Chandigarh

StateCommission

A/119/2024

UNITED INDIA INSURANCE COMPANY LIMITED - Complainant(s)

Versus

HARPAL SINGH AHLUWALIA - Opp.Party(s)

NITIN GUPTA

30 Sep 2024

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

UNION TERRITORY, CHANDIGARH

 

 

Appeal No.	119 of 2024
Date of Institution	14.03.2024
Date of Decision	30.09.2024

 

United India Insurance Company Limited, SCO No.855, 1^st Floor, NAC, Manimajra, Chandigarh through its Divisional Manager.

Appellant is now represented through duly authorised signatory of Regional office at SCO No.123-124, Sector 17-B, Chandigarh.

.…..Appellant/Opposite Party No.1.

Versus

1]      Harpal Singh Ahluwalia, aged 70 years S/o Sh. Joginder Singh Ahluwalia resident of H.No.160, Sector 9-B, Chandigarh.

…..Respondent/Complainant.

2]      Bank of Maharashtra, SCO No.88/89, Sector 17-C, Chandigarh through its Manager.

3]      Health India Insurance TPA Pvt. Ltd., No.406-412, 4^th Floor, Neelkanth Corporation Park Kirol Road Village Vidyavihar (West), Mumbai – 400086.

...Respondents/Opposite Parties No.2 & 3.

 

 

BEFORE:  JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT

                SH. RAJESH K. ARYA, MEMBER

               

Argued by:- 

 

Sh.  Nitin Gupta, Advocate for the appellant.

Ms. Nidhi Ayer, Advocate for Respondent No.1.

Sh. J. S. Bagga, Advocate for Respondent No.2.

Respondent No.3 exparte vide order dated 23.04.2024.

 

PER RAJESH K. ARYA, MEMBER

              The instant appeal has been filed by opposite party No.1 – United India Insurance Company Limited, appellant herein, against order dated 07.02.2024, rendered by the Ld. District Consumer Disputes Redressal Commission-II, U.T., Chandigarh, (hereinafter to be called as the District Commission), vide which, Consumer Complaint No.274 of 2020 filed by the complainant – Sh. Harpal Singh Ahluwalia (respondent No.1 herein) has been partly allowed qua opposite party No.1 and the same has been dismissed against opposite parties No.2 & 3. The Ld. District Commission directed appellant/opposite party No.1 to pay the sum assured i.e. Rs.5,00,000/- to respondent No.1/complainant alongwith interest @9% per annum from the date of filing of the complaint till the date of actual realization of the amount. It directed to comply with its order within 60 days from the date of receipt of its certified copy.

2]           The case of respondent No.1/complainant before the Ld. District Commission was that The Group Insurance Scheme was introduced by Opposite Party No.2 under the name "MAHA BANK SWASTHAYOJNA (Group Health Insurance Scheme)." Attracted by the benefits, the complainant agreed to open an account and take the policy. An executive of Opposite Party No.2 facilitated the completion of all formalities, including the signing of necessary documents and the complainant’s account (No. 60071873215) was opened in 2011. Consent for premium deduction through ECS was also obtained. On 31.01.2019, the complainant was admitted to Medanta Hospital for stabilization and evaluation, undergoing a coronary artery bypass graft (CABG) on 05.02.2019. At the time of hospital admission, he lodged a claim for a cashless facility with appellant/Opposite Party No.1. However, the claim was not approved and when inquired, Opposite Party No.1 mentioned technical difficulties without providing a specific reason. The complainant was assured that all expenses would be reimbursed. Due to the denial of the cashless facility and based on the assurance given by Opposite Party No.1, the complainant had no option but to pay Rs.6.5 lakhs to the hospital directly. After being discharged, he filed a reimbursement claim with Opposite Party No.1 in February 2019, which was acknowledged by it via email on 04.03.2019. Despite the passage of nearly 17 months and the service of a legal notice on 26.04.2019, no action was taken by the opposite parties to resolve the issue. Hence, respondent No.1/complainant filed consumer complaint before the Ld. District Commission.

3]           On the other hand, it was the contest by opposite party No.1 that the policy in question was issued to Bank of Maharashtra, with the complainant insured under Policy No.1116042818P106189739, effective from 26.09.2018, to 25.09.2019. It was acknowledged that the complainant was hospitalized at Medanta The Medicity Global Health Private Limited from 31.01.2019, to 15.02.2019 for the surgical procedure related to CAD (Coronary Artery Disease), HTN (Hypertension), Type 2 Diabetes Mellitus (T2 DM), CKD (Chronic Kidney Disease) and left ventricular failure. He was covered under the United India Insurance Maha Bank Swastha Yojana policy, with a basic sum insured of Rs.5 lakhs. According to medical records, the complainant had a history of hypertension and diabetes mellitus for 35 years and CAD for 15  years. He underwent a coronary angiography on 05.02.2019 along with multiple other investigations, including serum blood urea nitrogen, ultrasound (USG) report, X-ray, pulmonary function test, and ECG. It was further stated that hypertension and diabetes mellitus are pre-existing conditions. It was further stated that on 05.11.2019, the complainant was asked to provide certain documents and endorsements for policy continuity as there was a gap in coverage between the years 2016-17 and 2017-18. In letter dated 02.12.2020, the complainant admitted being unable to provide endorsements for the gap period. As there was a lapse in the insurance policy, the 2017-18 policy was considered a new policy. Consequently, claim was repudiated per the terms and conditions of the policy, specifically under exclusion clause 4 and sub-clause 4.1, as the pre-existing diseases were not covered under the policy.

4]           Opposite party No.2 also contested the complaint by filing its reply wherein it was stated that they are engaged exclusively in the banking business, while the insurance services offered to customers are entirely handled by opposite party No.1. It was further stated that they do not issue insurance policies as the insurance aspect is managed by Opposite Party No.1 and Opposite Party No.3. Therefore, any grievance from the complainant, if any, lies solely against Opposite Party No.1 and Opposite Party No.3.

5]          Despite proper service, Opposite Party No.3 failed to appear and as a result, it was preceded against ex parte order by the Ld. District Commission on 19.09.2022.

6]          Before us also, in appeal, none appeared on behalf of respondent No.3/opposite party No.3 despite due service, as such, it was proceeded against exparte vide order dated 23.04.2024.

1. The order of the Ld. District Commission has been challenged by the appellant/opposite party No. 1 – the Insurance Company, on the ground that the appellant is not liable to cover any expenses incurred for pre-existing conditions until 48 months of continuous coverage have elapsed, as per Exclusion Clause 4.1 of the Insurance Policy. It is further stated that, in this case, there was a gap in coverage and the 2017-18 policy was considered a new policy. Therefore, the complainant did not have continuous coverage for 48 months and the claim related to the pre-existing condition was rightly repudiated by the appellant. In support of contentions raised, the appellant has placed reliance on Sonu Vs. Birla Sun Life Insurance Co. Ltd. & Anr., 2017 (3) CLT 271; Reena Kansal Versus United India Insurance Company, I (2015) CPJ 523 (NC) and Vikram Greentech (I) Ltd. & Anr. Vs. New India Assurance Co. Ltd., Civil Appeal No.2080 of 2002 decided by Hon’ble Supreme Court of India on 01.04.2009 and another judgment of Hon’ble Apex Court in M/s Industrial Promotion & Investment Corporation of Orissa Ltd. Vs. New India Assurance Company Ltd. & Anr., Civil Appeal No.1130 of 2008 decided on 22.08.2016. Lastly prayer for setting aside of the impugned order has been made by the appellant.  
2.             On the other hand, on behalf of respondent No.1/complainant, it has been vehemently argued that since the opening of the bank account with respondent No.2 – Bank of Maharashtra, the insurance premium was automatically deducted from the complainant’s account by respondent No.2. In March 2023, the complainant received a letter from the appellant-insurance company stating that the insurance policy had been discontinued. Until the policy’s expiration, premiums were deducted automatically from the complainant's account. It was argued that the complainant wrote a letter on 21.05.2022 to respondent No.2 and respondent No.2 replied on 13.06.2022 confirming that the premium was debited by respondent No.2 from the customer’s account to the insurance company as mandated. It has further been argued that an agreement between the appellant and respondent No.2 stipulated that both parties were responsible for renewing the insurance policy in a timely manner, given sufficient balance in the complainant’s account. Despite having sufficient funds and standing instructions for premium deduction, neither respondent No.2 deducted the premium nor did the appellant-insurance company notify the complainant about the renewal. This negligence by both parties led to a lapse in coverage amounting to a deficiency in service and unfair trade practice. It has further been argued that there was no fault on the part of the complainant and he was being unfairly harassed. It has been contended that the insurance policy had been renewed periodically since its inception but the renewal was not done for the disputed period without any justification. Therefore, both the appellant and respondent No.2 are jointly and severally liable to pay the claim amount as the complainant’s claim is valid under the policy. Lastly, prayer for dismissal of the appeal has been made.
3.            Respondent No.2, during the course of arguments, supported the case of the appellant by stating that the premium for the period in question, was duly deducted by it and remitted to the appellant. To substantiate this fact, Counsel for respondent No.2 placed on record Account Statement starting from 23.05.2011 till 26.09.2023 showing the date when insurance premium was deducted. It has been further contended that the Ld. District Commission rightly partly allowed the complaint against the appellant and as such, this appeal be dismissed.
4.          After considering the rival contentions of the parties and going through the impugned order and material available on record and the written arguments carefully, we are of the considered view that the appeal is liable to be dismissed for the reasons to be recorded hereinafter.
5.           This case concerns the claim of the complainant, who underwent treatment for Coronary Artery Bypass Grafting (CABG) during the validity of an insurance policy issued by the appellant-insurance company. The treatment took place at Medanta The Medicity Global Health Private Limited between 31.01.2019 and 15.02.2019, incurring medical expenses of Rs.6,67,143/-, as substantiated by the medical bill on record as Annexure C-3. The claim was repudiated by the appellant - insurance company via letter dated 11.01.2020 (Annexure R-3), citing Exclusion Clause 4 and sub-clause 4.1 of the insurance policy, on the basis that the complainant was suffering from pre-existing conditions of hypertension, diabetes mellitus (DM), and coronary artery disease (CAD). The onus of proving that the complainant was suffering from pre-existing conditions rested upon the appellant. Although the appellant relied on the medical records of the complainant, however, it neither produced the concerned records before the Ld. District Commission nor examined the treating doctor to substantiate its claim. Furthermore, no affidavit from the treating doctor was provided, nor was any investigation report by the insurance company’s investigation team submitted. In the absence of an affidavit or testimony from the treating physician, reliance could not be placed solely on medical prescriptions, test reports or passing references in the treatment notes. Therefore, in our considered view, the Ld. District Commission rightly concluded that the appellant – Opposite Party No.1 failed to discharge its burden of proving that the complainant had pre-existing conditions prior to obtaining the insurance policy.
6.           The Ld. District Commission based its findings on the basis of documentary evidence on record and in view of law laid down by Hon’ble National Commission in New India Assurance Co. Ltd. vs. Arun Krishan Puri, III (2009) CPJ 6 (NC), wherein it was held that the burden of proving the existence of pre-existing diseases at the time of obtaining the policy lies with the insurer. Further the Ld. District Commission cited the judgment of Hon'ble Supreme Court in Biman Krishna Bose vs. United India Insurance Company, Civil Appeal No. 3438 of 1995, wherein it has been held that an insurance claim cannot be repudiated on the grounds of the life assured having hypertension without proper evidence, as hypertension is not fatal in itself. Further, placing reliance on the judgment of Hon’ble National Commission in Satish Chander Madan vs. M/s Bajaj Allianz General Insurance Co. Ltd., Revision Petition No. 3619 of 2013, decided on 11.01.2016; wherein it was held that “Hypertension is a common ailment and can be controlled by medication – Claim was wrongly repudiated”; Dharmendra Goel vs. Oriental Insurance Co. Ltd., III (2008) CPJ 63 (SC) and New India Assurance Company Limited vs. Smt. Usha Yadav & Others, 2008 (3) RCR (Civil) 111, the Ld. District Commission rightly held the repudiation to be unjustified.
7.          Now coming to the second contention raised by the appellant to justify the repudiation of the claim on the ground that there was a gap in coverage and the 2017-18 policy was considered a new policy, therefore, the complainant did not have continuous coverage for 48 months and the claim was rightly repudiated on this score also, it may be stated here that on 17.09.2024, in appeal, Counsel for respondent No.2-Bank of Maharashtra vehemently contented that the premium for the year 2017-2018 was deducted by it and paid to the appellant – Insurance Company and he sought time to place on record the bank account statement to substantiate this fact. Since the said document was essential for the just decision of this controversy, this Commission directed respondent No.1 to bring on record the said document. The said document i.e. Account Statement for the period 23.05.2011 till 26.09.2023  was placed on record by the Counsel for respondent No.2 on 20.09.2024 showing the date when insurance premium was deducted.
8.           Bare perusal of this statement, particularly relating to the period 01.01.2017 to 31.12.2017, transpires that on 26.09.2017, premium of Rs.7,685/- by respondent No.2 – Bank of Maharashtra from the account of respondent No.1/complainant against renewal of the policy in question.  Similarly, premium of Rs.7,683/- was debited from the account of the complainant on 06.08.2018 for renewal of the policy in the year 2018. On that date, there was sufficient balance in the account of the complainant. It is also coming out of the record that since the opening of the bank account with Respondent No.2, the insurance premium payable by the complainant was automatically deducted by Respondent No.2 from the complainant’s account. Notably, in March 2023, the appellant-insurance company notified the complainant that the insurance policy had been discontinued. Until the policy’s validity, all premiums were deducted automatically from the complainant’s account by Respondent No.2. The complainant subsequently wrote a request letter dated 21.05.2022 to Respondent No.2 and the latter's reply dated 13.06.2022 confirmed that the premium was debited through a mandate from the complainant’s account and transferred to the appellant - insurance company. Furthermore, a Memorandum of Understanding (MOU), Annexure A-1, was executed between the appellant and Respondent No.2, which explicitly stated that both parties were responsible for ensuring the timely renewal of the insurance policy, contingent upon the complainant maintaining sufficient funds in the bank account. This clearly establishes a shared responsibility for policy renewal between the appellant-insurance company and Respondent No.2, subject to the complainant’s compliance with the requirement to maintain sufficient funds. This clearly indicates that the appellant was responsible for managing and renewing the policy in a timely manner, contingent upon the availability of adequate funds in the complainant’s account. The complainant, for his part, had consistently fulfilled his obligation by maintaining sufficient funds for premium deduction. Therefore, the failure to renew the policy cannot be attributed to the complainant but rather demonstrates a deficiency in service on the part of the appellant, who failed to fulfil its contractual duties under the MOU. The discontinuation of the policy, despite sufficient funds being maintained by the complainant, reflects a significant lapse in the responsibilities that were expressly assigned to the appellant, resulting in considerable inconvenience and undue hardship to the complainant. Therefore, the contention raised by the appellant with regard to lapse in the policy due to non-receipt of premium is totally baseless and not sustainable in view of documentary evidence brought on record by respondent No.2. However, the judgments relied upon by the appellant in support of its contentions, are of no help to it, being distinguishable on fact.
9.          In view of the facts and circumstances of the case, we do not find any infirmity or material irregularity in the impugned order passed by the Ld. District Commission, which is legal, just and fair.
10.          For the reasons recorded above, this appeal, being devoid of merit, must fail and the same is dismissed with no order as to costs.
11.          Certified copies of this order be sent to the parties free of charge.
12.          File be consigned to Record Room after completion.

Pronounced.

30.09.2024.

                           [JUSTICE RAJ SHEKHAR ATTRI]

PRESIDENT

 

 

                                                                               

 [RAJESH K. ARYA]

MEMBER

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