Sh. Sanjay Kumar (President)

ORDER

22.12.2023

1.         The complainant has filed the present complaint against the OP under section 12 of Consumer Protection Act, 1986.  The brief facts as alleged in the complaint are that complainant is the medical policy holder of OP Ins. Co. vide policy bearing no. 30704596201700 w.e.f. 05.10.2017 to 04.10.2020 for the period of 3 years for a sum insured of Rs. 20 lakhs.

2.         In the month of August, 2017, the complainant felt weakness, weight loss and as such on the advise of local doctor he visited Sir Ganga Ram Hospital for further diagnosis. The complainant was admitted to Sir Ganga Ram Hospital and his treatment was done on cashless basis. Again the month of April, 2018, the complainant suffered similar problem as well as weight loss and he was again admitted and the OP duly provided the cashless coverage to the complainant.

3.         On 02.05.2018, complainant visited BLK Hospital in the morning and having found no relief he further approached R.M.L. Hospital, Delhi for further diagnosis, where for the first time he came to know that he was suffering from kidney disease and he was advised to get dialysis. The complainant lodged the claim for dialysis with OP vide claim no. 355482 but OP Ins. Co. vide its letter dated 30.05.2019 repudiated the genuine claim and thereafter even cancel the policy in question vide letter dated 19.12.2018

4.         After receiving the repudiation letter the complainant approached OP-2 as well as the officials of the OP-1 Ins. Co. to reconsider his claim but all in vain. Being aggrieved by the conduct of OP, complainant approached this Commission for redressal of his grievance.

5.         Notice of the complaint was sent to both the OPs despite service OP-2 chosen not to contest the complaint. OP-1 filed its written statement wherein it denied any deficiency in service on its part, the relevant para of facts of the maters are reproduced as under:-

(4)        I state that the policy holder in clause 7 of the proposal form dealing with the “existing insurance details” has to the following:-

“Are you or any persons proposed to be insured already insured under the health insurance/personal accident policy with M/s Max Health Ins. Co. Ltd or any other Ins. Co.” has answered with a “No” whereas the fact of the matter is that complainant is an insured in two other policies with OP bearing no. 30548324 (hear beat gold 20 lakhs-with commencement date of 22.07.2016) and 30548334 (Health Assurance with commencement dated 22.07.2016).

(5)        I state that the answering OP Company received a reimbursement claim request bearing no. 336809 dated 30.05.2018 from the complainant for treatment undertaken by the complainant at BLK Super Speciality Hospital, date of admission 24.04.2018/ 02.05.2018 for a claimed amount of Rs. 27,50,000/-. It is submitted that upon verification and investigation it was discovered that this was the clear cut case of non disclosure of material facts ; hence, the said claim bearing no. 336809 dated 30.05.2018 was rejected for the reason content therein.

(7)        I state that investigation conducted by OP-1 company has revealed the true facts, as it has come to light that the complainant had deliberately and knowingly not disclosed his complete and correct prior adverse history of hypertension since last 4 years, and the fact that complainant having raised Paratharmone level indicating severe long standing kidney disease, CKD much prior to policy inception, displaying the malafide intent to be able to avail policy benefits. There is also multiple non disclosure of paratharmone and decrease levels of iron, transferin and vitamin B-12.

(8)        I state that suppression and misrepresentation of medical information in the present case was material to the under writing decision and the OP Company would not have extended cover and thereby not issued the policy basis the finding has dose then disclose at the time of application or may leads to alteration in the contractual terms.

It is further stated that repudiation of the claim and cancellation of the policy on the part of OP-1 company is valid and is consonance with the terms and condition of the policy. It is further prayed that the present complaint case ex-facie, misconceived, vexatious, untenable and devoid of merit, hence, dismissed with cost.

6.         Complainant filed rejoinder to the written statement of OP-1 thereby reiterating the contents of the complaint and simply denying the averments made by OP. Complainant also filed his evidence by way of affidavit. The OP filed evidence by way of affidavit of Sh. Chandrika Bhattacharya, Chief Manager Legal.

7.         Both the parties filed their respective written arguments. We have heard the arguments advance at the bar in length by both the parties.

8.         Complainant has placed on record the copy of policy documents pertaining to policy bearing no. 30548334201600 having the commencement date of 23.07.2016. He has also placed on record the copy of another policy document bearing no. 30704596201700 dated 06.10.2017,the complainant had annexed with the complaint several copies of the above referred policies, complainant has also placed on record the copy of prescription issued by BLK Hospital, he has also placed on record the copy of OPD card of RML Hospital as well as the copy of policy cancellation letter dated 19.12.2018 in support of his contention.

9.         Ld. counsel for the OP Ms. Simran Varma has contended that the insured/complainant the complainant had deliberately and knowingly not disclosed his complete and correct prior adverse history of hypertension since last 4 years, and the fact that complainant having raised Paratharmone level indicating severe long standing kidney disease, CKD much prior to policy inception, displaying the malafide intent to be able to avail policy benefits. There is also multiple non disclosure of paratharmone and decrease levels of iron, transferin and vitamin B-12 but has concealed this fact at the time of proposal.  While filling the Proposal Form on 25.09.2017 for the subject policy the insured answered Question No.5 have you even undergone or been advised any of the following investigation) other than routine health checkup) TMT, Angiography, ECO Cardiography, CT Scan, MRI, FNAC, Biopsy etc. as ‘No’ and to question no.7 Do you have hypertension and/or Diabetes/High cholesterol or Heart problem and/or Thyroid disorder in Negative.  It is further stated that the prescription of general OPD of 24.04.2018 of BLK Hospital clearly established that complainant is suffering from hypertension since 4 years. The OPD registration card dated 02.05.2018 of RML Hospital clearly establish that the complainant is suffering from kidney disease.  It was stated that the Life Assured had given false replies in the application for insurance, as such the policy was obtained by concealment and suppression of material facts.

10.       On the other hand, it is argued by the complainant counsel Sh. M.K. Gill that there is no concealment of material facts by the insured, and prayed that the relief claims be granted.

11.       It is admitted position that the insured had taken insurance policy from the OP on 05.10.2017. Claim has been repudiated by the OP on the ground that there is non disclosure/misrepresentation of material fact hence, claim is rejected as per policy terms and conditions. In support of his contention, counsel for OP has placed on record the copy of investigation report duly signed by Dr. Ashwani Goel treating doctor of the insured in which he had answered to the queries of insurer as under:               

The aforesaid investigation report clearly reflects that insured was suffering from hypertension since last 4 years, and the fact that complainant having raised Paratharmone level indicating severe long standing kidney disease, CKD much prior to policy inception, displaying the malafide intent to be able to avail policy benefits. There is also multiple non disclosure of paratharmone and decrease levels of iron, transferin. As such it is clearly establish that the insured had given false replies in the application for insurance, as such the policy was obtained by concealment and suppression of material facts. 

12.       Perusal of the record shows that the Proposal Form attached with the complainant as well as the written statement shows that while filling the Proposal Form on 25.09.2017 for the subject policy the insured answered Question No.5 have you even undergone or been advised any of the following investigation) other than routine health checkup) TMT, Angiography, ECO Cardiography, CT Scan, MRI, FNAC, Biopsy etc. as ‘No’ and to question no.7 Do you have hypertension and/or Diabetes/High cholesterol or Heart problem and/or Thyroid disorder in negative.  It is further stated that the prescription of general OPD of 24.04.2018 of BLK Hospital clearly established that complainant is suffering from hypertension since 4 years. The OPD registration card dated 02.05.2018 of RML Hospital clearly establish that the complainant is suffering from kidney disease

13.       The contracts of insurance are contracts of uberrima fides and every material fact is required to be disclosed. In United India Page 11 of 13 Insurance Co. Ltd. v. M.K.J. Corpn., III (1996) CPJ 8 (SC), a two Judge Bench of Hon‟ble Supreme Court has observed: “It is a fundamental principle of Insurance law that utmost good faith must be observed by the contracting parties. Good faith forbids either party from concealing (non-disclosure) what he privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary. Just as the insured has a duty to disclose, „similarly, it is the duty of the insurers and their agents to disclose all material facts within their knowledge, since obligation of good faith applies to them equally with the assured‟.”

14.       In Satwant Kaur Sandhu v New India Assurance Company reported in IV (2009) CPJ 8 (SC), Hon‟ble Supreme Court has observed that in a contract of insurance, the expression “material fact” is to be understood in general terms, to mean as any fact which would influence the mind of a prudent Insurer, in deciding whether to accept the risk or not. If the proposer has knowledge of such fact, he is obliged to disclose it, particularly while answering questions in the proposal form. Any inaccurate answer will entitle the Insurer to repudiate its liability because there is clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance, which is based on the principle of utmost faith– uberrimae fidei. Good faith forbids either party from non-disclosure of the facts which the party privately knows, to draw the other into a bargain, from his ignorance of that Page 12 of 13 fact and his believing the contrary. It has also been emphasized that it is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not.

15.       In PC Chacko and Anr. v. Chairman, Life Insurance Corporation of India & Ors. (2008) 1 SCC 321, the Hon‟ble Supreme Court has upheld the repudiation of the contract of insurance on the ground of non-disclosure and mis-statement in the proposal form to the various questions to which the answers were given by the insured.

16.       The Hon’ble Supreme Court of India in Civil Appeal No. 4261 of 2009 title as “Reliance Life Ins. Co. ltd. & Anr. Vs. Rekha Ben Naresh Bhai Rathod’ have held that the contract of uberrima fides-utmost good faith-and every material fact must be disclosed, otherwise there is a good ground for recession of the contract. Admittedly, the document annexed with the complaint shows that the insured had not given correct answers and had obtained the policy by suppressing material facts. 

17.       In the facts and circumstances of the present case, the OP was justified in repudiating the present claim. In view of the above discussion, we find no merits in the present complaint, same is hereby dismissed.File be consigned to record room.

Copy of the order be given to the parties free of cost as per order dated 04.04.2022 of Hon’ble State Commission after receiving the application from the parties in the registry.

Order be uploaded on www.confonet.nic.in.

Announced in open Commission on   22.12.2023.

Sanjay Kumar                                                         Rajesh

                 President                                                              Member