O R D E R
K.S. MOHI, PRESIDENT
The complainant has filed the present complaint against the O.Ps u/sec. 12 of Consumer Protection Act, 1986. The facts as alleged in the complaint are that the complainant had taken a health insurance policy (Easy Health Floater Standard) bearing No.110100/11051/1000161826 for the period from 10.02.2011 to 09.02.2012 from the O.P for himself and his family members. It is alleged that gross premium payable to the O.P was Rs.8,824/-. On 10.05.2011 complainant had suffered heart problem and was admitted in Max Health Care, 2 Press Enclave Road, Saket, New Delhi and was discharged on 13.05.2011. It is alleged that complainant incurred a total sum of Rs.3,67,522/- on his medical expenses. It is further alleged that when the complainant was admitted in the hospital cashless hospital service was applied but the request was rejected by the O.P on 10.05.2011 through its third party administrator to the Max Hospitals stating that request for cashless hospitalization for the complainant had been received but on the basis of primary scrutiny of the submitted documents the cashless facility was denied but further stated that the complainant can go for reimbursement with all the previous insurance and medical records. It is alleged that the complainant submitted all the original medical Hospital bills etc. with the O.P to reimbursement of the claim which was paid by the complainant for his treatment. It is alleged that O.P has not given any claim to the complainant and repudiated the claim of the complainant vide letter dated 24.05.2011 on the ground that as per clause section 7 (o) of the policy wording and that policy was cancelled with immediate effect and a cheque of Rs.8,824/- towards refund of premium for the above policy by cheque. It is further alleged that the complainant has not en-cashed the cheque till date. It is alleged that complainant orally requested the O.P and also wrote a representation to the O.P to reimburse the claim amount but all in vain. Complainant has also sent a legal notice dated 24.06.2011 but to no avail. On these facts complainant prays that O.P be directed to pay the mediclaim amount of Rs.3,67,522/- and also to pay cost and compensation as claimed.
2. O.P appeared and filed its written statement. In its written statement, O.P has not disputed that complainant had taken policy refer to above. It is alleged that the complainant sent a pre-authorization request for cashless facility to the TPA on 10.05.2011 through Max Super Specialty Hospital for the treatment of chest pain since 3 days with diagnosis of Coronary Artery Disease (CAD) and proposed line of treatment was Coronary Angiography (CAG) with approximate expenses of Rs.10,350/- wherein it was clearly mentioned on pre-authorization request for cashless facility form that the complainant was a known case of diabetes and hypertension (HTN) for the last 2 years. It is further alleged that the complainant replied in negative while answering to a specific question in clause 6 of the proposal form with regard to Diabetes and HTN, accordingly it was established conclusively that the complainant had a history of diabetes and HTN for which he had taken regular medication and he deliberately and fraudulently suppressed the same from the O.P at the time of taking the policy in question. It is alleged that the complainant was guilty of fraudulent suppression of material facts, resulting into serious breach of principles of “utmost good faith” under the laws of insurance and as such the TPA was constrained to deny for the above cashless facility of the complainant vide its letter dated 10.05.2011 and communicated the same to the complainant through the above said hospital and subsequently the O.P cancelled the policy of the complainant for the reasons stated above vide its letter dated 24.05.2011 and refunded the entire premium through cheque. Dismissal of the complaint has been prayed for.
3. Complainant has filed her affidavit affirming the facts alleged in the complaint and has proved documents exhibited as Ex. C-1 to C-12. On the other hand Shri Sameer Bhatnagar, Vice President-Legal has filed affidavit in evidence on behalf of O.P testifying all the facts as stated in the written statement. Parties have also filed their written submissions.
4. We have carefully gone through the record of the case and have heard submissions of Ld. Counsels for the parties.
5. In this case the repudiation was effective mainly on account of fraudulent, suppression or material facts resulting into breach of principles of utmost good faith and consequently O.P cancelled the policy by letter dated 24.05.2011. The plea taken by the O.P is that the insured was a known case of diabetes and hypertension for last 2 years and while answering to a specific question in section 6 of the proposal form with regard to diabetes and HTN, the insured deliberately and fraudulently suppressed the same from the O.P at the time of taking of the policy. The question for consideration in the present case is as to whether the facts allegedly suppressed by insured for material or not. It goes without saying that suppression of material facts would entail in repudiation of the policy. The three conditions should be complied with before repudiation in such case namely (a) The statement must be on a material matter or must suppress facts which it was material to disclose, (b) The suppression must be fraudulently made by the policy holder and (c) The policy holder must have known at the time of making statement that it was false or that suppressed facts which it was material to disclose. Therefore, a deliberate wrong answer which has a great bearing on the contract of insurance, if discovered, may lead to the police being vitiated in law because one of the great principle of insurance law is that a contract of insurance is based upon on utmost good faith, Uberrima fides. In the instant case, in the proposal form, in answer to hypertension, diabetes the insured stated in the negative. Now whether this answer in the proposal form will lead to repudiation of claim on the basis of suppression of material facts is the core question to decide. The material fact is one which goes to the root of the case. It needs to be clarified that disease hypertension is connected with life style of a particular person which can be overcome by traditional treatment and can never be said to be a pre-existing disease. In Aviva Life Insurance Claim Department Vs Sharanjeet Kaur IV (2014) CPJ 124 (PUNJ), death-claim was repudiated on ground of suppression of pre-existing disease. The court held that hypertension is a life style disease, easily controllable with conservative medicine. Insured not deliberately concealed material fact, repudiation was held unjustified. Insurer cannot repudiate the contract unless the fact is actually material. Insurer can avoid policy only by proving that the statement is false, fraudulent. The duty to disclose is limited to the facts which are within the knowledge of the insured alone. Even otherwise it is the duty of the insurance to prove existence of pre-existing disease of insured at the time of in taking policy by leading medical evidence against the insured which has not been done in the present case.
6. Therefore, we are of the opinion that repudiation was effected un-justified. Therefore, there is a deficiency in service. We direct the O.P to pay sum of Rs.3,67,522/- with interest @ 6% from the date institution of the complaint till payment. We further award of Rs.8,000/- towards harassment, mental agony loss of time which will also include cost of litigation.
Copy of this order be sent to the parties as per rules.
Announced this 02nd day of April, 2016.
(K.S. MOHI) (SUBHASH GUPTA) (SHAHINA)
President Member Member
