Complainant/respondent obtained health first policy from the petitioner, according to which there was a coverage upto Rs.3,75,000/- including surgical benefits of Rs.37,500/-.  Respondent met with an accident and sustained extensive craniofacial injuries.  He was admitted

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in St.Thomas Hospital, Chettipuzah.  He underwent surgery on 30.11.2006 and was discharged on 08.12.2006.  He incurred an expense of Rs.22,056/- for treatment.  Claim was lodged with the petitioner and petitioner settled the claim for Rs.4,125/-.  According to the petitioner, the surgery that the respondent underwent was not covered under the policy.  However, as per terms of the policy, complainant/respondent was entitled to the following benefits:

          Aggrieved by this, respondent filed the complaint before the District Forum.

          District Forum allowed the complaint and directed the petitioner to pay Rs.3,750/- (750x5 days) as daily hospital benefit and post hospitalization benefit of Rs.375/- (one day) and surgical benefit of Rs.22,056/- claimed by the respondent along with interest @ 8% p.a.

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from the date of filing of the complaint till the date of order.  Rs.5,000/- were awarded as compensation and Rs.2,000/- as costs.

          Petitioner being aggrieved filed the appeal before the State Commission which has dismissed the appeal and increased the rate of interest from 8% to 12% p.a.  State Commission in its order has observed as under:

“The counsel for the appellant has no dispute with respect to the amounts awarded i.e. Rs.3750/- and Rs.375/-. The complainant had purchased 3 units of the policy. According to the appellant the hospitalization benefit is at the rate of Rs.250/- per day and post hospitalization benefit Rs.125/- per day.  As the complainant has purchased 3 units the amount for hospitalization would be Rs.750/- per day, and for post hospitalization Rs.375/- per day. The main dispute is with respect to the surgical benefit. The appellant is relied on Ex. B2 policy conditions wherein there is a list of surgeries that are covered. J On an examination of Ext. B2 document we find that the surgeries specified therein are very rare surgeries which any assured would not have to undergo in case of normal illnesses.  For example orthopaedic surgeries mentioned are plastic repair of cranium, prosthetic replacement of bone, replantation of upper limb, replantation of lower limb, implantation of prosthesis for limb, amputation of hand, amputation of hand, amputation of leg or foot. 

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We find that the surgeries covered are devised in such a manner that normal surgeries are not covered by the policy.  The above scheme amounts to fraud perpetuated on the customer.  We find that the opposite party should not be allowed to get away with such a scheme. We find that as per Ext. A9 bill the complainant has been charged for hospitalization expenses for a sum of Rs.15,404/-.  He was impatient for 6 days.  He underwent surgery under general anaesthesia. He also underwent CT scan for which Rs.2000/- has been charged at the above hospital.  Hence we find that the complainant would be entitled for inpatient treatment a sum of Rs.18,500/- (rounded).  He will be entitled for a sum of Rs.3500/- for OP treatment which can be taken reasonable as 10 days.  Altogether he will be entitled for a sum of Rs.22,500/-.  The complainant will be entitled for costs of Rs.5000/-.  The complainant will be entitled interest at 12% from the date of complaint i.e. 25.7.08.  The order of the Forum is modified accordingly. The amounts are to be paid within 2 months from the date of receipt of this order failing which the complainant will be entitled for interest  @ 15% from 16.7.2011 the date of this order.”       

          State Commission in its order has observed that the surgery covered under the policy are devised in such a manner that normal surgeries are not covered under the policy; that the scheme framed by

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the petitioner amounted to fraud perpetuated on the customer; that the petitioner should not be allowed to get away with such a scheme.

          On a contention raised by counsel for the petitioner that in a contract of insurance, parties are governed by the terms and conditions of the policy and the consumer fora cannot allow the claim by changing the terms and conditions of the policy, limited notice was issued to the respondent to show cause as to why the impugned order be not set aside.  Petitioner was directed to pay a sum of Rs.10,000/- to the respondent to meet the litigation and other allied expenses.  

          Respondent is not present despite service.  Petitioner has deposited the sum of Rs.10,000/- towards litigation expenses before the District Forum.

          Prima-facie we agree with the contention raised by counsel for the petitioner that in a contract of insurance, parties are governed by the terms and conditions of the policy and the consumer fora cannot either change the terms and conditions of the policy or can direct the insurance company to change its terms and conditions.  We also agree with the contention raised by counsel for the petitioner that in the absence of appeal by the respondent, the State Commission could not increase the rate of interest from 8% to 12%.  Since the respondent is not present, we

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are not interfering with the impugned order but the same be not taken as a reference for future reference.

          Rate of interest awarded by the State Commission is reduced to 8% p.a.

          Since respondent has not come present despite service, he is not entitled to get the litigation expenses.  District Forum is directed to refund the sum of Rs.10,000/- deposited by the petitioner towards litigation expenses under the directions of this Commission.