KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
VAZHUTHACAUD, THIRUVANANTHAPURAM
APPEAL No. 145/2016
JUDGMENT DATED: 13.07.2023
(Against the Order in C.C. 125/2015 of CDRF, Wayanad)
PRESENT:
SRI. AJITH KUMAR D. : JUDICIAL MEMBER
SMT. BEENA KUMARY. A : MEMBER
APPELLANTS:
- The Manager, Star Health and Allied Insurance Co. Ltd., Branch Office, 219, 2nd Floor, Penta Towers, Kaloor, Cochin.
- The Manager, Star Health and Allied Insurance Co. Ltd., Branch Office, Ammu’s Complex, Kalpetta.
(By Adv. G.S. Kalkura)
Vs.
RESPONDENT:
A. Lillykutty, W/o N.V. Abraham, Njaliyath House, Padmam Lane, Thiruvankulam Post, Ernakulam now residing at Njaliyath House, Pazhamudi Post, Kalpetta.
(By Adv. Narayan R.)
JUDGMENT
SMT. BEENAKUMARY A. : MEMBER
The appellants are the opposite parties in C.C. No. 125/2015 of the Consumer Disputes Redressal Forum, Wayanad (District Forum for short). The respondent is the complainant. The District Forum allowed the complaint based on a mediclaim policy. Against the said order the opposite parties have filed this appeal.
2. Brief facts of the case are as follows: The complainant is the policy holder of senior citizens Red Carpet Insurance Policy vide No. P/181211/01/2014/006548. The inception of the policy was on 28.02.2014. While so on 14.09.2014 complainant sustained injuries due to a domestic fall from her house at Kalpetta. On the next day she went to her son's house at Thiruvananthapuram. Since there was pain and swelling in her right leg and right hand on 16.09.2014, she admitted at SP Fort Hospital, Thiruvananthapuram and undergone a surgery. Immediately after the admission this matter was referred to opposite party insurance company. While so on 20.09.2014 the office of the Opposite parties at Chennai informed the Hospital by fax Message that they refused the policy benefits since there is non-disclosure of material facts at the very inception of the policy. Hence the complainant was forced to arrange a huge amount of Rs.1,22,921/- for payment of Hospital Bills at the time of discharge on 22.09.2014. After the discharge, on 24.10.2014 the complainant sent a written request to the Chennai office of the Opposite parties requesting them to settle the claim at the earliest. In response to the same the complainant received a letter from the Zonal office of the Opposite parties directing the complainant to submit all original Bills and discharge summery etc. Accordingly the complainant sent all documents to the Zonal office of the Opposite parties. Thereafter on 11.12.2014 the complainant received a reply from the Chennai office of the Opposite parties refusing the claim of the complainant. Complainant alleges that the reason for the denial of policy benefits by the Opposite parties is illegal. The complainant did not suppress any material facts as alleged in the reply of the Opposite parties. The injuries sustained to the complainant are due to a domestic fall which has no relevance to the surgery underwent for cancer which was completely healed years back. Complainant alleges that the opposite parties have no right to deny the claim amount of Rs.1,22,921/-. The complainant sustained irreparable mental agony and hardships due to the illegal act of opposite parties. Hence the complaint was filed alleging deficiency of service on the part of the opposite parties.
3. On receipt of notice, opposite party entered and filed version contending as follows:- The complaint is not sustainable either on facts or on law and is liable to be dismissed. The District Forum has no jurisdiction to entertain the complaint since no cause of action has arisen at Kalpetta. The complainant has taken the policy from the opposite party's Branch office at Ernakulam. The complainant submitted a claim at Thiruvananthapuram office. The cause of action for this complaint ie, the claim repudiation was made from the pposite party's Chennai address. The complainant was admitted and treated at S.P. Fort hospital, Thiruvananthapuram. The Honourable Supreme Court has ordered in sonic surgical Vs. National Insurance Company Ltd.2009 KHC 5136 that "Branch office means the branch office where the cause of action has arisen". Since the parties entered into contract of insurance are not within the Jurisdiction of the District Forum. Hence the question of Jurisdiction is to be decided as a preliminary issue. It is submitted that the complainant had taken Senior citizen Red carpet insurance policy from the opposite party Vide policy no. P/181211/O1/2014/006548 from 27.02.2014 to 27.02.2015 for a sum insured of Rs. One Lakh. The opposite parties submitted that the proposal form is the basis and integral part of the contract and on that basis the policy was issued. The policy issued to the complainant is essentially a health insurance policy. So the information regarding the health status of the complainant at the time of filling the proposal form are material for proper underwriting of the proposal. The policy is issued after accepting the facts in the proposal form on utmost good faith. In the proposal form the complainant further declared that if after the insurance policy is effected, any particulars stated in the proposal form are found incorrect, the insurance company would have "no liability" under the policy. The complainant was admitted on 16.09.2014 at SP Fort Hospital, Trivandrum for treatment of Screw Fixation for Avulsion Fracture right Calcaneum and after treatment she was discharged on 22.09.2014. The opposite party received a pre-authorization request letter from the hospital on 17.09.2014. On the same day the opposite party has sent a query to the hospital requesting to furnish the case sheets and investigation details. The opposite party received a discharge summary dated 25.10.2012 of Baby Memorial hospital which clearly reveals that the complainant had undergone MRM surgery (modified Radical Mastectomy) for CA breast in 2012 and also she was suffering from hypertension for which she was on treatment. Hence based on the available records, the opposite party rejected the cashless facility due to suppression of material facts and informed the same to the Hospital on 20.09.2014. The averment in the complaint that as per policy, the complainant is entitled for Cashless facility is totally false and denied by the opposite parties. It is submitted that Cashless facility is not a part of contractual obligation as per the terms and conditions of the Insurance policy contract. It is more than the commitment given under the contract of insurance and meant for extra comfort level for the customer. It is a facility extended to those cases where the liability of the Insurance Company under the policy is established beyond any doubt. In all other cases, the insured has to submit a completed claim form with all supporting treatment documents to enable the company to understand and process the claim on merit. The case records from Baby memorial Hospital revealed that the complainant had treated for Ca Breast, Hyper Para Thyrodisom and HTN since 25.11.2012 and she had undergone mastectomy surgery in 2012. In this case the proposer has not revealed any diseases in the medical history column despite there is a specific question that "Is any of the person proposed for insurance suffering/ suffered from: a) Stroke b) Cancer c) Chronic kidney disease, d) Parkinsons disease e) Alzheimers disease f) Any other disease/illness or sustained any injury or disability." The complainant has answered "NO" to this specific question. Moreover in the additional questionnaire with regard to the Cancer, the insured has answered “NO". Since the complainant has intentionally suppressed material facts in the proposal form, the company repudiated the claim due to "suppression of material facts" and informed the complainant on 11.12.2014. The SP Fort hospital intentionally avoided the details of pre-existing illness in the discharge summary which clearly indicates collusion between the complainant and the hospital in order to get a claim from the opposite party unlawfully. If the insured person discloses the facts of pre-existing disease a decision will be taken by the opposite party whether to accept or reject the proposal. If there is suppression of material facts then the insurance contract becomes void from the beginning and the company is not liable to indemnify the insured. The said position of law is held by the Honourable Supreme Court in a decision reported in 2009 KHC 4898. In this case complainant has tried to defraud the company by suppressing the existing illness and try to get compensation from the opposite party. Hence the policy was vitiated by the element of fraud. Moreover the complainant dragged the opposite parties to an unnecessary litigation knowing well that policy is obtained by violating the conditions mentioned in the contract. There is no deficiency in service from the part of the opposite party. The claim was repudiated based on the terms and conditions of the policy contract. Hence they prayed for the dismissal of the complaint.
4. Complainant filed proof affidavit and was examined as PW1. Exts. A1 to A14 documents were marked on her side. Opposite party was examined as OPW1 and Exts. B1 to B8 were marked. On the basis of the evidence and documents the findings of the District Forum are that the contention raised by the opposite party that the Wayanad District Forum has no jurisdiction to entertain the complaint was not correct. Opposite party’s branch office situated all over Kerala, thereby complainant can file complaint anywhere having its branch offices. Before the District Forum the opposite parties argued that insurance is based on bonafides. The complainant is a senior citizen and took the policy on 28.02.2014 concealing all the health related problems. To prove that aspect the opposite parties produced Exts. B1 to B8 documents. Ext. B6 discharge summary dated 29.11.2012 and other case records from Baby Memorial Hospital, Kozhikode revealed that the complainant had treated for CA Breast, Hyper Parathyroidism and HTN since 25.11.2012 and she had undergone mastectomy surgery in 2012. In this case the complainant has not revealed any diseases in the medical history column despite there is a specific question that "Is any of the person proposed for insurance suffering/ suffered from: a) Stroke b) Cancer c) Chronic kidney disease, d) Parkinsons disease e) Alzheimers disease f) Any other disease/illness or sustained any injury or disability." The complainant has answered "NO" to this specific question. Moreover in the additional questionnaire with regard to the Cancer, the insured has answered "NO" (Ext.B4). Relying on these records opposite party argued that the complainant intentionally suppressed the material facts relating to her health condition while taking the policy. Hence the policy issued to the complainant itself is void ab initio.
5. The complainant argued that as per Ext.A4 and B6 Discharge summary she underwent a surgery. On going through the Histopathology Report of Post operative specimen (Ext.A14) dated 05.12.2012 there was no sign of cancer. Hence further cancer treatment such as Radiation and Chemotherapy was not required to her. To prove the claim of the complainant she produced Ext.A6 Renewal Notice issued by the opposite party. The complainant received Ext.A6 renewal notice immediately after the receipt of Ext.A4 repudiation letter. On perusal of Ext.A6 Notice the District Forum found that still opposite parties are ready and willing to renew the policy of the complainant. Hence opposite party's contention that this policy is not valid, is not sustainable. Based on the submissions, records and evidence put forth by the parties the District Forum found that the present treatment is not the continuation of previous treatment. The present claim is not in any way related to the past surgery. The present treatment of Screw fixation for Avulsion Fracture right Calcaneum was underwent after a fall. On a perusal of Ext. A14 it is evident that the specimen is free of cancer. More over as per Ext.A6 notice now also opposite parties are ready to renew the policy of the complainant. The District Forum found that the opposite parties repudiated the claim on a suspicion of cancer. Hence there is deficiency in service on the part of opposite parties and complainant is entitled to get the claim amount of Rs.1,00,000/- along with Rs. 3,000/- as costs. Aggrieved by the impugned order the opposite parties have filed this appeal.
6. Main contentions raised by the appellants are that the District Forum failed to consider that the opposite parties had acted only as per the terms and conditions of the policy and as per the guidelines of IRDA. The District Forum failed to consider that the insured has not revealed the pre-existing illness in the policy and has tried to defraud the company by suppressing the existing illness and trying to get compensation for treating such illness. The appellants further argued that the District Forum failed to consider the fact that on account of the suppression of material facts the policy has become null and void and the complainant is not entitled to get any benefit.
7. Heard both sides and perused the entire records of the District Forum. The claim is on the basis of a medi-claim policy. The contention raised by the appellant is that the policy issued to the complainant is a health insurance policy. So the information regarding the health status of the complainant at the time of filing the proposal and earlier are material for proper underwriting of the proposal. The policy is issued after accepting the facts i.e; the proposal form on utmost good faith. The opposite party received a discharge summary dated 25.10.2013 of Baby Memorial Hospital which clearly reveals that the complainant had undergone MRM Surgery for CA breast in 2012 and also she was suffering from hypertension for which she was on treatment. Hence the opposite party rejected the cashless facility due to suppression of material facts and informed the hospital on 20.09.2014. Since the complainant has intentionally suppressed the material facts in the proposal form, the company repudiated the claim due to that reason. If there is suppression of material facts then the insurance contract becomes void from the beginning and the company is not liable to indemnify the insured.
8. It is the settled position of law that insurance policy is a contract between the insurer and the insured. Both the parties are liable to obey the terms and conditions of the policy. Ext. B6, the case sheet of the complainant proved that she had undergone treatment which was not disclosed and has been suppressed. The District Forum failed to consider that the insured has not revealed the pre-existing illness on the policy and suppressed the material facts. There was suppression of material facts and hence the policy has become null and void and the complainant is not entitled to get any benefit.
9. Utmost care must be exercised in filling the proposal form. In a proposal form the appellant declares that she warrants truth. The contractual duty so imposed is such that any suppression, untruth or inaccuracy in the statement of the proposal form will be considered as a breach of the duty of good faith and will render the policy voidable by the insurer. In this case the finding of the District Forum that the complainant is entitled to get the claim amount is based on a misconception of records and unsustainable in the eye of law. For the above stated reasons we find that the order passed by the District Forum is against the terms and conditions of the policy and therefore the order passed by the District Forum in C.C. No. 125/2015 on the file of the Consumer Disputes Redressal Forum, Wayanad is set aside.
In the result, the appeal is allowed. No order of costs.
The appellants have the right to withdraw the amount deposited by them before this Commission and before the District Forum, on proper application.
AJITH KUMAR D. : JUDICIAL MEMBER
BEENA KUMARY. A : MEMBER
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