By Smt. Beena. M, President (I/C):-

            This is a complaint filed under section 35 of the Consumer Protection Act 2019

2.  Facts of the case in brief:  The Complainant had taken Arogya Sanjeevani Policy with insurance coverage from 28.10.2022 to 27.10.2023 from the Opposite Party bearing No.181315/01/2023/005957. The complainant had policy No.181315/01/2022/005170 with the Opposite Party and renewed that policy by paying Rs.18,182/-. The Complainant was admitted to MIMS Hospital Kozhikode on 28.12.2022 due to sudden illness and the doctors said that the Complainant has suffered from stroke.  The Complainant has incurred more than Rs.1,60,000/- for treatment.   The Complainant has submitted medical records etc. to the Opposite Party for Insurance claim, but the opposite Party denied the insurance claim on the grounds that the Complainant had concealed the reason of his previous illness during the period from 28.10.2020 to 27.10.2021 when he applied for insurance.  According to the Complainant, he has no history of stroke or related ailments. The repudiation of insurance claim is deficiency in service.  Hence this complaint.

3.  Commission issued notice to the Opposite Party they received the notice and filed their version.

4.  The Opposite Party filed version in short is as follows:-

The Opposite Party admitted the Policy of the Complainant. 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 along with the Policy Schedule.

5.   It is submitted that the Proposal form is the basis of the insurance contract and on that basis the policy was issued. In this case, the Complainant has only disclosed that he was suffering from Diabetes Mellitus in the proposal form and hence the same was endorsed in the policy schedule as Pre-existing disease. The policy is issued strictly according to the terms and conditions only and it is a settled law that the parties to the insurance contract are bound by the terms and conditions of the policy issued.  Acceptance of proposal is based on the information/details given by the proposer.  Acceptance of risk is to be decided by the insurance company. If the health status of the proposer is found satisfactory based on the facts in the proposal, the insurer would accept the risk and issue policy. If the health status is not satisfactory, the insurer would decline the risk. If a proposer submits wrong information in the proposal to mislead the insurer to issue a policy, it is fraud (section 17 of the Indian Contract Act, 1872).

6. It is submitted that during the aforesaid policy period, the Complainant was admitted at Aster MIMS Hospital, Kozhikode on 28.12.2022 and was diagnosed with Acute Stroke-Left MCA territory infarct Etiology-Cardioembolic, Left CCA Occlusion-S/p DSA, Atrial fibrillation with CVR, Obstructive Airway Disease. After the treatment he was discharged on        03/01/2023. Thereafter, the Complainant had submitted discharge summary with bills and reports for the reimbursement of the medical expenses.

7.  It is submitted that as part of claim processing protocol, the Company had collected records from Aster MIMS Hospital, Kozhikode. As per the physicians record and the Anaesthesia record collected by the Opposite Party from the hospital, it is known that the Complainant has history of old Cerebrovascular Accident 3 years back, which is prior to the inception of policy and was not revealed in the proposal form at the time of disease in the proposal form, which is the basis of contract at the time of taking the policy, it amounts to suppression of material facts.  As per Condition No.10.1 of the policy issued to the Complainant, “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 Opposite Party had repudiated the claim vide letter dated 31/01/2023 and the same was informed to the Complainant. As per condition No.10.7 of the policy, 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 -cooperation of the insured by sending the Insured 30 days notice by registered letter at the Insured person's last known address. Hence as per the condition, a notice dated 05.01.2023 was issued to the Complainant and informed that the policy in the name of the Complainant was cancelled with effect from 14.02.2023. The Opposite Party submitted that In Satwant Kaur Sandhu v. New India Assurance Co. Ltd. (2009) 8 SCC 316, the Hon’ble Supreme Court has held that 'Material Fact’ is to be understood to mean as any fact which influence the judgment of prudent insurer, in deciding whether to accept the risk or not. If the proposer has the knowledge of such fact, he is obliged to disclose it particularly while answering questions in the proposal form. Any incorrect answer will entitle the insurer to repudiate their liability because there is a clear presumption that any information sought for in the proposal form is material of the purpose of entering into a contract of insurance, which is based on the principle of utmost good faith, Uberime Fides.

8.   The Hon’ble Supreme Court in Reliance Life Insurance Co. Ltd & ,Anr v. Rekhaben Naresh bhai Rathod reported in civil appeal No.4261 of 2019 dated 24/04/2019 observed that a contract of insurance is contract of uberima fides and there must be complete good faith on the part of the assured. The assured is thus under a solemn obligation to make full disclosure of material facts which may be relevant for the insurer to take into account while deciding whether the proposal should be accepted or not. While making a disclosure of the relevant facts, the duty of the insured to state them correctly cannot be diluted. It is standard practice for the insurer to set out in the application a series of specific questions regarding the applicant's health history and other matters relevant to insurability. The object of the proposal form is to gather information about a potential client, allowing the insurer to get all information which is material to the insurer to know in order to assess the risk and fix the premium for each potential client. Proposal forms are significant part of the disclosure procedure and warrant accuracy of statements. Utmost care must be exercised in filling the proposal form. In a Proposal Form, the applicant declares that she/he warrants truth. The contractual duty so imposed is such that any suppression of untruth or inaccuracy in the statement in the proposal form will be considered as a breach of the duty of good faith and will render the policy voidable by the insurer. It has been held that all-important element in such a declaration is the phrase which makes the declaration the "basis of contract". These words alone show that the proposer is warranting the truth of his statements so that in the event of a breach this warranty, the insurer can repudiate the liability on the policy irrespective of issues of materiality. It is sufficient for this Court to hold in the present facts that the information which was sought by the insurer was indeed material to its decision as to whether or not to undertake a risk. The proposer was aware of the fact, while making a declaration, that if any statements were untrue or inaccurate or if any matter material to the proposal was not disclosed, the insurer may cancel the contract and forfeit the premium.  After the repudiation, the Complainant had submitted a request before the Opposite Party to return the original documents. Based on the request, the Opposite Party had returned the documents vide letter dated 25/04/2023.

9. It is submitted that the claim was repudiated due to the reason that the Complainant wilfully suppressed the material fact of diseases as mentioned above at the time of inception of the policy, which was clearly revealed from the medical records of the complaint. The claim of the Complainant was repudiated solely for legal and cogent reasons. It is submitted that the Opposite Party has not committed any deficiency in service or unfair trade practice to the Complainant.  The complaint is liable to be dismissed with costs of the Opposite Party.

10.  The doctor from the MIMS Hospital was examined as PW1 and Exts.A1 to Ext.A4 series were marked through him. One witness is also examined as PW2 on the part of Complainant and Exts.A5 to Ext.A9 were marked through him.  The Opposite Party submitted that they have no oral evidence, the documents produced were marked as Ext.B1 and B2.

11.  Points for consideration:

1. Whether there is any deficiency in service on the part of the Opposite Party?
2. If so, relief and cost.

12.  We have heard the arguments of the Complainant and have gone through pleadings along with documents produced by both parties in support of their case/defence.  The controversy in the present case is as to whether the Complainant is entitled to the claim amount or not. The Opposite Party admitted the issuance of policy and the hospitalization of the Complainant during the validity period of the policy. The only ground raised by the Opposite Party in repudiating the claim is that the Complainant was suffering from Cerebrovascular accident 3 years back which is excluded from coverage of the policy as the Complainant had pre-existing disease (Diabetes Mellitus) which the Complainant had not disclosed while obtaining the policy in the proposal form.   At the time of chief examination doctor( PW1) deposed that “Patient sâ history  case sheet  old strock (3yrs back)F¶v FgpXnImWp¶p.  Question mark C«v A§ns\ FgpXp¶Xv emergency I­v further examination \v th­nbmWv. Clarification sImSp¯n«p­v. ‘not a known case of strock’F¶v” and at the time of cross examination, the doctor deposed “Patient \v aq¶phÀjw ap³]v strock D­mbn F¶v ]dªm icnbÔ.  The deposition of PW1 makes it clear that the previous disease is not known case of stroke, so the Complainant was not suffering from any disease at the time of obtaining the policy.   Moreover, this type of problem i.e., Cerebrovascular accident occurs suddenly and nobody knows about the occurrence of the same.  Even otherwise, Diabetes Mellitus and hypertension are not material disease and therefore non-disclosure thereof is not a concealment.   Here, the insurance company was at liberty to get the Complainant medically examined prior to issuance of the policy as it is under obligation to ensure before issuing medi-claim policy whether a person is fit to be insured or not.  Therefore, repudiation of claim of the Complainant amounts to deficiency in service on the part of Opposite Party. 

In the result, the Complaint is allowed and the Opposite Party is directed to pay the claim amount of Rs.1,60,000/- (Rupees One Lakh Sixty Thousand Only) along with interest @ 9% p.a. from 03.01.2023 till realization of amount to the Complainant.  The Opposite Party is also directed to pay Rs.10,000/- (Rupees Ten Thousand Only) as compensation and Rs.5,000/- (Rupees Five Thousand Only) as cost of the proceedings.  This Order must be complied by the Opposite Party within 30 days from the date of receipt of this Order.  Failing which, the Complainant is entitled to get interest @ 8% from the date of Order till realization.

Dictated to the Confidential Assistant, transcribed by him and corrected by me and pronounced in the Open Commission on this the 29^th day of July 2024.

Date of Filing:-25.05.2023.

PRESIDENT(I/C)      : Sd/-

MEMBER       : Sd/-

APPENDIX.

Witness for the Complainant:-

PW1.              Dr. Abdurahiman.                                      Doctor.

PW2.              Mathew. K.                                                  Lab Assistant.

Witness for the Opposite Parties:-

                        Nil      

Exhibits for the Complainant:

A1.                  Discharge Summary.

A2.                  Copy of Investigation Sheet.

A3.                  Letter.                                                                        Dt:03.01.2023.

A4(Series).   Bills ( 7 numbers).

A5.                  Covering Letter.                                                      Dt:25.04.2023.

A6.                  CD (3 Numbers).

A7.                  ECG (3 Pages).

A8.                  MRI Certificate.

A9.                  Claim Repudiation Letter.                                    Dt:31.03.2023.

Exhibits for the Opposite Parties:-

B1.                  Copy of Anaesthesia Record.

B2.                  Copy of Arogya Sanjeevani Policy for the period of 28.10.2022 to

27.10.2023.

PRESIDENT(I/C)      : Sd/-

MEMBER                   : Sd/-

/True Copy/

Sd/-

                                                                                             ASSISTANT REGISTRAR

                                                                                                  CDRC, WAYANAD.

Kv/-