Tamil Nadu

StateCommission

FA/50/2018

The Branch Manager, The Management Star Health Allied Insurance Co Ltd - Complainant(s)

Versus

A.Parthasarathi - Opp.Party(s)

N.Vijaya Raghavan

28 Apr 2023

ORDER

IN THE TAMILNADU STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI.

 

Present:   Hon’ble THIRU. JUSTICE R. SUBBIAH  :   PRESIDENT

                  THIRU R   VENKATESAPERUMAL         :      MEMBER

 

F.A. No. 50 of 2018

[Against the order passed in C.C. No.80 of 2015 dated 24.10.2017 on the file of the D.C.D.R.F., Chennai (North)].

 

Friday, the  28^th day of April 2023

 

 

1.  The Branch Manager/The Management

     Star Health & Allied Insurance Co.Ltd

     KMR Centre, 6^th floor 

     No./2, Harrington Road

     Chetpet, Chennai – 600 031.

    

2.  The Management

     Grievance Department

     Star Health & Allied Insurance Co.Ltd.

     No.1, New Tank Road

     Valluvarkottam High Road

     Nungambakkam

     Chennai 600 034.

 

3.  The Branch Manager/ The Manager

     Star Health & Allied Insurance Co.Ltd.

     No.1, New Tank Road

     Valluvarkottam High Road

     Nungambakkam

     Chennai 600 034.                                              ..  Appellants/

                                                                            Opposite parties     

 

- Vs –

A. Parthasarathi

S/o. G. Arulanandam

Plot No.138, 7^th Street

Kumaran Kudil (Extension)

   Mettukuppam,

   Chennai- 600 097.                                  .. Respondent/Complainant                                                                                                        

   

    Counsel for Appellants/Opposite Parties   : M/s. N. Vijayaraghavan

 Counsel for the Respondent/Complainant : M/s. C.Russel Raj

                                                                                                                         

 

     This appeal came up before us for final hearing on 17.04.2023, and on hearing the arguments of the counsel for the Appellants and on perusing the material records, this Commission passes the following order:-

 

O R D E R

R.SUBBIAH J., PRESIDENT

 

             This appeal has been filed under Section 15 of the Consumer Protection Act, 1986 as against the order dated 24.10.2017 passed by the District Consumer Disputes Redressal Forum, Chennai (North) in C.C. No.80 of 2015, allowing the complaint filed by the Respondent herein.

 

     2.  The Appellants are the opposite parties 1 to 3 and the respondent is the complainant.  For the sake of convenience, the parties will be referred as per their ranking before the District Forum. 

 

     3.  The case of the complainant, as given in the complaint filed before the District Forum, is as follows :-

             The complainant had taken a Family Health Optima Insurance Policy for the period from 24.03.2014 to 23.03.2015 for an assured sum of Rs.5 lakhs + bonus Rs.5 lakhs, totally Rs.10 lakhs, under policy No.P/111113/01/2014/013749, with the opposite parties.  Whileso, the complainant was hospitalised on 15.01.2015 at Global Health City Hospital, Chennai for treatment and got discharged from the hospital on 17.01.2015.  For the said treatment, the complainant submitted a claim on 25.01.2015 for Rs.2,30,519/- based on the hospital bills, along with the original discharge summary and other relevant documents including bills, receipts, lab reports, X-ray/Scan film, medical prescription bills etc., to the full satisfaction of the opposite parties.  Inspite of production of all the documents along with the claim, on 13.02.2015, the 1^st opposite party had again demanded the said original records.  Since the said documents have already been given to the opposite parties in original, he could not give the documents again.  But, with an ulterior motive, on 24.02.2015, the 1^st opposite party sent a notice stating that the insurance company is not liable to make any payment in respect of the complainant’s claim.  Thus rejected the claim made by the complainant.  The reason for rejection of the claim by the opposite parties, is non-disclosure of material facts by the complainant.  Hence, the complainant sent an Advocate Notice on 12.03.2015, for which a reply was sent by the opposite party on 24.03.2015.  The complainant had taken treatment in the year 2015 for the ailment.  Prior to that, in the year 2010, the complainant had consulted one Dr.S.S.Ayyer but he has not taken any treatment.  Therefore, the treatment taken on 15.01.2015 is not for a pre-existing disease.  The complainant is a policy holder of the opposite party from the year 2013 to till date but in any occasion the 1^st opposite party has not raised any question with regard to the said policies.  The 1^st opposite party has further renewed the policy for the period 24.03.2015 to 23.03.2016, which would clearly show that there is no deficit anywhere in the policy of the complainant from the year 2013 to till date.  If there is any deficit in the policy, the opposite parties would have cancelled the policy and the policy would not have been renewed further for the period 24.03.2015 to 23.03.2016.  In the said circumstances, due to deficiency of service and bad trade practice of the opposite parties, the complainant has been disturbed physically and mentally. Hence, he had filed a complaint before the District Forum for the following directions to the opposite parties :-

1.  To pay Rs.2,30,519/- towards cash bill for the hospital treatment;
2.  To pay a sum of Rs.2,00,000/- for mental agony, anguish and frustration; and
3. To pay a sum of Rs.20,000/- towards cost.

 

             4.  The said complaint was resisted by the opposite parties by filing a version stating that the complainant had availed Family Health Optima Insurance Policy No.P/111113/01/2014/013749 with the opposite parties for the period from 24.03.2014 to 23.03.2015 in respect of medical and hospitalisation expenses incurred during the policy period.  The policy is contractual in nature and the claims arising therein are subject to the terms and conditions, forming part of the policy.  The complainant made a claim for reimbursement of hospitalisation expenses of Rs.2,30,519/- incurred towards his medical treatment and hospitalisation for Single Vessel Coronary Artery disease, primary PCI with stenting to RCA at Global Hospitals, Chennai.  On receipt of the claim papers filed by the complainant, the opposite parties scrutinized the same and observed the following from the internal case records of the treating hospital and from the medical summary dated 05.08.2014 of Fortis Malar Hospital submitted in response to the query raised by the opposite parties during pre-authorisation request for cashless treatment:

1.    Complainant/ Insured patient has hypertension for the past 4 years with history of (R) MCA (Middle Cerebral Artery stroke) for the past 4 years and is on treatment.
2. As per the consultation report dated 27.01.2010 of Fortis Malar Hospital, the complainant had stroke on right MCA, in fact one year back. 

The aforesaid medical records shows the ailments of the complainant that were present even prior to the inception of medical insurance policy, which were not disclosed by the complainant to the insurer, while availing the policy.  Condition No.7 of the policy, clearly stipulates as follows :-

“If there is any misrepresentation/non-disclosure of material fact, 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 such claim.”

 

The above medical records of the complainant, relating to his pre-existing health condition are material facts, of which the complainant had knowledge and is bound to disclose in the proposal form, while availing the policy with the opposite parties.  But, the complainant had wantonly misrepresented and had suppressed the material facts from the opposite parties, which amounts to violation of policy terms.  Therefore, the opposite parties were constrained to repudiate the claim of the complainant, by letter dated 24.02.2015.  The repudiation of claim is proper, based on policy terms and the opposite parties have not committed any deficiency of service as alleged by the complainant.   The Supreme Court has held in series of decisions that liability of the insurer would be within the four corners of the contract of insurance alone.  It is true that the complainant had availed Family Health Optima Insurance Policy with the 1^st opposite party.  But the claims arising under the policy is payable, subject to the terms and conditions attached therein.  Further, the averment in paragraph 4 of the complaint that the complainant incurred a sum of Rs.2,03,519/- towards hospital expenses is specifically denied and the complainant is put to strict proof of the same.   The treatment records of the complainant dated 05.08.2014 and the consultation report dated 27.01.2010 of Fortis Malar Hospital reveals that the complainant had major health risk issues which were not disclosed to the insurer.  The complainant has nowhere in his complaint had denied the treatment records issued by Fortis Malar Hospital, which gives a detailed medical history of the complainant.  Hence, the allegation that the opposite parties have repudiated the claim by giving lame excuses and with business mind, is baseless and untenable.  The allegation of the complainant that the opposite parties ought to have cancelled the policy for the defect but has renewed the same for a further period from 24.03.2015 to 23.03.2016, which shows that the insurer has no specific stand in the business, is denied.  Repudiation of a claim for breach of policy terms does not ipso-facto lead to cancellation of policy.  The cancellation of the policy is at the discretion of the company depending on various factors.  Mere renewal of the policy does not imply that the repudiation of claim by the insurer is improper.  The complainant having sought for renewal of policy even after repudiation of his earlier claim, cannot take it as defence to validate his earlier claim.  The opposite parties have not committed any act of professional negligence as alleged by the complainant.  Thus, they sought for dismissal of the complaint. 

             5.  In order to prove the case, both the parties have filed their proof affidavits and on the side of the complainant, 10 documents have been marked as Exhibits A1 to A10 and 5 documents were filed on the side of the opposite parties and marked as Exhibits B1 to B5.  

             6.   The District Forum, after analyzing the entire evidence on records had observed that the complainant had treatment in the year 2010 itself as per Ex.B4 for the ailment of stroke – right MCA on left facio –brachial weakness which was fully recovered.  It further reveals that the complainant had taken treatment for nerve diseases and such diseases also fully recovered, as per the documents.  The nerve disease has nothing to do with the treatment taken by the complainant in the Global City Hospital.  The complainant underwent treatment in the Global City Hospital for Renal Coronary Artery ailment.  The treatment given for the disease in the year 2010 is a different disease than the Coronary Artery disease.  Therefore, the repudiation made by the opposite parties is not legally sustainable and allowed the complaint.  Aggrieved over the same, the present appeal has been filed by the opposite parties.

 

             7.  It is submitted by the counsel for the appellants/ opposite parties that the respondent/complainant availed Family Health Optima Insurance Policy for the period from 24.03.2014 to 23.03.2015 covering medical and hospitalisation expenses incurred during the policy period.  The complainant was hospitalised from 15.01.2015 to 17.01.2015 for treatment of Single Vessel Coronary Artery disease, Primary PCI with stenting to RCA.  Since he had policy coverage, he submitted a claim for a sum of Rs.2,30,519/- based on the bills issued by the hospital, along with necessary documents.  But, his claim was rejected on the ground that the complainant was having hypertension for the past 4 years with history of (R) MCA (Middle Cerebral Artery stroke) for the past 4 years and he was under treatment.  Further, as per the consultation report dated 27.01.2010 of Fortis Malar Hospital, marked as Ex.B4, the complainant had stroke on right MCA, one year back.  But he had suppressed these facts in the proposal form.  Therefore, the Insurance Company had repudiated the claim on the ground that the respondent/complainant had not disclosed the material facts at the time of availing the policy in the year 2013, that he was undergoing treatment for hypertension for the past 4 years and also had stroke on right MCA, one year ago.  Learned counsel submitted that Insurance is a contract of utmost good faith and the respondent/ complainant is bound to disclose the health conditions and ailments at the time of availing the policy. The respondent/complainant is guilty of misrepresentation and suppression of facts as he had failed to disclose his past health condition, thereby rendering the policy invalid and unenforceable.  In this regard, counsel for the appellants/ opposite parties also invited attention of this Commission to Condition No.7 of the Policy, Ex.B2, and submitted that the said condition entitles the appellants/ opposite parties to repudiate the claim if there is any misrepresentation/ non-disclosure of material facts by the respondent/ complainant at the time of availing the policy.  But the District Forum has erred in holding that the claim has been made for Coronary Artery disease and previous treatment was for a different disease without considering the fact that the appellant has repudiated the claim for non-disclosure of material fact and not for pre-existing disease. In support of his contention, learned counsel for the appellants/ opposite parties relied upon the judgment reported in (2009)8SCC 316 in the case of Satwant Kaur Sandhu Vs New India Assurance Co. Ltd.  For the similar proposition, he has also relied upon the judgment reported in 2020 SCC Online SC 848  in the case of Branch Manager, Bajaj Allianz Life Insurance Co. Ltd., & Ors  Vs. Dalbir Kaur.  

 

             8.  There is no representation for the respondent/ complainant.  Keeping in mind the submission of the learned counsel for the appellants/opposite parties, we have carefully perused the entire material available on records. 

 

             9. It is the specific stand of the appellants/ opposite parties that the complainant had deliberately suppressed the health conditions and ailments in the proposal form, at the time of availing the policy.  Therefore, he is guilty of misrepresentation and suppression of facts, as he had failed to disclose his past health conditions, thereby rendering the policy invalid and unenforceable.  In support of his contention, he invited the attention of this Court to Ex.B4 i.e., the Consultation Report of Fortis Malar Hospital dated 27.01.2010, from which it could be seen that the complainant had a major risk factors of stroke on right Middle Cerebral Artery, which he has not disclosed in the proposal form.  But the District Forum has come to the conclusion that as per Ex.B4 the treatment undergone by the complainant in the year 2010 is for stroke on right Middle Cerebral Artery on left facio-brachial weakness, which was fully recovered.  The said disease has nothing to do with the treatment taken by the complainant at the Global City Hospital for Renal Coronary Artery ailment and thus the District Forum has come to the conclusion that there is no nexus between the Coronary Artery disease and the disease referred in Ex.B4 and passed an order against the Insurance Company.   But in our opinion the said finding of the District Commission is not legally sustainable since the actual question that has to be decided in this case is as to whether there is suppression of any material facts in the proposal form or not.   It is well settled legal principle that, in matter of insurance policies like the present instance, suppression and misrepresentation of material facts would render the policy invalid in the eye of law.  Such an instance enables the Insurance Company to repudiate the claim arising from the policy for the reason that the principle of uberrima fides/ utmost good faith is flouted due to suppression of material facts.  If the insured has knowledge of facts which others cannot know, he should not resort to suppressio veri/suppression of truth.  In the case on hand, since the insured had suppressed the material facts about his past health condition, which is the criterion for considering the issuance of the policy itself, the complainant cannot expect any positive consideration of the claim.  With regard to the same, it would be appropriate to rely upon some of the following judgments submitted by the counsel for the appellants/opposite parties:

1. (2019) 6 SCC 175 [Reliance Life Insurance Co.Ltd. & anr. Vs. Rekhaben Nareshbhai Rathod] wherein it is held that the failure of the insured to disclose the policy of insurance obtained earlier in the proposal form entitles the insurer to repudiate the claim under the policy.

 

2. 2020 SCC Online SC 848 [Branch Manager, Bajaj Allianz Life Insurance Co. Ltd., & Ors  Vs. Dalbir Kaur]  wherein it is held that,

        “A contract of insurance is one of utmost good faith. A proposer who seeks to obtain a policy of life insurance is duty bound to disclose all material facts bearing upon the issue as to whether the insurer would consider it appropriate to assume the risk which is proposed. It is with this principle in view that the proposal form requires a specific disclosure of pre-existing ailments, so as to enable the insurer to arrive at a considered decision based on the actuarial risk. In the present case, as we have indicated, the proposer failed to disclose the vomiting of blood which had taken place barely a month prior to the issuance of the policy of insurance and of the hospitalization which had been occasioned as a consequence. The investigation by the insurer indicated that the assured was suffering from a pre-existing ailment, consequent upon alcohol abuse and that the facts which were in the knowledge of the proposer had not been disclosed. This brings the ground for repudiation squarely within the principles which have been formulated by this Court in the decisions to which a reference has been made earlier. In Life Insurance Corporation of India vs Asha Goel, this Court held:

“12…The contracts of insurance including the contract of life assurance are contracts uberrima fides and every fact of material (sic material fact) must be disclosed, otherwise, there is good ground for rescission of the contract. The duty to disclose material facts continues right up to the conclusion of the contract and also implies any material alteration in the character of risk which may take place between the proposal and its acceptance. If there is any mis-statements or suppression of material facts, the policy can be called into question. For determination of the question whether there has been suppression of any material facts it may be necessary to also examine whether the suppression relates to a fact which is in the exclusive knowledge of the person intending to take the policy and it could not be ascertained by reasonable enquiry by a prudent person.” 

 

The above judgements are squarely applicable to the facts of this case also.  Even in this case the complainant had suppressed the treatment undergone by him in the year 2010 for the ailment of stroke – right MCA on left facio–brachial weakness, which is evident from consultation record of the complainant dated 27.01.2010 of  Fortis Malar Hospital marked as Ex.B4.  Therefore, there is clear suppression of facts in this case.  But, without considering these factual aspects properly, the District Forum had allowed the complaint.  Therefore, the order passed by the District Commission is not legally sustainable.  We find no valid reason to sustain the orders passed by the District Forum and hence the same is liable to be set aside.

 

             10.  In the result, the Appeal is allowed, by setting aside the impugned order dated 24.10.2017 passed by the District Consumer Disputes Redressal Forum, Chennai (North) in C.C. No.80 of 2015.   Consequently, the complaint is dismissed.

 

 

R  VENKATESAPERUMAL                                                                                                                      R.SUBBIAH

         MEMBER                                                                                                                                         PRESIDENT

 

 

Index :  Yes/ No

AVR/SCDRC/Chennai/Orders/April/2023