STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Shri Pawan Taneja, aged about 37 years, s/o Shri RS Taneja, r/o Flat No.304, B-Block, 3rd Floor, Rail Vihar, Sector 4, Mansa Devi Complex, Panchkula, Haryana.

….…Appellant/Complainant

                           V E R S U S

1.        Iffco-Tokio General Insurance Company Limited, through its Managing Director and Chief Executive Officer, Corporate Office, Iffco Tower, 4^th  & 5^th  Floors, Plot No.3, Sector 29, Gurgaon 122001, Haryana.

2.        Iffco-Tokio General Insurance Company Limited, through its Branch Manager, Plot No.2B-C, 4^th  Floor, Iffco Complex, Sector 28-A, Madhya Marg, Chandigarh UT 160018.

3.        The Oriental Insurance Company Limited, through its Chairman cum Managing Director, Registered Office: Oriental House, A-25/27, Asaf Ali, Road, New Delhi 110002.

4.        Paramount Health Services (TPA) Private Limited, through its Regional Manager, Regional Office: D-39, Okhla Industrial Area, Phase I, Near DD Motors, New Delhi 110020.

..… Respondents/OPs

Appeal under Section 15 of the Consumer Protection Act, 1986.

BEFORE:    MR. JUSTICE SHAM SUNDER, PRESIDENT.

                   MRS. NEENA SANDHU, MEMBER.

Argued by: Sh. Neeraj Pal Sharma, Adv. for the appellant.

Sh. Rajneesh Malhotra, Adv. for respondents No. 1 & 2

Sh. Vinod Chaudhri, Adv. for respondent no.3

OP-4 exparte.

PER  JUSTICE SHAM SUNDER, PRESIDENT

1.        This appeal is directed against the order dated 06.01.2011, rendered by the District Consumer Disputes Redressal Forum-I, UT, Chandigarh (hereinafter to be called as the District Forum only) vide which it partly allowed the complaint, in favour of the complainant, in the following manner:-

i.   “In view of the above findings, we deem it proper to take the righteous decision and partly allowed the complaint in favour of the complainant with the following directions:-

ii.   All OPs would be jointly & severally liable to pay Rs.32,462/- to the complainant against the medi-claim before the cancellation of the policy.

iii.   The OPs shall also pay Rs.10,000/- to the complainant towards compensation besides Rs.5000/- cost of litigation.

This order shall be complied with within 30 days from the date of its receipt, failing which the OPs would be liable to pay aforesaid amount of Rs.42,462/- with interest @12% per annum from the date of order till its actual payment to the complainant, besides cost of litigation.  However, the complainant will return the cheque of Rs.19,682/- to the OPs which had been sent by them as refund on pari-pasu basis from the date the complainant left the job. They will give a fresh cheque of the accordingly reduced amount from the date of cancellation of the policy till 23.5.2010.

It needs to be added here that the OPs would not be liable for payment of Rs.1,13,055/- against the medi-claim for the second hospitalization after the cancellation of the policy by the OPs”.

2.        The facts, in brief, are that the complainant was employee of OP-1, in the capacity of Manager w.e.f. 19.4.2004. The complainant was offered a critical medical insurance policy by OPs 1 & 2, for the medical insurance of his family, including parents, in May 2004. It was a group insurance policy for all the employees of OP Nos.1 & 2.  OP-3, Oriental Insurance Company, had issued the medi-claim policy to OP Nos.1 and 2, for coverage of its employees.  Regular premium for the medical insurance policy, was being paid to OP-3, by OP Nos.1 & 2, by direct deduction, from the salaries of the employees. The complainant had paid Rs.22,615/- plus taxes, as premium per annum. Rs.27,138/- plus taxes, had been deducted by OP-1, from the salary of the complainant, for the year 2009-2010, for coverage of both his parents. It was stated that the complainant, had been paying regular premiums for the policy, from 2004 to 23.5.2010. The complainant, resigned from the service of OPs 1 & 2, on 22.9.2009, and when he was relieved of of his duties, the OPs did not raise any objection, qua the continuation of the medi-claim insurance policy, nor was any notice for cancellation of the same, was given by either of the parties.  No premium on pari passu basis was, at that time, refunded to the complainant. 

3.        Subsequently, the mother of the complainant, was admitted to Sir Ganga Ram Hospital on 12.10.2009, for surgery.  In accordance with the terms and conditions of the policy, cashless treatment, was to be given to the patient.  The complainant, in accordance with these terms, filled in the admission note, and sent the same to OP-4, for approval.  However, he was surprised to know that the cashless facility was denied to him.  He was informed by OPs 1 & 2, that the benefits, under the medi-claim policy, were available, only to serving employees and the denial had thus occasioned.  The complainant, thus paid Rs.1,62,462/-, from his own pocket, for the treatment of his mother.

4.        Thereafter, he issued a legal notice to OPs No.2 to 4, through registered post, whereby he demanded the amount, from them. OP-2, vide letter dated 10.11.2009, informed that the denial was, in accordance with the terms of the policy, since, he had resigned from the job and the coverage could not be extended, beyond the date of resignation. A cheque, in the sum of Rs.19,682/-, dated 17.12.2009, was issued, in favour of the complainant, as refund of premium on pari-passu basis, which the complainant, did not get encashed. It was further stated that the mother of the complainant, was once again taken to Sir Ganga Ram Hospital, for knee replacement. This time, the total treatment cost was Rs.4,13,055/-. This amount was also paid by the complainant, from his own sources.  The OPs, on demand, did not pay this amount, to the complainant. It was further stated that the aforesaid acts of the OPs, amounted to deficiency, in service, and indulgence into unfair trade practice.

5.        When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only) was filed, with a prayer, that the OPs be directed to make payment of Rs.32,462/- against his first claim of Rs.1,62,462/- (Rs.1,30,000/- had been allowed by United India Insurance Company being insurer of the wife of the complainant) and Rs.1,13,055/- against the second claim of Rs.4,13,055/- (as Rs.3 lacs had been allowed by Apollo DKV Insurance Company being the insurer of the complainant), alongwith compensation and litigation costs.

6.        OPs 1 & 2, in their written reply, stated that the Medi Claim Group Insurance Policy, was taken by them for their employees from OP-3. It was further stated that this policy was only valid, for an employee of the Company, during the period of employment of an employee, in the service of the Company. It was further stated that the cover came to an end, as and when, the employee left the service of the Company.  It was further stated that the premium paid for the full year, had already been refunded, on pro-rata basis, to the complainant, for the period, after the date of resignation, till the end of policy period i.e. from 22.9.2009 to 23.5.2010. It was further stated that the complainant, should have got the policy cancelled, when he left the job.  It was further stated that, the claim was being sought, for a period, when the group insurance policy was not effective, for him, and his beneficiaries, as he resigned from the Company, on 22.9.2009. It was further stated that, since, the complainant had himself resigned from the post on 22.9.2009, the cover for insurance, did not extend to him, and his family, thereafter. It was further stated that, under these circumstances, OP-1 and OP-2, were neither deficient, in rendering service, nor indulged into unfair trade practice. The remaining averments, were denied, being wrong.

7.        OP-3, in its separate written reply, took up almost the similar pleas, as were taken by OPs 1 & 2, in their written reply.  It was stated that the insurance cover, related to a group insurance and could not be extended to a person, who was not a part of the group i.e. who had left the service and no longer remained an employee of OP-1 and OP-2.  It was further stated that, after his resignation, from the job, the complainant, automatically forfeited his claim for indemnification.

8.        Despite service, no duly authorized representative appeared, on behalf of OP-4. Accordingly, it was proceeded against ex-parte. 

9.        The parties led evidence, in support of their case.

10.     After hearing the Counsel for the parties, as well as, on going through the evidence, and record, the District Forum, accepted the complaint partly, in the manner, referred to above, in the opening para of this order.

11.     Feeling aggrieved, against the order, vide which the complaint was accepted partly, the instant appeal, was filed, by the appellant/complainant.  

12.     We have heard the Counsel for the parties, and have gone through the evidence and record of the case, very carefully. 

13.     The Counsel for the appellant, submitted that, no doubt, when the complainant, was an employee of respondents no.1 and 2, they obtained a group insurance policy, for their employees, including the complainant, and deductions of premium, used to be made from their salary. He further submitted that, no doubt, the complainant resigned on 22.09.2009, and he was relieved of his job, yet his mere resignation could not be said to be a sufficient ground to deny his claim in respect of the group insurance policy. He further submitted that the group insurance policy, which was obtained by respondents no.1 and 2, from respondent no.3, for its employees, did not contain any Clause that, if an employee, resigned from service, he would not be entitled to the benefits, available to him under the same. He further submitted that the terms and conditions, of the group insurance policy were required to be interpreted, as it is, and could not be altered by the District Forum. He further submitted that, under these circumstances, when the complainant had paid the full premium for the aforesaid policy, even after his resignation, he and his family members, who were the beneficiaries, under the policy, were entitled to the amount, claimed by the complainant. He further submitted that the District Forum, was, thus, wrong in only partly accepting the complaint. He further submitted that the order of the District Forum, be modified and the appellant be awarded, the entire amount claimed by him.

14.     On the other hand, the Counsel for the respondents, submitted that since it was a group insurance policy, which was taken by respondents no.1 and 2, from respondent no.3, for its employees, benefits thereunder, could only be obtained by the person, who continued, to be an employee of respondents no.1 and 2, and not by the person, who had resigned the job of the Company. They further submitted that the very nomenclature of the policy, in itself, revealed, that it was for the welfare and benefit of the employees of respondents no.1 and 2 Company, and not for an employee, who had already resigned. They further submitted that, ultimately, the policy was cancelled and the premium paid by the complainant, was refunded to him, on pro-rata basis. They further submitted that the District Forum, was right, in allowing the complaint partly against respondent no.3. They further submitted that respondents no.1 and 2, were not liable to pay any amount, but the District Forum, was wrong, in holding the OPs jointly and severally, liable.

15.     After giving our thoughtful consideration, to the rival contentions, advanced by the Counsel for the parties, in our considered opinion, the appeal is liable to be dismissed, for the reasons to be recorded hereinafter. The first question, that arises for consideration, is, as to whether, the complainant and his dependants, being the beneficiaries, were entitled, to the benefits, under the said policy, even if, he (complainant) no longer remained an employee of respondents nos.1 and 2, Company. According to Clause I, of the Mediclaim Insurance Policy (Group), Annexure C-1, the insured is a person, who has paid the premium to Company, as consideration for the insurance. The Group Insurance Policy was obtained by OP Nos.1 and 2, for all its employees, and the premium was deducted from their salary. Though OP Nos. 1 and 2, were the insured, yet the complainant, who had paid premium, was the beneficiary alongwith his dependants. According to Clause 3.1 of Mediclaim Insurance Policy (Group) C-1, insured person means the person(s) named on the Schedule of the Policy. However, the OPs did not produce the Schedule. Under these circumstances, an adverse inference can be drawn, against them that had the same been produced by them, it would not have supported their case. The complainant was thus, covered by the aforesaid policy. The submission of the Counsel for respondents no.1 and 2,  that since, the complainant resigned from their job, he no longer remained employee, and, as such, was not an insured person, under the policy, does not appear to be correct and stands rejected.

16.     The next question, that arises for consideration is, as to whether, the OPs could cancel the policy. Clause 5.11 of the policy, relating to the cancellation of the policy reads as under:-

“5.11 CANCELLATION CLAUSE company may at any time without assigning any reason cancel this policy by sending the insured 30 days notice by registered letter at the Insured’s last known address and in such an event the Company shall refund to the Insured a pro-rata premium for un-expired period of Insurance.  The Company shall, however, remain liable for any claim which arose prior to the date of cancellation.  The Insured may at any time cancel this policy and in such event the Company shall allow refund of premium at Company’s short period rate only (table given here below) provided no claim has occurred during the policy period upto date of cancellation.”

17.     The plain reading of the aforesaid Clause, clearly reveals that the Company could cancel the policy, at any time, without assigning any reason, by sending the insured 30 days notice vide registered letter, at the insured last known address and, in that event, the Company shall refund to the Insured a pro-rata premium for unexpired period of insurance. It is further clear from the afore extracted Clause, that the Company, would, however, be liable for any claim, which arose prior to the date of cancellation. The OPs, in this case in terms of Clause 5.11 of the policy, vide email, annexure C-13, dated 17.12.2009, sent a cheque of Rs.19,682/- (copy C-14), of the premium, for unexpired period of policy, on pro-rata basis. The Counsel for the appellant/complainant, admitted that the cheque, in the sum of Rs.19,682/-, towards the amount of premium deposited by the complainant, for the unexpired period of policy,  on pro-rata basis, was received by the complainant, but he did not get it encashed. Once, the cheque, in the sum of Rs.19,682/-, towards the refund of amount of premium, deposited by the complainant, for the unexpired period of policy, on pro-rata basis, was sent to the complainant, by the Insurance Company, it clearly exhibited its intention of cancellation of the policy, in terms of Clause 5.11, extracted above. The Company was not required to assign any reason. Thus, in the email dated 17.12.2009, no reason for cancellation was assigned, though cheque aforesaid was sent. It is, therefore, held that in terms of Clause 5.11, referred to above, the policy qua the complainant, was rightly cancelled and the amount of premium on pro-rata basis, in the sum of Rs.19,682/-, was rightly ordered to be refunded, in his favour and the cheque was sent to him. There was, thus, substantial compliance of the provisions of Clause 5.11, extracted above. Whether, the cheque was got encashed, by the complainant, or not, that hardly mattered. He perhaps, did not get the said cheque encashed, merely under the hope, that the policy would continue, for the whole year. If he did not accept the refund by not encashing the cheque, it did not constitute, a valid reason for continuation of the policy. The submission of the Counsel for the appellant, to the effect, that the policy continued throughout, therefore, being, without merit, must fail, and stands rejected.

18.     The next question, that arises for consideration is, as to whether the complainant was entitled to the amount of Rs.32,462/-, against his first claim of Rs.1,62,462/-, on 23.10.2009 and the second amount of Rs.1,13,055/- against the second claim of Rs.4,13,055/- on 24.02.2010. The amount of Rs.32,462/-, claimed by the complainant, was certainly spent by him, before the policy was cancelled on 17.12.2009, when the cheque of Rs.19,682/-, of the premium deposited by the complainant, for the unexpired period of policy, on pro-rata basis, was sent to him. In view of Clause 5.11, of the policy, extracted above, the respondents/OPs, were liable to make payment of Rs.32,462/-, to the complainant, for the medical treatment, before the cancellation of the policy. The second amount was spent by the complainant on 24.02.2010 i.e. after e-mail, annexure C-13 dated 17.12.2009, was sent to him, when respondent no.3/OP-3, made its intention clear to cancel the policy, by refunding the amount of Rs.19,682/-, as premium, deposited by the complainant, on pro-rata basis. Any liability, therefore, incurred by the complainant after 17.12.2009, could not be fastened upon the respondents/OPs. The District Forum, was, thus, right in holding so. The findings of the District Forum, in this regard, being correct, are affirmed.

19.     No doubt, the terms of the policy could not be altered by the District Forum, but it was required to interpret the terms and conditions of the policy, as it is. As stated above, according to Clause 5.11, extracted above, respondent no.3, could cancel the policy, at any time, without assigning any reason, by giving notice to the insured. The insured’s, in this case were respondents no.1 and 2 and the insurer was respondent no.3. It was under these circumstances, that a cheque of Rs.19,682/-, as refund, towards the premium, deposited by the complainant, on pro-rata basis, vide email dated 17.12.2009, was sent, as the policy was cancelled, without assigning any reason. So the District Forum, did not go beyond the terms and conditions of the policy, and it interpreted the terms and conditions of the same, as it is. The submission of the Counsel for the appellant, in this regard, being without merit, must fail, and the same stands rejected.

20.     The Counsel for respondents No.1 and 2, submitted that they are not liable to pay any amount to the complainant, but the District Forum, was wrong in fastening the liability upon them. He further submitted that they were only the insured, whereas, liability should have been solely fastened upon respondent no.3/OP-3, being the insurer. It may be stated here, that respondents No.1 and 2, have not filed any cross- appeal, challenging the legality of the impugned order. If, they were aggrieved against the order of the District Forum, they could challenge the same, by way of filing a cross-appeal. In the absence of any cross appeal, filed by respondents No.1 and 2, no relief can be granted to them, to that effect, that they were not liable to pay any amount. The submission of the Counsel for respondents No.1 and 2, in this regard, being without merit, must fail, and stood rejected.

21.     In view of the above discussion, it is held that the order of the District Forum, does not suffer from illegality, or perversity, warranting the interference of this Commission. 

22.     For the reasons recorded above, the appeal, being devoid of merit, must fail, and the same is dismissed, with no order as to costs.

23.     Copies of this order be sent to the parties free of charge.

Pronounced.                                                    

September 1^st, 2011

Sd/-

 [JUSTICE SHAM SUNDER]

PRESIDENT

Sd/-

 [NEENA SANDHU]

MEMBER

Rg