Before  the District Consumer Dispute Redressal Commission [Central], 5th Floor                                         ISBT Building, Kashmere Gate, Delhi

                               Complaint Case No. 212/2019

Anil Kumar

R/o BE-326, Gali No.4

Hari Nagar, New Delhi-110064                                                         ...Complainant

                                      Versus

Max Bupa Health Insurance Company

(through its Manager/General Manager)

39, IIIrd Floor, Pusa Road,

WEA, Karol Bagh, New Delhi-110005                                    ...Opposite Party

                                                                   Date of filing         : 27.07.2019

                                                                   Date of Order        : 30.09.2023

Coram: Shri Inder Jeet Singh, President

             Ms. Shahina, Member -Female

   Shri Vyas Muni Rai, Member

Vyas Muni Rai                                 

ORDER

1.1.The present complaint has been filed by Sh. Anil Kumar (in short ‘the complainant) against Max Bupa Health Insurance Company, through its Manager/General Manager (in short ‘OP’) u/s 12 of Consumer Protection Act-1986 for the reimbursement of mediclaim along with compensation and cost of litigation.

1.2. The complainant is policy holder of mediclaim policy bearing no. 30672303201700 for the period w.e.f 27.05.2017 to 26.05.2019 for two years for the insured sum of Rs. 5 lakhs, under portability issued by OP in favour of complainant. The complainant informed the agents of OP company about all his past illness/history and then only OP agreed to port the earlier policy bearing no. P/700016/01/2017/000597 of the complainant which was earlier taken from Star Health and Allied Insurance Co. Ltd.

1.3. The complainant, on 04.08.2018, suffered accidental injuries while driving his scooter and was taken to the casualty of Kalra Hospital for treatment and on the advice of the treating doctor firstly X-ray & then MRI was conducted and ACL tear was detected in the knee.

1.4. The complainant, after a week on 11.08.2018 visited at U.K. Nursing Home, for further treatment and he was again advised MRI of Knee (R). On 13.08.2018, MRI was done and treating doctor advised for surgery for ACL tear and till then the complainant was put on medication.

1.5. The complainant on 28.08.2018 slipped from the stairs at home in the night and got injured his knee again and due to severe pain he went to J.P. Narayan Trauma Centre, again plaster was applied and he was put on some medication and was advised to visit in OPD for further management.

1.6. On 05.09.2018, the complainant visited the Sports Injury Safdarganj Hospital for further examination, where treating doctor examined the injured knee and referred MRI/X-ray and confirmed that it is a case of “ACL Tear” which requires surgery, however, due to internal swelling and stiffness, he was put on some medication as well as on exercises to relax knee muscles to get rid of stiffness, date 27.03.2019 for admission  and date 29.03.2019 for surgery were fixed.

1.7. The complainant visited B.L.K. Hospital on 17.12.2018 where the treating doctor examined the injury and also advised for surgery but after getting rid of stiffness/swelling. The complainant in the first week of March, again visited the B.L.K. Hospital, Delhi, where admission was fixed for 11.03.2019 and 12.03.2019 for surgery. The hospital collected some papers/insurance particulars for lodging cashless claim for the purpose of surgery and informed OP on 06.03.2019; OP sought some additional information and demanded some more papers which are provided within time. However, pre-approval of cashless claim was denied by OP/Insurance Company. Thereafter, complainant was to run from pillar to post but OP denied the genuine claim along with pre and post medical expenses on the one pretext or the others.

1.8. The complainant and his wife, somehow arranged money to pay the hospital bills to get discharged from the hospital but his claim was denied. Not only this, OP also cancelled the policy in question on the false and flimsy grounds.

1.9. The complainant prays directions against OPs to pay hospitalization/treatment expenses (including post hospitalization expenses) to the tune of Rs. 3,79,676/- being the claim amount; compensation for mental torture to the tune of Rs. 90,000/- and litigation expenses of Rs. 21,000/- and to pass other order or orders which the Commission may deem fit and proper in the facts and circumstances of the case.

1.10. The complaint is accompanied by copy of insurance policy, treatment papers, copy of repudiation letter, copy of denial of cashless claim, copies of e-mails exchanged between complainant and OP, copy of I.P.D. records, copy of discharge summary, bill vouchers etc.

2.1. OP files reply under the signature of Ms. Chandrika Bhattacharya, Chief Manager-Legal (duly authorized by OP vide authorization letter dated 28.08.2019). Complaint is based on mis-representation of facts and is not maintainable, therefore, is liable to be dismissed.

2.2. Present complaint is abuse of process of law as there is no deficiency of services on the part of OP nor there is any unfair trade practices. OP’s repudiation of claim and subsequent cancellation of policy by OP is valid as per terms & conditions of the policy. Complaint is devoid of any cause of action.  The complainant has breached the contract by concealing the adverse medical conditions. The complainant/insured has to make full disclosure of history of illness suffered by him and others proposed to be insured, in the Proposal Form , even during porting of a policy, as per IRDAI circular dated 09.09.2011, ERDAI (Health Insurance) Regulations,2013, etc. IRDAI Regulation-2016 grants unconditional rights to Insurance Company to fully underwrite the risks and accept/reject accordingly. The complainant has committed fraud by concealing material facts about his adverse medical conditions and by not doing so, insured rendered the insurance contract ‘void-ab-initio’.

2.3. The complainant’s pre-authorization request for cashless treatment and Claim Reimbursement Request was denied due to non-disclosure of material facts by the insured at the time of porting the policy. From the Investigation Report non-disclosure of material facts was found that the complainant suffered from history of thyroid since 10 years, history of cholesterol,a birth h/o hypercholesterolemia and was on medication for the same, as is evident from the medical documents received by OP Company. If the complainant would have made true and correct disclosures in the Proposal Forms filled at the time of porting the policy, the company would not have ported the subject policy.

2.4. It is also the case of OP that policy kit containing all relevant documents were duly received by the policy holder to verify and examine the benefits, terms & conditions of the policy. Since, the medical information and documents submitted along with Cashless Request indicated that liability of OP could not be established. The OP denied authorization vide its letter dated 07.03.2019 on the ground that “cashless cannot be provided as chronicity of the illness cannot be ruled out at this moment and hence liability cannot be established at this juncture in view of the received documents and needs further verification. Hence, cashless is denied….”   The request for reimbursement of claim request against cashless/ Pre-Authorization received from the complainant was also denied after investigation on the ground that insured has history of thyroid since 10 years; non-disclosure of material facts resulted in cancellation of the policy as per clause-3 and definition-14 of the policy and policy was cancelled on 29.05.2019.

2.5. OP has cited different case law in its reply and written arguments which will be discussed at appropriate stage in this order.

2.6. OP has referred clause-7 of the proposal form dealing with the ‘declaration’ that complainant/insured has agreed and declared:-

“I hereby declare I fully explained the contents of the proposal form and all other documents incidental to availing the health insurance from Max Bupa Health Insurance Company Limited to the proposer.”

2.7. On receipt of said declaration, information and details provided including the medical history by the proposer in the proposal form and portability form believing to be true, correct, the policy under reference was issued by OP.

2.8. OP received reimbursement claim request against cashless/ pre-authorization on behalf of complainant, investigation, verification of the claim of the complainant was done and the reimbursement claim was rejected on the ground of history of thyroid since ten years, birth history of cholesterol during investigation, complainant himself stated that he has hypothyroidism and cholesterol since two years, which is prior to the issuance of the policy and submission of proposal form.

2.9. The opposite party vide its letter dated 18.03.2019 had issued notice of cancellation for subject policy since the details submitted by complainant indicated a clear case of non-disclosure of material facts and the cancellation of policy is within the terms & conditions, more particularly  clause-3 and definition of 14 of the policy. Thereafter, policy was cancelled on 29.05.2019.

3. Complainant files brief rejoinder to the reply of OP which is on pattern of the contents of the complaint.

4. The complainant led his evidence by filing affidavit which is the narration of the complaint. OP led evidence by filing affidavit of Sh. Bhuvan Bhaskar, it is also on the pattern of written statement and documents annexed. However, there is no authority letter in favour of Sh. Bhuvan Bhaskar (though it is stated to have been filed vide letter dated 01.02.2019). The designation and place of posting of the signatory of the affidavit is also not disclosed.  

5. The complainant and the OP filed their written submissions which is on the line of pleading & evidence filed by them.

6. Mr. Bhupesh Kumar Chandna, Advocate for the complainant and Ms. Nimisha Sharma, Advocate for OP presented their oral submissions on 10.05.2023.

7. It does not require to reproduce here either the contents of written arguments or the contentions advanced orally, since the same will be discussed/appreciated while dealing with the issue involved.

8. (Findings)- The rival contentions of both the sides are considered, keeping in view the material on record, which is oral narration of events and the documentary record as mentioned in the affidavits of parties.

9.1. The case of the complainant is that he had made available all the records to OP to settle the claim but it failed to reimburse the claim. OP’s stand is that repudiation of claim and subsequent cancellation of policy on its part is valid and in consonance with the terms and condition of the policy.OP, further states that the complainant breached the contract by concealing the adverse medical conditions. The OP refers part-5 ‘Medical History’ of the ‘Proposal Form’ to the specific question “Do you takes tablets, medicines or drugs on a regular-basis? and another question regarding consultation with doctor in the past two years-the complainant replied “NO” which is stated to be non-disclosure on his part but OP has not proved this in its affidavit.

9.2. OP further states in its repudiation letter dated 22.08.2019 that ‘As per the submitted documents and investigation, it was found that the insured has h/o cholesterol and hyper cholestromia   and the same was not disclosed at the time of taking the policy, as per policy terms and conditions, which is material non-disclosure. Hence, as per policy terms condition claim stands repudiated under definition 14. However, OP’s ‘Investigation Report’verified by its investigator (Manual), Thyroid (Hyperthyroid) is stated to be since last 02 years. However, OP in its e-mail dated 21.05.2019 informed the complainant that as per documents and investigation done, it was found that insured has h/o thyroid since last 10 years and birth h/o cholesterol and hypercholesterolemia.

          The complainant and OP both exchanged various e-mails where in OP has been reiterating that the complainant is having h/o thyroid since last 10 years, while complainant has been constantly denying the same and has been asking for the documentary evidence from OP to this effect.

9.3 Further, in condition no. 4 h (5)(e) (Standard Terms and Conditions) under the head ‘Portability Benefit’ of the policy it reads as under:-

‘(e) we have received necessary details of medical history and claim history from the previous insurance company for the insured person’s previous healthinsurance policy through IRDAI’s web portal’.

          Therefore, above conditions of policy clearly manifests that had the complainant been suffering from thyroid since last 10 years at the time of porting of policy (as is the stand of OP for rejection of complainant’s claim in the present case), the OP would not have issued the present policy to the complainant. Thus, OP as per its own condition of portability policy allowed the complainant to port his health insurance policy after satisfying itself about the medical history and claim history from the previous insurance company for the insured/complainant; rejection of claim of the complainant on the ground of PED lacks logic.

9.4. In hospital’s ‘Discharge Summary’ the complainant was diagnosed as ‘Right Knee Anterior Cruciate Ligament Tear with Lateral meniscus Tear’. It would be relevant to reproduce followings from the discharge summary:-

• History of present illness : 43 years old male patient presented with pain and instability right knee following injury to the right knee. Patient now admitted to the BLK Hospital for further management.
• Past History: Nothing significant.
• Family history: Nothing significant.
• Advice on Discharge:

• Tab Zocef 500 mg –(used in bacterial infection).
• Tab Chymoral plus-(used to relieve pain and inflamtion)
• Tab Ultracet-(used in treatment of pain relief)
• Cap Biospring 10 (contain Vitamin ‘B’ complex, Zinc, Falic Acid, Vita-C) 
• Tab Bonabond-(is a blend of Vitamins and minerals essential for body, it helps in blood formation and bone mineralization).
• Tab Pan 40 mg: (is used in treatment of Heart burn, gastroesophageal reflux disease.
•  

Thus, from the above description of prescribed medicines by the treating doctor of the hospital during and post hospitalization, it clearly depicts that neither the complainant was having the history of thyroid since last 10 years nor any medicine prescribed/advice on discharge has any co-relation for the thyroid treatment.

9.5. Mr. Bhuwan Bhaskar acclaims in his affidavit to be constituted attorney of OP company vide authority letter dated 01.02.2019 (but authorization letter dated 01.02.2019 has not been filed) but neither his  place of posting nor designation has been disclosed. Exhibit-RW 1/1-(letter of authorization  Annexure- RW 1/1 is dated 28.08.2019 in favour of Sh. Chandrika Bhattcharya, Chief Manager-Legal who is the author of OP’s reply). So, authorization  in favour of Sh. Bhuvan Bhaskar is not proved, then how it could be treated evidence by OP.

9.6 However, for the sake of argument, OP’s own case is (as referred in affidavit):-

‘However, I state that without getting into the merits of the matter and purely as a gesture of goodwill, the company is agreeable to pay the claim but will not be able to continue the policy’.

          Therefore, this is short of admissibility of the claim of the complainant by the OP.

9.7. OP in its reply and written arguments has cited different case law viz Satwant Kaur Sandhu Vs. New India Assurance Co. Ltd. (2009) 8 SCC 316, P.C. Chacko & Anr. Vs. Chairman, Life Insurance Corporation of India and others [Appeal (Civil) 5322 of 2007; Life Insurance Corporation of India & Ors Asha Goel & Anr. [2001] SCC 160; Mithoolal Nayak Vs. Life Insurance Corporation (AIR 1962 SC 814). Hazi Ahmed Yar Khan Vs. Abdul Gani Khan (AIR 1937 Nag 207 at 272); NCDRC’s Revision Petition No. 469/2006 in United India Insurance Co. Ltd. Vs. Subhash Chandra etc and all the case law cited by OP are on the facts and circumstances of ‘non-disclosure of material facts’ by the insured and insurance contract based on ‘utmost good faith’ but ratio of these cases do not apply in the facts and circumstances of the present case; since want of non-disclosure of material facts by the complainant has not been proved by the OP. Therefore, preponderance of probabilities goes in favour of the complainant and against the OP.

          It is relevant to refer the case law on the applicability of ratio of the case. In Padma Sundara Rao & Ors Vs. State of Tamil Nadu & Others II 2002 SLT, 483, rule on precedent was discussed that ratio of a case is facts specific i.e. ratio of case has to be read as per the facts of a particular case and change of a single fact can make difference to the ratio of case.

9.8. Hon’ble State Commission, Delhi in case of Sh. Pradeep Kumar Garg Vs. National Insurance Co. Ltd. (Appeal No. A-482/2005) has discussed in detail as to what would constitute PED; the relevant paras are referred here in under and relevant paragraph of judgment is reproduced (as it is):

“[6.  Complaint was dismissed merely on the premise of report of Dr. N.C. Singhal, a Doctor on the panel of respondent-Company opining that claimed disease is a consequence of Hysterectomy done; 10 years back. Such ground is highly preposterous, farfetched and untenable in the eye of law. Recently the Supreme Court has deprecated the practice of Insurance Companies for rejecting the claims in respect of medi-claim policies on the ground of pre-existing disease.

7.  On the concept, meaning and impart of word disease, pre-existing disease in reference to medical  insurance policies, we have drawn following 10 conclusions in highly extensive, dissective manner. These are as under:

(i) Disease means a serious derangement of health or chronic deep-seated disease frequently one that is ultimately fatal for which an insured must have been hospitalized or operated upon in the near proximity of obtaining the medi-claim policy.

(ii) Such a disease should not only be existing at the time of taking the policy but also should have existed in the near proximity. If the insured had been hospitalized or operated upon for the said disease in the near past, say, six months or a year he is supposed to disclose the said fact to rule out the failure of his claim on the ground of concealment of information as to pre-existing disease.

 (iii) Malaise of hypertension, diabetes, occasional pain, cold, headache, arthritis and the like in the body are normal wear and tear of modern day life which is full of tension at the place of work, in and out of the house and are controllable on day to day basis by standard medication and cannot be used as concealment of pre-existing disease for repudiation of the insurance claim unless an insured in the near proximity of taking of the policy is hospitalized or operated upon for the treatment of these diseases or any other disease.

(iv) If insured had been even otherwise living normal and healthy life and attending to his duties and daily chores like any other person and is not declared as a diseased person as referred above he cannot be held guilty for concealment of any disease, the medical terminology of which is even not known to an educated person unless he is hospitalized and operated upon for a particular disease in the near proximity of date of insurance policy say few days or months.

 (v) Disease that can be easily detected by subjecting the insured to basic tests like blood tests, ECG  etc. the insured is not supposed to disclose such disease because of otherwise leading a normal and healthy life and cannot be branded as diseased person.

 (vi) Insurance Company cannot take advantage of its act of omission and commission as it is under obligation to ensure before issuing medi-claim policy whether a person is fit to be insured or not. It appears that insurance companies dont discharge this obligation as half of the population is suffering from such malaises and they would be left with no or very little business.

9.9 We would also like to refer judgment of Hon’ble NCDRC, New Delhi in case titled ICICI Prudential Life Insurance Co. Ltd. Vs. Veena Sharma &Anr-IV (2014) CPJ 580 (NC):-

8. The law on this subject has been very clearly enunciated by Hon’ble Supreme Court in decision pronounced on 13.09.2010. Fact in this case Balwinder Kaur v. Life Insurance Corporation of India, Civil Appeal No. 7969 of 2010, were very similar to those in the revision petition before us. The claim under the policy had been repudiated on the ground that the insured had given incorrect answers to the queries in the proposal form. The District Forum held that the repudiation was not legally tenable as there was no evidence led in support of the certificate of the doctor who had treated the deceased. The certificate had noted that the insured had a chronic illness for the last many years. The order of the District Forum was set aside by the State Commission. The National Commission had agreed with the decision of the State Commission.

9. Hon'ble Apex Court reversed the orders of the National Commission and the State Commission, holding, that:

“The onus to prove that the deceased had obtained policy by suppressing facts relating to his illness was on the Corporation, but no tangible evidence was produced on its behalf to prove that the deceased was suffering from serious liver ailment at the time of taking policy and he deliberately suppressed this fact. Undisputedly, the policy was issued on 29.3.1998. The deceased must have filled the proforma some time prior to that date. Therefore, the Corporation ought to have produced evidence to prove that as on the date of filing the proforma, the deceased was suffering from any identified ailment and he had intentionally written ‘no’ against item Nos. (a) to (d)
of Clause 11. This the Corporation had failed to do.”

10. We therefore, find ourselves in complete agreement with the view taken by the Fora below. The Revision Petition are held to e devoid of any merit and are dismissed for the same reason. No costs.”

9.10 Therefore, after critical analysis of case of both sides with record and ratio of case law cited in para 9.7 and 9.8 above, it is held that complainant has succeeded in proving deficiency of services and unfair trade practices on the part of OP.

9.11. Since, complainant has succeeded in establishing his claim as discussed in the forgoing paragraphs, therefore, cancellation of policy by OP vide letter dated 29.05.2019 is not sustainable. Thus, subject the policy is restored ab-initio.

9.12. As, deficiency of service is proved against OP; OP is held liable to reimburse Rs. 3,79,676/- of bills and  hospitalization/treatment (including post hospitalization expenses) to the complainant.

9.13. The complainant seeks compensation for mental torture but it should be commensurate to the situation. Thus, it would justify both end to quantify a lump sum compensation of Rs. 20,000/- and it is allowed in favour of the complainant and against the OP.

          The complainant was constrained to file complaint, now costs are also quantified for Rs. 10,000/- in favour of complainant and against OP.

9.14  The complainant has also claimed other relief or order in his favour under the circumstances of this case. The complainant is also allowed interest @ 6% pa on amount of Rs. 3,79,676/-  in his favour and against OP from the date of filing the complaint till realization.

9.15 Considering the aforesaid circumstances, the complaint is allowed in favour of the complainant and against OP to pay a sum of Rs. 3,79,676/- to the complainant along with 6% interest pa from the date of filing the complaint till its realization; Rs. 20,000/- damages/compensation, apart from Rs. 10,000/- towards litigation costs.

9.16 The aforesaid amount shall be paid to the complainant by OP within 30 days from the receipt of this order, failing which OP will be liable to pay interest at the rate of 7% pa on the amount of Rs. 3,79,676/- instead of 6% pa.  

10:  Announced on this 30^th September, 2023. Copy of this Order be sent/provided forthwith to the parties free of cost as per rules for necessary compliance.

[Vyas Muni Rai]                      [ Shahina]                              [InderJeet Singh]

        Member                          Member (Female)                              President