Chandigarh

DF-II

CC/182/2019

Satish Kumar - Complainant(s)

Versus

Oriental Insurance Company Ltd. - Opp.Party(s)

Ad. Sourabh Goel

09 Mar 2023

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-II

U.T. CHANDIGARH

 

Consumer Complaint No.	:	182/2019
Date of Institution	:	28.03.2019
Date of Decision	:	09.03.2023

 

                   

           

 

1.  Satish Kumar Age 57 years, S/o Lt.Sh. Banarsi Dass resident of House No.838, Sector-7, Panchkula.

 

2. Raj Rani Age 56 years, wife of Sh. Satish Kumar resident of House No. 838, Sector -7, Panchkula.

....Complainants

Versus

1. Oriental Insurance Company Ltd., SCO No. 72-73A, 2nd Floor, Grain Market, Sector-26, Chandigarh through its Branch Officer.

 

2. Mrs. Naresh, House No. 1915/1, Sector-47C, Chandigarh, Agent/Broker of Oriental Insurance Company Ltd.

 

3.  Vipul Med-Corp Insurance TPA Pvt. Ltd., SCI No. 98, 1 Floor, Industrial Area, Phase-2, Chandigarh, 160002.

 

4.  Shalby Multi-Specialty Hospital, Phase- 9, Sector 63, SAS Nagar, Mohali, Punjab, through its authorized representative.

 

…. Opposite Parties

BEFORE:
		SHRI AMRINDER SINGH SIDHU,	PRESIDENT
		SMT.PRITI MALHOTRA,	MEMBER
		SHRI B.M.SHARMA	MEMBER
PRESENT:-
	Sh.Sourbh Goel, Counsel of complainants Sh.J.P.Nahar, Counsel of OPs No.1 and 3 OPs No.2 & 4 exparte.

   

ORDER BY AMRINDER SINGH SIDHU, M.A.(Eng.),LLM,PRESIDENT

1.     The complainants have filed the present complaint under Section 12 of the Consumer Protection Act, 1986 for deficiency in service and unfair trade practice conducted by the opposite parties. The complainants stated that they are husband and wife and in year 2013, the complainant No.1 has availed Medical Insurance Policy from OP No.1 and the same was renewed from year to year without any gap. In year 2017, again Medical Insurance Policy was renewed for a total sum insured of Rs.5,00,000/- for the period from 30.11.2017 to 29.11.2018 by paying the total premium of Rs.22,630/- for the year 2017-2018. The policy was issued by the OP No.1 from their office situated at Sector 26 Chandigarh. OP No.2 is the Broker and agent of OP No.1 and OP No.3 is TPA. The complainant No.2 had to undergo both joint /knee replacement due to arthritis. The total expenditure including the cost of implant room rent medicine extra incurred by the complainant was Rs.3,75,529/-. After discharge from the hospital, the complainant had submitted the claim form along with all the documents on a 21.11.2018 and the complainant also submitted claim for medical expenses incurred post hospitalization claiming Rs.32,952/- for Post Hospitalization Expenses. To utter surprise of the complainants as against the claim of Rs.3,75,529/-, OP No.3 made an arbitrary direct deduction of Rs.1,25,748/- and after applying co-pay direction of Rs.25,005/-, only sum of Rs.2,25,046/- only was approved. A perusal of the letter dated 11th of January 2019 shows that OP No.3 has mentioned that customary package rates are Rs.1,70,000/- and cost of implant is Rs.85,000/- whereas the complainant incurred total expenses of Rs.3,75,529/, which included the cost of implant as Rs.1,18,629/- and thereafter, on 23.01.2019, OP No.3 approved post hospitalization claim of Rs.29,653/-.  The complainant served legal notice on 22nd of January 2019 through his counsel against illegal and arbitrary deduction of Rs.1,25,478/- by OP No.3 and OP No.3 assigned the following reason for the deduction as under:-

“Rs.500/- file/admission /registration charges  :

Not Payable: Rs.4499/- non-payable item Rs.12,029/- as per R and customary PCKG 1,70,000/- and cost of implant 85K, Rs.450/- cross matching.”

        The Perusal of the above shows that deduction has been made by taking fixing the cost of package at Rs.1,70,000/- and cost of implant has been fixed at Rs.85,000/- total Rs.2,55,000/- and after deduction of Rs.25,000/- as co-pay and other deductions only a sum of Rs.2,25,046/- was approved. The complainant stated that in the entire policy, there was no mention of any limit on the claim of particular disease of surgery. Thus, OP No.3 by misusing its dominant position has made arbitrary deduction from the claim of the complainant. It was never informed either by OP No.1 or OP No.3 at any stage from the date of insurance of policy till the date of discharge from the hospital that there is some package settlement between them and to make some arbitrary or illegal deductions from the claim of the policyholder. The complainants were entitled to treatment as per policy coverage and as the complainant was insured for Rs.5,00,000/- and total expenditure incurred at Rs.3,75,529/-. OP No.3 is not justified in making deductions from the claim of the complainants. The arbitrary and illegal deductions made by the opposite parties, amounts to unfair trade practice and deficiency in service, which caused mental and physical harassment to the complainants for which they are entitled to compensation.  Lastly, the complainants have prayed that the complaint be allowed and the OPs be directed to pay a sum of Rs.1,25,478/- which were wrongly deducted from the claim of the complainants along with interest, cost and compensation.

2.     After the service of notice upon OPs No.1 and 3, OPs No.1 and 3 appeared through their counsel and filed the written version to the complaint where they have denied all the allegations made against them. OPs No.1 and 3 denied that deductions have been made arbitrary and referred to  Annexure C-4, the claim settlement letter dated 11th of January 2019, wherein OP No.3-TPA has given the justifications for the deductions of the amounts as following:-

A) An amount of Rs.500/-, has been deducted  as the file/admission registration charges are not payable under the policy.

B) An amount of Rs.4499/- has been deducted towards non-payable items.

C)  An amount of Rs.1,20,029/- has been deducted which is beyond customer package (PPN package or GIPSA rates.)

D) An amount of Rs.450/- has been deducted, which pertain to cross matching, which is not payable.

        They further replied that they are liable to pay only the expenses which are customary and reasonable and necessarily incurred. TPA has rightly deducted the amounts which are not payable. The patient has herself signed a form which is Annexure C-2,” PPN Network Declaration by Patient /Patient’s Attendant” on 17th of November 2018 and at serial No.3 in case, the policy holders wishes to avail better facility. It is mentioned “On my own option, I wish to avail above better facility and I hereby agree to pay on my free will, after being explained in a detail by the hospital authority in my own and understand able language about mentioned additional facilities/procedure /treatment and associated cost of it, which is over and above the agreed PPN tariff. Further, if I opt to go for final bill reimbursement with the insurance company, respective insurance company will reimburse only as per agreed PPN tariff rates and balance amount will be borne by myself or patient only. I have also been explained that when room service of category better than eligible room rent is availed by the patient. Not only the difference in room rent but also an equal proportion of all other charges associated with the treatment shall be borne by me.”

        It is denied that any arbitrary direction was made. OP No.3 has rightly mentioned that customary package rates at Rs.1,70,000/- and cost of implant at Rs.85,000/-, a copy of rate schedule finalized with the Fortis Hospital, Mohali, which is one of the best hospitals in the region is annexed as Annexures OP-1&3/2. It was denied that deductions were made arbitrary, but as per terms and conditions of the policy. lastly, OPs No.1 and 3 prayed for dismissal of the complaint with heavy costs.

3.     The complainants filed replication to the written version of the opposite parties wherein they denied submissions made in the written version. The pleadings made in the complaint by the complainants are reiterated in their replication. In the replication, the complainant’s denied the justification in the claim settlement letter dated 11th of January 2019 (Annexure C-4) stating that it is arbitrary, illegal and unjust. The complainants had availed Medical Health Insurance Policy from OP No.1, copy of the policy is Annexure C-1. There is neither any condition in the insurance policy nor any undertaking given by the complainant at the time of issuance of the Insurance Policy that they will be entitled for reimbursement only as per PPN tariff. Moreover, perusal of form at page No.26 of the complaint Annexure C-2 shows that Clause 3 of the said document is blank and the contents of clause 3 cannot be made applicable to the complainants. Moreover, the said document on page No.26 does not form part of insurance policy, and therefore merely by getting the said document signed from the complainant, they cannot deny reimbursement of the medical expenses incurred by the complainant which are well within the limit of sum insured. The complainants were holding the policy for a total sum of Rs.5 lakhs with only condition of co-pay of 10%, the OPs could not have deducted any other amount other than 10% of the claim as co-pay.
4.     Despite due service through registered post, OP No.2 failed to put in appearance and as a result thereof it was ordered to be proceeded against exparte vide order dated 08.05.2019.
5.     Despite due service through registered post, OP No.4 failed to put in appearance and as a result thereof it was ordered to be proceeded against exparte vide order dated 02.12.2021.
6.     The parties filed their respective affidavits and documents in support of their case.
7.     We have heard the Counsel for the contesting parties and have gone through the documents on record, including written submissions.
8.     The main issue involved in the present complaint is whether the OPs have deducted amount of Rs.1,25,478/- illegally and arbitrarily or as per law?
9.     In order to find out answer to the above said issue, the reply dated 09.02.2019 of OP No.1 (Annexure C-10)  to the legal notice dated 22.01.2019 (Annexure C-6) is relevant and important which is reproduced herewith for the ready reference:-

"In reference to your letter dated 22.01.209 regarding short settlement of claim of Mrs. Raj Rani lodged under Policy No. 231300/48/2018/424 vide our claim file no. 19RB040IF0429. We wish to state as under:-

The patient Smt. Raj Rani 55Y/F was admitted in Shalby Multi Speciality Hospital, Mohali from 11.11.2018 to 17.11.2018 which is a non network hospital. She was diagnosed as a case of Osteoarthritis- Bilateral knee joint and under went Bilateral Total Knee Joint replacement. An amount of Rs. 375529/- was lodged under claim file No. 19RB040IF0429.

The claim was processed by us as per terms & conditions of DIC. Happy Family Floater Policy issued to insured by M/s Oriental Insurance Co. Ltd. We hope the insured would have undergone the terms & conditions of the policy.

We wish to inform you that we have negotiated packages with various hospitals in Mohali under GIPSA PPN for various surgeries/procedures including surgery of Total Joint Knee replacement. List of all such hospitals is provided in our guidebook supplied to each insured along with our ID Card and also available on our website.

The insured has preferred to undergo. Total Knee Joint replacement in a non-network hospital. Keeping in view the policy provisions under clauses 1.1 & 1.2 which provide that the company will reimburse to the insured person, the amount of such admissible expenses which are medically necessary for the treatment, are reasonable and customary. Further policy clauses 3.41 explains Reasonable & Customary charges as the standard charges prevailing in the geographical area for identical or similar services. We would like to add that the GIPSA PPN Rates negotiated with various hospitals including the prominent hospitals are the rates which satisfy the provisions of clause 1.1, 1.2 & 3.41.

We have compared the negotiated package with most of the prominent hospital in Mohali i.e. Fortis Hospital, Mohall and approved the claim for an amount of Rs.2,50,051/- loss of Rs.25,005/- i.e. co-pay as per policy clause 4.29- Rs.2,25,046/- which satisfies policy terms and conditions of expenses being 'Medically Necessary for the treatment, Reasonable and Customary',

If the insured had applied cashless through our Network PPN Hospital, our cost would have remained limited to the negotiated/agreed packages only."

10.     From the perusal of letter dated 22nd February 2019 it is observed that OP No.1 stated that  “ we hope the insured would have undergone the terms and conditions of policy.” It is clear from the above said wording that OP No.1 hope that the insured would have undergone through the terms and conditions of the policy. Under the Consumers Protection Law, the insurance companies are under legal obligation not only to explain the terms and conditions to the consumers but also make them understand the same. In the present case, OP No.1, left it to the consumers /insured to undergo through the terms and conditions of the policy which is not right. The insurance companies are legally bound to explain the terms and conditions of the policy to the consumers, failing which deduction clause will not be applicable upon them.
11.     Further,  OP No.1 relied upon “Declaration by the Patient/Patient’s Attendant  Form on 17th of November 2018 duly signed by the patient, which is Annexure C-2.
12.     This admission on the part of the complainants is not good on the two grounds. Firstly, the form was signed only by the patient and not by the complainant No.1 and secondly the medical certificate of any doctor is not obtained regarding the physical and mental fitness of the patient. In the absence of any medical fitness certificate, it could not be believed that patient was in a fit state to agree with the terms and conditions of the form. hence, they are not binding upon the complainants.
13.         So from the above said discussion, it is clear that neither the terms and conditions of the policy were ever explained to the complainants to make them understand the same nor Form Annexure C2 was got signed from the patient in physical and mental fit state. Rather it was got signed when the patient was undergoing operation bearing lot of physical and mental pain and obviously under the influence of medicines. Moreover, it was never signed by complainant No.1. Hence, the conditions and mentioned in the form are not applicable upon the complainants. It is safely concluded that OP No.1 deducted amount of Rs.1,25,478/- wrongly and arbitrary. Therefore, OP No.1 is liable to pay the same to the complainants.
14.     In the facts of this case, ratio of the decision of Hon’ble Apex Court in case of Dharmendra Goel Vs. Oriental Insurance Co. Ltd., III (2008) CPJ 63 (SC) is fully attracted, wherein it was held that, Insurance Company being in a dominant position, often acts in an unreasonable manner and after having accepted the value of a particular insured goods, disowns that very figure on one pretext or the other, when they are called upon to pay compensation.  This ‘take it or leave it’, attitude is clearly unwarranted not only as being bad in law, but ethically indefensible.  It is generally seen that the insurance companies are only interested in earning the premiums and find ways and means to decline claims.

        In similar set of facts the Hon’ble Punjab & Haryana High Court in case titled as New India Assurance Company Limited Vs. Smt.Usha Yadav & Others 2008(3) RCR (Civil) Page 111 went on to hold as under:-

    “It seems that the insurance companies are only interested in earning the premiums and find ways and means to decline claims. All conditions which generally are hidden, need to be simplified so that these are easily understood by a person at the time of buying any policy.  The Insurance Companies in such cases rely upon clauses of the agreement, which a person is generally made to sign on dotted lines at the time of obtaining policy. Insurance Company also directed to pay costs of Rs.5000/- for luxury litigation, being rich.

15.     In view of the above discussion, the present complaint deserves to be partly allowed against OP No.1 only and the same is accordingly partly allowed. OP No.1 is directed to pay sum of Rs.1,25,478/- to the complainants along with interest at the rate of 9% from the date of filing this complaint till the date actual payment to the complainants.
16.     The complaint qua OPs No.2 to 4 stands dismissed as there is no deficiency in service on their part.
17.     This order be complied with by the opposite parties within 60 days from the date of receipt of its certified copy.
18.     The pending application(s) if any, stands disposed of accordingly.
19.     Certified copy of this order be sent to the parties, as per rules. After compliance file be consigned to record room.

Announced 09/03/2023
	Sd/- (AMRINDER SINGH SIDHU) PRESIDENT
	Sd/-
	(PRITI MALHOTRA) MEMBER
	Sd/-
	(B.M.SHARMA) MEMBER