Haryana

Ambala

CC/89/2022

Heena Kapoor - Complainant(s)

Versus

Star Health and Allied Insurance Co Ltd - Opp.Party(s)

Gopal

21 Mar 2024

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, AMBALA.

Complaint case no.	:	89 of 2022
Date of Institution	:	17.03.2022
Date of decision	:	21.03.2024

Heena Kapoor D/o Sh. Joginder Pal, aged about 30 years, R/o House No.88/1406, Baldev Nagar, Distt. Ambala.

          ……. Complainant

                                                Versus

1. Star Health and Allied Insurance Co. Ltd., Branch office: SCO-180, 1 To 3, 3rd Floor, Minerva Complex, Rai Market, Ambala Cantt-133001, Through authorized Signatory.
2. Star Health and Allied Insurance Co. Ltd., Regd. & Corporate office: 1, New Tank Street, Valluvar Kottam High Road, Nungambakkam, Chennai-600034, Through authorized Signatory.

                                                                                   ….…. Opposite Parties.

Before:        Smt. Neena Sandhu, President.

                         Smt. Ruby Sharma, Member,

          Shri Vinod Kumar Sharma, Member.           

 

Present:       Shri Santosh Kumar, Advocate, counsel for the complainant.

                      Shri Mohinder Bindal, Advocate, counsel for the OPs.

Order:        Smt. Neena Sandhu, President.

                   Complainant has filed this complaint under Section 35 of the Consumer Protection Act, 2019 (hereinafter referred to as ‘the Act’) against the Opposite Parties (hereinafter referred to as ‘OPs’) praying for issuance of following directions to them:-

1. To pay the amount of Rs.90,000/- spent by the complainant on her treatment alongwith interest @18%.
2. To pay Rs.1,00,000/- as compensation for mental pain and harassment
3. To pay Rs.11,000/- as litigation expenses
4. Grant any other relief which this Hon’ble Commission may deems fit.

 

2.             Brief facts of the case are that the complainant has purchased a Health Insurance policy from the OPs, bearing Policy No. P/211117/01/2022/004762 valid from 30.09.2021 to 29.09.2022 for assured sum of Rs.1 lac, on making paying of premium of Rs.8,390/-.   The complainant was medically checked by the  OP 's Medical Officer and after seeing her reports, the policy was issued. Suddenly in the month of December, 2021, the complainant  suffered from fever, cough and when it was not controlled, on 24.12.2021, she was taken to GABA Hospital, Yamuna Nagar and was admitted there. Various medical tests were done by the Doctors in the hospital and she was admitted in ICU. She remained under treatment with that hospital from 24.12.2021 to 06.01.2022. The complainant spent a sum more than Rs.90,000/- in the hospital. No intimation was received by the complainant from the OPs for cashless treatment, therefore the complainant paid the entire amount to the hospital and after discharge from the hospital, she immediately sent a claim form with discharge summary and final invoice to the OPs. But to her utter shock, the OP denied the claim of the complainant vide letter dated 10.01.2022. Therefore the complainant sent a legal notice to the OPs through her counsel but no response has been received. The repudiation of the mediclaim is illegal, null and void, malafide and against the principle of fair play and deficiency in services on the part of the OPs. Hence, the present complaint.
3.           Upon notice,  the OPs  appeared and filed written version wherein they raised preliminary objections to the effect that the present complaint is ex-facie misconceived, vexatious, untenable and devoid of any merit; the complainant has approached this Commission with unclean hands; this Commission  has no jurisdiction to entertain and try the present complaint as the dispute involves the determination of complex and number of complicated issues, laws and facts that cannot be decided in the absence of expert and huge evidence, as such only the civil court has jurisdiction in the matter; there is no relation of consumer between the parties; the present complaint is without any cause of action etc. On merits, it has been stated that  the complainant by concealing and suppressing true and material facts about her pre- existing ailment procured the insurance policy illegally from the OPs. As per hospital record, the complainant was admitted on 24.12.2021 i.e. after about three months of the inception of the very first insurance policy in Gaba Hospital, Yamuna Nagar and diagnosed and treated for LRTI (Lower respiratory tract infection which includes acute bronchitis, pneumonia, acute exacerbations of chronic obstructive pulmonary disease and acute exacerbations of bronchiectasis for which the complainant submitted request for cashless treatment which was initially given for Rs.40,000/- on 03.01.2022 but the same was withdrawn on 06.01.2022 after going through the submitted treatment papers by the hospital. On scrutiny of the further treatment documents, it was observed that the complainant was K/C/O DCSSC i.e. Diffuse Cutaneous Systemic Sclerosis for the last 8 years with Raynaud, skin thickening, digital ulcers, Calcinosis Cutis, Arthritis, Echo RWMA i.e. Echocardiographic Regional Wall Motion Abnormalities with K/C/O Hypothyroidism which diseases she concealed while getting the very first insurance policy in question from the OPs for the period from 30.09.2021 to 29.09.2022. Moreover, the finding of the ECHO report showed EF as 35% only since 2012 and thus the expert medical team of the OP after going through the submitted medical record and findings given therein observed that the complainant has long standing different diseases, much prior to the date of the commencement of the first policy, hence found them pre existing disease. Under the insurance contract utmost good faith must, be observed by the contracting parties and good faith forbids either party from non- disclosure of the facts which the party knows. The insured has a duty to disclose each and every information and material fact about pre-existing ailment and about his health at the time of availing the policy. Since the complainant has intentionally and deliberately concealed and suppressed the material facts about her pre-existing ailments to take illegal benefits of policy from OPs, hence the claim was rightly and legally held not maintainable and payable. The entire medical/treatment record was considered in detail by the competent authority and after scrutinizing and elaborating the whole facts, situation, records and the evidence, it was found and established that the insured concealed her different ailments/problems and treatment while getting the insurance policy from the Ops which have been proved to be a pre-existing disease. Due to misrepresentation and non disclosure of material facts, the insurance policy of the complainant insured was cancelled as per Condition no. 15 of the policy and the complainant was communicated about the cancellation of her insurance policy with refund of her premium amount of Rs.7110/-. The complainant in order to put undue pressure filed this false complaint by exploiting the process of law; hence the present complaint deserves dismissal on this score alone. The insurance policy is contractual in nature and the claims arising therein are subject to the terms and conditions forming part of the policy. The complainant had accepted the policy agreeing and fully aware of such terms and conditions. The terms and conditions of the policy were explained to the complainant at the time of proposing policy and the same was served to the complainant alongwith the policy schedule. Moreover, it is clearly stated in the policy schedule "THE INSURANCE UNDER THIS POLICY IS SUBJECT TO CONDITIONS, CLAUSES, WARRANTIES, EXCLUSIONS ETC. ATTACHED." The insured has a duty to disclose all material facts in proposal while buying an insurance policy. 19(2) of Protection of Policy Holder Regulations 2017 read as "The requirements of "disclosure of material information" regarding a proposal or policy apply, under these regulations, both to the insurer and insured." The proposal, declaration given by the Proposer (Insured) forms the basis of the 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 she has not consulted or taken treatment which could be gathered from the following:-

1. Are you in good health and free from physical and mental disease infirmity. If not give details - Yes;

2. Have you consulted/taken treatment/been admitted for any Illness/disease/injury/Surgery - If yes, details- No;

4. Have you ever suffered or suffering from any of the following C) Heart Disease If Yes, since when – No.

 

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 porting of 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 Hon'ble Supreme Court in Satwant Kaur & Others V/s New India Assurance Co. Ltd (2009) 8 SCC 316 has held that : "Any fact which would influence the mind of a prudent insurer in deciding whether to accept or not to accept the risk is a material fact. If the proposer has knowledge of such fact, he is obliged to disclose it particularly while answering questions in the proposal form. Rest of the averments of the complainant were denied by the OPs  and prayed for dismissal of the present complaint with costs.

4.             Learned counsel for the complainant tendered affidavit of complainant as Annexure CW1/A alongwith documents as Annexure C-1 to C-18 and closed the evidence on behalf of complainant.  On the other hand, learned counsel for the OPs tendered affidavit of Sumit Kumar Sharma, Senior Manager of the OPs Company-Star Health and Allied Insurance Co. Ltd., 1^st Floor, Himalaya House, 23, Kasturba Gandhi Marg, New Delhi-110001 as Annexure OP-A alongwith documents Annexure R-1 to R-11, R11A, R12 and R-13 and closed the evidence on behalf of  the OPs.
5.           We have heard the learned counsel for the parties and have also carefully gone through the case file.
6.           Learned counsel for the complainant submitted that neither any wrong information was provided by the insured with regard to her health at the time of filling up of the proposal form nor she was suffering from any pre-existing disease, yet, the genuine claim filed by the complainant has been repudiated by the OPs, which act amounts to deficiency in providing service. 
7.           On the contrary, the learned counsel for the OPs submitted that since there has been concealment of material facts with regard to the disease referred to above i.e. Raynaud’s and ECHO LVEK 35%), suffered by the insured, at the time of obtaining the insurance policy in question, as such, the claim of the complainants was rightly rejected by the OPs , strictly as per terms and conditions of the insurance policy.
8.           It is clearly coming out from the repudiation letter dated 10.01.2022, Annexure R-12 that the claim of the complainants stood repudiated by the  OPs  on the ground that the insured had concealed the fact that she was suffering from Raynaud’s and ECHO LVEK 35%). Relevant part of rejection letter is copied below:-

“………….We wish to bring your kind attention that during the scrutiny of the above claim papers, we observe that you have NOT declared the details: Raynaud's and ECHO LVEF 35% (relating to Mr/Mrs.HEENA KAPOOR), which were found to be pre existing at the time of taking the policy for the first time during 30-SEP-21 TO 19-FEB-22. This amounts to non disclosure of material facts.

 

We draw your attention to condition no. 17 in the Policy clause which reads as follows

 

The Company may cancel this policy on grounds of misrepresentation, fraud, moral hazard, non disclosure of material fact as declared in the proposal form and/or claim form at the time of claim and non co-operation of the insured by sending the Insured 30 days notice by registered letter at the Insured person's last known address.

 

This letter shall be taken as the notice of cancellation as per the above mentioned policy condition. You are hereby informed that as per the above clause, we intend to cancel the policy with effect from 19-FEB-22

 

We shall also process relevant refund of premium and send along with cancellation endorsement…”

 

9.           It may be stated here that the above said reason of rejection of claim of the complainant is based on one document dated 24.11.2012, Annexure R-7 allegedly issued by the GABA Hospital. It is significant to mention here that this document, Annexure R-7 is not signed by any doctor nor it has been made clear as to by which mode this document has been procured by the OPs. The  entire record pertaining to the alleged disease i.e. Raynaud’s and ECHO LVEK 35% has not been produced by the OPs.  The affidavit of the treating doctor to this effect has also not been placed on record by the OPs. The OPs have also failed to give any justification as to why such exercise of obtaining such documents were not carried out by them at the time of issuance of the insurance policy in the year 2021. Under these circumstances, no reliance can be placed on the document, Annexure R-7. 
10.           Apart from above, it is also an admitted fact that the disease for which the claim had been raised by the complainant under the policy in question is “Acute Respiratory Failure, Lower Respiratory Tract Infection, Cardiomegaly, dilated right atrium and ventricle, RA/RV Grossly dilated, Severe TR, Severe PAH, MVP (grade II), Mild MR.” and she was  admitted in the GABA Hospital with c/o cough, fever, running nose, chest congestion and decreased appetite. Not even a single document has been placed on record by the OPs  to prove that there was any nexus  of the alleged disease-Raynaud’s and ECHO LVEK 35%  with Acute Respiratory Failure, Lower Respiratory Tract Infection, Cardiomegaly, dilated right atrium and ventricle, RA/RV Grossly dilated, Severe TR, Severe PAH, MVP (grade II), Mild MR.”  suffered by the insured. In  Abdul Latif and Others Vs. LIC of India III ( 2014) CPJ  357( NC) and Sulbha Prakash Motogaonkar and Others Vs. Life Insurance Corporation of India and Others 2021 13 SCC 561 decided on 05.10.2015, the Hon’ble Supreme Court has observed that if concealment is of such a nature that it has no nexus with the disease diagnosed by the insured, the insurance company cannot repudiate the claim. Relevant part of this order is copied below: - 

“6.……. The death of the insured due to ischaemic heart disease and myocardial infarction had nothing to do with his lumbar spondylitis with PID with sciatica. In our considered opinion, since the alleged concealment was not of such a nature as would disentitle the deceased from getting his life insured, the repudiation of the claim was incorrect and not justified”.

11.           A similar question as to whether, the claim is payable, in case there is no direct nexus with the treatment taken by the insured, with the pre-existing disease he is suffering from and was not disclosed, also fell for determination before the Hon’ble Supreme Court in Sulbha Prakash Motegaonkar & Ors. Vs. LIC of India [Civil Appeal No.8245 of 2015] decided on 5.10.2015, wherein,  although it was proved that the insured therein had concealed regarding his pre-existing disease but he died on account of some other reason, even then the Hon’ble Supreme Court of India, allowed the consumer complaint while holding that the disease from which the insured died had no nexus with the pre-existing disease. Relevant part of the said order is reproduced hereunder:-

“…..We are of the opinion that the National Commission was in error in denying to the appellants the insurance claim and accepting the repudiation of the claim by the respondent. The death of the insured due to ischaemic heart disease and myocardial infarction had nothing to do with his lumbar spondilitis with PID with sciatica. In our considered opinion, since the alleged concealment was not of such a nature as would disentitle the deceased from getting his life insured, the repudiation of the claim was incorrect and not justified…….”

12.            In Life Insurance Corporation of  India Vs. Jyotsna Rawal, Revision Petition No. 864 of 2018 decided on 08.05.2018, the Hon’ble National Commission  held as under :

8.       In this context, I would like to rely upon the decision of Hon'ble Supreme Court in Civil Appeal No.8254 of 2015 in the case of Sulbha Prakash Motegaonkar & Ors. Vs. Life Insurance Corporation of India, decided on 05-10-2015. This was the case where the deceased died due to Ischemic Heart disease and myocardial infarction. There was a concealment of lumbar spondylitis with PID with sciatica and, therefore, the insurance company repudiated the claim. Hon'ble Supreme Court held that it was not the case of insurance company that the deceased was suffering from life threatening disease which could or did cause death of the insured. The Court observed as below:

"We are of the opinion that the National Commission was in error in denying to the appellants the insurance claim and accepting the repudiation of the claim by the respondent. The death of the insured due to ischemic heart disease and myocardial infarction had nothing to do with his lumbar spondylitis with PID with sciatica. In our considered opinion, since the alleged concealment was not of such a nature as would disentitle the deceased from getting his life insured, the repudiation of the claim was incorrect and not justified.

13.           In Pratibha Bevinal Vs. Metlife India Insurance Co. Ltd., Consumer Complaint No. 88 of 2011 decided on 07.10.2022 the Hon’ble National Commission  held as under :

7………This Commission in Revision Petitions (supra) has also been guided by this judgement of the Hon'ble Supreme Court and these orders have attained finality. In the instant case, the  OP 's ground for repudiation of the policy is the concealment of a heart condition and diabetes mellitus. However, the cause of death of the DLA is a road accident due to rash and negligent driving by a motor cyclist. I am, therefore, of the view that the matter is squarely covered by Sulbha Prakash Motegaonkar (supra) and therefore the complaint is liable to succeed.

14.           In view of the ratio of law laid down by the Hon’ble Supreme Court and also the Hon’ble National Commission and considering that there was no nexus between the material fact / information relating to Raynaud’s and ECHO LVEK 35% alleged to  have been suppressed, against the treatment for Acute Respiratory Failure, Lower Respiratory Tract Infection, Cardiomegaly, dilated right atrium and ventricle, RA/RV Grossly dilated, Severe TR, Severe PAH, MVP (grade II), Mild MR.” taken by the insured, keeping in view the decision of Hon’ble Supreme Court in Sulbha Prakash Matogaonkar (supra) and other judgments of the Hon’ble National Commission  cited above,  we are of the view that repudiation of the claim by  the OPs  is not correct.  It is therefore held that repudiation of claim by the OPs filed by the complainant is illegal and arbitrary. The complainant is therefore held entitled to the amount spent by her on her treatment.
15.           In view of the aforesaid discussion, we hereby partly allow the present complaint and direct the OPs, in the following manner:-
    1. To pay the amount of Rs.88210/- spent by the complainant on her treatment in GABA Hospital, as is evident from Bill dated 30.12.2021, Annexure C-3 alongwith interest @6% p.a. from the date of repudiation of the claim onwards i.e. 10.01.2022, Annexure C-16.
    2. To pay Rs.5,000/- as compensation for the mental agony and physical harassment suffered by the complainant.
    3. To pay Rs.3,000/- as litigation expenses.  

The OPs are further directed to comply with the aforesaid directions within the period of 45 days, from the date of receipt of the certified copy of the order, failing which the OPs shall pay interest @ 8% per annum on the awarded amount, from the date of default, till realization. Certified copy of this order be supplied to the parties concerned, forthwith, free of cost as permissible under Rules. File be indexed and consigned to the Record Room.  

   Announced:- 21.03.2024.

 

(Vinod Kumar Sharma)	(Ruby Sharma)	(Neena Sandhu)
Member	Member	President