Order by:
Sh.Amrinder Singh Sidhu, President.
1. The complainants have 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 they purchased family insurance policy bearing No.P/1611 14/1/2016/008524 from the Opposite Parties on 31.12.2015 and as per the policy, it covered Health Insurance of 4 persons namely Ashwani Kumar, Sushma Rani, Pranshu and Rizul. Further alleges that complainant Rizul born as a pre-mature baby nearby 8 ½ months after pregnancy (250 days) and as per the medical science, mature baby birth is considered when a baby take birth on or after 260 days from the date of conception. However, the birth of Rizul was normal one and no complication was ever faced by child or his mother and at later sage, due to his weak hearing capacity; he was given a hearing aid machine when he was about 3 ½ years old. Moreover, the Opposite Parties did not ask for relevant papers regarding the hearing aid and pre-mature birth of Rizul nor any medical test was ever conducted by the Opposite Parties in the beginning till date. In the year 2015 when Rizul was about 16 years old, the complainant No.1 purchased the above mentioned policy and the said policy form was in English and was filled by Opposite Party No.4 Vikas Garg in his own writing as the complainant No.1 is matriculate pass only and is unable to understand English. Further alleges that said insurance policy of Rizul was being renewed till 2018 and during the period of last months of 2017 and in the starting month of 2018, Rizul started feeling very weak and started facing certain health issues and the complainant No.1 approached Dr.Sandeep Puri, DMC Hospital Ludhiana on 11th January, 2018 who advised him to conduct blood tests in writing which were conducted immediately. On 16th January, 2018, it was came to notice that said Rizul was having kidney problem and he was admitted in hospital on 17th January, 2018 for treatment and at that time, on consultation with different hospitals, they advised transplant of kidney and finally a kidney was taken from mother of Rizul and was transplanted on 09.03.2018 in Max Hospital, Mohali. The complainant further alleges that at the time of purchasing the policy, the Opposite Parties never issued any terms and conditions of the policy document nor any question was ever asked regarding premature birth of a child at the time of filling the proposal form. Thereafter, after treatment, the complainants lodged claim with the Opposite Parties for the reimbursement of their medical bills, but the Opposite Parties refused to pay the claimed amount vide letter dated 23.04.2018 on the ground of non disclosure of birth of pre-mature baby and sensory hearing problems. 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) To direct the Opposite Parties to pay the amount of Rs.20 lakhs on account of compensation on account of medical expenditure incurred for treatment of Rizul and on account of mental tension, agony and physical harassment.
Hence, the present complaint.
2. On notice, Opposite Parties appeared through counsel and contested the complaint by filing the written version taking preliminary objections therein inter alia that the intricate questions of law and facts are involved in the present complaint which require voluminous documents and evidence for determination which is not possible in the summary procedure under the Consumer Protection Act, and the appropriate remedy, if any, lies only in the Civil Court. The complainant has concealed the fact that The Insured availed Star Comprehensive Insurance Covering Ashwani Kumar-self and Sushma Rani Spouse, Pranshu and Rizul son vide policy No. P/211222/01/2018001247 for the period 31.12.2017 to 02.06.2018 for Rizul and the policy with regard to other persons was valid upto 31.12.2018 as the policy for Rizul was cancelled vide letter dated 23.04.2018. 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 and the complainant has accepted the policy agreeing and being fully aware of such terms and conditions and executed the proposal form. The insured Rizul was hospitalized in Dayanand Medical College and Hospital (DMC) Ludhiana (M.Corp) on 17.01.2018 and discharged on 23.01.2018 towards the treatment of CKD 5(D)B/L/SNHL/Secondary Hyperarathryroism. Thereafter, the insured submitted the claim for reimbursement of medical expenses for the treatment of Rs.98,362/- and on scrutiny it is observed that as per ICP, the insured patient is a child born pre-maturely with bilateral sensory hearing loss from 3 years of age and speech difficulty. At the time of inception of policy the insured have not disclosed the above mentioned medical history/ health details of the insured person which amounts to misrepresentation/ non-disclosure of material facts. Hence the claim of the complainant was rejected and the same was informed to the insured vide letter dated 20.04.2018 and as per the conditions No.12, the policy is liable to be cancelled, since the insured has not disclosed the material facts in the proposal form and thus the policy of Rizul was cancelled vide letter dated 23.04.2018 and the different in premium was refunded by way of demand draft dated 25.05.2018 for an amount of Rs. 3126/-. The insured was suffering from PED since birth and the same was not disclosed at the time of inception of the policy, so the Opposite Parties are not liable to make any payment in respect of expenses for treatment of the pre-existing disease/ condition, since the date of commencement of first year policy with the company on 31.12.2015, hence there is no deficiency in service on the part of the Opposite Parties. On merits, the Opposite Parties took up the same and similar pleas as taken up by them in the preliminary objections and hence there is no deficiency in service on the part of Opposite Parties.
3. In order to prove their case, the complainant have tendered into evidence the affidavit of the complainant Ex.CW1/A, affidavit of Risul Ex.CW2/A, copies of documents Ex.C1 to Ex.C124 alongwith CD and closed the evidence.
4. On the other hand, to rebut the evidence of the complainant, Opposite Parties also tendered into evidence the documents Ex.OP1 to 4/1 to Ex.OP1 to 4/16 and affidavit of Sh.Rajiv Jain Ex.OP1 to 4/17 alongwith copies of documents Ex.OP1 to 4/18 to Ex.OP1 to 4/21 and closed the evidence on behalf of the Opposite Parties.
5. We have heard the ld.counsel for the parties, perused the written submissions of the complainant and also gone through the documents placed on record.
6. Ld.counsel for the complainant has reiterated the averments as narrated in the complaint and contended that first of all, the written version filed on behalf of Opposite Parties has not been filed by an authorized person. Therefore, the written version so filed is not maintainable. The complainants purchased family insurance policy bearing No.P/1611 14/1/2016/008524 from the Opposite Parties on 31.12.2015 and as per the policy, it covered Health Insurance of 4 persons namely Ashwani Kumar, Sushma Rani, Pranshu and Rizul. Further alleges that complainant Rizul born as a pre-mature baby nearby 8 ½ months after pregnancy (250 days) and as per the medical science, mature baby birth is considered when a baby take birth on or after 260 days from the date of conception. However, the birth of Rizul was normal one and no complication was ever faced by child or his mother and at later sage, due to his weak hearing capacity; he was given a hearing aid machine when he was about 3 ½ years old. Moreover, the Opposite Parties did not ask for relevant papers regarding the hearing aid and pre-mature birth of Rizul nor any medical test was ever conducted by the Opposite Parties in the beginning till date. In the year 2015 when Rizul was about 16 years old, the complainant No.1 purchased the above mentioned policy and the said policy form was in English and was filled by Opposite Party No.4 Vikas Garg in his own writing as the complainant No.1 is matriculate pass only and is unable to understand English. Further alleges that said insurance policy of Rizul was being renewed till 2018 and during the period of last months of 2017 and in the starting month of 2018, Rizul started feeling very weak and started facing certain health issues and the complainant No.1 approached Dr.Sandeep Puri, DMC Hospital Ludhiana on 11th January, 2018 who advised him to conduct blood tests in writing which were conducted immediately. On 16th January, 2018, it was came to notice that said Rizul was having kidney problem and he was admitted in hospital on 17th January, 2018 for treatment and at that time, on consultation with different hospitals, they advised transplant of kidney and finally a kidney was taken from mother of Rizul and was transplanted on 09.03.2018 in Max Hospital, Mohali. The complainant further alleges that at the time of purchasing the policy, the Opposite Parties never issued any terms and conditions of the policy document nor any question was ever asked regarding premature birth of a child at the time of filling the proposal form. Thereafter, after treatment, the complainants lodged claim with the Opposite Parties for the reimbursement of their medical bills, but the Opposite Parties refused to pay the claimed amount vide letter dated 23.04.2018 on the ground of non disclosure of birth of pre-mature baby and sensory hearing problems. As such, there is deficiency in service on the part of the Opposite Parties.
7. On the other hand, ld.counsel for the Opposite Parties has repelled the aforesaid contention of the ld.counsel for the complainant on the ground that first of all, the intricate questions of law and facts are involved in the present complaint which require voluminous documents and evidence for determination which is not possible in the summary procedure under the Consumer Protection Act, and the appropriate remedy, if any, lies only in the Civil Court. The complainant has concealed the fact that The Insured availed Star Comprehensive Insurance Covering Ashwani Kumar-self and Sushma Rani Spouse, Pranshu and Rizul son vide policy No. P/211222/01/2018001247 for the period 31.12.2017 to 02.06.2018 for Rizul and the policy with regard to other persons was valid upto 31.12.2018 as the policy for Rizul was cancelled vide letter dated 23.04.2018. 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 and the complainant has accepted the policy agreeing and being fully aware of such terms and conditions and executed the proposal form. The insured Rizul was hospitalized in Dayanand Medical College and Hospital (DMC) Ludhiana (M.Corp) on 17.01.2018 and discharged on 23.01.2018 towards the treatment of CKD 5(D)B/L/SNHL/Secondary Hyperarathryroism. Thereafter, the insured submitted the claim for reimbursement of medical expenses for the treatment of Rs.98,362/- and on scrutiny it is observed that as per ICP, the insured patient is a child born pre-maturely with bilateral sensory hearing loss from 3 years of age and speech difficulty. At the time of inception of policy the insured have not disclosed the above mentioned medical history/ health details of the insured person which amounts to misrepresentation/ non-disclosure of material facts. Hence the claim of the complainant was rejected and the same was informed to the insured vide letter dated 20.04.2018 and as per the conditions No.12, the policy is liable to be cancelled, since the insured has not disclosed the material facts in the proposal form and thus the policy of Rizul was cancelled vide letter dated 23.04.2018 and the different in premium was refunded by way of demand draft dated 25.05.2018 for an amount of Rs. 3126/-. The insured was suffering from PED since birth and the same was not disclosed at the time of inception of the policy, so the Opposite Parties are not liable to make any payment in respect of expenses for treatment of the pre-existing disease/ condition, since the date of commencement of first year policy with the company on 31.12.2015, hence there is no deficiency in service on the part of the Opposite Parties.
8. Perusal of the contention of the ld.counsel for the complainant shows that the written version filed on behalf of Opposite Parties has not been filed by an authorized person. Therefore, the written version so filed is not maintainable. The Opposite Party is limited Company and written version has been filed on the basis of special power of attorney given to ld.counsel for the Opposite Party. In this regard, Hon’ble Supreme Court of India in a judgment (2011)II Supreme Court Cases 524 titled as “State Bank of Travancore Vs. Kingston Computers India Pvt. Ltd.” and in para no.11 of the judgment, has held that
“the plaint was not instituted by an authorized person. On the plea that one authority letter dated 02.01.2003 was issued by Sh. R.K.Shukla in favour of Sh. A.K.Shukla. Further plaint failed to place on record its memorandum/articles to show that Sh. R.k.Shukla has been vested with the powers or had been given a general power of attorney on behalf of the Company to sign, verify and institute the suit on behalf of the Company.”
Similar proposition came before the Hon’ble Delhi High Court in “Nibro Ltd. Vs. National Insurance Co. Ltd.”, 2 (2005) 5SCC 30 that the
“bear authority is not recognized under law and ultimately, it was held that the plaint was not instituted by an authorized person. Here also appellant has not placed on record any resolution passed by any Board of Director in favour of Mr. Soonwon Kwon and that he was further authorised to delegate his power in favour of any other person. Further there is no memorandum/articles of the Company to show that Mr. Soonwon Kwon is one of the Director of the Company. In the absence of that evidence on record we cannot say that the special power of attorney given by Director Soonwon Kwon is a competent power of attorney issued in favour of Sh. Bhupinder Singh. In the absence of any resolution of the Company or any memorandum/articles of the Company to show that Sh. Soonwon Kwon is Director and that he was further authorised to issue power of attorney in favour of Sh. Bhupinder Singh.”
Recently our own Hon’ble State Commission, Punjab Chandigarh in FAO No.1235 of 2015 decided on 25.01.2017 in case titled as L.G.Electronics India Private Limited Vs. Sita Ram Chaudhary also held that the plaint instituted by an unauthorized person has no legal effect.
9. For the sake of arguments, for the time being, if the written reply filed by Opposite Party No.2 to 4 is presumed to be correct, the next plea raised by Opposite Parties is that the intricate questions of law and facts are involved in the present complaint which require voluminous documents and evidence for determination which is not possible in the summary procedure under the Consumer Protection Act and appropriate remedy, if any, lies only in the Civil Court and this District Consumer Commission has no jurisdiction to try and decide the present complaint. So far as the objection that complicated question of the fact is involved as such the Insured be relegated to go before Civil Court, is concerned, The Consumer Protection Act, 1986 (as amended upto date) (hereinafter referred to as the Act) was enacted with object to provide for better protection of the interests of the consumers and for that purpose, to make provision for the establishment of consumer council and other authorities for settlement of consumer disputes and other matter connected therewith. Section 13 (4) (as amended upto date) confers same powers upon the authorities under the Act, which are vested in Civil Court under Code of Civil Procedure, 1908, while trying a suit in respect of (i) The summoning and enforcing the attendance of any defendant or witness and examining the witness on oath, (ii) the discovery and production of any document or other material object producible as evidence, (iii) the reception of evidence on affidavits, (iv) the requisitioning of the report of the concerned analysis or test the appropriate laboratory or from other relevant source, (v) issuing of any commission for the examination of any witness and (vi) any other matter which may be prescribed. The authorities are conferred jurisdiction to decide the issue of “unfair trade practice” which has been defined under Section 2 (r) (as amended upto date) of the Act. This definition is similar to the definition of “fraud” as given under Section 17 of Indian Contract Act, 1872. From these provisions it is clear that this Commission can hold a full trail as held by civil court or adopt summary procedure for decision of any complaint. Under the Act, although the jurisdiction of the authorities is limited to consumer complaint, but while deciding such complaint no limit has been fixed for adjudicating of the dispute. Three Judges Bench of Supreme Court in Dr. J.J. Merchant Vs. Shrinath Chaturvedi, (2002) 6 SCC 635, (paragraph-7) held that the object and purpose of the Act is to render simple, inexpensive and speedy remedy to the consumer with complaint against defective goods and deficient services and the benevolent piece of legislation, intended to protect a large body of consumer from exploitation. Consumer Forum is an alternate Forum, established under the Act, to discharge the function of Civil Court. Under the Act, the consumers are provided with an alternative efficacious and speedy remedy. As such the Consumer Forum is an alternative forum established under the Act to discharge the functions of Civil Court. Therefore, delay in disposal of the complaint would not be a ground for rejecting the complaint and directing the complainant to approach the Civil Court. The argument that the complicated question of fact cannot be decided by the Forum, has been specifically rejected (In paragraph-12). Similar view has been taken in Amar Jwala Paper Mills Vs. State Bank of India, (1998) 8 SCC 387, CCI Chambers Coop. Hsg. Society Ltd. Development Credit Bank Ltd. (2003) 7 SCC 233. Recently, Hon’ble National Commission, New Delhi in CC No. 101 of 2009 titled as mahalaxmi Dyes & Chemicals Ltd. Vs. New India Assurance Company Limited decided on 07.09.2021 also held so. Hence, this District Consumer Commission is not convinced with the aforesaid contention of the ld.counsel for the Opposite Parties.
10. The next plea raised by Opposite Parties is that the complainant has violated the terms and conditions of the policy in question and as per the terms and conditions of the policy, the complainant is not entitled to the claim as claimed. But the Opposite Party could not produce any evidence to prove that terms and conditions of the policy were ever supplied to the complainant insured, when and through which mode? It has been held by Hon’ble National Commission, New Delhi in case titled as The Oriental Insurance Company Limited Vs. Satpal Singh & Others 2014(2) CLT page 305 that the insured is not bound by the terms and conditions of the insurance policy unless it is proved that policy was supplied to the insured by the insurance company. Onus to prove that terms and conditions of the policy were supplied to the insured lies upon the insurance company. From the perusal of the entire evidence produced on record by the Opposite Party, it is clear that Opposite Party has failed to prove on record that they did supply the terms and conditions of the policy to the complainant insured. As such, these terms and conditions, particularly the exclusion clause of the policy is not binding upon the insured. Reliance in this connection can be had on Modern Insulators Ltd.Vs. Oriental Insurance Company Limited (2000) 2 SCC 734, wherein it is held that “In view of the above settled position of law, we are of the opinion that the view expressed by the National Commission is not correct. As the above terms and conditions of the standard policy wherein the exclusion clause was included, were neither a part of the contract of insurance nor disclosed to the appellant, the respondent can not claim the benefit of the said exclusion clause. Therefore, the finding of the National Commission is untenable in law.” Our own Hon’ble State Commission, Punjab, Chandigarh in First Appeal No.871 of 2014 decided on 03.02.2017 in case titled as Veena Mahajan (Widow) and others Vs. Aegon Religare Life Insurance Company Limited in para No.5 has held that
“Counsel for the appellant argued that copy of insurance policy was not supplied to the appellant and hence, the exclusion clause in the contract of the insurance policy is not binding upon him. He further argued that no proof of sending of insurance policy was ever produced by the respondent despite specific contention raised by the complainant that the insurance policy was never received by him. He argued that though there is an averment of the OP that the policy in question was delivered through Blue Dart Courier to the complainant. In order to prove their contention, no affidavit of any employee of Blue Dart was produced who would have made a statement to have the effect that the policy was delivered to the complainant nor any acknowledgement slip for having received the article by the complainant through courier company was produced by the insurance company. He argued that since no policy document was received by the insured and argued that the terms and conditions as alleged to be part of the insurance policy were not binding upon the insured. He argued that policy was issued in the name of deceased Sh.Vijinder Pal Mahajan with his wife Mrs.Veena Mahajan as beneficiary and the same was never refused by the OP and the proper premium for insurance was paid by late complainant. He argued that as per the specific allegations made in the complaint in para No.4, no rebuttal to that contention was specifically there in their written reply in para No.2 and para No.4 in the reply filed by OP in the District Forum. He argued that Hon'ble National Consumer Disputes Redressal Commission, New Delhi in case of "Ashok Sharma Vs. National Insurance Co. Limited", in Revision Petition No. 2708 of 2013 held in para No.8 to the point of non-delivery of terms and conditions of the policy. He also cited Hon'ble Supreme Court's decision given in the matter of "United India Insurance Co. Limited Vs. M.K.J.Corporation" in Appeal (civil) 6075-6076 of 1995 (1996) 6 SCC 428 wherein the Apex court held that a fundamental principle of Insurance Law makes it that utmost good faith must be observed by the contracting parties. Good faith forbids either party from concealing what he privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary. Just as the insured has a duty to disclose, "similarly, it is the duty of the insurers and their agents to disclose all material facts within their knowledge, since obligation of good faith applies to them equally with the assured and further argued that since the terms and conditions were not supplied even on repeated requests the same cannot be relied upon by the opposite party in order to report to repudiate the genuine claim of the wife of the deceased policy holder.”
11. It is not disputed that Insured availed Star Comprehensive Insurance Covering Ashwani Kumar-self and Sushma Rani Spouse, Pranshu and Rizul son vide policy No. P/211222/01/2018001247 for the period 31.12.2017 to 02.06.2018 for Rizul and the policy with regard to other persons was valid upto 31.12.2018 as the policy for Rizul was cancelled vide letter dated 23.04.2018. Perusal of the record shows as and when the Opposite Parties have come to know that in the starting month of 2018, Rizul started feeling very weak and started facing certain health issues and the complainant No.1 approached Dr.Sandeep Puri, DMC Hospital Ludhiana on 11th January, 2018 who advised him to conduct blood tests in writing which were conducted immediately. On 16th January, 2018, it was came to notice that said Rizul was having kidney problem and he was admitted in hospital on 17th January, 2018 for treatment and at that time, on consultation with different hospitals, they advised transplant of kidney and finally a kidney was taken from mother of Rizul and was transplanted on 09.03.2018 in Max Hospital, Mohali, then the Opposite Parties intentionally and knowingly to avoid their legal liability to pay the hospital charges have cancelled the policy vide letter dated 23.04.2018 and the different in premium was refunded by way of demand draft dated 25.05.2018 for an amount of Rs. 3126/-, which is totally wrong and illegal and is the violation of the terms of the policy as well as IRDA rules. Hence, we do not agree with the aforesaid contention of the ld.counsel for the Opposite Party.
12. In such a situation the repudiation made by the Opposite Party 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 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 are of the opinion that the Opposite Party-Insurance Company have wrongly and illegally repudiated the claim of the complainant. Consequently, we partly allow the complaint and the Opposite Party-Insurance Company is directed to reimburse the medical expenses for the treatment of Rs.98,362/- (Rupees ninety eight thousands three hundred and sixty two only) within 45 days from the date of receipt of copy of this order, failing which the Opposite Parties shall be liable to pay the awarded amount alongwith interest @ 8% per annum from the date of filing the complaint i.e. 17.12.2018 till its actual realisation. Keeping in view the peculiar circumstances of the case, the parties are left to bear their own costs. Copies of the order be supplied to the parties free of cost. File be consigned to record room after compliance.
14. Reason for delay in deciding the complaint.
This complaint could not be decided within the prescribed period because the government has not appointed any of the Whole Time Member in this Commission for about 3 years i.e. w.e.f. 15.09.2018 till 27.08.2021 as well as due to pandemic of COVID-19.
Announced in Open Commission.
Dated: 30.11.2021.
