BEFORE :

HON’BLE MR. SUBHASH CHANDRA, PRESIDING MEMBER

HON’BLE AVM J. RAJENDRA, AVSM VSM (Retd.), MEMBER

For the Petitioner                 Mr Sanjay Kumar Verma, Advocate

For the Respondents            Ms Suman Bagga, Advocate

ORDER

1. This Revision Petition No.277 of 2017 filed under Section 21(b) of the Consumer Protection Act, 1986 (for short, "the Act"), challenges the order dated 01.09.2016, of the Haryana State Consumer Dispute Redressal Commission, Panchkula (in short, "the State Commission") in First Appeal No. 274 of 2016 wherein the State Commission, allowed the appeal filed by the Respondents and set aside the order 03.03.2016 passed by the District Forum, Panchkula in Complaint Case No. 196/2015.
2. We have heard the Learned counsels for both the parties and perused the records.
3. The relevant facts of the case, in brief, are that the Petitioner had been regularly taking travel insurance policies for his trips to the USA. In 2014, he obtained a "Travel Super Age Elite" policy on 21.06.2014 valid from 24.06.2014 to 21.09.2014 for a sum assured of USD 50,000 after paying a premium of Rs.13,693. Prior to the issue of  the policy, the Petitioner underwent a medical examination by the Respondent’s recommended doctors on 06.06.2014, which did not reveal any ailment, although the Petitioner himself disclosed that he had an hypertension and asthma. During his stay in the USA, the Petitioner requested an extension of his policy for 30 more days, which was granted, extending the coverage until 27.10.2014. On 25.09.2014, he experienced blood in his urine and was diagnosed with Haematuria, but no serious treatment was required. The hospital sent a medical bill of USD 11,516 directly to the Respondents for clearance.
4. Despite the existence of a valid travel medical policy, the Respondents rejected the claim on 27.02.2015, stating that Haematuria was linked to a pre-existing condition, prostatic hypertrophy, which was not covered under the policy. The Petitioner issued a legal notice on 11.05.2015, disputing the claim denial, explaining that Haematuria is not a chronic condition and can occur due to various factors. When no response was received, the Petitioner filed Consumer Complaint No. 196 of 2015 before the District Forum, Panchkula, claiming Rs.7.60 lacs, interest, and compensation. The District Forum allowed the complaint on contest on 03.03.2016, directing the Respondents to pay Rs.7.60 lacs with 9% interest and Rs.25,000 as compensation.
5. Aggrieved by this decision, the Respondents filed First Appeal No. 274 of 2016 before the State Commission, Haryana. It is the contention of the petitioner that the State Commission, without providing him an opportunity to reply, erroneously allowed the Respondent’s appeal and dismissed the complaint, holding that the Petitioner was suffering from a pre-existing medical condition and therefore, not entitled to the claim under the policy.
6. The counsel for Petitioner argued that the Petitioner obtained a "Travel Super Age Elite" policy on 21.06.2014 for a sum assured of USD 50,000 on paying a premium of Rs.13,693/- for travel to USA. The policy was preceded by a medical examination by the Respondent’s doctor on 06.06.2014, when no ailments were detected, though the Petitioner disclosed having an hypertension and asthma, which was recorded. While in USA the Petitioner requested and was granted a 30 day extension of the Policy from 23.09.2014 to 27.10.2014. However, on 25.09.2014, the Petitioner was required to visit a hospital for blood in urine and was diagnosed with Haematuria. However, no treatment or hospitalization was needed. A medical bill of $11,516 (Rs.7.60 lacs) was sent directly to the Respondents for payment under the Policy which was repudiated despite the submission of all required documents on the grounds of pre-existing medical conditions. The Petitioner’s legal notice on 11.05.2015, clarifying that Haematuria was not a chronic condition but a one-time ailment, was not considered forcing him to approach the District Forum.
7. Counsel for Respondent argued that the Petitioner obtained a Medi Claim Travel Insurance Policy from the Respondent Company, initially valid from 17.08.2013 to 14.11.2013, and extended for two months until 13.01.2014. The Petitioner later obtained the same policy valid from 24.06.2014 to 21.09.2014, which was further extended for 30 days due to an extended stay in the USA, covering the period till 27.10.2014. The Respondent's liability was limited to USD 10,000 per illness, subject to the policy terms and conditions. It was stated that petitioner had prostatic hypertrophy as an existing medical condition which was excluded in the policy.
8. The Petitioner, in the policy's proposal form, indicated ‘NO’ in response to questions about any pre-existing disease, illness, or treatment, implying that he was in good health. However, while in the USA on 25.09.2014, the Petitioner fell ill and was diagnosed with Haematuria. Upon receiving the medical documents from Bridgeport Hospital, it was revealed that the Petitioner had experienced similar symptoms a year prior but did not follow up on treatment. After reviewing the claim, the Respondent repudiated it on 27.02.2015, citing "Non-disclosure of material information" regarding the Petitioner's past medical history of Prostatic Hypertrophy, justifying the denial of the claim due to the concealment of the pre-existing condition.
9. The letter of repudiation dated 27.02.2015 reads as under:

On detailed scrutiny of the same, we find that the claim does not fall under the purview of the policy for reasons given below:

You have lodged a claim for medical expenses incurred towards Haematuria. As per received medical records you are known to be suffering from prostatic Hypertrophy and you had suffered from similar complaints last year. Policy incepted on 23rd Sep 2014 and started with treatment for haematuria from 25th Sep 2014. You are suffering from Haematuria current episode since 5-7 days. As per policy terms any medical condition or complication arising from it which existed before the commencement of the policy period will not be payable. Since present medical condition is pre-existing to the policy hence we regret to inform you the claim stands repudiated.

Standard Travel Policy Exclusions

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:

2.4     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.

Hence we regret to inform you that the claim is inadmissible and thus repudiated. We have retained the claim docket for future reference.

(Emphasis supplied)

10. The order of the District Forum allowing the complaint reads as below:

…………For repudiating an insurance claim, it is not sufficient for insurer to say that the statement made by the insured regarding his health in proposal form was inaccurate or false. In the present case the insurance policy and the liability of the insurer under the terms and conditions of the policy is admitted. It is also established that the insured felt ill during the subsistence of the policy. Only controversy is as to whether the insured had pre-existing disease and that the burden of proving the pre-existing disease is on the insurer. The insurance company had taken the plea of pre-existing disease therefore, the burden to prove the same lies on it. Hon’ble National Commission in case titled as LIC of India Vs. Dr.P.S.Agrawal, I 2005 CPJ 41 has held that the onus to prove that there was material concealment of any disease which directly proved fatal, would be on insurance company to justify its act to repudiate the claim. The burden of proof, therefore, is on the insurer to prove material concealment and justify the ground for no claim. Hon’ble National Commission has also taken the same view in judgment dated 11.01.2016 passed in case titled as Satish Chander Madan Vs. M/s Bajaj Allianz General Insurance Company Limited (Revision petition No.3619 of 2013). The OPs have even failed to bring the treating doctor before this Forum to depose that the complainant was having pre-existing disease. It is worthwhile to mention here that now-a-days people face problem like acidy, indigestion, back pain, headache and different such symptoms may occur time-to-time with different levels of intensity. They, therefore, cannot be considered as disease, required to be enumerated in proposal form. In modern days a layman is not expected to know and disclose in the proposal form a disease unless and until he suffers from such a disease for which he had been hospitalized or undergone treatment. The act and conduct of the OPs reveals that instead of acting fairly the insurance company is trying to befool their customers. Further, as a matter of fact in reality, the insurance companies in India are functioning arbitrarily in monopolistic manner and they are bent upon to harass and humiliate the consumers and with a view to escape and avoiding its legal and factual liabilities to make the payment of sum assured are acting in dramatical, opposite of the principle of fair play and decency and in that series, it is not even carrying that its wrongly actions are causing wrongful losses to their consumers. In the present case the insurance company is trying to avoid its liability by making one pretext or the other, which cannot be allowed to do so.

5.       Keeping in view the facts and circumstances mentioned above we are of the considered opinion that there is deficiency in service on the part of Ops. Therefore, the present complaint is allowed and the Ops are directed as under:

(i) To pay Rs.7,60,000/- to the complainant spent by him for treatment and tests during hospitalization along with interest @ 9 % per annum from the date of submission of claim till its realisation;

 (ii) To pay an amount of Rs.20,000/- as compensation for mental agony, harassment;

 (iii) To pay Rs.5,000/- as cost of litigation. The OPs shall comply with this order within a period of one month from the date its communication to it comes about.

11. On appeal, the State Commission upheld the contentions of the

Respondent as per its finding which is extracted below:

…………….if we go through the evidence available on the file it will be clear that the complainant was having this problem since one year. Complainant produced record of Bridgeport Hospital including the report of Department of Fairfield Urgent Care Centre from where he was referred to Bridgeport Hospital. Against columns of reason for visit, this problem since more than one year is clearly mentioned therein.

…………In Ex R 6 dated 25.09.2014, it is mentioned that blood in the urine is coming since 4-5 days that means since 20^th or 21.09.2014, whereas he got this policy further renewed on 23.09.2014. At that time he did not disclose about this ailment. It shows that he was well aware about this problem when he obtained insurance policy and further got it renewed. As per terms and conditions of insurance policy in case of concealment of material facts or ailments, insured is not entitled for any compensation because cardinal principle of contract of life insurance is uberrima fidei, i.e., utmost good faith. When complainant has concealed the true facts from the opposite party he was not entitled for any relief as per opinion of Hon’ble National Commission expressed in revision petition no. 3114 of 2014 titled as Amzad Khan vs Aviva Life Insurance Co. Ltd., decided on 30.01.2015.

It is opined in this case that if previous ailment is not disclosed at the time of obtaining insurance policy, the same is fatal. At the time of examination of complainant on 06.06.2014 doctor put the questions to him and as per his answers he marked the columns. At the time of such examination any problem which is visible can only be detected by the doctor. Had he told about this problem and doctor did not conduct further examination then it would have been a different matter. As per Ex R 6 he was having history of hypertension and Asthma whereas he denied the existence of these problems. When complainant himself has produced documents about treatment it cannot be opined that insurance company has failed to prove the previous ailment. Learned District Forum failed to take into consideration all these aspects and wrongly opined that the opposite party – insurance company has failed to prove pre-existing disease. Hence, impugned order dated 03.03.2016 is set aside. Resultantly appeal is allowed and complaint is dismissed.

12.   From the foregoing, it is apparent that while the proposal form mentioned response in the negative in respect of “pre-existing disease, illness or treatment”, there was a clear declaration of asthma and  hypertension. The incident involving treatment of Haematuria and claim for reimbursement while in the USA has been disallowed by the respondent on the ground that it amounted to a pre-existing disease which was not disclosed and therefore violated the principle of uberrima fides or utmost good faith. Reliance was placed:

1. Reliance Life Insurance Co. Ltd., vs Rekhaban Nareshbhai Rathode (Civil Appeal no. 4261 of 2019 (SC) decided on 2.04.2019;
2. Satwant Kaur Sandhu vs New India Assurance Co. Ltd.,  (2009) SCC 316
3. P C Chacko and Anr. vs Chairman LIC (2008) SCC 321

13.   While it is a fact that the incident of Haematuria or blood in urine occurred while the insured petitioner was in the USA on an extended policy, other than the disclosure from the treatment papers that the petitioner had undergone a similar experience one year, no records to establish either treatment or hospitalisation has been brought on record. The respondent seeks to rely upon the claim papers to contend that as this was a pre-existing disease, the claim was rightly repudiated on the grounds that it was suppression of material facts.

14.   The petitioner has relied upon the judgment of this Commission in LIC vs Chandra Baghrecha IV (2003) CPJ 16 (NC) that when the insured was thoroughly examined by the doctor of the insurance company before the approval of the insurance policy, repudiation on the ground of non-disclosure of illness prior to the obtaining of the insurance was not justified.

15.   The issue which falls for consideration is whether the claim for treatment for haematuria by the petitioner was justified under the policy.

16.   From the records, it is seen that the petitioner had declared hypertension and asthma as a pre-existing disease at the time of obtaining the insurance. The same is not disputed by the respondent. The only ground for repudiation of the claim for the treatment obtained by the petitioner while in the USA is that the diagnostic notes of the doctor indicated that previous episode of passing blood in the urine had been experienced by the petitioner some time ago. There was no documents that have been brought on record to establish that the petitioner had been aware of Haematuria prior to obtaining of the insurance policy on 21.06.2014 which had been wilfully suppressed. It is, also not evident from the medical examination conducted by respondents’ own doctor that the petitioner was suffering from Haematuria. The contention of the respondent that Haematuria was a pre-existing disease which had not been disclosed at the time of obtaining the insurance policy is not supported by any documentary evidence to establish Haematuria as a pre-existing disease except the doctor’s notes at the time of consultation in Bridgeport Hospital. On the contrary, the contention of the petitioner is that at the time of obtaining the policy he had declared hypertension and asthma as pre-existing diseases but had not mentioned passing of blood in the urine since the same has not been experienced investigated or treated as a pre-existing disease and was therefore, not considered to be pre-existing illness/ disease since an isolated incident of that nature had not been investigated or established to be Haematuria. Medical examination conducted by the respondent also proves that doctor had also not detected Haematuria as per-existing disease.

17.   The law on disclosure of pre-existing illness under the principle of ubberima fidei is well established through the judgment of the Hon’ble Supreme Court in Satwant Kaur Sandhu (supra) and Rekhaban (supra). In the facts and circumstances of the instant case, however, that principle cannot be applied mechanically since pre-existence of Haematuria had not been established through any medical examination or proved by the respondent to be a pre-existing disease on the basis of medical treatment records that was wilfully not disclosed by the petitioner at the time of obtaining of the policy in question. The conclusion of the respondent that at the time extension of the policy on 23.09.2014 the petitioner had experienced symptoms for 5-7 days which was not disclosed cannot be considered to be withholding of material evidence. An ordinary person would consult a doctor or approach a hospital only after observing symptoms for a few days and if he/ she experiences discomfort. It cannot be expected that an average person would diagnose himself/ herself based on observed symptoms and disclose an illness as part of the extension of an existing policy of health coverage. Even otherwise, ‘prostatic hypertrophy’ is an age related prostrate gland enlargement which can cause difficulty in urination. This ailment had not been detected by the examining doctor at the stage of the policy proposal on 21.06.2014. ‘Non disclosure’ of the same on 23.09.2014 by the petitioner when he had not consulted a doctor for the same cannot be considered to be wilful suppression of material facts. Therefore, the contention of the respondent that principal of utmost good faith has been violated in the instant case cannot be sustained.

18.   For the aforesaid reasons, we find merit in the Revision Petition which is accordingly allowed. Orders of the State Commission are set aside and the order of the District Forum in CC no. 196 of 2015 is affirmed.

19.   Pending IAs, if any, stand disposed of by this order.