Order by:

Sh.Amrinder Singh Sidhu, President

1.       The complainant  has filed the instant complaint under section 35 of  the Consumer Protection Act, 2019 on the allegations that complainant has purchased policy bearing no.P/211222/01/2021/002501 (in his name) from respondent no.1 which was valid from 29.07.2020 to 10.5.2021. Complainant was Corona Kavach policy holder of Opposite Parties company and at the time of purchasing of policy, Opposite Parties assured complainant that Corona ailment is covered under the said policy and by this way complainant and his other family members are secured under the said policy for Corona disease. During the said policy, unfortunately complainant suffered from Covid 19 disease and he was admitted in Mehar Super specialty Hospital, Singhpura Road, Zirakpur Mohali on 20.09.2020. Complainant remained in the hospital upto 26.09.2020.  The complainant has submitted all the relevant documents i.e. original policies, Adhar card, Bank account, Pan number and photo to requisite counter for claim on the basis of the above said policy and immediately intimated the admission of complainant in the hospital and filed the requisite form as per the requirement of Opposite Parties policy for testament. Despite complainant timely performed all the formalities relating to the claim and submitted all the documents required by Opposite Parties. Despite that opposite parties have not honored/ paid the medical bills and other bills covered under the said policy of complainant. Opposite parties have arbitrary, illegally rejected the claim of the complainant. At the time of filing of the proposal Form the complainant had disclosed all the medical history/existing disease in the proposal form and had signed the same. Moreover the complainant had already insured with Oriental Insurance company and purchased mediclaim policy in the year 2016. The complainant is paying the regular premium uptill now. Further alleges that the complainant had purchased the policy from opposite parties only to cover Covid 19 disease/ailment.  Opposite parties were asked many a times to admit the rightful claim, but they have complaint refused to do so. Legal notice was also served upon the opposite parties but with no effect. Hence this complaint. Vide instant complaint the complainant has sought the following reliefs.

a)       Opposite Parties may be directed to make the payment of claim of Rs.2,47,876/- alongwith interest @ 24 % per annum. 

b)      To pay an amount of Rs.1,00,000/- be allowed to be paid by the opposite parties as compensation on account of harassment, mental tension and agony suffered by the complainant.

c)       And any other relief to which this Hon’ble Consumer Commission, Moga may deem fit be granted in the interest of justice and equity.       

2.       Opposite Parties appeared through counsel and contested the complaint by filing  the written version taking preliminary objections therein inter alia that the present complaint is filed without any cause of action, as the claim of the complainant was denied by the answering Opposite Parties on the ground of Pre-existing disease & Non-Disclosure of material facts. It is established from the medical/treatment records as filed by the insured and as received from the treating hospital that the insured was a k/c/o diabetes mellitus, hypertension and chronic kidney disease (CKD) for past 4 years, prior to commencement of the policy, and complainant was on regular medication and the same was never disclosed at the time of procurement of policy, thus, the claim was found not payable. The insured/complainant by not disclosing the PED before procuring the policy has violated the policy document/contract and also the core principle of insurance i.e. the Principle of Good Faith and had obtained the policy through concealment of material facts. The present application pertains to insurance claim under Corona Kavach Policy bearing No. P/211222/01/2021/002501 valid from 29/07/2020 to 10/05/2021 covering the Complainant for a sum of Rs. 5,00,000/-. However, the aforesaid insurance policy was issued to the insured by the answering Opposite Parties subject to the terms and conditions of the insurance policy. The said terms and conditions were handed over and supplied to the insured at the time of the contract. Moreover the terms and conditions of the policy were explained to the complainant at the time of proposing policy and the same were served to the complainant along with policy schedule. The complainant had accepted the policy agreeing and being fully aware of such terms and conditions and executed the proposal form. Therefore it is submitted that in case if any liability would arise against the answering Opposite Parties, then it would be subject to the terms and conditions of the insurance policy. The answering Opposite Parties craves for the leave of this Commission to put the true and correct facts, as they stand, before this Commission and the same are set forth in the following paras:

(a) That a claim was received for hospitalization of insured and upon scrutiny, of the medical documents as provided by the insured, as per the discharge summary, it was found by the answering insurance co., that the insured was suffering from diabetes mellitus, hypertension and chronic kidney disease on regular medication.

(b) Thus, the opponent raised query vide letter dated 01/12/2020 to submit the treating doctor certificate stating exact onset and duration of the disease, all past medical records pertaining to CKD and previous history of hospitalization in the past, if any.

(c) That in reply to the query, the complainant furnished a self declaration letter on 09/12/2020 dated nil. As per the letter, it is noted that, he being the MBBS doctor taking treatment for CKD by himself from the last 4 years.

(d) From the above findings, it is noted that the insured has CKD prior to the inception of the policy and also he has not furnished the previous investigation towards the CKD. Further, the insured has not disclosed the medical history in the proposal form, thus, the claim was found not payable.

(e) As per 8. Claim Procedure No.8.4, the insured person has to submit all the required documents and details called for by us.

(f) The claim was repudiated under the ambit of specific condition no 9.1 as mentioned under the policy terms and conditions. However as per policy terms and conditions the company is not liable to make any payment on account of any Pre-existing disease which was not disclosed at the time of purchasing the policy.

(g) That the complainant had a duty of disclosure of information related to all kinds of pre-existing diseases, i.e "chronic kidney disease" which the applicant being a MBBS doctor had prior knowledge to commencement of the policy. That the applicant had a duty to disclose as the complainant had agreed to abide by the Terms & Conditions of the policy.

(h) As such, in terms of the said provision of the insurance policy, the insurance company have repudiated the claim of applicant in a proper manner, after due application of mind vide letter dated 31/12/2020.

(i) The insured has a duty to disclose all material facts in proposal form while buying an insurance policy. Section 19(2) of Protection of Policy Holder Regulation 2017 reads as under that "The requirements of disclosure of material information regarding a proposal or policy apply under these regulations both the insured and insurer."

The proposal declaration given by the insured form the basis of contract between the proposer and the company. The Proposer in the proposal form has affirmed that the insured person was in good health and that he has not consulted or taken treatment.     From the above findings, it is clearly evident that the insured is well aware of the past medical history and failed to disclose the same in the proposal form during the purchase of the policy amounting to non disclosure of material facts thus violating the cardinal principle of the insurance making the contract of insurance voidable and unenforceable. The disclosures made by the proposers facilitate the insurance company to take decision whether to give coverage to the proposer and what the premium would be. In the present case, had the fact of "CKD" had been disclosed at the time of taking policy, either the coverage would have been denied totally or policy would have been issued with condition of permanent exclusion of ailments relating to the ailment he was suffering from. However, the Applicant herein choose NOT to disclose the ailments and obtain the policy. This act of the applicant amounts to fraud under de Indian Contract Act and as such the contracts becomes voidable. Opposite parties put reliance on certain judgements of Hon’ble Supreme Court of India and Hon’ble National Commission. Further alleges that in order to prove its case, the Opposite Parties will have to lead evidence and examine its witnesses and expert evidences. It is respectfully submitted that the Hon'ble Supreme Court of India has stated that the Civil Court is the appropriate forum to decide cases which are complicated in nature and in which oral and documentary evidences are required to be led. The Hon'ble Supreme Court has specifically stated that the proceedings before the Commission are essentially summary in nature and adjudication of issues which involve disputed factual questions should not be adjudicated. Therefore, in the fact and circumstances of the present case, Civil Court is the appropriate forum to decide and adjudicate the present case, as this Commission cannot receive evidence in detail in its summary jurisdiction under the Act. The Complainant has got no cause of action and locus-standi to file the present complaint. That the instant complaint is false, malicious, incorrect and with malafide intent and is nothing but an abuse of the process of law and is an attempt to waste the precious time of this Court, as the same has been filed by the complainant just to avail undue advantage. This Commission has got no jurisdiction to try and decide the present complaint. Remaining facts mentioned in the complaint are also denied and a prayer for dismissal of the complaint has been made.

3.       Complainant has also filed replication to the written reply of opposite parties and contended that the claim of the complainant is not on the basis of diseases, which has been mentioned by the opposite parties, rather the claim of the complainant is based on the disease of Covid-19, which was got treated by the complainant during the Covid-19 period and same is covered under the said policy. The opposite parties / respondents are intentionally ignoring to pay the amount of compensation to the complainant. The present application of complainant pertains to insurance claim under Corona Kavach. Remaining objections taken by the opposite parties have been denied.

4.       In order to  prove  his  case, the complainant has tendered into evidence his affidavit Ex.C1 alongwith copies of documents Ex.C2 to Ex.C6.

5.       On the other hand, to rebut the evidence of the complainant,  Opposite Parties also tendered  into evidence the  affidavit of Sh.Sumit Kumar Sharma Ex.OP1-3/A alongwith copies of documents Ex.OP1-3/1 to Ex.OPs1-3/17.

6.       During the course of arguments, ld.counsel for the Complainant as well as Opposite Parties have mainly reiterated the facts as narrated in the complaint as well as in written reply respectively. We have perused the rival contentions of both the parties and also gone through the record. The contention of the complainant is that he has purchased policy bearing no.P/211222/01/2021/002501 namely Corona Kavach from opposite party no.1 valid from 29.07.2020 to 10.5.2021. Opposite Parties assured the complainant that Corona ailment is covered under the said policy and by this way complainant and his other family members are secured under the said policy for Corona disease. During the said policy, unfortunately complainant suffered from Covid 19 disease and he was admitted in Mehar Super specialty Hospital, Singhpura Road, Zirakpur Mohali on 20.09.2020. Complainant remained in the hospital upto 26.09.2020.  After discharge from the hospital, the complainant has lodged the claim with opposite parties and submitted all the relevant and required documents with opposite parties. However, opposite parties have arbitrary, illegally rejected the claim of the complainant.

7.       The main point for adjudication vehemently contended before us by Opposite Parties is that  on scrutiny of the claim documents, it is observed  that that the insured was a k/c/o diabetes mellitus, hypertension and chronic kidney disease (CKD) for past 4 years, prior to commencement of the policy, and complainant was on regular medication and the same was never disclosed at the time of procurement of policy, thus, the claim was found not payable. The insured/complainant by not disclosing the PED before procuring the policy has violated the policy document/contract and also the core principle of insurance i.e. the Principle of Good Faith and had obtained the policy through concealment of material facts. But we do not agree with the aforesaid contention of the ld.counsel for the Opposite Parties. The onus to establish this fact is upon the Opposite Parties in this case.  We have perused the copies of  medical record placed by Opposite Parties of the treating hospital, but there is neither any affidavit nor  complete particulars of the investigator recorded in them. Even the original certificate has not been placed on the record. There is no affidavit of doctor of the treating hospital to establish this fact on the record regarding previous disease of insured. He is a private doctor and not posted in any recognized health institute or government hospital. We are unable to rely upon the above referred investigation report appended with the Photostat copy of  medical record of complainant. In the absence of any affidavit of investigator and the affidavit of treating doctor of the hospital, we do not place any reliance upon these documents, as pressed into service by the Opposite Parties in this case. Consequently, we are of this view that Opposite Parties have failed to discharge the onus solemnly laid upon it to prove this fact that life assured was suffering from above pre-existing disease before taking the policy and he deliberately and fraudulently concealed this material fact from Opposite Parties. We, thus, conclude that there is no substantive evidence on the record to prove this fact that life assured was suffering from any disease before he took the insurance policy and he willfully suppressed this fact fraudulently from the Opposite Parties. Moreover, if the life assured was suffering from any diseases prior to issuance of the policy, in question, the same must not have escaped the notice of the empanelled doctors of the Insurance Company. However, no such investigation record has been produced by the opposite parties. In case Bajaj Allianz Life Insurance Co. Ltd. & Ors. Vs. Raj Kumar III (2014) CPJ 221 (NC), it was held by the Hon’ble National Commission that “usually, the authorized doctor of the Insurance Company examines the insured to assess the fitness and after complete satisfaction, the policy is issued. It was held that the Insurance Company wrongly repudiated the claim of the complainant.”

8.       Furthermore,  as per policy document Ex.C2 the date of birth of  Dr.Ram Tirath Bansal, insured is 11.05.1956 as on 29.07.2020 (meaning thereby which is  more than 45 years, so it was the bounden duty of the Opposite Parties-Insurance Company to get the life assured medically examined before issuing the policy in his name who was above 45 years of age. In support of his contention Ld.counsel for the complainant placed reliance upon I.R.D.A.I Rules and Instructions with regard to thorough medical examination if the insured is more than 45 years which is reproduced as under:-

“As per instructions issued by the Insurance Regulatory and Development Authority of India (IRDAI), it was bounded duty of the insurer to put insured to thorough medical examination in case Mediclaim insured was more than 45 years and if insurance company failed to do so then insurance company has no right to decline the insurance claim on account of non disclosure of the facts of pre existing disease when the policy was taken. The above observations is supported by law cited in SBI General Insurance Company Limited Vs. Balwinder Singh Jolly” 2016(4) CLT 372 of the Hon’ble State Commission, Chandigarh.”

However, the Opposite Parties-Insurance Company has not placed on record any evidence that before issuing the policy they ever got medically examined the insured. So, the abovesaid law squarely covers the case of the complainant that it was the duty of the insurer to get medically examined while issuing the policy and once the policy was issued the insurer cannot take the plea of pre-existing disease of the insured.

9.       It also needs to be mentioned that Section 19 of the General Insurance Business (Nationalization) Act, 1972 states that it shall be the duty of every Insurance Company to carry on general insurance business so as to develop it to the best advantage of the community. The denial of medical expenses reimbursement is utterly arbitrary on the ground that disease in question was pre-existing disease. It is mere an excuse to escape liability and is not bona fide intention of the insurance company. Fairness and non-arbitrariness are considered as two immutable pillars supporting the equity principle, an unshakable threshold of State and public behavior. Any policy in the realm of insurance company should be informed, fair and non-arbitrary. When the insurance policy has exclusions/conditions to repudiate the claim or limit the liability, the same must be specifically brought to the notice of the insured and are required to be got signed to show that such exclusions and conditions have been brought to his/her notice.  Recently, our own Hon’ble State Consumer Disputes Redressal Commission, Chandigarh in  First Appeal No. 50 of 2019 titled as Bajaj Alliance General Vs. Arjan Singh decided on 04.03.2021 also held so.

10.     The need for interpreting a contract always arises in two situations, (i) when a gap is needed to be filled in the contract and (ii) an ambiguity is needed to be resolved in the contract, then to find out correct intention of the contract, spirit behind it is required to be considered. Normally, the insurance policy is a contract of adhesion in which other party is left with hardly any bargaining power as compared to the insurer. Insurance contracts are standard form contracts and are drafted by the insurance company and as such, insurance company is at higher footing than the insured. The benefit of such clause, as exclusion clause, would go to the insured unless the same is explained in clear terms by the insurer. In such circumstances, the tribunal would be more oriented towards the interpretation which goes against the party who has inserted/drafted the disputed clause in the agreement/contract. The adjudicating authority is required to look into whether the intention of the party is to exclude or limit liability has been appropriately explained to the other party or not. This Commission while interpreting insurance agreement is to honour the intention of the parties, who have signed the agreement. Even if the agreement had general exclusion/condition for misrepresentation still fraudulent misrepresentation and non-disclosure may not be there. The innocent and negligent misrepresentations are to be ignored.  On the other hand, the rulings (i) Satwant Kaur Sandhu Vs. New India Assurance Company Limited, (ii) Murti Devi Vs. Birla Sun Life Insurance and (iii) Mamohan nanda Vs. United India Insurance Company Limited,   cited by the ld.counsel for the Opposite Parties  are not applicable and relevant  to the facts of the present case.  The insurance companies are in haste to charge the premium, but when the time to pay the insurance claim comes, they generally take up one excuse or the other to avoid their liability. The reliance of counsel for the complainant on law laid down in “Life Insurance Corporation of India Vs. Priya Sharma & others” 2012(4)CPJ-646, “Life Insurance Corporation of India & others Vs. Harbans Kaur” 2009(3)CPC-677, and “Life Insurance Corporation of India & another Vs. Ashok Manocha” 2011(3)CPC-285, would have been applicable, had this fact been established that life assured suffered from pre-existing ailment of kidney and he deliberately suppressed this fact fraudulently from the Opposite Parties, when he took the insurance policy. In view of our finding recorded above that Opposite Parties had failed to prove this fact that complainant was suffering from any pre-existing ailment and hence these authorities would not be attracted in this case. In this regard, on the same and similar facts and circumstances of the case, Hon’ble State Consumer Disputes Redressal Commission, in First Appeal No.62 of 2015  decided on 02.02.2017 in case India First Life Insurance Vs. Ms.Sudesh Rani also held so.   

11.     Case of the complainant that he purchased the policy namely Corona Kavach from the opposite parties and during the policy period  is he suffered from Covid 19 disease. The contention of the opposite parties is that the claim of the complainant was repudiated by the Opposite Parties on the ground of Pre-existing disease & Non-Disclosure of material facts. However, we do not agree with the contention of opposite parties because the complainant purchased the policy only for Covid 19 and taken the treatment for Covid 19 under the policy of Corona Kavach and not for any other disease.  This plea of the Opposite Parties is totally false and unfair and proves the high handedness of the Opposite Parties  by rejecting the genuine claim of the complainant.

12.     In such a situation the repudiation made by the Opposite Parties regarding genuine claim of the complainant appears to have been made without application of mind. It is usual with the insurance company to show all types of green pesters to the customer at the time of selling insurance policies, and when it comes to payment of the insurance claim, they invent all sort of excuses to deny the claim. In the facts of this case, ratio of the decision of 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 seams 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.

13.     In view of the above discussion, we are of the opinion that the Opposite Parties-Insurance Company have wrongly and illegally repudiated the claim of the complainant. Consequently, we partly allow the complaint and the Opposite Parties-Insurance are directed to pay Rs.2,47,876/- (Rupees Two lakh forty seven thousand eight hundred seventy six only) as per the final bill of Mehar Super Specialty Hospital dated 26.09.2020 alongwith interest @ 8% per annum from the date of filing the present complaint i.e. 23.06.2021 till its actual realization.  The compliance of this order be made by  the Opposite Parties-Insurance Company within 60 days from the date of receipt of this order, failing which the complainant  shall be at liberty to get the order enforced through the indulgence of this District Commission. Copies of the order be furnished to the parties free of cost. File be consigned to record room after compliance.

Announced in Open Commission.