06.04.2015

JAGANNATH BAG, MEMBER

The present appeal is directed against the Order of the Ld. District Consumer Disputes Redressal Forum, Unit -1, Kolkata, dated 12.02.14 in CDF / Unit -1 / Case No. 507/2012 , whereby the complaint was allowed on contest with cost against OP No.1 and ex parte without cost against OP No.2.

The Complainant’s case, in brief, was as follows:

The Complainant was enrolled under the Group Medical Insurance Policy provided by the Allahabad Bank to its retired employees. The policy was issued in the name of the Complainant and his wife with coverage till 31.03.2012 from 01.04.2011. The policy was renewed from 01.04.2012 to 31.03.2013 under the Cashless Benefit Scheme for a sum insured of Rs.1,00,000/-. On 30.04.2012, the Complainant suffered severe abdominal pain and was admitted to RE-LIFE Hospital under Dr. Debasish Sarkar . The Complainant remained hospitalized for seven days in ICCU and for two days in ICU. A sum of Rs.71,533/-was spent for treatment and allied expenses.  OP No.1 disbursed Rs. 20,000/- to the hospital management, but the Complainant had to bear the balance amount of Rs. 51, 533/- before being discharged. Soon after discharge from the hospital, the Complainant submitted the claim form to OP No.1 on 01.06.2012 along with all relevant documents. The claim was repudiated by OP No.1 by their letter dated 19.07.2012 on the ground that the entire limit for surgical management, i.e., Rs. 20,000/- (20% of sum insured ) already exhausted in previous claim under No. CID 255514.  The Complainant alleged that the OP No.1 deliberately ignored the clause which they themselves provided in their Insurance Coverage Structure, i.e., 8 (i) in their Circular. Finding no other alternative, the Complainant filed a consumer complaint before the Ld. Forum below.

The complaint has been contested by the OP No.1 by filing a W.V. wherein the material allegations have been denied. It has been submitted that the entire limit for surgical management, i.e., Rs. 20,000/- was already exhausted in previous claim. Hence, the insured was not entitled to get any further benefit exceeding Rs. 20,000/-. It has also been contended that the Complainant did not disclose the fact of his previous claim. There was no negligence or deficiency in service on their part.

Ld. Forum below, having perused the materials on record and having heard the Ld. Advocates observed that OPs had sufficient deficiency on their part and the complaint was substantiated. The complaint was allowed with costs. OP No.1 was directed to reimburse a sum of Rs. 51,533/- to the Complainant and also to pay a sum of Rs. 20,000/- for harassment and mental agony and another sum of Rs. 5,000/- as litigation cost.

Being aggrieved by and dissatisfied with the order of the Ld. Forum below, the Appellant Insurance Company have come up before this Commission, inter alia, with a prayer for setting aside the impugned order.

Ld. Advocate appearing for the Appellant submitted that the Ld. Forum below failed to appreciate the fact that a sum of Rs. 20,000/- being 20% of the sum being insured of Rs. 1,00,000/- had already been exhausted in the same policy period and further claim of the Respondent / Complainant was not entertainable. The claim was repudiated in terms of the policy condition as provided under Clause 8 (iii). The Complainant never denied that his earlier claim of Rs. 20,000/- was exhausted vide his previous claim under ID 255514 in the same policy period. There was no negligence or deficiency in service on their part. The impugned order deserves to be set aside.

Ld. Advocate appearing for Respondent No.1 submitted that the repudiation was not made as per terms of the policy. As per clause 8 (i), the Respondent was eligible for reimbursement of his total claim amounting to Rs. 71,533/- which was very much within the limit of Rs. 1,00,000/- being the sum insured .The Respondent / Complainant had undergone a major surgical operation as stated in his complaint. The disease of the Complainant was diagnosed to be acute cholecystitis treated with laparoscopic GP operation followed by post operational complications. All hospital bills, test reports and discharge certificate were submitted to the Insurance Company in connection with the settlement of the claim. It was as per whims of the Insurance Company that they considered the ailment to be categorized under clause 8 (iii) of the policy in question. But, the claim should have been considered under clause 8 (i) for grant of insurance benefit. Ld. Forum below rightly adjudicated the matter and the impugned order deserves to be upheld.

            The point for consideration is whether repudiation of the claim of the Complainant was made as per the policy condition or not.

                               Decision with Reasons

We have gone through the memorandum of appeal together with copies of the impugned order, the petition of complaint, the W.V. filed by OP No.1, the policy schedule containing, inter alia, Clauses / Endorsement attached to the policy and other documents including affidavit on evidence filed by the petitioner, questionnaire put by the OP No.1 and replies thereto furnished by the Complainant etc.

            There is no dispute that the Complainant / Respondent was insured with the Appellant / Insurance Company and while the policy was valid, he was hospitalized. A total sum of Rs. 71,533/- was billed by the attending hospital namely RE-LIFE, a multi-disciplinary  hospital. He was under the treatment of Dr. Debasish Sarkar . After pathological tests, investigation etc., the disease of the Complainant / Respondent was diagnosed to be acute cholecystitis which was treated with laparoscopic GP operation .

            It appears that the Appellant / Insurance Company repudiated the claim citing the Clause 8 (iii) of the policy schedule which shows that a claim against hospitalization expenses for surgical interference for ailments other than clause (i) and (ii) as indoor patient would be restricted to Rs. 20,000/- against a policy sum of Rs. 1,00,000/-.

            Clause 8 (i) of the policy schedule  provides that reimbursement of hospitalization expenses for treatment of major ailment as indoor patient in a hospital, i.e., cancer, serious cardiac ailment , kidney transplantation , major accident resulting in multiple complicated facture / injury, major paralysis, major brain/lungs/coronary bypass surgery, any cerebral related injury etc. The ailments which have been named under the said clause 8 (i) are not exhaustive in nature which means that similar major ailments can be considered for reimbursement under clause 8(i) of the said policy schedule. The treatment undergone by the Complainant was also in the nature of a major operation which the Appellant Insurance Company did not deny with such document or evidence before the Ld. Forum below as could establish their repudiation of the claim in question. Ld. Advocate for the Respondent pointed out during argument that the OP Insurance Company offered another cheque amounting to Rs. 11,000/- in addition to the payment of Rs. 20,000/- already made prior to repudiation of the claim in question. Such act on the part of the Insurance Company implies that the Insurance Company themselves were not sure as to whether the claim was rightly repudiated in reference to clause 8 (iii) of the policy schedule. In fact, in their reply to question No. 9 to 12 raised by the Complainant, it was stated that a cheque of Rs. 11,000/- was issued by their office by mistake. Such submission on the part of the Appellant/Insurance Company cannot be accepted as a very valid reason for issuing a cheque in sofar as such issuance of cheque is made after consideration of all relevant facts. In this case also the plea of the Insurance Company that  the cheque was issued by mistake can hardly be believed.

            Ld. Forum’s order directing the OP Insurance Company to reimburse a sum of Rs. 51,533/- appears to be justified. However, the direction of the Ld. Forum below for payment of compensation of Rs. 20,000/- for harassment and mental agony and Rs. 5,000/- as litigation cost appears to be much on higher side which deserves to be modified. The appeal appears to have some merit in that aspect.

            Going by the above discussion ,we are inclined to hold that the impugned order may be revised and hence,

                                                Ordered

that the appeal be and the same is allowed in part. The Appellant is directed to pay a sum of Rs. 5,000/- as compensation for harassment and mental agony and Rs. 2,000/- as litigation costs. The other part of the impugned order shall remain unchanged. The impugned order stands modified accordingly.  The entire amount of Rs. 51,533/- and Rs. 5,000/- plus Rs. 2,000/- shall be paid by the Appellant Insurance Company within a period of 40 days from the date of this order, failing which interest @ 9% p.a. shall accrue over the entire sum from the date of this order till full realization. There shall be no separate order as to costs.