Charanjit Singh, President;

1        The present complaint has been received from the District Consumer Disputes Redressal Commission Amritsar by the order of the Hon’ble State Consumer Disputes Redressal Commission Punjab, Chandigarh for its disposal.

2        The complainant has filed the present complaint by invoking the provisions of Consumer Protection Act under Section 11, 12 against the opposite parties on the allegations that the complainant purchased health Suraksha Policy (Silver Plan) from the opposite party bearing policy No. 295220078977330100011 for a sum assured for Rs. 5 Lacs which commences from 18.7.2016 to midnight 17.8.2017. The complainant paid premium to the tune of Rs. 26,043/- to opposite party. Thereafter, the policy cover note was issued in favour of complainant by opposite party. On 12.9.2016 the complainant slipped in the bathroom and got fracture on his hip bone. Thereafter, he was admitted in Fortis Escorts Hospital, Majitha Verka Bypass Road, Amritsar where he was treated from 12.9.2016 to 17.9.2016 and thereafter, he was discharged from the hospital. During the treatment it was diagnosed that the complainant has suffered fracture neck of femur right side, DM Type II, HTN. He had to undergone right Hemi Arthro Plasti Hip replacement on 13.9.2016. In this respect a claim was lodged with the opposite party under scheme treatment during the period of treatment, but to the utter surprise, the opposite party repudiated the genuine claim of the complainant on the ground that the complainant is a known case of diabetic, mellitus and hypertension and alleged that the injured/ complainant had not disclosed the ailment while purchasing the said policy. The claim of the complainant was repudiated by the opposite party. The opposite party has repudiated the genuine claim of the complainant intentionally on baseless ground. It was well within the knowledge of the opposite party at the time of issuing the said policy to the complainant that the complainant is a patient of diabetic and hypertension. The opposite party has admitted this fact in the claim repudiation letter dated 30.11.2016 that the complainant was a patient of diabetics and hypertension from the inception of the first policy dated 28.6.2014. At the time of issuing further policy i.e. policy under question, it was well within the knowledge of the opposite party that the complainant is a patient of diabetics and hypertension. At the time of discharge from the hospital on 17.9.2016, the complainant had to pay total medical treatment bills amounting to Rs. 1,64,583.38 Paise. The total bill includes the expenses of partial hip replacement, drugs, consumables, investigations and other charges. The opposite party has intentionally run away from his liability under the said policy and intentionally not paid the medical bills of the complainant. The complainant has to manage the funds immediately in order to pay his medical bills to the hospital. The complainant has suffered huge mental agony, inconvenience and unnecessary harassment at the hands of the opposite party without any fault on his part and the act of the opposite party also fall under deficiency in service.  The complainant has prayed as under:-

(a)     The opposite parties may kindly be directed to make the payment of Rs. 1,64,583.38 Paise as benefit of claim of insurance policy alongwith interest @18% p.a. from the date of admission of the complainant in the hospital till its realization.

(b)     The opposite parties may also be directed to pay Rs. 50,000/- for mental agony and harassment suffered by the complainant due to illegal acts and conducts of the opposite parties.

(c)      The costs of the complaint alongwith counsel fee to the tune of Rs. 15,000/- may also be awarded to the complainant.

3        After formal admission of the complaint, notice was issued to Opposite Party and the opposite party appeared through counsel and filed written version and contested the complaint by interailia pleadings that the claim of the complainant was repudiated on the ground of non disclosure. The complainant has concealed the true and material facts from this commission. Patient is a known case of Diabetes Mellitus and Hypertension before the first inception of policy i.e. on 28.6.2017. There is history of Diabetes since 22 years and Hypertension for the last 17 years, but the insured has not disclosed the said pre-existing disease while purchasing the policy. The claim of the complainant was found not payable as per the policy terms and conditions, as the complainant violated clause 10 r ii of the policy document/ contract and also the core principle of insurance i.e. the People of Good faith and had obtained the policy through concealment of material facts which amounts to fraud. With regard to diabetes and hypertension has been admitted by the complainant himself in Para No. 2 of the complaint, but he intentionally did not disclose this fact at the time of procuring policy from the opposite party. The present complaint has been filed on the ground of health Suraksha Policy bearing No. 2952200789773301 covering the risk of Mr. Mohinder Singh for a total sum of Rs. 3,00,000/- . The said policy was issued alongwith terms and conditions and policy schedule and the claim, if any, was always subject to terms and conditions of the same. A pre authorization/ cashless request was received by the opposite party. After perusal of the pre-authorization request form, it came to the knowledge of the opposite party that the complainant suffered from Hypertension and Diabetes. In order to identify the exact duration of the said ailment the opposite party issued a letter to the hospital, to which the hospital issued a certificate dated 13.9.2016, stating that the patient duration of DM is from 22 years and HTN is from 17 years. Therefore, the cashless facility of the complainant was denied by the opposite party. After the cashless denial the complainant filed the reimbursement claim, claiming that he was admitted in the hospital on 12.9.2016 for the treatment of Fracture Neck Femur.  As per the discharge summary it was again found that the complainant was diagnosed with DM type II, Hypertension and Fracture Neck of Femur right side. It was further clearly mentioned in the discharge summary that the patient is known case of the type II DM and Hypertension, which was never disclosed by the complainant at the time of policy inception.  The insurance is based upon the principle of utmost good faith and the person proposing for insurance cover is supposed to disclose all the pre existing diseases at the time of taking the insurance cover. Act of the non disclosing the fact of pre-existing diseases by the complainant amounts to non disclosure of material facts and thus the claim of the complainant was repudiated under Section 10 r ii and intimation of the same was given to the complainant vide letter dated 30.11.2016. As per the terms and conditions of the policy, the complainant is not entitled for any claim, as the insured was having history of Diabetes since last 22 years and Hypertension since last 17 years before the first inception of first policy, therefore, the claim was rejected on the ground of non-disclosure of material fact under Clause 10 r ii of terms and conditions of policy. The complainant violated clause 10 r ii of the policy document/ contract. Clause 10 r (ii) states that ‘ We may terminate this policy on grounds of misrepresentation, fraud, non disclosure of material facts or non cooperation by you or any insured person or anyone acting on your behalf or on behalf of an insured person. Such termination of the policy shall be from the inception date or the renewal date (as the case may be) upon 30 days notice and by sending an endorsement in his regard at your address shown in the schedule premium. The disclosure of previous ailment was material fact while issuance of the policy and ought to have been disclosed by the insured. Thus the insured by not doing so had misled the opposite party, while granting his insurance cover, as stated in the policy schedule. If the insured would have disclosed the said material facts of previous ailments to the opposite party at the time of issuance of policy, then the opposite party would not have issued the insurance policy with certain additional conditions. The previous ailments are crucial and material for the underwriters to take decision while accepting the risk. Hence concealment of any such material conditions hamper the decision making process of the underwriters and amounts to concealment/ fraudulent act on the part of the proposer, which makes the contract of insurance voidable at the option of the insurance company . Withholding any information intentionally amounts to fraud. As the contract of insurance is based upon the principle of utmost good faith and the insured was duly bound to correctly and diligently to disclose all facts, which was within his knowledge. Which fact has a bearing on the decision of the insurer at the time of acceptance of risk on the life of a person is a material fact and is significant to be disclosed by the insured. Non disclosure of the material fact, about the history of complainant which would have affected the decision of the opposite party company. Therefore, the insured by not doing the same act has violated the terms and conditions of the policies. The complainant is estopped by his own act and conduct from filing the present complaint. The complainant has filed the present complaint without any cause of action against the opposite party, therefore, liable to be dismissed. The complainant has no locus standi to file the present complaint. 

4        To prove his case, the complainant has placed on record affidavit of complainant Ex. CW1/A, copy of policy Ex. C-1, copy of denial of cashless claim facility Ex. C-2, copy of claim repudiation letter Ex. C-3, copy of inpatient bill Ex. C-4,  medical bill and receipts pertaining to Mohinder Singh Ex. CW2/A and closed the evidence.  Ld. counsel for the opposite party has placed on record affidavit of Pankaj Kumar Ex. OP-1, copy of power of attorney of Pankaj Kuamr Ex. OP-2, copy of policy Ex. OP-3, copy of terms and conditions Ex. OP-4, Copy of the pre authorisation request form Ex. OP-5, copy of the query reply Ex. OP-6, copy of discharge card Ex. OP-7, copy of repudiation letter Ex. OP-8, copy of certificate dated 19.9.2016 Ex. OP-9 and closed the evidence.

5        We have heard the Ld. counsel for the parties and have gone through the record on the file.

6        Ld. counsel for the complainant contended that  the complainant the complainant purchased health Suraksha Policy (Silver Plan) from the opposite party bearing policy No. 295220078977330100011 for a sum assured for Rs. 5 Lacs which commences from 18.7.2016 to midnight 17.8.2017, copy of insurance policy is Ex. C-1 The complainant paid premium to the tune of Rs. 26,043/- to opposite party. Thereafter, the policy cover note was issued in favour of complainant by opposite party. On 12.9.2016 the complainant slipped in the bathroom and got fracture on his hip bone. Thereafter, he was admitted in Fortis Escorts Hospital, Majitha Verka Bypass Road, Amritsar where he was treated from 12.9.2016 to 17.9.2016 and thereafter, he was discharged from the hospital. During the treatment it was diagnosed that the complainant has suffered fracture neck of femur right side DM Type II, HTN. He had to undergone right Hemi Arthro Plasti Hip replacement on 13.9.2016. In this respect a claim was lodged with the opposite party under scheme treatment during the period of treatment, but to the utter surprise, the opposite party repudiated the genuine claim of the complainant on the ground that the complainant is a known case of diabetic, mellitus and hypertension and alleged that the injured/ complainant had not disclosed the ailment while purchasing the said policy. The claim of the complainant was repudiated by the opposite party. The opposite party has repudiated the genuine claim of the complainant intentionally on baseless ground. It was well within the knowledge of the opposite party at the time of issuing the said policy to the complainant that the complainant is a patient of diabetic and hypertension. The opposite party has admitted this fact in the claim repudiation letter dated 30.11.2016 Ex. C-3 that the complainant was a patient of diabetics and hypertension from the inception of the first policy dated 28.6.2014. At the time of issuing further policy i.e. policy under question, it was well within the knowledge of the opposite party that the complainant is a patient of diabetics and hypertension. At the time of discharge from the hospital on 17.9.2016, the complainant had to pay total medical treatment bills amounting to Rs. 1,64,583.38 Paise. The total bill includes the expenses of partial hip replacement, drugs, consumables, investigations and other charges. The complainant has prayed that the present complaint may be allowed.

7        On the other hands, Ld. counsel for the opposite party contended that the claim of the complainant was repudiated on the ground of non disclosure. The complainant has concealed the true and material facts from this commission. Patient is a known case of Diabetes Mellitus and Hypertension before the first inception of policy i.e. on 28.6.2017. There is history of Diabetes since 22 years and Hypertension for the last 17 years, but the insured has not disclosed the said pre-existing disease while purchasing the policy. He further contended that the claim of the complainant was found not payable as per the policy terms and conditions, as the complainant violated clause 10 r ii of the policy document/ contract and also the core principle of insurance i.e. the People of Good faith and had obtained the policy through concealment of material facts which amounts to fraud. With regard to diabetes and hypertension has been admitted by the complainant himself in Para No. 2 of the complaint, but he intentionally did not disclose this fact at the time of procuring policy from the opposite party. The present complaint has been filed on the ground of health Suraksha Policy bearing No. 2952200789773301 covering the risk of Mr. Mohinder Singh for a total sum of Rs. 3,00,000/- . The said policy was issued alongwith terms and conditions and policy schedule and the claim, if any, was always subject to terms and conditions of the same. A pre authorization/ cashless request was received by the opposite party. After perusal of the pre-authorization request form, it came to the knowledge of the opposite party that the complainant suffered from Hypertension and Diabetes. He further contended that in order to identify the exact duration of the said ailment the opposite party issued a letter to the hospital, to which the hospital issued a certificate dated 13.9.2016, stating that the patient duration of DM is from 22 years and HTN is from 17 years. Therefore, the cashless facility of the complainant was denied by the opposite party. After the cashless denial the complainant filed the reimbursement claim, claiming that he was admitted in the hospital on 12.9.2016 for the treatment of Fracture Neck Femur.  As per the discharge summary it was again found that the complainant was diagnosed with DM type II, Hypertension and Fracture Neck of Femur right side. It was further clearly mentioned in the discharge summary that the patient is known case of the type II DM and Hypertension, which was never disclosed by the complainant at the time of policy inception.  He further contended that the disclosure of previous ailment was material fact while issuance of the policy and ought to have been disclosed by the insured. Thus the insured by not doing so had misled the opposite party, while granting his insurance cover, as stated in the policy schedule. If the insured would have disclosed the said material facts of previous ailments to the opposite party at the time of issuance of policy, then the opposite party would not have issued the insurance policy with certain additional conditions. The previous ailments are crucial and material for the underwriters to take decision while accepting the risk. Hence concealment of any such material conditions hamper the decision making process of the underwriters and amounts to concealment/ fraudulent act on the part of the proposer, which makes the contract of insurance voidable at the option of the insurance company . He further contended that withholding any information intentionally amounts to fraud. As the contract of insurance is based upon the principle of utmost good faith and the insured was duly bound to correctly and diligently to disclose all facts, which was within his knowledge. Which fact has a bearing on the decision of the insurer at the time of acceptance of risk on the life of a person is a material fact and is significant to be disclosed by the insured. He further contended that non disclosure of the material fact, about the history of complainant which would have affected the decision of the opposite party company and prayed that the present complaint may be dismissed.

8        The present complaint has been repudiated the claim of the complainant vide Ex. OP8 which is reproduced as follows:-

As per the documents submitted, patient was admitted on 12.9.2016 for the treatment of Fracture Neck Femur, Patient is known case of Diabetes Mellitus and Hypertension before the first inception of the policy (28.6.2014) . There is history of diabetes since 22 years and Hypertension for the last 17 years. Insured had not disclosed the ailment while purchasing the policy. Hence, there is non disclosure of material facts and thus this claim is being repudiated under Section 10 r ii.

The claim of the complainant has been repudiated only on the ground that the patient is known case of Diabetes Mellitus and Hypertension before the first inception of the policy (28.6.2014) . There is history of diabetes since 22 years and Hypertension for the last 17 years and the complainant has concealed this fact from the opposite party at the time of obtaining the policy. The diabetes is not a material disease, therefore, non disclosure thereof is not a concealment. We draw support from Life Insurance Corporation of India Vs. Sushma Sharma from II (2008) CPJ 213 wherein Hon'ble State Commission has held as under:-

“So far as hypertension and diabetes is concerned, no doubt, it is a disease but it is not a material disease. In these days of fast life, majority of the people suffer 14 from hypertension. It may be only the labour class who work manually and take the food without caring for its calories that they do not suffer from hypertension or diabetes. Out of the literate and educated people particularly who have the white collar jobs, majority of them suffer from hypertension or diabetes or both. If the Life Insurance Companies are so sensitive that they consider hypertension and diabetes as material diseases then they should wind up their business and stop accepting premium. If these diseases had been material Nand Lal insured would not have survived for 10 years after he started suffering from these medical problems. Like hypertension ,diabetes has also infected a majority of the Indian population but the people who suffer from diabetes and continue managing it under the medical advice, they survive for number of years and none of these diseases is fatal and as discussed above, if these diseases had been material deceased Nand Lal insured would not have survived for 10 years.”.

We further draw support from Life Insurance Corporation of India Vs. Sudha Jain II (2007) CPJ 452 wherein Hon'ble Delhi State Consumer Disputes Redressal Commission, New Delhi has held that maladies like diabetes, hypertensions being normal wear and tear of life, cannot be termed as concealment of pre-existing disease.  Moreover, the opposti party has failed to establish the relation between fractured neck treatment and DM Type II and HTN. The complainant has not suffered and treated for DM Type and HTN.

9        Not only this, the Opposite Party could not examine any medical practitioner/ doctor who has treated the life assured for diabetes nor the Opposite Party has filed any affidavit of any doctor who has medically treated the life assure for the disease prior to taking of the policy. It has been held by the Hon'ble National Commission in case New India Assurance Co.Ltd & Anr Vs. Murari Lal Bhusri 2011(III) CPJ 198 (NC) that where the Insurance company failed to produce any evidence to show that respondent was aware of any pre-existing disease at the time when insurance policy was taken, opposite party was not justified in repudiating the claim of the complainant on the ground of pre-existing disease. It has been held by the Hon'ble Supreme Court of India in case P.Vankat Naidu Vs. Life Insurance Corporation of India & Anr 2011(3) CPC 350 that where no cogent evidence was produced by the respondent to prove that insured/deceased had concealed any fact about his illness or hospitalization, it was held that no material fact was suppressed by the deceased in this respect. It has been held by the Hon'ble State Commission of Punjab in case Life Insurance Corporation of India Vs. Miss Veenu Babbar and another 2000(1) CLT 619 that repudiation on the basis of history recorded in the hospital records is illegal and arbitrary and the same could not be treated as substantive material to base any decision. Same view has been taken by the Hon'ble National Commission in case Life Insurance Corporation of India & Ors. Vs. Kunari Devi IV(2008) CPJ 89 (NC) that where no document has been produced in support of allegation of suppression of disease at the time of taking policy or revival of policy, history recorded in hospital's bed ticket, not to be treated as evidence as doctor, recording history not examined, suppression of disease not proved, insurer was held liable under the policy. It has further been held by the Hon'ble National Commission in case Sahara India Life Insurance Co. Ltd. & Anr Vs. Hansaben Deeepak Kumar Pandya IV(2012) CPJ 13(NC) that where the opposite party insurance company has failed to produce on record any evidence to show that deceased insured ever consulted doctor for taking treatment of heart disease, the repudiation of the claim on the ground of suppression of material fact is totally illegal. It has been held by Hon’ble State Consumer Disputes Redressal Commission, Chandigarh in case titled as Ashwani Gupta & Ors. Vs. United India Insurance Company Limited 2009(1) CPC page 561 that where the claim of the complainant has been repudiated on the ground that the assured had pre-existing disease of diabetes mellitus which was not disclosed- apparently, burden to prove lies upon the insurer- If assured was suffering from pre-existing disease why insurer had not checked it at the time when proposal form was accepted by its staff-Respondent has failed to fulfill this requirement before repudiating the claim and the appellant was held entitled to claim alongwith interest @ 9%. In the present case, the Opposite Party has simply relied upon the history of the life assured recorded at the time of his admission in the hospital

10      In such a situation the repudiation made by the Opposite Party regarding the genuine claim of the complainant appears to have been made without application of mind. It is usual with the insurance company to show all types of green pesters to the customer at the time of selling insurance policies, and when it comes to payment of the insurance claim, they invent all sort of excuses to deny the claim. In the facts of this case, ratio of the decision of Hon‟ble Apex Court in case of Dharmendra Goel Vs. Oriental Insurance Co. Ltd., III (2008) CPJ 63 (SC) is fully attracted, wherein it was held that, Insurance Company being in a dominant position, often acts in an unreasonable manner and after having accepted the value of a particular insured goods, disowns that very figure on one pretext or the other, when they are called upon to pay compensation. This „take it or leave it‟, attitude is clearly unwarranted not only as being bad in law, but ethically indefensible. It is generally seen that the insurance companies are only interested in earning the premiums and find ways and means to decline claims. In similar set of facts the Hon‟ble Punjab & Haryana High Court in case titled as New India Assurance Company Limited Vs. Smt.Usha Yadav & Others 2008(3) RCR (Civil) Page 111 went on to hold as under:-

 “It seams that the insurance companies are only interested in earning the premiums and find ways and means to decline claims. All conditions which generally are hidden, need to be simplified so that these are easily understood by a person at the time of buying any policy. The Insurance Companies in such cases rely upon clauses of the agreement, which a person is generally made to sign on dotted lines at the time of obtaining policy. Insurance Company also directed to pay costs of Rs.5000/- for luxury litigation, being rich.

11      During the pendency of the present complaint, Mohinder Singh complainant in this case has since died and after his death Jasbir Kaur complainant No. 1(A) is widow, Tejidner Singh complainant No. 1(B) is his son, Manpreet Singh complainant No. 1(C) is his son and they have been impleaded in the present complaint. 

11      In view of above discussion, the present complaint is allowed and opposite party is directed to pay Rs. 1,64,583.38 Paise to the complainants.  The complainants have been harassed by the opposite party unnecessarily for a long time. The complainants are also entitled to Rs.10,000/- ( Rs. Ten Thousand only) as compensation on account of harassment and mental agony and Rs 5,000/- ( Rs Five Thousand only) as litigation expenses. The complainants are entitled to the awarded amount as follows:-

          Jasbir Kaur                              :         34%

          Tejinder Singh               :         33%

          Manpreet Singh             :         33%

Opposite Party  is directed to comply with the order within one month from the date of receipt of copy of the order, failing which the complainants are entitled to interest @ 9% per annum, on the awarded amount, from the date of complaint till its realisation.  Copy of order will be supplied by District Consumer Disputes Redressal Commission, Amritsar to the parties as per rules. File be sent back to the District consumer Disputes Redressal Commission, Amritsar.

Announced in Open Commission

08.09.2022