Haryana

Ambala

CC/443/2016

Arjun Gupta - Complainant(s)

Versus

M/s Star Health - Opp.Party(s)

Gagan Kohli

12 Feb 2018

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM AMBALA

 

                                                          Complaint case no.        : 443 of 2016.

                                                          Date of Institution         : 14.12.2016.

                                                          Date of decision   :  12.02.2018

 

Arjun Gupta (minor aged 15 years) son of Sh.Sanjay Gupta, resident of House No.A-54, Tribune Colony, Ambala Cantt. through his father being natural guardian and next friend.

……. Complainant.

                                      Versus

 

M/s Star Health and Allied Insurance Co.Limited, having its registered and corporate office: 1, New Tank Street, Valluvar Kottam High Road, Mungambakkam, Chennai-600034. Service may be effected on its local office: SCO no.432, 2^nd Floor, Manali House, Ambala City.

 

                                                                             ….…. Opposite party.

 

BEFORE:   SH. D.N. ARORA, PRESIDENT

                   SH. PUSHPENDER KUMAR, MEMBER         

                   MS. ANAMIKA GUPTA, MEMBER                 

 

Present:       Sh.Gagan Kohli, counsel for complainant.

                   Sh.Mohinder Bindal, counsel for OP.

 

ORDER

                   The complainant has filed the present complaint under Section 12 of the Consumer Protection Act, 1986 with the averments that his father had purchased a medi-claim from Op under Family Health Optima Insurance Plan for his family including wife Monica Gupta, his daughters ishita & Tanya and complainant on proposed dated 27.03.2012 with date of inception of first policy as 29.03.2012 valid upto 28.03.2013for insured value of Rs.3 lac and the requisite premium was paid through account payee cheque. The policy was successfully renewed ending on 28.03.2015 but for Rs. 5  lac through account payment cheque was encashed on 24.03.2014. Thereafter the policy No.P/161113/01/2015/003270 was again renewed for one year ending on 28.03.2016 for Rs.5 lac + Rs.1,05,000/- = Rs.6,05,000/- through account payee cheque encashed on 31.03.2015. In July, 2014 the complainant took treatment from various doctors at various hospitals and  a medi claim bill of Rs.1,43,345/- was submitted with the Op but it repudiated the claim of the complainant vide letter dated 04.01.2016 with ulterior motive.  The policy No.P/161113/01/2015/003270 was operative when the medi-claim bill was repudiated by the OP but the OP had issued a letter dated 10.02.2016 alongith an account payee DD No.150346 dated 08.02.2016 for Rs.596/- drawn on HDFC Bank cancelling the poicy for the remaining period i.e. w.e.f. 10.02.2016 to 28.03.2016 and further renewed the policy for remaining four members. The complainant returned the said draft dated 08.02.2016. The complainant and his family members were not having any knowledge about any ear diseases as there were no symptoms of any such disease. The OP has cancelled the policy of the complainant with ulterior motive in the midway. The insurance policy is sold by the OP to the General Public and it has a public policy to issue such insurance policies to any of the citizen of country.  The OP cannot shirk its responsibility about indemnifying the claim of the complainant and the complainant has been ready and willing to pay premium for his policy renewal. The act and conduct of the Op clearly amounts to deficiency in service on its part. In evidence, the complainant has tendered affidavit Annexure CX and documents Annexure C1 to Annexure C8.

2.                          On notice Op appeared and filed its reply wherein many preliminary objections such as jurisdiction, cause of action, concealment of material facts and maintainability etc. The complainant had developed decreased hearing left ear for 4 years and alopecia. The alopecia cannot develop all of sudden and proved to be a pre-existing disease, therefore, he is not legally entitled for any claim. At the time of inspection of policy from 29.03.2012 to 28.03.2013, the insured have not disclosed about the medical history/health details of the insured person in the proposal form which amounts to misrepresentation of material facts. Hence, the claim was rightly repudiated as per condition No.8 of the policy and the same was communicated to the insured vide letter dated 04.01.2016. Due to misrepresentation and non disclosure of material facts, the insurance policy qua complainant was cancelled as per condition No.15 of the policy and the complaint was communicated about the cancellation vide letter dated 07.01.2016 but the complainant has filed the present false complaint by exploiting the process of law.  The complainant was having pre-existing disease and he has concealed from the insurance company which is clear cut violation of terms and conditions of the insurance policy. The OP has rightly repudiated the claim of the complainant and that too was without any discrimination.  There is no deficiency in service on the part of OPs. Other contentions have been controverted and prayer for dismissal of the complaint has been made.  In evidence, the Ops have tendered affidavit Annexure RA and documents Annexure R1 to Annexure R23.

3.                 We have heard learned counsel for the parties and gone through the case file very carefully.

4.                Undisputedly, the complainant has obtained an insurance policy from the Op and the same was renewed from time to time. The grouse of the complainant is that he fell ill and took treatment from various doctors at various hospitals but the Op has repudiated the claim to the tune of Rs.1,43,345/-spent during his treatment in another case titled as Sanjay Kumar Gupta Vs. Star Health complaint No.345 of 31.08.2016despite the fact that it was the duty of the insurance company to indemnify the same and also wrongly cancelled the policy qua the complainant in the present case.

5.                On the other hand learned counsel for the Op argued that the policy in question for complainant has been obtained by concealment the  material facts because at the time of obtaining the policy in question complainant was having pre-existing disease for which the claim has been submitted. The insurance company has rightly repudiated the claim of the complainant submitted in another case titled as Sanjay Kumar Gupta Vs. Star Health complaint No.345 of 31.08.2016.  In support of his contentions he drew the attention of this Forum towards document Annexure R16 i.e. OPD slip of Medanta Global Health Pvt. Limited issued on 12.09.2015 wherein it has been mentioned that the patient was having such problems 4 years back (deceased hearing from left ear progressive hearing loss alopecia). He further drew the attention of this Forum towards document Annexure R20 i.e. prescription slip issued by Dayanand Medical College & Hospital  issued on 04.09.2015 wherein it has been mentioned that the patient is suffering ear problem for the last 3-4 years.  The policy in question has righty been cancelled qua the complainant after sending the requisite amount by way of demand draft by the insurance company as the same was obtained by concealing the material facts regarding his state of health.

6.                Perusal of the case file reveals that for the first time the policy in question was obtained on 29.03.2012 and prior to the purchase of the insurance policy in question Insured was a patient of ear problem as mentioned in document Annexure R11 i.e. OPD slip of Medanta Global Health Pvt. Limited issued on 12.09.2015 wherein it has been mentioned that the patient was having such problems 4 years back (deceased hearing from left ear progressive hearing loss alopecia). He further drew the attention of this Forum towards document Annexure R18 i.e. prescription slip issued by Dayanand Medical College & Hospital  issued on 04.09.2015 wherein it has been mentioned that the patient is suffering ear problem for the last 3-4 years

7.                   It is a well settled proposition of law that a contract of insurance is based on the principle of utmost good faith – uberrimae fidei, applicable to both the parties.  The rule of non-disclosure of material facts vitiating a policy still holds the field.  The bargaining position of the parties in a contract of insurance is unequal. The insured knows all the facts, the insurer is unaware of anything which may be material to the risk. Very often, it is the insured who is the sole person who has this knowledge.  The insurer may not even have the means to find out facts which would materially affect the risk.  The law, therefore, enjoins on the insured an absolute duty to disclose correctly all material facts which are within his personal knowledge or which he ought to have known had he made reasonable inquiries.  A contract of insurance, therefore, can be repudiated for non-disclosure of “material facts.”  On this point reliance can be taken from case law titled as M/s Kotak Mahindra Old Mutual Life Insurance Company Limited and others 2017 (4) CLT 84 wherein Hon’ble State Commission Haryana has held as under :

7.      In Mithoo Lal V. Life Insurance Corporation of India , AIR 1962 Supreme Court 814, Hon’ble Apex Court held as under:-

“Contract of life insurance entered into as a result of fraudulent suppression of material facts by policy holder- Policy is vitiated and person holding assignment of policy cannot claim benefit of contract………….”

8.      Hon’ble Apex Court in Modern Insulators Ltd. Vs. Oriental Insurance Co. Ltd. – (2000) 2 SCC 734 held as under:-

“It is the fundamental principle of insurance law that utmost good faith must be observed by the contracting parties and the good faith forbids either party from non-disclosure of the facts which the parties know.  ………..”

9.      In Revision Petition No.967 of 2008, Life Insurance Corporation of India versus Smt. Neelam Sharma, decided on September 30^th, 2014, Hon’ble National Commission observed as under:-

“8.       In Satwant Kaur Sandhu vs. New India Assurance Company Ltd. (2009) 8 SCC 316, it has been observed by the Supreme Court that the expression “material fact” is to be understood in general terms to mean as any fact which would influence the judgment 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 their 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 –uberrima fides.  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 fact and his believing the contrary. (See: United India Insurance Co. Ltd. Vs. M.K.J. Corporation [(1996) 6 SCC 428].  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. Of course, obligation to disclose extends only to facts which are known to the applicant and not to what he ought to have known.”

“11.     Having given our anxious consideration to the material on record, we are of the opinion that the answers given by the Insured in the proposal form were untrue to his knowledge. There was clear suppression of “material facts” in regard to the health of the Insured.  It was not for the Insured to determine whether the information sought for in the aforesaid questionnaire was material for the purpose of the two policies…..”  

 

In the present case the proposal form Annexure R2 has been filled up by the father of the insured Arjun Gupta wherein it has been mentioned that the insured is having no pre-existing disease. The proposer in the proposal form Annexure R2 has given the answer in negative as mentioned in column (1) J with regard to disease such as disorder of ear/nose/throat.   The insurance company has rightly cancelled the policy qua the complainant and has rightly sent back the money through demand draft to the complainant.

8.                          In view of the position as discussed above, it is well proved that son of the complainant was having pre-existing disease before the inception of the policy in and the policy in question has been obtained by misrepresenting the material fact qua the health status form the insurance company and the repudiation made by the insurance company in another case titled as Sanjay Kumar Gupta Vs. Start Health others Compliant No.345 of 31.08.2016. The cancellation of the policy qua the complainant cannot be termed as illegal. Therefore, the present complaint is without any merit and the same is accordingly dismissed leaving the parties to bear their own costs. A copy of this order be supplied to the parties free of costs. File be consigned to the record room after due compliance.

ANNOUNCED ON:      12.02.2018

                                               

(PUSHPENDER KUMAR)     (ANAMIKA GUPTA)      (D.N.ARORA)                      MEMBER                  MEMBER               PRESIDENT