DR. SADHNA SHANKER, MEMBER

1.       The present appeal has been filed ­under Section 19 of the Consumer Protection Act, 1986 in challenge to the Order dated 06.05.2015 passed by the State Consumer Disputes Redressal Commission, Punjab (hereinafter to be referred to as ‘State Commission’) in complaint No. 15 of 2011 whereby complaint was accepted.

2.       Heard learned counsel for the appellant (hereinafter referred to as the ‘insurance company’) and the learned counsel for the respondent (hereinafter referred to as the ‘complainant’) and perused the record including the State Commission’s impugned Order dated 06.05.2015 and the memorandum of appeal.

3.       There is a delay of 14 days in filing the present appeal.  

In the interest of justice and considering the reasons mentioned in the application for condonation of delay, the delay in filing the appeal is condoned.

4.       The brief facts of the case are that the complainant, who was about 13 years of old at the time of filing the complaint, was insured with the insurance company for the last three years and the details of the insurance policies are as under:

      i.  Insurance Business for authorized Mahindra dealership in the name of Universal Motors, Amritsar;

      ii. Personal accident and mdi claim insurance for the entire family members;

      iii. Comprehensive insurance of various vehicles owned by the family;

      iv. Full insurance cover of residential house including household articles;

      v. Building insurance of authorized dealership showroom etc.

      It is alleged that the family members of the complainant were insured vide medi-claim insurance policy bearing no. 1000842611. The father of the complainant got travel policy issued to the complainant, styled as Reliance Travel Care Insurance Policy, bearing policy no. 2003592817000953 for the period from 31.07.2009 to 28.09.2009 for an insured amount of US $50,000. The father of the complainant went to United States on 31.07.2009 for a visit. All the expenses in case of any medical emergency met by the complainant were to be incurred by the insurance company. On 26.08.2009, father of the complainant asked to opposite party no. 4 to get the travel care insurance company in the name of complainant enhanced to the maximum limit allowable, as he always believed in covering the maximum risk. The father of the complainant paid the extra premium for covering the enhanced risk upto US $2,50,000/-. The said enhancement would take effect on the expiration of first policy i.e. on 28.09.2009, as conveyed to him. In the first week of October 2009, when the complainant was in US, she felt pain in her back and she was taken to hospital for her checkup, where the doctors diagnosed her with having 62⁰ Right Thoracic Scoliosis and the surgery of the complainant was likely to be scheduled in January 2010. It is alleged that the complainant was at grave risk for further progression given her tender age and curve magnitude. It was observed by the doctors in their report that the complainant neither had any prior treatment of scoliosis nor she had been on any medication for the same. Before undergoing the above surgery in January 2010, the father of the complainant contacted the insurance company intimating about it. It is alleged that International SOS Suit rejected the claim, vide letter dated 27.11.2009 on the ground that the complainant was having pre-existing disease under the exclusion clause of the contract of insurance. The claim of the complainant was repudiated on the premise that the policy came into effect from 29.09.2009 and the first consultation of the complainant with the doctor took place on 06.10.2009 and as such scoliosis cannot become severe in a week.

5.       Being aggrieved by the repudiation by the insurance company, the complainant filed a complaint before the State Commission seeking direction to the insurance company to pay an amount of Rs. 30,40,982.72 paise incurred on the treatment of complainant along with interest @24% p.a. from 14.01.2010 till its realization and Rs. 5 lakh as compensation towards mental agony.

6.       The insurance company filed the written statement stating that the claim with regard to the pre-existing disease is not payable under the terms and conditions of the policy and the documents sent by the father of the complainant was sent to M/s Probus Associates and Consultants Pvt. Ltd. for investigation. The investigator has opined that Ms. Atteya Sandhu had these deformities prior to the inception of the subject policy and the claim is not admissible under the policy issued to RGICL. It is also stated that M/s International SOS Services India Pvt. Ltd. opined that the medical condition did not merit immediate surgery and the patient could have postponed the surgery until she returned back to India as she was asymptomatic. It is also stated that the claim is time barred and the State Commission did not have the necessary pecuniary and territorial jurisdiction and the complainant had tried to misled the State Commission. It is also stated that the complaint involves complicated questions of fact and law and the same cannot be adjudicated by the State Commission. There is no deficiency in service on the part of the insurance company and the complaint is liable to be dismissed.

7.       The State Commission, vide order dated 06.05.2015, had accepted the complaint and directed the insurance company to settle the claim of the complainant. It directed the insurance company to pay the amount of Rs. 30,40,982/- actually incurred by the complainant on her treatment along with interest at the rate of 10% per annum from the date of treatment till actual payment along with Rs. 1 lakh as compensation towards mental harassment and Rs. 15,000/- as costs of litigation.

8.       Being aggrieved by the order of the State Commission, the insurance company has filed the instant appeal before this Commission.

9.       Learned counsel for the insurance company has argued that the complainant was suffering from pre-existing disease, which is not covered under the policy and the claim of the complainant was repudiated by the TPA, M/s International SOS Services India Pvt. Ltd. vide letter dated 27.11.2009. He further submits that the policy was issued on 28.09.2009 and the complainant consulted the doctor on 06.10.2009 and on consultation, it was found that the complainant was diagnosed with Scoliosis, which is associated with deformity/structural disparity of body, which cannot happen within a span of 7-8 days and the insurance company is not liable to make payment in respect of pre-existing disease.  He further argued that the terms of insurance policy must be strictly construed. In support of its contention, he placed reliance on the decision in the case of United India Insurance Co. Ltd. vs. Harchand Rai Chandan Lal, civil appeal no. 6277 of 2004. Also, he placed reliance on the decision in the case of Satwant Kaur Sandhu vs. New India Assurance Co. Ltd. Civil Appeal No. 2776 of 2002 (2009) wherein it was emphasized that any inaccurate answer will entitle the insurer to repudiate his liability because there is a clear presumption that any information sought for in the proposal form is material for the purpose of entering into the insurance contract.  Furthermore, he argued that the case of the complainant falls within the exclusion clause 3 of the policy, therefore the insurance company is not liable to pay any amount to the complainant.

10.     Learned counsel for the complainant vehemently argued that as per the doctors’ report, the complainant neither had any prior treatment of scoliosis nor she had been on any medication for the same, therefore, it cannot be said that the complainant was suffering from pre-existing disease. He further argued that the complainant was covered under the medi-claim policy of the insurance company since 2008 and if the disease of scoliosis was pre-existing, the complainant could have got the same treated under medi-claim policy earlier.

11.     The question for our consideration is as to whether the insurance company was justified in repudiating the claim of the complainant.

12.     The main challenge in this appeal is to the finding of the State Commission that the scoliosis was not a pre-existing condition since the summary of the case of the insured recorded by the doctor in America, has not been provided prior to the commencement of the insurance for the disease.

13.     A perusal of the case history dated 06.10.2009 recorded by the doctor in America says that she has no pain, has not had any prior treatment and takes no medications. It goes on record to say that the impression is “Adolescent idiopathic scoliosis with relatively severe curve and skeletal immaturity”.

14.     It is seen from the above, what the hospital has said, that she has not received any treatment for scoliosis earlier. However, she was brought for evaluation regarding scoliosis itself. The fact that she was not treated or was not on any medication, does not amount to any certification that she was not suffering from the disease for sometime. Further, nowhere in the summary, has it been mentioned that the problem is a current development and not a pre-existing one.

15.     It is seen from the investigation report submitted by the insurance company that it was stated by the father of the complainant that she was developing complaints of breathlessness while walking and working. It was also stated that “height of Ms. Ateeya is more than her age and hence they thought that bend /Cobb in her back is due to her way of walking / sitting.” Hence they did not pay any attention to these symptoms.”

16.     It is, thus, admitted by the father that she had have a curve in her back, which was visible even prior to going for her consultation at the hospital. The report of the doctor in America also states that she had gross skeleton deformity – structural disparity in the neck and shoulder region. Once it is admitted that visible curvature in the back existed prior to the US consultation, it cannot be argued that this condition developed within a period of one week of taking the insurance. Whatever be the cause of the ailment, structural impairments developed over a period of time.

          At this stage, it is apposite to refer the investigator’s report, which reads as under:

“In view of the above mentioned facts, it is clear beyond doubt that Ms. Ateeya Sandhu had these deformities prior to the inception of the subject policy. It is also proved that these deformity did not manifest into any medical symptoms (like breathlessness – as declared by the family) which necessitated immediate medical /surgical intervention. It also appears that the insured M/s Ateeya along with her father Mr. Ranjit Sandhu are trying to mislead the Underwriters by concealing the actual circumstances (and medical history) leading to the subject hospitalization with the sole intention of taking undue benefit under the policy issued by RGICL.”

17.     In this case, the insurance company has submitted an investigation agency’s report, which has not been controverted or challenged by the insured in any other manner except by reliance on the case history recorded by the doctor in America on 06.10.2009. As already pointed out, the case history does not at any stage say that this is not a pre-existing condition, on the other hand, it records that there was extensive structural impairment in the child. The investigation report is an important document and cannot be discarded without cogent reasons or by evidence to the contrary led by the insured.

18.     In view of the above, we are of the view that the finding of the State Commission is based on presumption, which is recorded as under:-

  “We can presume that this case was not a pre-existing disease case, as there is no medical treatment or history of the complainant prior thereto.”

       Further, the State Commission has not considered the facts brought out by the investigating agency’s report in its order.

19.     In view of the above, discussion, we are of the view that the finding of the State Commission is not sustainable in the eye of law and the order of the State Commission is liable to be set aside.

20.     In the result, the appeal is allowed and the order dated 06.05.2015 of the State Commission is set aside. Consequently, the complaint is dismissed.