DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION (EAST)

GOVT. OF NCT OF DELHI

CONVENIENT SHOPPING CENTRE, FIRST FLOOR,

SAINI ENCLAVE, DELHI – 110 092

C.C. No. 312/2019

Date of Institution: 08.02.2013

Judgment Reserved on: 25.06.2024

Judgment Passed on: 01.07.2024

QUORUM:

Sh. S.S. Malhotra (President)

Sh. Ravi Kumar (Member)

Order By: Shri S.S. Malhotra (President)

JUDGMENT

1. By this judgment, the Commission shall dispose off the complaint of the complainant alleging deficiency in service in not reimbursing the mediclaim of the insured.
2. Before coming to the facts it is necessary to mention that the complaint was originally filed in District Consumer Dispute Redressal Commission (New Delhi), Vikas Bhawan but subsequently vide order date 15.07.2019 of the Hon’ble State Consumer Dispute Redressal Commission (SCDRC), Delhi it was transferred to this Commission and as such it was registered in this Commission as file bearing CC No.312/2019 whereas the original complaint was bearing CC No. 123/2013. 
3. Brief facts as stated by the complainant in the complaint are that complainant had been insuring himself and his family by purchasing mediclaim policy from United India Insurance since 2005 in the name of Happy Family Floater Policy and he has the (i) Policy No. 042500/48/05/20/00000738 for the period 05.08.2005 to 04.08.2006, (ii) Policy No. 042500/48/06/20/00000868 for the period 05.08.2006 to 04.08.2007, (iii) Policy No. 042700/48/07/97/00000908 for the period 05.08.2007 to 04.08.2008, (iv) Policy No. 040700/48/08/97/00000968 for the period 06.08.2008 to 05.08.2009, (v) Policy No. 040700/48/09/97/000001025 for the period 06.08.2009 to 05.08.2010. However, in terms of the Circular No. HO/DGM/(t)/91/2006/CR-6073 dated 14.09.2006, the complainant transferred the said policy with the OP i.e. from United India Insurance to Oriental India Insurance Company and he was issued Policy No. 215502/48/2010/4956 which was valid for the period 07.03.2010 to 06.03.2011 for a sum of Rs. 5 lakh and father of the complainant was duly covered in the said policy, however the father of the complainant Sh. Mohinder Singh fell ill and was diagnosed with Lacunar Infarch with Apical Cardiomyopathy with K/C/O Type IIDM+HTN and was to be admitted in hospital (Khetrapal Hospital at F-95, Bali Nagar, Main Najafgarh Road, New Delhi) and spent Rs.28,904/-. The father of the complainant again fell ill in November 2010 and this time was admitted in Sir Ganga Ram Hospital and was diagnosed Cervicalc 4 Pivd with Cord Compression with Quardriparesis and remain admitted in hospital from 30.11.2010 to 07.12.2010 and spent Rs.2,14,253/-. His father further fell sick in December 2010 and was diagnosed with HD Uper Gi Bleed and this time was admitted in Balaji Action Medical Institute, Paschim Vihar, New Delhi-63 from 26.12.2010 to 29.12.2010 and spent Rs.42,166/-. His father thereafter again fell sick in the month of January 2011 and was diagnosed with Lower Respiratory Tract Infection with Sepsis with Azotemia with K/C/O DM Type-II with HTN and as per the advise he was admitted in Khetrapal Hospital at F-95, Bali Nagar, Main Najafgarh Road, New Delhi and remained there from 25.01.2011 to 29.01.2011 and spent an amount of Rs.40,023/- on his treatment and thus the entire amount of the bill came to around Rs.5 lakh from 06.07.2010 to 29.01.2011 and he submitted all these bills for reimbursement to the OP but OP did not pay any heed to the request of the complainant and rather rejected the claim on the ground that policy of the complainant was in first year and as per the policy condition HTN and its complications are excluded in first two year as per the policy’s clause 4.3 and other ailment were covered only after four years of the inception of the policy and since the ailment was in the first year of the policy the claim was rejected. It is further submitted that the complainant has availed the said insurance policy since 2005 and only got transferred the said policy with the OP, in terms of the circular dated 14.09.2006 of IRDA the relevant portion of the said circular reproduced herein below;
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4. The OP has filed its reply taking preliminary objections that present complaint is without any cause of action and there is no deficiency in service on the part of OP. The complainant had taken the policy as per the terms & conditions and therefore expenses incurred on the treatment of the insured with pre-existing diseases are not payable by the insurer under the terms & conditions of the policy only and in the present case complainant has been suffering from various ailments & complications in nature since last three years and since the policy has been taken for the first year the claim was rightfully rejected and therefore there is no deficiency on the part of OP.
5. As far as merits are concerned, the fact the complainant had been taking policy earlier from United India Insurance for about 6 years and then he took the policy from the OP and father of the complainant was covered in the policy are not denied. However, it is denied that complainant has spent total amount of Rs. 5 lakh on the treatment of his father in between 06.07.2010 to 29.01.2011 and simultaneously it is stated that the policy of the complainant is fresh & ailments which have occurred within the first year policy and since there are pre-existing diseases found as per the investigation, the claim was not maintainable. It is further submitted that as far as the circular dated 14.09.2006 is being referred to by the complainant the same does not pertains to public in general but the same was internal affair of the OP and the same is nothing to do with the portability of the insurance policy of the complainant. It is further submitted that portability clause of the mediclaim policy became effective in 2011 only i.e. from 01.10.2011 as per the guidelines issued by IRDA and this circular was not effective on the date when the complainant purchased the Happy Family Floater Policy from the OP on 07.03.2010 and was valid upto 06.03.2011 and since portability has started in October 2011 the said circular is not relevant for complainant & therefore it is prayed that complaint of the complainant be dismissed.
6. Complainant has filed rejoinder to the written statement of OP thereby denying the contents of the written statement and reaffirming the contents of the complaint particularly, he is relying on circular dated 14.09.2006. The complainant has filed his own evidence by way of affidavit whereas OP has filed evidence of Sh. Rajender Kumar, Divisional Manager of OP. The complainant has also filed written argument.
7. The Commission has heard the arguments and perused the record. In nut-shell the case of the complainant is that his father fell ill who was duly covered in the policy and prior to the said policy he was having the policies  right from the year 2005 upto the year 2010 and subsequently for the year 2010-2011 he got his policy transferred from the previous insurance company to this insurance company i.e. the OP and when he applied for a claim under the new policy his claim was rejected, basically contending that ailment was the pre-existing ailment and since the policy with the present insured is only for this year/first year, such claim as has been demanded by the insured are not applicable.
8. Ld. Counsel for complainant has argued that this defense of the OP is not well found in terms of the circular dated 14.09.2006 on the insurance company “On renewal of policies of other insurance companies where cumulative bonus is confirmed by the previous insurer the insured will be given the benefit of continuity and pre-existing clause will be applied retrospectively for the period for which the cumulative bonus had been allowed. No other discount will however be given. Similarly in no benefit will be allowed in fixation of sum insured and waived of difference of premium. Sum insured will be fixed as per the basic sum insured under the expiring policy or as chosen by the insured.”
9. The OP in the written statement although has not denied this circular but has tried to wriggle-out from it by stating interalia that the said circular is not for the general public but is for the internal use of the OP/inter insurance and therefore is of no help for the complainant and basically the policy was not portable as the rules pertaining to portability of the policy had only come and become effective w.e.f. from 01.10.2011 and since the policy of the complainant is from March 2010 – March 2011 this circular or contention that the policy was duly ported is of no consequences as far as complainant is concerned.
10. The Commission is being taken by surprise when the OP says that the particular circular is not for the public and the Commission is of the opinion that if a circular has been issued by IRDA then this circular becomes a guideline as far as all the insured persons are concerned and is binding upon all the companies who are engaged in insurance business & who are governed by IRDA. The functioning of the insurance company if understood in few words is to issue the policy to the general public on the basis of guidelines framed by IRDA from time to time and every insurance company has to follow such guidelines and there cannot be any defense that particular circular is for the public or is for insurance company. In case even if it is for insurance company, it is binding upon the insurance company, and insurance company has to exercise such powers for the stakeholder i.e. the insured. The public/affected people w.r.t. any circular are the primary stake-holders of the insurance company i.e. the insured from whom the premium would come and would be disbursed as per the terms & conditions of the policy and even otherwise this contention of the OP could have been appreciated in much better way if the insurance company would have been able to inform the Commission the particular guidelines issued by the that IRDA are not for the insured or that circular is not to be circulated to the public at large or it is for internal use only. In the considered opinion of this Commission there cannot be any circular which may be called for internal use as once the document is in public domain and the complainant has been able to lay hand on it, then it is a public document and is part of the policy. Therefore since the existence of the circular dated 14.09.2006 is not in dispute and as per this circular, although there is no specific word portability yet benefit of the previous policies have been allowed to be conferred to the new policy holder even in the first year provided other terms & conditions are satisfied.
11. Coming to the facts of the present case the complainant had been taking the policy from the year 2005 and he is continuing this policy upto the 2009-2010 and from the previous insurance for the current year when the complaint was lodged he got the policy from the present OP thereby declaring all the facts that he had been earlier taking the policy from the previous insurance company. The insurance company otherwise also, takes proper/complete information from any insured/new insured as to whether he had earlier been availing the benefits of some policy from other insurance company or not and if all such facts have been declared by the insured then insurance company issues the policy on the basis of terms & conditions as approved by IRDA, therefore this contention of the OP that circular was not for the complainant/public use is not well found and OP is liable to reimburse the amount.
12. Now coming to the next aspect i.e. the amount which the complainant is entitled. Insured value of the policy Rs.5 Lakh and complainant has claimed Rs.5 Lakh from the OP, however in his complaint/pleadings he submits that he was admitted in hospital for four times and for the first time he spent Rs.28,904/- for the second time he spent Rs.2,14,253/- for the third time he spent Rs.42,166/- and for the fourth time he spent Rs.40,023/- towards hospitalisation charges. This amount in total does not come to Rs.5 Lakh and he was directed to file the details of the bills and the amount spent on the hospital, he has accordingly filed copy the bills again alongwith details of the amount he spent and as per the record he spent an amount of Rs.3,23,031.60/-. The Commission has perused this record. Apart from test charges at Star Imaging and Path Lab for Rs.3400/- for which there is no prescription or advise all other amount mentioned in the bill of pre-admission stage and some of the medicine bills are which are post-discharge from the hospital are matching. The Commission has gone through relevant dates and apparently the contention of complainant is well found. Accordingly an amount of Rs.3,23,031.60-3400=3,19,631.60/- is the amount which the complainant has spent & complainant has been able to prove that non-reimbursing the amount to complainant by OP amounts to deficiency in service.
13. There is another relevant factor in the present complaint i.e. the complaint was originally filed in March 2013 but vide order dated 24.05.2019 the matter was transferred to this Commission which was received on 15.07.2019. Since this is an order of Hon’ble SCDRC but in these circumstances the interest is being granted to the complainant from the date when file/matter was received in this office.
14. The Commission hereby orders as follows;

• The OP is directed to pay Rs.3,19,631.60/-(roundoff 3,19,632/-) interest @7.5% p.a from 15.07.2019 alongwith compensation of Rs.25,000/- & litigation charges of Rs.7500/-.
• This Order is to be complied within 30 days from the date of receiving the same & in case the OP would not pay the amount within 30 days the rate of interest would be @9% on the above amounts till realisation.           

 Copy of the Order be supplied/sent to the Parties free of cost as per rules.

Announced on 01.07.2024.

File be consigned to Record Room.