IN THE CONSUMER DISPUTES REDRESSAL FORUM, ALAPPUZHA
Saturday the 28th day of September, 2018
Filed on 06.06.2017
Present
1. Sri.E.M. Muhammed Ibrahim , BA,LLM (President)
2. Smt. Sheela Jacob, B.com,LLB (Member)
in
CC/No.147/2017
Between
Complainant:- Opposite party:-
Sri.Binukumar Viswanathan, 1. Branch Manager,
Ayodhya, Federal Bank Ltd,
Kandiyoor East, Mavelikara Branch.
Thattarambalam.P.O.,
Mavelikara, 2. DGM and Zonal Head,
Alappuzha. Federal Bank Ltd,
(By Adv.S. Seema) Zonal Office.
3. Somesh Chandra,
Chief Operations Officer and
Chief quality officer,
Max bhupa health insurance co. Ltd
Corporate office, Block B1/1-2,
Mohan Co-operative Industrial
Estate, Mathura Road,
New Delhi- 110044
4. Ashish mehrotra,
Managing Director and chief
Executive officer,
Max bhupa health insurance co. Ltd
Corporate office, Block B1/1-2,
Mohan Co-operative Industrial
Estate, Mathura Road,
New Delhi- 110044
(By Adv.Saji Isaac K.J. for oppo: Parties 3&4)
ORDER
SRI.E.M. MUHAMMED IBRAHIM.B.A.LLM (PRESIDENT)
This case is based on a consumer complainant filed under section 12 of the Consumer Protection Act, 1986.
2. The averments in the complaint in short are as follows:-
While the complainant was working abroad, the first opposite party approached the complainant and canvassed banking business and gradually the complainant developed a close connection with the manager of the 1st opposite party and he made several deposits and had NRI transactions. As per the request by the manager of the 1st opposite party, the complainant was constrained to join insurance policy of MAX BHUPA which is one of the Insurance Company having dealings with the first opposite party bank. After complying with statutory formalities and also undergoing the procedure stipulated by the bank on 27-07-2015 the complainant transferred Rs.16,883/- to the account of MAX Bhupa joined insurance scheme and obtained insurance policy Certificate No.30447988201500 having customer ID 2000126219. The said policy was issued by 3rd opposite party.
3. On the midnight of 3-2-2016 the complainant was suffering from suffocation he was brought to the nearest hospital at Sreekantapuram Kandiyur, Mavelikara as advised by the Doctor the complainant had undergone a detailed check up and he was admitted at Valiyath hospital, Karunagappally and thereafter he was referred to Amrita Institute of Medical Sciences and Research Centre at Ernakulam for better treatment. It is diagnosed that complainant has been affected with a degenerative defect in cardiac conduction system below the A V node and the only remedy is to implant pacemaker and it was detected on 19-07-2016 by Dr. K.U. Natarajan. The complainant was admitted there on 20-07-2016 and in the mean time he approached 3rd and 4th opposite parties by sending mail and also lodged a claim. But it was very unfortunate that in his critical condition his the claim was rejected very irresponsibly and he got a letter that his policy was cancelled without giving any notice or explanation that on the ground that non disclosure of his illness at the time the complainant put forward the application but prior the admission itself he submitted the proposal for pre approval before the company. The complainant realized that actually he was cheated and the company purposefully evading from giving the financial aid as agreed earlier. More than that they alleged false, vexatious and defaming allegations against the complainant while rejecting his claim that he had earlier disease while he was taking policy and he had suppressed the disease. The notice of cancellation of policy and reimbursement request with ID 109138 was rejected by the 4th opposite party on 21-07-2016. The complainant was got admission in Amrita Institute and was treated there as an inpatient from 20-07-2016 to 25-07-2016 and pace maker was implanted and thereafter discharged him on medication and a total amount of Rs.2,93,440/- was to be paid at that hospital. For further medication Rs.45,000/- was already spent. In this particular situation the complainant intimated the branch manager of the 1st opposite party that he is the only person who made him to believe that he would be secured for all health problems but he became helpless. Due to the rejection of claim he in a pathetic condition depending on his family members for such huge amount and he became frustrated and depressed that adversely affected the health conditions especially Blood pressure, sugar etc. and the complainant felt most in secured in this condition. According to the complainant there is deficiency in service on the part of the opposite parties. Hence the complainant is entitled to get reimbursed the medical expenses met by him amounting to Rs.3,38,440/- with interest at the rate of 18 % and compensation to the tune of Rs.10,00,000/- and costs of the proceedings.
4. Opposite party 1 and 2 remain exparte.
5. Opposite party No.3 and 4 resisted the case by filing joint version raising the following contentions:-
The complaint is not maintainable either in low or on facts. However opposite parties 3 and 4 would admit that the complainant had obtained Max bhupa heart beat health family floater insurance policy having coverage for 2 adults and 3 children. The complainant has also paid annual premium of Rs.17,518/- and the policy was to run for a period of 1 year from 31-07-2015. But would content that the complainant was a known case of diabetes mellitus since the last 5 years and hyperlipidemia since 2014. But the complainant had suppressed the above material facts and had also made false declarations and hence the policy had become void abinitio. As the complainant has suppressed material facts which are vital in assessing the undertaking of risk by the opposite parties, the non-disclosure of facts relating to medical condition of the diabetes mellitus since the last 5 years and hyperlipidemia since 2014 are material facts that have direct bearing on the underwriting of risk by the 3rd and 4th opposite parties. If the complainant disclosed the fact that he was having diabetes mellitus and hyperlipidemia, these opposite parties would have assessed the policy accordingly. The policy of the complainant was issued based on the material facts disclosed by the complainant in the proposal form at the time of taking the policy. According to the conditions of the policy, if a claim is any way found to be fraudulent, or if any false statement, or declaration is made or used in support of such claim, or if any fraudulent means or devices are used by the insured person any false or incorrect disclosure to information norms is made to obtain any benefit under the policy, then the policy shall be void and all claims being processed shall be forfeited for all insured persons. The 3rd and 4th opposite parties are not liable for any claim in connection with or in respect of non-disclosure of pre-existing disease. According to the conditions of the policy, the policy shall be void and all premium paid thereon shall be forfeited to the company in the event of misrepresentation, mis-description or non-disclosure of any material fact. In view of the terms and conditions of the policy the 3rd and 4th opposite parties are entitled to cancel the policy of the complainant as he had not disclosed material facts in relation to his pre existing the disease and had acted in a dishonest or fraudulent manner in relation to the policy. The 3rd and 4th opposite parties had repudiated the claim of the complainant as he had not disclosed his pre-existing medical condition at the time of obtaining the policy. The complainant had accepted the policy in full satisfaction and is hence bound by the terms and conditions of the policy. Contract of insurance is a contract uberimmae fidei and parties are bound to observe the terms of the agreement in utmost good faith. Contract of insurance is a contract based on the terms and conditions of the policy and the opposite parties are liable only according to the conditions, terms limitations and exclusions of the policy. The complainant further had an option of cancelling the policy within 15 days from the date of insurance if he had any objections to the terms and conditions of the policy. The act of payment of premium and the non-exercise of the cancelling option during the free look period can only be deemed to be an acceptance of the policy terms and conditions. There has been no deficiency in service of the 3rd and 4th opposite parties. The 3rd and 4th opposite parties are not liable to pay any compensation to the complainant. Even assuming without admitting liability, the liability of these opposite parties are limited and subject to the terms, conditions, limitations and exclusions of the policy.
6. In view of the above pleadings the following points arise for consideration are:-
(1) Whether repudiation of claim is legal and proper.
(2) Whether there is any deficiency in service on the part of opposite parties 1 to 4.
(3) Whether the complainant is entitled to get refunded the medical expenses and
also entitled to get compensation.
(4) Reliefs and costs.
7. The learned counsel for the complainant and opposite parties 3 and 4 have filed notes of argument. Heard both sides.
Point No. 1 to 3
For avoiding repetition of discussion of materials these 3 points are considered together. The following are the admitted facts in this case. The complainant had obtained Ext.P1 policy from MAX BHUPA Heartbeat Health Family Floater Insurance Policy having coverage for 2 adults and 3 children. The complainant paid the annual premium of Rs.17,518/-. The policy was to run for a period of one year commencing from 31.07.2015. The complainant has taken the policy through the manager of the first opposite party at Mavelikara Branch. Unfortunately the complainant suffered ailment during the mid night of 3.2.2016 the complainant suffering from suffocation and he was brought to the nearest hospital and later he was referred to Amrita Institute of Medical Science and Researches Centre at Ernakulam for better treatment. It is also an admitted case that on 19-07-2016 the Doctor diagnosed that complainant has been affected with a degenerative defect in cardiac conduction system and only remedy is to implant pacemaker. The complainant was admitted at the hospital on 20.07.2016 and later he approach the 3rd opposite party MAX BHUPA health insurance company with the claim but the claim was repudiated by the insurance company on the ground that he has obtained the policy by concealing material facts and therefore opposite parties No.3 and 4 and are having no liability to entertain the claim. Hence they rejected the claim. According to the opposite parties 3 and 4 the policy was issued to the complainant based on the proposal form submitted by the complainant and in column 6 of Ext.B1 proposal form the Medical History, the complainant had answered in the affirmative to the specific questions pertaining to the good health of all the individuals proposed to be insured that they are not taking medicines or drugs on a regular basis, that the complainant had also stated there in that the individuals proposed to be insured had neither experienced any health problems or medical conditions nor consulted any doctor or healthcare professional that he was also aware of the information provided by him is the basis for the insurance policy. It is clear from the available materials that the 3rd and 4th opposite parties had repudiated the claim as complainant had not disclosed his pre-existing medical condition at the time of obtaining the policy. It is also clear from the available materials that the complainant had accepted the policy in full satisfaction and therefore he is bound by the terms and conditions of the policy. It is further to be pointed out that though the complainant had an option of cancelling the policy within 15 days from the date of issuance, if he had any objections to the terms and conditions of the policy. But he had not opted to cancel it instead he paid premium and the non-exercise of the cancelation option during the free look period can only be deemed to be an acceptance of the policy terms and conditions as contended by the opposite parties 3 and 4.
It is to be pointed out in this connection that the Hon’ble Supreme Court in United India Insurance Co. Ltd V M.K.J Corporation, III (1996) CPJ SC, has held that “it is a fundamental principle of insurance law that utmost faith must be observed by the contracting parties in the case of contract of insurance. It is further held that good faith forbids either party from non-disclosure of the facts which the party privately knows, to draw the other into a bargain from his ignorance of that fact and his believing the contrary. The above principle was affirmed by the Supreme Court in Modern Insulators V Oriental Insurance Co. Ltd, 2000 CPJ 1 (SC). The Supreme Court in Life Insurance Co.Ltd Vs AshaGoel (2001) 2 SCC 160 held that contracts of insurance including the contract of life assurance are contracts of uberrima fides and every material fact must be disclosed, otherwise, it would be a good ground for rescinding of the contract. It was observed that the duty to disclose material facts continues right up to the conclusion of the contract and also implies any material alteration in the character of the risk which may take place between the proposal and its acceptance and that if there are any misstatements or suppression of material facts, the policy can be called in question.
The Hon’ble Supreme Court in the above quoted decisions has further observed that for determining whether there is a suppression of material facts, it may be necessary to examine whether the suppression relates to a fact which is in the exclusive knowledge of the person intending to take the policy and it could not be ascertained by reasonable enquiry by a prudent person. The Supreme Court in Satwant Kaur Sandhu Vs New India Assurance Company Limited (2000) 8 SCC 316 has held that in a contract of Insurance, any fact which would influence the mind of a prudent insurer in deciding whether to accept or not to accept the risk is a material fact. If the proposer has knowledge of such fact, he is obliged to disclose it particularly while answering questions in the proposal form. Needless to emphasise that any inaccurate answer will entitle the insurer to repudiate his liability because there is clear presumption that any information sought for in the proposal form is material for the purpose of entering into a Contract of Insurance.
According to opposite parties 3 and 4 there are suppression of material facts at the time of proposal. We have examined the merit of the above contention Ext. X1 is the treatment record of the complainant and is admitted by him to be his treatment record. In page No.161 of Ext.X1, it is seen stated that the complainant was having hyperthyroidism and pre-existing LBBB (Left Bundle Branch Block) from 2014. Page Nos.165,169 and 174 of Ext. XI also states the same. Ext.B2, Pre-authorization from issued from Amritha Institute of Medical Science would contain that the complainant was having diabetes mellitus since 5 years, Hyperlipidemia since 2014. The policy was issued to the complainant based on the proposal form submitted by him. In the proposal form dated 27.07.2015 in column 6 Medical History attached to Ext. A1 and B1, the complainant had answered in the affirmative to the specific questions pertaining to the good health of all the individuals proposed to be insured. He had further stated that neither himself nor the persons proposed to be insured had been taking medicines or drugs on a regular basis. He had further stated that the individuals proposed to be insured had neither experienced any health problems or medical conditions nor consulted nay doctor or healthcare professional. The complainant has also declared in the proposal form that he was also aware that the information provided by him was the basis for the insurance policy. In Ext.A4, discharge summary it is stated “Echo on 24.10.2014. Septal motion consistent with LBBB”. In the light of the above material on record it is clear that the complainant was a known case of diabetes mellitus since the last 5 years and hyperlipidemia since 2014. But while submitting the proposal form, the complainant had wilfully omitted all the above mentioned material information in order to obtain the policy. Hence there is clear suppression of material facts.
The learned council for the complainant has argued that the opposite parties have not produced any documents not prove that the complainant has suppressed his disease and taken policy, but in view of the materials available in record I find no force in above contentions. Ext. X1 is the treatment record of the complainant and PW1 admitted to have undergone treatment as per that document. Page No.161 of Ext.X1 it is seen stated that the complainant was having hyperthyroidism and pre-existing LBBB (Left Bundle Branch Block) from 2014. Page Nos.165,169 and 174 of Ext. XI also states the same. Ext.B2, Pre-authorization from issued from Amritha Institute of Medical Science stated that the complainant was having diabetes since 5 years, Hyperlipidemia since 2014. The policy was issued to the complainant based on the proposal form submitted by him. In the proposal form dated 27.07.2015 in column 6 Medical History attached to Ext. A1/ B1, the complainant had answered in the affirmative to the specific questions pertaining to the good health of all the individuals proposed to be insured. In Ext.A4, discharge summary it is stated “Echo on 24.10.2014. Septal motion consistent with LBBB”. But while submitting the proposal form, the complainant had omitted all the above mentioned facts and obtained the policy. The complainant has also admitted when he was in the witness box as PW1 that he had undergone check up on every 6 months before 2 years of submitting the proposal form. It is also clear from the available materials that the policy was issued to the complainant by the opposite parties NO.3 and 4 based on the proposal form submitted by him. It is also brought out the materials information suppressed by the material information which was vital in assessing the undertaking of risk by the opposite parties the non disclosure of facts relating to prove diabetes mellitus since the last 5 years and hyperlipidemia since 2014 are material facts that have direct bearing on the underwriting of risk by the 3 and 4 opposite parties.
The learned council for the complainant in para 5 of arguments note has stated that the opposite parties have not examined the Doctor to prove that the complainant was suffering from any disease or proceed any material facts. Even if no Doctor has been examined, the admission of PW1 and the facts stated Ext.X1,A1/B1 Ext.A4 documents would substantiate the contentions of the opposite parties 3 and 4. It is settled principle that if the defence contention is clear from the evidence tendered there is no need by the complainant adduce any oral or documental evidence by the opposite parties to prove their contentions.
The conditions of the policy would indicate that if the policy has been obtained by suppression of material facts the policy shall be avoid and all premium paid there on shall be forfeited to the company in the event of misrepresentative or non disclosure of any material facts. Contract of insurance is a contract uberimmaefidei and parties are bound to observe the terms of the agreement in utmost good faith. Contract of insurance is a contract based on the terms and conditions of the policy and the opposite parties are liable only according to the conditions, terms limitations and exclusions of the policy. In the circumstance the complainant is not entitled to get the claim nor entitled to get refunded the premium paid on the policy. In view of the reasons stated above it is clear that there is no deficiency in service negligence or unfair trade practice on side of the opposite parties No.1 to 4. In the circumstances it is clear that the reputation of claim by the opposite parties No.3 and 4 is legal and proper and therefore the complaint is not entitled to get the claim amount or compensation as claimed in the complainant. These 3 points answered accordingly.
Point No.4
In view of my finding with record to point No. 1 to 3 we find no merit in this complaint and the same is only to be dismissed.
In the result the complaint stands dismissed.
Parties are directed to suffer their respective costs.
Dictated to the Confidential Assistant, transcribed by her corrected by me and pronounced in open Forum on this the 28th day of September, 2018.
Sd/-Sri.E.M. Muhammed Ibrahim (President):
Sd/-Smt. Sheela Jacob (Member) :
Appendix:-
Evidence of the complainant:-
PW1 - Binu kumar V (Witness)
Ext.A1 - Insurance policy Max Bupa health insurance dtd 01.08.2015
Ext.A2 - Token issued by Amritha Institute of Medical Science &Research centre
dtd 25.07.2016
Ext.A3 - Claim form
Ext.A4 - Discharge summary
Ext.A5 - Medical bills 20.07.2016 to 25.07.2016
Ext.A6 - Statement of account form
Ext.A7 - Notice of cancellation of policy
Ext.A8 - Mediacl certificate dtd 19.07.2016
Ext.A9 - Notice dtd 13.08.2016
Evidence of the opposite parties:-
Ext.B1 - Policy document
Ext.B2 - Copy of pre-authorization form
// True Copy //
By Order
Senior Superintendent
To
Complainant/Opposite parties/S.F.
Typed by:- Sa/-
Compared by:-
