IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, ALAPPUZHA

Thursday the 31^stday of March, 2022.

                                      Filed on 10.09.2021

Present

1. Sri.S.Santhosh Kumar  BSc.,LL.B  (President )
2. Smt. Smt.C.K.Lekhamma, B.A, LLB (Member)

In

CC/No.197/2021

between

Complainant:-                                                              Opposite party:-

Sri.MohammedMoosaSait                              1.     Max Bupa Health Insurance Co.

Baithulnoor, Eravikad Ward                                  Puthuran Plaza, M.G.Road

Alappuzha-688002                                                 Cochin-682033

(Adv. Viswabhadran)                                             (Adv. SajiIsaac.K.J)

                                                              2.   IRDA. Consumer Affiars

                                                                    Department, Grievance Redressal

                                                                    Cell, Gachibowli

                                                                     Hyderabad-500032     

                                                                     (Exparte)

O R D E R

SRI. S.SANTHOSH KUMAR (PRESIDENT)

Complaint filed under Sec.35 of the Consumer Protection Act, 2019.

1.      Complainant’s case briefly stated is as follows:-

Complainant is maintaining a SB account with Kalarcode branch, Federal Bank Ltd. and the manager suggested the complainant to get the entire family members insured under a single health policy called family floater issued by 1^st opposite party. Finding cashless treatment plan offered by the 1^st opposite party, he joined the health insurance paying a premium of Rs.11,219/- for a coverage of Rs.3 lakhs and a policy certificate was issued on 31.05.19.  Under the policy the complainant and all his family members are covered and the cover extend through impatient health charges, pre and post hospitalization expenses, domiciliary hospitalization, hospital cash etc.  The eldest son of the complainant was admitted at Sahrudaya hospital Alappuzha on 12.08.2019 for flu like illness for secondary pneumonia a common disease and was discharged from the hospital after a week on 20.08.2019.  Immediately after discharging him the hospital a claim was submitted to the 1^st opposite party. But after keeping it pending for about 2 months under claim No.46/1717 it was rejected on 23.11.19 citing reasons “ as per received documents some requirements is incomplete like treating doctor, certificate with previous record of treatment since when insured is known case of seizures and on medication.  Hence claim was rejected under clause 7.3 as per policy terms and conditions. Under claim assessment and repudiation terms and conditions of the policy document in clause 7.4, the following is mentioned.

1. 1^st opposite party may investigate claims to determine the validity of a claim.
2. The company shall settle or repudiate a claim within 30 days of the receipt of last necessary information and other documents prescribed. 

2.      When the complainant submitted the claim application 1^st opposite party demanded documents relating to the hospitalization as well as previous treatments taken by his son.  It was obtained from the concerned doctors and provided.  But instead of settling the claim thereafter the 1^st opposite party again rejected the same and it was intimated to the complainant on 11.01.2020.  Though the complainant thereafter through letters and e-mails requested the 1^st opposite party to review the decision it was not done.  When 1^st opposite party continued its silence complainant vide his E-mail dated 12.08.2020 brought the matter before the 2^nd opposite party as they are the statutory institution set up to protect the interest of all policy holders, including persons like complainant.  2^nd opposite party also did nothing to redress the grievance.  Subsequent to this rejection 1^st opposite party has cancelled the policy issued to the complainant.  Hence the complaint is filed to give a direction to the 1^st opposite party to settle the claim immediately along with interest @ 18 % per annum and they may be directed to pay an amount of Rs.50,000/- as compensation for the mental agony and other hardships.  2^nd opposite party may be directed to bear half of the compensation for the deficiency in their service.

2^nd opposite party remained exparte.

3.      1^st opposite party filed a version mainly contenting as follows:-

Complainant has not approached this Commission with clean hands and the complaint is not maintainable.  Complainant had availed health companion variant 1 policy which was valid from 30.05.2019 to 29.05.2020.  The policy was issued based on the declarations in the proposal form submitted by the complainant.  In the proposal form it is clearly stated that “please ensure that the details provided in the proposal form are correct”.  If the information provided is incorrect or incomplete,  the company may not accept liability for claims made under the policy.  Complainant had answered in the negative in the proposal form regarding the medical habits of the son of the complainant to the specific questions.   Complainant had also declared in the proposal form that the statements are true and complete in all respects.  

4.      Complainant’s son MuhammedMirasSait was suffering from seizure disorder since 8 years.  Had the complainant disclosed the fact 1^st opposite party would have assessed the risk and would not have issued the policy to the son of the complainant.  The policy was issued to the complainant for the premium which was paid by him based on the disclosures made in the proposal form. The fact regarding the health condition and seizure disorder of the complainant’s son was a material fact as far as the risk undertaken by the 1^st opposite party was concerned.  The policy conditions provided that the 1^st opposite party had the discretion upon the disclosure of the health status of the persons proposed for insurance and declarations made in the proposal to apply a risk loading on the premium payable.  The policy was issued stating pre-existence disease as “None” in the policy.  The policy had a free look in period of 15 days. There was no objection from the part of complainant. 

5.      According to the disclosure to information norm in the policy conditions, the policy shall be void and all premium paid hereon shall be forfeited to the company in the event of misrepresentation, mis-description or non-disclosure of any material fact.  The claim of the complainant was repudiated by the 1^st opposite party by letter dated 15.01.2020 as the complainant had not disclosed the material fact regarding seizure disclosure of his son since 8 years.  Complainant is duty bound to disclose all existing medical conditions pertaining to the health of the person proposed to be insured.   Since the policy was obtained by suppression and misrepresentation it rendered the policy void ab initio.  Hence complainant is not entitled for any relief and so the complaint may be dismissed with cost.

6.        On the above pleadings following points were raised for consideration:-

1. Whether there was any deficiency of service from the part of the opposite parties as alleged?
2. Whether the complainant is entitled to realize claim amount along with interest as prayed for?
3. Whether the complainants is entitled to realize an amount of Rs.50,000/- as compensation from the opposite parties as prayed for?
4. Reliefs and cost?

7.      Evidence in this case consists of the oral evidence of PW1 and Exts.A1 to A7 from the side of the complainant. Opposite parties have not adduced any oral evidence Ext.B1 to B4 were marked during cross examination of PW1.

8.      PW1, the complainant availed a health insurance policy for himself and family members from the 1^st opposite party M/s Max bupa health insurance  company, as per Ext.B1 proposal dtd. 25/8/2019.  It wasfor  a period of one year from 30/5/2019 to 29/5/2020  Ext.A1 is  the insurance certificate. During the pendency of the policy his son Master Muhammad MeeraSait fell ill and was admitted at Sahurdya Hospital,  Alappuzha from 12/8/2019 to 20/8/2019  which is revealed from Ext.A3 certificate.   A claim form was filed before the 1^st opposite party.  After verifying the claim as per Ext.A6 letter dtd. 12/8/2020 1st opposite party repudiated the claim on a contention that there was pre-existing disease to the insured and it was not disclosed at the time of availing the policy.   Dissatisfied with the same complaint is filed for getting a direction to the 1^st opposite party to settle the claim immediately along with interest.  Complainant is also claiming an amount of Rs.50,000/- as compensation   from 1^st opposite party  with an order to share the compensation by the 2^nd opposite party.  2^nd opposite party remained exparteand  1^st opposite party filed a version admitting the policy.  However  it was contented that in the proposal form there was  non disclosure of  material facts. After getting the policy documents onenquiry it was revealed that the insured had seizure disorder for which he was consuming medicine.  Without noticing the came the risk was under taken by the 1^st opposite party and so when it was found out they are entitled to repudiate the claim and so they prayed for dismissal of the complaint with cost. Complainant got examined as PW1 and Ext.A1 to A7 were marked.  Opposite parties have not adduced any oral evidence. During the cross examination of PW1 Ext.B1 to B4 were marked.

9.      Ext.A1 is the policy issued to PW1 and family for the  period of one year from 30/5/2019 to 29/5/2020.  The total sum assured is Rs.6 lakhs.  Ext.B1 is the healthcompanion proposal form dtd. 28/5/2019  filed  for getting the policy. From Ext.B1 it is seen that MuhammedMeeraSait  whohas claimed medi Claim benefit was also insured.  The case of PW1, complainant is that his son who was  one of the insured was admitted at M/s Sahrudaya Hospital , Alappuzha  on account of   flue like illness with secondary  pneumonia on 12/8/2019 and discharged on 20/8/2019.  Ext.A3 is the certificate issued from Sahrudaya hospital.  Though through PW1 Ext.A6 was marked on a contention that it was repudiation of claim by the 1^st opposite party it is seen that it is only a mail seeking for additional information.  However during cross examination of PW1 Ext.B3 which is the repudiation letter dtd. 15/1/2020 was marked.  The reason for repudiation noted in Ext.B3 as follows:-As per the submitted documents/investigation done by us, it was found that the insured was suffering from seizure disorder since 8 years.  It was found that you have not disclosed the same at the time of taking the policy. Hence, as per the policy terms and condition under clause 10.21.

          This falls under non disclosure.  Hence your claim stand repudiated. 

10.    Ext.B2 is the policy.  Sec. 10.21 of  Ext.B2 reads as follows:-

 Disclosure to information Norm means the policy shall be void and all premium paid hereon shall be forfeited to the company in the event of misrepresentation,mis-description or non-disclosure of any material fact.10.57 deals with pre existing disease which reads as follows:-Pre –existing disease means any condition, ailment or injury or related conditions(s) for which the insured person had signs or symptoms and /or were diagnosed and /or received Medical Advice/treatment within 48 months, prior to the first Policy issued by us.  Ext.B1 is the health companion proposal form submitted byPW1 for availing the mediclaim policy.  In page No.3 Sec.A there are 4 questions which is shown as A,B,Cand D.  For all the questions the answers given by all insured persons are ‘N’(No).  As per Sec. B if any of the previous answers are Yes, they have to give further details.  Here in this case since for answers to Sec. A ‘No’ is given by the insured, there is no question of   going to Sec. B  orgoing to Sec. C.  In Sec.B there is a specific question regardingpsychiatric and nervous disorders(Brain/spine):- Sudden loss of consciousness, decrease in strength/ movement of limbs,  paralysis loss of  speech or memory, tremors, stroke, seizure/epilepsy/fits, Parkinsonism, Alzheimer’s etc.

11.    The learned counsel appearing for the opposite party relied upon ext. B4 certificatedtd. 25/11/2019 issued by Dr. Parameswaran, who is a consultant neurologist. A copy of the same was produced by the complainant and marked as Ext.A3(a) which reads as follows:-  This is to certify that master Muhammad MirasSait  is under  my treatment for last 8 year for seizure disorder.  BLRE(Benign localization related epilepsy). This seizures are well controlled and he is seizure free for last 5 years. He is on low dosage of medication for maintaining harmony.  

12.    So according to  learned counsel appearing for the opposite party Ext.B4(A3(a) revealed that  the   person who has claimed  insurance claim was a known case of seizure disorder for last 8 years and even at the time of   issuing  the certificate on 25/11/2019 he was under low dosage of medication.  During cross examination PW1 admitted that for the last 8 years his son had  seizure disorder and is under treatment of Dr. Parameswaran.  At the time of availing policy the specific mentioned question was answered as ‘No’.  According to him the questions were not clear and so such answers were given.  He further admitted that after giving answers as ‘No’ to A,  Section  B was not answered purposefully.    In a nutshell  the contention of the learned counsel appearing for the 1^st opposite party is that  policy was availed  suppressing the seizure disorder  of insured and so they are justified in repudiating the claim.  The law in this regard is well settled by the various judicial pronouncements.The expression material is explained inReliance  Life Insurance Co. Ltd   And Anr  Vs. RekhabenNareshbhaiRathod (2019 KHC 6482)

13.    The expression material is defined as  follows:-

      “The opinion of  the particular assured as to the materiality of a fact will not as a rule be considered, because it follows from the accepted test of materiality that the question is whether a prudent insurer would have considered that any particular circumstances was a material fact and not whether the assured believed it so…”

Materiality from the insured’s perspective is a relevant factor in determining whether the insurance company should be able to cancel the policy arising out of the fault of the insured whether a question concealed is or is it not material is a question of fact.

“Any fact which goes to the root of the contract of insurance and has a bearing on the risk involved would be “material”

14.    During re-examination it was brought out by the learned counsel appearing for the complainantthat  Ext.B1 was  filled  up by the agent of the company.  But such a contention is  unsustainable in view of the decision of a Division Bench of the Mysore  High Court in    V.K. SrinivasShetti  Vs. Messers Premier Life and General Insurance Co. Ltd.[AIR 1958  Mys 53]  Where it was held

      “Now it is clear that a person who affixes his signature to a proposal which contains a statement which is not true, cannot ordinarily escape from the  consequence arising there from by pleading that he chose to sign the proposal containing such statement without either reading or understanding it.  That is because, in filling up the proposal form, the agent normally, ceases to act as agent of the insurer but becomes the agent of the insurer but becomes the agent of the insured and no agent can be assumed to have authority from the insurer to write the answers in the proposal form.

      If an agent nevertheless does that, he becomes merely the amanuensis ofthe  insured, and his knowledge of the untruth or inaccuracy of any statement contained in the form of proposal does not become the knowledge of the insurer.  Further apart from any question of imputed knowledge, the insured by  signing that proposal adopts those answers and makes them his own and that would clearly be so, whether the insured signed the proposal without reading or understanding it, it being irrelevant to consider how the inaccuracy arose if he has contracted, as the plaintiff has done in this case that his written answers shall be accurate.”

15.    This view was affirmed by the Hon’ble Supreme Court in the decision cited above.  (2019 KHC  6482).. It was held by the  Hon’ble Supreme Court in  Export Credit Guarantee Corporation of India  Ltd. Vs. M/s Garg Sons International  (2013 (1) KHC SN 16 (SN)

“Consumer Protection Act, 1986 –Section 2, Section 14, Section 19-Insurance claims- Rule of strict interpretation – Held, terms of insurance policy have to be strictly construed in order to determine the extent of the liability of the insurer - It is  not permissible for the Court to substitute terms of the contract itself, under the garb of construing terms incorporated in the agreement of insurance – Insurance  Law”

16.    The learned counsel appearing for the complainant relied upon a ruling of Hon’ble Supreme Court   in  Manmohan Nanda  Vs. United India Assuranc Co Ltd&Anr.(Civil Appeal No.8386 of 2015).It was held,

“  On a consideration of the aforesaid judgments, the following principles would emerge.

1.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 of 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 non-disclosure of a material fact, and seek to repudiate the claim.

17.    As clause No.IV it was held that if any column is set blank it is for the insurance company to ask the insured  to fill it up.  But here in this case there is a difference. In   Ext.B1 proposal form regarding the   1^st set of questions shown as Sec. A, the answers are given as “No”.  Only if anyquestion is answeredas  ‘Yes’, insurer is duty bound to fill up questions of Sec. B.   So the ruling relied upon by the complainantcannot be applied in this case.  Hence from the evidence on record and in the light of the judicial pronouncements referred above it can be seen that there is non- disclosure of  material fact in Ext.B1 proposal form.  Though as per Ext.A3(a) certificate issued by consultant neurologist the insured was suffering from seizure disorder for the last 8 years and still  under medication by low dosage  it was suppressed in Ext.B1 proposal form.  The explanation offered by PW1 during re-examination that certain answers were kept blank since he was unable to understand the same is not at all acceptable, whybecause he had the assistance of the agent of the company to fill up the application form.  As a matter of fact ifcertain risk factors are shown in the proposal form either the insurance company can deny the claim or accept the claim with a higher premium. Here in this case since the answers shown in Ext.B1 proposal form for Sec. A areis the negative there was no question of further filling upon Sec. B.  As discussed earlier in Sec. B for the specific question regarding  seizure/epilepsy/fits etc. is  seen unfilled.    In said circumstances we are of the opinion that the insurance company repudiated the claim for non disclosure of material facts in Ext.B1 proposal form.  So it cannot be held that there was deficiencyof service from the part of the 1^st opposite party insurance company.  In said circumstances complainant is not entitled to get any relief and so these points are found against him.

18.    Point No.4.

In the result, complaint is dismissed.  Parties are directed to bear their respective cost.

Dictated to the Confidential Assistant, transcribed by him corrected by me and pronounced in open Commission on this the 31^st   day of March, 2022.    

                               Sd/-Sri.S.SanthoshKumar(President)

Sd/-Smt.C.K.Lekhamma (Member)

Appendix:-Evidence of the complainant:-

PW1                    -        MuhammedMoosaSait (Complainant)

Ext.A1                -        Insurance Certificate     

Ext.A2                -        Payment Details

Ext.A3series       -        Certificate (2nos)

Ext.A4                -        Payment Details

Ext.A5                -         Letter dtd. 1/2/2020

Ext.A6                -      Repudiation  of claimdtd. 12/8/2020

Ext.A7 series      -      Circular        

Evidence of the opposite parties:-           

Ext.B1                -        Health Companion Proposal Form

Ext.B2                -        Policy

Ext.B3                -        Repudiation letter dtd. 28/12/2019

Ext.B4                -        Certificate dtd. 25/11/2019

//True Copy ///

To     

          Complainant/Oppo.party/S.F.

                                                                                                     By Order

                                                                                                  Assistant Registrar

Typed by:- Br/-

Compared by:-