Chandigarh

StateCommission

A/131/2024

SUSHIL KUMAR SHARMA - Complainant(s)

Versus

MANIPAL CIGNA HEALTH INSURANCE COMPANY LIMITD - Opp.Party(s)

R C GUPTA

04 Nov 2024

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

UNION TERRITORY, CHANDIGARH

 

 

Appeal No.	131 of 2024
Date of Institution	27.03.2024
Date of Decision	04.11.2024

 

Sh. Sushil Kumar Sharma resident of Flat No.37 GH No.38, Sector 20, Panchkula – 134112 (Haryana).

.…..Appellant/Complainant.

Versus

1]      Manipal Cigna Health Insurance Company Limited (Formerly known as Cigna TTK Health Insurance Company Limited), 1^st Floor, SCO No.149-150, Sector 9-C, Next to Yes Bank, Madhya Marg, Chandigarh 160009, through its Branch Manager.

2]      Manipal Cigna Health Insurance Company Limited (Formerly known as Cigna TTK Health Insurance Company Limited), Registered Office: 401/402, 4^th Floor, Raheja Titanium, Of Western Express Highway, Goregaon (East), Mumbai – 400063.

 

...Respondents/Opposite Parties.

 

BEFORE:  JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT

                SH. RAJESH  K. ARYA, MEMBER

               

Argued by:- 

 

Sh.  R. C. Gupta, Advocate for the appellant.

Sh. Krishna Kant, Advocate for the respondents.

 

PER RAJESH K. ARYA, MEMBER

              The instant appeal has been filed by the complainant  - Sh. Sushil Kumar Sharma, appellant herein, for modification of order dated 01.02.2024 passed by District Consumer Disputes Redressal Commission-I, U.T., Chandigarh, (hereinafter to be called as the District Commission only), vide which, his Consumer Complaint bearing No.931 of 2022 has been partly allowed as under:-

“4.   In the light of the aforesaid discussion, the present consumer complaint succeeds, the same is hereby partly allowed and OPs are directed as under :-

(i)    To restore the subject policy in the name of the complainant, as per its terms & conditions, with upto date benefits on payment of requisite charges, if any;

(ii)   to pay Rs.7,000/- to the complainant as compensation for causing mental agony and harassment;

(iii)  to pay Rs.7,000/- to the complainant as costs of litigation.

5.    This order be complied with by the OPs within forty five days from the date of receipt of its certified copy, failing which, the payable amounts, mentioned at Sr.No.(i) & (ii) above, shall carry interest @ 12% per annum from the date of this order, till realization, apart from compliance of direction at Sr.No.(iii) above.

6.    Pending miscellaneous application(s), if any, also stands disposed of accordingly.”

2]           In brief, the case of the appellant/complainant before the Ld. District Commission was that he held a health insurance policy with United India Insurance Company from 30.3.2002 to 29.3.2017, during which, a claim for stenting in 2007 was successfully made. In 2017, upon the assurance of better services, the complainant ported the policy to respondent No.1 under the “ProHealth – Plus” plan, renewing it annually until 2022. During the policy's validity, he was hospitalized on 26.4.2021, incurring a bill of Rs.1,75,462/-. However, the respondents denied the cashless claim request and later rejected the reimbursement, citing irrelevant previous medical history. The Insurance Ombudsman directed the respondents to pay the claim, which they did but subsequently terminated the policy on unjust grounds. Despite repeated requests, the respondents refused to reconsider, leading to allegations of deficiency in service and unfair trade practices.

3]           On the other hand, while contesting the consumer complaint, the respondents acknowledged that the appellant ported the insurance policy from a previous insurer, with the first policy issued from 30.3.2017 to 29.3.2018 and renewed annually thereafter. However, he allegedly withheld critical information about pre-existing conditions, specifically a history of hypertension and coronary artery disease (CAD) with stenting in 2007. This non-disclosure, deemed material to the insurance decision, led the respondents to terminate the policy. It was stated that the appellant did not challenge the policy termination before the Ombudsman, making the current complaint subject to the principle of res judicata and thus, not maintainable.

1.            After hearing the Counsel for the parties and going through the evidence and record of the case, the Ld. District Commission partly allowed the complaint, as stated above.
2. Now the appellant is seeking modification in the relief awarded by the Ld. District Commission to the effect that firstly, he has already subscribed a policy from M/s Star Health Assure Insurance Company and paying premium for the last 2 years and since he has lost faith in the respondents and not interested in restoration of the policy, as directed by the Ld. District Commission, he be granted refund of premium paid since inception. Secondly, the appellant has sought enhancement in compensation and costs of litigation awarded by the Ld. District Commission as the same is too meager and unrealistic.
3.             On the other hand, on behalf of the respondents, it has been argued that the prayer of the appellant for refund of the premium paid by him is completely misplaced as he has already enjoyed the coverage under the policies. It has further been argued that the appellant is not entitled to any relief or compensation from this Commission and the appeal is liable to be dismissed.
4.            We have considered the rival contentions of the parties and gone through the impugned order and material available on record and the written arguments carefully.
5.             As regards the modification sought by the appellant in the first relief awarded by the Ld. District Commission with regard to restoration of the subject policy in his name, as per the terms & conditions, with up-to date benefits on payment of requisite charges, if any, it may be stated here that the claim of the appellant at this stage qua refund of the premium since inception of the said policy is not tenable and sustainable in the eyes of law. The premium paid for an insurance policy that is renewed annually is generally non-refundable, as the insured has already benefited from the coverage provided during the policy term. When a policyholder pays the premium, he is essentially entering into an agreement with the insurer for protection against specific risks over a set period, regardless of whether a claim is made. This means that even if no claim arises during the coverage period, the policyholder still enjoys the peace of mind and security that comes from knowing they are insured. The insured benefits from the possibility of filing claims, knowing they have financial protection during the term. Refunding premiums, after the policy has been active, would undermine the basis of the agreement, as it would suggest that the insurer should bear the risk without compensation. Once the policy has been issued and the coverage period has started, the premium paid is typically not subject to refund, since the policyholder has already received the service they paid for: the availability of insurance protection. In the instant case, the respondents have already paid the claim amount of Rs.1,75,462/- to the appellant as the admissible amount in compliance to order dated 24.01.2022 passed by the Insurance Ombudsman. Thus, the prayer of the appellant qua refund of the premium is highly misconceived and not maintainable and stands rejected.
6.            Now coming to amounts of compensation and costs of litigation, as awarded by the Ld. District Commission, we are of the considered view that the same is highly meagre and needs to be adequately enhanced looking at the physical harassment and mental agony suffered by the appellant due to deficiency in rendering service and unfair trade practice on the part of the respondents and for the reasons to be recorded hereinafter. In their written arguments, the respondents have stated that they have already paid the amount of compensation of Rs.7,000/- and costs of litigation of Rs.7,000/-, as imposed by the Ld. District Commission, to the appellant through NEFT on 15.03.2024. It may be stated here that the dispute between the parties centred around the terms and conditions of the subject policy, previous policies, and the termination letter, Annexure C-9. The appellant had continuous insurance coverage from 30.3.2002 to 29.3.2017 with the previous insurer and ported the policy to the respondents on 30.3.2017. The said policy was renewed annually, with the subject policy valid from 7.4.2021 to 6.4.2022, Annexure C-5. However, the respondents arbitrarily and in an illegal manner terminated the policy on 23.6.2021, citing non-disclosure of a pre-existing history of angioplasty and hypertension. The appellant had disclosed treatment for coronary artery disease (CAD) in 2007 and the insurer was responsible for reviewing this history at the time of porting. Despite this, the respondents denied a COVID-19-related claim, only paying it after intervention from the Insurance Ombudsman. The respondents then terminated the policy, citing non-disclosure of medical history, a claim, which the appellant disputed. In our concerted view, the termination has rightly been viewed as arbitrary, particularly since conditions like hypertension are considered common lifestyle diseases, not grounds for policy repudiation, as upheld by various legal precedents. Moreover, since the waiting period for pre-existing conditions under the subject policy had already been met, the respondents’ actions amounted to deficiency in service and unfair trade practice as rightly held by the Ld. District Commission. Therefore, to our considered opinion, the compensation and litigation costs awarded by the Ld. District Commission are inadequate given the physical and mental suffering endured by the appellant. The award should be suitably enhanced, considering the prolonged physical harassment, mental agony and financial hardship suffered by the appellant due to the deficiency in service and unfair trade practices engaged in by the respondents. This view finds support in several legal precedents where the courts have recognized the need to compensate claimants adequately when insurance companies fail to honor their commitments. In the case of Ghaziabad Development Authority vs. Balbir Singh (2004) 5 SCC 65, the Hon’ble Supreme Court emphasized the importance of awarding just compensation to a consumer who has suffered due to the negligence of service providers. It was held that "compensation must be commensurate with the nature, extent, and degree of the suffering experienced by the consumer." In cases where the consumer has been subjected to undue hardship, inadequate compensation defeats the purpose of consumer protection laws, which aim to ensure accountability in service provision and fairness in treatment. Similarly, in Sikka Papers Ltd. vs. National Insurance Co. Ltd. & Ors. (2009) 7 SCC 777, the Hon’ble Supreme Court reinforced that insurance companies must act in good faith and fairly process claims of policyholders. Any unreasonable delay or denial in claim settlement amounts to deficiency in service and the affected party deserves compensation that adequately reflects the inconvenience and distress caused by such actions. Further, in Charan Singh vs. Healing Touch Hospital & Ors. (2000) 7 SCC 668, the Hon’ble Supreme Court highlighted that "while quantifying damages, a Consumer Forum must take into account not only the actual loss suffered but also the pain, suffering, and harassment faced by the consumer." This principle implies that mere reimbursement of the actual expenses is insufficient when the aggrieved party has undergone mental distress and physical hardship due to the unfair practices or negligence of the insurer. In the present case, the appellant endured not only the financial burden of medical expenses due to the respondents’ unjustified denial of a valid claim, which they subsequently paid on orders/directions of Insurance Ombudsman but also significant mental stress and physical suffering. The respondents’ denial of a claim and subsequent termination of the policy forced the appellant into an unwarranted legal battle, exacerbating his suffering. The award of compensation must, therefore, reflect the respondents’ failure to fulfill their duties in a fair and prompt manner as well as the inconvenience and anxiety caused to the appellant. In our view, the amount of compensation and costs of litigation (as awarded by the Ld. District Commission), if enhanced to Rs.50,000/- and Rs.25,000/- respectively, that will meet the ends of justice. To this extent only, the impugned order needs modification.
7.          For the reasons recorded above, this appeal is partly accepted and the impugned order is modified only to the extent that the respondents shall pay an amount of Rs.50,000/- as compensation for causing mental agony and harassment and Rs.25,000/- as costs of litigation, to the appellant, within a period of 30 days from the date of receipt of certified copy of this order, failing which, the said amounts of Rs.50,000/- & Rs.25,000/- shall carry interest @12% per annum from the date of passing of this order till realization. However, the respondents shall adjust the amount of Rs.14,000/-, already paid to the appellant, while computing the amount now awarded by this Commission towards compensation and costs of litigation.
8.          However, rest of the impugned order shall remain intact subject to modification aforesaid. 
9.          Certified copies of this order be sent to the parties free of charge.
10.          File be consigned to Record Room after completion.

Pronounced.

04.11.2024.

                           [JUSTICE RAJ SHEKHAR ATTRI]

PRESIDENT

 

 

 

                                                                               

 [RAJESH K. ARYA]

MEMBER

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