STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

                                                Date of Institution: 17.04.2017

                                                          Date of final hearing: 16.10.2023

                                                     Date of pronouncement: 05.12.2023

First Appeal No.449 of 2017

In the matter of :-

1. The Oriental Insurance Company Ltd., 4 B.P. 1^st Floor, Neelam Bata Road, Bata Chowk, NIT, Faridabad-121001 through its Divisional Manager.
2. The Oriental Medcorp TPA Pvt. Ltd., 515 Udyog Vihar, Phase V, Gurgaon, Vipul Medcorp TPA Pvt. Ltd., Plot No. 1/A, Second Floor, 19/6, Mathura Road, Faridabad-121006 through its Managing Director/Principal Officer/In charge.

Now both through their authorized signatory B.S. Ahuja, Dy. Manager, Regional Office, SCO No. 109-111, Sector-17D, Chandigarh.                                                                 ..Appellants

                             Versus

Smt. Nirmal Aggarwal wd/o Sh. Satish Aggarwal C/o M/s Aggarwal Dairy, C-45, Dabwa Sabji Mandi Chowk, NIT Faridabad.

…..Respondent

CORAM:             Naresh Katyal, Judicial Member

Argued by:-       Sh. J.P. Nahar, counsel for appellants.

Respondent already proceeded against ex-parte vide order dated 18.09.2019.

                                                ORDER

NARESH KATYAL, JUDICIAL MEMBER:

          Delay of 54 days in filing the present appeal stand condoned for the reasons stated in the application for condonation of delay.

2.      Challenge in this appeal No.449 of 2017 of appellants has been invited to legality of order dated 12.01.2017 passed by District Consumer Disputes Redressal Forum-Faridabad (In short “District Consumer Commission”) in complaint case No.155 of 2012, vide which complainant’s complaint has been allowed.

3.      Factual matrix: complainant’s husband Sh. Satish Aggarwal in continuation of previous policies, got himself and his wife (complainant) insured with OP No.1 under Floater Medi-claim Policy No.272400/48/2011/4070 valid from 23.09.2010 to 22.09.2011. Sum Assured was Rs.6,00,000/-. Premium amount was Rs.18,806/-. On 20.08.2011, husband of complainant became unconscious; was admitted in Asian Institute of Medical Science-Faridabad. His condition did not improve and he was discharged on 04.09.2011 and shifted to Niramaya Hospital-New Delhi on same day, where he expired on 13.09.2011. Initially, OP No.2 vide cashless authorization letter dated 31.08.2011 approved Rs.2,00,000/- for treatment of complainant’s husband, but application for further cash approval of Rs.5,06,566/- was denied by OP No.2 vide letter dated 04.09.2011 on ground that: sum insured exhausted, so complainant paid aforesaid amount to hospital, as well as, final bill raised by Niramaya Hospital amounting to Rs.2,21,781/-. She was busy in performing last rites of her husband and was under shock, emotional stress; so she could not submit claim form in time and submitted final bills of hospitals to OP No.2 on 13.10.2011 for payment of balance amount, but despite her visits and requests; she neither received claimed amount nor any letter denying claim from OPs. She sent legal notice dated 29.10.2011 to OPs and OP No.1 replied to it by giving reference of OP No.2’s letter, but she (complainant) had never received said referred letter. OPs finally refused on pretext that: she had not submitted claim form within 7 days of death of her husband. In her complaint she prayed for directing OPs to pay Rs.4,00,000/- towards hospital bills along with interest @ 18% p.a. from date of submitting claim form i.e. 13.10.2011 till realization and Rs.99,000/- as compensation for mental tension, harassment.  

4.      OPs/appellants raised contest. In defence so entered by Insurance Company/OP No.1; it is pleaded that complaint is false, frivolous, vague etc. Complainant has not come with clean hands and concealed material facts. She is/was not consumer as defined under Act. OP No.1 never undertook to provide insurable service to insured, in case sum insured got exhausted. Claim in question was out of the scope of Family Floater (Mediclaim) Policy. Complaint is bad for non-joinder of necessary parties, as LRs of deceased-Sh. Satish Aggarwal are necessary parties. Complainant had no cause of action and locus standi to file complaint. Claim No. 12CB01OIA2104 was registered with OP No.2 on account of hospitalization of complainant’s husband on 20.08.2011 in Asian Institute of Medical Sciences-Faridabad. OP No.2 vide email dated 24.08.2011 sought insurance policies for last four years and authorized hospital of cashless facility for total sum of Rs.2,00,000/-. As per discharge request; for the period 20.08.2011 to 04.09.2011, prepared by Asian Institute of Medical Sciences-Faridabad: insured Satish Kumar was diagnosed as a case of Lt. MCA Infarct with Midline shift: Post Thrombolysis: Post Decompressive Craniotomy: Type-2 diabetes mellitius CAD: Post PTCA.  Hospital sent communication dated 13.09.2011 to OP No. 2 for collecting Rs.2.00 lacs only against final bill dated 04.09.2011 for Rs.5,06,566/-. OP No. 2 processed the subject claim on account of hospitalization of insured Satish Aggarwal for period 20.08.2011 to 04.09.2011 with Asian Institute of Medical Sciences so as to release sum assured Rs.2.00 lacs vide its approval dated 21.09.2011. As a result OP No. 2 vide reference dated 18.10.2011 released approved amount, vide cheque No. 987024 dated 13.10.2011 for Rs.1,74,286/- favouring Asian Institute of Medical Sciences.

5.      Claim No. 12RB0101A2373 was registered vide claim form dated NIL, enclosing therewith, final bill of Rs.2,21,781/- received with OP No. 2 on 13.10.2011 for and on behalf of insurance company on account of hospitalization of insured Satish Aggarwal for period 04.09.2011 to 13.09.2011 in Nirmaya Hospital-New Delhi with ailments Lt. MCA Infarct with Midline shift: Post Thrombolysis: Post Decompressive Craniotomy: Type-2 diabetes mellitius CAD: Post PTCA. Vide reference dated 03.11.2011; OP No. 2 sought information from insured in submitting delayed claim. At this OP No. 2 received death summary dated 13.09.2011, on 25.11.2011. At this stage complainant got issued legal notice dated 29.10.2011 to OPs. In token thereof, insurance company sent communication to her counsel that: claim will be processed as per terms and conditions of insurance policy. It is pleaded that as per terms and conditions of Family Floatter (Medi) Insurance Policy the diseases: Lt. MCA Infarct with Midline shift: Post Thrombolysis: Post Decompressive Craniotomy: Type-2 diabetes mellitius CAD: Post PTCA are covered up to sum assured, at the time of inception of Medi insurance policy, prior to enhancement of sum assured. Insured was entitled to claim, payable and admissible, for sum insured Rs.2.00 lacs only, which sum insured had exhausted on account of settlement of first claim and release thereof by OP No.2 through cheuqe No. 987024 dated 13.10.2011 for Rs.1,74,286/-. Second claim of Rs.2,21,781/- and/or balance medical expenses against bill for Rs.5,06,566/- is inadmissible and not payable within terms and conditions of Medi insurance policy. It is admitted that insurance Policy No. 272400/48/2011/4070 valid from 23.09.2010 to 22.09.2011 (in renewal of previous policy No. 272403/48/2010/1479 for the period 23.09.2009 to 22.09.2010) was obtained in the name of Satish Aggarwal for sum insured of Rs.6.00 lacs. As a matter of fact; OP No. 1 has mentioned following status of Medi-claim insurance policies:-

          It is denied that officials of OP No. 2 have assured complainant that they will process the claims and admit the same for sum insured of Rs.6.00 lacs. OPs have already settled the admissible and payable claim for sum insured of Rs.2.00 lacs, being sum insured at the time of inception of insurance policy. Inter-alia on above basic pleas and by denying other pleas; dismissal of complaint has been prayed.

6.      OP No.2 was proceeded against ex-parte in the proceedings before learned District Consumer Commission vide order dated 23.05.2012.

7.      Parties (Complainant and OP No.1-Insurance Company) had led their respective evidence; oral as well documentary.

8.      On critically analyzing the same, learned District Consumer Commission-Faridabad vide order dated 12.01.2017 has allowed complaint and directed OPs to reimburse Rs.4,00,000/- with interest @ 9% p.a. from date of filing of complaint till realization and to pay Rs.5,500/- as compensation for mental tension and harassment and Rs.2100/- as litigation expenses within 30 days from receipt of order.

9.      Feeling aggrieved; OPs have filed this appeal.

10.    I have heard learned counsel appearing for appellants.

11.    Learned counsel for the appellants/insurer has urged that impugned order dated 12.01.2017 is wrong, illegal and against the actual facts and evidence so available in the case. It is contrary to settled legal principles. It is urged that as per clause 4.1 of the policy; Rs.4.00 lacs was not to be paid, as it was outside the scope of terms and conditions of Medi-claim Insurance Policy. Rs.2.00 lacs has already been paid to complainant. This was the amount, which was sum assured, at the time of inception of Medi-claim Insurance Policy, which was subsequently being renewed. It is urged that learned District Consumer Commission has committed an illegality by ignoring the fundamental fact that: insured Satish Aggarwal was admitted in hospital with ailments of Lt. MCA Infarct with Midline shift: Post Thrombolysis: Post Decompressive Craniotomy: Type-2 diabetes mellitius Chronic Artery Disease: Post PTCA and those were pre-existing disease and as per clause 4.1; the insured person of the family when the cover incepts for the first time are excluded up to 4 years of this policy, being in force continuously. As per terms and conditions of Family Floater Medi-claim Insurance Policy; diseases like hypertension, diabetes, atherosclerotic are covered up to sum insured at the time of inception of Medi-claim insurance policy, prior to enhancement of sum insured. In this case in hand; sum insured was enhanced in year 2009-2010 and likewise in subsequent year 2010-2011. Thus, as per contention exclusion clause 4.1, 4.2 & 4.3 will apply afresh, for enhancement portion of sum insured. On these submissions, learned counsel for appellants has urged that impugned order dated 12.01.2017 is faulty, both on legal and factual front.

12.    Since, sole respondent/complainant did not appear in proceedings of this appeal and has been proceed against ex-parte vide order dated 18.09.2019 of this Commission and said order still holds the light of its day, therefore, this Commission has proceeded to decide this appeal on submissions of appellants/insurer.

13.    Admittedly, Satish Aggarwal-since deceased was having Happy Family Floater Insurance Policy which has currency w.e.f.  23.09.2010 to 22.09.2011.  Through this Policy, sum insured was Rs.6.00 lacs. Happy Family Floater Insurance Policy was firstly taken by insured in year-2006 and sum insured at that time was Rs.2.00 lacs. From year-2006 (23.09.2006) to year-2009 (22.09.2009); Medi-Claim insurance policy was continuously being renewed with assured/insured sum of Rs.2.00 lacs. With effect from 23.09.2009, Medi-claim insurance policy was renewed for enhanced insured/assured amount of Rs.6.00 lacs and thereafter for following year as well i.e w.e.f. 23.09.2010, this quality policy was again renewed for sum insured Rs.6.00 lacs. It was during currency period of renewed policy, valid from 23.09.2010 to 22.09.2011 for sum insured of Rs.6.00 lacs; insured Satish Aggarwal had suffered medical ailments as described herein above in this order and succumbed to same on 13.09.2011. Above mentioned facts are not in dispute.

14.    During the indoor hospitalization of insured-Satish Aggarwal at Asian Institute of Medical Sciences-Faridabad from 20.08.2011 to 04.09.2011; insurer had discharged its liability by indemnifying insured to the extent of Rs.1,74,286/- and by paying this amount (Rs.1,74,286/-) to Asian Institute of Medical Sciences through cheque No.987074 dated 13.10.2011 in favor of Asian Institute of Medical Sciences.  As a matter of fact, total bill amount of Asian Institute of Medical Sciences was Rs.5,06,566/-. Insured-Satish Aggarwal was also admitted in Nirmaya Hospital-New Delhi on 04.09.2011 for treatment of same ailments, of which he was hospitalized in Asian Institute of Medical Sciences-Faridabad and eventually expired there on 13.09.2011. Therefore, second aspect concerning insured/complainant is with regard to hospital charges of Nirmaya Hospital-New Delhi amounting Rs.2,21,786/- and balance amount (remained unpaid) from total bill amount of Rs.5,06,566/- which pertained to Asian Institute of Medical Sciences-Faridabad. 

15.    While dealing with second aspect; insurer’s express and specific stand is that: this claim is inadmissible and reason quoted is that: sum insured/assured (Rs.2.00 lacs) already stood exhausted, while it was in process of indemnifying first claim of Asian Institute of Medical Sciences pertaining to Rs.5,06,566/-. For the sake of repetition, it is mentioned that against this bill insurer had paid Rs.1,74,286/- through cheque dated 13.10.2011 in favour of this hospital. Firstly, OP No.2 sought information from complainant/insured regarding submitting delayed claim. In response to this query; complainant submitted death summary dated 13.09.2011, which was received by OP No. 2 on 25.11.2011. Secondly, insurer has put up a stand that: as per terms and conditions of Family Floater (Medi) Insurance Policy; diseases viz: hypertension, diabetes and atherosclerotic are covered up to sum insured, at the time of inception of Medi insurance policy, prior to enhancement of sum insured. Purportedly, by putting up this stand; insurer has projected that prior to 22.09.2009, down the line, till 23.09.2006; insured-Satish Aggarwal was having continuous Medi insurance policy for sum assured/insured of Rs.2.00 lacs. Hence after 23.09.2009, sum insured was enhanced up to Rs.6.00 lacs and four years thereafter reckoning from 23.09.2009 insurer has no liability to indemnify insured for assured/insured sum of Rs.6.00 lacs. In this regard insurer has pressed clause 7 of the insurance policy which pertains to renewal of policy. Relevant extract of this clause No. 7, strenuously pressed by insurer/appellants reads as follows:-

“7  Renewal of Policy:

a)   XXXXXXX

b)   XXXXXXXX

In case the policy is to be renewed for enhanced sum insured then the restrictions as applicable to a fresh policy (condition 4.1, 4.2 & 4.3 SHALL apply to additional sum insured) as if a separate policy has been issued for the difference.

In case of increase in sum insured, treatment for pre-existing disease (after specified time) and for disease/ailment/injury for which treatment has been taken in the earlier policy period, the enhanced sum insured will be applicable only after four continuous renewals with the increased sum insured.”

16.              Above stance of insurer/appellants has no credence in legal parlance. There was no enhancement of sum insured for Medi claim insurance policy period 23.09.2010 to 22.09.2011 i.e. the period during which insured unsuccessfully obtained medical treatment in two hospitals. Policy for enhanced sum insured initially began to operate from 23.09.2009. As a matter of fact there was no Medi claim obtained by insured, since very inception of Medi claim policy from 23.09.2006 which was continuously being renewed for three years upto 22.09.2009 for sum assured/insured of Rs.2.00 lacs and hence after from 23.09.2009 sum insured was enhanced to Rs.6.00 lacs. Likewise in the year of policy with enhanced sum insured (23.09.2009 to 22.09.2010) also there was no Medi claim obtained by insured. Therefore, strictly speaking; Clause 7 pertaining to renewal of policy will not sub-serve any cause of insurer/appellants. Condition of four years continuous renewal with increased/enhanced sum insured will be applicable, only if, medical treatment is taken in earlier policy periods.

17.    At legal pedestal, the issue is no more res-integra. If insurer/appellants have invoked its exclusion clause of medi claim insurance policy then, it has to lead specific and clinching evidence to prove its exclusion from policy. Reliance in this regard can be placed on recent judgment of Hon’ble Supreme Court in case titled as “National Insurance Co. Ltd. Vs. Vedic Resorts and Hotels Pvt. Ltd.” (Civil Appeal No.4979 of 2019) decided on 17.05.2023, and also on decision of Hon’ble Apex Court in case titled as “National Insurance Company Limited vs. Ishar Das Madan Lal” (2007) 4SCC 105.

18.    While applying the legal dictum of afore cited judgments to the facts of this appeal, “it is held that insurer (The Oriental Insurance Company Ltd.) has miserably failed to bring on record any tangible evidence, to prove its exclusion from policy by invoking clauses 4.1 to 4.3 of same. Denial of claim by appellants by invoking above clauses of policy was erroneous and unjustified as insurer has not led any evidence that insured obtained any medical treatment prior to his hospitalization in Asian Institute of Medical Science on 20.08.2011, therefore, insurer cannot invoke exclusion clause of insurance policy by saying that: sum assured/insured was enhanced for Medi claim policy of insured for two years only. Obviously, by declining to indemnifying insured/complainant with regard to bill of Rs.2,21,786/- of Nirmaya Hospital-New Delhi and balance amount (which remained unpaid) from total bill amount of Rs.5,06,566/- which pertained to Asian Institute of Medical Sciences-Faridabad; insurer/appellants have put insured/complainant in vulnerable and onerous state by creating sordid conditions for her, and in turn enriched itself. This is just because, insurer/appellant No. 1 had been receiving insurance premiums, qua Medi Claim Insurance Policy, which was renewed for enhanced amount from 23.09.2009. Having received insurance premium from insured; insurer cannot wriggle out from its liability, under Medi claim insurance policy by wrongly invoking exclusion clauses.

19.    Consequently, insurer/appellants has not legs to stand in this appeal and appellants have been rightly fastened with liability, jointly and severally, to reimburse complainant by paying Rs.4,00,000/- along with interest @9% p.a. plus Rs.5,500/- as mental tension and Rs.2,100 as litigation expenses.  There is absolutely no illegality, infirmity or manifest error (legal or factual) in impugned order dated 12.01.2017 passed by learned District Consumer Commission-Faridabad. As a sequel thereto; order dated 12.01.2017 is maintained and affirmed, being outcome of proper appreciation of facts and evidence brought on record.  This appeal, being devoid of merits is hereby dismissed.

20.    Statutory amount of Rs.25,000/- deposited by appellants at the time of filing of this appeal be refunded to it, after due identification and verification as per rules and on expiry of period meant for further appeal /revision, if any.

21.    Application(s) pending, if any stand disposed of in terms of the aforesaid judgment.

22.    A copy of this judgment be provided to all the parties free of cost as mandated by the Consumer Protection Act, 1986/2019. The judgment be uploaded forthwith on the website of the Commission for the perusal of the parties.

23.    File be consigned to record room.

Date of pronouncement: 05^th December, 2023

                                                                             Naresh Katyal               

                                                                            Judicial Member

                                                                            Addl. Bench-II