COMPLAINT FILED: 25.04.2009<br /> DISPOSED ON: 16.01.2010 <br /> <br /> BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM AT BANGALORE (URBAN)<br /> <br /> <br /> 16TH JANUARY 2010<br /> <br /> <br /> PRESENT :- SRI. B.S. REDDY PRESIDENT<br /> <br /> SMT. M. YASHODHAMMA MEMBER <br /> SRI. A. MUNIYAPPA MEMBER <br /> <br /> COMPLAINT NO.967/2009<br /> <br /> <br /> COMPLAINANT T.S. Muthukrishnan,<br /> 166, 1st Floor, 8th Cross,<br /> II Stage, Indira Nagar,<br /> Bangalore – 560 038.<br /> <br /> Advocate: Sri <br /> <br /> <br /> V/s.<br /> <br /> <br /> OPPOSITE PARTIES 1. Branch Manager,<br /> Indian Overseas Bank,<br /> Indira Nagar Branch,<br /> C.M.H. Road, <br /> Indira Nagar,<br /> Bangalore – 560 038.<br /> <br /> 2. Managing Director,<br /> United India Insurance Co. Ltd.,<br /> 24, Whites Road,<br /> Chennai – 600 014.<br /> <br /> Advocate: Sri <br /> O R D E R<br /> <br /> SRI. B.S. REDDY, PRESIDENT<br /> <br /> The complainant filed this complaint U/s. 12 of the Consumer Protection Act of 1986, seeking direction against Opposite Parties (herein after called as O.Ps.) to pay sum of Rs.5,00,000/- being the amount of compensation for reimbursement of hospitalization and post hospitalization expenses and to pay Rs.3,00,000/- each OP-1 and 2 as compensation for mental agony and torture and to award costs of proceedings Rs.20,000/- and pay interest from the date of first complaint i.e. 19.04.2008, on the allegations of deficiency in service on the part of the OPs. <br /> <br /> 2. In the complaint it is stated that the complainant had purchased an Indian Overseas Bank Health Care Plus Policy No.0604/00040 dated 1st September 2005 from OP-1; subsequently the same was renewed / purchased from the OP-1 with policy No.2006/ 484100580/9 dated 19th August 2006 and policy No.2007/ 484101156/9 dated 04.01.2008. OP-1 abruptly changed the Insurance Company and from August – 2006 the policy is being issued by OP-2 on their behalf. OP-1 had already changed three insurance companies in four years. First it was National Insurance Company (2005-06), second was United India Insurance Co. Ltd., (2006-08) and now the third is Universal Sompo General Insurance Co. Ltd., (2008) by their letter dated 10.12.2008. Each time they had forced policyholders to terminate the existing policy and to effect a new proposal thereby violating the code of conduct specified in Section 9 Sub Section (2)-(ii)-(h) of IRDA (Licensing of Corporate Agents) Regulations 2002. OP-1 and 2 betrayed the complainant by their deficiency in service which has resulted in huge loss of time, money and energy in addition to ill-treatment, cheating and mental agony and torture. The family member covered in the policy Mrs. Kalpagam had suffered a fracture in the spinal cord needed an emergency surgery, complainant was denied most important cashless service by the third party administrator (TPA) appointed by OP-1 and 2 claiming that the policy is “very fresh”. OP-2 failed to provide adequate information along with the policy document regarding the terms, conditions, exclusions and definitions though the “policy state subject to terms, conditions, exclusions and definitions”. OP-2 violated IRDA Regulations which amounted to total deficiency in service. The policy documents also states that “the proposal and declaration by the insured is the basis of this contract and deemed to be incorporated”. However, the proposal and declaration duly signed and sealed by the OP-1 and 2 were not attached to the policy. <br /> <br /> When the policy expired the complainant did not receive any intimation from the OP-1. Since he had no occasion to use the policy which was kept in the safe, he had not noticed the validity date. He expected prompt service from OP-1 and hoped that the OP-1 would send a reminder. OP-1 failed to ensure remittance of the premiums within the stipulated time which amounts gross negligence and total deficiency in service. Even though sending reminders would have helped the OP-1 to ensure continued business, the OP-1 has chosen not to do so, in order to induce a “break” in the policy, so that policy benefits can be denied to their customers. Hence this deficiency is also a preplanned and deliberate deficiency. Only after 4 months the complainant noticed the policy and immediately he called on OP-1 to renew the policy. However OP-1 refused to renew the policy and asked to file a fresh application. The complainant was totally helpless; he had to file a fresh application. This had resulted in loosing the entire money he had paid for the last two years. OP-1 also collected extra amount towards their charges violating the IRDA Regulations. By displaying the OP-1’s name in a prominent manner, charging an administration fee of Rs.55/- and disregarding the code of conduct, OP-1 violated the guidelines on licensing of corporate agents and IRDA Regulations. Being fed up by their wrong attitude and deficiency in service, the complainant was forced to reduce the premium amount as well as the sum insured. If only the policy was renewed in time he would have continued the same amount. Hence OP-1 and 2 are liable for all the consequences. Insurance is a matter of solicitation and hence it is their duty to educate / advise the customers about all aspects of the policy and the need to renew in time by sending reminders as mandated by Section 9 of IRDA (Licensing of Corporate Agents) Regulations 2002. OPs have also left their customers at the mercy of a careless third party TPA who have no concern for the ailing patient requiring emergency surgery. The TPA had allowed a junior person, who had no knowledge of the TPA’s own published policy to process and deny request of the cashless service by stating “very fresh policy hence cashless not possible”. The said reason has not covered in the published document; the TPA has totally mishandled the request with absolute disregard to the ailing patient requiring emergency surgery. If fresh policy is not eligible for cashless service, it should have been published in the document along with above reasons and it should have been informed the hospital authorities before issuing the forms. If the complainant had any clue that the cashless service is not possible, he would have made alternate arrangement without wasting time. He was made to run around to ensure that the Doctors and hospital authorities complete the request for approval forms and after submitting all the supporting documents cashless service has been denied. The complainant had no time left to make alternate arrangement for finance, after he was informed that the cashless service is denied. He did not have any money at that time. It had caused “near heart attack” situation for him, he had managed by using credit cards and making payments in bits and pieces and requesting them for more time, much to the annoyance of the hospital authorities, this is not the way to allow the TPA to treat their customers so badly. If he had not arranged for finance, emergency surgery would not have been performed and it could have even endangered the life of patient. The TPA had “recommended” to try reimbursement. This is mainly to make the complainant to run around once again before final rejection in order to continue enjoying the “sadistic pleasure”. By the time request for reconsideration was made, the complainant had already made most of the payment including the surgery and submitted the reports of the treating Doctor as well as the Specialist Neuro Surgery and hence this itself was a reimbursement request only. In his reply letter OP-1 stated that the complainant must approach the TPA for reimbursement even though claim was rejected twice, including reimbursement request. Even then OP-1 did not offer to render necessary assistance for reimbursement claim as mandated by the code of conduct specified in Section 9 of IRDA (Licensing of Corporate Agents) Regulations 2002. Mr. V.Sekar, General Manager of OP-2 we received the copy of notice dated 05.04.2008 sent the e-mail in which he had acknowledged the increased agony due to the denial of cashless facility and has promised to revert to him (complainant) within a week, but till date no action was taken. This also amounted to gross negligence and total deficiency in service by OP-2. It is stated that the complainant had categorically and clearly alleged, defined and established the gross negligence in his notice to OPs and subsequently in the complaint and hence claimed consequential damages. The complainant is victim of the misdeed of the OPs which had caused severe strain on him and his family, physically, mentally and financially. Hence the non-payment of the full claim would ruin his family. Whereas payment of the full claim of Rs.11.20 Lakhs with interest, OPs will not suffer any set back whatsoever as they are making profit of several crores. OP-1 and 2 have violated all norms of decency and delicacy that are essential for the timely treatment of the patient and have made “Mockery” of the health insurance policy; they are “fully liable to reimburse all medical expenses including post hospitalization expenses up to a maximum of the original limit of Rs.5.00 Lakhs”. Hence the complainant is seeking necessary reliefs as sated above. <br /> <br /> 3. OP1 on appearance filed version contending that the complaint filed against OP Bank is not at all maintainable as there is no cause of action against OP1. OP1 is a not proper and necessary party to the proceedings, the complaint is liable to be dismissed in limine. It is submitted that it is for the insured to select / opt to insurance company while submitting proposal form. OP Bank has no role to play in that regard. OP Bank is not responsible for the negligence on the part of the complainant in renewal of the Insurance Policy in time. OP has not violated any rules, regulation and guidelines while discharging its duties and obligations. OP Bank acts as an agent to the United India Insurance Company Ltd., for the account holder of the Indian Overseas Bank for the medi-claim policy of OP2 and therefore the relationship between the OP 1 & 2 is that of an agent and principal. On 04-01-2008 fresh proposal form for IOB Health Care Plus Policy was submitted by the complainant to the OP2 through OP1. Thus a contract of insurance has come into existence between United India Insurance Company Ltd., and the complainant. Except complying with the authority given by the account holder to debit and transfer from their account required premium payable to the OP2, no other activities are performed by OP1 Bank in these health care policies. The very declaration given by the Insured in the proposal form clearly reveals that OP Bank has no any obligation to fulfill the claim of insured /complainant. The medical reimbursement claim for the treatment under went by Smt.M.Kalpagam at Manipal Hospital requires to be submitted to the third party administrator i.e., M/s.T.T.K.Health Care Service Ltd., and/or the United India Insurance Company Ltd., who alone are the competent authorities to examine the medical claims of the complainant, according to the terms of the contract and rules. On over all reading of the complaint reveals that the medi-claim for the treatment of the wife of the complainant has not been considered favourable by M/s.T.T.K.Health Care Service Pvt. Ltd., and by the OP2 on the ground that the policy is very fresh. As such M/s.T.T.K. Health Care Service Pvt. Ltd., is a proper and necessary party to the proceedings, the complainant is bad for non-joinder of necessary parties. The averments that the terms and conditions, exclusions and definitions were not attached to the policy are baseless since the proposal form was to be filled in quadruplicate and 4th copy is meant for the client as acknowledgement from the OP Bank branch along with salient features of the policy. The policy holder has to get the insurance policy renewed before it lapsed if he is so desired and no obligation what so ever can be cast on the OP Bank for issuance of notice to its customers for the renewal of the insurance policies. As such there is no deficiency in the service on the part of the OP1 Bank. The complainant cannot found fault with OP Bank for his failure to get his policy renewed for further period. OP1 had not been given any standing instructions to renew the policy automatically before its expiration. Moreover the Bank balance in the account of complainant was only Rs.6,024/- while the premium amount was Rs.7,316/-, thus the balance amount was less than what was required for the renewal premium amount. Earlier complaint No.970/2008 was disposed of on 05-08-2008. The complaint preferred appeal in appeal No.1739/2008 before the Karanataka State Disputes Redressal Commission, Bangalore. The said appeal was disposed on 06-11-2008 with a direction to the complainant to file a fresh complaint on the same cause of action by impleading all necessary parties. The complainant has filed present complaint without impleading 3rd party administrator that is M/s.T.T.K. Health Care Pvt. Ltd., before whom his claim was refused. As such the complaint filed by the complainant suffers from non-joinder of the necessary parties. OP Bank is not liable to pay any compensation; hence it is prayed to dismiss the complaint with exemplary costs. <br /> <br /> 4. OP2 filed version denying that the policy was issued in favour of the complainant covering the health care insurance policy for the period from 19-08-2006 till 2008, as per the averments made in the complaint. It is submitted that if policy particulars are furnished; then liability of the OP is limited to the terms and conditions of the policy. It is submitted that all the policy will be sent with terms and conditions and hence the allegation itself is wrong. It is not mandatory to obtain proposal, on oral information the policy can be issued on receipt of the policy if complainant found anything wrong information, immediately he should get it corrected and no such request is made; now he cannot make any allegation against this OP; even if the policy was issued by this OP. It is submitted that as per the terms and condition no 4.1of the policy all the pre existing disease is not covered under the policy and hence all such expenses are not covered under the policy. Further it is submitted that as per the complaint it is not clear when the incident was taken place and as per the policy terms and condition in fresh policy the cash less benefit is not available. As per the complaint averment it is clear that it is pathological fracture and hence complainant may not be entitled to get compensation since the risk is not covered under the policy if at all this OP has issued and hence the complaint is not maintainable. If at all OP1 has committed deficiency in service; complainant can blame OP1 and not this OP company. Complainant has not come up with clean hands and it requires voluminous documentary and oral evidence, hence direction may be issued to the complainant to approach Civil Court for the relief claimed in the complaint. There is no deficiency of service on the part of the OP. Even if repudiation of the claim is based on the policy terms and conditions the same will not amounts to deficiency of service. Hence it is prayed to dismiss the complaint. <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> It is contended for the Ops that TTK Health Care services Pvt. Ltd., which is a third party administrator is a necessary party to the proceedings, as the main grievances of the complainant is, cashless service was denied by TPA, on account of same, he has suffered mental agony and he is claiming compensation. In our view TTK Health Care Services is appointed by OP2 as its TPA as an agent, OP2 is answerable for all acts and omissions on the part of its agent. When OP2 is a party to the proceedings; the presence of TPA to the proceedings cannot be considered as necessary. OP2 represents its agent TPA. Hence there is no any substance in the arguments that the complaint is bad for non-joinder of necessary party. <br /> <br /> In the proposal form submitted by the complainant a declaration is given by him stating that he has read and understood features of the IOB Health care Plus scheme and agree to abide by the terms and conditions and exceptions laid down therein. He understand that in case of any claim Indian Overseas Bank will not take any responsibility or accept any correspondence and the same have to be pursued with the third party administrator and United India Insurance Company Ltd., only. Further he has agreed that his proposal and declaration shall form the basis of the contract between him and United India Insurance Company Ltd. In view of this declaration the learned counsel for the OP1 contended that OP1 is not responsible of any claim with regard to the policy, as contract has been entered in to between the complainant and OP2, hence OP1 is not liable to pay any amount to the complainant. In our view though as per the declaration in the proposal form the complainant has agreed that in case of any claim OP1 will not under take any responsibility; but OP1 being corporate agent through which the complainant purchased the policy from OP2, was under an obligation to inform the complainant about the due date of the renewal of the earlier policy, the failure on the part of the OP1 to inform the same is an act of deficiency in service. Inspite of the declaration furnished in the proposal form OP1 is answerable for claim in respect of deficiency in service.<br /> <br /> The sum insured is Rs.3,00,000/- as per the policy documents produced by the complainant as per the Annexure-G Document No.7. The sum insured was Rs.5,00,000/- as per the earlier policy No.2006/484100580/9 the copy of which has been marked as Annexure – F Document No.6. Annexure - B Document No.2 reveals hospitalization and post hospitalization expenses to the tune of Rs.5,59,344/-. The complainant is claiming Rs.5,00,000/- as compensation towards reimbursement of hospitalization and post hospitalization expenses from OP1 & 2 on the ground that the earlier policy which he had taken was for a sum of Rs.5,00,000/-. The said policy was not renewed on account of deficiency in service on the part of the OP1 in not informing the complainant due date for renewal. In our view merely because OP1 has not taken care to inform the complainant regarding the due date of renewal of the earlier policy the entire responsibility cannot be saddled on OP1. It was the responsibility of the complainant to get his policy renewed within the due date. He cannot claim excuse on the ground that he has kept policy declaration in a safe and hence he could not know the due date of renewal. Further the claim for reimbursement of medical expenses is not yet considered by OP2. Still it is open for the complainant to claim the reimbursement of medical expenses with regard to the medical treatment of his wife. Merely because the TPA refused cashless service even after the complainant re-submitted for consideration with medical certificates and making payment of medical expenses, it cannot be said that the claim for medical reimbursement has been repudiated by OP2. As per Annexure – Q Document No.17 TPA refused cashless service stating that the policy being very fresh and it is a pathological fracture. However it will be processed as reimbursement as per the policy terms and conditions. In Annexure – P Document No.16 the Nero surgeon has certified that Mrs.Kalpagam.M was admitted in their hospital with acute onset of paraplegia of 2 days duration with dorsal spine involvement secondary to acute osteomyelitis. This is not pre-existing disease and patient’s needs emergency surgery. The pathology can be noticed in MRI Scan. In our view the complainant can claim reimbursement as per policy terms and conditions, for reimbursement of medical expenses. Therefore the claim of the complainant for reimbursement of medical expenses as compensation cannot be considered in this complaint. <br /> <br /> The complainant has claimed Rs.3,00,000/- from each OP1 & 2 as compensation for causing mental agony and torture in denying cashless service while his wife was admitted in the hospital. The third policy administrator being the agent of the OP2 is the main cause in denying the cashless service without any justification. The complainant has suffered mental agony and torture on account of denial of cashless service. With great difficulty he managed to mobilise the required funds at that moment for the surgery. OP2 is liable for the act of its agent TPA in denying the cashless service, to pay the compensation to the complainant. OP1 has failed to inform the complainant regarding due date of renewal of earlier policy. Taking into consideration of the facts and circumstances, it would meet the ends of justice by directing OP1 to pay compensation ofRs.10,000/- and OP2 to pay compensation of Rs.1,00,000/- to the complainant with litigation expenses of Rs.5,000/-. Accordingly we proceed to pass the following: <br /> <br /> O R D E R<br /> The complaint filed by the complainant is allowed in part. OP1 is directed to pay compensation of Rs.10,000/- and OP 2 to pay compensation of Rs.1,00,000/- with litigation expenses of Rs.5,000/- to the complainant.<br /> <br /> This order is to be complied within four weeks from the date of communication of this order. <br /> <br /> Send copy of this order to both the parties free of costs.<br /> <br /> (Dictated to the Stenographer and typed in the computer and transcribed by him, verified and corrected, and then pronounced in the Open Court by us on this the 16th day of January 2010) <br /> <br /> <br /> MEMBER MEMBER PRESIDENT<br /> <br /> s.n.m./NRS <br /> <br /> <br /> <br />