IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, KOTTAYAM

Dated, the 29^th day of July, 2024

Present: Sri. Manulal V.S. President

  Smt. Bindhu R.  Member

Sri. K.M. Anto. Member

C C No. 250/2022 (Filed on 21.11.2022)

O R D E R

Sri. Manulal V.S. President

The complaint is filed under Section 35 of the Consumer Protection Act 2019.

The complainant obtained medical insurance from the first opposite party, an insurance company, through the second opposite party, Axis Bank, on 21.10.2010. The complainant paid the premium for three consecutive years without making any claims during that period. After paying the third premium, the complainant contracted COVID-19 received treatment at St. Thomas Hospital in Chethipuzha, Changanassery, incurring hospital bills totalling           ₹ 80,168/- (Rupees eighty thousand one hundred and sixty eight only). When the complainant submitted a claim for the treatment expenses, the first opposite party rejected it and cancelled the policy, alleging that the complainant had concealed an existing medical condition at the time of obtaining the policy.

The complainant obtained the policy on the advice of the second opposite party, where he had an account, following the recommendation of the NRI cell officer. The complainant was led to believe that the policy would be valid both in India and abroad. However, after receiving the insurance card, he realized it was a group medical insurance policy.

When the policy came into force, the complainant was abroad and had not received the policy enrollment form, an OTP was sent to his Indian mobile number while he was overseas and the policy was activated accordingly. In the enrolment form later sent to the complainant the first opposite party listed his correct mobile number in one place and a toll-free number in another. When the complainant questioned this, the first opposite party admitted it was an inadvertent error. The complaint alleges that the first and second opposite parties activated the policy by sending the OTP to this toll-free number without providing the enrollment form.

The rejection of the insurance claim and cancellation of the policy based on unfounded allegations have caused the complainant considerable stress. Therefore, the complainant is filing this complaint, seeking an order to direct the opposite parties to refund ₹ 1,35,968/- (Rupees one lakh thirty five thousand nine hundred and sixty eight only) to pay ₹ 3,20,000/- (Rupees three lakhs twenty thousand only) as compensation and ₹ 30,000/- (Rupees thirty thousand only) as the cost of this litigation.  

Upon notice from this commission, opposite parties appeared before this commission and filed separate versions.

Version of the first opposite party is as follows:

The complaint is not maintainable before the Consumer Dispute Redressal Forum. In the complaint, the complainant alleged that the officer of the NRI cell of Axis Bank misrepresented that the policy was valid in India and abroad. When such an allegation is raised in the complaint, the complaint is not maintainable before the Consumer Dispute Redressal Forum. The complainant further alleged that he had not signed the policy enrollment form. Hence, on the basis of the said allegation, this forum has no jurisdiction for adjudicating such a case. When there is an allegation of fraud or misrepresentation, detailed evidence is required and in such circumstances, a civil court only has jurisdiction.

The insurance is a contract on the basis of utmost good faith. It is the duty of the person who takes the policy to disclose all the details and pre-existing disease, if any, to the insurance company. The medical records of the complainant show that the complainant had been treated for Obstructive Sleep Apnea and he was treated at St. Thomas Hospital, Chethipuzha on 22.06.2019. Dr. Vinod Jose Kakkanad was the doctor who treated the complainant on 22.06.2019. The policy is valid only from 21.10.2019. This shows that the complainant had taken the policy without disclosing his pre-existing disease. Hence, the reason for repudiation is true and correct. The policy is issued subject to the terms and conditions of the policy. As per clause - section 4(7) of the terms and conditions of the policy, the company has the right to cancel the policy in case of misrepresentation and nondisclosure of material facts.

The complainant has not spent ₹ 80,168/-(Rupees eighty thousand one hundred and sixty eight only) as the expenses for treatment. The bills submitted by the complainant are not payable under the terms and conditions of the policy. The reason for the cancellation of the policy and repudiation of the claim is true, valid, and correct.

It is specifically stated in the policy: 'For more details, please refer to our website, www.tataaig.com". Policy wordings only of the opted benefits shall be applicable and must be read in conjunction with the certificate of insurance.' The details of coverage have been given to the complainant and all allegations contrary to this are false. This opposite party has nothing to conceal from the policyholders. There is no need to stay in India to follow up on the claim of the complainant.  There is no unfair trade practice or deficiency of service on the part of the first opposite party.

The second opposite party filed version contending as follows:

 No service in respect of this transaction was availed by the complainant or rendered by the second opposite party for a consideration that has been paid or promised. The complainant voluntarily applied for policy bearing                No. 237868334 dated 22.10.2019 and submitted the proposal form to the first opposite party. The transactions between the complainant and the first opposite party are unknown to the second opposite party. The insurance company is solely liable and responsible for payment or rejection of the insurance claim in relation to the insurance policy. The second opposite party is not in the business of insurance and hence the complaint is liable to be dismissed on the grounds of mis-joinder of the necessary party to the complaint as this opposite party is not a necessary party.

The second  opposite party is a Scheduled Commercial Bank and a Corporate Agent of the Insurance Company, i.e., TATA AIG Insurance. The opposite party Bank's role is only as a Corporate Agent/Facilitator and the insurance is issued by the first opposite party. The second opposite party is unaware of the alleged deficiency of service caused to the complainant. There is no negligence, deficiency of service, or unfair trade practice on the part of the second opposite party.

The complainant filed proof affidavit in lieu of chief examination and marked Exhibits A1 to A5. Vishva Dharani S, who is the chief legal manager of the first opposite party, filed proof affidavit in liu of chief examination and marked Exhibit B1. Ranjith R, the Branch Manager of the second opposite party, filed a proof affidavit. Treatment records from St. Thomas Hospital, Chetthipuzha, is marked as Exhibit X1.

In the light of complainant  version and evidence on record, we would like to consider the following points.

1. Whether the complaint is maintainable or not?
2. Whether there is any deficiency in service or unfair trade practice on the part of the opposite parties
3. If so, what are the reliefs and costs?

Point No. 1

The specific case of the complainant is that in 2019, the second opposite party with whom the complainant maintains an NRI account, canvassed him to join the medical insurance policy provided by the first opposite party. The second opposite party deducted an amount of ₹ 18,600/- (Rupees eighteen thousand six hundred only) from the account of the complainant on 22.10.2019 and enrolled his name in the medical insurance policy of the first opposite party. In the complaint, it is alleged by the complainant that at the time of availing the policy, the second opposite party made him believe that the policy had coverage in India and abroad and it is further alleged that he has not signed the policy enrollment form. The complaint was resisted by the first opposite party, contending that the complaint is not maintainable before this commission on the ground that when there is an allegation of fraud and misrepresentation needs, detailed evidence is required, and in such circumstances, only the civil court has  jurisdiction.

On going through the complaint and the proof affidavit filed by the complainant, we can see that, even though there is an averment in the complaint to the effect that the complaint had not signed in the enrollment form, the complainant did not stick to that allegation. Moreover, the complaint states that the first opposite party has sent an OTP to confirm the enrollment form. It is pertinent to note that the complaint is filed by the complainant and not through an agent or lawyer. The main allegation of the complaint is that the opposite party illegally repudiated his claim for reimbursement of treatment expenses for COVID-19. On going through the proof affidavit filed by the complainant, we can see that he did not reiterate the averments in the complaint. Therefore, we are of the opinion that the complaint is maintainable before this commission.

Point Nos. 2 & 3.

It is proved by Exhibit A1, which is a group Medicare Certificate of insurance issued by the first opposite party to the complainant, that he and his wife, Anita Joseph and two children were insured under the said policy. On perusal of Exhibit A1, we can see that the policy was valid from 21.10.2019 to 20.10.2020 and the sum assured was ₹ 1,00,000/- (Rupees one lakh only) each for the insured persons. Exhibit A2 proves that the complainant was admitted to  St. Thomas Hospital at Chethipuzha on 06.11.2021 and diagnosed with covid 19 category C mild and treated there as an inpatient till 09.11.2021. The complainant had paid ₹ 80,168/- (Rupees eighty thousand one hundred and sixty eight only) for the treatment vide Exhibit A3. The first opposite party repudiated the claim of the complainant, stating that the complainant has had a known case of Obstructive Sleep Apnea since June 2019 and the same has not been disclosed in the proposal form.

According to the first opposite party, they repudiated the claim of the complainant as per clause section 4(7) of the terms and conditions of the policy. The first opposite party has the right to cancel the policy in case of misrepresentation and nondisclosure of the material facts. In order to substantiate their claim, the first opposite party relied on Exhibit X1 treatment record.

On going through Exhibit X1, we can see that the complainant consulted a doctor at St. Thomas Hospital Chethipuzha on 18.02.2019 with the complaints of Sleep Apnea and advised CPAP. He again consulted the doctor on 22.06.2019, complaining of occasional sleep discomfort and a sleep study was conducted. He is advised to take medicine for one month. On going through Exhibit X1 we can see that after that, he consulted the doctor only on 22.05.2021 with the complaint of hypertension and dyslipidemia. On going through the medical records. We cannot see that the complainant was regularly on medication for sleep apnea.

The main reason for the repudiation of the claim is that the deceased had suppressed the material facts of his previous ailment when the policy was taken. Admittedly, the complainant underwent the treatment for the covid 19. Hence, we are of the view that the main question is whether there is any nexus between ailment and pre-existing disease.  There is nothing on record that may show that ailment of Obstructive Sleep Apnea may lead to COVID-19.   Hon'ble Supreme Court, in the case of  Sulbha Prakash Motogaonkar and Others Vs. Life Insurance Corporation of India and Others 2021 13 SCC 561 decided on 05.10.2015 observed as under:"6.……. The death of the insured due to ischemic heart disease and myocardial infarction had nothing to do with his lumbar spondylitis with PID with sciatica. In our considered opinion, since the alleged concealment was not of such a nature as would disentitle the deceased from getting his life insured, the repudiation of the claim was incorrect and not justified".

Subsequent to the above judgment of the Hon'ble Supreme Court, National Consumer Dispute Redresal Commission in various cases, relying on the judgment of Sulbha Prakash Matogaonkar and Others (supra), have observed that if there is no nexus between the material fact/disease, which was not disclosed and the cause of death, the insurance company's action of repudiating the claim on the ground of suppression of material facts/nondisclosure of pre-existing ailment is not correct.  Some of these cases are listed below:

The Hon'ble National Commission, in the case titled Life Insurance Corporation of India Vs. Sunita & Others 2020 SCC OnLine NCDRC 710 has held in Para-9 to 11 as under: "8. In the present case, the deceased assured was suffering from diabetes mellitus and chronic liver disease when brought to the hospital. But, the death was due to cardiac arrest. In our view, the cause of death is nowhere connected to his pre-existing disease. Our view dovetails from the decision of the Hon'ble Supreme Court in the Civil Appeal No. 8245 of 2015 titled Sulbha Prakash Motegaoneker v. Life Insurance Corporation of India, decided on 05.10.2015, wherein it was observed that suppression of information regarding any pre-existing disease, if it has not resulted in death or has no connection to cause of death, would not disentitle the claimant for the claim.

          In Life Insurance Corporation of  India Vs. Jyotsna Rawal, Revision Petition No. 864 of 2018 decided on 08.05.2018, National Commission  held as under:

8……….. In this context, I would like to rely upon the decision of the Hon'ble Supreme Court in Civil Appeal No.8254 of 2015 in the case of Sulbha Prakash Motegaonkar&Ors. Vs. Life Insurance Corporation of India decided on 05-10-2015. This was the case where the deceased died due to Ischemic Heart disease and myocardial infarction. There was a concealment of lumbar spondylitis with PID with sciatica, and therefore, the insurance company repudiated the claim. Hon'ble Supreme Court held that it was not the case of the insurance company that the deceased was suffering from life-threatening disease which could or did cause the death of the insured. The Court observed as below:

"We are of the opinion that the National Commission was in error in denying to the appellants the insurance claim and accepting the repudiation of the claim by the respondent. The death of the insured due to ischemic heart disease and myocardial infarction had nothing to do with his lumbar spondylitis with PID with sciatica. In our considered opinion, since the alleged concealment was not such a nature as would disentitle the deceased from getting his life insured, the repudiation of the claim was incorrect and not justified.

In Neelam Chopra Vs. Life Insurance Corporation of India and Ors, Revision Petition No. 4461 of 2012 decided on 08.10.2018, NCDRC held as under :

"13.    From the above observations of the Hon'ble Supreme Court, it is clear that suppression of any information relating to a pre-existing disease, if it has not resulted in death or has no direct relationship to the cause of death, would not completely disentitle the claimant for the claim."

In Lachman Sarup Vs. LIC of India, Revision Petition No. 42 of 2012 decided on 04.02.2019, National Commission  held  as under :

7………..Even if it is presumed for the sake of arguments that she had not succumbed to the injuries which she sustained when she fell from the stairs, the fact remains that the claim could not have been denied unless it was shown that she had died on account of suffering from Kochi's Chest. No material has been placed before this commission to show that Kochi's Chest by itself was a life threating disease even at the time when the deceased insured is alleged to have died. The onus was upon the insurer to prove either that the deceased insured had died on account of she suffering from Kochi's Chest or that Kochi's Chest was by itself a life threating disease. Therefore, relying upon the decision of the Hon'ble Supreme Court in Sulbha Prakash (supra),  I hold that the repudiation of the claim was not justified.

In Bajaj Allianz General Insurance Co. Ltd. Vs. Usha P Joshi and Ors., First Appeal No. 48 of 2012 decided on 01.12.2019, NCDRC observed as under:

"13……The appellant has failed to show that diabetes, hypertension, and angina had any nexus with 'SYNCOPE' for which the respondent was treated and the claim put up."

18…….The appellant, however, has failed to bring to my notice any proved fact in support of the contention that there was suppression of any material information or concealment of a pre-existing disease which had the nexus with the disease for which the respondent/complainant was treated in USA and for which she had put up her claim.  It is noteworthy that the present claim is under 'travel secure policy' to redeem the insured for the expenses for the treatment of an ailments abroad. The appellant has failed to prove that the ailment with which the respondent/complainant had taken treatment while in the USA had any nexus with her earlier condition of diabetes or two/three fainting episodes or hypertension, etc., and that she had deliberately concealed her condition of "SYNCOPE" for which she was treated in USA.

In Pratibha Bevinal Vs. Metlife India Insurance Co. Ltd., Consumer Complaint No. 88 of 2011 decided on 07.10.2022, National Commission held as under :

7………This Commission in Revision Petitions (supra) has also been guided by this judgement of the Hon'ble Supreme Court and these orders have attained finality. In the instant case, the opposite party's ground for repudiation of the policy is the concealment of a heart condition and diabetes mellitus. However, the cause of death of the DLA is a road accident due to rash and negligent driving by a motorcyclist. I am, therefore, of the view that the matter is squarely covered by Sulbha Prakash Motegaonkar (supra), and therefore, the complaint is liable to succeed.

Therefore, we are of the opinion that the first opposite party has committed a deficiency in service by not honouring the genuine claim of the  Complainant for the reimbursement of treatment expenses. Exhibit A3 proves that the complaint had spent ₹ 80,168/- (Rupees eighty thousand one hundred and sixty eight only) for his treatment at St.Thomas Hospital, Chetthipuzha. No doubt, the illegal repudiation of the claim of the complainants by the first opposite party has caused much mental agony and hardship to the complainant, for which the first opposite party is liable to compensate. As a result, we allow this complaint and pass the following order.

We hereby direct the first opposite party to pay ₹ 80,168/- (Rupees eighty thousand one hundred and sixty eight only) to the complainant with an interest @9%per annum from 21.11.2022. i.e., the date on which this complaint is filed till realization.

We hereby direct the first opposite party to pay ₹ 25,000/- (Rupees twenty five thousand only) to the complainant as compensation for the deficiency in service on the part of the opposite parties.

We hereby direct the first opposite party to pay ₹ 3,000/- (Rupees three thousand only) as the cost of this litigation.

Pronounced in the Open Commission on this the 29^th day of July, 2024

Sri. Manulal V.S, President   Sd/-

    Smt. Bindhu R.  Member        Sd/-

    Sri. K.M. Anto. Member         Sd/-

APPENDIX :

Exhibits from the side of the Complainant :

A1     -        Copy of the Enrolment form

A2     -         Copy of the discharge summery  from St. Thomas Hospital, dated            

                     09.11.2021

A3     -         Copy of the expense letter issued  from St. Thomas Hospital, dated            

                     09.11.2021

A4     -        Copy of claim rejection form.

A5     -        Copy of the printout of e-mail dated 27.04.2022

Exhibits from the side of the Opposite Parties :

B1      -        Copy of the terms and conditions

Exhibit marked through witness:

X1       -          Treatment records from St. Thomas Hospital

By Order,

      Sd/-

                                                                                               Assistant Registrar