O R D E R<br /> <br /> <br /> <br /> SRI.D. KRISHNAPPA, PRESIDENT:<br /> <br /> <br /> The grievance of the complainants against the Op in brief is, that the complainants had taken out a policy for its employees and their family members under a Group Medical Policy by Op No.1. The said policy was issued by first Op in July 2004 taken by the Group Company Accelrys Solutions Pvt. Ltd., and that coverage continued till 04/06/2007 which was due for renewal. That Accelrys Solutions Pvt. Ltd., (which is herein after referred to ASPL) let off its employees in March 2007. Then the first Op insisted on a change in the policy term since the Liaison Officer of Accelrys KK and another concerned where there were less than 10 employees, a fresh policy in the name of Accelrys KK was issued by Op No.1 which was in effect from 02/08/2007 till 01/08/2008. Premium amount of Rs.1,35,000/- was all along with Op No.1 which was used for renewal of the policy which was renewed from 02/08/2008 till 01/08/2009. That the father of the second complainant D.P. Gupta was hospitalized for fungal refractory peritonitis, being a patient of Type II was diagnosed and treated on 10/11/2008 and was discharged on 04/01/2009 who was hospitalized on 11/11/2008. That they incurred hospital expenditure of Rs.2,14,144.71 and claim for Rs.2.00 lakhs was made to the Ops but the first Op through his letter dated 02/04/2009 refused to pay the insurance amount on the ground that D.P. Gupta was suffering from Type II DM/DN/CKD/ESRD on CAPD since 2005 and that ailment was existed from commencing of the policy which fall within the exclusion clause 4.1 of the policy. This decision was taken by Op No.1 based on medical information provided by Op No.2 stating that there was a break in the policy period from 04/06/2007 to 02/08/2007. That policy issued in July 2004 covered the employees of ASPL of which the complainant was one of the beneficiary. As the employees of ASPL were let off, a change of policy was required and a new policy in the name of Accelrys KK India came to be issued. That premium amount of Rs.1,35,000/- was lying with Op No.1 prior to March 2007 but the policy came to be issued only on 02/08/2007. Complainants have therefore contended that policy has continued from the year 2004 and therefore repudiation of his claim under condition No.4.1 of the conditions of the policy is wrong and therefore has prayed for a direction to the Ops to pay the insurance amount of Rs.2.00 lakhs with interest and costs.<br /> <br /> 2. Ops have appeared through their advocate and Op No.1 has filed version and a memo is filed on behalf of Op No.2 adopting version and affidavit evidence of Op No.1 Ops in their version have contended that Op No.1 is an Insurance Company and Op No.2 is a third party administrator. Ops admitted to have issued insurance policy covering these employees of complaint No.1 and their 22 dependants with effect from 02/08/2007 to 01/08/2008 by contending that as the group size was very small to provide group mediclaim policy, complainant No.1 had issued Group Mediclaim policy on 02/08/2007 on revised terms in which pre-existing disease is not covered and that policy was later renewed from 02/08/2008 to 01/08/2009 with second Op. After receipt of the claim from the second complainant, they found from the discharge summary of patient that the father of the second complainant was a patient of Type II diabetic with Nephropathy and Chronic Kidney disease was on dialysis since July 2005. That second catheter was placed on patient on 28/02/2007 for fungal peritonitis. Therefore, contended that the father of the second complainant had disease even prior to the inception of the policy and therefore come within the exclusion condition No.4.1 of the policy. It is further contended that mediclaim policy obtained earlier by ASPL was by different company and that do not cover the employees of the first complainant company. That after ASPL Company let off its employees, a new policy is issued before the employees of the first complainant which is a new entity and that new policy came to be issued from 02/08/2007 to 01/08/2008. Ops have admitted though they had collected premium amount from the first complainant but it was Rs.1,32,951/- and not Rs.1,35,000/- as claimed by the complainants. This Op admitted to had kept premium money with them from the month of March 2007 and have stated that the policy commences only upon all formalities being fulfilled and the policy is assigned with a number and after requisite formalities policy commenced in the month of August 2007 and was in force till 01/08/2009 after subsequent renewal. The Ops just taking shelter under condition No.4.1 and 4.16 have justified their action in repudiating the claim of the complainant and have prayed for the dismissal of the complaint.<br /> <br /> 3. In the course of enquiry into the complaint, the complainant and Divisional Manager of first Op have filed their affidavit evidence reproducing what they have stated in their respective complaint and version. The complainant along with the complaint has produced a copy of the mediclaim policy issued by Op No.1 from 02/08/2007 to 01/08/2008 and from 02/08/2008 to 01/08/2009 and has also produced copy of discharge summary of the patient, copy of claim application, copies of medical bills, copies of certain e-mails sent by Op No.2 to them. Op No.1 has also produced copies of some documents with a copy of conditions of the policy. We have heard the second complainant who is in person and perused the written arguments filed on behalf of Op No.1.<br /> <br /> 4. On consideration of the above materials, following points for determination arise.<br /> <br /> 1. Whether the complainants prove that the Ops have caused deficiency in their service in not reimbursing medical expenditure of father of the second complainant.<br /> 2. To what relief the complainants are entitled to?<br /> 5. Our findings are as under:<br /> <br /> Point No.1 : In the affirmative<br /> Point No.2 : See the final order<br /> <br /> REASONS<br /> 6. Answer on point No.1: Before we proceed to the disputed facts in the complaint in hand it is necessary to go to the back ground of the dispute. It is not in dispute, the second complainant was earlier an employee of a Private Company called Accelrys Solutions Pvt. Ltd., which is called as ASPL. It is not in dispute that the ASPL Company had taken mediclaim policy for its employees which was in effect from July 2004 till 04/06/2007. Thereafter that ASPL Company let of its employees in March 2007 then this first complainant took over and continued those employees in his establishment and policy in the name of the first complainant came to be issued with effect from 02/08/2007 till 01/08/2008 and later on was renewed till 01/08/2009. The complainant argued that the Accelrys Solutions Pvt. Ltd., and this present complaint No.1 AKK are sister concern. But the first Op has contended as if that ASPL Company and AKK are different companies are different entities and has further contended that the policy issued in favour of first complainant to cover its employees is a new policy and is not a continued one. Therefore, the Ops have contended as if new policy issued in favour of the first complainant commenced from 02/08/2007 and that policy was not in force prior to 02/08/2007.<br /> <br /> 7. Ops by relying upon discharge summary of the father of the second complainant have contended as if the father of the second complainant had Typed II DM/DN/CKD/ESRD on CAPD since from July 2005 and second Catheter was placed on 28/02/2007 because of fungal peritonitis, have thereby held that this disease of the father of the second complainant was there even prior to the inception of the policy i.e 02/08/2007 and therefore by relying upon condition No.4.1 of the exclusion of the policy have repudiated the claim on the ground that the insured is not entitled for reimbursement of the medical expenditure for the pre-existing disease, whereas the complainant has contended that the policy issued in favour of ASPL was continued as that policy was issued during July 2004 was in force for more than 4 years till his father was admitted for treatment as in patient during November 2008 and therefore submitted that he is entitled for reimbursement of the medical expenditure. In order to find out whether the mediclaim policy issued in favour of employees of ASPL continued and ensured to the benefit of its employees who continued in the organization of the first complainant, we shall look into the contentions of the parties and certain documents produced. The Ops in para 3(1) of the version by narrating the policy issued from 02/08/2007 have stated and a sentence reads as under.<br /> <br /> “It is further submitted as the group size was very small to provide him group mediclaim policy, the complainant No.1 was issued a group mediclaim policy on 02/08/2007 on revised terms wherein unlike a tailor made group mediclaim policy, pre-existing disease can not be covered. Here we emphasize the word issued policy on 02/08/2007 on revised terms. In order to say revised terms then there must have been a policy issued already with certain terms and when subsequent policy is sought, that policy may be issued on revised terms revising the earlier terms. Therefore, here we say that the Ops issued a subsequent policy by revising the terms of the earlier policy”.<br /> <br /> 8. The second complainant had made a claim with Ops for reimbursement of the medical expenditure. The claim was forwarded by Op No.1 to Op No.2 who is a third party administrator who addressed a letter to the father of the second complainant on 23/09/2009 in which there is reference to earlier policy which reads as under.<br /> “After a policy period from 05/06/2006 to 04/06/2007, the next policy period is from 02/08/2007 to 01/08/2008 ( with a break of months) and it is has further reference to clause 4.1 condition of the policy is omitted as it is not relevant. Thus we confine to reference to the policy period of 2006 and 2007. Further, we see a copy of the letter addressed by first complainant to the Divisional Manager of Op No.1 on 25/05/2009. In Para 4 of the letter, the first complainant has categorically referred to the earlier policies and stated that group mediclaim policy issued by Op No.1 in July 2004 taken by their Group Company Accelrys Solutions Private Limited that coverage continued until 04/06/2007 which was due for renewal. Since Accelrys Solutions Pvt. Ltd., had let off all their employees in March 2007, the Divisional Manager of Op T. Babu insisted upon change in policy terms as future coverage was required for less than 10 employees. It is further stated that Op No.2 was in custody of Rs.1,35,000/- from Accelrys Solutions towards renewal and thereby stated that policy continued from July 2004 from the period of ASPL till it was renewed up to the year 2009. The Ops have not denied this fact as narrated in the letter of the first complainant. Further the second Op through another letter by referring to the policy has stated that the claimant is covered under the policy with effect from 07/07/2003 and there is a break in the policy period from 05/06/2006 to 04/06/2007 to 02/08/2007 to 01/08/2008 here also the second Op has categorically stated that claimant the second complainant is covered under the previous policy. Then we have another e-mail of the second Op sent to the second complainant on 31/08/2009 in which he has stated that claim D.P. Gupta is covered under policy with effect from 07/07/2003 and there is a break in the policy period from 05/06/2006 to 04/06/2007 to 02/08/2007 to 01/08/2008. Here again the second Op has reassured the covering of the claim of the second complainant under the policy issued in favour of ASPL. Therefore, it can not lie in the mouth of the Ops to contend that policy issued in favour of ASPL did not continue and the policy they had issued to cover the claim of the second complainant is a new policy came into effect for the first time from 02/08/2007. Added to this, we have another statement of the Ops themselves to prove that the policy issued in favour of ASPL was issued in favour of the employees of a sister concern namely ASPL whose employees were continued in other sister concern namely the first complainant. The Ops in the written arguments have contended that there was a mediclaim policy issued in July 2004 which covered all employees of ASPL in which complainant No.2 was one and there was no break in the policy except in July 2007. Therefore, the Ops intend to say that the first complainant took a new policy on 02/08/2007 after a gap of nearly two months. The Ops have thus contended that there was a breakage in the policy for a period of two months.<br /> <br /> 9. The complainant have contended that the first complainant had paid a premium amount of Rs.1,35,000/- in advance to Op No.1 for renewal of the policy and that amount was lying with Op No.1 even prior to March 2007 and that policy is issued with effect from 02/08/2007. Ops have admitted that premium amount of Rs.1,32,951/- was lying with them from March 2007 but denied that it was Rs.1,35,000/-, Ops have stated as if the policy would commence only upon all formalities fulfilled and after issue of the policy number. Hear the opponents intends to say that premium was paid for issue of new policy but Ops have not produced any papers or documents to prove the proposal form given by the first complainant, proposal form they had received from the first complainant and any documents in that regard given for the purpose of issue of new policy. When that amount of Rs.1,32,951/- was paid even prior March 2007 the first Op would not have taken more than 5 months for processing it and for issue of a new policy. The first complainant who is a sister concern of ASPL employed the employees of ASPL who were terminated during March 2007. The let off employees of ASPL had the benefit of policy till 2007. The first complainant paid premium amount during 2007 itself requesting the first Op to renew the policy and therefore, when old policy was in force till July 2007 and when the complainant paid the premium amount during March 2007. Op No.1 ought to have renewed the policy instead of waiting till 02/08/2007. The first Op themselves is to be held responsible for breaking of the policy for a period of two months between July 2007 to 02/08/2007 for which the complainants can not be blamed. The fact that premium amount was paid towards renewal of the earlier policy was conveyed by the first complainant to the first Op on 25/05/2009 itself clearly proves that the Ops have failed to discharge their legal duty by allowing the policy to lapse between July 2007 to 01/08/2007. Therefore, the Ops have no option but to consider the insurance policy is a continued one from July 2004 till 01/08/2009. The period of hospitalization of father of the second complainant was in between the validity period of insurance. Clause 4.1 of the condition of the policy though excludes the pre-existing disease if the claim is made at the inception for the first time. But that pre-existing disease is covered after 4 continued claimless policy years. Therefore repudiation of the claim of the complainants by the Ops amounts to deficiency and unfair trade practice. As such, we answer point No.1 in the affirmative and pass the following order.<br /> <br /> O R D E R<br /> <br /> Complaint is allowed. Ops No.1 and 2 are jointly and severally held as liable to pay the insurance claim of Rs.2.00 lakhs to the second complainant and are therefore directed to pay that amount within 60 days from the date of this order failing which they shall pay interest @ 9% p.a from the date of this complaint till the date of payment.<br /> <br /> Ops shall also pay cost of Rs.5,000/- to the complainant.<br /> <br /> Dictated to the Stenographer. Got it transcribed and corrected. Pronounced in the Open forum on this the 10th August 2010.<br /> <br /> <br /> <br /> MEMBER MEMBER PRESIDENT<br /> <br /> <br /> <br />