DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, SAHIBZADA AJIT SINGH NAGAR (MOHALI)

Consumer Complaint No.909 of 2017

                                               Date of institution:  30.10.2017                                             Date of decision   :  05.12.2018

Gurpreet Singh Sandhu aged about 38 years son of
Shri Major Singh, resident of House No.1525, Phase-5, SAS Nagar, Mohali.

…….Complainant

Versus

1.     M/s. Star Health and Allied Insurance Co. Ltd., Regd. & Corporate Office 1, New Tank Street, Valluvarkottam High Road, Nungambakkam, Chennai-600034 through its
Authorised Signatory.

        IInd Address:

        M/s. Star Health and Allied Insurance Co. Ltd., Tele Sales: S-529, First Floor, School Block Road, Near Laxmi Nagar, Metro Station, Shakarpur, New Delhi 110092.

2.     Sachin Kumar, Employee/Representative, M/s. Star Health and Allied Insurance Co. Ltd., S-529, First Floor, School Block Road, Near Laxmi Nagar, Metro Station, Shakarpur, New Delhi 110092 (Mob. 9971476932 and email: telesalesastdelhi@starhealth.in.

3.     Ankit Asdri, Employee/Representative, M/s. Star Health and Allied Insurance Co. Ltd., S-529, First Floor, School Block Road, Near Laxmi Nagar, Metro Station, Shakarpur, New Delhi 110092 (email: ankit.asdri@starhealth.in.

                                                        ……..Opposite Parties

Complaint under Section 12 of

the Consumer Protection Act.

Quorum:    Shri G.K. Dhir, President,

                Shri Amrinder Singh Sidhu, Member

                Mrs. Natasha Chopra, Member.

Present:     Shri Paramjit Singh, counsel for complainant.

Shri Gaurav Bhardwaj, counsel for OPs.

Order by :-  Shri G.K. Dhir, President.

Order

               Complainant earlier was having family health medical insurance policy from ICICI Lombard Co. Ltd. for the last more than 7 years, but on 28.02.2015 he received a phone call from OP No.2 for persuading him to port that policy to M/s. Star Health and Allied Insurance Co. Ltd. OP No.2 arranged a talk with OP No.3 (senior of OP No.2) for satisfaction of complainant. Both of them persuaded complainant for porting the policy. Earlier policy of complainant was going to expire on 03.03.2015, due to which it was not possible for complainant to port his policy with OPs on a short notice. Assurance was given to complainant as if policy will be ported within one day because OP Company has all medical records of policy holders of different companies available with it. Assurance was given for providing of benefits of previous policy by getting the same treated as a continuing policy. Complainant telephonically informed OP No.2 and 3 about his hospitalization in 2014 and payment of the claim made by ICICI Lombard, on which these OPs replied that they have all the records available with them, but complainant has to give policy documents of ICICI Lombard only alongwith his ID proof. Assurance was given to complainant to cover illness related to his hospitalization in future, if required. On next working day, complainant received 5 blank forms through e-mail from OPs and he was informed telephonically to put his signatures at specific points on blank forms because remaining will be filled by OPs themselves after going through record of previous last four years policy details obtained from ICICI Lombard. On 02.03.2015, complainant signed 5 blank forms and sent the same alongwith other documents on email to Star Health & Allied Insurance Company.  Copies of sent blank forms are annexed with the complaint. Complainant received soft copy of his policy known as Family Health Optima Plan bearing No. P/700004/2015/000936 with validity date for period from 04.03.2015 to 03.03.2016, on 05.03.2015 through e-mail. After going through policy documents, complainant noticed that on first page of the policy it was written, “No PED Declared”. Complainant immediately thereafter gave telephone call to OP No.2 for clearing the issue and getting response from officials of OPs as if on third page of the policy it is written that all exclusions waived and PED covered. Complainant bonafide believed that clarification and he continued his policy with OPs till date. Copy of policy issued with validity period from 04.03.2017 to 03.03.2018 also alleged to be annexed. On 16.07.2017, complainant suffered from illness, due to which he was rushed to Max Health Care Hospital, Mohali, where he remained admitted earlier in 2014. Complainant was discharged from there on 21.07.2017 at about 11.00 A.M. An amount of Rs.1,83,238/- was spent by complainant on this treatment. Earlier treatment of the complainant was for period from 04.08.2014 to 13.08.2014 regarding which he got claim from ICICI Lombard. Though medical health policy of complainant was cashless, but claim intimation request and service request No.CR2000359178 was declined on the ground that complainant has not informed OPs about pre existing disease at the time of porting the policy. This repudiation alleged to be illegal and arbitrary and that is why letter dated 31.07.2017 was sent by complainant for calling upon OP No.1 to look into the matter and resolve the same. OPs through letter-cum-notice dated 17.08.2017 informed complainant that due to non disclosure of pre existing disease, they are intending to cancel coverage of complainant w.e.f. 26.09.2017. OPs have now conveyed complainant that his policy has been cancelled on 26.09.2017, which action of OPs also alleged to be arbitrary, unjust and unlawful. By claiming that OPs adopted unfair trade practice and rendered deficient services, this complaint filed for seeking refund of the borne medical expenses of Rs.1,83,238/- on hospitalization alongwith incurred miscellaneous expenses of Rs.10,000/- with interest @ 12% per annum from the date of complaint till date of actual payment. Compensation for mental harassment and agony of Rs.1.00 lakh more claimed alongwith any other relief to which complainant may be found entitled.

2.             OPs filed joint reply by pleading inter alia as if complaint is not maintainable because complainant has not approached this Forum with clean hands; no cause of action accrued in favour of complainant; complainant estopped by his act and conduct from filing the complaint, more so when he failed to disclose pre existing disease in the proposal form, despite existence of exclusion clause in the policy. Policy governed by terms and conditions and this Forum has no territorial jurisdiction. OP No.1 is not having any branch office in Mohali. Admittedly complainant availed Family Health Optima Insurance Plan covering himself, his wife Sukhdeep Kaur and children Anureet Sandhu and Nimrat Sandhu for insured sum of Rs.5.00 lakhs vide policies detailed below:

        -       P/700004/01/2015/000936 – 04.03.2015 to 03.03.2016

        -       P/700004/01/2016/002914 – 04.03.2016 to 03.03.2017

        -       P/700004/01/2017/005316 – 04.03.2017 to 03.03.2018

                Complainant had earlier cover with ICICI Lombard General Insurance vide policies detailed below:

-       4034i/FFH/W-605563/03/000 – 26.02.2011 to 25.02.2012

-       4034i/FFH/W-605563/03/000 – 26.02.2012 to 25.02.2013

-       4034i/FFH/W-605563/03/000 – 04.03.2013 to 03.03.2014

-       4034i/FFH/W-605563/03/000 – 04.03.2014 to 03.03.2015

3.             Complainant admittedly was admitted in Max Super Speciality Hospital, Mohali on 16.07.2017 for treatment of Altered Sensorium, for which he submitted pre authorization request for cashless treatment, but same was declined vide letter dated 17.07.2017 stating that “Stupor/Hypersomnolence (Urine +ve for Opidates/Ketones), for which the complainant has been hospitalized is an excluded disease/condition/procedure in terms of policy of insurance issued to complainant. There is history of similar episode in 2014 also, i.e. prior to porting of policy with OPs and that has not been informed to the OPs at the time of porting of policy.  Admittedly, subsequently complainant submitted claim record for reimbursement of medical expenses of Rs.1,83,238/-, but on scrutiny of discharge summary; pre-authorization form; progress notes and the earlier record of discharge summary of 2014, it was observed that complainant has respiratory failure since from 2014, but he has not disclosed same during portability. Complainant has not disclosed about the medical history/health details in the proposal form, while porting the policy and as such same alleged to be a misrepresentation and non disclosure of material facts. Condition No.8 of policy provides that if there is any misrepresentation or non disclosure of material facts whereby complainant or any other person acting on his behalf, then Company is not liable to make any payment. So decision of repudiation of claim was communicated to complainant vide letter dated 10.08.2017. As per condition No.15 of the policy, OP Company may cancel the policy on misrepresentation or non disclosure of material facts in the proposal form, and as such in view of non disclosure of pre existing disease, now policy has been cancelled and premium refunded to complainant. As per provisions contained in IRDA (Health Insurance) Regulations, 2013, insurance company shall address the existing insurance company seeking necessary details of medical history and claim history of the concerned policy holder through web portal of the IRDA. However, the previous insurer of complainant has not replied to the queries and that is why policy was issued just on the basis of declaration made by complainant in the proposal form. Even as per Condition No.6 of the policy, insurance company not liable to make any payment under the policy in respect of any expenses, whatsoever incurred by the insured in connection with or in respect of psychiatric, mental and behavioral disorders. Contract of insurance is based on principles of ‘Uberrima Fide’ and the same arrived at in this case on the basis of information provided by complainant through proposal form. It is claimed that complainant himself approached OPs for portability of insurance policy from ICICI Lombard. Had complainant disclosed the fact regarding hospitalization and of the paid claim amount by ICICI Lombard, then same would have been reflected in the policy. Forms which have been sent were to be filled and signed by complainant. Complainant had signed the forms, duly filled by mentioning details himself of self and his family members, but he failed to disclose pre existing disease. Complainant downloaded these forms blank on 27.09.2017 and then signed them for enclosing the same with the present complaint. Date of down loading is mentioned on the bottom. Policy was rightly canceled by refunding premium amount of Rs.15,943/- to complainant. Cancellation of policy was rightly done as per condition No.15 of terms and conditions of policy. Other averments of the complaint denied.

4.             Complainant to prove his case tendered in evidence his affidavit Ex.CW-1/1 alongwith documents Ex.C-1 to Ex.C-12 and thereafter closed evidence.  On the other hand, counsel for OPs tendered in evidence affidavit Ex.OP-1/1 of Shri Rajiv Jain, Chief Manager alongwith documents Ex.OP-1 to Ex.OP-6 and then closed evidence.

5.             Written arguments not submitted. Oral arguments heard and records gone through.

6.             It is not disputed that complainant alongwith his family members earlier was having health medical insurance policy obtained from ICICI Lombard, which he ported to Star Health Insurance in 2015 on payment of premium. Copy of  first ever insurance cover note got by complainant from OPs is produced as Ex.C-6 with validity for period from 04.03.2015 to 03.03.2016. Proposal date of this policy is mentioned as 03.03.2015 alongwith receipt date as 02.03.2015. Subsequently complainant got this policy renewed with OPs for period from 04.03.2016 to 03.03.2017 through Ex.OP-1 and then from 04.03.2017 to 03.03.2018 through Ex.C-7 = Ex.OP-2 and as such it is obvious that virtually first ever policy cover note issued in favour of complainant is Ex.C-6 on portability. After going through this Ex.C-6 it is made out that no pre existing disease is declared by complainant in the proposal form and same fact even incorporated in Ex.C-7 as well as in Ex.OP-1 and Ex.OP-2. So it is vehemently contended by counsel for OPs that complainant concealed factum of pre existing disease from which he suffered in 2014 and that is why OPs entitled to cancel the policy due to suppression of material facts and on account of misrepresentation. OPs have produced on record copy of discharge summary of treatment of complainant from Max Health Care for period from 16.07.2017 to 21.07.2017 as Ex.OP-4 and the same record also produced as Ex.C-8 and Ex.C-9 by complainant. Earlier discharge summary of treatment of complainant got from Max Health Care during period from 04.08.2014 onwards is produced on record as Ex.C-10 by complainant. So it is a case in which complainant has not concealed the factum of previous ailment treatment got in 2014 by him.  After going through third page of insurance policy cover note Ex.C-6, it is made out that continuity benefits made applicable to the policy got ported by complainant to OPs for the first time from ICICI Lombard by mentioning pre existing disease of complainant, his wife and children is covered. First year and first two years exclusion clause is waived alongwith waiting period of 30 days as per page 3 of Ex.C-6. So in view of contents of Ex.C-6, submission advanced by counsel for complainant has force that coverage to complainant alongwith his family members was granted on portability, even regarding pre existing disease/ailment by waiving the waiting period of 30  days as well as of the first year and second year exclusion clause. So certainly OPs now cannot repudiate the claim of complainant just on the ground that he has not disclosed pre existing disease. When benefit of pre existing disease had been allowed to complainant on portability by issue of cover note Ex.C-6, then OPs estopped by their act and conduct from repudiating the cashless request or reimbursement request just on the ground of non disclosure of pre existing disease, more so when forms Ex.C-1 to Ex.C-5 obtained blank from complainant by OPs, but with his signatures.

7.             After going through Ex.C-1 portability form; proposal form Ex.C-2; insured person details Ex.C-3 to Ex.C-5, it is made out that almost all the columns of those documents are blank, but signatures of complainant are there on all these documents. When complainant had been called upon to send the signed blank forms, then there is no occasion with complainant to disclose about pre existing disease regarding which he got treatment in 2014. So virtually policy cover note Ex.C-6 has been issued in favour of complainant on the basis of blank signed forms obtained from complainant. It was the duty of OPs before issue of insurance cover note Ex.C-6 to get all the forms Ex.C-1 to Ex.C-5 filled from complainant, but that precaution has not been taken by OPs and as such certainly fault lay with OPs in not calling upon the particulars of pre existing ailment condition declared from complainant. As complainant has produced on record blank proposal form alongwith above referred documents, but OPs have not produced on record the original proposal form or the insured detail form or the portability form and as such it is obvious that suppression of facts is by OPs and not by complainant. Record of portability form Ex.C-1 or of proposal form Ex.C-2 or of insured person details Ex.C-3 to Ex.C-5 bound to be with OPs, but OPs have shirked in producing that record and as such inference is obvious that complainant disclosing truth as if blank forms only got signed from him for issuing the policy in question for the first time by OP No.1 in his favour in March, 2015. That is an act of utmost unfair trade practice and as such in view of waiver of exclusion clause and providing of coverage for pre existing disease by issuing first portability policy with continuity benefits in favour of complainant, now OPs cannot deny benefits available to complainant. Being so, repudiation of claim of complainant through letter Ex.OP-6 is quite inappropriate.

8.             It is contended by counsel for OPs that if at all entitlement of complainant for reimbursement of incurred expenditure on treatment in 2017 is there, then liability of OPs to the extent of Rs.1,44,654/- alone is pleaded in affidavit Ex.OP-1/1 of Shri Rajiv Jain, Chief Manager of Star Health Insurance. Deduction of amount of Rs.11,304/- made on account of expenses borne on dressing, gauge, micropore etc. is a fact  borne from details of total amount worked as Rs.1,44,654/- attached with Ex.OP-6. Certainly these deductions liable to be made, but counsel for complainant contends that amount of Rs.8,070/- deducted on account of dietician, RMO charge etc. is inappropriately made. That submission of counsel for complainant has no force because as per terms and conditions of the policy only the amount payable is at prescribed rates with certain deductions. These deductions have been made through the worked out chart as per terms and conditions of the policy, copy of which is produced on record as Ex.OP-3 and as such certainly entitlement of complainant remains for reimbursement of Rs.1,44,654/- and not more than that.

9.             Reasonable and customary charges are payable, but insurance company not liable to pay in respect of expenses incurred by the insured in connection with or in respect of details given in Clause 3.0 (exclusions) of Ex.OP-3.As per clause 3.14 of Ex.OP-3 charges incurred in hospital or nursing home primarily for diagnostic, x-ray or laboratory examinations not consistent with or incidental to the diagnosis and treatment are not payable. Deduction of amount of Rs.19,210/- for investigation is made on the ground that report of holter moniter  or of MRI or of x-ray during period from 16.07.2017 to 18.07.2017 not produced. In fact copies of these reports have not been produced by complainant even now and as such deductions are certainly permissible. As expenses reimbursable are on treatment and as such expenses borne on supervision fee or for dietician charges are not payable and as such deduction of Rs.8,070/- rightly done through submitted calculation sheet. Likewise deduction of Rs.11,304/- of dressing, gauge etc. rightly done as per exclusion Clause No.3 of Ex.OP-3 alongwith other clauses thereof.  As complainant suffered lot of mental tension and agony due to repudiation of his genuine claim, in circumstances that despite providing of coverage for pre existing ailment, repudiation took place on account of that and as such somewhat reasonable hefty amount of compensation and litigation expenses required to be allowed in favour of complainant and against OP No.1, the insurer. OP No.2 and 3 are agents of OP No.1 and liability for payment of insurance claim remains of principal and not of the agents as per Section 226 of Indian Contract Act and as such complaint deserves to be allowed against OP No.1 and not against OP No.2 and 3.

10.            Next contentious issue remains as to whether refund of insurance premium amount has been done or not on cancellation of policy. No document has been produced by OPs for showing refund of that amount and as such matter in that respect needs be left for determination in separate proceedings.

11.            No other point argued.

12.            As a sequel of above discussion, complaint allowed against OP No.1 only with direction to it to pay amount of Rs.1,44,654/- (Rs. One Lakh Forty Four Thousand Six Hundred Fifty Four only), within 30 days from the date of receipt of certified copy of the orders, failing which OP No.1 will have to pay interest @ 9% per annum  from today onwards till payment.  Compensation for mental agony and harassment of Rs.30,000/- (Rs. Thirty thousand only) and litigation expenses of Rs.10,000/- (Rs. Ten thousand only) more allowed in favour of complainant and against  OP No.1.  Payment of amount of compensation and litigation expenses be made within 30 days from the date of receipt of certified copy of the order. Complaint against OP No.2 and 3 is dismissed. Dispute regarding refund of premium amount kept open which can be got decided through separate proceedings. Certified copies of the order be supplied to the parties as per rules.  File be indexed and consigned to record room.

Announced

December 05, 2018.

                                                                (G.K. Dhir)

                                                                President

                                                       (Amrinder Singh Sidhu)

Member

(Mrs. Natasha Chopra)

Member