Order by:

Sh.Amrinder Singh Sidhu, President

1.       The  complainant  has filed the instant complaint under section 12 of the Consumer Protection Act, 1986 (now section 35 of Consumer Protection Act, 2019) on the allegations that he purchased Family Health Optima Insurance Plan from the Opposite Parties for a sum assured of Rs.5 lakhs vide policy bearing No.P/211222/01/2021/0060028 for the period 10.12.2020 to 09.12.2021 against the paid up premium of Rs.20077/-. Further alleges that on 30.01.2021 the complainant felt pain in left arm alongwith chest pain, where  the complainant contacted  Pragma Hospital Bathaina where the doctors done ECG and ECHO and the doctors found the complainant quite OK. Again on 05.02.2021 he complainant suddenly having chest pain and he was admitted in Dayanand Medical College & Hospital, Ludhiana  where on 09.02.2021 bypass surgery was conduced by the doctors and the complainant remained there for 10 days and the treating hospital  charged Rs.2,75,773/- as expenses towards his treatment. Thereafter, the complainant lodged the claim with the Opposite Parties for the reimbursement of his claim under the policy, but the Opposite Parties rejected the claim of the complainant on the ground of concealment of pre existing diseases, but these allegations are not correct. Whereas the complainant has received a sudden chest pain and thee was no pre existing diseases before the purchase of the policy in question.   As such, there is deficiency in service on the part of the Opposite Parties. Vide instant complaint, the complainant has sought the following reliefs.

a)       The Opposite Parties may be directed to reimburse the medical claim amounting to Rs.2,75,773/-.

 b)     The amount of Rs.50,000 lakhs be allowed to be paid by the opposite parties on account of compensation due to mental tension and harassment caused by the complainant besides Rs.11,000/- as litigation expenses.

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-Insurance Company  appeared through counsel and contested the complaint by filing  the written version taking preliminary objections therein inter alia that the complaint filed by the complainant is not maintainable and is liable to be dismissed as the complainant has attempted to misguide and mislead this District Consumer Commission.  Brief facts are that the claim of the complainant was denied by the Opposite Parties on the ground of Pre-existing disease. 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 patient of long standing heart disease, which takes more than 2 months to develop, hence it is PED and has 48 months waiting period as per the terms and policy. Moreover, the treatment against which the present claim was filed was also related to the ailment of unstable angina, acute coronary syndrome coronary artery disease double vessel disease as the treatment taken  by the insured and the ailment diagnosed was Unstable Angina-coronary artery diseases double vessel disease 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. Principle of Good Faith and had obtained the policy through concealment of material facts. On merits, the Opposite Parties took up almost the same and similar pleas as taken up by them in the preliminary objections and hence,  no illegality has been committed by the Opposite parties while repudiating the claim of the complainant and the complaint may be dismissed with costs. 

3.       In order to  prove  his  case, the complainant has tendered into  evidence her affidavit Ex.C1 alongwith copies of documents Ex.C2 to Ex.C18 and  closed the evidence on behalf of the complainant.

4.       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.Op1,2/A alongwith copies of documents Ex.OP1,2/1 to Ex.OP1,2/17 and closed the evidence.

5.       We have heard the ld.counsel for the parties and  also  gone through the documents placed  on record.

6.       During the course of arguments, ld.counsel for the Complainant as well as ld.counsel for Opposite Parties has mainly reiterated the facts as narrated in the complaint as well as in the written statement respectively. We have perused the rival contentions of the parties and also gone through the record on file.

7.       The main contention of the complainant is that at the time of proposal the life assured was not suffering any such disease. Moreover, no such terms or conditions were ever conveyed or supplied by the Opposite Parties to the complainant.  On the other hand, ld.counsel for the Opposite Parties has repelled the aforesaid  contention on the ground that  the claim of the complainant was denied by the Opposite Parties on the ground of Pre-existing disease. 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 patient of long standing heart disease, which takes more than 2 months to develop, hence it is PED and has 48 months waiting period as per the terms and policy. Moreover, the treatment against which the present claim was filed was also related to the ailment of unstable angina, acute coronary syndrome coronary artery disease double vessel disease as the treatment taken  by the insured and the ailment diagnosed was Unstable Angina-coronary artery diseases double vessel disease 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. Principle of Good Faith and had obtained the policy through concealment of material facts.

8.       The main point for adjudication vehemently contended before us by Opposite Parties is that  the insured/ complainant had concealed the pre existing disease  of unstable angina, acute coronary syndrome coronary artery disease double vessel disease as the treatment taken  by the insured and the ailment diagnosed was Unstable Angina-coronary artery diseases double vessel disease. 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.”

9.       Furthermore,  as per the proposal form Ex.C2,  at the time of obtaining the policy, the insured has duly mentioned his age as 17.05.1974 (meaning thereby which is  more than 45 years, so it was the bounden duty of the Opposite Parties-Insurance Company to get the insured 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.

10.     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.

11.     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 appellant 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.   

12.     In such a situation the repudiation made by Opposite Parties-Insurance Company regarding genuine claim of the complainant have been made without application of mind. It is usual with the insurance company to show all types of green pasters 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 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 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 hold that the Opposite Party-Insurance Company have  wrongly and illegally rejected the claim of the complainant.

14.     Now come to the quantum of compensation.  The complainant has claimed the amount of Rs.2,75,773/- spent on his treatment, and on the other hand, the Opposite Parties have not denied these expenses by filing any cogent and convincing evidence on the record and hence we hold that the complainant is entitled to the reimbursement of this amount.   

15.     In view of the aforesaid facts and circumstances of the case,  we partly allow the complaint of the Complainant and direct Opposite Parties-Insurance Company to pay Rs.2,75,773/- (Rupees two lakh seventy five thousands seven hundred seventy three only) to the complainant alongwith interest @ 8% per annum from the date of filing the present complaint i.e. 26.10.2021 till its actual realization.  The compliance of this order be made by the Opposite Parties within   60 days from the date of receipt of copy of this order, failing which the  complainant shall be at liberty to get the order enforced through the indulgence of this District Consumer Commission. Copies of the order be furnished to the parties free of costs. File is ordered to be consigned to the record room.

Announced in Open Commission.