IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, ALAPPUZHA
Monday the 21stday of March, 2022.
Filed on 05.03.2021
Present
- Sri.S.Santhosh Kumar BSc.,LL.B (President )
- Smt. Smt.C.K.Lekhamma, B.A, LLB (Member)
In
CC/No.63/2021
between
Complainant:- Opposite party:-
Sri.Jeni Esther John 1. CholamandalamM.S.General
Malikuttiyil House Insurance Company Limited
Erazha North Represented by The Director
Chettikulangara.P.O New No. 319, Old No.154
Mavelikkara Shaw Wallace Building, 2nd Floor
Alappuzha-690106 ThambuChetty Street
(Adv. Viswabhadran) Parry’s Corner, Chennai-600001
(Adv. C.Muraleedharan)
2. The Bank of Baroda
Rep. by The Director
Suraj Plaza Gnj. Baroda-390005
Pin.0265/2361852
(Adv. P.K.Mathew)
3. The Branch Manager
Bank of Baroda, Mavelikkara
Alappuzha
(Adv. P.K.Mathew)
O R D E R
SRI. S.SANTHOSH KUMAR (PRESIDENT)
Complaint filed u/s 35 of the Consumer Protection Act,2019
1. Material averments briefly stated are as follows:-
Complainant joined a health policy with 1st opposite party M/s Cholamandalam M.S General Insurance company Ltd. and the policy is valid from 7/11/2019 to 6/11/2020. Complainant is having a savings bank account with 3rd opposite party M/s Bank of Baroda, Mavelikara Branch. The Branch Manager induced the complainant as a customer of the bank and directed to the insurance company agents to meet her and both of them induced and convinced her with brochures and chart that the health policy is good, attractive and it covers all treatment expenses. It was assured that the policy covers 60 days pre hospitalization expenses, all impatient hospitalization expenses with single occupancy AC room and 90 days post hospitalization expenses. They convinced that it covers all diseases and full expenses and due to the inducement complainant joined the health policy.
2. During the period of insurance policy complainant underwent treatment and surgery. All the treatment records were sent to the insurance company. However for silly reasons they are delaying reimbursement and finally rejected the claim with some baseless allegations. Complainant sustained mental agony and physical strain due to the act of opposite parties.
3. In the policy certificate itself they mentioned that pre-existing disease is not applicable, but the claim was rejected on some baseless allegations. There is deficiency of service from the part of opposite parties.Hence the complaint is filed for realizing an amount of Rs. 1,43,000/-.
4. 1st opposite party filed a version mainly contenting as follows:-
There is absolutely no deficiency in service on the part of this opposite party. The claim of the complainant was analyzed and deputed special investigation team M/s Optimus for verifying the medical records from the treated hospital and it was found that the complainant had pre-existing diseases prior to the inception of policy which was not disclosed. Hence the claim was repudiated on the basis of the policy conditions. Hence the complaint is not maintainable and it may be dismissed in-limine .
5. This opposite party issued a Group Health Insurance Policy to the complainant for the period from 7/11/2019 to 6/11/2020 and the sum assured was Rs. 3lakhs subject to terms, conditions and exclusion clause of the policy. Complainant submitted a claim form on 25/8/2020 for medical expenses under gone by her in Paul’s Hospital, Cochin for a period from 19/8/2020 to 20/8/2020. On perusal of hospital records of M/s VSM hospital , Mavelikara it was found that the complainant had undergone treatment for Sinusitis and Migraine as on 15/6/2019 prior to the inception of policy and the same was not disclosed at the time of obtaining the policy. This is a non disclosure of a material fact and the policy was obtained by suppressing this fact. Hence the policy is void abinitio and no claim can be entertained on this policy. Policy is issued on the basis of good faith and if material facts are not disclosed at the time of obtaining policy it become void. As per exclusion clause 3.2 of the policy pre-existing diseases are not covered by the policy. Hence a repudiation letter was sent on 31/10/2020 high lighting the point. Hence there is no deficiency of service from the part of this opposite party and so the complaint may bedismissed with compensatory cost.
6. Opposite parties 2 and 3 filed a version mainly contenting as follows:-
The complaint is frivolous, vexatious, and scandalous and is filed for abusing the process of this commission. These opposite parties are not necessary parties to the case. There is no privity of contract between the complainant and these opposite parties. Information was not given to these opposite parties regarding the repudiation of claim by 1st opposite party.
7. It is true that the complainant is having a savings account with 3rd opposite party and she joined the health policy with the 1st opposite party and a sum of Rs.2915/- was transferred from her savings account to the account of the opposite party on 7/11/2019 by way of cheque. The allegation that the manager of 3rd opposite party induced the complainant to join the policy is false. The Bank is not an agent of the 1stopposite party and there is no such privity of contract. 1st opposite party had issued a group health insurance policy to the complainant for a period from 7/11/2019 to 6/11/2020 and the insured sum is Rs.3 lakhs. When the claim was analyzed by the 1st opposite party it was noticed that complainant was having pre-existing disease which was not disclosed in the proposal and hence claim was repudiated. These opposite parties has nothing to do with the claim and its refusal. It is between the insured and the insurer. There is no deficiency of service from the part of these opposite parties and hence the complaint may be dismissed with compensatory cost.
8. On the above pleadings following points were raised for consideration :-
1) Whether there is anydeficiency ofservice from the part of opposite parties as alleged?
2) Whether the 2nd and 3rd opposite parties are liable for repudiation of claim?
3) Whether the complainant is entitled to realize an amount of Rs.78,000/- being the treatment expenses from the opposite party?
4) Whether the complainant is entitled to realize an amount of Rs. 40,000/- as compensation for deficiency of service from the part of opposite parties?
5) Whether the complainant is allowed to realize an amount of Rs. 20,000/- as traveling expenses legal and other expenses as prayed for?
6) Reliefs and Cost.
9. Evidence in this case consists of the oral evidence of PW1 and Ext.A1 to A5, A6 series, A7, A8, A9series and A10 from the side of the complainant and the oral evidence of RW1, 2 and Ext.B1 to B6 from the side of opposite parties.
10. Point No. 1 to 5:-
PW1 is the complainant in this case. She filed an affidavit in tune with complaint and marked Ext.A1 to A5, A6 Series, A7,A8, A9series and A10. During cross examination of PW1 Ext.B1 was marked.
11. Rw1 is the Deputy Manager of the 1st opposite party. She filed an affidavit in tune with the version and marked Ext.B2 to B6.
12. RW2 is the Asst. Manager of 3rd opposite party during relevant period. He filed an affidavit in tune with the version.
13. PW1, the complainant is a savings bank account holder of M/s Bank of Baroda at its Mavelikara branch. According to her then bank manager and one Anshad who is a staff of 1st opposite party M/s Cholamandalam MS General Insuarnce Co. Ltd. contacted her and requested to join a medi claim policy offered by 1st opposite party. Accordingly she joined a policy for a period one year from 7/11/2019 to 6/11/2020. During the policy period complainant underwent treatment and surgery at M/s Paul’s hospital, Ernakulam . After the treatment she sent all records in original to the insurance company claiming the amount.Initially they demanded more documents and it was also submitted.However the claim was repudiated on a contention that she had pre-existing disease and it was not disclosed in the proposal form. According to her the rejection was on baseless allegations which amount to deficiency of service. Hence the complaint is filed for realizing an amount of Rs.78,000/- as treatment expenses, Rs.5000/- as interest , Rs.5000/- as traveling expenses, Rs. 20,000/- for mental agony, Rs. 20,000/- for physical strain, Rs.10,000/- for Legal & Other Procedural expenses and Rs. 5000/- for other expenses.(Rs. 1,43,000/- in total). First opposite party filed a version admitting the policy.According to them a group health insurance policy was insured to the complainant for a period from 7/11/2019 to 6/11/2020 and the total sum assured was Rs. 3lakhs. She submitted a claim form on 25/8/2020 for medical expenses for a period from 19/8/2020 to 20/8/2020. However on analysis of the claim and investigation it was noticed that she had under gone treatment on 15/6/2019 at M/s VSM hospital ,Mavelikara for Sinusitis and Migraine. The policy was obtainedby not disclosing preexisting disease.As per exclusion clause No.3.2 Pre existing disease are not covered by the policy and hence the claim was rightly repudiated. Hence they prayed for dismissal of the complaint. Opposite parties 2 and 3 filed a joint version admitting that Pw1 is having SB account with 3rd opposite party. However they have no connection with the joining of health insurance by PW1. A cheque for Rs.2915/- from the savings bank account was issued to the 1st opposite party on 7/11/2019 as per request of the complainant.They denied the allegation that the manager of the 3rd opposite party induced complainant to join the health insurance policy. According to them they are not necessary party and they have no role in repudiating the claim. However in para.4 they supported the averment of 1st opposite party that the claim was repudiated as per exclusion clause 3.2 regarding pre existing disease. Complainant got examined as PW1 and Ext.A1 to A10 were marked. During her cross examination copy of cheque issued to 1st opposite party for joining the medicalim policy was marked as Ext.B1. The Deputy Manager of 1st opposite party was examined as RW1 and Ext.B1 to B5. However it was noticed that Ext.B1 was already marked during the cross examination of PW1 and without noticing the same the documents produced by RW1 were marked as Ext.B1 to B5 and so it was rearranged as Ext.B2 to B6. The then Asst. Manager of 3rd opposite party bank was examined as RW2. The learned counsel appearing for the complainant filed an argument note and heard learned counsel appearing for the opposite parties.
14. The fact that PW1 had availed medicalimpolicy from the 1st opposite party for a period of one year from 7/11/2019 to 6/11/2020 is not in dispute since it is proved by Ext.A1(Ext.B2). It is also an admitted case that PW1 had undergone treatment at M/s Paul’s hospital, Ernakulam. Ext.A4 is the discharge bill dtd. 20/8/2020 from which it is seen that PW1 was admitted on 19/8/2020 and discharged on 20/8/2020. The amount covered by Ext.A4 discharge bill is Rs.66,485/-. Ext.A5 is the receipt by which the amount was paid by PW1 to the hospital. Ext.A6 series are 9 bills by which PW1 purchased medicines and scan bill amounting to Rs.12,200/-. Ext.A10(Ext.B3) is the discharge summary from which it is revealed that hysterectomy was done upon PW1. As the admission of PW1 at Paul’s hospital is admitted. The claim was repudiated by 1st opposite party by Ext.A8( Ext.B6) on 31/10/2020.The reason for repudiation is noted as follows:-
“ On perusal of the claim documents, it is observed that the insured is K/C/O Sinusitis, Migraine as per the history recorded in the discharge summary, this information is not disclosed in the proposal form while proposing for insurance. In view of this non-disclosure of material information, the contract of insurance becomes void and no claim is payable under this policy.”
15. So the reason for repudiation of the claim was that PW1 had Sinusitis and Migraine and it was not disclosed in the proposal form. Hence according to 1st opposite party as per clause 3.2 of Ext.B2 conditions of policy they are entitled to repudiate the claim. 3.2 of Ext.B2 reads as follows:-
“ Pre-Existing Disease(PED) :-Benefits will not be available for any pre-existing condition(s) as defined in the policy, until 24 consecutive months of continuous coverage have elapsed, since inception of the first policy with us”
16. Now the question to be looked into is whether there was non disclosureof pre-existing disease by the complainant in the proposal form. Ext.A1 (Ext.B2) is the Certificate of Insurance issued by 1st opposite party to PW1. In the insured details column pre-existing disease is shown as NotApplicable(NA). So the learned counselappearing for the complainant pointed out that pre-existing disease column was shown as not applicable and so PW1 was not bound to disclose any pre-existing disease,since it was not a pre condition for issuing the policy. Per contra relying upon Ext.B5 the learned counsel appearing for the 1st opposite party pointed out that on 22/3/2019 PW1 had under gone treatment at M/s VSM hospital, Thattarambalam and past illness and treatment is shown as Sinusitis. Admittedly the policy was taken on 7/11/2019 and so PW1 was knowing about the treatment at VSM hospital done on 22/3/2019 and it was not disclosed, it was contended.
17. First of all it is noticed that as per Ext.B5 it is seen that PW1 had undergone treatment at M/s VSM hospital on 22/3/2019 for Sinusitis and Migraine and later on 5/8/2020 she consulted in the same hospital with complaints of bleeding. On 12/8/2020 she was advised hysterectomy and later she consulted M/s Paul’s hospital, Ernakulam where hysterectomy was done. As pointed out by the learned counsel appearing for the complainant, Sinusitis and Migraine was effecting head and hysterectomy was in connection with gynic problems. So the pre existing disease had no connection with the treatment under gone at Paul’s hospital and so 1st opposite party cannot repudiate the claim under exclusion clause of 3.2 as pre-existing disease was not disclosed. The medical records issued from M/s VSM hospital is not sufficiently proved since the doctor was not examined as a witness. Marking of a document and proving the same is not one and the same. As held by the Hon’ble High Court In M/s PRS Hospital Killipalam, Thiruvananthapuram Vs. P. Anilkumar (2020 0 Supreme (Kerala) 883.
“There are four stages before a Court of law can rely upon a document. They are (i) marking of a document, (ii) admissibility of a document, (iii) proof of contents of the document and (iv) evaluation of the document. Reliance upon a document can be made by the court only if all the above four stages are complied with or satisfied. By the mere marking of a document, it does not become admissible in evidence. Further, the marking of a document and being admissible in evidence, will still not render the contents of a document as proved. When a document, admissible in evidence, is marked, still to be relied upon by the courts, its contents will have to be proved. For the contents of a document to have a probative value, the person who wrote the contents or is aware of the contents and its veracity must be invited to give evidence about it. It is thereafter the last stage ie, evaluation takes place. Evaluation of the document is a judicial exercise. Unless all these stages are done, a court of law cannot rely upon any document produced or marked before it.”
18.We do agree that this is applicable to complainant also. However the documents produced from the side of the complainant are admitted and the claim was repudiated only on a contention that pre-existing disease was not disclosed. So it was the duty of the 1st opposite party to examine the doctor who issued Ext.B5 treatment records and prove that PW1 had any pre-existing disease and it was not disclosed.
19. The cross examination of PW1 revealsthat she herself has exonerated opposite parties 2 and 3. She stated that the staff of 3rd opposite party came to help the staff of 1st opposite party personallyand there was no connection with the bank. She also stated that there was no deficiency of service from the part of opposite parties 2 and 3 in refusing the claim. The cross examination of RW1 who is the Deputy Manager of 1st opposite party also shows that opposite parties 2 and 3 have no involvement in settling the claim. The cross examination of RW1 bythe learned counsel appearing for the complainant shows that shepretended ignorance for most of the questions. She doesn’t know whether pre-existing disease of PW1 is coming under exclusion category. She admitted that in Ext.A1(Ext.B2) the column pre-existing disease is shown as not applicable(NA). She doesn’t know whether the pre-existing disease and the treatment incurred by PW1 areone and the same. It was also contended by the learned counsel appearing for the complainant that the policy conditions were not sent to the complainant along with policy certificate.
20. The learned counsel appearing for the complainant relied upon a ruling of Hon’ble Supreme Court in Manmohan Nanda vs. United India Assurance Co. Ltd &Anr. (2021 SCC Online SC 1181) Para.69 reads as follows:-
“The object of seeking a mediclaim policy is to seek indemnification in respect of a sudden illness or sickness which is not expected or imminent and which may occur overseas. If the insured suffers a sudden sickness or ailment which is not expressly excluded under the policy, a duty is cast on the insurer to indemnify the appellant for the expenses incurred there under.”
21. In this context we are enlightened by the decision of the Hon’ble High Court of Punjab and Haryana in IFFCO TOKIO General Insurance Company Ltd. Vs. Permanent Lok( LAWS (P &H) 2011 838)
“Having heard learned counsel for the petitioner appellant we are of the considered view that no interference of this Court would be warranted in the view taken by the learned single Judge as well as the LokAdalat. The law is well settled with regard to the exclusion clauses in standard form of contracts. When the bargaining powers of the parties is unequal and a consumer has no real freedom to contract then such a power may be considered unfair. The principle deducible from various precedents is that the Courts would not enforce and when called upon to do so, strike down such an unfair and unreasonable clause in a contract, entered into between parties who are not equal in bargaining power, For instance, the above principle would apply where the inequality of bargaining power is the result of the great disparity in the economic strength of the contracting parties. It would also apply where a man has no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or rules may be. The types of contract to which the principle formulated above applies to terms which are so unfair and unreasonable that they shock the conscience of the Court. They are opposed to public policy and require to be adjudged void. In that regard we may place reliance on the judgment of Hon’ble the Supreme Court rendered in the case of Central Inland Water Transport Corporation Ltd. Vs. BrojoNathGanguly.
In the present case the exclusion clause No.1 would not apply to the consumer because premium for three years stand already paid and claim cannot be deemed to be made in respect of the period of three years. Moreover, the precondition existed in the year 2002, which was five years prior to acquiring the insurance policy. This result could be achieved if principle of interpretation known as ‘contra proferentem’ is applied. The application of these techniques means that any ambiguity in a clause excluding liability should be construed against the proferens and in favour of the party against whom the clause is pleaded. [ See Chapter III, Control of Exclusion Clauses in England and India by M.M.Kumar] Moreover, we find that the exclusion clause No.1 of the policy, as noticed in preceding para 2, on the basis of which the claim of respondent No.2 was declined, is unfair and unreasonable clause, which cannot be acted upon by the Insurance Company.”
22. It was held by the Hon’ble Supreme Court in Omparakash Vs. Reliance General Insurance on 4/10/2017 in Civil Appeal No. 15611 of 2017.
“Rejection of the claim on purely technical grounds in a mechanical manner will result in loss of confidence of policy – holders in the insurance industry. It needs no emphasis that the Consumer Protection Act aims at providing better protection of the interest of consumers. It is a beneficial legislation that deserves liberal construction. This laudable object should not be forgotten while considering the claims made under the Act.”
23. So from the above discussion it is crystal clear that the repudiation of the genuine claim by the 1st opposite party on a contention that PED was not correct. As discussed earlier in Ext.A1 policy it is stated that PED not applicable.Further PED which was brought through Ext.B5 had no connection with the ailment for which the claim application was filed. Further the existence of PED was not proved sufficiently since the doctor who issued Ext.B5 was not examined as a witness.
24. PW1 is claiming an amount of Rs.78,000/- as treatment expenses. Ext.A4 is the discharge bill for Rs. 66,485/-. Ext.A6 series are tax invoices and scan receipt amounting Rs.12,200/-.So PW1 is entitled for an amount of Rs. 78,685/- and she has claimed Rs.78,000/- as treatment expenses.
25. From Ext.A1 and Ext.B2 it is seen that PW1 paid an amount of Rs. 2915/- as total premium. When she presented a bill for Rs. 78,000/- it was repudiated on a contention that there was pre-existing disease. Definitely one will sustain mentalagony if a genuine claim is repudiated without sufficient reason. PW1 is claiming an amount of Rs. 20,000/- for mental agony and Rs. 20,000/- for physical strain. According to us an amount of Rs.25,000/- can be allowed as compensation for deficiency of service. These points are found accordingly
26. Point No.6:-
In the result complaint is allowed in part.
A) Complainant is allowed to realize an amount of Rs. 78,000/- along with interest @ of 9% from 31/10/2020(date of repudiation Ext.B6) till realization from the 1st opposite party.
B) Complainant is allowed to realize an amount of Rs.25,000/- from the 1st opposite party as compensation.
C) Complainant is allowed to realize an amount of Rs.3000/- as cost from the 1st opposite party.
The order shall be complied within one month from the date of receipt of this order.
Dictated to the Confidential Assistant, transcribed by him corrected by me and pronounced in open Commission on this the 21st day of March, 2022.
Sd/-Sri.S.SanthoshKumar(President)
Sd/- Smt.C.K.Lekhamma (Member)
Appendix:-Evidence of the complainant:-
PW1 - Jeni Esther John (Complainant)
Ext.A1 - Certificate of Insurance
Ext.A2 - Confirmation letter dtd. 21/10/2020
Ext.A3 - Certificate dtd.21/10/2020
Ext.A4 - Discharge Bill dtd. 20/8/2020
Ext.A5 - Receipt dtd. 20/8/2020
Ext.A6 series - Bills
Ext.A7 - Copy of letter
Ext.A8 - Copy of Repudiation Letter
Ext.A9series - Certificates(2nos)
Ext.A10 - Copy of Discharge Summary
Evidence of the opposite parties:-
RW1 - Manjusha(Dpty Manager 1st OP)
RW2 - ArunVijay(Asst. Manager 3rd OP)
Ext.B1 - Policy copy with conditions
Ext.B2 - Certificate of Insurance
Ext.B3 - Claim Form
Ext.B4 - Copy of Discharge Summary
Ext.B5 - Medical Records
Ext.B6 - Copy of letter of repudiation
//True Copy ///
To
Complainant/Oppo.party/S.F.
By Order
Assistant Registrar
Typed by:- Br/-
Compared by:-
