Haryana

Karnal

CC/772/2019

Buta Ram - Complainant(s)

Versus

ICICI Prudential Life Insurance Company Limited - Opp.Party(s)

B.R. Dahiya

13 Feb 2023

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, KARNAL.

 

                                                        Complaint No. 772 of 2019

                                                        Date of instt.21.11.2019

                                                        Date of Decision:13.02.2023

 

Buta Ram son of Shri Mulakh Raj, resident of House no.97, Prem Nagar, Karnal.

                                               …….Complainant.

                                              Versus

 

1.     ICICI Prudential Life Insurance Company Limited, ICICI Prulife Towers, 1089, Appasaheb Marathe Marg, Prabhadevi, Mumbai-400025 through its authorized signatory.

 

2.     ICICI Prudential Life Insurance Company Limited, Sector 12, Karnal through its authorized signatory.

 

                                                                      …..Opposite Parties.

 

Complaint Under Section 12 of the Consumer Protection Act, 1986 and after amendment Under Section 35 of Consumer Protection Act, 2019.

 

Before   Sh. Jaswant Singh……President.

              Shri Vineet Kaushik……Member

      Dr. Rekha Chaudhary…….Member

                   

Argued by: Shri B.R. Dahiya, counsel for complainant

                   Shri Dheeraj Sachdeva, counsel for the OPs.

 

                    (Jaswant Singh President)

ORDER:   

                

                The complainant has filed the present complaint Under Section 12 of the Consumer Protection Act, 1986 as after amendment under Section 35 of Consumer Protection Act, 2019 against the opposite parties (hereinafter referred to as ‘OPs’) on the averments that complainant purchased a policy bearing no.12796842 (ICICI Pru Health Saver), proposal date 28.10.2009 from the OPs. The said policy is whole life plan where the complainant can stay invested for his entire life and premium amount payable was Rs.25,000/- and frequency of payment was selected on yearly basis. As per the key benefit of the said policy, the complainant was offered to avail of hospitalization insurance benefit for the complainant and his family member upto 75 years of age and to avail a health saving benefit which reimburse all other medical expenses not covered under the hospitalization benefits by building a health fund for complainant and his family members and the complainant was offered to receive cashless facility expenses during hospitalization for minimum of 24 hours or on undergoing any of the listed day care procedure including room, boarding, nursing expenses a charged by hospital, intensive care unit charges and medical practitioner fee which includes physical, specialist, anesthetist, surgeons, consultants pathologists, radiologists and radiation oncologists, HSB, hospitalization insurance benefits including family floater, pre hospitalization and post hospitalization cover, day care treatment cover etc. The said policy was valid upto 31.10.2009 to 31.10.2040 having annual limit Rs.5,00,000/- and complainant and his family members were covered. Complainant paid the premium amount regularly, vide receipt dated 28.10.2009, 30.11.2010, 30.11.2011, 15.11.2012, 30.11.2013. In the month of August, 2019 the complainant fell ill and was suffering from difficulty in breathing at times, and got admitted in Max Super Specialty Hospital, Shalimar Bag, New Delhi and remained admitted upto 21.08.2019 and due information was sent to the OPs for cashless facility but OPs postponed the matter for providing cashless facility and several emails were exchanged and OPs were requested to do needful and to provide permission for cashless treatment of complainant but vide email dated 03.09.2019, OPs refused to provide cashless treatment on the ground that fund value falls below 110% of one full year premium and that telephone conversation was held with the complainant and that policy is foreclosed on 30.9.2018. The said act of OPs while foreclosing the policy is illegal and complainant never informed regarding fund value below 110% and no notice/conversation was ever taken place and OPs on false and frivolous grounds rejected the claim of the complainant, which is illegal, arbitrary and under the law, OPs cannot escape from the liabilities to be provided by it to the customer and the OPs charged huge amount as premium from the complainant and they are legally bound to provide benefit to the complainant and to reimburse the amount of Rs.3,50,000/- spent by the complainant on his treatment alongwith interest @ 24% per annum and also other benefits of day care, hospitalization insurance benefits, health saving benefits etc. as mentioned in the policy. In this way there is deficiency in service and unfair trade practice on the part of the OPs. Hence this complaint.

2.             On notice, OPs appeared and filed its written version raising preliminary objections with regard to maintainability; cause of action and concealment of true and material facts. On merits, it is pleaded that on 28.10.2009, OP had received a duly filled and signed proposal form. Based on the information provided in the said application/proposal form and considering it to be true and correct, company issued the policy in question covering complainant Buta Ram, spouse Asha Rani, Dheeraj Dhir and Prerna Dhir children and the mode of premium as annual and sum insured was Rs.5,00,000/- It is further pleaded that policy documents were sent on 05.11.2009, vide Blue Dart Couriers and was delivered on 11.11.2009. The complainant required to pay a premium of Rs.25,000/- annually for the entire policy term. As per the terms and conditions of the policy, complainant was required to pay annual premium from the date of issuance of the policy i.e. 31.10.2009 till the Cover Cessation Date i.e. 31.10.2040. Complainant paid the annual premiums from 31.10.2009 till 31.10.2014. Thereafter, complainant failed to pay the remaining annual renewal premiums, for the reasons best known to him. As per point 2 of clause 12-Continuation of the policy, if the premiums have been paid for the first three years and thereafter if any due premium is not paid even after the expiry of the days of grace, the policy will continue for a period of two years, during which the policy holder can pay the due premium and revive the policy. Further, it also clearly stated that if the policy is not revived within this period, the policy will be foreclosed as per the foreclosure conditions stated in clause 26. In clause 26 of the applicable terms and conditions, it is stated that if the premiums have been paid for three full policy years and after three full policy years have elapsed, a notice would be sent to the policyholder well before the total Fund Value reaches or falls below 110% of one full year’s premium. This is done to allow the policyholder a change to pay the renewal premiums and policy prevents the policy from foreclosing. However, clause 26 further states that if fund value reaches or falls below 110% of one full year’s premium, then the policy will be foreclosed. Thus, if the policyholder discontinues payment of future premiums after payment of 3 full years premiums, then the policy shall continue till the time the Fund Value under the policy falls below 110% of one full year’s premium. It is further pleaded that OPs duly sent a notice dated 23.02.2018 to the complainant that the Fund Value was Rs.37176.38 and that if the fund value falls below the minimum foreclosure limit, the policy will be terminated inspite of which the complainant failed to pay renewal premiums and revive the subject policy. Thus, due non-payment of the renewal premiums since 31.10.2014 by the complainant and non-revival of the policy by the complainant, the Fund Value under the subject policy fell below 110% of one full year’s premium on 30.09.2018. Therefore, subject policy foreclosed on 30.09.2018 as per the above mentioned terms of the policy. It is further pleaded that the disputed claim of the complainant pertaining to hospitalization in August, 2019 was after the foreclosure of the subject policy, when the policy was already terminated, therefore, the claim is not payable as the policy was not in force at the time of disputed hospitalization. It is further pleaded that complainant has availed two health claims under the subject policy during its existence. The details of the claim paid to the complainant are as follows:-

Sr. no.          Date of payment      Particulars     Status of       Amount paid   Mode of

                                                                   Claim                               payment

1.                 11.09.2013              Diabetes         Accepted      Rs.12090/-     NEFT

                                                Mellitus II/?

                                                Dysentry

2.                 30.09.2017              Acute

gastroentertis Accepted      Rs.49,018/-    NEFT

                                                with dehydration,

                                                DM    

                                     

         

 

                  

 The said claims paid by the OPs as per terms and conditions of the insurance policy. There is no deficiency in service and unfair trade practice on the part of the OPs. The other allegations made in the complaint have been denied and prayed for dismissal of the complaint.

3.             Parties then led their respective evidence.

4.             Complainant has tendered into evidence his affidavit Ex.CW1/A, copy of insurance policy Ex.C1, copy of first premium receipt and statement of account Ex.C2, copy of application form Ex.C3, copy of payments receipts dated 28.10.2009, 30.11.2010, 30.11.2011, 15.11.2012, 30.11.2013 Ex.C4 to Ex.C8, copy of OPD slip Ex.C9, copy of bill Ex.C10, copy of deposit/advanced receipts Ex.C11 to Ex.C14, copy of IP issue slip Ex.C15, copy of settlement receipt Ex.C16, copy of bill of supply inpatient bill Ex.C17, copy of duplicate bill of supply inpatient bill Ex.C18, copy of treatment slip Ex.C19, copy of bill dated 27.08.2019 Ex.C20, copies of bills of supply Ex.C21 to Ex.C25 and Ex.C28, copies of tax invoices dated 30.09.2019 and 03.10.2019 Ex.C26 and Ex.C27, copy of discharge summary Ex.C29, copy of policy foreclosure cashless facility denied Ex.C30, copy of emails dated 10.08.2019 (two) and 20.08.2019 Ex.C31 to Ex.C33, copy of emails send by OPs dated 03.09.2019 (two), 06.09.2019 and 18.09.2019 Ex.C34 to  Ex.C37 and closed the evidence on 27.10.2021 by suffering separate statement.

5.             On the other hand, learned counsel for the OPs has tendered into evidence affidavit of Thejus Joseph, Manager-Legal Ex.RW1/A, copy of application form Ex.OP1, copy of insurance policy alongwith terms and conditions Ex.OP2, copy of letter dated 23.02.2018 Ex.OP3 and closed the evidence on 17.12.2022 by suffering separate statement.

6.             We have heard the learned counsel of the parties and perused the case file carefully and have also gone through the evidence led by the parties.

7.             Learned counsel for complainant, while reiterating the contents of the complaint, has vehemently argued that complainant purchased a health insurance policy from the OPs. The said policy was valid upto 31.10.2009 to 31.10.2040, having annual limit Rs.5,00,000/-. Complainant paid the premium amount regularly upto 2014.  As per the key benefit of the said policy, the complainant was offered to avail of hospitalization insurance benefit for the complainant and his family member upto 75 years of age. In the month of August, 2019, the complainant fell ill and was suffering from difficulty in breathing at times, and got admitted in Max Super Specialty Hospital, Shalimar Bag, New Delhi and remained admitted upto 21.08.2019 and due information was sent to the OPs for cashless facility but OPs did not provide the cashless facility and vide email dated 03.09.2019, OPs refused to provide cashless treatment, on the ground that fund value falls below 110% of one full year premium and that policy is foreclosed on 30.9.2018. The complainant never informed regarding fund value and no notice as alleged by the OPs was ever served upon the complainant, if the said notice was served upon to the complainant, complainant should have deposited the next premium amount. OPs have rejected the claim of complainant on false and frivolous grounds and lastly prayed for allowing the complaint.

8.             Per contra, learned counsel for the OPs, while reiterating the contents of written version, has vehemently argued that OPs have issued the policy in question to the complainant.  Complainant paid the annual premiums from 31.10.2009 till 31.10.2014. As per point ‘2’ of clause 12-Continuation of the policy, if the premiums have been paid for the first three years and thereafter if any due premium is not paid even after the expiry of the days of grace, the policy will continue for a period of two years, during which the policy holder can pay the due premium and revive the policy. If the policy is not revived within that period, the policy will be foreclosed as per the foreclosure conditions stated in clause 26. He further argued that OPs sent a notice dated 23.02.2018 to the complainant that the Fund Value was Rs.37176.38 and that if the fund value falls below the minimum foreclosure limit, the policy will be terminated inspite of which the complainant failed to pay renewal premiums and revive the subject policy. Thus, due to non-payment of the renewal premiums since 31.10.2014 and non-revival of the policy, the Fund Value under the subject policy fell below 110% of one full year’s premium on 30.09.2018 and subject policy was foreclosed on 30.09.2018. He further argued that the disputed claim of the complainant pertaining to hospitalization in August, 2019 was after the foreclosure of the subject policy, when the policy was already terminated, therefore, the claim is not payable. He further argued that complainant has availed two health claims under the subject policy during its existence and lastly prayed for dismissal of the complaint.

9.             We have duly considered the rival contentions of the parties.

10.           Admittedly, complainant had purchased the policy in question from the OPs. It is also admitted that complainant had paid the premium of the policy upto 2014.

11.           The claim of the complainant has been denied by the OPs, vide letter Ex.OP3 dated 23.02.2018, which reproduced as under:-

.       “Your annual premium is Rs.25000/- and your fund value as on February 6, 2018 is Rs.37176.38.

.       The minimum foreclosure limit for your policy is 150% of the annual premium which amounts to Rs.110%.

.       If the fund value falls below the minimum foreclosure limit, your policy will be terminated (foreclosed). On termination (foreclosure) of the policy, the fund value will be paid to you as per applicable policy terms and conditions”.

       

12.           As per version of the OPs, due non-payment of the renewal premiums since 31.10.2014 by the complainant and non-revival of the policy, the Fund Value under the subject policy fell below 110% of one full year’s premium on 30.09.2018, therefore, policy in question was foreclosed on 30.09.2018. The disputed claim of the complainant pertaining to hospitalization in August, 2019 was after the foreclosure of the subject policy, when the policy was already terminated, therefore, the claim is not payable.

13.           Both the parties have relied upon the terms and conditions of the insurance policy Ex.OP2. The relevant point ‘2’ of the clause 12 is reproduced as under:-

“If premium have been paid for the first three years and thereafter if any due premium is not paid even after the expiry of the days of grace, the policy will continue for two years, during which the policyholder can resume payment of the premium. During this period, the hospitalization Insurance Benefit will continue and all applicable charges will be deducted from the fund subject to the foreclosure conditions stated in clause 26. The policy holder will continue to have the benefit of investment in the respective Unit Funds. If the policy is not revived within this period, it will be foreclosed at the end of the revival period as per the foreclosure condition stated in clause no.26”.

26. Foreclosure of the policy:

“If premiums have been paid for three full years and after three policy years have elapsed since inception, notice will be given to the policyholder well before the total fund value reaches 110% of one full year’s premium. Thereafter, if the Fund Value reaches or falls below 110%of one full year’s premium the policy will be foreclosed. The foreclosure Fund Value (Fund Value as on the foreclosure date based on that day’s NAV) can be claimed within the next five years as health saving benefit subject a maximum limit of 50% of the foreclosed Fund Value. The maximum aggregate benefit that can be claimed over the five years is limited to the foreclosed fund value”.

14.           In the present case, OPs have alleged that company sent a notice dated 23.02.2018 to the complainant that the Fund Value was Rs.37176.38 and that if the fund value falls below the minimum foreclosure limit, the policy will be terminated despite of that the complainant had failed to pay renewal premiums and to get revive the subject policy.

15.           The onus to prove its version lies upon the OPs but OPs have miserably failed to prove the same by leading any cogent and convincing evidence. OPs have not placed on file any such documents to establish that in which fund the company has invested the money of the complainant. Furthermore, OPs have not placed on file any such document to ascertain that the value of the complainant's fund is less than 110%. Hence, the plea taken by the OPs has no force.

16.  

17. Further,  Hon’ble Punjab and Haryana High Court in case titled as New India Assurance Company Ltd. Versus Smt. Usha Yadav & others 2008 (3) RCR (Civil) 111, has held as under:-

                It seems that the Insurance Companies are only interested in earning the premiums which are rather too stiff now a days, but are not keen and are found to be evasive to discharge their liability. In large number of cases, the Insurance companies make the effected people to fight for getting their genuine claims. The Insurance Companies in such cases rely upon clauses of the agreements, which a person is generally made to sign on dotted lines at the time of obtaining policy. This is, thus pressed into service to either repudiate the claim or to reject the same. The Insurance Companies normally build their case on such clauses of the policy, but would adopt methods which would not be governed by the strict conditions contained in the policy.

 

 18.          Keeping in view the ratio of the law laid down in the abovesaid judgments, facts and circumstances of the complaint, we are of the considered view that act of the OPs amounts to deficiency in service and unfair trade practice. 

19.           The complainant has spent Rs.3,50,000/-on his treatments  and in this regard he has placed on record medical bills Ex.C10, Ex.C11 to Ex.C28. The said bills have not been rebutted by the OPs. Hence the complainant is entitled for the said amount alongwith interest, compensation and litigation expenses etc.

20.           Thus, as a sequel to abovesaid discussion, we  allow the present complaint and direct the OPs no.5 to pay Rs.3,50,000/- (Rs.three lakhs fifty thousand only)   to the complainant alongwith interest @ 9% per annum from the date of repudiation of claim till its realization. We further direct the OPs to pay Rs.20,000/- to the complainant on account of mental agony and harassment and  Rs.11,000/- towards the litigation expenses. This order shall be complied with within 45 days from the receipt of copy of this order. The parties concerned be communicated of the order accordingly and the file be consigned to the record room after due compliance.

Dated:13.02.2023                                                                    

                                                                  President,

                                                     District Consumer Disputes

                                                     Redressal Commission, Karnal.

 

(Vineet Kaushik)        (Dr. Rekha Chaudhary)

                           Member                          Member