Before the District Consumer Dispute Redressal Commission [Central District] - VIII, 5th Floor Maharana Pratap ISBT Building, Kashmere Gate, Delhi
Complaint Case No.215/01.08.2019
Sandeep Singh son of Shri Ram Raj Singh,
r/o C-2/710. Street no.11, 2nd Pusta, Sonia Vihar,
Delhi …Complainant
Versus
OP- Max Bupa Health Insurance Company,
B-1,I-2, Mohan Cooperative Industrial Estate,
Mathura Road Block-e New Delhi-110044.
Branch - 39, 3rd Floor, Pusa Road,
WEA Karol Bagh, New Delhi-110005 ...Opposite Party
Date of filing: 01.08.2019
Coram: Date of Order: 03.07.2024
Shri Inder Jeet Singh, President
Ms. Rashmi Bansal, Member -Female
FINAL ORDER
Inder Jeet Singh , President
This case is scheduled for Orders (item no.12).
1.1. (Introduction to dispute of parties) - The complainant/Insured has grievances of unfair trade practice and deficiency of services against OP firstly - there was no sanction of pre-authorisation for cashless facility for medical bills in respect of treatment of complainant and subsequently by declining reimbursement of hospitalization medical bills despite it were covered under Medi-claim Insurance Policy, on the pretext of concealment of facts of previous ailment/wrong declaration in proposal form besides insurance policy was also cancelled; OP has invoked terms and conditions. The acts of OP of denial/repudiation of valid claim & cancellation of policy are wrong and without substance.
The complainant seeks directions that insurance policy be restored the policy since cancellation of policy was wrong, reimbursement of medical bills of Rs.1,30,782/- with interest of 24%pa, compensation of Rs.1,00,000/- on account of harassment , mental agony and pains, costs and other appropriate reliefs.
1.2. The OP opposes the complainant by denying allegations of unfair trade practice trade practice and of deficiency of services and OP also justifies declining pre-authorisation and repudiation of claim and cancellation of policy. The pre-authorised and then subsequent claims were properly declined as the complainant had suppressed material facts of previous ailment existing immediately prior to making declaration in the proposal form and inception of policy, The policy was also properly cancelled in terms of policy conditions, since the complainant suppressed and failed to disclose pre-existing diseased. The policy was obtained by misrepresentation and against the principles of utmost good faith. It cannot be construed deficiency of services and complainant is not entitled for any claims.
2.1. (Case of complainant) –The complainant/insured took health/mediclaim insurance policy for himself and for his family members from the OP on 18.01.2016 for sum insured of Rs. 5 lakh; the insurance policy was opted since the OP assured and advised benefits under the policy. This policy was got renewed for next year of 18.01.2017 to 17.01.2018 and further renewed from 18.01.2018 to 17.01.2019. To say, the policy continued from 18.01.2016 to 17.01.2019. Moreover, no claim bonus benefit was given upto Rs. 12 lakh, which included no claim bonus of Rs. 2 lakh and he fill amount of Rs. 5 lakh, excluding base sum insured of Rs. 5 lakh. The complainant also received letter dated 20.01.2017 from the OP for renewal of the policy.
2.2. In September 2018 the complainant was suffering with some illness and he got the treatment from Sant Parmanand Hospital. The complainant furnished claim form for taking cashless mediclaim benefit under the renewed policy. The complainant also furnished treatment papers with the claim form. The complainant received mails dated 23.09.2018 and 26.11.2018 acknowledges receipt of claim of the complainant. There were some queries raised by the officials of OP, the complainant furnished the same and documents. But it surprised the complainant on receipt of letter dated 04.01.2019 that his claim was repudiated but it was on frivolous grounds.
The complainant wrote letter dated 24.12.2018 for reconsideration of claim by the OP, but the OP vide its letter dated 04.01.2019 not only repudiated the claim but also cancelled the policy.
2.3. The complainant had taken mediclaim policy in 2016 and get it renewed upto 2019 without raising any medical claim, however, his claim was repudiated, which is not based on actual facts and treatment of complainant; the repudiation is abuse of process of law. The complainant had suffered Hernia for which he was operated and treated by the doctors of Sant Parmanand Hospital from 22.09.2018 to 23.09.2018. The complainant is now healthy and fit after the surgery and discharge from the hospital. He also furnished certificate issued by the treating doctor to clarify the query raised by the OP, which elucidates that the treatment taken by the complainant is not related with his previous statement, therefore, the repudiation of the claim is against natural justice and principle of law. The OP is liable to make the entire payment of claim amount, which it failed to do despite several requests, demand and even legal notice dated 04.04.2019 or to reply the legal notice. The acts of OP caused great mental pain and mental agony to the complainant, for which it is liable to pay compensation of Rs. 1 lakh. That is why the complaint was filed for the claims and reliefs (already mentioned in paragraph 1.1 above).
2.6. The complaint is accompanied with copies of - insurance policy, prescriptions and treatment papers, discharge summary, letters, legal notice dated 16.03.2019 with postal receipts, its reply dated 04.06.2019, emails and communication.
3.1 (Case of OP)- The case of OP is already introduced in paragraph 1.2 above. The insurance policies issued from time to time are not disputed by the OP but claim is opposed.
3.2 The complaint is opposed by way of preliminary objection as well as on merits with the support of case law that complainant is not entitled for any relief in equity or otherwise as he has suppressed material facts about his status and previous ailments, there is breach of settled principle of insurance contract based on utmost good faith. The complainant was required to disclose every material fact, otherwise there is a good ground for recession of the contract, which is also upheld by Hon’ble Supreme Court of India. The complainant has also made false declaration for seeking insurance policy by way of misrepresentation.
3.3. The complainant is discovered to be an insurance agent of the OP at Pusa Road branch Delhi having code no. MBHDEL0124267, he is well aware about the conditions of various policies in that capacity as well as consequences for non-disclosure of vital facts. The complainant has medical history of stiffness of upper limb/epilepsy but it was concealed at the inception of policy. It has came into light that he has that medical history prior to 03.01.2016, which is an admitted fact by the complainant through his doctor’s certificate placed on record by himself. It was not mentioned in the proposal form of 10.01.2016 signed by him for insurance policy and by virtue of concealing this material fact with wrong declaration, the complainant obtained the policy. The said past history was material and it was concealed by the complainant, vis-à-vis this material fact was relevant for the insurer to decide whether or not the insurance policy is to be issued. Since there was non-disclosure of previous ailment at the time of availing the policy, the claim was repudiated and insurance policy was cancelled by invoking appropriate terms and conditions of the policy bearing no. 30492707201600 w.e.f 18.01.2016 to 17.01.2017 initially issued to the complainant and it was renewed from time to time and lastly it was renewed from 18.01.2018 to 17.01.2019.
3.4. The written statement is blend of bundle of facts, reproduction of contents of documents with images of documents and case law (the case law will be mentioned subsequently at appropriate stage of this order). The OP reproduces the contents of documents and its images to support the plea that complainant had concealed the material facts of ailments and made false declaration. The complainant had consulted doctors at AIIMS on 03.01.2016, the medical papers mentions “history of stiffness of left upper limb since one month ago. Lasted transiently for 1 hour, now four days ago, started sudden onset parasthesia of left upper limb and tremors of left upper limb, jaundice since childhood; Having local tremors on left upper limb”. This clearly shows that when the proposal for was signed and furnished on 10.01.2016, the complainant was suffering from that ailment but the complainant has not declared it and concealed it by mentioning answer ‘NO’ against appropriate column of ailment or treatment etc. Similarly, the complainant had appended declaration to the proposal form, which reads as “I/we hereby declare on my behalf and on behalf of each of the persons proposed to be insured that the above statements, answers and/or particulars give by me are true and complete in all respects to the best of my knowledge……….”. On the face of it, it is a false declaration and the complainant being an agent of insurance company was well aware of non-disclosure of material information and its consequences.
3.5. After appropriate investigation, the complainant was issued notice dated 19.12.2018 for cancellation of policy based on non-disclosure and the claim was repudiated. Then complainant requested the OP by letter dated 24.12.2018, it was repudiated vide letter dated 10.01.2019 (the letter dated 24.12.2018 and 10.01.2019 have been filed by the complainant at page no. 71 and 81 of his paper book). Thus, because of significant of non-disclosure the policy was cancelled on 22.01.2019. The claim of complainant was rightly repudiated on these conditions. The reimbursement of the claim was denied with the reason “pre-existing diseased was not disclosed by the complainant at the time of inception and availing the policy”. The OP requests for dismissal of the complaint.
3.6. The written statement is accompanied with copies of - authority letter dated 01.02.2019 in favour of Ms. Chandrika Bhattacharya to author of written statement etc., identity card issued by OP while appointing the complainant as an agent on 01.04.2015, proposal form dated 10.01.2016, policy schedule with terms and conditions, latest policy, terms and conditions, declining of preauthorization letter dated 23.09.2018, reimbursement claim form, OPD record dated 03.01.2016 of AIIMS in respect of complainant and copy of repudiation letter dated 19.12.2018; in addition the complainant relies upon other letters dated 24.12.2018 and 10.01.2019 filed by the complainant.
4.1. (Evidence)- In order to prove the complaint, the complainant led his own evidence by way of affidavit with the support of document filed with the complaint.
4.2. On the other side, OP led evidence by filing affidavit of Shri Bhuvan Bhashker, constituted attorney of OP. The affidavit is supported with documents besides images of documents in the affidavit.
5.1 (Final hearing)- Both the parties have filed their written arguments. At the stage of oral submissions, Ms Kashika Singla, Advocate [being Associate with authority of Ms. Anita Kumar, Advocate for OP] presented oral submissions.
5.2. In order to fortify the contentions, the OP derives reasons for the following relevant cases:-
(a) Satwant Kaur Sandhu Vs.New India Assurance Co. Ltd. (2009) 8 SCC 316-
'when information on a specific aspect is asked for in the proposal form, the assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge. Obligation to disclose extends only to facts which are known to the applicant and not to what he ought to have known.
Whether the information sought for is material for the purpose of the policy is a matter not to be determined by the proposer.
(b) Mrs. Shnyni Valsan Pombally Vs. State Bank of India RP. No. 3947/2013, wherein it was held that contract of insurance is based on the principle of utmost good faith, which applies to both sides. The rule of non-disclosure of material facts vitiating a policy still holds the field.
(c) P C Chacko & antr Vs Chairman, LIC Ltd (AIR 2008 SC 424), held that contract of life insurance are contracts of utmost good faith, every material fact must be disclosed, otherwise there is good ground for recession of the contract. (further reference is also made to reported case in AIR 1992 Delhi 197, AIR 1994 SC853, I 1994 CPJ 425, I 1997 CPJ 94].
(d) When material facts are not disclosed relating to the health, the claim can be repudiated; one is not entitled for benefit of insurance if the material facts are concealed; the parties are bound by terms and conditions of the policy (the OP refers many cases in the written arguments to highlight these aspects viz. (i) Lal Chand son of Shri Birbal vs. Life Insurance Corporation of India RP No. 2749/2006 NCDRC, (ii) Maya Devi Vs. Life Insurance Corporation of India III (2011) CPJ 43 (NC), (iii) United India Insurance Co. Ltd. Vs. Harchand Rai Chandan Lal Appeal No. 6277/2004, (iv) General Assurance Society Ltd. Vs. Chandumull Jain and Another (1966) 3 SCR 500.
6.1 (Findings)- The rival contentions are considered by taking into account stock of material and evidence of parties, the documentary record proved and case law/decision referred .
6.2 On the face of record, the relationship of the complainant and of the OP are of the Insured and of the Insurer is not disputed nor about the medi-claim policy issued/renewed from time to time, its tenure and sum insured and premium paid. The proposal form dated 10.01.2016 furnished is also not disputed. The complainant has also not rebutted/disputed that he was appointed as an insurance agent by the OP nor his identity card proved by the OP. The complainant had undergone medical treatment as indoor patient in the Sant Parmanand Hospital, the discharge summary issued on such occasion besides the record pertaining to his treatment/consultancy at AIIMS New Delhi are also not disputed. The complainant was not extended cashless facility and the complainant had paid the entire medical bills of his hospitalization; it is also not a disputed fact.
The terms and conditions of the policy are also not disputed, the complainant has refers clause 3 of the insurance policy, which is based on the insurance policy filed
6.3. But the consumer dispute is (1) 'whether or not the complainant had pre-existing disease for the purposes of policy or he had concealed it from the OP? (2) Whether or not the complainant is entitled for insurance claims and other reliefs? In order to determine such issues, it needs to analyze the evidence, whether there was pre-existing of disease for the purposes of obtaining policy and for want of its declaration, what consequences would ensue?
From that point of view to appreciate the rival case of parties, it is relevant to refer law laid down in "Jagdish Vs LIC of India [FA no.1055/2003 dod 17.12.2007, decided by Hon'ble State Commission]", in which circumstances and parameters of pre-existing disease were laid down in detail, its paragraph 10 is reproduced -
"Para 10 -Our conclusions on the meaning and import of words disease, pre-existing
disease for the purpose of medi-claim insurance policy, 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 test, 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 acts 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 do not discharge this obligation as half of population is suffering from such malaises and they would be left with no or very little business. Thus any attempt on the part of the insurer to repudiate the claim for such non-disclosure is not permissible, nor is exclusion clause invoke-able,
(vii) Claim of any insured should not be and cannot be repudiated by taking a clue or
remote reference to any so-called disease from the discharge summary of the insured by invoking the exclusion clause or non-disclosure of pre-existing disease unless the insured had concealed his hospitalization or operation for the said disease undertaken in the reasonable near proximity as referred above,
(viii) Day to day history or history of several years of some or the other physical problem
one may face occasionally without having landed for hospitalization or operation for the disease cannot be used for repudiating the claim. For instance an insured had suffered from a particular disease for which he was hospitalised or operated upon 5, 10 to 20 years ago and since then had been living healthy and normal life cannot be accused of concealment of pre-existing disease while taking medi-claim policy as after being cured of the disease, he does not suffer from any disease much less the pre-existing disease,
(ix) For instance, to say that insured has concealed the fact that he was having pain in
the chest off and on for years but has never been diagnosed or operated upon for heart disease but suddenly lands up in the hospital for the said purpose and therefore is disentitled for claim bares dubious design of the insurer to defeat the rightful claim of the insured on flimsy ground. Instances are not rare where people suffer a massive attack without having even been hospitalised or operated upon at any age say for 20 years or so,
(x) Non-disclosure of hospitalization/or operation for disease that too in the
reasonable proximity of the date of medi-claim policy is the only ground on which insured claim can be repudiated and on no other ground.
6.4. As appearing there is dispute of pre-existing disease and its concealment in the proposal form, both the issues are related with each other, they are required to be analyzed together, that is why both are being taken together. By considering facts, features, evidence of parties along-with the settled law, the following conclusions are drawn:-
(i) The proposal form 10.01.2016 has been proved by the OP, otherwise it is also not disputed. The proposal form (at page no. 21-29/Annexures R3) at its page no. 24 seeks medical history under column no. 5 whether in the last two years had the applicant consulted a doctor of professional health care or has been to any hospital for operation or investigation or to take any table or medical or drug on regular basis or experience any health problem in the medical condition for the last 3 months, all the questions were responded in ‘negative’.
(ii) The complainant has proved OPD record of 03.01.2016 of AIIMS and it is the case of OP that the complainant/insured was suffering from ailment prior to policy inception; the policy was issued on the basis of proposal form 10.01.2016 and the made declaration and the first policy issued was 18.01.2016 to 17.01.2017 (Annexure R4/page no. 30-39). By reconciling the record and dates, the complainant was known case of epilepsy on 03.01.2016, which was immediately prior to furnishing the proposal form dated 10.01.2016.
(iii) The discharge summary of Sant Paramanand Hospital also mention complainant’s ailment of epilepsy?
(iv) The complainant has not disclosed in the proposal form regarding any ailment or consultancy or treatment taken during that span of time asked for.
(v) In view of the sub clauses (i) to (iv) above, it makes out the case of concealment of pre-existing disease in the proposal form and also of wrong declaration in the proposal form. But the insurance policy was issued on the basis of facts and data mentioned proposal form believing to be truly declared by the applicant.
(vi) The clauses (ii) and (x) of Jagdish Vs LIC of India case (supra) are applicable but against the complainant.
(vii) The complainant is insurance agent of OP, he was knowing not only the procedural aspect but also about the business of insurance policy, the terms and conditions of policy in respect of various products being dealt by the OP. It cannot be construed that he was ignorant about the proposal form, otherwise it is also not the case of complainant.
(viii) When there was active concealment of pre-existing disease or condition and also wrong declaration, therefore, the OP has properly repudiated the claim. Moreover, cancellation of policy by OP on the same set of facts and circumstances was also proper and within the terms of policy conditions.
(ix) Although, the complainant had written letter dated/response 24.12.2018 to the OP requesting for extension of waiting period in respect of the ailment for which policy was being cancelled, however, the OP has declined the request. It is in the discretion of insurer, under the peculiar circumstances of the case, whether or not to extend the waiting period or to restore the insurance policy. Consequently there is no reason for the insurance policy to be restored.
7. Thus the complaint could not be established by the complainant, nor deficiency of services or otherwise, the complaint fails. It is dismissed. No orders as to cost.
8. Announced on this 3rd day of July 2024 [आषाढ़ 12 , साका 1946]. Copy of this Order be sent/provided forthwith to the parties free of cost as per rules for compliances, besides to upload on the website of this Commission.
[ijs-81]
