Order by:

Sh.Amrinder Singh Sidhu, President

1.       This Consumer Complaint has been received by transfer vide order dated 26.11.2021 of Hon’ble President, State Consumer Disputes Redressal Commission, Punjab at Chandigarh under section 48 of CPA Act, vide letter No.04/22/2021/4 C.P.A/38 dated 17.1.2022 from District Consumer Commission, Ludhiana to District Consumer Commission, Moga to decide the same in Camp Court at Ludhiana and said order was ordered to be affected from 14^th March, 2022.

2.       The  complainants  have filed the instant complaint under section 12 of the Consumer Protection Act, 1986 (now section 35 of Consumer Protection Act, 2019) on the allegations that on the allurement of agent of Opposite Parties, the complainant purchased family medical insurance policy bearing No.OG-18—1203-8430-00000067 from Opposite Parties valid for the period w.e.f. 23.05.2017 to 22.05.2018 covering the insured amount of Rs.5 lakhs against the paid up premium of Rs.15,572/-. Unfortunately,  Muskan Grover daughter of the complainant remained sick due to depression and she remained admitted in Rattan Multi Speciality Hospital & Diagnostic Centre, Ludhiana  where the complainant borne the total charges amounting to Rs.10,000/- including all the expenses of treatment.  Thereafter, the complainant lodged the claim with the Opposite Parties for the reimbursement of his claim and also completed all the formalities, but the Opposite Parties repudiated the claim of the complainant on the  false and flimsy grounds  and as such, there is deficiency in service on the part of the Opposite Parties. Vide instant complaint, the complainant has sought the following reliefs.

a)       The Opposite Parties may be directed to make the payment of medical expenses amounting to Rs.10,000/- and also to pay of Rs.50,000 on account of compensation due to mental tension and harassment caused by the complainant.

3.       Opposite Parties  appeared through counsel and contested the complaint by filing  the written version taking preliminary objections therein inter alia that the complaint filed by the complainant is not maintainable and is liable to be dismissed as the complainant has attempted to misguide and mislead this District Consumer Commission.  It is submitted that the officials of the Opposite Parties scrutinised the claim documents in view of the policy terms and conditions and applied their mind and thereafter rightly repudiated the claim of the complainant vide letter dated 29.07.2017 on the ground that claim documents reveal that claimant was hospitalized for the treatment of anxiety neurosis with hysteria and in view of this the claim stands repudiated a s the policy does  not extend coverage for any expenses incurred on the treatment of any mental or psychiatric illness.  On merits,  the Opposite Parties took up the same and similar pleas as taken up by them in the preliminary objections.   Hence, Opposite Party has rightly repudiated the claim of the complainant after application of mind and the complaint may be dismissed with costs.  

4.       In order to  prove  their  case, the complainants tendered into  evidence his affidavit Ex.C-A alongwith copies of documents Ex.C1 to Ex.C20 and closed the evidence on behalf of the complainant.

5.       On the other hand,  to rebut the evidence of the complainant,  Opposite Parties also tendered into evidence the affidavit Ex.RA alongwith copies of documents Ex.R1 to Ex.R13 and  closed the evidence.

6.       We have heard the ld.counsel for the parties, written submissions of the Parties  and also  gone through the documents placed  on record.

7.       During the course of arguments, ld.counsel for the Complainants has  mainly reiterated the facts as narrated in the complaint and  contended that  the written version  filed on behalf of Opposite Parties-Insurance Company has not been filed by an authorized person. Therefore, the written version so filed is not maintainable. Opposite Party  is limited Company and written version has been filed on the basis of special power of attorney given  to ld.counsel for the Opposite Party.  Further contended that no such terms and conditions were ever conveyed or supplied to the complainant at the time of insurance and the alleged terms and conditions are not applicable on the case of complainant. Further contended that the complainant purchased family medical insurance policy bearing No.OG-18—1203-8430-00000067 from Opposite Parties valid for the period w.e.f. 23.05.2017 to 22.05.2018 covering the insured amount of Rs.5 lakhs against the paid up premium of Rs.15,572/-. Unfortunately,  Muskan Grover daughter of the complainant remained sick due to depression and she remained admitted in Rattan Multi Speciality Hospital & Diagnostic Centre, Ludhiana  where the complainant borne the total charges amounting to Rs.10,000/- including all the expenses of treatment.  Thereafter, the complainant lodged the claim with the Opposite Parties for the reimbursement of his claim and also completed all the formalities, but the Opposite Parties repudiated the claim of the complainant on the  false and flimsy grounds.

8.       On the other hand, ld.counsel for the Opposite Party has repelled the aforesaid contention of the ld.counsel for the complainant on the ground that on receipt of claim from the complainant,  the officials of the Opposite Parties scrutinised the claim documents in view of the policy terms and conditions and applied their mind and thereafter rightly repudiated the claim of the complainant vide letter dated 29.07.2017 on the ground that claim documents reveal that claimant was hospitalized for the treatment of anxiety neurosis with hysteria and in view of this the claim stands repudiated as the policy does  not extend coverage for any expenses incurred on the treatment of any mental or psychiatric illness.

9.       Perusal of the contention of the ld.counsel for the complainant   shows  that  the written version  filed on behalf of Opposite Party has not been  filed by an authorized person. Therefore, the written version so filed is not maintainable. The Opposite Party is limited Company and written version has been filed on the basis of special power of attorney given  to ld.counsel for the Opposite Party.  In this regard, Hon’ble Supreme Court of India in case titled as Shubh  Shanti  Services  Limited  v.  Manjula S.Agarwalla and others (2005) 5 SCC 30, decided on 11.05.2005 has  and observed to the following effect:

 “..............As already stated, it has not been  averred in the plaint nor sought to be proved that  any resolution had been passed by the Board of  Directors  of  the  plaintiff  company  authorising  Shri A.K. Shukla to sign, verify and institute the  suit.   It  has  also  not  been  averred  that  the  memorandum/articles of the plaintiff company give ny right to Shri A.K. Shukla to sign, verify and  institute  a  suit  on  behalf  of  the  plaintiff  company.  It, therefore, follows that the plaint  has been instituted by Shri A.K. Shukla only on  the  authority  of  Sh.  Raj  K.Shukla,  CEO  of  the  plaintiff  company.   Such  an  authority  is  not  recognized under law and, therefore, I held that  the  plaint  has  not  been  instituted  by  an  authorised  person.   Issue  No.1  is  accordingly,  decided against the plaintiff and in favour of the  defendants.”

Further,  Hon’ble Supreme Court of India in a judgment (2011)II Supreme Court Cases 524 titled as “State Bank of Travancore Vs. Kingston Computers India Pvt. Ltd.” and in para no.11 of the judgment,  has held that

“the plaint was not instituted by an authorized person. On the plea that one authority letter dated 02.01.2003 was issued by Sh. R.K.Shukla in favour of Sh. A.K.Shukla. Further plaint failed to place on record its memorandum/articles to show that Sh. R.k.Shukla has been vested with the powers or had been given a general power of attorney on behalf of the Company to sign, verify and institute the suit on behalf of the Company.”

Recently Hon’ble State Consumer Disputes Redressal Commission, Punjab at  Chandigarh in FAO No.1235 of 2015 decided on 25.01.2017 in case titled as L.G.Electronics India Private Limited Vs. Sita Ram Chaudhary also held that the plaint instituted by  an unauthorized person has no legal effect.

10.     The main plea  raised by Opposite Party  is that the complainant has violated the terms and conditions of the policy in question and as per the terms and conditions of the policy, the complainant is not entitled to the claim as claimed.  But the Opposite Party could not produce  any evidence to prove that terms and conditions of the policy were ever supplied to  the complainant insured, when and through which mode? It has been held by Hon’ble National Commission, New Delhi in case titled as The Oriental Insurance Company Limited Vs. Satpal Singh & Others 2014(2) CLT page 305 that the insured is not bound by the terms and conditions of the insurance policy unless it is proved that policy was supplied to the insured by the insurance company. Onus to prove that terms and conditions of the policy were supplied to the insured lies upon the insurance company. From the perusal of the entire evidence produced on record by the Opposite Party,  it is clear that Opposite Party  has failed to prove on record that they did supply the terms and conditions of the policy to  the complainant insured. As such, these terms and conditions, particularly the exclusion clause of the policy is not binding upon the insured. Reliance in this connection can be had on Modern Insulators Ltd.Vs. Oriental Insurance Company Limited (2000) 2 SCC 734, wherein it is held that “In view of the above settled position of law, we are of the opinion that the view expressed by the National Commission is not correct. As the above terms and conditions of the standard policy wherein the exclusion clause was included, were neither a part of the contract of insurance nor disclosed to the appellant, the respondent can not claim the benefit of the said exclusion clause. Therefore, the finding of the National Commission is untenable in law.”  Our own Hon’ble State Commission, Punjab, Chandigarh in First Appeal No.871 of 2014 decided on 03.02.2017 in case titled as Veena Mahajan (Widow) and others Vs. Aegon Religare Life Insurance Company Limited in para No.5 has held that

“Counsel for the appellant argued that copy of insurance policy was not supplied to the appellant and hence, the exclusion clause in the contract of the insurance policy is not binding upon him. He further argued that no proof of sending of insurance policy was ever produced by the respondent despite specific contention raised by the complainant that the insurance policy was never received by him. He argued that though there is an averment of the OP that the policy in question was delivered through Blue Dart Courier to the complainant. In order to prove their contention, no affidavit of any employee of Blue Dart was produced who would have made a statement to have the effect that the policy was delivered to the complainant nor any acknowledgement slip for having received the article by the complainant through courier company was produced by the insurance company. He argued that since no policy document was received by the insured and argued that the terms and conditions as alleged to be part of the insurance policy were not binding upon the insured. He argued that policy was issued in the name of deceased Sh.Vijinder Pal Mahajan with his wife Mrs.Veena Mahajan as beneficiary and the same was never refused by the OP and the proper premium for insurance was paid by late complainant. He argued that as per the specific allegations made in the complaint in para No.4, no rebuttal to that contention was specifically there in their written reply in para No.2 and para No.4 in the reply filed by OP in the District Forum. He argued that Hon'ble National Consumer Disputes Redressal Commission, New Delhi in case of "Ashok Sharma Vs. National Insurance Co. Limited", in Revision Petition No. 2708 of 2013 held in para No.8 to the point of non-delivery of terms and conditions of the policy. He also cited Hon'ble Supreme Court's decision given in the matter of "United India Insurance Co. Limited Vs. M.K.J.Corporation" in Appeal (civil) 6075-6076 of 1995 (1996) 6 SCC 428 wherein the Apex court held that a fundamental principle of Insurance Law makes it that utmost good faith must be observed by the contracting parties. Good faith forbids either party from concealing what he privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary. Just as the insured has a duty to disclose, "similarly, it is the duty of the insurers and their agents to disclose all material facts within their knowledge, since obligation of good faith applies to them equally with the assured and further argued that since the terms and conditions were not supplied even on repeated requests the same cannot be relied upon by the opposite party in order to report to repudiate the genuine claim of the wife of the deceased policy holder.”

11. In the absence of terms and conditions of the policy in question, such repudiation of the genuine claim of the complainant is not legal and valid. In such a situation the repudiation made by Opposite Party-Insurance Company regarding genuine claim of the complainant have been made without application of mind. It is usual with the insurance company to show all types of green pasters to the customer at the time of selling insurance policies, and when it comes to payment of the insurance claim, they invent all sort of excuses to deny the claim. In the facts of this case, ratio of the decision of Hon’ble Apex Court in case of Dharmendra Goel Vs. Oriental Insurance Co. Ltd., III (2008) CPJ 63 (SC) is fully attracted, wherein it was held that, Insurance Company being in a dominant position, often acts in an unreasonable manner and after having accepted the value of a particular insured goods, disowns that very figure on one pretext or the other, when they are called upon to pay compensation.  This ‘take it or leave it’, attitude is clearly unwarranted not only as being bad in law, but ethically indefensible.  It is generally seen that the insurance companies are only interested in earning the premiums and find ways and means to decline claims. In similar set of facts the Hon’ble Punjab & Haryana High Court in case titled as New India Assurance Company Limited Vs. Smt.Usha Yadav & Others 2008(3) RCR (Civil) Page 111 went on to hold as under:-

“It seams that the insurance companies are only interested in earning the premiums and find ways and means to decline claims. All conditions which generally are hidden, need to be simplified so that these are easily understood by a person at the time of buying any policy.  The Insurance Companies in such cases rely upon clauses of the agreement, which a person is generally made to sign on dotted lines at the time of obtaining policy. Insurance Company also directed to pay costs of Rs.5000/- for luxury litigation, being rich.

12.     In view of the above discussion, we hold that the Opposite Party-Insurance Company have  wrongly and illegally rejected the claim of the complainant.

13.     To support their contention, the Opposite Party has cited the rulings, but these rulings are not applicable to the facts of the present case and are not supportive to the instant case.

14.     The complainant in his complaint has claimed the reimbursement of his medical bill upto the extent of Rs.10,000/- and this amount spent by the complainants on  treatment has nowhere denied by the Opposite Party by filing any cogent and convincing evidence and hence, the claim of the complainant to that amount is genuine and we allow the claim of the complainant accordingly.  

15.     In view of the aforesaid facts and circumstances of the case,  we allow the complaint of the Complainant and direct Opposite Party-Insurance Company to pay the amount of Rs.10,000/- (Rupees ten thousands only)  to the complainant alongwith interest @ 8% per annum from the date of filing the present complaint i.e. 17.11.2017 till its actual realization. Opposite Party–Insurance Company is also directed to pay compensation to the complainant for causing mental tension and harassment to the tune of Rs.5,000/- (five thousands only). The compliance of this order be made by Opposite Party-Insurance Company within 45 days from the date of receipt of copy of this order, failing which the complainant  shall be at liberty to get the order enforced in accordance with law. Copies of the order be furnished to the parties free of cost by District Consumer Commission, Ludhiana and thereafter, the file be consigned to record room after compliance.

16.     Reason for delay in deciding the complaint.

This Consumer Complaint was originally filed at District Consumer Disputes Redressal Forum (Now Commission) at Ludhiana and it keep pending over there until Hon’ble State Consumer Disputes Redressal Commission, Punjab vide letter No.04/22/2021/4 C.P.A/38 dated 17.1.2022 has transferred the instant Consumer Complaint alongwith Other Complaints to District Consumer Commission, Moga with directions to work on this file onward from 14^th March, 2022 and accordingly District Consumer Commission, Moga has decided the present complaint today i.e.24.05.2022 at Camp Court, Ludhiana, as early as possible as it could decide the same

Announced in Open Commission at Camp Court, Ludhiana.