Punjab

Ludhiana

CC/19/161

Rama Dhir - Complainant(s)

Versus

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

Rakesh Sabharwal Adv.

12 Sep 2023

ORDER

CONSUMER DISPUTES REDRESSAL COMMISSION, LUDHIANA.

                                                Complaint No:161 dated 28.03.2019.                                                         Date of decision: 12.09.2023.

 

1. Rama Dhir W/o. Sh. Sunil Dhir, R/o.B-19-624, Malerkotla House, Civil Lines, Ludhiana.
2. Sh. Sunil Dhir S/o. Sh. Satpal Dhir,  R/o.B-19-624, Malerkotla House, Civil Lines, Ludhiana.                                                                                                                                                    ..…Complainants

                                                Versus

1. Max Bupa Health Insurance Co. Ltd., Max House–I, Dr. Jha Marg, Okhla, New Delhi-110020 through its Managing Director Sh. Ashish Malhotra.
2. Max Bupa Health Insurance Co. Ltd., Kunal Tower, 26, 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 complainants            :         Sh. R.K. Maurya, Advocate and Sh. Pardeep                                              Kapoor, Advocate.

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

 

ORDER

PER SANJEEV BATRA, PRESIDENT

1.                In brief, the facts of the case are that on allurement of representatives of the opposite parties, the complainants purchased health insurance policy in the year 2013 first time which was renewed from time to time. The opposite parties granted No Claim Bonus to the complainants every year. The complainants purchased the policy No.30256540201704 w.e.f. 19.09.2017 to 18.09.2018 for Rs.11,60,000/- including Basinc Sum insured of Rs.6,00,000/-, Rs.1,60,000/- as No Claim Bonus amount and Rs.5,00,000/- as Re-fill amount and paid a premium of Rs.37,878/-. The complainants stated that on 27.08.2018, the complainant Rama Dhir was admitted in Fortis Hospital, Ludhiana due to acute knee problem and the opposite parties were informed regarding her ailment and admission. She was discharged on 01.09.2018 after treatment. Fortis Hospital, Ludhiana raised bill No.IPCS 2516976 dated 01.09.2018 for Rs.2,52,021/-. The complainant spent more than Rs.2,70,000/- on her treatment and medicine expenses. The complainant lodged claim with the opposite parties for reimbursement of treatment amount vide request ID No.201501 but the opposite parties repudiated the claim on false and flimsy grounds by claiming that the complainant was suffering from hypertension since last 27 years with reference to clause (3) and sent notice of cancellation of policy dated 05.09.2018. According to the complainants, none of the conditions mentioned in Clause 3 is applicable on the policy and disease of the complainant. The empanelled doctor of the opposite parties examined the complainant prior to issuance of the policy and found them fit from all respects and never found that she suffered from hypertension. Moreover, about 6 years have been lapsed since the date of purchase of the policy. Even in hospital record, it is no where mentioned that the complainant ever suffered from hypertension. The complainant many times requested the opposite parties to settle and pay her claim but they flatly refused to settle and pay the same. The complainant further stated that there is clear deficiency in service on the part of the opposite parties by not settling her genuine claim due to which she has  suffered mental tension, harassment and pain etc. The complainants also sent a legal notice dated 01.10.2018 through counsel Sh. Rakesh Sabherwal, Advocate but no reply has been received from the opposite parties. Hence this complaint, whereby they prayed to direct the opposite parties to pay Rs.2,70,000/- along with interest @12% per annum and to pay compensation of Rs.2,00,000/- besides litigation charges of Rs.22,000/-.

2.                Upon notice the opposite parties appeared and filed their joint written statement and by taking preliminary objections, assailed the complaint on the ground of maintainability of the complaint; distortion of facts by the complainant, lack of jurisdiction; concealment of facts etc. The opposite parties stated that the complainant did not disclose about the medical adversities suffered by her at the time of taking the policy. The complainant has not submitted any claim under the policy and only pre-authorization request was submitted for treatment at Fortis Hospital, Ludhiana vide preauthorization ID Nio.201501 and after scrutinizing the medical record and preliminary investigations, it has come to their knowledge that it was not possible to ascertain the liability at this Juncture as it was found that the complainant was suffering from hypertension since 27 years and on regular treatment. Even the medicine prescribed for treatment of HTN was mentioned as Amlog along with the dosage i.e. much before issuance of the first policy which she failed to disclose the same at the time of taking the policy. The company issued the notice of the cancellation and on not receiving any response from the complainant, the policy was cancelled. The opposite parties further stated that after denial of pre-authorization, the complainant never raised the claim with the company.

                   Under the column facts of the case, the opposite parties admitted issuance of policy in favour of the complainants with base sum insured of Rs.5,00,000/- on the basis of proposal form submitted by the complainants and also admitted the renewal of the policy. According to the opposite parties, policy documents were sent to the insured along with terms and conditions of the policy with option of free look period of 15 days to the complainant to return/cancel the policy in case they are not satisfied with the terms and conditions, which the complainants did not opt. The opposite parties reiterated the crux of averments made in the preliminary objections.

                   On merits, the opposite parties reiterated the crux of averments made in the preliminary objections and facts of the case. 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 their claim, complainant No.1 tendered her affidavit Ex. CA in which she reiterated the allegations and the claim of compensation as stated in the complaint. The complainant also tendered documents Ex. C1 is the copy  of Aadhar card of Rama Dhir, Ex. C2 is the copy of Aadhar card of Sunil Dhir, Ex. C3 is the copy of insurance policy w.e.f. 19.09.2017 to 18.09.2018 along with documents, Ex. C4 is the copy of inpatient bill dated 01.09.2018 of Fortis Hospital, Ludhiana, Ex. C4/A is the copy of legal notice dated 01.10.2018, Ex. C5 and Ex. C6 are the copies of postal receipt, Ex. C7 is the copy of notice of cancellation of the policy and closed the evidence.

4.                On the other hand, counsel for the opposite parties affidavit Ex. RA of  Chandrika Bhattacharya, Senior Manager-Legal of the opposite parties along with documents Ex. OP1/1 is the copy of letter of authorization dated 28.08.2019, Ex. OP1/2 is the copy of proposal form, Ex. OP1/3 is the copy of insurance policy w.e.f. 19.09.2013 to 18.09.2014, Ex. OP1/4 is the copy of preauthorization form, Ex. OP1/5 is the copy of treatment record/discharge summary  of Rama Dhir, Ex. OP1/6 is the copy of denial of authorization dated 01.09.2018, Ex. OP1/7 is the copy of notice of 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.                There is not much of the dispute so far as the facts of the case are concerned. As per letter Ex. OP1/3, the health insurance policy namely Heartbeat Silver plan valid from w.e.f. 19.09.2013 to 18.09.2014. It was further renewed from time to time on regular basis and lastly it was renewed from 19.09.2017 to 18.09.2018 vide letter Ex. C3. It is further not disputed that the complainant was hospitalized with Fortis Hospital, Ludhiana from 27.08.2018 to 01.09.2018. Thereafter, the patient was discharged in recovering condition as is evident from the discharge summary Ex. OP1/5 However, the bills in respect of hospitalization of the complainant has not been paid by the opposite parties. Instead the opposite parties issued letter Ex. C7 = Ex. OP1/7 whereby the insurance policy was proposed to be cancelled on the ground of non disclosure of the fact that the complainant was suffering from hypertension since 27 years. It has further been mentioned in the letter Ex. C7 = Ex. OP1/7 that as per clause 3 of the policy terms and conditions, the policy was being cancelled.

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 she was suffering from hypertension since 27 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. OP1/2 has been placed on the file, the complainant provided the wrong information with regard to her medical history. Here it would be relevant to reproduce the Column No.6 of the proposal form Ex. OP1/2, 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 hypertension since 27 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. OP1/2 filled in the year 2013. 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 2013 or subsequently when the policy was renewed from time to time.

8.                In the present case, the complainant was admitted in the Fortis Hospital, Ludhiana on 27.08.2018 with chief complaints of pain in right knee for 3 months and difficulty in walking for 1 month and she was diagnosed of Osteoarthritis Right knee with flexion and varus deformity as per discharge summary Ex. OP1/5. As per discharge summary, under the column Course in the hospital it is mentioned that patient got admitted with above mentioned complaints. Her clinic radiological evaluation revealed osteoarthritis right knee with flexion and varus deformity. She underwent total knee replacement right knee under C.S.E.A. on 25.08.2018. She is being discharged in recovering condition. 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 hypertension since 27 years. 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.               

(6)     The appellant’s argument that there is no hard and fast rule that every person with DM-II will necessarily have a cardiac disease merely because it is a risk factor holds water. A person who does not suffer from DM-II can also suffer from a cardiac ailment. He had disclosed his DM-II status for which he was under treatment. The ECG report and other tests also indicated normal parameters. Further, statins were a preventive prescription to prevent development of cardiac issues as DM-II is a risk factor, not because he had a cardiac ailment or hyperlipidaemia. Further, the examining physician was informed of the same before the policy was taken. Accordingly, there was no suppression of any material fact by the appellant to the insurer.

(7)     It was for the insurer to gauge related complications based on the information provided. The insurance company did not think that the medical and health condition of the appellant was such which did not warrant issuance of a medical policy. The insurance company therefore did not decline the proposal of the assured as a prudent insurer.”

Perusal of notice of repudiation/cancellation Ex. C7 = Ex. OP1/7 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 such as hypertension 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.2,70,000/- i.e. Rs.2,52,021/- vide bill Ex. C4 and the remaining amount claimed on account of her pre and post hospitalization. In the given set of above said facts and circumstances, it would be just and appropriate if the repudiation/cancellation letter Ex. C7 = Ex. OP1/7 issued by the opposite parties is set aside and the opposite parties are directed to settle and reimburse claim lodged by the complainant Rama Dhir in respect of her treatment/pre as well as post-hospitalization with Fortis Hospital, Ludhiana from 27.08.2018 to 01.09.2018 along with composite costs of Rs.10,000/-.

10.              As a result of above discussion, the complaint is partly allowed with an order that the repudiation/cancellation letter Ex. C7 = Ex. OP1/7 issued by the opposite parties is set aside and the opposite parties are directed to settle and reimburse claim lodged by the complainant Rama Dhir in respect of her treatment/pre as well as post-hospitalization with Fortis Hospital, Ludhiana from 27.08.2018 to 01.09.2018 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.         

11.              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:12.09.2023.

Gobind Ram.