BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION AT BANGALORE (URBAN)

DATED 11^TH DAY OF JULY 2024

ORDER

SMT.M.SHOBHA, PRESIDENT

1. The complaint has been filed under Section 35 of C.P.Act (hereinafter referred as an Act) against the OP for the following reliefs against the OP:-

1. Refund a total sum of Rs.5,85,000/- being the amount paid by the complainant.
2. Pay Rs.3,00,000/- being interest accrued on aforesaid sum of Rs.1,35,000/- @ 1.5% p.a.,
3. Pay future interest @ 15% p.a., or as decided by this Hon’ble Commission from 01.06.2021 till date of payment.
4. Pay Rs.1,00,000/- towards compensation for financial loss and mental agony endured to the complainant on account of deficiency of service.
5. Pay Rs.50,000/- towards litigation expenses in prosecuting the matter.
6. Pass such other reliefs as this commission deems fit.

2. The case set up by the complainant in brief is as under:-

The complainant has purchased the insurance policy from the OP on 27.01.2021 for an amount of Rs.6,00,000/- along with portability benefit from 2015 for each family member i.e., the complainant his late wife and his dependent son with an opted option of auto recharge facility. The health insurance as such is an insurance product/services which covers medical and surgical expenses of an insured in division. The health insurance policy extends coverage against medical expenses incurred owing to the accident illness or injury and even mental health ailments after the circular given by IRDAI dated 16.08.2018 and letter dated 22.10.2018 directing all the insurance companies to comply with the provision u/s 21(4) of mental health act 2017 which reads as “every insurer shall make provision for medical insurance for treatment of mental illness on the same basis as is available for treatment of physical illness”  It has come into force from 29.05.2018. The IRDAI has also advised the insurers to ensure that the persons affected with mental illness are given similar treatment as person affected with physical illness.  Any individual can avail such a policy against monthly or annual premium payments for a specified tenure. 

3. The complainant has obtained a policy No.19810596 and it was in force from 28.01.2022 to 27.01.2023 in the name of his son namely Abhipriya Mitra.  The son of the complainant was hospitalized from 05.05.2022 to 03.07.2022 for 60 days and the complainant has claimed Rs.1,00,938/-.  The claim of the complainant was rejected by the OP stating that the psychological disorder: ASD(Autism Spectrum Disorder) is not included in the policy. the OP have further rejected the claim made by the complainant for his son for having taken treatment from 25.07.2022 to 01.10.2022 for 69 days of Rs.1,26,035/- for the same reason.
4. It is the case of the complainant that his son was diagnosed with “Schizophrenia, OCD & Bipolar disorders” at the time of purchasing the insurance on 27.01.2021.  The OP had issued a letter to the complainant to confirm stating that the complainant’s son has covered under mental disorders.  Schizophrenia/OCD/Bipolar – disorders and has been already included by the OP Care insurance from 28.01.2021 by the letter dated 20.07.2021.
5. The claim of the complainant has been rejected for a number of times by the OP for the reason stating that as “undisclosed PED ASD”.  The OP has mentioned in their email communication that the complainant has not disclosed the current disorders.  The complainant’s son has been diagnosed with ASD including ADHD, OCD and Bipolar disorder which are already included in the policy.  The complainant has also got a letter from NIMHANS stating that ASD has been diagnosed by them only after his recent admission.
6. The complainant has repeatedly reached out to the OP regarding the insurance that was bought by him upon the advise of the OP as per the needs specified by the complainant and the claims were rejected by the OP.  even though the IRDAI has issued the circular and also issued the letter on 22.10.2018 directing all the insurance companies to make provision for medical insurance for treatment for mental illness. Inspite of that the OP has rejected the claim made by the complainant for his son for having taken treatment for mental illness. Hence the complainant has filed this complaint.

7. In response to the notice, OP appears and files version and had admitted about the issuance of the policy bearing policy No.19810596 and it is valid from 28.01.2021 till 27.01.2022 for a sum insured upto six lakhs subject to policy terms and conditions. The said policy was ported from oriental insurance company ltd., wherein the date of enrollment was 11.11.2019 and further the policy was renewed till 27.01.2023. 
8. The OP further admitted that the claim made by the complainant for the hospitalization of his son at NIMHANS from 07.05.2022 till 03.07.2022 as he was diagnosed with obsessive compulsive disorder, Autism spectrum disorder, dull normal intelligence.  After received the claim this OP asked the complainant to provide the documents related to the treatment.  After verification of the claim and investigation papers this OP have sent a denial letter on 21.10.2022 by rejecting the claim for the following reasons;

Non disclosure of material facts/pre-existing ailments at time of proposal : Autism Spectrum Disorder.

Non disclosure of material facts/pre-existing ailments at time of proposal.

9. It is further case of the OP that they had received a reimbursement claim for hospitalization of the complainant’s claim at NIMHANS from 25.07.2022 till 30.09.2022 as he was diagnosed with mixed obsession thoughts and acts, childhood autism spectrum, disturbance of activity and attention.  The claim was rejected by the OP on the ground that non disclosure of material facts/pre existing ailment at the time of proposal: Autism spectrum disorder.  As per the discharge summary it was specifically mentioned that “25 year old unmarried male belonging to MSES presented with illness of 9 years duration insidious onset continuous course exacerbation from last 6 months characterized by repetitive behavior, compulsive non paraphilic sexual behavior, reassurance seeking, proxy compulsions, restricted interests, verbal and physical aggression in the background of temperamental difficulties in form of autistic traits and dull nor intelligence.
10. Even though the complainant has the chance to disclose about his son’s past medical history at the time of filing the proposal form but failed to disclose the same for the best reasons known to him. The complainant has mentioned under the heading additional details the following mis-declaration was made: Does any person(s) to be insured have any pre-existing diseases? The answer was No.
11. The complainant by none disclosing the correct health status of patient has blatantly violated the principle of utmost good faith and the policy terms and conditions which is the basis of contract between the complainant and the company.  Upon the basis of non disclosure of ASD the policy was cancelled and the same was informed to the complainant by sending RPAD. The premium paid shall be forfeited and no refund of premium shall be affected by the company. Hence the claim of the insured has been rightly repudiated by the OP company as per the terms and conditions of the policy. There is no deficiency on the part of this OP company towards the complainant. Hence complaint deserves to be dismissed. Hence OP prayed for dismissal of the complaint.

12. The complainant has filed his affidavit evidence and relies on 11 documents.  Affidavit evidence of official of OP has been filed and OP relies on 12 documents.

13. Heard the arguments of advocate both the parties. Perused the written arguments filed by both the parties.

14. The following points arise for our consideration as are:-

1. Whether the complainant proves deficiency of service on the part of OP?
2. Whether the complainant is entitled to relief mentioned in the complaint?
3. What order?

15. Our answers to the above points are as under:

Point No.1:  Affirmative

Point No.2: Affirmative in part

Point No.3: As per final orders

REASONS

16. Point No.1 AND 2: These two points are inter related and hence they have taken for common discussion.  We have perused the allegations made in the complaint, version, affidavit evidence of both the parties, written arguments and documents filed by both the parties.
17. In support of their case complainant has filed his affidavit evidence and reiterated all the allegations made in the complaint and filed 11 documents as Ex.P1 to P11. Ex.P1 is the Copy of the portability letter dated 31.01.2022, Ex.P2 is the copy of the policy documents, Ex.P3 is the copy of the letter dated 20.07.2021, Ex.P4 is the copy of the policy, Ex.P5 is the copy of the same letter dated 05.11.2022 from NIMHANS, Ex.P6 is the copy of the email communication, Ex.P7 is the copy of the circular issued by IRDAI dated 26.08.2018, Ex.P8 is the copy of the letter dated 22.10.2018 issued by IRDAI, Ex.P9 is the copy of the terms and conditions of the OP, Ex.P10 is the copy of the email communication.
18. Sri.Dayananda, Manager – Branch Operations of OP company, has filed his affidavit evidence and relied on 12 documents. Ex.R1 is the copy of the policy certificate, Ex.R2, 6 are the copy of the pre-authorisation form, Ex.R3, 7 are the copy of the discharge summary, Ex.R4 is the Copies of the query letters, Ex.R5, 8 are the Copy of the claim denial letter, Ex.R9 is the Copy of the proposal form, Ex.R10 is the Copy of the cancellation letter, Ex.R11 is the Copy of the terms and conditions and Ex.R12 is the Copy of authorization letter.
19. There is no dispute that the complainant purchased the insurance policy from the OP limited for Rs.6,00,000/- covering medical and surgical expenses for the complainant his late wife and his son. The policy was rejected by the OP for not including the psychological disorder ASD (Autism Spectrum Disorder) in the coverage.  The complainant son was diagnosed with Schizophrenia, OCD & Bipolar disorders.  The OP has confirmed that the policy was already included in the coverage from 28.01.2021. The current policy was also endorsed for inclusion of these disorders.  The inclusion of mental disorder in the policy was confirmed by the OP by issuing the letter as per Ex.P3 on 20.07.2021. They have clearly stated in the Ex.P3 that they have modified the details schizo-obsessive disorder, bipolar disorder(port benefit passed).
20. It is pertinent to note here that the complainant’s son was diagnosed with the above said mental disorder at the time of purchasing of the policy on 27.01.2021.  The complainant has also got a letter from NIMHANS Bangalore stating that ASD has been diagnosed by them recently. It is a new assessment/diagnosis by the NIMHANS doctor and the same was informed to the OP on 05.11.2022. the complainant’s son was taken treatment for the mental illness for 60 days from 05.05.2022 to 03.07.2022 and the complainant has made a claim for Rs.1,00,938/- and the same was repudiated by the OP by giving the reason that the psychological disorder was not disclosed while taking the policy.  again the OP have repudiated the claim for the same reason for the claim made by the complainant for his son for Rs.1,26,035/- for having taken treatment from 25.07.2022 to 01.10.2022. 
21. The contention of the OP is that the complainant has not disclosed the ASD and AHD suffered by his son at the time of issue of the policy and violated the terms and conditions of the policy and they have treated it as a pre-existing disease.  Inspite of repeated request from the complainant and by producing the relevant medical records issued by the NIMHANS that the complainant’s son was diagnosed with ASD and ADHD recently by the NIMHANS doctor and it is not at all a pre existing disease and he came to know recently only after the doctors at NIMHANS diagnosed it.
22. The OP has also relied on number of decisions in support of their contention and they are all related to the violation of terms and condition by the policy holders and none disclosure of pre existing disease at the time of taking the policy.
23. On the other hand, the complainant has also relied on the decisions of the Hon’ble High Court of Delhi in

1. Shikha Nischal –vs- National Insurance company limited & another W.P.(C) 3190/2021
2. Subhash Khandelwal V Max Bupa Health Insurance Company Limited, 2021 SCC online Del 1751.

24. It is clear from the above decisions that the insurance company was liable towards the petitioners claim since it fail to comply with sec 21(4) of MHCA. The Hon’ble apex court has ordered the insurance company to pay an extra amount of rs.25,000/- towards litigation cost, since the petitioner has to resort to litigation in order for her claim to be honored even though the insurance company has previously paid petitioner claim of Rs.3,95,000/- in accordance with the IRDAI’s instructions. The apex court further ruled that all the insurance providers were required to implement sec 21(4) of the MHCA as of the day it took effect suggesting that the any health insurance plan issued after that date would need to cover mental illness regardless of any other conditions.
25. In this complaint the OP have continuously repudiated the claim of the complainant’s son only on the ground that mental disorder and they are not liable to pay any medical expenses spent by the complainant for his son for his treatment for his mental illness at NIMHANS hospital. It is mandatory on the insurance companies to honor the claim of the insurer for having taken treatment for mental illness and have to treat the same as equal to physical illness. Even though the complainant has clearly intimated the OP by sending letter and the same was confirmed by the OP for having included the mental illness of the complainant’s son in the policy the OP have simply repudiated the claim of the complainant. Under these circumstances complainant has suffered mental agony apart from monitory loss.  The complainant has clearly established the deficiency of service, negligence and unfair trade practice on the part of the OP.  Hence we answer point No.1 in affirmative and point No.2 partly in affirmative.
26. Point No.3:- In view the discussion referred above we proceed to pass the following;

O R D E R

1. The complaint is allowed in part.
2. OP is directed to pay Rs.2,26,973/- with interest at 9% p.a., from the date of repudiation till realization to the complainant.
3. OP is further directed to pay compensation of Rs.50,000/- with litigation expenses of Rs.10,000/- to the complainant.
4. The OP shall comply this order within 60 days from this date, failing which the OP shall pay interest at 12% p.a. after expiry of 60 days on Rs.2,26,973/- till final payment.
5. Furnish the copy of this order and return the extra pleadings and documents to the parties.

(Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Open Commission on this 11^TH day of JULY 2024)

Documents produced by the Complainant-P.W.1 are as follows:

Documents produced by the representative of opposite party – R.W.1;