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 on the persuasion of the agent of the Opposite Parties-Insurance Company, the complainants purchased the first policy in the month of April, 2017 valid for the period w.e.f. 17.04.2017 to 16.04.2018 from the Opposite Parties-Insurance Company and at that time, the company has got completed all the formalities and medical check up through their expert doctors and the medical of the complainants by the expert physician/ doctor was found OK and the complainants were found in perfect and fit condition in all respects. Further alleges that with the grace of god, the complainants have got no health issue in the intermediate period of the policy and thus no claim was lodged with the Opposite Parties-Insurance Company for the intermediated effective period of the policy. Again in continuation of the earlier policy, the complainants purchased another policy bearing No.P/211222/01/2018/000045 and there is no break down of even a single day in between both the polices to take the best usage and benefits of the policy and the complainants on their persuasion did the same and purchased the same with policy No.P/211222/01/ 2019/000105 with a customer code AA0004986125 and no claim bonus of previous policy and has enhanced the coverage limit from Rs.5,00,000/- to 6,25,000/- by giving the recharge benefit to the complainants in the above said previous policies. The complainant suffered with pain in her knees when she came back from Canada and on 19.04.2019 she got it consulted with the doctors at Fortis Hospital and the complainant No.2 has gone through various medical tests and in this regard, the Opposite Parties were duly informed and on the advice of Opposite Parties, the complainant No.2 got admitted in Fortis Hospial Mohali on 03.05.2019 and after treatment, she was discharged on 10.05.2019. After discharge, the complainants lodged the claim with the Opposite Parties, but the Opposite Parties rejected the claim of the complainants vide letter dated 25.05.2019. 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 release the amount of claim amounting to Rs.3,21,000/- alongwith future interest @ 18% per annum from the date of lodging the complaint and also to pay Rs.11,000/- on account of legal fee, Rs.5000/- as clerical fee etc and Rs.50,000/- on account of compensation due to mental tension and harassment caused by the complainant.
b) 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. The complainant has concealed the fact regarding the past health history from the first year of policy inception. The complainant has availed Family Health Optima Insurance Plan Policy No.P/211222/01/2020/000037 for the period 17.04.2017 to 16.04.2018. 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 alongwith the policy schedule. The claim is reported in the 3rd year of the policy vide claim No.CLI/2020/211222/0041600. As per the pre authorisation, the patient Harjinder Kaur was diagnosed with Osteoarthritis for both knees and raised the pre authorisation request for cashless treatment and the same was denied vide letter dated 22.04.2019 stating that the insured patent was diagnosed of Osteoarthritis Knee and on scrutiny of the documents it is observed that the x-ray bilateral knee dated 19.04.2019 shows osteoarthritis changes in the form of periarticular osteophytes, loss of joint space and joint surface sclerosis. Based on these findings, the medical team of Opposite Parties of the opinion that the insured patient has chronic, longstanding disease, existing problem prior to inception of the first medical insurance policy, hence it is a pre existing disease and the claim was repudiated and communicated vide letter dated 25.05.2019. On merits, Opposite Parties-Insurance Company took up the same and similar pleas as taken up by them in the preliminary objections. Hence, Opposite Parties-Insurance Company have rightly repudiated the claim of the complainant after application of mind and the complaint may be dismissed with costs.
3. In order to prove their case, the complainant have tendered into evidence affidavit Ex.CW1/A of Harjinder Kaur, complainant No.2 alongwith copies of documents Ex.C1 to Ex.C9 and closed the evidence on behalf of the complainants.
4. On the other hand, to rebut the evidence of the complainant, Opposite Parties-Insurance Company also tendered into evidence the copies of documents Ex.Ops1 to Ex.Ops14 and affidavit of Sh.Rajiv Jain, Chief Manager Ex.Ops15 and closed the evidence.
5. We have heard the ld.counsel for the parties and also gone through the documents placed on record.
6. Ld.counsel for the Complainant has mainly reiterated the facts as narrated in the complaint and contended that at the time of issuance of the first policy in favour of the complainants, no term and conditions were ever explained or supplied by Opposite Parties to the complainant. Further contended that the complainants purchased the first policy in the month of April, 2017 valid for the period w.e.f. 17.04.2017 to 16.04.2018 from the Opposite Parties-Insurance Company and at that time, the company has got completed all the formalities and medical check up through their expert doctors and the medical of the complainants by the expert physician/ doctor was found OK and the complainants were found in perfect and fit condition in all respects. Further contended that with the grace of god, the complainants have got no health issue in the intermediate period of the policy and thus no claim was lodged with the Opposite Parties-Insurance Company for the intermediated effective period of the policy. Again in continuation of the earlier policy, the complainants purchased another policy bearing No.P/211222/01/2018/000045 and there is no break down of even a single day in between both the polices to take the best usage and benefits of the policy and the complainants on their persuasion did the same and purchased the same with policy No.P/211222/01/2019/000105 with a customer code AA0004986125 and no claim bonus of previous policy and has enhanced the coverage limit from Rs.5,00,000/- to 6,25,000/- by giving the recharge benefit to the complainants in the above said previous policies. The complainant suffered with pain in her knees when she came back from Canada and on 19.04.2019 she got it consulted with the doctors at Fortis Hospital and the complainant No.2 has gone through various medical tests and in this regard, the Opposite Parties were duly informed and on the advice of Opposite Parties, the complainant No.2 got admitted in Fortis Hospial Mohali on 03.05.2019 and after treatment, she was discharged on 10.05.2019. After discharge, the complainants lodged the claim with the Opposite Parties, but the Opposite Parties rejected the claim of the complainants vide letter dated 25.05.2019.
7. On the other hand, ld.counsel for the Opposite Parties repelled the aforesaid contention of the ld.counsel for the complainant on the ground that the complainant has concealed the fact regarding the past health history from the first year of policy inception. The complainant has availed Family Health Optima Insurance Plan Policy No.P/211222/01/2020/000037 for the period 17.04.2017 to 16.04.2018. 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 alongwith the policy schedule. The claim is reported in the 3rd year of the policy vide claim No.CLI/2020/211222/0041600. As per the pre authorisation, the patient Harjinder Kaur was diagnosed with Osteoarthritis for both knees and raised the pre authorisation request for cashless treatment and the same was denied vide letter dated 22.04.2019 stating that the insured patent was diagnosed of Osteoarthritis Knee and on scrutiny of the documents it is observed that the x-ray bilateral knee dated 19.04.2019 shows osteoarthritis changes in the form of periarticular osteophytes, loss of joint space and joint surface sclerosis. Based on these findings, the medical team of Opposite Parties of the opinion that the insured patient has chronic, longstanding disease, existing problem prior to inception of the first medical insurance policy, hence it is a pre existing disease and the claim was repudiated and communicated vide letter dated 25.05.2019.
8. We have perused the rival contentions of both the parties. The main 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.”
- The next point for adjudication vehemently contended before us by Opposite Parties is that the claim is reported in the 3rd year of the policy vide claim No.CLI/2020/211222/0041600. As per the pre authorisation, the patient Harjinder Kaur was diagnosed with Osteoarthritis for both knees and raised the pre authorisation request for cashless treatment and the same was denied vide letter dated 22.04.2019 stating that the insured patent was diagnosed of Osteoarthritis Knee and on scrutiny of the documents it is observed that the x-ray bilateral knee dated 19.04.2019 shows osteoarthritis changes in the form of periarticular osteophytes, loss of joint space and joint surface sclerosis. Based on these findings, the medical team of Opposite Parties of the opinion that the insured patient has chronic, longstanding disease, existing problem prior to inception of the first medical insurance policy, hence it is a pre existing disease and the claim was repudiated. On the other hand, the complainants have specifically contended that they purchased the first policy in the month of April, 2017 valid for the period w.e.f. 17.04.2017 to 16.04.2018 from the Opposite Parties-Insurance Company and at that time, the company has got completed all the formalities and medical check up through their expert doctors and the medical of the complainants by the expert physician/ doctor was found OK and the complainants were found in perfect and fit condition in all respects and this averment has nowhere denied by the Opposite Parties by filing any cogent and convincing evidence on the record. Moreover, 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. 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 the complainant no.2 was suffering from above pre-existing disease before taking the policy and she 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 insured was suffering from any disease before she took the insurance policy and she willfully suppressed this fact fraudulently from the Opposite Parties. Moreover, if the insured 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.”
10. Furthermore, as per the policy schedule, at the time of obtaining the first policy, complainant no.2 harjinder Kaur was 53 years old ( with date of birth as 15.04.1965) (meaning thereby which is more than 45 years, so it was the bounden duty of the Opposite Parties-Insurance Company to get the proposed insured medically examined before issuing the policy in his/ her 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 party 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.
11. 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.
12. 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 insured complainant No.2 was suffering from any pre-existing ailment of knee problem 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.
13. 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.
14. In view of the above discussion, we hold that the Opposite Party-Insurance Company have wrongly and illegally rejected the claim of the complainant.
15. In view of the aforesaid facts and circumstances of the case, we allow the complaint of the Complainant and direct Opposite Parties-Insurance Company to make the insurance claim of Rs.3,21,000/- (Rupees three lakh twenty one thousands only) as per bill Ex.C7 issued by Fortis Hospital, Mohali to the complainant alongwith interest @ 8% per annum from the date of filing the complaint i.e. 19.06.2019 till its realization. Opposite Parties-Insurance Company is also directed to pay compensation to the complainants for causing mental tension and harassment to the tune of Rs.10,000/- (Ten thousands only). The compliance of this order be made by Opposite Parties-Insurance Company within 45 days from the date of receipt of this order, failing which the complainants 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.
16. Reason for delay in deciding the complaint.
This complaint could not be decided within the prescribed period because the State Government has not appointed any of the Whole Time Members 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:30.03.2022.
