Before the District Consumer Dispute Redressal Commission [Central], 5th Floor ISBT Building, Kashmere Gate, Delhi
Complaint Case No.-176/2018
Mrs. Farzana Ranjan w/o Shri Jyoti Ranjan
R/o Q 2nd Floor, Market, South Patel Nagar,
New Delhi-110008 ...Complainant
Versus
HDFC Ergo General Insurance Co. Ltd.
Office: Ground Floor, Ambadeep Building-14,
Kasturba Gandhi Marg, Delhi-110002 ...Opposite Party
Senior Citizen Case
Date of filing: 07.09.2018
Date of Order: 13.10.2023
Coram: Shri Inder Jeet Singh, President
Ms. Shahina, Member -Female
Shri Vyas Muni Rai, Member
Vyas Muni Rai
ORDER
1.1. The present complaint has been filed Mrs. Farzana Ranjan (in short the complainant) against OP i.e. HDFC Ergo Insurance Co. Ltd. (erstwhile Apollo Munich Health Insurance Co. Ltd.) u/s 12 of the CP Act 1986.
1.2. The complainant is a senior citizen. The complainant had been insuring herself since 2014 against medical risks. The present policy no. 110100/11001/AA00034115-03 for the period w.e.f. 13.02.2017 to 12.02.2018 was taken from OP under Easy Health Individual Standard Insurance Policy. All the policies were provided by OP without terms and conditions.
1.3. The complainant went to hospital on 09.01.2017 for routine checkup and during investigation it was discovered that complainant is suffering from uterus/ vaginal problem and hysterectomy surgery is required. At the time of consultation with doctor, the complainant had informed about past history of vaginal surgery since 20-22 years back, and treatment was received as medically advised. Thereafter, complainant had absolutely no problem for nearly twenty years after that.
1.4. The complainant in the year 2014 had gone through comprehensive medical checkup by the panel doctor of OP at the time of issuance of policy, and she had no ailment. All the reports were submitted to the OP and after complete medical checkup, OP had insured the complainant under the said policy. The condition encountered by the complainant was covered under the instant policy i.e. “Easy Health Individual Standard-Insurance Policy”. The OP was bound to bear the hospitalization and medical expenses under the policy.
1.5. On 17.04.2017 a pre-approval for Rs. 1,50,000/- was issued by the OP to the hospital and complainant was allowed for the treatment on the same day and was admitted for the treatment and after surgery, she was discharged on 20.04.2017.
1.6. The complainant submitted to OP the full details of her treatment including bills, discharge summary, investigation reports and all documents but OP did not honour its liability under the said policy.
1.7. The complainant sent many letters and e-mails to OP for reimbursement of claim of Rs. 1,63,837/-. The complainant also visited the branch office of the OP to know the status of claim but got no satisfactory answer from the OP.
1.8. On 11.07.2017, the complainant received a letter from OP that claim is not payable under the policy.
1. “As per the query letter sent to you, we have observed that requirement raised by us has not been complied. Hence due to non-compliance of the requested documents we regret to inform you that your claim is repudiated under section VI (ii) (sic. VII (i) (i) ) of the policy. Please submit below documents at earliest to enable us to reopen the claim & decide on admissibility”.
2. “Permanent exclusion letter has been sent to you, in view of history of recurrent uterus prolapse 20 and 22 years back existing prior to policy inception”.
1.9. The rejection of claim and its ground given by the OP is totally wrong and illegal. The complainant never received any permanent exclusion letter nor copy of the terms and conditions of the policy from the OP either at the time of issuance of policy or at the time of renewal of policy.
1.10. The rejection of claim by OP is illegal and contrary to the contract of insurance. The rejection of valid claim is deficiency of service as per the provisions of CP Act, 1986.
1.11. The complainant prays for directions to OP for a sum of Rs. 1,63,837/- being the amount payable under the policy with 18% interest from the date of payment of bills to the hospital till its realization, compensation of Rs. 1,00,000/- towards harassment, mental pain and agony; Rs. 20,000/- as cost of litigation; any other relief as this Commission may consider appropriate.
1.12. The complaint is accompanied with copies of insurance policies from 2014 onwards, copy of discharge summary dated 20.04.2017, copy of prescription dated 09.01.2017, 28.01.2017 and 12.04.2017 from the Max Hospital, laboratory investigation reports from the hospital, copy of indoor patient bill with bill payment receipt Rs. 1,63,837/- from Max Hospital, copy of email dated 20.04.2017 received from OP, copy of letter dated 01.05.2017 of the complainant, copy of email dated 02.05.2017 received from OP and other email on different dates and rejection letter dated 15.07.2017.
2.1. OP files reply under the signature of Ms. Deepti Rustagi, Senior Vice President, Legal duly authorized by OP. The complaint is a gross abuse of the process of law. The complaint is based on frivolous and baseless facts; the complaint is devoid of merit and without cause of action and it is liable to be dismissed. The complaint is barred by limitation; the complainant suppressed material facts; this Forum has no jurisdiction; the complaint suffers from non-joinder and misjoinder of parties; complaint requires to be tried by the Civil Court of competent jurisdiction as the adjudication of matter requires recording of elaborate evidence.
2.2. The complainant’s ailment, for which claim was raised, falls under the general exclusion clause as per terms of the policy, hence, claim is not payable. From the documents submitted by the complainant for reimbursement, it was found that the insured was admitted for genital prolapse and had taken treatment for the same and had also undergone some surgery related to prolapse 20-22 years back. Since, requirement raised by the OP was not complied; claim was repudiated as per Section VII (i)(i) of terms and condition of policy which is reproduced as under:-
VII (i).(i). Claims Payment
“we will be under no obligation to make any payment under this Policy unless we have received all premium payments in full in time and all payments have been realized and we have been provided with the documentation and information requested to establish the circumstances of the claim, its quantum or Our liability for it, and unless the Insured person has complied with his obligation under this Policy”.
2.3. The policy holder had signed the proposal form after going through the terms and conditions for the policy. The details of the policy were also explained to her by the insurance agent. In initial authorization letter dated 14.04.2017 by OP to the hospital, it was clearly mentioned in para 2 that ‘we will not be liable for payment to the hospital in the event of the facts presented by the hospital/ insured during the preauthorization are found to be incorrect/ revised.” OP also sent query letter dated 20.04.2017 to the hospital to provide all documents when surgery was done for prolapse 22 years back, with first consultation letter etc. OP vide letter dated 20.04.2017 wrote to the hospital ‘we are processing cashless request and are unable to arrive at a decision of admissibility as we require additional documents for reason to provide all documents of treatment when surgery done last 3 years back with first consultation letter.’ Since, documents were not provided by the insured, thus cashless was not approved and insured was to make claim for reimbursement post treatment.
2.4. Thereafter complainant submitted claim for reimbursement for amount of Rs. 1,60,507/- for diagnosis of genital prolapse but on review of claim the documents furnished were not sufficient to process claim. Again query letter dated 17.05.2017 was sent to complainant seeking all documents of treatment related to surgery done for prolapse 22 years back and also related to surgery done for prolapse 3 years back. The complainant was asked to give declaration/ consent for permanent exclusion in policy for uterine prolapsed, because of non-disclosure. Since no consent had been provided by the complainant, his claim was rejected for non-receipt of consent for exclusion as well as the exclusion applied. There is no deficiency of service on the part of OP.
2.5. Complaint of the complainant is liable to be dismissed on the basis of case law replied upon by OP in para 19 of its reply ( it will be dealt subsequently at appropriate stage).
3.1. The complainant files rejoinder to the reply of the OP. The present treatment/ surgery of the uterus/ virginal, does not relate to the previous history of 20-22 years back episode. Under the contract of insurance, the definition of pre-existing does not include the disease recurring after a gap of 4 years or more; moreover no terms and conditions of policy was supplied at the time of insurance policy. The plea of the OP is denied being wrong and baseless but contents of the complaint have been reaffirmed.
4.1. The complainant Ms. Farzana Ranjan files her detailed affidavit of evidence supplemented by documents filed with the complaint, it’s narration of complaint.
4.2. The OP also files detailed affidavit of evidence of Ms. Deepti Rustagi, Vice President-Legal and Chief Complaince Officer. Affidavit is supplemented by the documents filed with the reply; it is on the lines of reply.
5.1. (Final hearing)- The complainant filed her written argument which is reflection of complaint and affidavit of evidence.
5.2. OP also filed written argument, which is narration of its reply and affidavit.
5.3. Sh. Rakesh Kumar, Advocate for complainant and Sh. Pankaj Aggarwal, Advocate for OP made their oral submissions.
5.4. During hearings, it was brought to the notice of Commission that OP ie Apollo Munich Health Insurance Co. Ltd, was merged into HDFC Ergo General Insurance Company Limited and that is why complainant brought an application when it came to her knowledge, therefore, the name of HDFC Ergo General Insurance Company Limited was substituted as OP in place of erstwhile Apollo Munich Health Ins. Co. Ltd. The array of Parties are named accordingly.
6.1. (Findings): The rival contentions of both the parties are considered, keeping in view of the material on record. The case of complainant is that she had made available all the records to OP to settle the claim but OP failed to reimburse the claim. However, OP refers clause no. VII (i)(i) of the terms and conditions of policies but complainant opposed it that terms and conditions including exclusion clause were never provided to her. The insurance policies provided to the complainant were of three pages each i.e. initial policy and the renewal policies, which do not contains detailed terms and conditions. However, policy terms and conditions filed by the OP with its reply runs into more than 20 pages, which clearly manifests that the complainant was not supplied copy of such detailed terms and conditions of policy nor the OP has proved the same were supplied to the complainant at the time of purchasing the policy or with Schedule of policies proved by complainant.
6.2. OP relies upon United India Insurance Co. Ltd. vs M/s Harchand Rai Chandan Lal C.T.J. 1018 SC (CP), a case of burglary and/ or house breaking policy that terms and conditions of the policy are to be construed in order to establish the claim of the insured, (whereas the complainant opposed it stating that when no such terms and conditions of policy were supplied to the complainant, the same cannot be invoked by the OP/Insurer).”
OP further relies upon Prem Kumar Chhabra Vs. LIC Limited (RP No. 3405 of 2017), Oriental Insurance Company Limited Vs. Sony Chiryan, (AIR 1999 SC 3252), General Insurance Society Limited Vs. Chand Mal Jain and Anr, reported in (1966) 3 SCR 500, Senior Divisional Manager, LIC of India Vs. Smt. Satwant Kaur Sandhu (RP NO. 3138/2006), Diwan Surender Lal Vs. Oriental Insurance Company Limited 1 (2009) CPJ 117 (NC), PC Chako and Anr Vs. Chairman, LIC of India and Ors. Appeal (civil) 5322 of 2007 arising out of SLP (C) No. 23951 of 2005. However, all these citations by OP are related to the non-disclosure and insurance contract based on the trust and good faith and terms & conditions of the policy and ratio of these cases are not applicable in the present case.
6.3. Further, there is occasion to go through case law JSK Industries Pvt. Ltd. Vs. OIC Ltd. 2022 Livelaw (SC) 884 wherein it was held that insurer cannot take the defence, which did not form basis of repudiation of the claim.
6.4. On comparison of rival contentions as well as its analysis, both the complainant and the OP are blaming each other, they are also referring their documents in order to support their respective contentions. Although, OP has cited case law already dealt in para no. 6.2 of this order but there is other appropriate case law to the situation. First of all, it is relevant to refer certain precedents, for appropriate appreciations, the same are:-
(i) Padma Sundara Rao & Others Vs State of Tamil Nadu & Others II 2002 SLT, 483, rule on precedent was discussed that ratio of a case is facts specific i.e. ratio of case has to be read as per the facts of a particular case and even change of a single fact can make difference to the ratio of case.
(ii) Bharat Watch Company (through its partners) Vs. National Co. Ltd., Civil Appeal No. 3912/2019 in SLP (C) no. 25468/2016, it was held that in the absence of appellant being made aware of terms of exclusions, it is not open to the insurer to rely upon exclusionary clauses.
(iii) In Manmohan Nanda Vs. United –India Assurance Co. [Civil Appeal no. 8386/2013) decided on 6.12.2021 by Hon’ble Supreme Court of India has also dealt the regulations ‘the IRDA (Protection of Policyholder’ Interests) Regulations 2002’ and it was held (in paragraph 34 thereof) “that just as insured has a duty to disclose all material facts, the insurer must also inform the insured about the terms and conditions of policy that is going to be issued to him and must strictly confirm to the statement in the proposal form or prospectus or those made through its agents. Thus, principle of utmost good faith imposes meaningful reciprocal duties owned by the insured and vice-versa”.
7. The stand of the OP in repudiating the claim is based on non-disclosure of earlier disease for which complainant was treated 20-22 years back, and pre-existing diseases and the exclusion clause. On this counts we would also like to refer case law:-
(i) Hon’ble State Commission, Delhi in case of Sh. Pradeep Kumar Garg Vs. National Insurance Co. Ltd. (Appeal No. A-482/2005) has discussed in detail as to what would constitute PED; the relevant paras are referred here in under and is reproduced (as it is):
“[6. Complaint was dismissed merely on the premise of report of Dr. N.C. Singhal, a Doctor on the panel of respondent-Company opining that claimed disease is a consequence of Hysterectomy done; 10 years back. Such ground is highly preposterous, farfetched and untenable in the eye of law. Recently the Supreme Court has deprecated the practice of Insurance Companies for rejecting the claims in respect of medi-claim policies on the ground of pre-existing disease.
7. On the concept, meaning and impart of word disease, pre-existing disease in reference to medical insurance policies, we have drawn following 10 conclusions in highly extensive, dissective manner. These are as under:
(i) Disease means a serious derangement of health or chronic deep-seated disease frequently one that is ultimately fatal for which an insured must have been hospitalized or operated upon in the near proximity of obtaining the medi-claim policy.
(ii) Such a disease should not only be existing at the time of taking the policy but also should have existed in the near proximity. If the insured had been hospitalized or operated upon for the said disease in the near past, say, six months or a year he is supposed to disclose the said fact to rule out the failure of his claim on the ground of concealment of information as to pre-existing disease.
(iii) Malaise of hypertension, diabetes, occasional pain, cold, headache, arthritis and the like in the body are normal wear and tear of modern day life which is full of tension at the place of work, in and out of the house and are controllable on day to day basis by standard medication and cannot be used as concealment of pre-existing disease for repudiation of the insurance claim unless an insured in the near proximity of taking of the policy is hospitalized or operated upon for the treatment of these diseases or any other disease.
(iv) If insured had been even otherwise living normal and healthy life and attending to his duties and daily chores like any other person and is not declared as a diseased person as referred above he cannot be held guilty for concealment of any disease, the medical terminology of which is even not known to an educated person unless he is hospitalized and operated upon for a particular disease in the near proximity of date of insurance policy say few days or months.
(v) Disease that can be easily detected by subjecting the insured to basic tests like blood tests, ECG etc. the insured is not supposed to disclose such disease because of otherwise leading a normal and healthy life and cannot be branded as diseased person.
(vi) Insurance Company cannot take advantage of its act of omission and commission as it is under obligation to ensure before issuing medi-claim policy whether a person is fit to be insured or not. It appears that insurance companies dont discharge this obligation as half of the population is suffering from such malaises and they would be left with no or very little business.
Thus any attempt on the part of the insurer to repudiate the claim for such non-disclosure is not permissible, nor is exclusion clause invokable.
(vii) Claim of any insured should not be and cannot be repudiated by taking a clue remote reference to any so-called disease from the discharge summary of the insured by invoking the exclusion clause or non-disclosure of pre-existing disease unless the insured had concealed his hospitalization or operation for the said disease undertaken in the reasonable near proximity as referred above.
(viii) Day to day history or history of several years of some or the other physical problem one may face occasionally without having landed for hospitalization or operation for the disease cannot be used for repudiating the claim. For instance an insured had suffered from a particular disease for which he was hospitalized or operated upon 5, 10 to 20 years ago and since then had been living healthy and normal life cannot be accused of concealment of pre-existing disease while taking medi-claim policy as after being cured of the disease, he does not suffer from any disease much less the pre-existing disease.
(ix) For instance, to say that insured bas concealed the fact that he was having pain in the chest off and on for years but has never been diagnosed or operated upon for heart disease but suddenly lands up in the hospital for the said purpose and therefore is disentitled for claim bares dubious design of the insurer to defeat the rightful claim of the insured on flimsy ground. Instances are not rare where people suffer a massive attack without having even been hospitalized or operated upon at any age say for 20 years or so.
(x) Non-disclosure of hospitalization/or operation for disease that too in the reasonable proximity of the date of medi-claim policy is the only ground on which insured claim can be repudiated and on no other ground.
6. We have taken a view that unless and until a person is hospitalized or undergoes operation for a particular disease in the near proximity of obtaining insurance policy or any disease for which he has never been hospitalized or undergone operation is not a pre-existing disease. If a person conceals the factum of his hospitalization of a particular disease or operation undergone by him in near proximity of obtaining the insurance policy say a year or two, only then it can be termed as
concealment of factum of disease and doctrine of good faith u/s 45 of the Insurance Act may be pressed in by Insurance Company and not otherwise. Doctrine of good faith is two-way traffic and not a one-way traffic. If the Insurance Companies take benefit of doctrine of good faith then they have to accept whatever the insured declares and should not subject the insured to medical test and et certificate from the Doctor on the panel that the insured possesses sound and good health and is entitled to medi-claim insurance policy. Such a certificate will be meaningless and of no relevance as to the state of health of a person.
7. In the result the appeal is allowed with the direction to the respondent to pay Rs. 32,407/- towards the expenses incurred by the appellant for treatment with additional compensation of Rs. 25,000/- for the mental agony, harassment, emotional suffering, physical and mental discomfort suffered by him.]” |
(ii) We would also like to refer judgment of Hon’ble NCDRC, New Delhi in case titled ICICI Prudential Life Insurance Co. Ltd. Vs. Veena Sharma &Anr-IV (2014) CPJ 580 (NC):-
8. The law on this subject has been very clearly enunciated by Hon’ble Supreme Court in decision pronounced on 13.09.2010. Fact in this case Balwinder Kaur v. Life Insurance Corporation of India, Civil Appeal No. 7969 of 2010, were very similar to those in the revision petition before us. The claim under the policy had been repudiated on the ground that the insured had given incorrect answers to the queries in the proposal form. The District Forum held that the repudiation was not legally tenable as there was no evidence led in support of the certificate of the doctor who had treated the deceased. The certificate had noted that the insured had a chronic illness for the last many years. The order of the District Forum was set aside by the State Commission. The National Commission had agreed with the decision of the State Commission.
9. Hon'ble Apex Court reversed the orders of the National Commission and the State Commission, holding, that:
“The onus to prove that the deceased had obtained policy by suppressing facts relating to his illness was on the Corporation, but no tangible evidence was produced on its behalf to prove that the deceased was suffering from serious liver ailment at the time of taking policy and he deliberately suppressed this fact. Undisputedly, the policy was issued on 29.3.1998. The deceased must have filled the proforma some time prior to that date. Therefore, the Corporation ought to have produced evidence to prove that as on the date of filing the proforma, the deceased was suffering from any identified ailment and he had intentionally written ‘no’ against item Nos. (a) to (d)
of Clause 11. This the Corporation had failed to do.”
10. We therefore, find ourselves in complete agreement with the view taken by the Fora below. The Revision Petition are held to e devoid of any merit and are dismissed for the same reason. No costs.”
8. Further, issues raised by the OP for repudiation of the claim is the exclusion clause as OP vide letter dated 15.07.2017 rejected the claim on the following grounds:-
“We have careful review your claim based on the document(s) submitted. We regret to inform you that claim is not payable under the policy.
Reasons:
1. As per the query letters sent to you, we have observed that requirement raised by us has not been complied. Hence due to Non compliance of the requested documents we regret to inform you that your claim is repudiated under section VI ii of the policy. Please submit below documents earliest to enable us to reopen the claim & decide on admissibility.
2. Permanent exclusion letter has been sent to you, in view of history of recurrent uterus prolapsed 20 and 22 years back existing prior to policy inception. Provide your acceptance so that case can be processed further.”
9. OP in its reply has stated that after sending aforesaid notice dated 05.06.2017, no revert had been received from the complainant and since requirement raised by the OP/Insured Company has not been complied, claim was repudiated as per section VII (i)(i).; but OP’s stand that no revert of its letter dated 05.06.2017 was received from the complainant is wrong and baseless. The complainant has filed a hand written letter dated 12.06.2017 which was also duly acknowledged/received in the office of OP at Laxmi Nagar (copy of the letter of complainant dated 12.06.2017 duly stamped as proof of service from the OP has been filed with the complaint and is available at page no. 53 of the paper book). In the said letter the complainant, inter-alia, has clarified that she was not treated for gynecological disorder rather a mere corollary surgery that is part of pregnancy and if seen medically that surgery has nothing to do with my present uterus problem. The complainant has also stated in the said letter that she had undergone all the medical tests with OP as asked and she was examined completely fit for the policy. All the related reports were submitted, she has further clarified in the said letter that problem of uterus for which claim has been applied is one time problem and there is no chance of its recurrence. Moreso, the issue of exclusion clause was raised by the OP when the claim was filed by the complainant and not before.
10. It is settled law that if the terms & conditions of the policy having exclusion clause not supplied to the insured at the time of purchasing the policy, claim cannot be rejected on this ground. The OP took the stand of exclusion clause only vide its letter dated 05.06.2017 sent to the complainant during pendency of the claim of the complainant. In the said letter, OP has stated that there is history of recurrent uterus prolapsed 20 and 22 years back and the same was not disclosed. This plea of OP is not sustainable as has been held in sub-clause (viii) of the case law i.e. Sh. Pradeep Kumar vs National Insurance Co. Ltd. (supra) in para 7 of this order and the same is also not as per the IRDA guidelines/ Regulations. The complainant has also proved the medical bills which are at page no. 34, 35, 36, 37 and 38 of her paper-book.
11. In view of the above discussion and settled law, complainant has proved her case of deficiency of services on the part of OP. Therefore, we hold that OP is liable for the deficiency of services and unfair trade practices meted out to the complainant.
12. Since deficiency of service stands proved against OP, OP is held liable to pay Rs. 1,63,837/- to the complainant payable under the Easy Health Individual Standards Insurance Policy. The complainant seeks 18% pa interest from the date of payment of hospital bill till its realization, however, no justification for the rate of interest has been given by the complainant. Therefore, 6% pa interest is awarded to the complainant from the date of filing of the complaint till realization, as complainant could not get her valid claim from the OP when it was needed most.
13. The complainant seeks compensation of Rs. 01 lakh towards mental harassment, agony suffered but it is to be commensurate to the situation since the complainant is senior citizen and there was no fault on her part; she was declined preauthorization/ cashless facility, then her valid claim was declined and her presentation were also avoided, which led to inconvenience, harassment and agony, thus, to justify both ends, the damage is quantified to the tune of Rs. 25,000/- and accordingly it is awarded in favour of complainant & against OP.
Since the complainant was constrained to file this complaint, costs are also quantified as Rs. 10,000/- in favour of complainant and against OP.
14. Considering the above conclusions drawn, OP is directed to pay the complainant Rs. 1,63,837/-; the amount spent on her treatment along with 6% pa interest from the date of filing the complaint till its realization, Rs. 25,000/- damages/compensation, apart from Rs. 10,000/- towards litigation cost.
15. The aforesaid amount shall be payable by OP to the complainant within 30 days from the receipt of this order, failing which the amount of Rs. 1,63,837/- shall be paid with 7% pa (instead of 6% pa).
16: Announced on 13th October 2023. Copy of this Order be sent/provided forthwith to the parties free of cost as per rules for necessary compliance.
[Vyas Muni Rai] [ Shahina] [Inder Jeet Singh]
Member Member (Female) President
