PER:

Charanjit Singh, President;

1        The present complaint has been received from the District Consumer Disputes Redressal Commission Amritsar by the order of the Hon’ble State Consumer Disputes Redressal Commission Punjab, Chandigarh for its disposal.

2        The complainants have filed the present complaint by invoking the provisions of Consumer Protection Act under Section 12 and 13 against the opposite party on the allegations that the deceased Sh. Kewal Krishan Arora got health insurance mediclaim insurance for himself from opposite party covering the risk period from 5.8.2016 to 4.8.2017  and the legal heirs of deceased are consumers of the opposite party.  Kewal Krishan Aroa unfortunately fell ill and was to be hospitalized at Carewell Heart & Super Specialty Hospital, Amritsar from 26.8.2016 till 9.9.2016 and the treatment cost of the said hospitalization came to Rs. 3,14,912/-  The opposite party was immediately informed about the said hospitalization and the treatment to be taken thereof as the said policy was issued on cashless basis and the sum insured for the medical benefit is for Rs. 2 Lacs. The opposite party instead of making the said payment repudiated the genuine claim of the complainant on the frivolous grounds vide their repudiation letter dated 27.1.2017 that the deceased was having preexisting disease and suppressed the said fact which infact was totally wrong and against the true facts as the opposite party was well aware of all the facts regarding the health condition of the said deceased. The complainant has prayed the following reliefs against the opposite party.

(a)     The opposite party be directed to pay the amount of Rs. 2 Lakh alongwith interest @ 12% from 27.1.2017 till realization.

(b)     The  opposite party be directed to pay the compensation of Rs. 50,000/- to the complainant. 

(c)      The opposite party be directed to pay the adequate cost of the litigation.

3        After formal admission of the complaint, notice was issued to Opposite party and opposite party appeared through counsel and filed written version and contested the complaint by inter-alia pleadings that the complainant availed the Senior Citizens Red Carpet Insurance Policy covering Mr. Kewal Krishan Arora- Self for the sum insured of Rs. 2,00,000/- vide Policy Nos.

-P/211111/01/2014/ 001224-05/AUG/2013 to 04/AUG/2014

- P/211111/01/2015/ 001449-05/AUG/2014 to 04/AUG/2015

- P/211111/01/2016/ 002033-05/AUG/2015 to 04/AUG/2016

- P/211111/01/2017/ 002596-05/AUG/2016 to 04/AUG/2017

The Uniqueness of Senior Citizen Policy

-        Co. Pay       :         A portion of every admissible claim is borne by the policy holder. Declared pre existing disease cover at 50% Co-payment and other illness (Non-PED’s) covered at 30% co payment

-        Sub limit     :         Total liability is restricted to a specified amount for certain identified illness during the policy period.

-        Age at entry:        60 years to 74 years.

-        Renewability:       Up to life time

The preamble of the policy clearly states the proposal, declaration and other documents, if any given by the proposer form the basis of the policy of insurance “Subject to terms, conditions, exclusions and definitions contained therein or endorsed or otherwise expressed hereon, the company undertakes if the insured person shall contract any disease and suffer from any illness or sustain any bodily injury through accident and if such disease or injury shall require the insured person, upon the advise of the duly qualified Physician/Medical Specialist/ Medical Practitioner or duly qualified Surgeon to incur Hospitalization expenses for medical / surgical treatment at any Nursing Home/ Hospital in India as therein defined as an in patient the company will pay to the insured person the amount of such expenses as are responsible and necessary incurred in respect by or on behalf of the insured person up to the limits indicated.  The company’s liability in respect of all claims admitted during the period of insurance shall not exceed the sum insured per family mentioned in the schedule. 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. In the face of the schedule, it is clearly mentioned that the insurance under this policy is subject to conditions, clauses, warranties, exclusion etc. attached.  The complainant was admitted in Carewell Heart and Super Specialty Hospital Amritsar on 26.8.2016 for the treatment of HTN/Acute with CRF/ Type 2DM and submitted claim records for reimbursement of medical expenses. On scrutiny of the claim records, it is observed that

• As per Discharge Summary, the complainant was admitted on 26.8.2016 and discharged on 9.9.2016 and diagnosed as ACUTE ON CRF T2DM WITH HTN URAEMIC CARDIOMYOPATHY WITH ENCEPIIALOPATHY.
•  The declaration letter dated 26.10.2016 from the son of the insured patient furnished during the verification of the claim vide claim No. CLI/2017/211111/0064543 states that the insured patient had history of surgery done for gangrene foot in the year 2009 and he was suffering from diabetes mellitus for 6 months prior to this surgery and also underwent Gall Bladder surgery in 2006-07 which are prior to inception of the medical insurance policy and hence it is a pre exiting disease. 

In the inpatient history and physical record of Nayyar Heart Institute and Super Specialty Hospital submitted vide claim No. CLI/2017/211111/0064543, the duration of diabetes mellitus is tampered and altered to read 4 to 5 moths which is not acceptable. From the above findings it is observed that there is misrepresentation of material facts. As per available records, the complainant had diabetes mellitus prior to policy inception which was not disclosed. The present admission and treatment of the insured patient was for the non disclosed preexisting diabetes and its complication. At the time of inception of the policy which is from 5.8.2013 to 4.8.2014 the above mentioned medical history/ health details of the insured person were not disclosed in the proposal form which amounts to misrepresentation/ nondisclosure of material facts.  As per condition No. 9 of the policy, if there is any misrepresentation/ non disclosure of material facts whether by the insured person or any other person acting on his behalf, the company is not liable to make any payment in respect of any claim. Hence the claim was repudiated and the same was communicated to the insured vide letter dated 27.1.2017. The complainant has concealed the material facts from this commission and has not come with clean hands. Therefore, he is not entitled for any claim. In this case, the insured was suffering from pre existing disease which was not disclosed in the proposal form and the insured also misrepresented the opposite party. The complainant has violated the terms and conditions of the policy, therefore, he is not liable for any compensation. The complainant is estopped by his own act and conduct from filing the present complaint as the complaint has been filed without any cause of action.  The complainant has no locus standi to file the present complaint. As per documents and information provided, the insured was suffering from pre-existing disease which was not disclosed in the proposal form and the insured also misrepresented the opposite party. During the verification, declaration letter dated 26.10.2016 was given by son of insured, he stated therein the insured has history of surgery performed for gangrene foot in the year 2009 and he was suffering form diabetes mellitus from six months prior to the surgery which is prior to inception of medical insurance policy, this fact was not disclosed in the proposal form, therefore, the complainant is not entitled for any claim. The patient history and physical record of Nayyar Heart Institute and Super Specialty Hospital was provided, the during of diabetes mellitus has been tampered and altered to read 4-5 months, whereby the insured provided the false and fabricated documents thereby misrepresent the material fact. As per available record, the insured has diabetes mellitus prior to policy inception and the same was cancelled and the present admission and treatment of insured patient was for the known disclosed pre existing diabetes and its complications, therefore, the claim is not payable as per the terms and conditions of the policy. At the time of inception of policy from 5.8.2013 to 4.8.2014 the proposal form was filled by the insured but he did not disclose therein regarding his medial history/ health detail, which amounts to representation and non disclosure of material facts, therefore, as per condition No. 9 of the policy, if there is any misrepresentation/ non disclosure of the material facts, whether by the insured person or any other person acting on his behalf, the company is not liable to make any claim, therefore, the present complaint has been rightly repudiated. So far as the admission of the insured from 26.8.2016 till 9.9.2016 and expenditure of Rs. 3,14,912/- is concerned that is a matter of record. The claim has been repudiated on the grounds mentioned in the repudiation letter. The opposite party has denied the other content of the complaint and prayed for dismissal of the same.

4        To prove his case, the complainant has placed on record affidavit of complainant Ex. C-1, copy of insurance cover Ex. C-2, copy of claim form Ex. C-3, copy of discharge summary Ex. C-4, copy of death certificate Ex. C-5, copy of repudiation letter Ex. C-6, coy of medical bills Ex. C-7 and closed the evidence.  On the other hands, Ld. counsel for the opposite party tendered in evidence affidavit of Sh. P.C. Tripathi Ex. OP-1, copy of the policy for the period 5.8.2016 to 4.8.2017 Ex. OP-2, Copy of policy for the period 5.8.2015 to 4.8.2016 Ex. OP-3, Copy of policy for the period 5.8.2014 to 4.8.2015 Ex. OP-4, copy of policy for the period 5.8.2013 to 4.8.2014 Ex. OP-5, Copy of terms and conditions Ex. OP-6, Copy of Proposal form Ex. OP-7, Copy of treatment record of Nayyar Hospital Ex. OP-8, copy of the claim form Ex. OP-9, copy of the discharge summary Ex. OP-10, copy of repudiation letter dated 27.1.2017 Ex. OP-11, copy of the claim form Ex. OP-12, copy of discharge summary Ex. OP-13, copy of the repudiation letter dated 7.11.2016 Ex. OP-14, affidavit of Sh. A.K. Sharma Ex. OP-15, copy of investigation report Ex. OP-16, copy of statement of Deepak Arora Ex. OP-17, copy of claim assessment Ex. OP- 18.

5        We have heard the Ld. counsel for the parties and have carefully gone through the record.

6        The opposite party has denied the claim of the complainant vide repudiation letter Ex. C-6 and operative Para of the repudiation letter is reproduced as follows:-

“It is observed from the declaration letter dated 26.10.2016 from the son of the insured patient furnished during the verification of the claim that the insured patient had history of surgery done for gangrene foot in the year 2009 and he was suffering from diabetes mellitus for 6 months prior to this surgery which is prior to inception of the medical insurance policy and hence it is a preexisting disease. In the inpatient history and physical record of Nayyar Heart Institute and Super Specialty Hospital, the duration of diabetes mellitus is tampered and altered to read 4 to 5 months which is not acceptable. Thus, there is misrepresentation of material facts. As per available record, the insured patient had diabetes mellitus prior to policy inception which was not disclosed. The present admission and treatment of the insured patient was for the non disclosed pre existing diabetes and its complications.

At the time of inception of policy which is from 5.8.2013 to 4.8.2014, the above mentioned medical history/ health details of the insured person were not disclosed in the proposal form which amounts to misrepresentation/ non disclosure of material facts.

As per condition No. 9 of the policy issued to you, if there is any misrepresentation/ nondisclosure of material facts whether by the insured person or any other person acting on his behalf, the company is not liable to make any payment in respect of any claim.”

The opposite party has rejected the claim of the complainants on the ground that Kewal Krishan Arora predecessor of complainants i.e. insured was suffering from diabetes mellitus and he has tampered the duration of diabetes mellitus and has not disclosed regarding the same due to which as per terms and conditions of the policy, the claim of the complainant has been repudiated vide ibid repudiation letter. On the other hands, the case of the complainant is that Sh. Kewal Krishan Arora got health insurance mediclaim insurance for himself from opposite party covering the risk period from 5.8.2016 to 4.8.2017 .  Kewal Krishan Aroa fell ill during the currency of policy period and was to be hospitalized at Carewell Heart & Super Specialty Hospital, Amritsar from 26.8.2016 till 9.9.2016. The treatment cost of the said hospitalization came to Rs. 3,14,912/-.  The complainants prayed that an amount of Rs. 2,00,000/- be given to the complainants because as per policy treatment for Rs. 2,00,000/- was covered. This fact is not disputed by the opposite party in their written version. Now to coming on the point that the disease is not a material disease, therefore, non disclosure thereof is not a concealment. We draw support from Life Insurance Corporation of India Vs. Sushma Sharma from II (2008) CPJ 213 wherein Hon'ble State Commission has held as under:-

“So far as hypertension and diabetes is concerned, no doubt, it is a disease but it is not a material disease. In these days of fast life, majority of the people suffer from hypertension. It may be only the labour class who work manually and take the food without caring for its calories that they do not suffer from hypertension or diabetes. Out of the literate and educated people particularly who have the white collar jobs, majority of them suffer from hypertension or diabetes or both. If the Life Insurance Companies are so sensitive that they consider hypertension and diabetes as material diseases then they should wind up their business and stop accepting premium. If these diseases had been material Nand Lal insured would not have survived for 10 years after he started suffering from these medical problems. Like hypertension ,diabetes has also infected a majority of the Indian population but the people who suffer from diabetes and continue managing it under the medical advice, they survive for number of years and none of these diseases is fatal and as discussed above, if these diseases had been material deceased Nand Lal insured would not have survived for 10 years.”.

We further draw support from Life Insurance Corporation of India Vs. Sudha Jain II (2007) CPJ 452 wherein Hon'ble Delhi State Consumer Disputes Redressal Commission, New Delhi has held that maladies like diabetes, hypertensions being normal wear and tear of life, cannot be termed as concealment of pre-existing disease.

7        Not only this, the Opposite Party could not examine any medical practitioner/ doctor who has treated the life assured for diabetes nor the Opposite Party has filed any affidavit of any doctor who has medically treated the life assure for the disease prior to taking of the policy. It has been held by the Hon'ble National Commission in case New India Assurance Co.Ltd & Anr Vs. Murari Lal Bhusri 2011(III) CPJ 198 (NC) that where the Insurance company failed to produce any evidence to show that respondent was aware of any pre-existing disease at the time when insurance policy was taken, opposite party was not justified in repudiating the claim of the complainant on the ground of pre-existing disease. It has been held by the Hon'ble Supreme Court of India in case P.Vankat Naidu Vs. Life Insurance Corporation of India & Anr 2011(3) CPC 350 that where no cogent evidence was produced by the respondent to prove that insured/deceased had concealed any fact about his illness or hospitalization, it was held that no material fact was suppressed by the deceased in this respect. It has been held by the Hon'ble State Commission of Punjab in case Life Insurance Corporation of India Vs. Miss Veenu Babbar and another 2000(1) CLT 619 that repudiation on the basis of history recorded in the hospital records is illegal and arbitrary and the same could not be treated as substantive material to base any decision. Same view has been taken by the Hon'ble National Commission in case Life Insurance Corporation 16 of India & Ors. Vs. Kunari Devi IV(2008) CPJ 89 (NC) that where no document has been produced in support of allegation of suppression of disease at the time of taking policy or revival of policy, history recorded in hospital's bed ticket, not to be treated as evidence as doctor, recording history not examined, suppression of disease not proved, insurer was held liable under the policy. It has been held by Hon’ble State Consumer Disputes Redressal Commission, Chandigarh in case titled as Ashwani Gupta & Ors. Vs. United India Insurance Company Limited 2009(1) CPC page 561 that where the claim of the complainant has been repudiated on the ground that the assured had pre-existing disease of diabetes mellitus which was not disclosed- apparently, burden to prove lies upon the insurer- If assured was suffering from pre-existing disease why insurer had not checked it at the time when proposal form was accepted by its staff-Respondent has failed to fulfill this requirement before repudiating the claim and the appellant was held entitled to claim alongwith interest @ 9%. In the present case, the Opposite Party has simply relied upon the history of the life assured recorded at the time of his admission in the hospital. If the life assured was suffering from any diseases prior to issuance of the policy, in question, the same must not have escaped the notice of the empanelled doctors of the Insurance Company. However, no such investigation record has been produced by the opposite parties. In case Bajaj Allianz Life Insurance Co. Ltd. & Ors. Vs. Raj Kumar III (2014) CPJ 221 (NC), it was held by the Hon’ble National Commission that “usually, the authorized doctor of the Insurance Company examines the insured to assess the fitness and after complete satisfaction, the policy is issued. It was held that the Insurance Company wrongly repudiated the claim of the complainant.”

8        Furthermore,  as per the proposal form Ex.OP-7,  at the time of obtaining the policy, the insured has duly mentioned his age as 15.6.1949, 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 above-said law squarely covers the case of the complainant that it was the duty of the insurer to get medically examined while issuing the policy and once the policy was issued the insurer cannot take the plea of pre-existing disease of the insured.

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

10      In such a situation the repudiation made by 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.”

11      However the complainant has prayed for a sum of Rs. two Lacs but the complainant is entitled for only one Lac as per condition of co-pay. As per terms and conditions of Co-Pay. As per terms and conditoins of policy Co-Pay- A portiion of every admissible claim is born by the policy holder. As such, the complainant is entitled for one Lac only.

12      In light of the above discussion, the complaint succeeds and the same is hereby allowed with costs in favour of the complainants and against the Opposite Party . The opposite Party is directed to make the payment of Rs. 1,00,000/- to the complainants. The complainants have been harassed by the opposite party unnecessarily for a long time. The complainants are also entitled to Rs.8,000/-( Rs. Eight Thousand Only) as compensation on account of harassment and mental agony and Rs 7,000/- ( Rs. Seven Thousand only) as litigation expenses. The complainants are entitled to the awarded amount as follows:-

          Kailash Arora                          :         25%

          Pooja Sethi                              :         25%

          Deepak Arora                          :         25%

          Kaushal Arora                       :         25%

Opposite Party is directed to comply with the order within one month from the date of receipt of copy of the order, failing which the complainants are entitled to interest @ 9% per annum, on the awarded amount, from the date of complaint till its realisation.  Copy of order be supplied by the District Consumer Disputes Redressal Commission, Amritsar as per rules. File be sent back to the District Consumer Disputes Redressal Commission, Amritsar.

Announced in Open Commission

15.7..2022