Punjab

Ludhiana

CC/19/202

Ishant Passi - Complainant(s)

Versus

Max Bupa Health Ins.Co.Ltd - Opp.Party(s)

Baljit Sharma Adv.

21 Sep 2023

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, LUDHIANA.

                                                Complaint No:202 dated 01.05.2019.                                                         Date of decision: 21.09.2023.

 

Ishant Passi son of Shri Ajay Kumar Passi, r/o.House No.635-I, Bhai Randhir Singh Nagar, Ludhiana.                                                                                                                                                                        ..…Complainant

                                                Versus

1. Max Bupa Health Insurance Company Limited, Corporate Office Block B1/1-2, Mohan Cooperative Industrial Estate, Mathura Road, New Delhi-110044 through its General Manager.
2.  Max Bupa Health Insurance Company Limited, Branch Office The Mall Road, Ludhiana through its Branch Manager.                                                                                                              …..Opposite parties 

Complaint Under section 12 of the Consumer Protection Act, 1986.

QUORUM:

SH. SANJEEV BATRA, PRESIDENT

SH. JASWINDER SINGH, MEMBER

MS. MONIKA BHAGAT, MEMBER

 

COUNSEL FOR THE PARTIES:

For complainant             :         Sh. Baljit Sharma, Advocate.

For OPs                          :         Sh. V.S. Mand, Advocate.

 

ORDER

PER SANJEEV BATRA, PRESIDENT

1.                Briefly stated, the facts of the case are that the complainant obtained medical claim insurance policy No.30636626 having validity from 04.03.2018 to 03.03.2019 for Rs.7,50,000/- covering medical risk for himself and his wife Nivedita Passi and Ms. Avni Passi and Mr. Avyukt Passi by paying a premium of Rs,17,818/-. The said policy was in continuation of previous policies since the year 2014. The complainant stated that unfortunately his daughter Avni Passi fell ill and was diagnosed for Dengue in C.M.C. Hospital, Ludhiana where she was admitted on 29.11.2018 and was discharged on 12.12.2018. The complainant spent more than Rs.4,50,000/- on her treatment and submitted the claim along with relevant papers with the opposite parties but the opposite parties repudiated the claim vide letter dated 28.02.2018 and 07.03.2019 on the ground that the complainant was suffering from pre-existing disease. The complainant served a legal notice dated 27.03.2019 upon the opposite parties but to no avail. The complainant claimed the repudiation of the claim to be illegal, arbitrary and against the principle of natural justice, which amounts to deficiency in service and unfair trade practice on the part of the opposite parties due to which the complainant suffered mental tension, pain, agony etc. In the end, the complainant prayed for issuing direction to the opposite parties to pay medical treatment expenses to the tune of Rs.4,50,000/- along with compensation of Rs.1,00,000/- and litigation expenses of Rs.33,000/- also.

2.                Upon notice, the opposite parties appeared and filed written statement and by taking preliminary objections, assailed the complaint on the ground of maintainability of the complaint; lack of jurisdiction; suppression of material facts; lack of cause of action etc. The opposite parties stated that they issued policy No.30636626201700 on the basis of information provided by the proposer. The policy was ported from United India Insurance Co. Ltd. As mentioned in the proposal form of the opposite parties, every interested insured person has to make full and frank disclosure of history of illness suffered by him and by those proposed to be insured in the said proposal form, even during porting of a policy, as per IRDAI Circular dated 9^th September 2011, IRDAI (Health Insurance) Regulations, 2013 as well as IRDAI (Health Insurance) Regulations, 2016, does not absolve or allow the porting insured from disclosing true and complete facts about his/her health conditions. The opposite parties stated that they have repudiated the claim of the complainant by passing a speaking order, which lists out the specific reasons for the decision. Moreover, the repudiation of the claim was on the grounds of misstatement of information, suppression of material information and furnishing of false information in the proposal form. The proposer at the time of submitting the proposal form did not disclose the correct information about his health and habits and as per documents/investigation done by the company, it was found that the insured Avnit Passi was asymptomatic till 1½ years of age when she developed deformity in her elbow and have been on regular treatment. Further the insured had a history of osteochondritis, which was not disclosed at the time of porting the policy with the opposite parties.

                   The opposite parties further stated that the complainant submitted claim No.394459 under the policy stating that the insured was treated for Dengue from 21.11.2018 to 12.12.2018 and the same was rightly repudiated by them on the ground of non-disclosure of material facts. The proposer had not disclosed about the fact that his wife was suffering from these problems much prior to the insurance of new policy. Since the insured did not perform his duty to disclose all material information, the contract of insurance between the opposite parties and the insured is a void contract.

                    Under the column of facts of the case, the opposite parties stated that they received an application form requesting for issuance of policy under portability on the health of the complainant, his wife Nivedita Passi, daughter Avni Passi and son Avyukt Passi and on the basis of information provided in the application/proposal form, the policy was issued for a sum assured of Rs.7,50,000/-. The policy was renewed in 2018. In the proposal form, the company received all the answers in negative with respect to status of health of the insured nor was any pre-existing condition or claim filed details with previous insurer provided and had not disclosed his adverse health conditions in the proposal form.  The opposite parties further stated that they received a claim No.394459 from treatment of Dengue at Christian Medical College and Hospital from 21.11.2018 to 12.12.2018. However, as per submitted documents/investigations done by the Company, it was found that insured Avni Passi was a symptomatic till 1½ years of age when she developed deformity in her elbow and have been on regular treatment. Further it was found that the insured has history of Osteochondritis and same was not disclosed at the time of policy portability with Max Bupa and as such, the claim was not be payable under the policy.

                   On merits, the opposite parties reiterated the facts mentioned in the preliminary objections. The opposite parties have denied that there is any deficiency of service and have also prayed for dismissal of the complaint.         

3.                In support of his claim, the complainant tendered his affidavit Ex. CA in which he reiterated the allegations and the claim of compensation as stated in the complaint. The complainant also tendered documents Ex. C1 is the copy of insurance policy w.e.f. 04.03.2018 to 03.03.2019, Ex. C2 is the copy of insurance policy w.e.f. 04.03.2016 to 03.03.2017, Ex. C3 is the copy of insurance policy w.e.f. 07.03.2015 to 06.03.2016, Ex. C4 is the copy of insurance policy w.e.f. 07.03.2014 and 06.03.2015, Ex. C5 is the copy of discharge summary, Ex. C6 to Ex. C8 are the copies of hospital bills/receipts, Ex. C9 is the copy of repudiation letter, Ex. C10 is the copy of notice of cancellation of policy dated 28.02.2019, Ex. C11 is the copy of legal notice dated 27.03.2019, Ex. C12 is the copy of postal receipts and closed the evidence.

4.                On the other hand, counsel for the opposite parties tendered affidavit Ex. RA of Sh. Chandrika Bhattacharya, Chief Manager of the opposite parties along with documents Ex. OP1/1 is the copy of letter of authorization, Ex. OP1/2 is the copy of proposal form, Ex. OP1/3 is the copy of welcome letter and policy documents, Ex. OP1/4 is the copy of claim form, Ex. OP1/5 is the copy of investigation report, Ex. OP1/6 is the copy of repudiation letter dated 29.03.2019, Ex. OP1/7 is the copy of notice cancellation of policy and closed the evidence.

5.                We have heard the arguments of the counsel for the parties and also gone through the complaint, affidavit and annexed documents and written reply along with affidavit and documents produced on record by both the parties. We have also gone through the written arguments submitted by the opposite parties.

6.                Admittedly, the complainant purchased online medi-claim Health Companion Family Floater policy Ex. C1=Ex. OP1/3 w.e.f. 04.03.2018 to 03.03.2019 from the opposite parties for himself and his family members including his daughter Avni Passi. During the subsistence of the policy, daughter of the complainant namely Avni Passi was admitted in Christian Medical College Department of Pediatrics, Ludhiana on 29.11.2018 where she was diagnosed Dengue like illness with chief complaints of fever and vomiting for 2 days. As per discharge summary Ex. C5, she was discharged on 12.12.2018. An amount of Rs.4,50,000/- were incurred by the complainant on the treatment of his daughter regarding which the complainant submitted claim on 28.12.2018 vide claim form Ex. OP1/4 with the opposite parties.      However, the bills in respect of hospitalization of daughter of the complainant has not been paid by the opposite parties. Instead the opposite parties issued letter Ex. C10 = Ex. OP1/7 whereby the insurance policy was proposed to be cancelled on the ground of non disclosure of the fact that Avni Passi had history of osteochondritis since 1.5 years. It has further been mentioned in the letter Ex. C10 = Ex. OP1/7 that as per clause 3 of the policy terms and conditions, the policy was being cancelled. Subsequently the claim of the complainant was repudiated vide repudiation letter dated 29.03.2019 Ex. C9 = Ex. OP1/6.

7.                Now the question arise whether the repudiation/cancellation of the policy on the ground mentioned therein is valid or not? The policy has been proposed to be cancelled by the opposite parties by invoking Clause-3 on the ground that the complainant had not disclosed that Avni Passi was suffering from osteochondritis since 1.5 years as stated above. Clause-3 of the policy invoked by the opposite parties provides for the termination of the policy, if the insured person has acted in a dishonest or fraudulent manner under or in relation to this policy did not disclose the material fact or made a misrepresentation in relation to the policy or if the insured person had not cooperated with the insurance policy. Clause 3 of the policy is reproduced as under:-

          “3.    Cancellation by Us:

Without prejudice to the above, We may terminate this policy during the Policy Period by sending 30 days prior written notice to your address shown the Schedule of Insurance Certificate without refund of Premium if:

1. You or any Insured Person or any person acting on behalf of either has acted in a dishonest or fraudulent manner under or in relation to this Policy; and/or
2. You or any Insured Person has not disclosed the material facts or misrepresented in relation to the Policy: and/or
3. You or any Insured Persons has not co-operated with Us.

For avoidance of doubt, it is clarified that no claims shall be admitted and/or paid by Us during the notice period.”

It has been vehemently argued by the counsel for the opposite parties that in the proposal form, copy of which Ex. OP1/4 has been placed on the file, the complainant provided the wrong information with regard to the medical history. Here it would be relevant to reproduce the Column No.6 of the proposal form Ex. OP1/4, which deals with the medical history of the insured. In the column of medical history, following four questions were required to be filled by the insured:-

1)      Within the last 2 years, have you consulted a doctor or a healthcare professional?

2)      Within the last 7 years, have you been to a hospital for an operation and/or an investigation (e.g. scan, X-ray, biopsy or blood tests)?

3)      Do you take tablets, medicines or drugs on a regular basis?

4)      Within the last 3 months have you experienced any health problems or medical conditions which you/proposed insured have/has not seen a doctor for?

The complainant answered all the aforesaid questions in negative. The claim of the complainant is sought to be repudiated on the ground that she was a patient of osteochondritis since 1.5 years. The first question in Column No.6 relates to a period of only 2 years immediately preceding the policy. While question No.2 relates to hospitalization within 7 years immediately preceding the policy. The proposal form Ex. OP1/4 filled on 11.02.2017. It is a matter of common knowledge that as a normal practice the form is filled by the insurance agent. In addition to this, despite being of age of 55 years at the time of issuance of the policy, the complainant was not got medically examined though in the proposal form there is a note at the end of column No.6 that in addition to the above four questions, the insurance company may have additional questions for the insured or may ask him to undergo medical tests to complete full medical assessment. No evidence has been lead by the opposite parties as to whether any additional questions were put to the complainant or not nor any evidence has been adduced that the complainant was subjected to some medical tests at the time of issuance of the policy in the year 2014 or subsequently when the policy was renewed from time to time.

8.                In the present case, the insured Avni Passi was admitted in the Christian Medical College and Hospital, Ludhiana on 29.11.2018 with chief complaints of fever and vomiting for 2 days as per discharge summary Ex. C5. As per discharge summary, under the column Course in the hospital it is mentioned that she is a 6 year old female child, a known case of moderate persistent asthma and hereditary enchondromas (Status right ulnar corticotomy) was admitted with a diagnosis of Dengue like illness with shock.  She is being discharged in improved condition. There is no nexus between the diagnosed disease and the alleged pre-existing disease. Therefore, any treatment taken by the complainant prior to taking the policy about which no questions were asked in the proposal form, it cannot be said that the opposite parties are justified in rejecting the claim or canceling the policy on the ground of suppressing her taking treatment for osteochondritis since 1.5 years. Further, the opposite parties have not produced any evidence of medical record with regard to diagnosis and treatment of the said pre-existing disease of father of the complainant. Even the report or the affidavit of the investigator was not brought on record to substantiate its claim. It is well settled that on account of non-disclosure of such general diseases, the genuine claim cannot be rejected. In this regard, reference can be made to Religare Health Insurance Company Ltd. Vs Subhash Chander Aggarwal in 2017(3) CLT 140 whereby it has been held by Hon’ble Punjab State Consumer Disputes Redressal Commission, Chandigarh that hypertension is a common disease and can be controlled by medication and it is not necessary that person suffering from hypertension would always suffer a heart attack. Further reference can be made to Tarlok Chand Khanna Vs United India Insurance Co. Ltd. 2012(1) C.P.J. 84 whereby it has been held by Hon’ble National Consumer Disputes Redressal Commission, New Delhi  that the onus to prove that the insured was suffering from pre-existing disease was on the insurer and if the insurer has not produced the expert opinion, the reasons for repudiation of the claim were held to be unjustified. A reference can be further made to Lakhwinder Singh and another Vs United India Insurance Company etc.  decided in Appeal No.29 of 2009 whereby it has been held by Hon’ble State Consumer Disputes Redressal Commission, U.T, Chandigarh that the maladies like diabetes, hypertension being normal wear and tear of the life cannot be treated as pre-existing diseases.

9.                Further in a case titled as Manmohan Nanda Vs United India Assurance Co. Ltd. and others 2022(I) CPJ 20 (SC) wherein the Hon’ble Supreme Court of India has observed as under:-

“(i) There is a duty or obligation of disclosure by the insured regarding any material fact at the time of making the proposal. What constitutes a material fact would depend upon the nature of the insurance policy to be taken, the risk to be covered, as well as the queries that are raised in the proposal form.

(ii) What may be a material fact in a case would also depend upon the health and medical condition of the proposer.

(iii) If specific queries are made in a proposal form then it is expected that specific answers are given by the insured who is bound by the duty to disclose all material facts.

(iv) If any query or column in a proposal form is left blank then the insurance company must ask the insured to fill it up. If in spite of any column being left blank, the insurance company accepts the premium and issues a policy, it cannot at a later stage, when a claim is made under the policy, say that there was a suppression or non­disclosure of a material fact, and seek to repudiate the claim.

(v) The insurance company has the right to seek details regarding medical condition, if any, of the proposer by getting the proposer examined by one of its empanelled doctors. If, on the consideration of the medical report, the insurance company is satisfied about the medical condition of the proposer and that there is no risk of pre­existing illness, and on such satisfaction it has issued the policy, it cannot thereafter, contend that there was a possible pre­existing illness or sickness which has led to the claim being made by the insured and for that reason repudiate the claim.

(vi) The insurer must be able to assess the likely risks that may arise from the status of health and existing disease, if any, disclosed by the insured in the proposal form before issuing the insurance policy. Once the policy has been issued after assessing the medical condition of the insured, the insurer cannot repudiate the claim by citing an existing medical condition which was disclosed by the insured in the proposal form, which condition has led to a particular risk in respect of which the claim has been made by the insured.

(vii) In other words, a prudent insurer has to gauge the possible risk that the policy would have to cover and accordingly decide to either accept the proposal form and issue a policy or decline to do so. Such an exercise is dependant on the queries made in the proposal form and the answer to the said queries given by the proposer.               

10.              Admittedly, the complainant had been subscribing to health policies from different insurance companies since 2014 and it was ported to the opposite party insurance company w.e.f. 04.03.2017 till 03.03.2018 by paying a premium of Rs.13,832/- as evident from the document clubbed under Ex. C1 for a sum of Rs.7,50,000/-. Just before porting of the policy, the complainant was holding a policy from United India Insurance Co. Ltd. Ex. C2 for a period of 04.03.2016 to 03.03.2017 and was having a coverage of insurance sum of Rs.5,00,000/-. Meaning thereby when the complainant switched over to the present opposite parties, the sum of the insurance cover was enhanced from Rs.5,00,000/- to Rs.7,50,000/-. Further the insurance certificate for the period 04.03.2017 to 03.03.2018 also provides the insurance details with regard to the complainant and other beneficiaries. The insurance detail qua the complainant is reproduced as under:-

Name of the Insured Person(s)	Age	Gender	Relationship with the Policy Holder	Insured with Max Bupa (since)	Pre Existing Condition	Personal Waiting Period
Mr. Ishant Passi	28	Male	Applicant	04/03/2017	‘Exclusions applicable of base sum insured “SPECIFIC WAITING PERIOD (WAIVED)’ 30 DAYS WAITING PERIOD (WAIVED) Exclusions applicable on incremental sum insured ‘All Specific personal waiting periods and 30 days waiting period applicable as per T&C.	None

          Perusal of the said insurance detail would show that the exclusion clause was only applicable on the incremental sum insured i.e. upon Rs.2,50,000/-. Considering the amount incurred by the complainant is less than Rs.5,00,000/- and as such, the case of the complainant even does not fall within the exclusion clause. Further perusal of notice of repudiation/cancellation dated 29.03.2019 Ex. C9 = Ex. OP1/6 also shows that the policy was also cancelled by the opposite parties. It appears to be unilateral decision of the opposite parties and no reasonable opportunity of being heard was afforded either to the insured or to the complainant before cancelling the policy. It is a gross violation of principle of natural justice. So the cancellation of the policy is hereby revoked and it will be deemed to be in operation for all intents and purposes during the period of its validity. Therefore, in our considered view, the repudiation of the claim on the basis of   non-disclosure of pre-existing diseases could not have   been made a ground to   reject the claim and cancel the policy on this ground cannot be sustained  in the eyes of law.  The insurance companies are required to be more liberal in their approach without being too technical. In this case, the complainant has raised a claim of Rs.4,50,000/- vide bills Ex. C6 to Ex. C8. In the given set of above said facts and circumstances, it would be just and appropriate if the repudiation/cancellation letter Ex. C9 = Ex. OP1/6 issued by the opposite parties is set aside and the opposite parties are directed to settle and reimburse claim lodged by the complainant in respect of the treatment of his daughter Avni Passi with Christian Medical College and Hospital, Ludhiana from 21.11.2018 to 12.12.2018 along with composite costs of Rs.10,000/-.

11.              As a result of above discussion, the complaint is partly allowed with an order that the repudiation/cancellation letter Ex. C9 = Ex. OP1/6 issued by the opposite parties is set aside and the opposite parties are directed to settle and reimburse claim lodged by the complainant in respect of the treatment of his daughter Avni Passi with Christian Medical College and Hospital, Ludhiana from 21.11.2018 to 12.12.2018 as per terms and conditions of the policy within period of 30 days from the date of receipt of copy of the order failing which the opposite parties shall pay interest @8% per annum on the settled amount to the complainant from the date of order till its actual payment. The opposite parties shall further pay a composite cost of Rs.10,000/- (Rupees Ten Thousand only) to the complainants. Payment of costs shall be made within a period of 30 days from the date of the receipt of the copy of this order. Copies of order be supplied to parties free of costs as per rules. File be indexed and consigned to record room.               

12.              Due to huge pendency of cases, the complaint could not be decided within statutory period.

 

(Monika Bhagat)          (Jaswinder Singh)             (Sanjeev Batra)

Member                         Member                              President        

 

Announced in Open Commission.

Dated:21.09.2023.

Gobind Ram.