Haryana

Ambala

CC/369/2010

Manish Gupta - Complainant(s)

Versus

LIC - Opp.Party(s)

B.S.Sudan

14 Jun 2016

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, AMBALA.

                                                                   Complaint Case No.369 of 2010/2015

       Date of Institution:   10.08.2010

       Date of Decision  :   14.06.2016

 

Manish Gupta son of Sh. Chaman Lal Gupta R/o H.No.6341/13, Ahluwalia Building, Ambala Cantt.

 

                                                                                                            ……Complainant.

 

Versus

 

1.         Zonal Manager, Life Insurance Corporation Ltd., 124, Cannaught Circus, Jewan Bharti Building, New Delhi-110001.

 

2.         Divisional Manager, Life Insurance Corporation Ltd., Division Health Unit, Division Office 489, Model Town, Karnal.

 

…..Opposite Parties.

Complaint Under Section 12 of the Consumer Protection Act

CORAM:        SH. A.K. SARDANA, PRESIDENT.

                        SH. PUSHPENDER KUMAR, MEMBER.

 

Present:          Sh. B.S. Sudan, Adv. counsel for complainant.

                        Sh. Jasmer Chand, Adv. counsel for Ops.

 

ORDER:

 

                        Present complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter in short called as the ‘Act’) has been filed by the complainant contending therein that he purchased a health policy from Ops bearing no.176330056 dated 25.06.2008 by paying the requisite premium and was insured for the major surgical benefits & accidental death &  other medical facilities. Complainant has further contended that he suffered heart disease i.e. Rheumatic Heart Disease and due to that complainant was hospitalized in Fortis Heart Hospital, Mohali from 12.07.2009 to 22.07.2009 where surgery was done upon the complainant and a sum of Rs.2,21,990/- was incurred  upon the treatment of complainant. Further it has been averred that complainant informed the OP Corporation qua his surgery and amount incurred thereupon as well as submitted necessary documents for releasing of the claim but complainant was surprised to know that his claim has been refused by OP insurance company without any plausible reason. So, a legal notice served upon the Ops, to which they replied that claim of the complainant has been repudiated by their higher authorities as pre-existing disease. Thus the complainant has prayed that the act and conduct of complainant is a clear cut case of deficiency in service and prayed for relief as per prayer clause of the complaint.  

2.                     Upon notice, Ops appeared through counsel and tendered reply raising preliminary objections qua non-maintainability of complaint and mis-jonder & non-joinder of necessary parties. On merits, it has been admitted that the policy in question has been purchased by complainant from the Ops but the policy annexed with the complaint is a NMG category i.e. Non-Medical General and in this case,  the medical of a policy holder, opting for health policy is not done as per the option of the policy holder. It has been further urged by the Ops that it is purely the option of a person opting for a health insurance policy whether to have NMG category LIC Policy or otherwise, if one opts for NMG, in that eventuality, the medical of a person concerned is not done. Further it has been urged that if complainant hides or conceals any fact about his health before purchasing  a health policy, claim of such person is repudiated as per rules.  Alongwith the written statement, Ops have annexed list of 49 surgeries and stated vide para No.2 of the reply/W.S. that policy holder of the aforesaid insurance policy i.e. complainant is covered in the listed surgeries as per the terms & conditions of the aforesaid policy.  In this way, Ops  have submitted that there is no deficiency or negligence in service on their part and prayed for the dismissal of the complaint with costs.

3.                     To prove his contention, complainant tendered his affidavit as Annexure CX alongwith documents as Annexures C-1 to C-8 and closed his evidence whereas on the other hand, counsel for Ops tendered in evidence affidavit of  one Sh. P.K. Saxena Manager (LEHPF) LIC Divisional Office, Karnal as Annexure  R-1 alongwith documents as Annexures R-2 to R-13 and closed the evidence on behalf of Ops.

4.                     We have heard learned counsel for the parties and perused the records. Learned counsel for the complainant argued that the Ops have wrongly repudiated the claim of the complainant whereas he was duly covered under the policy ‘Health Plus with Profit Policy’ taken from OP-insurance company.  Counsel for the complainant  drawn our attention towards the documents  Annexures R-4 & R-13 tendered by Ops in their evidenced wherein vide  Annexure R-4, cause of repudiation has been mentioned as under:-

Repudiation Code	Cause of Repudiation
M01	Surgeries not listed in allowed surgeries
H01	Pre-existing illness irrespective of prior medical treatment or advise.

 

                        Whereas on perusal of Annexure R-13, it reveals that the surgery of valve replacement using mechanical prosthesis via open chest surgery is fully covered to the extent of 100% for which the complainant was operated upon in the  Fortis Hospital and for whose treatment, the complainant is seeking reimbursement from Ops as clear from document i.e. Bill Annexure C-1 read with document Annexure C-8 i.e. policy details & hospitalization details  vide clause ‘Brief description of the treatment/surgery-Surgery of MVR(Mitral Valve Replacement).’ Besides it, counsel for complainant has placed reliance on case law rendered by Hon’ble Kerala State Consumer Disputes Redressal Commission, Thiruvananthapuram in FA No.A/12/335 United India Insurance Company Vs. Safiya decided on 18.04.2013 reported in 2013(3) CLT Page 195 wherein it is held that “Consumer Protection Act,1986, Section 2(1)(g)-Insurance Claim(health)-Repudiation-Pre-existing disease-Insurer failed to prove that the congenital disease was within the knowledge of insured-In the absence of any proof regarding any treatment undergone by the insured prior to the inception of the Insurance policy-Claim cannot be repudiated”. Counsel for complainant also placed reliance on another  case law reported in 2012 (1) CLT Pg. 185 titled as Life Insurance Corporation of India & Another Vs. Ashok Manocha decided by Hon’ble National Commission, New Delhi in Revision Petition No.10 & 11 of 2007 wherein it is held that “Insurance claim-Repudiation-Suppression of material fact-Certificate of the hospital which has been  submitted as evidence, does not have the seal of the doctor who had signed it-There is no affidavit of the said doctor nor of any officer of the petitioner/insurance company to prove the authenticity of medical treatment at Hospital as also the medical certificate issued thereafter-Plea on behalf of the petitioner that since the written  statement was made in affidavit form it should be taken as evidence repealed since the Respondent did not get an opportunity to cross-examine or challenge the same-Pleadings cannot be held as evidence and in the absence of any evidence in support of the case set up the certificate produced by the petitioner from the hospital is of no help to the petitioner-Order of the District Forum upheld.”  Counsel for complainant further placed reliance on another case law rendered by Hon’ble Andhra Pradesh State Commission reported in 2014(4) CLT Pg. 115 wherein General Observations have been rendered by the Hon’ble Bench that  “we have been observing that in a number of cases, the insurance companies are issuing policies basing on the statements made by the proposer in utmost good faith but when it comes to settlement of claims, they start examining the matter under the microscope.  In a majority of policies issued by the insurance companies they were routed through their agents. The agents in their anxiety to get their commission and the insurance company in order to do more and more business see that  the policies are  issued the moment they received the premium amount. Even the insurance companies are not aware as to who is the proposer, what is his /her status or health condition etc.. Here, the intention is very clear that first they induce the people to purchase the policies and later they start litigation.  Even in the instant case also, the proposal was made through agent.  On Ex.B1 we find the rubber stamps of the agent and specified person code and license Nos. on the first and last pages of the proposal.  A  close scrutiny of the proposal form would reveal  even the columns were filled up by the agent and simply obtained the signatures of proposer on ‘x’marks. It is manifest that the proposal was routed through the agent of the LIC.  If we may say so, the agents are playing fraud on LIC as well as gullible consumers with false assurances.  When the policy was issued by the insurance company with utmost good faith, the same yardstick has to be applied while settling  the claims also.  The LIC ought to have made thorough enquiry, investigation or necessary medical health check—ups before issuance of policy irrespective of the amount involved.  Without doing so, when they have issued the policy, now they cannot turn round and contend that they need not pay any amount as there was suppression of material information with regard to his health”.  Besides it, counsel for complainant also placed reliance on plethora of judgments to strengthen his case which are detailed below:-

(i)        2014(3)CLT Pg 207 (Raj.) Nirmala Devi Vs. Birla Sunlife Insurance Co. Ltd.

(ii)       2014(3) CLT Pg.202 (Haryana) The OICL Vs. Vivek Rekhan.

(iii)     2014(3) CLT Pg. 49 (NC) Manager Bajaj Allianz Life Insurance Co. Ltd. & Others Vs. Mrs. Raj Kumar.

 

and prayed for acceptance of the complaint.

5.                     On the other hand, the counsel for Ops has argued that complainant has not disclosed his pre-existing disease intentionally and made a false answer to the questions mentioned in the proposal form.  Had he disclosed the said disease in the proposal form, the OP insurance company would not have issued the policy in question to the life assured. As such, he has played fraud upon the answering OP.  Thus under the terms and conditions of the OP-company, if any information given by the assured person in the proposal form is found false or incorrect, in that event, the contract  become void ab-initio and nothing is payable to the insured person and the amount deposited by him/her shall be forfeited.  Besides it, counsel for Ops argued that policy in question taken by complaint is NMG category i.e. Non-Medical General Category and in this case,  medical of a policy holder, opting for health policy is not done as per the option of the policy holder. Hence, OP have rightly repudiated the claim of the complainant. The counsel for the Ops has placed reliance on case law rendered by Hon’ble Supreme Court of India in Civil Appeal No.2776 of 2002 titled as Satwant Kaur Sandhu Vs. New India Assurance Company Ltd. decided on 10.07.2009 reported in 2009(4) RCR (Civil) Page 692  wherein it has been held that “Insurance Act, 1938, Section 45-Consumer Protection Act, 1986 Sections 2(1)(o)(g) and (c)(xiii)-Insurance Regulating and Development Authority (Protection of Policy holders interests) Regulations, 2002 Regulation 2(1(d)-Repudiations of medical insurance claim-Material Fact-Suppression of  -“Material fact” means  any fact which would influence the judgment of a prudent insurer in fixing the premium or determining whether to accept the risk or not-If the proposer has knowledge of such fact, he is obliged to disclose the same-Failure to do so entitled the insurer to repudiate his  liability under the policy”. Counsel for the Ops also placed reliance on other case laws rendered by Hon’ble National Consumer Disputes Redressal Commission, New Delhi in Revision Petition No.1242 & 2241 of 2013 decided on 13^th January 2014 and 11^th March 2014 wherein it has been held that “A contract of insurance is based on the principle of utmost good faith. The facts relating to his health were known to the insured.  Any fact, which goes to the root of contract of insurance and has a bearing on the question of fixing the premium or determining whether the insurer would like to accept the risk, would be “material”.  He is under the absolute duty to disclose all the “material facts” which are within his personal knowledge.  In this case, repudiation is justified”.  

 

 6.                    At the very outset, it is admitted case of both the parties that complainant got his life assured with the Ops. The main objection of the OP insurance corporation is that the life assured is not entitled for benefits under the policy in question due to pre-existing illness irrespective  of prior medical treatment or advise and the surgery  not listed in the allowed surgeries as clear from repudiation letter dated 29.10.2009 (annexure C-8). Perusal of  policy document (Annexure C-7 & R-2 placed on file by both the parties), it reveals that policy is ‘LIC’s Health Plus Plan-LIC’s Health Plus with Profit’ but it is nowhere depicted in the policy that it does not cover any medical facility or other benefits under the policy to the insured person. Further on perusal of document Annexure R-3, it reveals that the proposal form of complainant was filled  &  routed through Agent Chander Shekhar-1053169 to which the complainant signed bonafidely and thus the observation set by the Hon’ble Andhra Pradesh State Commission reported in 2014(4)CLT Page 115 (supra) is fully applicable to the facts of present case.  Ops have also relied upon the documents Annexure R-6 & R-7 for repudiating the claim of complainant whereby they have sought opinion of Dr. Alok Gupta, DMR, Karnal  who reported that ‘patient was a known case of Rheumatic Heart Disease since childhood’ but  the Ops have neither examined the said doctor as witness before the Forum nor any affidavit of concerned doctor to prove the contents of treatment record etc. has been placed on file wherefrom  contention of Ops qua pre-existing illness is not proved.  On the other hand, complainant in support of his case has placed on record a bill of Rs.2,21,990/- (Annexure R-1) which he incurred at Fortis Hospital, Mohali for his treatment  but the said bill has not been controverted by the Ops and further from the document i.e. surgical benefit annexure (Annexure R-3), the operation/surgery of valve replacement is fully covered to the extent of 100% as mentioned in Annexure C-8 & R-4 tendered by both the parties qua surgery of valve replacement of complainant. Thus we have no option except to believe the version of complainant. Further, the citations referred above submitted by the counsel for complainant are conforming to the facts and circumstances of the present case whereas the citations submitted by counsel for the Ops are not applicable to the facts and circumstances of the present case and thus are not helpful in deciding the case in hand.

7.                     In view of the facts discussed above, we are of the confirmed view that the Ops have wrongly repudiated the claim of complainant, as such, the  complaint of complainant is allowed and the Ops are directed to comply with the following directions within thirty days from the communication of this order:-

(i)        To pay a sum of Rs.2,21,990/- to the complainant alongwith simple interest @ 9% per annum from the date of repudiation of claim i.e. 29.10.2009 to till the date of order.

(ii)       Also to pay a sum of Rs.10,000/- on account of compensation qua causing mental harassment etc.

(iii)     And to pay a sum of Rs.10,000/- on account of costs of litigation etc. incurred by the complainant.

                        Further the award in question/directions issued above must be complied with by the OPs within the stipulated period failing which all the awarded amounts shall further attract simple interest @ 12% per annum for the period of default.  Copies of this order be sent to the parties concerned, free of costs.  File be consigned to the record room after due compliance. 

 

Announced:14.06.2016                                                                        Sd/-

                                                                                                    (A.K. SARDANA)

                                                                                                          PRESIDENT

                                                                                                                

                                                                                                  Sd/-

                                                                                 (PUSHPENDER KUMAR)                                                                                                                                                                                              MEMBER