BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION AT BANGALORE (URBAN)

DATED 08^TH DAY OF NOVEMBER 2023

ORDER

SMT.M.SHOBHA, PRESIDENT

1. The complaint has been filed under Section 35 of C.P.Act (hereinafter referred as an Act) against the OP for the following reliefs against the OP:-

1. Direct the OP insurance company to pay the compensation of Rs.12,07,335.85 to the complainant also permit the complainant to recover the said money from OP insurance company.
2. Grant such other reliefs as this Hon’ble Commission deems fit.

2. The case set up by the complainant in brief is as under:-

Complainant is the permanent resident of Bangalore, who is born and brought up in Bangalore and residing in his ancestral property. He went to Abudabi and working in Abudabi from 2005 till 2016.  Thereafter he has been residing in Bangalore.

3. The complainant has approached the OP by filing an application for medical insurance. After receipt of the said application from the broker of the OP, this complainant has obtained the medical reports. It is only after due diligence the medical insurance was given to the complainant with a yearly premium of Rs.15,552/- and he has paid the premium on 02.02.2021 and the policy was issued.  The medical insurance policy is insured for a sum of Rs.1 crores extendable upto Rs.2 crores.  This complainant has availed the said insurance policy only in the context of his age and also in anticipation that if there is any medical emergency the said policy can come into effect and rescue this complainant in case of any medical emergency. Except blood pressure this complainant is not having any other medical issue and he was not at all suffering from any other related issues.  
4. This is a specific grievance of the complainant that he has developed certain breathing issues in the month of August 2021 and he was admitted to St.John Medical college hospital, Koramangala, immediately after the admission in the said hospital the complainant was diagnosed with right sided consolidation and right hydro pneumothorax S/P ICD insertion and in accordance with the said medical emergency he was kept in observation in ICU. He was in unconscious stage at ICU in the hospital on 22.08.2021. The medical history about the complainant was given by his brother who was not able to understand the questions that were posed before him and also during the spur of the moment.  The complainant was more anxious to his health condition which was bottle neck to his life on the said day.  During the said conversation the brother of the complainant had mentioned that this complainant used to smoke two or three cigarettes occasionally may be over a period of more than three to four months.  The brother of the complainant had explained the complainant occasionally had the habit of smoking two to three cigarettes in a span of three to four months. The said statement was recorded and accorded by the hospital authorities and during the said emergency it was recorded in the daily medical summary.  The complainant after recovery the hospital authorities has furnished the medical bills for the said period.
5. The complainant had contacted the representative of the OP and had applied for cashless facility during the said medical emergency.  Immediately after receipt of the application from the complainant, the OP has rejected the claim stating that the medical summary report reveal that this complainant was a chain smoker who was smoking two packs of cigarettes’ per day.  The claim made by the complainant was repeatedly rejected by the OP stating that the complainant has developed lung related issues as he is a chain smoker and hence they have rejected his claim.  After analyzing the medical reports which was wrongly recorded by the hospital authorities, the hospital authorities have issued subsequent medical report stating that this complainant was not a chain smoker who had a habit of smoking two to three cigarettes over a period of three to four months.  After received the report from the hospital authority the complainant again forwarded the same to the OP but the OP have rejected the same.  They have not responded appropriately to the request of the complainant.
6. In view of the rejection made by the OP company the complainant has suffered mental agony and financial loss and he was forced to take the financial assistance from his friends and relatives and arranged an amount of Rs.2,07,335.85 ps., and had cleared the medical bill.  He has also approached the ombudsmen appointed by IRDAI and made an application to the said grievance of the rejection of medical claim. The ombudsmen had disallowed the application of the complainant on 31.03.2022, aggrieved by the order the complainant has approached this commission for the deficiency of service on the part of the OP. hence the complainant has filed this complaint.
7. In response to the notice, OP appears and files version. It is the case of the OP that they have issued the health insurance policy under the plan namely CARE-Advantage covering to the complainant starting from 03.02.2021 to 02.02.2022 for a sum insured up to Rs.1 crore subject to policy terms and conditions.  After that the OP company had received a cashless request for the treatment of the complainant at St.John medical college hospital, Bangalore from 22.08.2021 and was provisionally diagnosed with Sepsis.  As per the admission document of the hospital the complainant is mentioned to be a chronic smoker since 10 years and was having two packs per day. Therefore the request made by the complainant was rejected, vide letter dated 23.08.2021 on the basis of non disclosure of material fact/preexisting ailments at the time of proposal – chronic smoker for 10 years, two packs per day.
8. The post rejection of cashless claim by this OP the complainant has approached the OP again with a reimbursement claim for the same hospitalization at St.John medical college hospital from 22.08.2022 to 06.09.2022.  As per the discharge summary he was diagnosed with right side consolidation, right hydro pneumothorax s/p ICD insertion, depression and hyperextension.  As per the admission document the complainant is a chronic smoker, therefore the claim was rejected.  The complainant has made misdeclaration at the time of filing the online proposal form at the time of taking the policy.  The complainant has not disclosed his habit of smoking, even though there is a clear question in the proposal form that Do you smoke consume alcohol, or cheq tobacco, ghutka or paan or use any recreational drugs? If yes then please provide the frequency amount consumed. If any untrue or incorrect statement made in the proposal form and there has been a misrepresentation, misdescription or non disclosure of any material particular, this company shall have no liability to make any payment of any claims and premium paid shall be forfeited to the complainant on cancellation of the policy as per clause 6 of general terms and conditions of the policy.
9. If the complainant made the correct disclosures in the proposal form the OP company would have issued the policy on different terms and conditions or would not have issued the policy at all. The policy holder shall furnish all information i.e., sought from him by the insurer.  Therefore the complainant herein is not only acting in breach of the policy terms and conditions governing the policy but also acted in blatant violation of the principles and regulations of the policy.  Under these circumstances, there is no deficiency of service on the part of this OP. Hence prays for dismissal of the complaint.

10. The complainant has filed his affidavit evidence and relies on 09 documents.  Affidavit evidence of official of OP has been filed and OP relies on 08 documents.

11. Both the parties have addressed their arguments and also filed their written arguments with citations.
12. The following points arise for our consideration as are:-

1. Whether the complainant proves deficiency of service on the part of OP?
2. Whether the complainant is entitled to relief mentioned in the complaint?
3. What order?

13. Our answers to the above points are as under:

Point No.1:  Affirmative

Point No.2: Affirmative in part

Point No.3: As per final orders

REASONS

14. Point No.1 AND 2: These two points are inter related and hence they have taken for common discussion.  We have perused the allegations made in the complaint, version, affidavit evidence, written arguments and documents filed by both the parties.

15. It is not in dispute that the complainant has taken a insurance policy bearing policy No.19998970 under the plan namely Care Advantage and the coverage starts from 03.02.2021 to 02.02.2022 for a sum insured up to one crores. 

16. The complainant in the month of august 2021 had developed some breathing issues and he was admitted to St.John medical college and hospital, Koramangala, Bangalore, immediately after the admission the complainant was diagnosed with right sided consolidation and right hydro pneumothorax S/P ICD Insertion and in accordance with the said medical emergency the complainant was kept in ICU on 22.08.2021.

17. It is the specific grievance of the complainant that when he was in unconscious stage the medical history about the complainant was given by his brother to the doctor who was not able to understand the questions that were posed to him. During the conversation the brother of the complainant has mentioned to the medical officer the complainant used to smoke 2 or 3 cigarettes occasionally may be over a period of more than 3 to 4 months, but the statement of the brother of the complainant was recorded as the complainant was a chain smoker who was smoking two packs of cigarettes per day. After recovery the complainant has clarify to the medical representative of the hospital that he is in the habit of smoking 2 to 3 cigarettes occasionally over a period of 3 to 4 months.  After that he has sent representation to the OP claiming medical reimbursement along with all the necessary documents but the claim of the complainant was rejected on the ground that the complainant is a chain smoker and for the said reason the complainant had developed lung related issues and with the said statement the medical claim of the complainant was rejected repeatedly by OP.

18. After that the complainant has also approached the insurance ombudsmen and their also complaint filed by the complainant was rejected.  

19. In support of his contention the complainant has filed his affidavit evidence and also relied on exhibits as Ex.P1 is the receipt issued by the OP, Ex.P2 is the insurance policy and Ex.P3 is the medical bill, medical summary and hospital discharge certificate, Ex.P4 is the rejection of the claim letter issued by the OP, Ex.P5 and 7 are the proceedings and order of disallowed by the Ombudsmen, Ex.P6 is the copy of the claim denial letter and Ex.P.8 and 9 are letter issued by the doctor of St.John medical college and hospital stating that they have wrongly recorded the history of the patient complainant elicited from his brother. Later the history was reviewed after the patient stabilized and removed from life support.  He has smoked one to two cigarettes once in three to four months in the past four years.  The discrepancies in the personal history recorded was because of the unreliability of the attender of the patient. Ex.P9 is the another letter issued by the doctor stating that the complainant need antibiotics, anticoagulation and hence he requires hospitalization for approximately 7 to 10 days.  As per Ex.P6 the OP have repudiated the claim on the ground of non disclosure of material facts/pre existing ailments at the time of proposal chronic smoker since ten years two packs per day and non disclosure of this fact.

20. On the other hand, the contention taken by the OP is that they have rejected the claim of the complainant vide letter dated 09.10.2021 on the basis of non disclosure of material facts/pre existing ailments at the time of proposal chronic smoker since ten years two packs per day.  As per the clarification submitted by the St.Johns hospital, nowhere says that the complainant is not a smoker and they have clearly stated that the complainant smoked one to two cigarettes once in three to four months in the past four years. The complainant had also approached the insurance ombudsmen, Bangalore and the complaint had been disposed off on 31.03.2022.

21. It is the specific contention taken by the OP that the complainant had a chance to disclose his pre existing disease of pancreatitis at the time of filing the online proposal form at the time of taking the policy.  He has made the following misdeclaration in the online proposal form

Do you smoke consume alcohol, or chew tobacco, ghutka or paan or use any recreational drugs? If Yes then please provide the frequency amount consumed.

22. The complainant has not disclosed his habit of smoking as per clause 6 general terms and conditions 6.1 disclosure to information norm:- If any untrue or incorrect statement are made or there has been a misrepresentation, misdescription 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 policy holder the insured person or any one acting on his behalf the company shall have no liability to make the payment of any claims and the premium paid shall be forfeited to the company on cancellation of the policy or the company may adjust the scope of cover and or the premium paid or payable accordingly.  

23. In support of their contention the OP company branch operation namely Sri.Harish N., was examined and he has relied on 8 documents.  

24. The only contention taken by the OP is that the complainant has not disclosed the fact that he is a chronic smoker since 10 years and he was having two packs per day. He has obtained the policy by misrepresentation. Hence they have rejected the claim on the basis non disclosure of material facts/pre existing ailments at the time of proposal i.e., the chronic smoker since 10 years.  Even the clarification submitted by the medical college hospital nowhere states that the complainant is not a smoker but the complainant smokes 1 to 2 cigarettes once in 3 to 4 months in the past four years.

25. On this back ground, we have gone through the Ex.P1 produced by the complainant. The complainant had disclosed the additional details called by the OP. There is no such column whether the complainant is having a smoking habit or not.

“The complainant has clearly mentioned and filled all the columns in page 2 of the said form ie., a, b c and d and clearly stated that he is not having any pre-existing disease and he has not filed any claim or any proposal form his health insurance been declined, cancelled or charged a higher premium and is any other persons to be insured, already covered under any other health insurance policy of care health insurance.   He has also filled up the another column that his job involves any hazardous activity, manual labour, operating heavy machines handling hazardous material. For all these queries the complainant has stated NO.”  

26. After due diligence the policy was issued in favour of the complainant.  There is no such column that whether the insurer was having smoking habit or not is not at all available in the said proposal form. When the complainant was smoking occasionally and even is not a chain smoker, the question of disclosing the same does not arise.  The hospital authorities have diagnosed that the complainant has taken treatment for right sided consolidation, right hydropneumothorax s/p ICD insertion, depression, hypertension. Even the history mentioned in the case summary and discharge summary, Ex.P3 and P4 discloses that the complainant was not having any pre-existing disease and he was admitted to hospital with the complaint of breathlessness since 12 pm., on 22.08.2021 and hoarseness of voice for one year. The Ops have repudiated the claim only on the ground that the complainant has got this problem due to his smoking habit and hence they have repudiated the claim.  

27. On this back ground, we have gone through the decision of the consumer court in Ahmadabad in CC No.598/2016, between Consumer Education and Research Society –vs- Oriental Insurance Co., Ltd., passed in 30.09.2021. The facts in this case and the facts in the above cited decision are similar.  In the said cited case

“The complainant’s husband had lung cancer and he died of the same.  The insurance company has rejected the claim incurred by the policy holder on the ground that he was addicted to smoking as mentioned in the treatment papers.  The consumer court has allowed the complaint filed by the complainant stating that there is no evidence to prove that the husband of the complainant was addicted to smoking apart from the mention of addiction smoking on the treatment papers. Neither was any clarification of evidence sought from the doctor who made the same observation. The observations made in the discharge summary or treatment papers alone cannot be counted as conclusive proof. Independent proof is required to be presented to support the claim.  In the said complaint the court has held that the complainant’s husband had lung cancer but there is no proof to ascertain that it was due to his addiction to smoking. The insurer has presented a report from the doctor that says that smokers are 25 times more likely to get lung cancer, but that alone does not prove that he suffered from lung cancer due to smoking.

28. It is also observed by the commission that

 The people who do not smoke also suffer from lung cancer and all those who smoke do not necessarily suffer from lung cancer.  Therefore the commission is of the opinion that the insurance company falsely rejected the claim without providing any conclusive proof in its support.  Hence the commission has allowed the claim.

29. We have gone through all the decisions cited by both the parties in detail. In addition to that we have also gone through the decision cited by us passed by the Ahmadabad(Addl) DCDRC in CC No.598/2016.  It is also undisputed fact that the complainant was having a valid insurance policy for a sum insured upto one crore and it covers from 03.02.2021 to 02.02.2022.  There is no column asked the complainant to disclose regarding his smoking habit in the proposal form and hence the question of disclosure of the smoking habit of the complainant do not arise.  Even though the Ops have taken the specific contention that the complainant was having this lungs issues due to his smoking habit have not at all adduced any expert evidence to prove their contention.  They have taken this decision only on the basis of the treatment papers issued by the hospital authorities. The observations made in the treatment papers alone cannot be counted as conclusive proof. The Ops have to lead independent evidence in support of their contention. Even the none smoking persons will get the lung issues. Hence this commission is of the opinion that the OP have falsely rejected the claim of the complainant without providing any conclusive proof in its support.  The complainant has claimed a total compensation of Rs.12,07,335.85 ps., and out of that Rs.2,07,335.85 ps., is the medical bills paid by the complainant to the hospital authorities. The complainant is entitle for the full reimbursement of the medical claim. In addition to this the complainant has also claimed damages of Rs.6,00,000/- for mental harassment and another Rs.4,00,000/- for the mental harassment and serious led down of the reputation of the complainant among his relatives, friends and well wishers which has caused serious deterioration in the health of the complainant. The amount of Rs.10,00,000/- claimed by the complainant towards compensation is on the higher side.  It is not in dispute that the complainant has suffered mental agony and harassment in view of the repudiation made by the OP company, even though the complainant is having an insurance policy for the amount covering more than one crore. Under these circumstances we are of the opinion that a compensation of Rs.2,00,000/- is sufficient in the facts and circumstances of 222this complaint. The complainant is also entitled for litigation expenses of Rs.25,000/-. Hence we answer point No.1 in affirmative and point No.2 partly in affirmative.

30. Point No.3:- In view the discussion referred above we proceed to pass the following;

O R D E R

1. The complaint is allowed in part.
2. The OP is directed to refund Rs.2,07,335.85 ps., towards medical bills with interest at 10% p.a., from the date of payment of the bills in the hospital till realization.
3. The OP is directed to pay Rs.2,00,000/- towards compensation along with litigation expenses of Rs.25,000/- to the complainant.
4. The OP shall comply this order within 60 days from this date, failing which the OP shall pay interest at 12% p.a. after expiry of 60 days on Rs.2,07,335.85 ps., till final payment.
5. Furnish the copy of this order and return the extra pleadings and documents to the parties.

(Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Open Commission on this 08^TH day of NOVEMBER, 2023)

Documents produced by the Complainant-P.W.1 are as follows:

Documents produced by the representative of opposite party – R.W.1;