Order dictated by:

Smt.Vinod Bala, Presiding Member

1.       The complainant  has brought the instant complaint under section 12 of the Consumer Protection Act, 1986 on the allegations that the Complainant purchased LIC's Health Protection Plus Plan (Table 902) from Opposite Party under Policy Number 133101158 dated 20.11.2009 and as such, the relationship of consumer and service provider between the parties; that the Complainant  has been regularly making the payment of the insurance premium to the Opposite Party since the year 2009 upto date, without any break and prior to November 2016 the Complainant  never lodged any claim  with the Opposite Party; that the Complainant  undergone a surgery in September, 2016 from Fortis Hospital, Mohali and in October, 2016 she lodged a claim of Rs.2,50,000/- with the Opposite Party and thereafter, the Opposite Party has released the claim of only Rs.54,161/- in February, 2017 through NEFT. Thereafter, the Complainant  visited many times to office of Opposite Party at Moga and made written and oral requests to the Branch Manager of Opposite Party to release the balance amount of Rs.1,95,839/- alongwith upto date interest per annum from the date of lodging the medical claim, but to no effect. In this way, the Opposite Party has wrongly and illegally retained the balance claim amount of the Complainant  without any reasonable cause.   Vide instant complaint, the complainant has sought the following reliefs.

a)       Opposite Party be directed to make the payment of medical claim of Rs.1,95,839/- alongwith upto date interest @ 18% per annum from the date of lodging the claim.

b)      Opposite Party be also directed to pay Rs.50,000/- on account of compensation for damages alongwith costs of the present litigation.

c)       Further it is prayed that any other relief which this Forum may deem fit and proper, be also granted.

Hence, this complaint.

2.       Upon notice, opposite party appeared and contested the complaint by filing written statement taking the preliminary objections inter alia that  the present complaint is liable to be dismissed as the necessary party i.e. TPA of the LIC has not been impleaded as party; that there is no deficiency in service on the part of the Opposite Party. The Complainant  purchased a policy bearing No.133101158 under Table Term 902-17-99 with the date of commencement 20.11.2009 i.e. Health Protection Plus Plan which is an  investment cum health insurance policy governed by terms and conditions as printed on the policy bond. On lodging the claim, the investigations were carried out and the requirements were sought from the Complainant. After the submission of the required documents the same were forwarded to E-Meditek Service Limited the TPA for scrutinising the same. As per the discharge summary as well as hospital treatment form submitted by the  Complainant duly issued by Dr.Amit Garg, the consultant of Complainant  from Fortis Hospital Mohali, it was found that at the  time of taking of the policy, the  Complainant  has concealed her pre-existing disease i.e. hypothyroidism from which, she was suffering since 2009 i.e. before taking the policy. Had the Complainant  disclosed about her pre-existing disease at the time  of making proposal, the Opposite Party would have sought more special reports for Thyroid T3, T4, T5 and thyroid questionnaire for rating her medical  proposal and  sent her case for higher  office reference. The Complainant  intentionally gave wrong  answers in the proposal form which are false to her  knowledge and were material  to disclose. The suppression of such material facts and false declaration made by the Complainant  in the proposal has affected the judgement of the Opposite Party in accepting the risk.  The present complaint is liable to be dismissed with special costs as the same has been filed intentionally on false and frivolous facts. The Complainant  had been duly informed about the repudiation of her claim and the reasons  for such repudiation vide letter dated 4.5.2017 which has duly been received by her. As per LIC's health Protection Plus conditions and privileges, the Opposite Party had already made the payment of due amount i.e. Rs.54,161/- on 23.02.2017 on account of domiciliary treatment benefit (DTB) details of which is given in para No.4 of the complaint and hence the instant complaint is not maintainable  and the same is liable to be dismissed as the Complainant  has already given her  consent in writing having received the amount already paid to her as full and final settlement of her claim under the terms and conditions of the policy. On merits, the Opposite Party almost took up the same and similar pleas as taken up by them in the preliminary objections.  Remaining facts mentioned in the complaint are also denied and a prayer for dismissal of the complaint with cost was made.

3.       In her bid  to prove the case, complainant tendered into evidence  affidavit Ex.C1 in support of the allegations made in the complaint and also produced copies of documents Ex.C2 and Ex.C22  and closed her evidence.

4.       On the other hand, to rebut the evidence of the complainant, the Opposite Party tendered into evidence the affidavit of Sh.Jagdeep Sharma, Manager LIC Ex.OPs1 and copies of documents Ex.OPs2 to Ex.OPs10 and  closed the evidence on behalf of Opposite Party.

5.       We have carefully gone through the pleadings of the parties; arguments advanced by the ld.counsel for the parties and have appreciated the evidence produced on record by both the parties with the valuable assistance of the ld.counsel for both the parties.

6.       From the record i.e. pleadings of the parties and the evidence produced on record by the parties, it is the case of the Complainant  that he purchased LIC's Health Protection Plus Plan (Table 902) from Opposite Party under Policy Number 133101158 dated 20.11.2009 and as such, the relationship of consumer and service provider between the parties; that the Complainant  has been regularly making the payment of the insurance premium to the Opposite Party since the year 2009 upto date, without any break and prior to November 2016 the Complainant  never lodged any claim  with the Opposite Party; that the Complainant  undergone a surgery in September, 2016 from Fortis Hospital, Mohali and in October, 2016 she lodged a claim of Rs.2,50,000/- with the Opposite Party and thereafter, the Opposite Party has released the claim of only Rs.54,161/- in February, 2017 through NEFT. Thereafter, the Complainant  visited many times to office of Opposite Party at Moga and made written and oral requests to the Branch Manager of Opposite Party to release the balance amount of Rs.1,95,839/- alongwith upto date interest per annum from the date of lodging the medical claim, but to no effect. Ld.counsel for the   complainant  submitted that all this amounts to deficiency of service on the part of the opposite party. Ld. counsel for the complainant has placed on record various judicial pronouncements to support her case. It was prayed to accept the complaint and to award the relief as claimed.

7.       Whereas the case of the Opposite Party is that there is no deficiency in service on the part of the Opposite Party. It is further argued that the Complainant  purchased a policy bearing No.133101158 under Table Term 902-17-99 with the date of commencement 20.11.2009 i.e. Health Protection Plus Plan which is an  investment cum health insurance policy governed by terms and conditions as printed on the policy bond. On lodging the claim, the investigations were carried out and the requirements were sought from the Complainant. After the submission of the required documents the same were forwarded to E-Meditek Service Limited the TPA for scrutinising the same. As per the discharge summary as well as hospital treatment form submitted by the  Complainant duly issued by Dr.Amit Garg, the consultant of Complainant  from Fortis Hospital Mohali, it was found that at the  time of taking of the policy, the  Complainant  has concealed her pre-existing disease i.e. hypothyroidism from which, she was suffering since 2009 i.e. before taking the policy. Had the Complainant  disclosed about her pre-existing disease at the time  of making proposal, the Opposite Party would have sought more special reports for Thyroid T3, T4, T5 and thyroid questionnaire for rating her medical  proposal and  sent her case for higher  office reference. The Complainant  intentionally gave wrong  answers in the proposal form which are false to her  knowledge and were material  to disclose. The suppression of such material facts and false declaration made by the Complainant  in the proposal has affected the judgement of the Opposite Party in accepting the risk.  The present complaint is liable to be dismissed with special costs as the same has been filed intentionally on false and frivolous facts. The Complainant  had been duly informed about the repudiation of her claim and the reasons  for such repudiation vide letter dated 4.5.2017 which has duly been received by her. As per LIC's health Protection Plus conditions and privileges, the Opposite Party had already made the payment of due amount i.e. Rs.54,161/- on 23.02.2017 on account of domiciliary treatment benefit (DTB) details of which is given in para No.4 of the complaint and hence the instant complaint is not maintainable  and the same is liable to be dismissed as the Complainant  has already given her  consent in writing having received the amount already paid to her as full and final settlement of her claim under the terms and conditions of the policy. So, the claim of the complainant has been rightly repudiated by the Opposite Party. Ld.counsel for the opposite party submitted that there is no deficiency of service on the part of the Opposite Party. Ld. counsel for Opposite Parties- Insurance Company have placed reliance upon the following judicial pronouncements to strengthen its point:-

(i)      Lata Vs. LIC of India,  of Hon’ble National Commission, New Delhi (Revision Petition No. 1598 of 2015, decided on 3.6.2016.

(ii)     Sunita Rani vs. PNB Metlife India Insuance,  of Hon’ble National Commission, New Delhi (Revision Petition No. 3322 of 2016, decided on 21.4.2017)

(iii)    Aman Kapoor Vs. National Insurance Company Limited of Hon’ble National Commission, New Delhi (Revision Petition No. 429 of 2017, decided on 17.4.2017)

8.       From the entire above discussion, we have come to the conclusion that the only ground for repudiation of the claim of balance amount of the Complainant  is that  as per the discharge summary as well as hospital treatment form submitted by the  Complainant duly issued by Dr.Amit Garg, the consultant of Complainant  from Fortis Hospital Mohali, it was allegedly found that at the  time of taking of the policy, the  Complainant  has concealed her pre-existing disease i.e. hypothyroidism from which, she was suffering since 2009 i.e. before taking the policy. It is the case of the opposite party that Had the Complainant  disclosed about her pre-existing disease at the time  of making proposal, the Opposite Party would have sought more special reports for Thyroid T3, T4, T5 and thyroid questionnaire for rating her medical  proposal and  sent her case for higher  office reference.  In this way, the Complainant  intentionally gave wrong  answers in the proposal form which are false to her  knowledge and were material  to disclose. The suppression of such material facts and false declaration made by the Complainant  in the proposal has affected the judgement of the Opposite Party in accepting the risk. Main perusal of the averments made by the Opposite Party is that   Dr.Amit Garg, the consultant of Complainant  from Fortis Hospital Mohali, it was found that at the  time of taking of the policy, the  Complainant  has concealed her pre-existing disease i.e. hypothyroidism from which, she was suffering since 2009 i.e. before taking the policy. But there was no bar on the Opposite Party–LIC to get the thorough medical check up at the time of issuance of the policy.  The Opposite Parties–LIC went on accepting the premiums from the  complainant without any doubt since the year 2009 without any break continuously rather believed whatever the complainant   had disclosed in the proposal form. The Opposite Party-LIC was within their right to cancel the policy if it doubted or found any information supplied by the life assured being false or wrong, but this has not been done by the Opposite Party–LIC. The investigation has been got done at the time when the claim was lodged by the complainant. It was for the Opposite Party–LIC to ensure about the health of the insured before issuance of the policy of such amount. Many times a person may not know himself/ herself if he/ she is suffering from any particular disease. Moreover, prior  to issuance of the policy, it was required to check up life assured thoroughly. It was the bounden duty of the Opposite Party–LIC to make thorough investigation at the initial stage. It appears that the Opposite Party–LIC has different yard stick at the time of accepting the policy  for procuring the business and different face at the time of discharge of its lawful liability. The authorities cited by ld.counsel for the Opposite Party–LIC are not helpful to Opposite Party–LIC because these are based on some different facts. We are rather, of the view that the act of the Opposite Party–LIC is  illegal in rejecting the claim of the complainant. The act of the Opposite Party-LIC by repudiating the  claim of the complainant  is illegal and void. It is otherwise the duty of the Insurance Company to verify the health status of an individual specifically when the Policy is continuing for the last many years i.e. ranging from 7 years and it was not a case that the policy was immediately taken. This is a common practice of the Insurance Companies to repudiate the claim on flimsy grounds without any justification. In this regard, we are supported  with the rulings: Life Insurance Corporation of India Vs. Ambika Prasad Pandey, AIR 1999 MP 13 and Life Insurance Corporation of India Vs. Narmada Agarwalla, AIR 1993 Ori 103. In the facts of this case, ratio of the decision of Hon’ble Apex Court in case of Dharmendra Goel Vs. Oriental Insurance Co. Ltd., 2008(3) CPJ 377 (SC) is fully attracted.  It was held that

“Insurance Company being in a dominant position, often acts in an unreasonable manner and after having accepted the value of a particular insured goods, disowns that very figure on one pretext or the other, when they are called upon to pay compensation.  This ‘take it or leave it’, attitude is clearly unwarranted not only as being bad in law, but ethically indefensible.”

On this point, Hon’ble Punjab & Haryana High Court in case titled as New India Assurance Company Limited Vs. Smt.Usha Yadav & Others (2008) 151 PLR 313 has held to the following effect:-

“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………………………………………………

In fact, all these conditions, which generally are hidden, need to be simplified so that these are easily understood by a person at the time of buying any policy…… .”

9.       More-so, it is not disputed that  instant policy  is the continuous policy,  as the complainant has been paying the premium from the year 2009 and no claim has been lodged or obtained by the complainant till 2016 i.e. present one. Recently, our own Hon’ble State Commission, Punjab, Chandigarh in Consumer Complaint No.367 of 2016,  Date of institution : 25.11.2016, decided on 24.10.2017 titled as Ranjan Garg Vs.  Apollo Munich Health Insurance Co. Ltd., and another, has held to the following effect:-

“ It is otherwise the duty of the Insurance Company to verify the health status of an individual specifically when the Policy is continuing for the last many years i.e. ranging from 6 to 8 years and it was not a case that the policies were immediately taken. This is a common practice of the Insurance Companies to repudiate the claimon flimsy grounds without any justification.

It is also relevant to mention here that Section 19 of the General Insurance Business Nationalization Act, 1972 states that it shall be the duty of every Insurance Company to carry on general insurance business so as to develop it to the best advantage of the community. The denial of medical expenses reimbursement is utterly arbitrary on the ground that disease in question was excluded as per exclusion clause. It is mere an excuse to escape liability and is not bona fide intention of the insurance company. Fairness and nonarbitrariness are considered as two immutable pillars supporting the equity principle, an unshakable threshold of State and public behavior. The terms and conditions of any policy in the realm of insurance company should be informed, fairly and non-arbitrarily. When the insurance policy has exclusions/conditions to repudiate the claim or limit the liability, the same must be specifically brought to the notice of the insured and are required to be got signed to show that such exclusions and conditions have been brought to his/her notice.

The need for interpreting a contract always arises in two situations, (i) when a gap is needed to be filled in the contract and (ii) an ambiguity is needed to be resolved in the contract, then to find out correct intention of the contract, spirit behind it is required to be considered. Normally, the insurance policy is a contract of adhesion, in which other party is left with hardly any bargaining power as compared to the insurer. Insurance contracts are standard form contracts and are drafted by the insurance company and as such, insurance company is at higher footing than the insured. The benefit of such clause, as exclusion clause, would go to the insured, unless the same is explained in clear terms by the insurer. In such circumstances, the tribunal would be more oriented towards the interpretation, which goes against the party, who has inserted/drafted the disputed clause in the agreement/contract. The adjudicating authority is required to look into, whether the intention of the party is to exclude or limit liability has been appropriately explained to the other party or not. This Commission while interpreting insurance agreement is to honour the intention of the parties, who have signed the agreement. Even if the agreement had general exclusion/condition for misrepresentation still fraudulent misrepresentation and non-disclosure may not be there. The innocent and negligent misrepresentations are to be ignored.”

Hon’ble Supreme Court in case  “United India Insurance Co. Ltd. v. Manubhai Dharamsinhbhai Gajera and Ors.” AIR 2009 SUPREME COURT 446; has held in para no.64 as under:-

 “64. Each of the aforementioned cases clearly shows that the action on the part of the authorities of the appellant was highly arbitrary. Respondents though were not entitled to automatic renewal, but indisputably, they were entitled to be treated fairly. We have noticed hereinbefore some of the clauses contained in the prospectus as also the insurance policy. When a policy is cancelled, the conditions precedents therefore must be fulfilled. Some reasons therefore must be assigned. When an exclusion clause is resorted to, the terms thereof must be given effect to. What was necessary is a preexisting disease when the cover was inspected for the first time. Only because the insured had started suffering from a disease, the same would not mean that the said disease shall be excluded. If the insured had made some claim in each year, the insurance company should not refuse to renew insurance policies only for that reason. The words ‘incepts for the first time’ as contained in clause 4.1 as also the words ‘continuous and without break’ if the renewal premium is paid in time, must be kept in mind as also the reasons for cancellation as contained in clause 7(1)(n) thereof.”

10.     The further contention of the ld.counsel for the Opposite Party is that the Complainant  has violated the terms and conditions of the policy in question duly issued to the Complainant and in this way, the Opposite Party has repudiated the claim of the Complainant.  In such a situation, the Insurance Company ought to have settled the claim of the complainant on “non standard basis” even if some of the conditions of the insurance policy are not adhered by the insured. Learned counsel in support of his above contention has relied upon the case titled National Insurance Company Limited versus Kamal Singhal IV (2010)CPJ297 (NC) wherein the Hon'ble National Consumer Disputes Redressal Commission, New Delhi relying upon various decisions of the National Consumer Disputes Redressal Commission in the matter of (1) National Insurance Company Ltd. v. J. P. Leasing & Finance Pvt. Ltd. (RP No. 643/2005), (2) Punjab Chemical Agency v. National Insurance Company Ltd. (RP No. 2097/2009), (3) New India Assurance Co. Ltd. v. Bahrati Rajiv Bankar, (RP) No. 3294/2009) and (4) National Insurance Company Ltd. v. Jeetmal, (RP No.3366/2009) and also judgment of the Hon'ble Apex Court in the matter of Insurance Company Versus Nitin Khandewal IV (2008) CPJ 1(SC), wherein Hon'ble Apex Court held in the matter of theft of a vehicle, breach of condition of the policy was not germane and also held further that : “ the appellant Insurance Company is liable to indemnify the owner of the vehicle when the insurer has obtained comprehensive policy to the loss caused to the insurer”. The Hon'ble Supreme Court has further held that; “even assuming that there was a breach of policy, the appellant Insurance Company ought to have settled the claim on “non-standard basis.” Hon'ble Apex Court in back drop of these features, in these cases, allowed 75% of the claim of the claimant on the “non-standard basis”. This view was again reiterated by the Hon'ble Apex Court in the matter of Amalendu Sahoo versus Oriental Insurance Company Limited. II(2010) CPJ 9(SC)=II (2010)SLT 672.  Hon'ble National Commission in the case National Insurance Company Limited versus Kamal Singhal referred to above relying upon the law laid down by the Hon'ble Supreme Court has held that;

“there being a long line of decisions on this score, we have no option but to uphold the finding of Fora below with modification that the claim be settled on 'non-standard' basis”, in terms of the guidelines issued by the Insurance Company. In case petitioner company fails to carry out the direction contained therein, the amount payable on 'non-standard' basis, shall carry interest @ 6% p.a from the date of expiry of six weeks till the date of actual payment”.

11.     Having regard to the position of the law, as has been laid down, by the Hon'ble Apex Court in the various decisions referred to here-in-above and also the view expressed by the Hon'ble National Commission, we are of the considered view that in the present case the complainant, if not entitled for the entire claimed amount, the Insurance Company definitely ought to have settled the complainant's claim on 'non-standard basis”, which in the facts and circumstances taking the assistance of the view expressed by the Hon'ble Apex Court and also by the Hon'ble National Commission, we allow 75% of the claim of the complainant on 'non-standard' basis”.

12.     In view of the aforesaid facts and circumstances of the case, we direct the Opposite Party to pay Rs.1,87,500/- (i.e. 75% of the claimed amount of Rs.2,50,000/-)  and Opposite Party can  deduct Rs.54,161/- which has already been admittedly paid to the Complainant) out of this awarded amount of Rs.1,87,500/-. The compliance of this order be made by the Opposite Party within 30 days from the date of receipt of copy of this order, failing which the awarded amount shall carry interest @ 6% per annum from the date of filing the complaint till its actual realization. The Opposite Party is also directed to pay Rs.5,000/- to the complainant  on account of compensation besides Rs.3,000/-as litigation expenses.   Copies of the order be furnished to the parties free of costs. File is ordered to be consigned to the record room.    

Announced in Open Forum