KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

VAZHUTHACAUD, THIRUVANANTHAPURAM

APPEAL Nos. 838/2017 &A 705/2018

COMMON JUDGMENT DATED: 28.02.2024

(Against the Order in C.C. 709/2014 & 710/2014 of DCDRC, Ernakulam)

PRESENT:

HON’BLE JUSTICE SRI. K. SURENDRA MOHAN     : PRESIDENT

SRI. AJITH KUMAR D.                                                    : JUDICIAL MEMBER

SRI. RADHAKRISHNAN K.R.                                        : MEMBER

APPEAL No. 838/2017

APPELLANT:

N. Kavirajan, S/o Narayanan, Vimala Bhavan, Bharanikavoo North P.O., Pallickal, Kayamkulam-690 503.

(Party in person)

                                                Vs.

RESPONDENTS:

1. M/s E-Meditek (TPA) Services Ltd., 35/292, 1^st Floor, Challirickal Building, Pottakuzhi Road, Peramparambil Lane, Mamangalam, Palarivattom P.O., Kochi-682 025 represented by its Manager.

2. M/s Bajaj Allianz General Insurance Co. Ltd., GE Plaza, Opp: Gunjan Cinema, Airport Road, Blue Hill Society, Yerwada, Pune, Maharashtra-411 006 represented by its Authorized Signatory. 

(By Adv. Rinu S. Aswan for R2)

APPEAL No. 705/2018

APPELLANT:

V. Vimalabhai, W/o N. Kavirajan, S/o Narayanan, Vimala Bhavan, Bharanikavoo North P.O., Pallickal, Kayamkulam-690 503.

(Party in person)

                                                Vs.

RESPONDENTS:

1. M/s E-Meditek (TPA) Services Ltd., 35/292, 1^st Floor, Challirickal Building, Pottakuzhi Road, Peramparambil Lane, Mamangalam, Palarivattom P.O., Kochi-682 025 represented by its Manager.

2. M/s Bajaj Allianz General Insurance Co. Ltd., GE Plaza, Opp: Gunjan Cinema, Airport Road, Blue Hill Society, Yerwada, Pune, Maharashtra-411 006 represented by its Authorized Signatory.    

COMMON JUDGMENT

SRI. RADHAKRISHNAN K.R.: MEMBER

These appeals are filed against the Common Order in C.C. Nos. 709/2014 & 710/2014 dated 14.11.2017 on the file of the District Consumer Disputes Redressal Commission, Ernakulam (District Commission for short).  As per the order, the District Commission dismissed the complaints.  Aggrieved by the said order the complainants have filed these appeals.

2.   Brief details of the complaints are as follows:  Complainant in C.C. No. 710/2014 (appellant in A 705/2018) is a retired employee of Steel Authority of India Ltd (SAIL) and the complainant in C.C. No. 709/2014 (appellant in A 838/2017) is her husband. The retired employees of SAIL Ltd. and their spouse are covered by a group medi-claim insurance policy issued by the 2^nd opposite party, M/s Bajaj Allianz General Insurance Co. Ltd. (insurer for short). The complainants have renewed the policy for a period of one year from 14.01.2013 by paying premium of Rs. 4,597/-.  The 1^stopposite party is M/s E-Meditek (TPA) Services, the Third Party Administrator, (TPA for short), authorised by the insurer for  processing the claims under the policy.  The complainants were admitted in M/s Amrita Ayurveda Hospital, Kollam. The complainant in C.C. No. 709/2014 was treated as inpatient from 19.07.2013 to 05.08.2013 and he has paid an amount of Rs. 23,256/- towards medical bills. The complainant in C.C. No. 710/2014 was admitted as inpatient from 12.08.2013 to 02.09.2013 and paid a hospital bill of Rs. 35,907/-.  The claim form with supporting documents  were submitted to the 1^st opposite party at Kochi,  who repudiated the claim on the ground that there was no such treatment being administered or any such investigative procedure being performed which support the need for hospitalization. 

3.  Notices were issued to the opposite parties.  They entered appearance and filed their version with identical pleadings.  According to them the claims are not payable as per exclusion clause 4.10 of the medi-claim policy issued for the benefit of the retired employees of SAIL.  Moreover, it was submitted that the District Commission has no jurisdiction to entertain the complaints.  The treatment was taken in Kollam and the complainants are residing in Alappuzha District.  Head Quarters of the 2^nd opposite party, who issued the policy, is at Pune.  Hence the District Commission, Ernakulam has no jurisdiction to entertain the complaint.  Hence, they prayed for dismissal of the complaints.

4.  Evidence in the cases consists of oral evidence of PW1 and Exts. A1 to A10 documents were marked in C.C. No. 709/2014.  Exts. A11 to A18 documents were marked in C.C. No. 710/2014.  The second opposite party examined DW1 and marked Exts. B1 to B4.  On the basis of the evidence adduced the District Commission dismissed the complaints.

5.  Heard and perused the records.  The appellants, who are senior citizens, appeared in person. The claims pertain to their ayurvedic treatment taken at Amrita Ayurveda Hospital, Kollam.  They submitted that the claim form and the connected papers were given to the office of the 1^st opposite party, TPA, at Ernakulam.  According to them both the opposite parties have offices in Ernakulam and the claims were submitted to the first opposite party, TPA, at Ernakulam.  Hence part of the cause of action has arisen at Ernakulam and therefore the District Commission, Ernakulam, has jurisdiction to entertain the complaints.  As is evidenced from the discharge summaries (Exts. A2 & A12) issued by Amrita Ayurveda Hospital, the complainants were suffering from the ailments and treatment was taken as stated in the respective discharge summaries.  Admission was not for diagnostic purpose alone and it was for the treatment for the ailments suffered by them.  This was clarified by the doctor of the hospital vide his letters dated 09.10.2013 (Exts. A5 and A15).  In spite of submitting the bills and clarification by the treating doctor of the hospital, and the frequent follow up with the Third Party Administrator there was no response from them.  Later, they repudiated the claims on flimsy grounds.  According to the appellants the licence of the TPA is suspended by the regulator Insurance Regulatory and Development Authority of India (IRDAI) for violation of the prescribed guidelines for TPAs and a copy of the said order was also produced. They submitted that there is deficiency in service on the part of the opposite parties/respondents and hence they prayed for allowing the complaints, with compensation and costs. 

6. The contentions of the second respondent are that the District Commission has no territorial jurisdiction to entertain the complaint and that the treatments were only for diagnostic purpose and hence the claims were repudiated as per clause 4.10 of the policy.  The TPA had obtained an expert opinion from the panel doctor who opined that the complainants/patients had not undergone any active line of treatment. There is no privity of contract between the complainants and the TPA. The District Commission rightly dismissed the complaints on merits and hence they prayed for confirming the order of the District Commission and dismiss the appeals.

7.  We have considered the submissions and examined the records.  It is admitted by the second respondent insurer that the appellants/complainants were covered under the Group Mediclaim policy issued to the previous employer of the appellant in A 705/2018, M/s SAIL, for a sum insured of Rs. 2 lakhs for the period from 01.01.2013 to 31.12.2013. They also submitted that the claims are processed and serviced by the 1^st respondent TPA, on their behalf as per the guidelines of the regulator. They recommend for payment or rejection of claims as per terms and conditions of the policy. According to the 2^nd respondent, the first respondent repudiated the claims after carefully going through the hospital records and obtaining an expert opinion.  They maintain that the repudiations were rightly done by the TPA and hence no interference by this Commission in the order of the District Commission is required.

8. The main points to be considered in these appeals are whether the complaints are maintainable before the District Commission, Ernakulam and whether the repudiation of the claims are justified. The appellants/complainants submitted the claim form and other supporting documents (Ext A3 and A13) to the office of the 1^st opposite party Third Party Administrator, situated in Ernakulam District. So far as the question of territorial jurisdiction of the District Commission is concerned, it is abundantly clear that the TPA’s office which handled the claims is located at Ernakulam.  Thus, a part of the cause of action arose at Ernakulam for servicing of the claims under the policy and therefore, the District Commission, Ernakulam had the jurisdiction to proceed with the case.  We also observe that the repudiation letter was issued by the head office of the first respondent, after having received the papers from their Ernakulam Office.  Moreover, version of the first opposite party was filed by the authorised representative from their Ernakulam office and version of the 2^nd opposite party was filed by the legal officer of their Ernakulam office.  DW1 is an officer of second respondent/second opposite party at Kochi.  As both the opposite parties had offices in Ernakulam and the claims were handled by the office of the first opposite party situated at Ernakulam, part of the cause of action arises at Ernakulam.  We do not find any merit in the assertion of the learned counsel for the second respondent/second opposite party that the District Commission, Ernakulam did not have the territorial jurisdiction to decide the present case.  The District Commission erred in finding that the complaints are not maintainable on the ground that they have no jurisdiction to entertain the complaint.   Hence we find that the complaints are maintainable before the District Commission, Ernakulam, as per section 11(2) of the Consumer Protection Act, 1986.

9.  The District Commission considered the complaints on merits as well. The complaints relate to claim for the expenses for ayurvedic treatment. Both appellants/complainants were treated as inpatients in Amrita Ayurveda hospital, Kollam, for different periods and the claims were submitted to the TPA. The TPA denied cashless service to the appellants.  So they subsequently submitted the claim form with treatment records and bills for reimbursement.  The claims were repudiated on the ground that they are not payable as per clause 4.10 of the medi-claim policy, which is reproduced below:

4.10: Charges incurred at Hospital or Nursing Home primarily for diagnostic, X-ray or laboratory examinations not consistent with Or incidental to the diagnosis and treatment of the positive existence or presence of any ailment, sickness or injury, for which confinement is required at a Hospital/Nursing Home. 

The repudiation letters dated 11.09.2013 (Ext A4/B4) and 24.12.2013 (Ext B3) were issued by the first respondent/first opposite party, TPA. The only reason for repudiation is that the admission in the hospital was only for diagnostic purpose etc. and not for treatment for any ailment, sickness or injury and hence claims are not payable as per clause 4.10 of the policy.

10.  On a perusal of the discharge summary (Ext A2 and A12) and other medical records we find that the complainants were admitted in the hospital and treated for the ailments suffered by them, viz., ‘Avabahukam’.  The complainants were admitted for specific diseases as is evident from the discharge summaries and clarification letters dated 9.10.13 (Ext A5 and A 15) of the treating doctor.  Hence the argument that they were admitted for diagnostic purposes etc. only is not tenable. The TPA/insurer failed to appreciate the intention of exclusion clause 4.10 of the policy. It is only to exclude those charges/inpatient claims relating to diagnostic/investigative procedures alone.  This clause has three parts which should be read in its true spirits.  Expenses for diagnostic procedures are also admissible if there is any positive existence of illness which requires hospitalization.  The respondents have conveniently taken or rather omitted a portion of the clause for justifying the repudiation of the claims.  According to the respondents they obtained an opinion from a Doctor who gave an expert opinion stating that there was no active line of treatment. Neither the Doctor was examined nor his report was produced.  There is nothing in evidence regarding the qualification or competency of the doctor who said to have given the opinion.  The decisions to repudiate the claims were arbitrary, without application of mind and misinterpreting the clause. The insurer mechanically endorsed the repudiation of the claims by the TPA. Hence repudiation of the claims as per clause 4.10 of the policy is arbitrary and hence not acceptable.

11. The basic role of a TPA is to act as an intermediary between the insurer and the insured, who facilitates cashless service and settlement/processing of health insurance claims. They are appointed by the insurance company. For their service they are paid a fixed per cent of the insurance premium as commission.  This is a part of the consideration (ie. premium) shelled out from the amount paid by the insured. This results in privity of contract between the insured and TPA as well.  However, it is to borne in mind that once the premium is collected and policy is issued, the insurer is duty bound to ensure to honour the commitments as per the terms of the contract. The claims of insured persons should not be left to the whims and fancies of the TPAs.  Repudiation of claims should be done by the insurer only as per IRDAI regulations. TPAs are only facilitators and they cannot go beyond their role by directly rejecting the claims. In this case the insurer had given a free hand to the TPA which is detrimental to the rights of the insurer and is in gross violation of the directions of the regulator.  It is unfortunate that these senior citizens had to run from pillar to post to get their genuine claims.

12. We observe that the certificate of registration of the TPA was suspended by the regulator, IRDAI, on 20.03.2018 for violation of their guidelines. We appreciate the timely intervention of the regulator for taking prompt action against the erring TPA. Inferior service in health insurance sector by a few adversely affects lot of insuring public. Refusing the eligible cashless service or wrongly repudiating the claims under mediclaim policies is not like other claims. This involves precious lives of human beings. Refusal of cashless service/wrong repudiation of health claims/delay in settlement of the claims etc may adversely affect further treatment of the patient/insured, especially for those who suffers from life threatening diseases. Proper decision should be taken at the right time and review mechanism should be effective.

13.  Based on the above discussion, we find that the claims are payable under the policy and that there is deficiency in service on the part of the opposite parties in wrongly repudiating the claims. In view of the above, the order of the District Commission is liable to be set aside. Considering the mental agony and hardships suffered by the appellants, we consider that an amount of Rs. 10,000/- each is a just and reasonable compensation.  Since the appellants are senior citizens and considering the long years of litigation we also award an amount of Rs. 15,000/- each as costs.

In the result, these appeals are allowed and the order dated 14.11.2017 in C.C. Nos. 709/2014 & 710/2014 of the District Commission, Ernakulam is set aside.  Consequently the complaints are allowed as under:

1. The opposite parties in C.C. No. 709/2014 are directed to pay the complainant Rs. 23,256/- (Rupees Twenty Three Thousand Two Hundred and Fifty Six only) with interest @ 8% per annum from the date of filing of the complaint till realization.
2. The opposite parties in C.C. No. 710/2014 are directed to pay the complainant Rs. 35,907/- (Rupees Thirty Five Thousand Nine Hundred and Seven only) with interest @ 8% per annum from the date of filing of the complaint till realization. 
3. The opposite parties are also directed to pay a compensation of  Rs. 10,000/- (Rupees Ten Thousand only) each to the complainants in both cases.
4. The opposite parties are also directed to pay costs of Rs. 15,000/- (Rupees Fifteen Thousand only) each in both cases. 
5. The above amounts shall be paid within one month from the date of receipt of a copy of this judgment failing which all the amounts shall carry interest @ 9% per annum from the date of default till realization. 

JUSTICE K. SURENDRA MOHAN  : PRESIDENT

                                    AJITH KUMAR  D. : JUDICIAL MEMBER

                                                                                                RADHAKRISHNAN K.R.  : MEMBER

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