BEFORE THE DISTRICT CONSUMER DISPUTES

REDRESSAL FORUM, JALANDHAR.

Complaint No.170 of 2014

Date of Instt. 16.05.2014

Date of Decision :27.02.2015

Shashi Khanna aged about 59 years son of Late Shri Sohan Lal Khanna, R/o House No.321, Mohalla Purani Kacheri Near Tube Well, Tanda Road, Jalandhar City-144001.

..........Complainant

Versus

1. Apollo Munich Health Insurance Company Limited, Branch Office Ist Floor, Satnam Complex, BMC Chowk, Jalandhar-144001(Punjab) through its Branch Manager.

2. Apollo Munich Health Insurance Company Limited, Registered Office, Apollo Hospital Complex, Hyderabad-500033.

.........Opposite parties

Complaint Under Section 12 of the Consumer Protection Act.

Before: S.Jaspal Singh Bhatia (President)

Ms. Jyotsna Thatai (Member)

Sh.Parminder Sharma (Member)

Present: Sh.KC Malhotra Adv., counsel for complainant.

Sh.Vikas Gupta Adv., counsel for opposite parties.

Order

J.S Bhatia (President)

1. The complainant has filed the present complaint under section 12 of the Consumer Protection Act, 1986 against the opposite parties on the averments that law abiding citizen, insurance minded complainant has been taking individual hospitalization and domiciliary benefit policy of insurance from New India Assurance Company Limited, Branch Office Code No.36901 Jalandhar since 2001. The complainant was allured and induced by tempting lucrative benefits of Easy Health Individual Standard Apollo Munich Health Insurance Policy( hereinafter referred to Health Insurance Policy) and was advised switching over under portability provision from the New India Assurance Company Limited to opposite parties on the assurance that health insurance policy of opposite parties is suitable, beneficial and advantageous to the need and requirement for risk coverage. On the inducement the complainant was canvassed, persuaded and made to agree to switch over under portability provision issued by Insurance Regulatory and Development Authority(IRDA). The complainant agreed to switching over under the portability provision from New India Assurance Company Limited to opposite parties without loosing any renewal benefit. Opposite parties covered the risk to reimburse/indemnify in patient treatment expenses for period more than 24 hours, pre-hospitalization, hospitalization for illness/disease/ailment and surgical treatment, domiciliary treatment at any nursing home/hospital including cashless facility of the complainant and his wife Sunita Khanna as under:-

2. Policy number was 180200/11201/1000320947 and policy period of insurance from 14.09.2012 to 13.09.2013. The complainant suffered illness and had taken treatment from Dayanand Medical Collage and Hospital, Ludhiana. The complainant was admitted as in-patient on 30.4.2013 and he was discharged on 6.6.2013 vide admission No.18808. The complainant was diagnosed as Cryptococcal Meningitis, communicated Communicating Hydrocephalus and Pulmonary Sarcoidosis (On Steroids). The complainant was denied cashless facility by opposite parties against specific provisions in health insurance policy. Subsequent to discharge from said hospital the complainant submitted claim on the prescribed claim form alongwith bills and payment receipts for amount of Rs.2,51,251/- incurred by the complainant to opposite party No.1 which in turn forwarded the same to opposite party No.2 for reimbursement of mediclaim of health insurance policy to the complainant. All the original documents pertaining to health insurance policy are with opposite party No.2. The complainant completed and complied with all formalities and requirements whichever were asked for settlement and payment of health insurance policy. To utter astonishment and shock the complainant received a letter dated 12.6.2013 from opposite party No.2 that Easy Health Individual Standard Policy No.1000320947 has been cancelled abinitio in view of non-disclosure for Shashi Kumar Khanna sacroidosis in the proposal form. Opposite parties had wrongly and perversely cancelled the policy unilaterally, arbitrarily and malafide. The cancellation of the policy was erroneous and perverse when the claim of the complainant was not hit by any such exclusion clause nor alleged non-disclosure. The cancellation letter was cryptic, non-speaking and unreasoned. The same is not binding on the complainant in any way. Opposite parties had granted health insurance policy by switching over under portability provision of IRDA with eyes open and all the benefits flowing from previous insurance policy of the New India Assurance Company Limited are applicable, admissible and payable to the complainant and opposite parties can not disown the liability fastened on them by cancellation of policy as had been done. On such like averments, the complainant has prayed for directing the opposite parties to reimburse expenses of Rs.2,30,000/- i.e Rs.2,00,000/- sum assured + Rs.30,000/- cumulative bonus alongwith interest and further directing the opposite parties to reinstate the mediclaim policy of the complainant as well as co-insured. He has also claimed compensation and litigation expenses.

3. Upon notice, opposite parties appeared and filed a written reply pleading that the complainant has not only deliberately and fraudulently suppressed his past history of sacroidosis but also suppressed the factum of regular medication taken by him for the same in the proposal form. Complainant deliberately and fraudulently suppressed the above material facts in the proposal form. It is further submitted that the policy kit containing all relevant documents were duly sent and delivered to the complainant at various time, thereby giving an opportunity to the complainant to verify and examine the benefits, terms and conditions of the policy taken by the complainant. It is pertinent to submit that the complainant never approached the opposite party stating that any information given in the documents in the policy kit was incorrect or any term and condition therein was not acceptable or clear to him, as the opposite party has strictly issued the policy based on information disclosed by the complainant. It is submitted that the medical examiner report (MER) standard medical tests are conducted which too are as per the declarations made in the proposal form. Pre-policy check up (MER) is not a substitute to rightful declaration in the proposal form rather is supplementary information required in addition to the information in proposal form. It would not be out of place to clarify that the standard pre-policy check up based on the information provided in the proposal form for sole purpose of underwriting risk by the insurer, is an optional process, done solely by the insurance company at its option based on the information provided to the insurance company by the proposer in the proposal form. Had the complainant disclosed about history for sacroidosis, some tests related to same might have been advised to evaluate coverage from the underwriting perspective before the issuance of the policy. However in this case the complainant never disclosed his medical condition to the company which was quite evident from the discharge summary and medical documents submitted by the complainant himself and treating hospital which reported that the complainant was having sacroidosis since two years which was not disclosed to the answering opposite party. Hence company was misled to issue the policy, which otherwise would not have been issued or not in the way as the policy have been issued. It was also not clear why the complainant had not disclosed in the proposal form or during the pre policy check up done about the treatment of sacroidosis prior to inceptions of the said policy. Thereafter on 2.5.2013, cashless request was received from the Dayanand Medical College & Hospital Ludhiana on behalf of the patient Shashi Kumar Khanna who got admitted with c/o fever, headache and diagnosis made was R/o Chronic Fungal Meningitis, C/C/o Pul sacroidosis, date of admission was 30.4.2013 with estimated duration of stay of days with estimated charges Rs.72,200/-. On scrutiny of the said documents particularly discharge summary dated 30.4.2013, it was observed that complainant was known case of pulmonary sacroidosis and on steroids off and on. On 3.5.2013, some of the documents received but failed to provide the requisite documents. On non receipt of the said documents, the cashless request was rejected vide letter dated 6.5.2014. However the complainant requested to review the said claim and submitted some of the documents i.e report dated 10.10.2012 of Centre for Chest Disease, Allergy & Sleep Disorders, New Delhi which mentioned that complainant was diagnosed for sacroidosis State II/I with depressive illness (Mild) with EDS decreased than before. Further in the end of said prescription, it is categorically stated that the treatment was overall improved. It is noteworthy to mention that on 5.5.2013, treating hospital (Dayanand Medical Collage & Hospital, Ludhiana) also submitted treating doctor certificate countersigned by the treating doctor i.e Loveleen Aggarwal stating that duration of sacroidosis is of two year and the said record is not available with the patient at present. Thus in light of the above documents and determination of the duration of treatment of the complainant i.e sacroidosis since two years, it was quite evident that the ailment/treatment was prior to the inception of the said policy and the said policy was issued on the basis of concealment of material facts. Had the said facts been disclosed at the time of inception of the policy, the said policy would not have been issued. Thus, since a policy of insurance is based on a policy of utmost good faith, and misleading information had been given to the answering opposite party to issue the said policy, the notice for termination of the policy under section VII of the policy was sent to the complainant in terms of letter dated 5.5.2013. Subsequently thereof in the line with the contents of the notice of termination dated 5.5.2013, the policy was cancelled ab-initio vide letter dated 12.6.2013. They denied other material averments of the complainant.

4. In support of his complaint, learned counsel for the complainant has tendered affidavits Ex.CA & Ex.CB alongwith copies of documents Ex.C1 to Ex.C21 and closed evidence.

5. On the other hand, learned counsel for opposite parties has tendered affidavit Ex.OPW/A alongwith copies of documents Ex.OP1, Ex.OPA to Ex.OPO and closed evidence.

6. We have carefully gone through the record and also heard the learned counsels for the parties.

7. The complainant had been earlier obtaining medicalim policy from the New India Assurance Company Limited. ex.C9 to Ex.C21 are the policies obtained by the complainant from New India Assurance Company Limited from the year 2001 onwards. ex.C21 is policy for the period 14.9.2011 to 13.9.2012. Thereafter the complainant shifted to opposite party insurance company by way of portability. Ex.C5 is circular issued by regulatory authority regarding portability of health insurance policies. As per circular of the regulatory authority, portability means the right accorded to an individual health insurance policy holder (including family cover) to transfer the credit gained by the insured for pre-existing conditions and time bound exclusions if the policy holder chooses to witch from one insurer to another insurer or from one plan to another plan of the same insurer, provided the previous policy has been maintained without any break. Counsel for the opposite parties contended that as per above circular the insurer may not be liable to offer portability if policy holder failed to approach the new insurer at least 45 days before the premium renewal date. No doubt the new insurance company is not bound to offer portability if the policy holder approach the new insurance company after 45 days from the premium renewal date but as per clause 3.2 of the above circular the insurer may consider a proposal for portability even if the policy holder fails to approach the insurer at least 45 days before the renewal date, it may be free to do so. So new insurance company can consider portability even after 45 days. The opposite party insurance company has itself produced portability form dated 17.8.2012. In the portability form number of years of continuance coverage are mentioned as 10 years, the sum insured as Rs.1 Lac and cumulative bonus as Rs.30,000/-. So the portability form produced by opposite parties clearly proves that the opposite party issued the medicalim or health insurance policy to the complainant by way of portability. As per above circular Ex.C5 issued by the insurance regulatory authority, after portability the credit gained by the insured for pre-existing condition and time bond exclusion shall remain with the insured. Ex.OPC is policy schedule issued by opposite party insurance company to the complainant. However under the new policy the sum insured was increased to Rs.2 Lacs and cumulative bonus remained as Rs.30,000/-. So waiting period and exclusion mention in the terms and conditions of the new policy are not applicable in this case as complainant had been obtaining policy from New India Insurance Company Limited since year 2001 and shifted to opposite party insurance company by way of portability. As per section 6 of the terms and conditions of the new policy if the insured renews with us i.e New India Insurance Company or transfer from any other insurer and increase the sum insured then exclusion shall only apply in relation to the amount by which the sum insured has been increased. In the present case, the sum insured has been increased by Rs.1 Lac. So complainant is only entitled to benefit after portability to the extent of Rs.1,30,000/- i.e Rs.1 Lac as sum insured and Rs.30,000/- as cumulative bonus. The opposite party insurance company has repudiated the claim and cancelled the policy of the complainant on the ground of suppression of pre-existing disease i.e sacroidosis. In order to prove that the complainant was already suffering from sacroidosis, it has produced discharge summary of DMC & Hospital, Ludhiana from where the complainant obtained treatment. Treatment record Ex.OPK dated 10.10.2012 is of Centre for Chest Diseases, Alergy & Sleep Disorders and further certificate Ex.OPL is issued by DMC & Hospital, Ludhiana and as per this certificate the patient was having sacroidosis for two years. Counsel for the complainant contended that opposite parties have not filed affidavits of the concerned doctor of DMC & Hospital, Ludhiana or Centre for Chest Diseases, Allergy & Sleep Disorders to prove the documents. In support of this contention, he has relied upon Life Insurance Corporation of India and others Vs. P.S.Aggarwal, 2005(1) CLT 494, ICICI Prudential Life Insurance Company Ltd Vs. Veena Sharma & Anr, IV (2014) CPJ 580(NC), SBI Life Insurance Co.Ltd Vs. Harvinder Kaur & Anr, III (2014) CPJ 552 (NC), LIC of India Vs. Joginder Kaur & Another, 2005(1) CPC 52 (NC), National Insurance Company Ltd Vs. Sardar Kulbir Singh, 2014(4) CLT 448 (NC), Life Insurance Corporation of India Vs. Badri Nageswaramma(deceased) and others, 2005(1) CPC 501 (NC), National Insurance Col.Ltd & Others Vs. Dr.Inderjit Singh, decided by Hon'ble State Commission in First Appeal No.152 of 2011 decided on 28.3.2011. We have carefully considered the above contentions advanced by learned counsel for the complainant and have gone through the above citied authorities relied upon by learned counsel for the complainant. The above cited authorities are on its own facts. In somewhat similar circumstances in Sangeeta Kaushik and others Versus Life Insurance Corporation of India and others 2010 (1) CLT page 481, our Hon'ble State Commission has held as under:-

22. This certificate has been given by the functionaries of the DMC and Hospital, Ludhiana. They had no interest in the respondents nor they were inimical to the appellants nor they had ‘any motive to issue a false certificate. Therefore, even if the certificate of the officials who filled the proposal form is not supported by their affidavits, it does not take away the beneficiary value of the document. The Hon'ble Supreme Court in the judgment reported as Satwant Kaur Sandhu vs. New India Assurance Company Ltd., 2009 CTJ 956 (Supreme Court) (CP) was pleased to hold as under -

"We can not find any substance -in the contention of learned counsel for the appellant that-reliance- could not be p1aced on the certificate obtain by the respondent from the hospital, where the insured was treated. Apart from the fact that at no stage the appellant had pleaded that the insured was not treated at’ Vijayá Health Centre at Ciennai where he ultimately died. It is more than clear from the. said certificate that information about. the medical history of the deceased must have been supplied by his family. members at the time of admission in the hospital a normal practice in any hospital. Significantly, even -the declaration in the proposal form by the proposer authorizes the insurer to seek information from any hospital he had attended or may attend concerning ‘any disease or illness which may affect his health."

8. The ratio of the above authority is applicable in the present case. According to the own version of the complainant, he was treated in DMC & Hospital, Ludhiana. He has himself produced record of DMC & Hospital, Ludhiana. Since according to own version of the complainant, he was treated in DMC & Hospital, Ludhiana as such we do not find any reason to disbelieve the said certificate issued by the DMC & Hospital, Ludhiana not with standing the fact that the doctor who has issued the certificate, has not been examined or his/her affidavit has not been filed. So the complainant suppressed the above material facts while shifting to opposite party insurance company. So he is not entitled to enhanced sum insured. However, the complainant is entitled to the credit gained by him under the old policies before shifting to the opposite party insurance company by way of portability for pre-existing conditions and time exclusion. In the policy Ex.C21 issued by New India Insurance Company Limited in coloum of details of pre-existing disease NA i.e not applicable is mentioned. So under the new policy with opposite party insurance company, the complainant is entitled to this credit. However, he is not entitled to the enhanced insurance sum but he is entitled to the sum insured i.e Rs.1 Lac and cumulative bonus of Rs.30,000/- to which he was entitled under the old policy with New India Insurance Company Limited before shifting to opposite party insurance company by way of portability.

9. In view of above discussion, the present complaint is partly accepted and opposite parties are directed to pay Rs.1,30,000/- to the complainant alongwith interest @ 9& PA from the date of repudiation or cancellation of policy till the date of payment. It is clarified that interest amount is being granted by way of compensation. No directions regarding reinstatement of policy are required as policy period has already expired. The complainant is also awarded Rs.3000/- on account of litigation expenses. Copies of the order be sent to the parties free of costs under rules. File be consigned to the record room.

Dated Parminder Sharma Jyotsna Thatai Jaspal Singh Bhatia

27.02.2015 Member Member President