Haryana

StateCommission

A/336/2018

RELIGARE HEALTH INSURANCE CO. LTD. - Complainant(s)

Versus

KARAMVIR SINGH - Opp.Party(s)

SACHIN OHRI

01 May 2023

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

                                                      First Appeal No.336 of 2018

                                                Date of Institution: 20.03.2018

                                                          Date of order:01.05.2023

 

Religare Health Insurance Company Ltd, registered office D-3, P3B, District Centre Saket, New Delhi and Corporate office at 1^st Floor, Tower-A, GYS Global,A3, A4, A5, Sector-125, Noida (UP) through Ms. Ramnique Sachar, Corporate Legal Manager,Authorized signatory, 3^rd Floor, Vipul Tech Square, Tower C, Sector 43, Golf Course Road, Gurgaon, Haryana.

                                                                    ....Appellant

Versus

Karamvir Singh S/o Balwan Singh, R/o H.No.2060, First Floor, Sector-46, Gurgaon (Haryana).

                                                                                           ...Respondent

CORAM:    S.P.Sood, Judicial  Member

                  

Present:-    Mr. SachinOhri, Advocate for theappellant.

                   Mr.Ashutosh proxy counsel for Mr.MadanJassal, Advocate for the respondent.

                                                ORDER

S P SOOD, JUDICIAL MEMBER:

          Delay of 16 days in filing the appeal is condoned for the reasons mentioned in the application filed for condonation of delay.

2.      The present appeal No.642 of 2018 has been filed against the order dated 02.11.2017of the District Consumer Disputes Redressal Forum, Gurgaon(In short now “District Commission”) in complaint case No.642 of 2015, which was allowed.

3.      The brief facts of the case are that complainant purchased a Religare health insurance policy from the opposite parties for a period from 20.06.2014 to 19.06.2015 and got insured his father and mother. At the time of obtaining the policy, his parents were medically examined and after they all were found fit and fine Ops have issued the policy.  During the subsistence of the insurance policy, the father of the complainant developed pain in his chest and he was taken to Balaji Hospital at Jind and thereafter was referred to Artemist Hospital, Gurgaon on 11.04.2015. The said hospital sent a request letter to OP for cashless hospitalization but the same was not approved.  After conducting various clinical tests his father was found to be suffering from blockage in some arteries and treating doctors carried out the desired surgery upon the patient-Balwan Singh and raised a bill of Rs.2,81,541.63/-, however complainant paid a sum of Rs.2,74,840.86/- against the same. Afterwards the complainant  has sought reimbursement of the bill amount but OP wrongly and illegally repudiated his claim vide letter dated 22.05.2015. Thus there being deficiency in service on the part of the OP, hence the complaint.

4.      Upon notice, OPs filed its written version stating therein that there was no privity of contract between the parties.  As per statement given by the  insuredBalwan Singh to the company’s investigator, he used to consume hukah (smoking) since last five years as such complainant had  committed breach of the principles of good faith. If the history of smoking by his father was disclosed by the complainant, the policy would have been issued by the respondent with separate terms and conditions. The father of the complainant was a chronic smoker since 5 years and complainant has also admitted this fact.  The claim was repudiated as per clause 6.1 of the policy terms and conditions i.e.non disclosure of smoking at the time of pre-policy medical check-up.  Rest of the contents of complaint were also denied being incorrect and prayed for dismissal of the complaint.

5.      After hearing both the parties, the learned District Commission, Gurgaonhas allowed the complaint vide order dated 02.11.2017, which is as under:-

“Thus, we direct the opposite party to reimburse the insurance amount of Rs.2,81,541.63/- in terms of the policy alongwith interest at the rate of 9% per annum from the date of filing of complaint till its realization and further to pay a sum of Rs.15000/- as compensation for mental agony harassment as well as litigation expenses.”

6.      Feeling aggrieved therefrom, OP-appellant has preferred this appeal before this Commission.

7.      Arguments heard. File perused.

8.      It is not disputed that the complainant had purchased a Religare Health Insurance covering himself and his parents namely Sh.Balwan Singh father and mother Smt.Veermati from the opposite parties. It is also not disputed that at the time of obtaining the policy, the complainant and his parents were medically examined through SRL Diagnostic, Gurgaon and were found fit and fine and only thereafter the OP issued the policy. It is also not disputed that during the subsistence of the policy in question,the father of the complainant was hospitalisedand complainant had to spent Rs.2,81,541.63/- on his father’s treatment.The claim was repudiated by the opposite partieson the ground that complainant was having pre existingdisease as father of the complainant was a chronic smoker since five years and the insured has categorically concealed this fact and did not disclose the same at the time of inception of policy. But there is no record on the file to prove that the insured was having any pre existing disease or his father used to smoke. It was observed in the discharge summary the insured patient was 55 years presented with complaints of left side chest pain radiating to left arm and as per the findings noted therein the patient was admitted and his ECG showed ST-T changes, screening Echo showed LVEF-45%. Patient taken for CAG which  showed IHD, CAD, SVD for which he underwent successful PTCA + S to LAD. Post procedure period was uneventful. Patient is being discharged with optimized medication and follow-up advice. Since the OPs have already  medically examined the complainant and his family members before obtaining the policy, why OPs repudiated the legitimate claim of the complainant.  During this examination the OP should have acquired the necessary indication regarding his being potentially a case where heart problem would affect him in the future. Why this observation was not brought on the record by the doctors concerned who all conducted his medical examination evaluating his health status.  The treating doctor had given a certificate dated 11.04.2015 to the effect that there was no past medical and surgical history of the father of the complainant.

9.      It is a matter of common experience, insurance companies often repudiate claims on grounds of non-disclosure of material information by the consumer. However they conveniently forget that there is an even greater statutory obligation cast on them to give full information to the consumer about the products they sell.

10.    The responsibilities of the insurer towards full disclosure is even more because (a) the Insurance Regulatory and Development Authority’s (IRDA) Regulation on the protection of Policyholders’ Interests’ specifically mandates this and (b) the contracts of insurance, which are ‘Adhesion Contracts’ or ‘Standard Form Contracts’ are drawn up unilaterally by the dominant party-the insurer. The consumer, being the weaker party has no bargaining power, nor knowledge of the terms of the contract. So, the apex court has often said that these contracts, therefore, demand a very high degree of fairness, good faith and disclousure on the part of the insurer.

          Here are two cases where the Supreme Court has reminded insurers of their obligation in this regard and warned them against violations. The two cases also show-case the kind of unfair practices indulged in by insurers.

          In Texco Marketing Pvt. Ltd. Vs TATA AIG General Insurance (CA No. 8249 of 2022, date of judgment: November, 9, 2022), for example the insurance company insured after due inspection, a shop located in a basement under the Standard Fire and Special Perils Policy, despite the fact that the policy specifically excluded basements. Subsequently, following a fire, when the policyholder made a claim, the insurer repudiated it on the basis of the exclusion clause!

          While ruling in favour of the consumer, the apex court observed that first and foremost, the insurer did not bring the exclusion clause to the notice of the consumer. And then, despite having knowledge of the exclusion clause, it insured the basement and received the premium benefits. After this, repudiating the policyholder’s claim on the basis of the exclusion clause was certainly an unfair trade practice. “This view is fortified by the finding that the exclusion clause is an unfair term, going against the very object of the contract, making it otherwise un-executable from its inception,” the apex court said.

          Some of the observations of the court in this case would go a long way in upholding the rights of the policyholders. For example, the court made it clear that an exclusion clause, if not brought to the notice of the consumer by the insurer or agent, would not be binding on the consumer. Similarly, an unfair term in an insurance contact would be un-executable. The Supreme Court also reminded insurers that an exclusion clause “is not a leverage or safeguard for the insurer, but is meant to be pressed into service on a contingency, being a contract of speculation”.

          Said the court: “Before we part with this case, we would like to extend a word of caution to all the insurance companies on the mandatory compliance of Clause (3) and (4) of IRDA Regulation, 2022. Any non-compliance on the part of the insurance companies would take away their right to plead repudiation of contract by placing reliance upon any of the terms and conditions included thereunder”.

11.    Therefore repudiation  on the ground that complainant’s father was chronic smoker is not justified.  There was nothing on the file which shows that father of the complainant was chronic smoker at the time of inception of the policy in question. The repudiation of the claim was bad in the eyes of law and was not justified. The OP has illegally repudiated the claim of the complainant. The learned District Commissionhas rightly allowed the claim of the complainant. The learned District Commission had committed no illegality while passing the order dated 02.11.2017.  The appeal is also devoid of merits and stands dismissed.

12.    The statutory amount of Rs.25,000/- deposited at the time of filing the appeal be refunded to the complainant-respondent-KaramvirSinghagainst proper receipt and identification in accordance with rules, after the expiry of period of appeal/revision, if any.

13.              Applications pending, if any stand disposed of in terms of the aforesaid order.

14.              A copy of this order be provided to all the parties free of cost as mandated by the Consumer Protection Act, 1986/2019. The order be uploaded forthwith on the website of the commission for the perusal of the parties.

15.              File be consigned to record room after due compliance.

 

 

1stMay, 2023                                                                        S. P. Sood                                                                                                                            Judicial Member                            

 

S.K(Pvt. Secy.)