Date of filing : 11-06-2010
Date of order : 27-10 -2011
IN THE CONSUMER DISPUTES REDRESSAL FORUM, KASARAGOD
CC. 138/2010
Dated this, the 27th day of October 2011
PRESENT
SRI.K.T.SIDHIQ : PRESIDENT
SMT.P.RAMADEVI : MEMBER
SMT.K.G.BEENA : MEMBER
Chacko. N.M, } Complainant
S/o.Mathew, Nirappel House,
Rajapuram, Kallar, Po. Rajapuram,
Kasaragod.Dt. Pin: 671532.
(Adv.T.M.Jose, Adv. K.E.Rajeevan Hosdurg)
1. Star Health and Allied Insurance Company Ltd, } Opposite parties
Represented by its Managing Director,
1, New Tank Street, Valuvarkottam High Round,
Nugampakkam, Chennai. 600034.
2. Branch Manager,
Star Health and Allied Insurance Company Ltd,
1st Floor, Grand Plaza, Fort Road, Kannur.670009.
(Adv. P.Venugopalan, Hosdurg)
3. Assistant Manager, Claims Department,
Star Health and Allied Insurance Company Ltd,
1st Floor, Vijaya Plaza, SS Kovil Road,
Thampanoor, Thiruvananthapuram. 695011.
O R D E R
SRI.K.T.SIDHIQ, PRESIDENT.
Succinctly stated the case of the complainant is as follows:
Complainant is the subscriber of Midi Classic Individual policy since 31-01-2008. It was renewed on 31-01-2009. During the subsistence of the policy he affected with and had undergone surgery for LIH (Left Inguinal Hernia). After the surgery he submitted his claim before the opposite parties. But opposite parties refused to honor the claim stating the reason “Various Existing Illness Suppressed while taking the policy. According to the complainant he has disclosed all the material facts at the time of proposing the policy. In 2007 he had undergone surgery for cardiac problem and the surgery marks are visible on his body. Further he had undergone a medical checkup also as part of the procedure for proposing the policy and the insurance consultant was with him at that time. Knowing and seeing all these the insurance consultant canvassed the policy. The proposal form was also filled by the Insurance consultant. Hence the rejection of the claim amounts to deficiency in service and therefore the complaint.
2. According to opposite party the claim for the surgery expenses for the Left Inguinal Hernia undergone by the complainant is rejected for the reason suppression of material fact. The complainant had a previous history of treatment for (1) cancer colon operation and Heart Surgery (PTCA) at AIMS in 2002. But in the proposal form, in the medical history column he has not disclosed the previous illness. Hence the claim is rejected.
3. Complainant filed proof affidavit in support of his claim. Exts A1 to A11 marked. Complainant faced cross-examination by the learned counsel for opposite parties. On the side of opposite parties DW1 examined and Exts B1 & B2 marked. Both sides heard. Documents perused.
4. Now the points for consideration are
1. Whether the rejection of the claim on the ground of suppression of material
facts amounts to deficiency in service on the part of opposite parties?
2. If so, what order as to relief and costs?
5. Point.No.1. The specific case of the complainant is that he obtained the Midi Classic Individual policy after undergoing necessary medical checkup as required under the proposal. His further case is that he had disclosed about all the illness he had affected and the surgeries he had undergone to the insurance consultant who canvassed the policy. Further the surgery marks are visible on his body, hence it cannot be suppressed. According to him he had disclosed all these aspects before proposing for the policy and after fully realizing his health history the agent canvassed the policy and took him to medical checkup. Hence as far he is concerned he has not suppressed any illness to obtain the policy.
6. In cross-examination complainant as PW1 deposed that the proposal form was filled by the insurance agent and the agent did not disclose the contents of the proposal form to him. The agent asked him about the diseases he is suffering at the time of filling up the proposal and he disclosed that he is a cancer patient and had undergone a surgery and also suffered heart complaints and the agent did not ask him about the details of doctors who treated him for the above diseases and at the time of joining the policy the doctors of Deepa Nursing Home asked about the diseases and the treatments he had undergone. He deposed that since 2004 he is a heart patient and he is taking pills related to heart complaints and the policy is obtained in 2008. He further deposed that he has not taken any treatment for hernia before treating at MIMS Hospital, Calicut and he approached MIMS Hospital because the Insurance agent told him that if he undergo treatment at MIMS Hospital the treatment expenses will be refunded as per the policy. PW1 further deposed that he is keeping all medical records pertaining to his earlier treatment and the insurance agent did not ask the medical records as the agent obtained his signature in the proposal form from Deepa Nursing Home after the medical checkup.
7. DW1 filed counter affidavit reiterating the defense set up by them in their version. In cross-examination by the learned counsel for the complainant, DW1 deposed that in this case the complainant was subjected to a general check-up but the policy issued not basing on the medical certificate. The agent of their company taken the complainant for medical checkup and the agent did not inform them about the surgery signs on the body of the complainant which the doctor noticed at the time of examination. DW1 denied the case of the complainant that the proposal form was filled by the agent. He further stated the proposal form doesnot contain anything regarding the earlier surgeries under gone by the complainant. DW1 admitted that in Ext.B5 the reason stated for the rejection of medi claim of the complainant is ‘pre-existing disease not disclosed by the complainant’.
8. Ext.B2 is the alleged proposal form pertaining to the policy of the complainant. From the evidence let in by both parties it is clear that complainant has obtained the Midi Classic Policy in 2008 which was subsequently renewed. The complainant has undergone a medical checkup in the presence of the insurance agent. After obtaining the medical certificate the insurance consultant accepted the proposal from the complainant. Column No.5 of Ext.B2 deals with the medical history of the proposer. In column No.(b) of 5 regarding the Heart diseases the complainant has given the answer ‘yes’. This would shows that complainant has not suppressed his heart disease from the proposal form. According to opposite parties he has furnished the answer ‘No’ in column No.5(f) instead of the fact that he has suffered cancer and this is a suppression of material fact.
9. Now the crucial question to be answered is whether the mere supply of answer No to column No.5(f) contain in the proposal form is a solid ground for rejection of the claim submitted by the complainant and whether it is so material to invalidate the contract? Our answer is in negative. The opposite parties cannot reject the claim. The admitted case of both parties is that the claim of the complainant is for the treatment expenses for the Inguinal Hernia. Hernia is neither a pre-existing disease nor it is a disease associated with cancer. According to the complainant he is not a cancer patient, though he was. The opposite parties failed to prove that Hernia is any way connected with the earlier treatment for cancer. Hence the concealment/misrepresentation of that fact of cancer is immaterial as far as the processing of this claim for Left Inguinal Hernia is concerned.
10. In the case of Bhagani V Life Insurance Corporation of India reported in AIR 1984 SC 125 the Hon’ble Supreme Court has held “the insurer cannot repudiate the liability by showing some inaccuracy or falsity of statement nor can it avoid the liability for immaterial misrepresentation or for material misrepresentation which had no bearing on the risk. Similarly mere non-disclosure of some immaterial facts would not perse give right to rescission In other words a misrepresentation would not ipso facto can be a ground available to the aggrieved party to avoid the contract unless it is found that consent of opposite parties was secured by practicing some deception. Thus on every misrepresentation or concealment of act, a contract cannot be avoided merely on trivial and inconsequential misstatement or non-disclosure”.
11. From the above decision it is clear that the opposite parties cannot avoid the contract and thereby reject the claim on the ground of inconsequential misstatement or non disclosure and the opposite party has not produced any evidence to show that the Inguinal Hernia was anyway related to the cancer contracted to the complainant long back.
12. Further in the case of M/s Modern Insulators Ltd V Oriental Insurance Ltd reported in I (2000)CPJ1 (SC) the Hon’ble Apex Court has held that it is fundamental principle of Insurance law that utmost god faith must be observed by the contacting parties and good faith must be observed by the contracting parties and good faith forbids either parties from non-disclosure of the facts which the parties know. The assured has a duty to disclose and similarly it is the duty of the Insurance Company and its agent to disclose all material facts in their knowledge since obligation of good faith applies to both equally. Complainant in his affidavit has stated that while subscribing the policy he disclosed and gave all information regarding his personal including pre-existing disease and nothing was concealed from the opposite parties in order to obtain any unlawful gain. We do not find anything to disbelieve this version of complainant.
13. The complainant in cross-examination has deposed that the proposal form was filled by the Insurance agent and the agent did not disclose him the contents of proposal form and he cannot say whether the agent filled the form basing on the information supplied by him and the agent told him that if any illness causes to him that will be indemnified by the Insurance Company and the agent asked him about the diseases he was suffering at the time of filling up the proposal and he disclosed that he is a cancer patient and had undergone a surgery. So it is clear that it is the agent who did the mischief by not filling up the proposal form according to the details supplied by the complainant. After the entry of private insurance companies in the insurance sector they are doing aggressive business. Earlier it was service oriented. But now a days it is purely business motivated as they are hell bent upon selling what they call ‘products’. As part of their aggressive business drive they offer ‘bonanza’ gala galore to their agents and who in turn grab the prospective policy holders by their throat by making tall promises. In most cases insurance policies contain numerous terms and conditions that normally are not disclosed to the insured. No insurance agent would explain terms and conditions those appears be adverse to the interest of the policy holder. The agent of the insurance company turns out to be a most vital factor. It is he who undertakes the insurance business on behalf of the insurer. He should make it a point to explain each and every condition or clause of the policy to the prospective policy holders which is printed in ‘small print’ of which ordinary persons would not be in a position to read between the lines. In most cases what is happening is that the agent obtain the signature of the proposer in an unfilled proposal form and subsequently fill up it with his volition and most often it would be beneficial to his interests alone.
14. So from the foregoing discussions it is clear that the opposite parties have committed deficiency in their service rendered to the complainant and therefore they are liable to compensate the complainant.
15. Points No.2. Relief and costs: The complainant has spent `22,000/- towards the treatment and medicine for the surgery he had undergone for left Inguinal Hernia. Definitely opposite parties are liable to make good the complainant for the actual loss he suffered.
In the result complaint is allowed and opposite parties are directed to pay `22,000/- to the complainant with a cost of `4,000/-. Time for compliance is one month from the date of receipt of copy of the order. Failing which the aforesaid amount `22,000/- will carry interest @ 12% per annum from the date of complaint till payment.
Sd/- Sd/- Sd/-
MEMBER MEMBER PRESIDENT
Exts.
A1. 23-1-2009 policy issued by Ops.
A2. 3-11-2009 Discharge Summary of Chacko issued MIMS Hospital
A3. 07-01-2009 Copy of lawyer notice.
A4. Postal acknowledgment card
A5. 30-11-2009 reply notice.
A6. 11-12-2009 letter sent by OP to complainant.
A7. 31-12-2009 letter sent by complainant to OP.
A8. 3-01-2010 Discharge Summary Department of General Surgery MIMS Hospital
A9 Series Discharge Bills
A10.01-04-2010 Claim Rejection Letter.
A11. 19-12-2009 copy of letter issued by OP to complainant.
B1.Photocopy of first policy
B2. Medi Classic Proposal Form.
PW1. N.M.Chacko
DW1. Dilip Kumar.P.S.
Sd/- Sd/- Sd/-
MEMBER MEMBER PRESIDENT
Pj/ Forwarded by Order
SENIOR SUPERINTENDENT
