinator, SPS Hospital, Medical Record Ludhiana who in his statement dated 17.05.2023 stated that as per the policy of the hospital and public notice published in the newspaper The Times of India, Chandigarh dated 31.05.2018, the medical record of indoor patients should be kept intact for a period of 5 years and thereafter the medical records will be discarded and in this case, the medical record of the patient Sushil Kumari of the year 2011 was discarded in the year 2016 as per the policy of the hospital. He further stated that he is unable to bring the summoned record of the patient bearing UHID No.103777 and as per his knowledge Dr. Anureet is not presently working in their hospital, Dr. Praphull Arya is still working in their hospital. The said witness also produced the copy of public notice.

4.                On the other hand, counsel for opposite party tendered affidavit Ex. RA of Sh. Sumit Kumar Sharma, Senior Manager of State Health & Allied Insurance Co. Ltd., branch at New Delhi along with documents Ex. R1 is the copy of policy terms and conditions, Ex. R2 is the copy of all policy schedule, Ex. R3 is the copy of 30 days intimation letter for policy cancelation dated 26.10.2017, Ex. R4 is the copy of endorsement schedule dated 22.11.2017, Ex. R5 is the copy of premium refund after the policy cancellation letter dated 27.11.2017, Ex. R6 is the copy of proposal form along with declaration letter, Ex. R7 is the copy of pre authorization request, Ex. R8 is the copy of field visit report, Ex. R9 is the copy of emergency consultation slip dated 23.10.2017, Ex. R10 is the copy of pre-authorization query letter dated 23.10.2017, Ex. R11 is the copy of pre-authorization rejection letter dated 23.10.2017, Ex. R12 is the copy of treating doctor certificate dated 23.10.2017, Ex. R13 is the copy of claim form, Ex. R14 is the copy of discharge summary, Ex. R15 is the copy of final bill, Ex. R16 is the copy of repudiation letter dated 25.11.2017, Ex. R17 is the copy of billing assessment sheet, Ex. R18 is the copy of IRDA guidelines and closed the evidence.

5.                We have heard the arguments of the counsel for the parties and also gone through the complaint, affidavit and annexed documents and written reply along with affidavit and documents produced on record by both the parties.      

6.                The present complaint has been filed by complainants Manoj Kumar and Kapil Dev Chitkara being sons and legal heirs of Smt. Sushil Kumari Chitkara, now deceased (hereinafter called as insured) widow of Sh. Haqeeqat Rai. The insured had obtained Senior Citizen Red Carpet Insurance Policy from the opposite party w.e.f. 24.07.2014 to 23.07.2015 Ex. C1 by paying premium of Rs.9500/- for insured sum of Rs.2,00,000/-. The said policy was subsequently renewed thrice for a period of 23.07.2015 to 24.07.2016, from 06.08.2016 to 05.08.2017, from 06.08.2017 to 05.08.2018. During the subsistence of last renewed policy which having a coverage of Rs.2,00,000/-, Smt. Sushil Kumari Chitkara remained admitted as indoor patient in SPS Apollo Hospital, Ludhiana for the following periods and incurred a total expenses of Rs.4,58,410/- on her treatment as detailed below:-

i.        23.10.2017 to 28.10.2017 (Total bill Rs.75,121/-)

ii.       18.11.2017 to 23.11.2017 (Total bill Rs.1,71,808/-)

iii.      25.11.2017 to 29.11.2017 (Total bill Rs.47,185/-)

iv.      11.01.2018 to 13.01.2018 (Total bill Rs.41,253/-)

v.       22.03.2018 to 24.03.2018 (Total bill Rs.1,23,043/-)

Unfortunately, the insured died on 24.03.2018. During the hospitalization of the insured, a claim of Rs.42,691/- out of the submitted bill of Rs.76,711/- was raised which was repudiated by the opposite party  vide repudiation letter dated 25.11.2017 Ex. R16, the operative part of which is reproduced as under:-

“We have processed the claim records relating to the above insured-patient seeking reimbursement of hospitalization expenses for treatment of compression fracture D12-2, diabetes mellitus, hypertension.

Although the present admission and treatment of the insured patient is for compression fracture D12-2, diabetes mellitus, hypertension, it is observed from the letter dated 23.10.2017 of the above hospital that the insured patient is diagnosed to have cancer uterus in 2011, which confirms the patient has cancer uterus prior to inception of medical insurance policy.

At the time of inception of your policy which is from 24.07.2014 to 23.07.2015, you have not disclosed the above mentioned medical history/heath details of the insured-person in the proposal form which amounts to misrepresentation/non-disclosure of medical facts.

As per Condition No.9 of the policy issued to you, if there is any misrepresentation/on-disclosure of material facts whether by the insured person or any other person acting on his behalf, the Company is not liable to make any payment in respect of any claim.

We are therefore unable to settle your claim under the above policy and we hereby repudiate your claim.

As per Condition No.13, the policy is also liable to be cancelled and necessary action will be taken by our Corporate Office.”

By virtue of this letter, the opposites party has not only declined he reimbursement claim of the insured/complainants but also cancelled the policy. The main reason for declining of reimbursement claim is that the insured patient was diagnosed to have Uterus Cancer in the year 2011. The opposite party has relied upon history recorded on 23.10.2017 by Dr. Anureet Gill vide document Ex. R9. The opposite party was required to produce medical record in this regard to substantiate its claim of said pre-existing disease. Instead it is the complainants who moved an application for summoning the record of SPS Apollo Hospital w.e.f. year 2010 to 24.03.2018. Vide order of this Commission dated 13.04.2023, the concerned Doctor/witness was ordered to be summoned with complete record. However, the doctor had already left the institution and medical record of the patient was not available with the hospital. It is evident that it is the complainants who made efforts to disprove the factum of pre-existing disease of the insured and it shows their bonafide. In the absence of examination of Dr. Anureet Gill or any other witness by the opposite party, it cannot be said that the insured had undergone hysterectomy in the year 2011. It necessarily implies that disclosure stated to have been made by the insured at the time of inception of the policy in the proposal form Ex. R6 were not false. Moreover, the insured was diagnosed as compression fracture B12-L2, DM (diabetic mellitus) and HTN (hypertension) which had no nexus with the alleged pre-existing disease. Recitals of repudiation letter are also suggestive of this fact as well. Further, the opposite party has also not exercised its right for getting the insured immediately examined either at the time of inception or renewal of the policy. As such, the repudiation of the claim is not justified.

7.                Perusal of repudiation letter Ex. R16 also shows that the policy was also canceled by the opposite party. It appears to be unilateral decision of the opposite party and no reasonable opportunity of being heard was afforded either to the insured or to the complainants before cancelling the policy. It is a gross violation of principle of natural justice. So the cancellation of the policy is hereby revoked and it will be deemed to be in operation for all intends and purposes during the period of its validity. It would be just and appropriate of the opposite party are directed to settle and reimburse the claim of Rs.75,121/- of the complainants for hospitalization of the insured from 23.10.2017 to 28.10.2017 with SPS Hospital, Ludhiana as per terms and conditions of the policy. The amount of Rs.9978/- already received by the complainants will be set off against the amount so settled and reimbursed. The complainants will be at liberty to submit the claim with regard to medical expenses incurred by the insured during the remaining period of hospitalization from 18.11.2017 to 23.11.2017, from    25.11.2017 to 29.11.2017, from 11.01.2018 to 13.01.2018 and from 22.03.2018 to 24.03.2018 with the opposite party within 30 days from the date of receipt of copy of order. In case the claim is submitted by the complainants, the opposite party shall consider and settle the claim of the complainants as per terms and conditions of the policy within 30 days from the date of receipt of claims from the complainants. The complainant are further held entitled for composite compensation of Rs.10,000/-.

8.                As a sequel of above discussion, the complaint is partly allowed with order that the cancellation of the policy is hereby revoked and it will be deemed to be in operation for all intended purpose during the period of its validity. The opposite party is directed settle and reimburse the claim of Rs.75,121/- of the complainants for hospitalization of the insured from 23.10.2017 to 28.10.2017 with SPS Hospital, Ludhiana as per terms and conditions of the policy. The amount of Rs.9978/- already received by the complainants will be set off against the amount so settled and reimbursed. The complainants will be at liberty to submit the claim with regard to medical expenses incurred by the insured during the remaining period of hospitalization from 18.11.2017 to 23.11.2017, from        25.11.2017 to 29.11.2017, from 11.01.2018 to 13.01.2018 and from 22.03.2018 to 24.03.2018 with the opposite party within 30 days from the date of receipt of copy of order. In case the claim is submitted by the complainants, the opposite party shall consider and settle the claim of the complainants as per terms and conditions of the policy within 30 days from the date of receipt of claims from the complainants. The opposite party shall also pay a composite costs of Rs.10,000/- (Rupees Ten Thousand only) to the complainants within 30 days from the date of receipt of copy of order. Copies of order be supplied to parties free of costs as per rules. File be indexed and consigned to record room.

 

 

9.                Due to huge pendency of cases, the complaint could not be decided within statutory period.

 

(Monika Bhagat)          (Jaswinder Singh)                      (Sanjeev Batra)                          Member                            Member                                       President         

 

Announced in Open Commission.

Dated:20.07.2023.

Gobind Ram.

 

 

Manoj Kumar Vs Star Heath                                 CC/20/91

Present:       Sh. S.K. Uppal, Advocate for complainant.

                   Sh. Rajeev Abhi, Advocate for OPs.

 

                   Arguments heard. Vide separate detailed order of today, the complaint is partly allowed with order that the cancellation of the policy is hereby revoked and it will be deemed to be in operation for all intended purpose during the period of its validity. The opposite party is directed settle and reimburse the claim of Rs.75,121/- of the complainants for hospitalization of the insured from 23.10.2017 to 28.10.2017 with SPS Hospital, Ludhiana as per terms and conditions of the policy. The amount of Rs.9978/- already received by the complainants will be set off against the amount so settled and reimbursed. The complainants will be at liberty to submit the claim with regard to medical expenses incurred by the insured during the remaining period of hospitalization from 18.11.2017 to 23.11.2017, from    25.11.2017 to 29.11.2017, from 11.01.2018 to 13.01.2018 and from 22.03.2018 to 24.03.2018 with the opposite party within 30 days from the date of receipt of copy of order. In case the claim is submitted by the complainants, the opposite party shall consider and settle the claim of the complainants as per terms and conditions of the policy within 30 days from the date of receipt of claims from the complainants. The opposite party shall also pay a composite costs of Rs.10,000/- (Rupees Ten Thousand only) to the complainants within 30 days from the date of receipt of copy of order. Copies of order be supplied to parties free of costs as per rules. File be indexed and consigned to record room.

 

(Monika Bhagat)          (Jaswinder Singh)                      (Sanjeev Batra)                       Member                     Member                                       President         

 

Announced in Open Commission.

Dated:20.07.2023.

Gobind Ram.