1.      This Order shall decide both the Appeals arising out from the impugned Judgment /Order dated 01.02.2017 passed by the State Consumer Disputes Redressal Commission, Delhi (hereinafter referred to as the “State Commission”) in Consumer Complaint No. 399 of 2011, wherein the State Commission allowed the complaint.

2.      The Appeals, FA/686/2017 and FA/1486/2017 have been filed with delays of 6 days and 36 days, respectively. For the reasons stated in the Applications seeking condonation of delay, the delay in filing both the appeals is condoned.

3.      For the sake of Convenience, the parties in the present case are being referred to as mentioned in the Complaint before the State Commission. “Mrs. Aruna Vaish (Since Deceased) is identified as the Complainant. While "Bajaj Allianz General Insurance Co. Ltd. is referred to as the Opposite Party/Insurer (in short OP Insurer).

4.      The brief facts of the case, as per the Complainant, are that in June 2009, the Complainant traveled to the USA for urgent some matters and acquired an Overseas Travel Insurance Policy from the OP, valid from 19.06.2009 to 16.10.2009. For the policy, she paid a premium of Rs.16,001. While in the USA, on 29.06.2009, she was admitted to Sequoia Hospital, Redwood City, California, due to weakness and low blood pressure. The diagnosis revealed Urinary Tract Infection & Sepsis, necessitating her stay in the hospital from 29.06.2009 to 03.07.2009. Notably, she wasn't requested to provide specific details during the policy purchase, which was based solely on her passport and travel documents. At the time of acquiring the insurance, she was unaware of her UTI and sepsis conditions. The total expenses for her treatment and hospitalization amounted to USD 83,801.48, equivalent to Rs. 41,90,074 in Indian currency @ Rs. 50 per US dollar. Her claim was repudiated by the OP vide letter dated 28.07.2009 on the grounds of pre-existing medical conditions exclude her claim from the policy cover and certain other reasons. Her pursuit of resolution led her to approach the ombudsman, who vide letter dated 12.10.2011, conveyed that her claim fell outside their jurisdiction. Only during last week of November, 2011 she was able to secure legal assistance. Consequently, feeling aggrieved by the situation, she filed a Consumer Complaint before the State Commission, seeking reimbursement of treatment expenses amounting to Rs.41,90,074, Rs. 7,00,000 for loss of mental peace, agony, harassment and insult, Rs. 51,000 as cost of litigation.

5.      She promptly submitted her claim to the OP along with supporting documents, post her discharge from hospital. However, she encountered several requests from OP for additional forms and information. Despite complying with these requests, her claim was repudiated on 28.07.2009, citing her alleged nondisclosure of ‘pre-existing diseases’ viz. diabetes, hypertension, hypercholesterolemia, hypothyroidism, rheumatoid and arthritis, when insurance was purchased. Notably, she was not prompted to fill any forms to disclose any medical condition during purchase of the policy, indicating lack of opportunity for disclosure.

6.      The OP insurer filed their reply before the learned State Commission, citing preliminary objections. The OP asserted that the Complainant was cognizant of the policy exclusion clause 2.4 and 2.4.12, which clearly delineated that medical expenses linked to pre-existing conditions were not covered. Highlighting the Complainant's medical history, specifically, Type II Diabetes requiring regular insulin treatment, hypertension, medication for hypothyroidism, rheumatoid arthritis, and occasional palpitations, the insurer contended that the non-disclosure of this medical history in the proposal form during policy acquisition prevented OP from accurately assessing the risk involved and deciding upon coverage terms, including relevant exclusions. The Complainant's omission in declaring her pre-existing ailments and medication constituted a significant non-disclosure of crucial information, thus disqualifying her from claiming any relief. The OP asserted that allowing her to benefit from her failure to disclose pertinent medical history would be inequitable. Contrary to the Complainant's assertion of not being prompted for detailed information and having the policy issued solely on the basis of passport and travel details, the insurer contended that the Complainant was indeed requested to complete the proposal form. In essence, the OP insurer's stand is on the assertion is that non-disclosure of her pre-existing medical conditions and medications during policy acquisition barred her from seeking coverage under the policy, as per the explicit exclusion clauses.

7.      The learned State Commission case allowed the complaint with the following Order: -

“12.    As a result of the above discussion I find that repudiation of claim by OP is not justified. However, complainant must get only reimbursement of her expenses of treatment. Since OP was defending its case on a plea which cannot be termed as malafide, complainant is not entitled to compensation for loss of mental peace, agony, harassment and insult. For the same reasons she is not entitled to cost of litigation.

13. To sum up OP is directed to pay Rs. 41,90,074 only on account of expenses for treatment.

14. Order should be complied with within two months failing which complainant would be entitled to interest @ 9% per annum from the date of this order till the date of payment. Copy of the order be sent to both the parties free of cost.”

8.      Aggrieved by the Order of the State Commission, both the parties i.e., the Complainant and the OP have filed the present cross Appeals before this Commission with the following prayer:

FA/686/2017 – filed by the Complainant- Aruna Vaish (Since deceased) Through Lrs.-

1. “It is therefore prayed that the Hon’ble Court may kindly be pleased to modify the impugned order under challenge to the effect that the appellant be given compensation to the tune of Rupees 3 lacs and cost of litigation of Rs. 51,000.00 in the interest of justice.

2. May kindly be pleased to direct the respondent to make the awarded amount on the applied rate (exchange rate) prevailing on the actual date of its realization, in the interest of justice.

3. May kindly be pleased to pass order in favor of the appellant and against the respondent thereby granting @18 P.A. from the date of filing of the complaint before the Hon’ble State Commission to till date of its realization in the interest of justice.

4. May kindly be pleased to pass any other order in favor of the appellant and against the respondent in the interest of justice.”

FA/773/2017 – filed by the Opposite Party- Bajaj Allianz General Insurance Co. Ltd.

1. Call for the records of complaint case no. 399/2011 titled as “Aruna Vaish Vs. Bajaj Allianz General Insurance Company Ltd.” decided by the State Consumer Disputes Redressal Commission, New Delhi and after perusing the same, may further be pleased to set aside the impugned order dated 01.02.2017 issued on 03.03.2017 and accept the First Appeal with costs throughout;
2.  Grant such other and further relief as this Hon’ble Commission may deem fit and proper in the facts and circumstances of the case.

9.      In Appeal No. 686 of 2017, the Appellants/Complainant have mainly contended that the State Commission's determination that the Respondent/OPs denied her bonafide claim. The malintent, deceit, negligence, and fraudulent actions of the OP were apparent from the onset, as evident in the records of the State Commission.  The State Commission failed to acknowledge that the Respondent was found engaged in unfair practices. This finding led to the direction for the Respondent to cover the treatment expenses. Consequently, the State Commission ought not to have denied compensation to her. The State Commission overlooked the fact that the appellant had to settle payments with the concerned Hospital at the prevailing exchange rate of USD on the date of actual payment realization. This crucial factor needs consideration in determining the compensation owed to the appellant.

10.    On the other hand, in Appeal No. 1486 of 2017, the Appellant/ OP have put forth the following main grounds of appeal.

a) The State Commission erred in ignoring that her documented medical history includes hypertension, diabetes, hypothyroidism and arthritis. These were pre-existing and primarily contributed to her ailment while abroad, rendering it pre-existing in nature. Accordingly, expenses incurred for this ailment were deemed non-payable under policy exclusion clauses 2.4 and 2.4.12.

b)  The State Commission failed to appreciate that the claim was repudiated after scrutiny of the claim documents. Medical reports indicated that she had received treatment for general malaise and moderately low sodium levels before arriving. During hospitalization, her blood sugar levels were high, while BP was low, necessitating conservative medical management. As the incurred expenses were linked to pre-existing conditions, these are non-payable under policy exclusion clauses.

c)  The State Commission erroneously considered only one issue “whether the respondent was asked to complete the proposal form and whether it was filled out”. Regardless of its completion or non-disclosure of pre-existing conditions, such diseases were explicitly excluded under Condition No. 2.4.12 of the policy.

d)  The State Commission failed to appreciate direct nexus with her pre-existing condition and the treatment received at Sequoia Hospital. Diabetes was cited as a predisposing factor for UTI. Diabetes would increase susceptibility to infections and sepsis.

e) The policy in question had an illness limit of 15,000 USD. Thus, the Appellant's liability should be capped at this amount.

11.    On issue of memo if Appeal, the Respondents have not filed any reply and filed respective written synopsis.

12.    The learned Counsel for Complainant reiterated the grounds of Appeal and raised concerns regarding the use of the prevailing US dollar rate from 2011 to determine compensation. He argued that as there was significant change in Dollar value, basing compensation on the 2011 rate unjust. He expressed that this decision could potentially reward the wrongdoer and undermine consumer confidence in the legal process. The learned Counsel contested the State Commission's conclusion that the Appellant was not entitled to adequate compensation as the OP purportedly defended the case in good faith. The Counsel asserted that the reality contradicted this assumption, highlighting that the OP was aware from the very outset that no proposal form was filled, yet they seemingly claimed otherwise during the proceedings. This discrepancy was a pivotal consideration for the State Commission. The learned Counsel emphasized the Appellant's prolonged legal battle seeking her legitimate consumer rights since 2011. As regards the order directing the OP to pay only the treatment costs, based on the 2011 US dollar rate, he argued that this implied OP’s unfair trade practice, consequently denying her compensation, litigation costs and available reliefs under the Act. He has contended that the learned State Commission failed to recognize the implications of rejecting the claim without justified reasons.

13.    On the other hand, the learned Counsel for OP Insurer reiterated the grounds of their Appeal and emphasized that the Complainant's admission to Sequoia Hospital in California, USA on 29.06.2009 was due to her generalized weakness and subsequent diagnosis of sepsis secondary to urinary tract infection, along with history of pre-existing ailments such as diabetes, hypertension, hypercholesterolemia, rheumatoid arthritis, hypothyroidism, atrial fibrillation etc. These expenses incurred by her were directly linked to these pre-existing conditions, falling within the ambit of Policy Exclusion Clauses 2.4 and 2.4.12, and therefore deemed non-payable. The said clauses are reproduced below:-

"2.4    The company shall be under no liability to make payment hereunder in respect of any claim directly or indirectly caused by, based on, arising out of or howsoever attributable to any of the following: -

2.412 any medical condition or complication arising from it which existed before the commencement of the policy period, or for which care, treatment or advice was sought, recommended by or received from a physician."

14.    In addition, they referred to medical records from Overseas Hospital that indicated she had received treatment for generalized malaise and hyponatremia (moderately low sodium level) before arriving in USA. During hospitalization, the records showed high blood sugar levels and low BP, requiring conservative treatment. The learned Counsel asserted that the pre-existing medical history of BP, diabetes, and arthritis have significantly contributed to her ailment abroad, making it pre-existing and falling outside the scope of coverage of the policy. Consequently, the OP/Insurer had no obligation to honour her claim and thus, the repudiation of claim was justified. They also stressed that the policy's illness limit was 15,000 USD, underscoring that the appellant's liability, if any, should be capped at this amount.

15.    I have examined the pleadings and associated documents placed on record and rendered thoughtful consideration to the arguments advanced by learned Counsels for both the parties.

16.    The main issues for determination is the application of policy clauses related to pre-existing conditions, scope for disclosure of medical conditions prior to the issue of the policy and whether the said insurance contract covers the expenses towards medical treatment actually provided to her abroad.

17.    The learned State Commission in its Order dated 01.02.2017 made the following observations: -

8. OP must be in possession of proposal, if filled by complainant. It did not file any such form. On 05.01.16 counsel for OP sought time to file proposal form and claim form. On 18.03.16 counsel for OP stated that proposal form was not traceable.

9. Complainant has mentioned from inception that she was not asked to sign any proposal form. The same is strengthened from the e-mails of OP asking complainant to fill up the form, after submission of claim by complainant. If the complainant had already filled up the proposal form, OP should not have asked her to fill up the form again.

10. Thus OP cannot be heard to say that complainant concealed any pre-existing disease. In Modern Insulators Ltd. Vs. Oriental Insurance Company Ltd I (2000) CPJ 1 Hon'ble Supreme Court held that if terms and conditions of the policy containing exclusion clauses are not communicated, exclusion clause does not form part of contract of insurance and OP cannot  claim benefit of said exclusion clause. The said decision was followed by National Commission in Oriental Insurance Company Vs. Charan Dass IV (2012) CPJ 216.

11. In New India Assurance Company Ltd. Vs. R. Subramanaya III (2014) CPJ 424 National Commission held that if insurance company does not place on record copy of insurance policy along with complete condition, adverse inference has to be raised against insurance company to the effect that had it filed the same it would have gone against it.

18.    It is an admitted position thatTop of Form

 Smt Aruna Vaish had taken a Travel Insurance Policy on 11.06.2009 No.OG-10-1101-9910-00008721 from the OP for the period 19.06.09 to 16.10.09 covering medical expenses incurred in hospitalization and other benefits.  She paid a premium of Rs.16,001/-.  She was admitted in Sequoia Hospital in California, United States of America towards treatment for the stated medical condition from 29.06.2009 to 03.07.2009.  During the course of treatment in the Hospital, she incurred USD 83,801.48, equivalent to Rs. 41,90,074 in Indian currency @ about Rs. 50 per US dollar. The said Insurance Policy inter-alia provides for cover towards medical expenses with the limit of USD 20000. Based on the such insurance cover, the Complainant had claimed Rs.41,90,074/- equivalent to USD 83,801.48 @ about Rs.50 Per Dollar for reimbursement. However, the OP/Insurer had repudiated the claim vide letter dated 28.07.2009 on the following grounds:

“You    have a past medical history of hypertension, diabetes, rheumatoid arthritis, hypercholesterolemia and hypothyroidism as per the medical record obtained from Sequoia Hospital.

You have presented to medical center overseas with complaints of generalized weakness and diagnosed with sepsis secondary to urinary tract infection, diabetes, hypercholesterolemia, hypertension, rheumatoid arthritis, hypothyroidism and atrial fibrillation.  The expenses are attributable to, arising out of, traceable to and a complication of your pre-existing ailments not payable under policy exclusion clause 2.4 and 2.4.12. 

19.    As against the repudiation, the Complainant approached the State Commission and the State Commission vide Order dated 01.02.2007 allowed the complaint to the extent of Rs.41,90,074 and directed the same to be complied within two months, failing which the Complainant would be entitled to interest @ 9% per annum from the date of the impugned order till the date of payment. Being aggrieved by the said order, the Complainant had filed F.A.686/2017 and OPs filed FA 1486/2017 on the grounds stated at Para-8 above. 

20.    The learned counsel for the Complainant asserted that the Complainant was never asked to fill out any proposal form, and therefore, there was no opportunity for her to disclose any pre-existing medical conditions. Additionally, he contested the use of the prevailing rate of USD in 2011 when the incident occurred as opposed to the rate in 2017, deeming it unjustified. He sought compensation of Rs.3 lakh, litigation costs of Rs.51,000, and the State Commission's awarded amount at the prevailing rate, along with 18% interest from the date of filing the complaint until payment. 

21.    On the contrary, the Opposite Party (OP) asserted that, despite the limited proposal for the Complainant, her pre-existing medical condition has direct nexus to her condition while traveling abroad, necessary for her hospitalization and further treatment. The OP contended that the claim is outside the policy's scope due to exceptions laid down in the policy. Further, the policy is limited to USD 15,000 for medical emergencies related to any one illness. According to the OP, the repudiation letter aligns with the policy terms.Top of Form The OP therefore sought setting aside the order of the learned State Commission by filing F.A. No.1486/2017 and upholding the repudiation of the claim made by the Complainant.

22.    It is an established fact is that the Complainant did not fill any proposal form for the policy in question. There is no record indicating that she was communicated any exceptions to the applicability of the policy, prior to her hospitalization. Therefore, the attempt of OP to raise such issues at a later stage is untenable. As regards informing the pre-existing medical conditions, the OP has not brought out anything to establish that she filled any proposal form or any other document containing information about existing medical conditions upon which the policy was issued or she stated anything to the OP in respect of the said policy, which was contradictory or false.

23.    Upon a careful examination of the contentions of both parties and the material on record, it is evident that the Complainant was entitled to medical treatment abroad during her hospital admission from 29.06.09 to 03.07.09, and the repudiation of her claim based on the grounds stated in the letter dated 28.07.2009 is, therefore, untenable. However, in terms of the policy in question dated 11.06.2009 obtained by her by paying appropriate premium, the limit of her claim towards scope of medical expenses was USD 20,000. Therefore, she is entitled only for claim up to USD 20,000, as on the date of discharge from the hospital on 03.07.2009. As the OP repudiated the entire claim on untenable grounds, she will also be entitled for compensation for the delay.

24.    As regards the rate of interest and the scope for payment of compensation, the Hon’ble Supreme Court in Experion Developers Pvt. Ltd. Vs. Sushma Ashok Shiroor, in Civil Appeal No.6044 of 2019 decided on 07.04.2022 held that:-

“We are of the opinion that for the interest payable on the amount deposited to be restitutionary and also compensatory, interest has to be paid from the date of the deposit of the amounts.  The Commission in the Order impugned has granted interest from the date of last deposit.  We find that this does not amount to restitution. Following the decision in DLF Homes Panchkula Pvt. Ltd. Vs. DS Dhanda and in modification of the direction issued by the Commission, we direct that the interest on the refund shall be payable from the dates of deposit. Therefore, the Appeal filed by purchaser deserves to be partly allowed. The interest shall be payable from the dates of such deposits.

At the same time, we are of the opinion that the interest of 9% granted by the Commission is fair and just.”

25.    The Hon’ble Supreme Court in the case of DLF Homes Panchkula Pvt. Ltd. Vs. D.S. Dhanda, in CA Nos. 4910-4941 of 2019 decided on 10.05.2019 held that multiple compensations for singular deficiency is not justifiable. Therefore, award of further compensation as claimed is untenable.

26.    The Complainant is, therefore, is also entitled to compensation at a rate of 9% per annum on this amount from the date of repudiation of the claim till the date of final payment.

27.    In view of the foregoing deliberations, both the First Appeals No.686 and 1486 of 2017 are disposed of with the following modification of the Order of learned State Commission, Delhi dated 01.02.2017 in CC/399 of 2011:

I.          The Opposite Party/ Insurer shall reimburse the Complainant for her claim of expenses for treatment to the extent of US Dollar 20,000 @ equivalent to Indian Rupees as on the date of her discharge from the Hospital on 03.07.2009;

II.         The Opposite Party/ Insurer shall also pay simple Interest @ 9% per annum on the said US Dollar 20,000 @ equivalent to Indian Rupees as on the date of her discharge from the Hospital on 03.07.2009, from the date of repudiation of the claim on 28.07.2009 till the date of final payment.

III.        The above payments shall be made within a period of one month from the date of this order. In the event of delay beyond one month, the interest applicable for such delayed period shall be 12% per annum.

28.    The parties are to bear respective costs. All pending applications, if any, are also disposed of accordingly. The statutory amount deposited by either party, if any due, is to be refunded as per law, after due compliance with this order.