F.A.No.688/2008 against C.C.No.866/2007, District Forum-I, Hyderabad.

Between:

1. The New India Assurance Co. Ltd.,

     Rep. by its Divisional Manager, 3-6-10,

     Anasuya Complex, opp:TTD Kalyana

     Mandapam, Himayatnagar, Hyderabad.

2. Family Health Plan Ltd., rep. by its

    Managing Director, Aditya, J.R.Apartments,

    3^rd floor, Road No.2, Banjara Hills,

    Hyderabad-500 034.                                                                                                Appellants/

                                                                                                                                      Opp.parties

And

Sarojini Bai Kalyanam, aged 50 years,

W/o.Narasing Rao Kalyanam,

Occ:Housewife, 7-1-29/B/6, Hyderabad.                                                                 Respondent/

                                                                                                                                      Complainant.

Counsel for the Appellants: Smt.S.N.Padmini

Counsel for the Respondent: Mrs.Kalpana Kilari

 QUORUM:   THE HON’BLE SRI JUSTICE D.APPA RAO, PRESIDENT                                                 

AND

SMT.M.SHREESHA,  MEMBER

.

TUESDAY, THE TWENTY EIGHTH DAY OF SEPTEMBER,

TWO THOUSAND TEN

Oral order:(Per Hon’ble Justice Sri D.Appa Rao, President)
***

        This is an appeal preferred by the opposite parties against the order of the District Forum directing them jointly and severally to pay Rs.2,25,000/- towards hospitalization expenses with interest at 12% p.a. from the date of submission of claim form till realization together with costs of Rs.2,000/-.

        The case of the complainant in brief is that she had obtained a Domicilliary hospitalization policy from the appellant for an amount of Rs.1,75,000/- covered under policy Ex.A1 for the period from 12-8-2006 to 12-6-2007 which was  renewed from the year 2003 onwards.  While so she had sudden chest pain on 19-12-2006 and she was admitted in the hospital and it was diagnosed  as CORONARY ARTERY disease and she underwent PTCA/stenting on 27-12-2006 and was discharged on 30-12-2008.  She incurred an expenditure of Rs.2,25,000/- towards the said treatment.  When the said amount was claimed, the appellant repudiated the policy on the ground that it was a pre-existing disease.  Therefore the complaint was filed for recovery of the amount together with interest and costs.

The appellants for reasons best known to them did not choose to contest the case and were set exparte.

The complainant in support of her case filed her affidavit and relied on Exs.A1 to A11.

The District Forum after considering the evidence on record and the pleadings put forward, opined that the complainant was admittedly covered by the insurance policy which was in existence from the year 2003 and for her ailment she underwent PTCA/stenting on 27-12-2006 and was entitled to the amount claimed and therefore directed the appellants to pay Rs.2,25,000/- together with interest at 12% p.a. and costs of Rs.2,000/-.

Aggrieved by the said order, the insurance company preferred the appeal contending that the District Forum did not appreciate the facts in correct perspective.  It ought not to have awarded Rs.2,25,000/- when the policy was issued for Rs.1,75,000/- with cumulative bonus of Rs.26,250/- and at any rate granting of interest at 12% p.a. is on high side and it should be only 7.5% p.a.  The repudiation of the policy was in view of the fact that the disease was pre-existing and therefore prayed that the appeal be allowed and the complaint be dismissed by allowing the appeal.

It is an undisputed fact that the complainant had taken a medi-claim policy existing since 2003 renewed till the year 2007 evidenced under Exs.A1 and A2.  It is also not in dispute that when the complaint had chest pain, she underwent PTCA/stenting on 27-12-2006 in CARE hospital and was discharged on 30-12-2006 evidence under discharge summary, Ex.A4.  She paid altogether Rs.2,25,000/- evidenced under bills, Exs.A7 to A10.  The insurance company repudiated the claim by its letter, Ex.A11, on the ground that the disease was pre-existing.  The contention that the disease was pre-existing was not supported by any evidence.  When she had been paying the premia from the year 2003 by virtue of Section 45 of the Insurance Act, the insurance company was not entitled to reopen and repudiate on the ground that there was suppression of material fact.  Section 45 of Insurance Act reads as follows:

45. No policy of life insurance effected before the commencement of this Act shall after the expiry of two years from the date of commencement of this Act and no policy of life insurance effected after the coming into force of this Act shall, after the expiry of two years from the date on which it was effected be called in question by an insurer on the ground that statement made in the proposal or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the policy, was inaccurate or false, unless the insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policy‑holder and that the policy‑holder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose:

Since the insurance company did not file any documents in order to prove that the complainant underwent treatment for the said ailment prior to 2003, it cannot be said that it was a pre-existing disease.  The repudiation was without any evidence was unjust in order to deny the just claim of the complainant.

In a recent judgement of the Supreme Court reported in (2010) 7 SCC 386 in New India Assurance Co. Ltd., v. Protection Manufacturers Private Limited, the apex court held that award of interest at 12% p.a. is justified in view of the fact that the said rate of interest is subsisting by that date.  Hence we do not see any mis-appreciation of fact or law in this regard. 

However, the District Forum ought not to have granted Rs.2,25,000/-, the entire amount spent by the complainant since the policy was only for Rs.1,75,000/- with cumulative bonus of Rs.26,250/- and such an amount of Rs.2,01,250/- could have been granted.  Except for this modification, we see no reason to interfere with the rest of the order of the District Forum.

In the result the appeal is dismissed except for modification directing the appellants to pay Rs.2,01,250/- instead of Rs.2,25,00/- while confirming the rest of the order of the District Forum and also pay costs of Rs.2,000/- in this appeal.  Time for compliance 4 weeks.

Sd/-PRESIDENT.

Sd/-MEMBER.

JM                                                                                                                     Dt.28-9-2010