Punjab

Ludhiana

CC/19/395

Sachin Sahi - Complainant(s)

Versus

M/s Religare Health Insurance Co.Ltd - Opp.Party(s)

M.S.Gulati Adv.

02 Jun 2023

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, LUDHIANA.

                                                Complaint No:395 dated 20.08.2019.                                                         Date of decision: 02.06.2023.

 

Sachin Sahi, Aged 41 years son of Shri Brij Bhushan Sahi, Resident of House No.117, Country Homes Colony, Samrala Road, Khanna, District Ludhiana.                                                                                            ..…Complainant

                                                Versus

1. M/s. Religare Health Insurance Company Limited, Vipul Tech Square, Tower ‘C’, 3^rd Floor, Sector 43, Golf Course Road, Gurgaon-122009, through its Managing Director.
2. M/s. Religare Health Insurance Co. Ltd., B-XIX/122/3/1, Ist Floor, Golden Plaza Mall, Mal Road, Ludhiana through its Manager.

…..Opposite parties 

Complaint Under section 12 of the Consumer Protection Act, 1986.

QUORUM:

SH. SANJEEV BATRA, PRESIDENT

SH. JASWINDER SINGH, MEMBER

MS. MONIKA BHAGAT, MEMBER

 

COUNSEL FOR THE PARTIES:

For complainant             :         Sh. Gaurav Saggi, Advocate.

For OPs                         :         Sh. G.S. Kalyan, Advocate.

 

ORDER

PER SANJEEV BATRA, PRESIDENT

1.                In brief, the facts of the case are that the complainant purchased online medi-claim Floater policy under Care Plan from the opposite parties for himself and his family members i.e. Sonia Sahi, wife, Samridhi Sahi and Sanya Sahi daughters and Saksham Sahi son for a sum of Rs.5,00,000/- vide policy No.12295214 w.e.f. 27.03.2018 to midnight of 26.03.2020 by paying the premium of Rs.27,907/- under Single Premium Payment mode and he was allotted ID No.59620412. The complainant stated that in terms of the policy, he and his family members were entitled to hospitalization expenses (in-patient care & day care treatment, pre-hospitalization & post hospitalization medical expenses, ambulance cover, organ donor cover, domiciliary hospitalization, automatic recharge, second opinion, alternative treatment, no claim bond and annual health check up benefits. According to the complainant, he was having severe headache for which he sought medical assistance at VMK Hospital, Khanna and for investigations of the exact ailment, he was admitted as indoor patient at the said hospital on 06.05.2019 and remained hospitalized till 09.05.2019 for which he incurred total expenditure of Rs.17,700/-. On seeing no improvement in his condition, the complainant sought discharge from the hospital at his own request on 09.05.2019 so that he could get better medical facilities for his ailment.

                   The complainant further stated that on 09.05.2019, he approached Fortis Hospital, Mohali for evaluation of his ailment and its management and on medical advise, he had undergone MRI brain on 09.05.2019 which did not reveal any significant abnormalities and on 10.05.2019 Lumber puncture was done and CFS was obtained for further investigations. On receipt of the report on 11.05.2019 CSF routine showed proteins 167.2, TC 1050, Glucose 36 gram stain and ZN Stain negative and he was admitted to Fortis Hospital Mohali as per medical instructions for management and further evaluation of the ailment. The complainant remained there as indoor patient from 11.05.2019 to 13.05.2019 and incurred expenditure of Rs.41,867/-. He was diagnosed of LYPMHOCYTIC MENINGTIS, TUBERCULAR MENINGITIS, VIRAL MENINGITIS AND VITAMIN 12 DEFICIECY with past history of Hypertension for 2 years. According to the complainant, prior to his admission at Fortis Hospital, Mohali he informed them about his mediclaim insurance policy and the Fortis Hospital, Mohali submitted a preauthorization request for cashless hospitalization with the opposite parties but the same was rejected by them vide their letter dated 13.05.2019 on the ground that ‘NON DISCLOSURE OF MATERIAL FACTS/PRE-EXISTING AILMENTS AT THE TIME OF PROPOSAL-PATIENT HAVING HISTORY OF HYPERTENSION PRIOR TO INCEPTION OF THE POLICY AND NON DISCLOSURE’, after seeking clarifications from Fortis Hospital, Mohali vide their letter dated 11.05.2019. The complainant submitted his claim for re-imbursement of the expenses incurred by him at VMK Hospital, Khanna as well as Fortis Hospital, Mohali but the said claims have been rejected by the opposite parties. The opposite parties rejected the claim for a sum of Rs.17,700/- incurred by the complainant at VMK Hospital, Khanna on the ground that the admission in the hospital is not justified whereas the claim in respect of his treatment at Fortis Hospital, Mohali was rejected on the ground of ‘NON DISCLOSURE OF MATERIAL FACTS/PRE-EXISTING AILMENTS AT THE TIME OF PROPOSAL-PATIENT HAVING HISTORY OF HYPERTENSION PRIOR TO INCEPTION OF THE POLICY’. Rejection of the claims is illegal, unjustified and arbitrary and without seeking any clarifications and justifications from the treating doctor. Moreover, the complainant purchased the policy online and he disclosed all the details as enquired by the concerned officials of the opposite party and no proposal form was asked for by the opposite parties. According to the complainant, the disease of hypertension cannot be treated as pre-existing disease as the same is controllable by medication etc. and he is living normal and healthy life by doing all his duties. However, the opposite parties had issued a notice for cancelation of policy No.12295214 vide letter dated 27.05.2019 and for forfeiture of entire premium on the ground of concealment of material facts/pre-existing ailments at the time of proposal. The said notice was replied by the complainant through letter dated 22.06.2019 but the opposite parties had not conveyed any decision about the cancellation of his insurance policy. The rejection of the claim of the complainant is unjustified, illegal, and arbitrary and against the provisions of the policy. In the end, the complainant has prayed for issuing directions to the opposite parties to pay a sum of Rs.2,84,799/- with interest @18% per annum along with litigation expenses of Rs.22,000/-.

2.                Upon notice, the opposite parties appeared and filed joint written statement and by taking preliminary objections, assailed the complaint on the ground of maintainability of the complaint, misrepresentation and concealment of facts and lack of cause of action etc. The opposite parties stated that the complainant was covered under policy No.12295214 w.e.f. 27.03.2018 to 26.03.2020 covering himself, his wife and other family members for a sum insured of Rs.5,00,000/- subject to policy terms and conditions. According to the opposite parties, the complainant filled claims w.r.t. his two hospitalizations. With regard to his first hospitalization, the complainant approached the opposite parties with a reimbursement claim with respect to his hospitalization in VMK Hospital from 06.05.2019 to 09.05.2019 with history of fever and severe headache and claimed an amount of Rs.17,700/- which was received on 21.06.2019 and on the assessment of the documents, some facts came upfront which are reproduced as under:-

• As per the discharge summary, the complainant was admitted with fever and headache, however as per the Vital Chart Sheet, the body vitals of the complainant including body temperature are in normal range, therefore not necessitating hospitalization in IPS basis.
• Complainant was subject to various tests and investigations which could had been administered on OPD basis only without any need for hospitalization of the complainant.

As per opposite parties, on finding that the hospitalization of the complainant was not justified and he could had been managed on OPD basis only, his claim was rejected as per clause 4.2 (1) read with Annexure II (71) for hospitalization for diagnostic/evaluation purposes and claim rejection letter dated 02.07.2019 was sent to the complainant. The relevant grounds are reproduced as under:-

• Admission not justified, hence case rejected.
• Admission not justified.

                   The opposite parties further stated that the complainant approached them with a cashless request w.r.t. his hospitalization in Fortis Hospital, Mohali w.e.f. 11.05.2019 with provisional diagnosis of TB Meningitis. He only filled cashless request for the said hospitalization without adducing the final bills and no reimbursement claim was filled. As per the opposite parties the actual liability of the company can’t be quantified in absence of the bills, some facts came upfront which are reproduced as under:-

• As per the statement of the complainant provided to the investigator, the complainant duly mentions that the complainant has history of Hypertension since 2 years (mid 2017) and was taking treatment (on medication) from Dr. Nagra for the same.

As per opposite parties, on finding that the complainant had a pre-existing disease of Hypertension prior to policy inception and the same was not disclosed in the Proposal Form, the cashless claim of the complainant was denied vide Clause 7.1 of the Policy Terms and Conditions and same was communicated to the complainant vide letter dated 13.05.2019, the operative part of the said letter is reproduced as under:-

• Non disclosure of material facts/pre-existing ailments at time of proposal patient having history of hypertension prior to inception of the policy.
• Non disclosure.

Clause 7.1 is reproduced as under:-

“7.1. Disclosure to Information Norm

If any untrue or incorrect statements are made or there has been a mis-representation, mid-description or non-disclosure of any material particulars or any material information having been withheld or if a claim is fraudulently made or any fraudulent means or devises are used by the policy holder or the insured person or any one acting on his/their behalf, the company shall have no liability to make payment of any claims and the premium paid shall be forfeit to the company.”

According to the opposite parties, the complainant had the duty to disclose any pre-existing disease in the online proposal form but he did not disclose the same. In the online proposal form, the complainant made disclosures which are reproduced as under:-

                   Additional details

1. Does any person(s) to be insured has any pre-existing disease?

Insured 1

No          .

2. Have any of the person(s) to be insured ever filed a claim with their current/previous insurer?

Insured 1

No.

3. Has any proposal for Health insurance been declined, cancelled or charged a higher premium?

Insured 1

No.

4. Is any of the person(s) to be insured, already covered under any other health insurance policy of Religare Health Insurance?

Insured 1

No.

The complainant did not disclose the fact that he was a known case of hypertension and had he disclosed the history of hypertension at the inception of the policy, then the company would had issued the policy subject to its underwriting guidelines. The policy was cancelled vide notice of cancellation dated 27.05.2019 and policy cancellation letter dated 13.11.2019 as per clause 7.13 read with clause 7.1 of the policy terms and conditions.

                   On merits, the opposite parties reiterated the crux of averments made in the preliminary objections. The opposite parties have denied that there is any deficiency of service and have also prayed for dismissal of the complaint.

3.                In support of his claim, the complainant tendered his affidavit Ex. CA in which he reiterated the allegations and the claim of compensation as stated in the complaint. The complainant also tendered documents i.e. Ex. C1 is copy of policy documents, Ex. C2 is the copy of deficiency letter dated 25.06.2019, Ex. C3 is the copy of treatment record of Fortis Hospital, Mohali, Ex. C4 is the copy of deficiency letter dated 11.05.2019, Ex. C5 is the copy of denial letter dated 13.05.2019, Ex. C6 is the copy of claim denial letter dated 02.07.2019, Ex. C7 is the copy of notice dated 27.05.2019 for cancellation of policy, Ex. C8 is the copy of reply dated 22.06.2019 to the notice for cancellation of the policy and closed the evidence.

4.                On the other hand, counsel for the opposite parties tendered affidavit Ex. RA of Sh. Kashif Nazki, Manager (Legal) of the opposite parties along with documents Ex. R1 is the copy of policy documents, Ex. R2 is the copy of policy terms and conditions, Ex. R3 is the copy of claim form, Ex. R4 is the copy of discharge summary dated 09.05.2019 of V.M.K. Hospital, Ex. R5 is the copy of investigation report, Ex. R6 is the copy of claim denial letter dated 02.07.2019, Ex. R7 is the copy of request for cashless hospitalization, Ex. R8 is the copy of claim verification form, Ex. R9 is the copy of denial letter dated 13.05.2019, Ex. R10 is the copy of proposal form, Ex. R11 is the copy of notice dated 27.05.2019 for cancellation of policy and closed the evidence.

5.                We have heard the arguments of the counsel for the parties and also gone through the complaint, affidavit and annexed documents and written reply along with affidavit and documents produced on record by both the parties.

6.                Admittedly, vide Ex. C1= Ex. R1, Ex. R2, the complainant purchased online Medi-Claim Floater Single Premium policy under Care Plan from the opposite parties for himself and his family members w.e.f. 27.03.2018 till 26.03.2020. Firstly, the complainant remained admitted at V.M.K. Hospital, Khanna from 06.05.2019 to 09.05.2019 and incurred medical expenses of Rs.17,700/-. He submitted reimbursement claim on 02.07.2019 (Ex. R6)  However, the opposite parties rejected the claim of the complainant regarding his first hospitalization with VMK Hospital, Khanna on the  ground that his hospitalization was not justified and he could had been managed on OPD basis only. The claim of the complainant was rejected vide claim rejection letter dated 02.07.2019 (Ex. R6) by invoking clause 4.2 (1) read with Annexure II (71) for hospitalization for diagnostic/evaluation purposes, which reads as under:-

          “We have reviewed the claim filed by you pertaining to Health Insurance    Policy (12295214) and hereby inform you that the claim is not payable as per policy terms and conditions listed below:-

• Admission not justified, hence case rejected.
• Admission not justified.”

The relevant clause 4.2 (1) read with Annexure II (71) is reproduced as under:-

          “4.2. (1) Any item or condition or treatment specified in List of Non-          Medical items (Annexure-II to Policy Terms & Conditions”

          ………

          “Annexure-II (71)

          Hospitalization for evaluation/diagnostic purpose.”

 

 

 

 

7.                Now the point for consideration arises how it is required to be assessed that the admission is primarily for evaluation and investigation purpose only?

8.                The counsel for the complainant has referred to the extract of the discharge summary Ex. R4 of V.M.K. Hospital, Khanna vide which the complainant was diagnosed of severe headache and under the column of brief history it was specificity mentioned that with history of fever and severe headache The discharge summary Ex. R4, when read as a whole clearly spells out that necessity arose for his admission in the hospital due to above said reason.  Further there is a certificate of doctors at page 2 of Ex. C2 vide which the doctor opines that initially it was a case of headache and fever due to which the patient stayed for almost 3 days and as the headache was not improving so at the request of the patient he was referred to tertiary care centre for further care.           

It is pertinent to mention that it is the complainant who opted for discharge from the hospital. Cumulatively, it appears that prima facie there was a strong case for the admission of the complainant in the hospital. On the other hand, the opposite parties have not produced any opinion of medical expert whereby it was opined that the admission of the complainant in the hospital was not desirable. Even otherwise, no prudent person would expose himself in such an environment of the hospital which is prone to severe infection. The claim has been repudiated on the premise that the admission primarily for observation and investigation and the treatment taken is possible on OPD basis and the expenses incurred in OPD basis are not covered under the policy in question is wholly unjustified.

9.                The complainant also remained admitted in Fortis Hospital, Mohali

From 11.05.2019 to 13.05.2019 and he incurred an amount of Rs.41,867/- on his treatment. His pre-authorization request was rejected on 13.05.2019 vide repudiation letter Ex. C5 = Ex. R9 on the following grounds:-

“We have reviewed your request and hereby inform you that the cashless hospitalization cannot be approved as per the terms and conditions of the policy stated below:-

• Non Disclosure of material facts/pre-existing ailments at the time of proposal. Patient having history of hypertension prior to inception of the policy.
• Non disclosure.”

The opposite parties denied the cashless claim of the complainant on the facts, reproduced as under:-

• As per the statement of the complainant provided to the investigator, the complainant duly mentions that the complainant has history of Hypertension since 2 years (mid 2017) and was taking treatment (on medication) from Dr. Nagra for the same.

 

The main basis of repudiation of the claim is that the complainant the complainant has history of Hypertension since 2 years (mid 2017) and was taking treatment (on medication) from Dr. Nagra for the same and as such, its non-disclosure amounts to suppression of material facts. The opposite parties have not produced any evidence of medical record with regard to diagnosis and treatment of the said pre-existing disease. Even the report or the affidavit of the investigator was not brought on record to substantiate its claim.      In this regard, further reference can be made to Religare Health Insurance Company Ltd. Vs Subhash Chander Aggarwal in 2017(3) CLT 140 whereby it has been held by Hon’ble Punjab State Consumer Disputes Redressal Commission, Chandigarh the hypertension is a common disease and it can be controlled by medication and it is not necessary that person suffering from hypertension would always suffer a heart attack and repudiation on account of pre-existing disease was not justified.

10.              The opposite parties denied the cashless claim of the complainant on the ground of non-disclosure of material facts/pre-existing ailments at time of proposal patient having history of hypertension prior to inception of the policy vide Clause 7.1 of the Policy Terms and Conditions, which is reproduced as under:-

Clause 7.1 is reproduced as under:-

“7.1. Disclosure to Information Norm

If any untrue or incorrect statements are made or there has been a mis-representation, mid-description or non-disclosure of any material particulars or any material information having been withheld or if a claim is fraudulently made or any fraudulent means or devises are used by the policy holder or the insured person or any one acting on his/their behalf, the company shall have no liability to make payment of any claims and the premium paid shall be forfeit to the company.”

It is apposite to mention that the policy was obtained by the complainant online and no proposal form was filled either by the complainant or any representative of the opposite parties. Only some queries were put forth during obtaining the policy online to which the complainant duly replied. In the absence of any duly signed and authenticated proposal form the matter in controversy cannot be adjudicated upon in favour of the opposite parties. The online proposal form is material document from which it could have been easily assessed whether there was a concealment on the part of the complainant. Non-production of proposal form leads to inevitable inference that either the proposal form was not got executed before issuing the policy or there are certain anomalies and discrepancies in the proposal form, production of which may prove adverse to the rights of the opposite parties. It was also well within the legitimate rights of the opposite parties to get the complainant medically examined by the empanelled doctors but no such option was exercised.

11.              In this regard, reference can be made to I (2022) CPJ 20 (SC) titled as Manmohan Nanda Vs United India Assurance Co. Ltd. and others wherein the Hon’ble Supreme Court of India has held as under:-

(i) 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 to 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 non­disclosure of a material fact, and seek to repudiate the claim.

(v) The insurance company has the right to seek details regarding medical condition, if any, of the proposer by getting the proposer examined by one of its empanelled doctors. If, on the consideration of the medical report, the insurance company is satisfied about the medical condition of the proposer and that there is no risk of pre­existing illness, and on such satisfaction it has issued the policy, it cannot thereafter, contend that there was a possible pre­existing illness or sickness which has led to the claim being made by the insured and for that reason repudiate the claim.

(vi) The insurer must be able to assess the likely risks that may arise from the status of health and existing disease, if any, disclosed by the insured in the proposal form before issuing the insurance policy. Once the policy has been issued after assessing the medical condition of the insured, the insurer cannot repudiate the claim by citing an existing medical condition which was disclosed by the insured in the proposal form, which condition has led to a particular risk in respect of which the claim has been made by the insured.

(vii) In other words, a prudent insurer has to gauge the possible risk that the policy would have to cover and accordingly decide to either accept the proposal form and issue a policy or decline to do so. Such an exercise is dependant on the queries made in the proposal form and the answer to the said queries given by the proposer.               

12.              Now, it has to be seen whether subsequent cancellation of the policy on the ground of non-disclosure of pre-existing disease is justified or not. In this context, it is relevant to point out that the policy was obtained by the complainant in the year 2018 by paying premium of Rs.27,907/- for a sum assured of Rs.5,00,000/-. In the notice for cancellation policy dated 27.05.2019 Ex. C7 = Ex. R11, the ground of the repudiation and cancellation has simply been mentioned to be non-disclosure of pre-existing diseases and clause 7.13 read with clause 7.1 of the policy has been invoked, which is reproduced as under:-

          Clause 7.1: Disclosure to Information Norm

If any untrue or incorrect statements are made or there has been a mis-representation, mis-description or non-disclosure of any material particulars or any material information having been withheld or if a claim is fraudulently made or any fraudulent means or devices are used by the Policyholder or the Insured Person or any one acting on his/their behalf, the Company shall have no liability to make payment of any Claims and the premium paid shall be forfeited ab initio to the Company.

Clause 7.13 Cancellation/Termination

1. The Company may at any time, cancel this Policy on grounds as specified in Clause 7.1 by giving 15 days’ notice in writing by Registered Post, Acknowledgement Due/recorded delivery to the Policyholder at his last known address and the Company shall have       no liability to make payment of any Claims and the premium paid       shall be forfeited and no refund of premium shall be effected by the Company……..

Since it has been concluded for the reasons enumerated here-in-before that the grounds for denial of reimbursement claims with regard to hospitalization at V.M.K. Hospital, Khanna from 06.05.2019 to 09.05.2019 and hospitalization of the complainant at Fortis Hospital, Mohali from 11.05.2019 to 13.05.2019 were not justified. So therefore, the cancellation of the policy cannot sustain and it will be deemed to be valid for all intent and purpose till its validity. In the light of above said facts and circumstances, the opposite parties were not justified in repudiating the claims of the complainant and as such, there is deficiency in service on the part of the opposite parties. In the given facts and circumstances of the case, if the opposite parties are directed to settle and reimburse the claims with respect to hospitalization of the complainant at V.M.K. Hospital, Khanna from 06.05.2019 to 09.05.2019 and with respect to hospitalization of the complainant at Fortis Hospital, Mohali from 11.05.2019 to 13.05.2019 in terms of policy terms and conditions along with interest @8% per annum from the date of filing of complaint till its actual payment. The opposite parties are also burdened with composite costs of Rs.10,000/-.

13.              As a result of above discussion, the complaint is partly allowed with direction to the opposite parties to settle and reimburse the claims with respect to hospitalization of the complainant at V.M.K. Hospital, Khanna from 06.05.2019 to 09.05.2019 and with respect to hospitalization of the complainant at Fortis Hospital, Mohali from 11.05.2019 to 13.05.2019 in terms of policy terms and conditions along with interest @8% per annum from the date of filing of complaint till its actual payment within 30 days from the date of receipt of copy of order. The opposite parties shall also pay a composite costs of Rs.10,000/- (Rupees Ten Thousand only) to the complainant within 30 days from the date of receipt of copy of order.  Copies of order be supplied to parties free of costs as per rules. File be indexed and consigned to record room.

14.              Due to huge pendency of cases, the complaint could not be decided within statutory period.

 

(Monika Bhagat)          (Jaswinder Singh)                     (Sanjeev Batra)

Member                         Member                                       President         

 

Announced in Open Commission.

Dated:02.06.2023.

Gobind Ram.

 

 

Sachin Sahi Vs Religare Health Insurance Co.                 CC/19/395

Present:       Sh. Gaurav Saggi, Advocate for the complainant.

                   Sh. G.S. Kalyan, Advocate for the OPs.

 

                   Arguments heard. Vide separate detailed order of today, the complaint is partly allowed with direction to the opposite parties to settle and reimburse the claims with respect to hospitalization of the complainant at V.M.K. Hospital, Khanna from 06.05.2019 to 09.05.2019 and with respect to hospitalization of the complainant at Fortis Hospital, Mohali from 11.05.2019 to 13.05.2019 in terms of policy terms and conditions along with interest @8% per annum from the date of filing of complaint till its actual payment within 30 days from the date of receipt of copy of order. The opposite parties shall also pay a composite costs of Rs.10,000/- (Rupees Ten Thousand only) to the complainant within 30 days from the date of receipt of copy of order.  Copies of order be supplied to parties free of costs as per rules. File be indexed and consigned to record room.

 

(Monika Bhagat)          (Jaswinder Singh)             (Sanjeev Batra)

Member                         Member                              President        

 

Announced in Open Commission.

Dated:02.06.2023.

Gobind Ram.