DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II

U.T. CHANDIGARH

1.                 Sanjeev Kumar Arora r/o H.No.553, Sector 8-B, Chandigarh.

2.                 Poonam Arora w/o Sanjeev Kumar Arora r/o H.No.553, Sector 8-B, Chandigarh.

                                      ---Complainants.

Versus

1.                 HSBC, SCO 1-2-3, Sector 9-D, Chandigarh

2.                 Tata AIG General Insurance Company Ltd., SCO 232-234, Second Floor, Sector 34-A, Chandigarh.

---Opposite Parties.

BEFORE:  SHRI LAKSHMAN SHARMA                 PRESIDENT

                   SMT. MADHU MUTNEJA                       MEMBER

                   SHRI JASWINDER SINGH SIDHU       MEMBER

Argued by: Sh. Sanjeev Kumar Arora complainant No.1 in person and as Advocate for complainant No.2

                        Sh. Sandeep Suri, Adv. for OP No.1.

                        Sh. Varun Chawla, Adv. proxy for Sh. Rajneesh Malhotra, Adv. for OP No.2.

PER LAKSHMAN SHARMA, PRESIDENT

1.                           Sh. Sanjeev Kumar Arora and Smt. Poonam Arora, have filed this complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter referred to as the Act only) praying for the following reliefs :

“1.     That the opposite party No.2 be directed to make the payment of Rs.5,394/-, withheld by it wrongly, to OP No.1

2.                 That the opposite party No.2 be directed to make the payment of the claim of the complainants for the hospitalization of complainant No.2 in Fortis Hospital in February 2009 for 8 days @ Rs.2,000/- per day under Health Care Policy No. HCP03000018973 effective from 26.6.2008 to 25.6.2009 covering both the complainants and their daughter.

3.                 That the opposite parties be directed to pay interest @ 18% from the day of intimation of the claim till the date of actual payment of the claim amount.

4.                 That the opposite parties be directed to pay a sum of Rs.50,000/- as compensation on account of the damage caused to the complainants on account of the harassment and mental agony caused to the complainants.

5.                 That the opposite parties be also directed to pay a sum of Rs.11,000/- as litigation charges as the complainant has been forced to file the present complaint against them for causing unnecessary harassment and mental agony.

6.                 Any other relief, which this Hon’ble Forum deems fit may also be granted.”

2.                           In brief, the case of the complainants is that they took a Health Care + policy bearing No.HCP0300018973 from opposite party No.2 covering the complainants and their daughter. The said policy was effective from 26.6.2008 to 25.6.2009. The complainants paid premium of Rs.8,890/-. According to the complainants, the said policy was taken on the basis of telephonic conversation between them and the employees of opposite party No.1.  Payment of premium was made through credit card issued by opposite party No.1.  It has specifically been pleaded by the complainants that they had received the policy schedule (C-1) from opposite party No.2 but neither they were supplied the terms and conditions of the policy nor the same were explained to them, by opposite party No.2, at the time of purchase of the policy.

                     The case of the complainants is that on 10.2.2009, complainant No.2 fell ill.  She was admitted in the Fortis Hospital, Mohali where both of her knees were replaced.  She was discharged on 18.2.2009. According to the complainants, as per the terms and conditions mentioned on the Policy Schedule (C-1), the complainants were entitled to indemnification of the expenditure @ Rs.2,000/- per day during the period of hospitalization upto a maximum of 180 days.  The complainants submitted claim alongwith all the relevant papers but the same was repudiated vide letter dated 19.6.2009 (C-4). According to the complainants, as the terms and conditions of the policy were not supplied to them, the repudiation of the claim on the exclusion clause, mentioned in the letter, amounts to deficiency in service.

                   It is further the case of the complainants that in the first week of June 2009, the complainants received a call from the office of the opposite party informing that the policy was going to expire on 25.6.2009 and the complainants were requested to get the same renewed.  They paid a sum of Rs.8,727/- as premium for the renewal of the said policy.  It has further been pleaded that on receipt of letter of repudiation, the complainants asked the opposite party to cancel the renewal of the policy.  Thereafter, they received a letter dated 29.6.2009 whereby the policy was cancelled w.e.f. 25.6.2009.  The complainants were refunded a sum of Rs.3,333/- against the premium of Rs.8,727/- paid by them for renewal of the policy.  According to the complainants, deduction of Rs.5,394/- amounts to deficiency in service. 

                   In these circumstances the present complaint has been filed seeking the reliefs mentioned above.

3.                           In the written statement filed by opposite party No.1 it has been averred that the complainants had purchased the policy in question from opposite party No.2.  It has been pleaded that it had received instructions for payment of the premium through credit card which were complied with and the payment of the premium was made to opposite party No.2 as per the directions of the complainant. It has been pleaded that as on 8.8.2011 an amount of Rs.19,712/- was payable and due to the bank by the complainants.  In these circumstances, according to the opposite party, there is no deficiency in service on its part so the complaint qua it deserves dismissal.

4.                           In the reply filed by opposite party No.2 it has been admitted that the complainants had purchased the policy in question.  It has also been admitted that the wife of complainant No.1 was admitted in the Fortis Hospital and that both her knees were replaced.  It has also been admitted that the complainant submitted the claim which was repudiated vide letter dated 19.6.2009. The case of the opposite party is that from the hospital record it is apparent that the treatment given to complainant No.2 was of total knee replacement.   According to the hospital record, Smt. Poonam Arora was known case of rheumatoid arthritis for the last 10-12 years. Thus, the ailment for which she was treated was pre-existing.  In these circumstances, according to Opposite party No.2, the complainants were not entitled to indemnification of the expenditure incurred in view of part B General exclusions of the policy. The plea of the complainants that terms and conditions of the policy were not supplied to them has been controverted

                   In these circumstances, according to the opposite party, the repudiation of the claim is in accordance with the terms and conditions of the policy.

5.                           We have heard the learned counsel for the parties and have gone through the documents on record.

6.                           Part B of General Exclusions of the policy, as reproduced in the written reply filed by opposite party No.2, reads as under :-

“Part B General Exclusions

This entire policy does not provide benefits for any loss resulting in whole or in part from, or expenses incurred, directly or indirectly, in respect of :-

Any pre-existing condition/any complication arising from it”

Relying upon the said clause and the discharge summary, wherein it has been mentioned that Smt. Poonam Arora was a known case of Rheumatoid Arthritis for 10-12 years, the claim had been repudiated. 

7.                           The case of the opposite party is that as Smt. Poonam Arora was suffering from a pre-existing disease, so the claim has been rightly repudiated.  However, there is no material on record to prove that the complainants had concealed the fact that Smt. Poonam Arora was a known case of Rheumatoid Arthritis for 10-12 years.  The proposal form has not been placed on record by opposite party No.2.  The relevant para of Annexure R-1 which is copy of the policy schedule reads as follows :-

“Tata AIG General Insurance Company Limited (We, Our or Us) will provide the insurance described in this policy and any endorsements for the Insured Period as defined in this policy, to the Policy holder (You, Your or Yourself) and the Insured Persons (You, Your or Yourself) named in the Schedule, in reliance upon the statements contained in the Proposal and Declaration, dated as stated in the Schedule and which shall be the basis of this policy and is deemed to be incorporated herein, in return for the payment of the required premium and compliance with all applicable provisions of this policy.”

From the bare perusal of this extract of the policy schedule, it is apparent that the terms and conditions are based on the proposal form and the declarations made therein.  However, opposite party No.2, for the reasons best known to it, has failed to place on record the proposal form to prove that the complainants had concealed the fact about the existence of the pre-existing disease.  Hence, the plea of opposite party No.2 cannot be believed.

8.                           Faced with this situation, it was vehemently argued by the ld. Counsel for opposite party No.2 that, as per the terms and conditions of the policy, pre-existing diseases are not to be indemnified.  Hence, in view of the terms and conditions of the contract, the complainants are not entitled to be indemnified for the expenditure because of the existence of the pres-existing disease.  However, this argument has no force.  The complainants have specifically pleaded that the terms and conditions of the policy were neither explained to them at the time of proposal nor the same were ever supplied to them thereafter. So, it is clear that the complainants were not aware about the said terms and conditions.  In these circumstances, the claim could not have been repudiated and the repudiation of the same amounts to deficiency in service.

9.                           In the case titled United India Insurance Co. Ltd. Vs. S.M.S. Tele Communications & Anr., III (2009) CPJ 246 (NC), the Hon’ble National Consumer Disputes Redressal Commission, New Delhi in Para No.15 has held as under: -

“15.Being aware of the existence of the policy is one thing and being aware of the contents and meaning of the clauses of the policy is another. It is not the case of the Insurance Company that the contents and the meaning of the policy were made known to the complainant (SMS). It is also nowhere on record that the Insurance Company had explained the meaning of all the exclusion clauses to the Bank and requested them in turn to bring them to the notice of the complainant.”

10.                       The ratio of the case titled United India Insurance Co. Ltd. Vs. S.M.S. Tele Communications & Anr. (Supra) is squarely applicable to the facts of the present complaint.

11.                       It has been next contended by the ld. Counsel for the complainants that they requested for cancellation of the policy on 24.6.2009, which was to commence w.e.f. 26.6.2009.  It has further been contended that the said request of the complainants was acceded to by opposite party No.2 vide its letter dated 29.6.2009 (C-5) and an amount of Rs.3,333/- was credited in the account of complainant No.1 on 30.6.2009 as is apparent from the credit card statement (C-6).  On the other hand, opposite party No.2 in para 8 of its written reply has denied that the policy was cancelled w.e.f. 25.6.2009 and has simply stated the letter dated 29.6.2009 was erroneously sent to the complainants.  However, we are of the opinion that mere denial does not absolve the opposite party of its liability.  It is not the specific stand of opposite party No.2 that the said letter was not sent by it or that it was a fabricated document.  In these circumstances, when the cancellation of the policy was made w.e.f. 25.6.2009, i.e. before its inception date of 26.6.2009, therefore opposite party No.2 should have refunded the whole amount, without any deduction, but, by deducting an amount of Rs.5,394/- from the total amount, opposite party No.2 certainly indulged in deficiency in service. 

12.                       Thus, as discussed above, there is deficiency in service by opposite party No.2 in repudiation of the claim as well as in deducting a sum of Rs.5,394/- from the premium given for renewal of the policy.

13.                       It would not be out of place to mention here that the complainants in para 1 of their relief are praying that the amount of Rs.5,394/-, withheld by opposite party No.2, be refunded to opposite party No.1 i.e. the bank who made the payment.  However, we are of the opinion that we cannot grant this relief as the amount was paid through the credit card account of complainant No.1 and it is between the complainants and the bank/opposite party No.1 to settle their accounts.  

14.                       In view of the above discussion, the present complaint is allowed qua opposite party No.2 with the following directions :

i)                   To refund the balance amount of Rs.5,394/- to the complainants which was illegally deducted at the time of cancellation of the policy. 

ii)                To pay Rs.2,000/- per day, for the hospitalization of complainant No.2 from 10.2.2009 to 18.2.2009, as per the policy schedule.

iii)              To pay Rs.10,000/- as compensation for mental agony and harassment suffered by the complainants.

iv)              To pay Rs.7,000/- as litigation expenses

The complaint qua opposite party No.1 stands dismissed with no order as to costs.

15.                       This order be complied with by the opposite party No.2, within 45 days from the date of receipt of its certified copy, failing which the amounts at (i), (ii) & (iii) shall carry interest @18% per annum from 19.7.2009 (i.e. one month after the repudiation letter dated 19.6.2009) till actual payment, besides payment of litigation costs.

16.                       Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

13.08.2012.

Sd/-

(LAKSHMAN SHARMA)

PRESIDENT

Sd/-

 (MADHU MUTNEJA)

MEMBER

Sd/-

(JASWINDER SINGH SIDHU)

MEMBER

hg