DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION ERNAKULAM
Dated this the 30th day of November 2024
Filed on: 03.10.2023
PRESENT
Shri. D.B.Binu President
Shri. V.Ramachandran Member
Smt. Sreevidhia.T.N Member
C.C No. 677/ 2023
COMPLAINANT
Gigi Thomas W/o Jojo Varghese, Peringarapillil House, Koovalloor P.O, Pothanicadu, Ernakulam Dist.- 686671
(By Adv.Tom Joseph, Court Road, Muvattupuzha-686 661)
Vs
OPPOSITE PARTY
M/s New India Assurance Company Ltd., Muvattupuzha Divisional Office, Kavikunnel Chambers, Muvattupuzha-686661, Represented by its Manager
(Op rep. by Adv.Joy Joseph, J & J Associates, MRRA-82, New India Lane, Kochi-682 028)
F I N A L O R D E R
D.B. Binu, President.
1) A brief statement of facts of this complaint is as stated below:
The complaint was filed under Section 35 of the Consumer Protection Act, 2019. The complainant, a policyholder of the New India Asha Kiran Policy since October 19, 2020, filed a claim under policy number 76160034212700000387 for expenses incurred during treatment for a left-eye condition. On September 7, 2022, the complainant was admitted to a medical facility, underwent surgery for retinal detachment (LE-S/P VR surgery) on September 8, 2022, and was discharged the following day. The total cost of treatment amounted to ₹34,770/-.
Subsequently, the complainant submitted a claim to the opposite party, the insurance provider, for reimbursement of the treatment expenses. However, the claim was repudiated on the grounds that the treated condition fell under a specific waiting period as per Clause 4.2(ii) of the policy. The complainant asserts that the treatment was for retinal detachment and not for cataract, as misrepresented by the insurance provider.
The complainant alleges that the repudiation of the claim is baseless and constitutes an act of unfair trade practice and deficiency in service. As a result, the complainant claims entitlement to reimbursement of ₹34,770/- along with 12% interest per annum from the date of claim submission until realization. Additionally, the complainant seeks ₹10,000/- as compensation for financial loss, mental agony, and hardship caused by the denial of the claim.
The complainant prays for the adjudication of the matter in their favour, granting the claimed amount with interest, compensation, and the costs of the proceedings.
2. NOTICE:
The commission issued a notice to the opposite party, who subsequently filed their version.
3. VERSION OF THE OPPOSITE PARTY
The New India Assurance Company Limited (the opposite party) contests the allegations presented by the complainant regarding the repudiation of a mediclaim. The company denies all claims except those explicitly acknowledged in their response.
The opposite party asserts that the complaint lacks legal and factual grounds, rendering it untenable and subject to dismissal. Contrary to the complainant's assertion that the treatment was for retinal detachment, the opposite party maintains that medical records indicate the procedure addressed a left eye posterior subcapsular polar age-related cataract. The company references Policy Clause 4.2(ii), which imposes a 24-month waiting period from the policy's inception for treatments related to cataracts and age-related eye conditions. Given that the complainant's treatment occurred within this exclusion period, the claim was deemed non-payable.
The opposite party contends that the claim was rightfully denied by the policy's terms and conditions, supported by the medical documentation provided by the complainant. The company communicated the decision to the complainant, advising the submission of additional documents or information to support the claim's validity. The complainant did not respond with further evidence. Therefore, the company denies any deficiency in service or engagement in unfair trade practices.
The opposite party stated that the complainant is not entitled to any compensation as requested in paragraph 5 of the complaint.
In conclusion, the New India Assurance Company Limited requests that the commission accept their contentions, dismiss the complaint, and grant any other reliefs deemed appropriate under the circumstances.
4. Evidence:
The complainant submitted a proof affidavit along with five documents. The documents in the complaint are marked as Exhibits A1 to A5.
- Exhibit A1: Copy of the policy schedule.
- Exhibit A2: Copy of the claim form.
- Exhibit A3: Copy of the discharge summary issued by Aravind Eye Hospital dated 09.09.2022.
- Exhibit A4: Copy of the treatment bill certificate.
- Exhibit A5: Copy of the claim repudiation letter dated 18.11.2022.
The opposite party submitted a proof affidavit along with one document. The document produced by the opposite party is marked as Exhibit B1.
5. Points for Consideration:
i) Whether the complaint is maintainable or not?
ii) Whether there is any deficiency in service or unfair trade practice by the opposite parties?
iii) If so, whether the complainant is entitled to any relief?
iv) Costs of the proceedings, if any?
6. Argument note filed by Adv. Tom joseph the counsel for the complainant:
- The complaint pertains to the unjust repudiation of the mediclaim by the opposite party, alleging that the treatment received by the complainant was for cataract surgery, which is excluded from policy coverage.
- Upon examining Exhibit A2 (the claim form) and Exhibit A3 (the discharge summary issued by Aravind Eye Hospital dated 09.09.2022), it is evident that the complainant underwent VR surgery, a procedure specifically for retinal detachment, and not for cataract as claimed by the opposite party.
- It is also significant to note, as evidenced by the age details provided in Exhibit A3, that the complainant was 53 years old at the time of the surgery. Thus, the assertion by the opposite party that the complainant’s treatment was for an age-related cataract condition is entirely baseless and unsustainable.
- In light of the above facts and supporting evidence, it is prayed that the complaint be allowed, holding the opposite party liable for their deficiency in service.
7 . Argument Note Submitted By The Opposite Party
The counsel for the opposite party submits the following argument note:
The disputed claim pertains to a mediclaim policy, as evidenced by Exhibit B1. This policy includes a clause that excludes coverage for cataract and age-related eye ailments for a period of 24 months from the policy's inception.
Exhibit B1 indicates that the policy commenced on October 19, 2020, a fact acknowledged by the complainant in paragraph 1 of the complaint.
The complainant was admitted for treatment on September 7, 2022, as stated in paragraph 2 of the complaint.
Therefore, it is evident that the treatment occurred within the 24-month exclusion period from the policy's inception.
Medical documents confirm that the treatment was for a left eye posterior subcapsular polar age-related cataract.
Given that the treatment was for cataract within 24 months of the policy's inception, the claim is not payable for the reasons stated above.
The complainant contends that the treatment was not for cataract; however, this assertion is incorrect.
Exhibit A3, the discharge summary provided by the complainant, states:
- Reason for admission: Left eye defective vision.
- Diagnosis: Left eye status post vitreoretinal (VR) surgery; both eyes posterior subcapsular cataract (PSCC); both eyes nuclear sclerosis grade II.
Exhibit A4 specifies the type of surgery as left eye phacoemulsification (PHACO) with Auroflex (AF) intraocular lens (IOL).
In ophthalmology, a posterior subcapsular cataract (PSCC) is a type of cataract characterized by a fast-growing opacity in the rear part of the natural lens. Phacoemulsification (PHACO) is a modern cataract surgery technique that employs ultrasound energy to emulsify the lens nucleus, vacuum to remove the nuclear material, and irrigation and aspiration for cortex and viscoelastic removal. This method allows for a smaller incision size compared to traditional cataract surgery, resulting in faster healing and less postoperative discomfort. The procedure involves removing the cloudy natural lens and replacing it with a clear artificial lens, known as an intraocular lens (IOL). The lens implant is charged in Exhibit A4 bills. Therefore, the surgery performed was a cataract surgery.
It is evident from the documents submitted by the complainant that the present claim pertains to the treatment of cataract. In the version submitted by this opposite party, based on the documents provided by the complainant, it is specifically stated that the treatment was for cataract. The complainant has not produced any other documents to contradict this position.
Therefore, the claim denial is in accordance with the policy. The claim falls within the exclusion/waiting period as stated above. The complainant cannot claim anything beyond what is provided in the policy.
The Apex Court, in various decisions, has affirmed that insurance is a contract, and courts must interpret insurance contracts strictly. Essentially, the insurer cannot be compelled to cover a loss that is not mentioned. Exclusion clauses in insurance contracts are interpreted strictly and against the insurer, as they have the effect of completely exempting the insurer from liability. The Hon'ble Supreme Court reiterated this position in its latest decision in United India Insurance Company vs. M/S Hyundai Engineering, reported in 2024 KHC Online 6296.
There was no deficiency of service or unfair trade practice on the part of this opposite party. The complainant is not entitled to any amount, cost, compensation, or interest in this regard from this opposite party.
Therefore, it is prayed that this Commission may consider the version and documents submitted by the opposite party and dismiss the complaint against this opposite party with costs
We have meticulously considered the detailed submissions of both parties, as well as thoroughly reviewed the entire record of evidence, including the argument notes.
i) Whether the complaint is maintainable or not?
The complaint was filed under Section 35 of the Consumer Protection Act, 2019, and pertains to the repudiation of a claim made under a mediclaim policy. The complainant is a consumer as defined under Section 2(7) of the Act, and the opposite party is a service provider. The dispute arises from an alleged deficiency in service by the insurance company, making the complaint maintainable before this Commission.
ii) Whether there is any deficiency in service or unfair trade practice by the opposite party?
- Policy Terms and Conditions:
The opposite party repudiated the claim citing Clause 4.2(ii) of the policy, which imposes a 24-month waiting period for cataracts and age-related eye ailments. However, Exhibit A3 (the discharge summary issued by Aravind Eye Hospital) clearly indicates that the treatment was for retinal detachment (LE-S/P VR surgery), not for cataracts as alleged by the opposite party. The complainant has provided sufficient evidence to substantiate her claim.
- Medical Evidence Contradicting Repudiation:
The discharge summary (Exhibit A3) explicitly diagnoses the complainant with retinal detachment, requiring VR surgery. The hospital bills (Exhibit A4) also confirm that the treatment involved procedures related to retinal detachment. The opposite party’s contention that the treatment was for cataracts lacks any corroborating evidence and appears to be a misinterpretation of the medical records.
- Deficiency in Service:
The opposite party’s denial of the claim on unfounded grounds demonstrates a lack of due diligence and constitutes a deficiency in service. The insurer’s reliance on a clause that is inapplicable to the actual treatment reflects negligence and an unfair trade practice.
- Unfair Trade Practice:
Repudiation of genuine claims without proper verification of facts creates undue hardship for policyholders and erodes trust in the insurer. Such actions qualify as unfair trade practices under Section 2(47) of the Consumer Protection Act, 2019.
iii) If so, whether the complainant is entitled to relief and Costs of the proceedings, if any?
- Unfair Trade Practices:
The principle of fairness in insurance practices was emphasized in LIC of India v. Consumer Education and Research Centre (1995 AIR 1811, 1995 SCC (5) 482), where the Hon'ble Supreme Court observed:
"We have, therefore, no hesitation to hold that in issuing a general life insurance policy of any type, public element is inherent in prescription of terms and conditions therein. The appellants or any person or authority in the field of insurance owe a public duty to evolve their policies subject to such reasonable, just and fair terms and conditions accessible to all the segments of the society for insuring the lives of eligible persons. The eligibility conditions must be conformable to the Preamble, fundamental rights and the directive principles of the Constitution."
This judgment underscores the duty of insurance providers to ensure that their policies and claims processes are fair, just, and transparent. In the present case, the opposite party failed to adhere to these principles by arbitrarily rejecting a valid claim, thereby violating their public duty and engaging in an unfair trade practice. Such actions not only contravene the foundational objectives of consumer protection laws but also erode public confidence in the insurance system.
The importance of fair interpretation of insurance policies has been highlighted in several landmark judgments. In Star Health and Allied Insurance Company Ltd. v. Avinash T. and Others, it was held that CFLTCs (COVID-19 First-Line Treatment Centers) are designated as hospitals for COVID-19 care under Kerala’s health guidelines. This judgment underscores that insurers must recognize valid claims in alignment with the intended purpose of healthcare facilities as defined by prevailing regulations.
Similarly, in Life Insurance Corporation of India v. Sunita (2021), the Hon’ble Supreme Court held that the terms of an insurance policy should not be interpreted unreasonably to deny coverage when the overall purpose of the policy is clear. Such an approach ensures that the policyholder’s legitimate expectations are honored, avoiding undue hardship or technical denial of claims.
In Suraj Mal Ram Niwas Oil Mills Pvt. Ltd. v. United India Insurance Co. Ltd. (2010), the Court reinforced that insurance policies must be construed in a way that does not defeat the legitimate expectations of the policyholder. This judgment emphasizes the duty of the insurer to adopt a reasonable and fair approach while construing policy terms, particularly in cases where the purpose and intent of the policy are unambiguous.
In the present case, the opposite party's misinterpretation of the medical records and the unjustified denial of the claim contravene the principles established in these precedents. The Commission reiterates that insurance providers are obligated to act in good faith and ensure that their policyholders' legitimate claims are honoured without unreasonable interpretations of policy terms.
Furthermore, the principle of interpreting insurance policies holistically and fairly has been reaffirmed in Canara Bank vs. United India Insurance Co. Ltd. & Ors. [(2020) 3 SCC 455], where the Hon’ble Supreme Court held:
"Insurance Policy must be read holistically so as to give effect to the reasonable expectations of all parties, including the insured. Coverage clauses are to be read broadly, and ambiguity, if any, must be resolved in favour of the insured. Exclusion clauses should be interpreted narrowly."
This precedent underscores the need for a balanced approach in interpreting policy terms, ensuring that the insured’s legitimate expectations are protected while maintaining the integrity of the contractual agreement. The National Consumer Disputes Redressal Commission, in Revision Petition No. 2513 of 2019, upheld this principle, emphasizing that exclusions must not be applied to unjustly deny valid claims.
Applying these principles to the present case, it is evident that the opposite party's reliance on a narrowly construed exclusion clause, in the absence of any supporting evidence, contradicts the insured’s reasonable expectations under the policy. The claim pertains to retinal detachment surgery, clearly supported by medical evidence, and does not fall within the ambit of exclusions for cataract treatment as alleged by the insurer. The opposite party’s actions thus constitute a failure to uphold its obligations under the policy, reinforcing the finding of deficiency in service.
The complainant is entitled to reimbursement of the treatment expenses along with interest. Additionally, the complainant is entitled to compensation for the financial loss, mental agony, and hardship caused by the deficiency in service.
4. Liability of the Opposite Party
The opposite party has failed to substantiate its claims with adequate evidence and has arbitrarily repudiated a genuine claim. This constitutes deficiency in service and unfair trade practice. The opposite party is held liable for the complainant’s losses and hardships.
The Commission empathizes deeply with the complainant, who sought timely financial relief for a genuine medical emergency but was met with unwarranted obstacles from the opposite party. Insurance policies are meant to provide peace of mind during challenging times, yet the complainant’s experience has instead been marred by stress and uncertainty. It is disheartening to see a service provider, entrusted with the responsibility of safeguarding its policyholders, misinterpret medical evidence and deny rightful claims. Such actions not only cause financial strain but also erode the trust policyholders place in their insurers. This Commission, therefore, stands firmly with the complainant, ensuring that justice is served, and the spirit of consumer protection upheld.
We determine that issue numbers (I) to (IV) are resolved in the complainant's favour due to the significant service deficiency on the part of the Opposite Party. The complainant has endured considerable inconvenience, mental distress, hardships, and financial losses as a result of the negligence of the Opposite Party.
In view of the above facts and circumstances, we are of the opinion that the Opposite Party is liable to compensate the complainant.
Hence, the prayer is allowed as follows:
- The Opposite Party shall pay the complainant ₹34,770/- (Rupees Thirty-Four Thousand Seven Hundred and Seventy only) as reimbursement for the treatment expenses incurred.
- The Opposite Party shall pay the complainant ₹10,000/- (Rupees Ten Thousand only) as compensation for financial loss, mental agony, and hardship caused due to the negligence and unfair trade practices of the Opposite Party. This compensation covers the emotional distress and the hardships endured by the complainant and her family.
- The Opposite Party shall pay the complainant ₹5,000/- (Rupees Five Thousand only) towards the costs of the proceedings.
The opposite parties are jointly and severally liable for the fulfilment of the above orders, which must be executed within 45 days from the date of receiving this order. Failure to comply with the payment orders under points I and II will result in interest at the rate of 9% per annum from the date of filing the complaint (03.10.2023) until the date of full payment realization
Pronounced in the Open Commission on this 30th day of November 2024.
Sd/-
D.B.Binu, President
Sd/-
V.Ramachandran, Member
Sd/-
Sreevidhia.T.N, Member
Forwarded by Order
` Assistant Registrar
APPENDIX
Complainant’s evidence
- Exhibit A1: Copy of the policy schedule.
- Exhibit A2: Copy of the claim form.
- Exhibit A3: Copy of the discharge summary issued by Aravind Eye Hospital dated 09.09.2022.
- Exhibit A4: Copy of the treatment bill certificate.
- Exhibit A5: Copy of the claim repudiation letter dated 18.11.2022.
Opposite parties evidence
Exbt.B1 - copy of New India Asha Kiran Policy Schedule
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