IN THE CONSUMER DISPUTES REDRESSAL FORUM, KOLLAM
Dated this the 15 th day of May 2018
Present: - Sri. E.M.Muhammed Ibrahim, B.A, LL.M. President
Sri. M.Praveen Kumar,Bsc, LL.B ,Member
CC.No.58/2016
S.Muraleedharan Pillai : Complainant
S/o Sivarama Pillai
Shreekrishna Mandiram, Kuzhiyam, Chemmakkadu P.O
Perinad, Kollam-691001
[By Adv.R.Sethunathan Pillai]
V/s
- Star Health and Allied Insurance Company Ltd.: Opposite Parties
Thankam Complex, Thrid Floor,
Residency Road, Chinnakkada
Kollam-691001
- Star health and allied Insurance Co.Ltd.
Regd and Corporate Office 1, New Tank Street,
Valuvar Kottam High Road, Nungambakam,
Chennai-600034.
[By Adv.A.Sudheer Bose]
ORDER
E.M.MUHAMMED IBRAHIM , President
This is a consumer complaint filed by one Mr.S.Muraleedharan Pillai under Section 12 of the Consumer protection Act disputing the repudiation of Insurance Medi claim and seeking to allow the complainant to realise Rs.57,527/- with interest and costs and also compensation to the tune of Rs.20,000/- from the two opposite parties.
The averments in the complaint in short are as follows.
On 14.01.13 the complainant took 1st Health Insurance policy with opposite parties. On expiry of the said policy, the complainant renewed the Insurance policy and insured for Rs.1,00,000/- for medical treatment expenses under ‘Senior Citizens Red Carpet Insurance Policy’ vide Policy No.P/181112/01/2014/006621. The said policy commence from 14.01.14
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midnight and ends on 13.01.2015. The policy assures Senior Citizens having age between 60-74 for getting Insurance coverage including the persons having previous illness. On 01.11.14 the complainant was admitted at the Travancore Medical College and Hospital, at Kollam and discharged on 11.11.2014. A medi claim with supporting details and medical bills issued by the said hospital was preferred by the complainant with the 1st opposite party Insurance Company. But 1st opposite party repudiated the claim by issuing letter dated 15.1.15 on the ground of suppression of illness while taking policy. The matter was taken up before the Grievance Cell of Star Health and Allied Insurance company Ltd, Chennai.
However the review committee of the opposite party Insurance company rejected the claim on the ground of non-disclosure of materials facts. Thereafter the complainant filed petition before Insurance Ombudsman that complaint was also dismissed on 08.01.2016. The complainant would further allege that at the time of inception of the policy the opposite party company assured the complainant that the policy covers the existing illness and as such medical check up is not required. Accordingly the opposite party Insurance Company had not subjected the complainant to medical examination. A leaflet published by the opposite party company was handed over to the complainant to make him to believe the terms and conditions of the policy. The complainant had no previous history of illness in order to suppress material fact. He took his 1st insurance policy on 14.01.2013 and the period of insurance was from 14.01.2013 to the midnight of 13.01.14. During the above period no such ailment was diagnosed and no claim was preferred by the complainant against the opposite parties. If the complainant was having any dishonest intention to deceive the opposite parties the complainant could have preferred the claim during the period of his first insurance policy. There was no suppression of any illness as alleged by the opposite parties. The repudiation of medical claim and
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rejection of claim by the grievance cell of Star health are not speaking orders and not supported by any evidence or materials. Since the complainant had taken the ‘Senior Citizen Red Carpel Insurance Policy’ the opposite party cannot forfeit the claim on the ground of suppression of existing illness. The opposite parties have committed breach of agreement and denial of the claim to the complainant is highly improper, illegal and unsustainable and it amounts to deficiency in service. Hence the complaint.
The opposite party No.1&2 entered appearance and resisted the complaint by filing a joint version raising the following contentions.
The complaint is not maintainable either in law or on facts. There is no deficiency in service on the part of the opposite parties. The complaint has been filed by suppressing material facts and raising false allegations. However the opposite parties would admit that the complainant took ‘Senior Citizen Red Carpel Insurance Policy’ from the opposite party and the sum insured was Rs.1,00,000/- commencing from 14.01.13 to 13.01.14 which was renewed up to 13.01.15. At the time of availing the policy the terms and conditions of the policy were explained to the complainant and also supplied the terms and conditions along with policy schedule. It is also stated in the policy schedule that the insurance under this policy is subject to conditions, clauses, warrantees, exclusions etc. attached. In the case of Senior Citizen Red Carpet Insurance Policy medical examination is not required as the insured was above 60 years of age and only those pre-existing diseases which are specifically declared by the proposer in the proposal form are covered under the policy . So it is compulsory that the information regarding the health must be provided in the proposal form for the opposite party to provide coverage with suitable co-payment, ie, 50% of each and every claim arising out of all pre-existing diseases as defined and 30% in case of all other claims which are to be borne by the insured. It is further contented that the proposal form is the basis of
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insurance contract and on the basis of which policy is issued. In the proposal form the complainant has specifically declared that he was suffering from Diabetes Mellitus only. It is further declared in the proposal form that if the insurance policy has effected any particulars stated in the proposal form are found incorrect, the insurance company would incur ‘no liability’ under the policy. 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). In the instant case; the complainant had only revealed Diabetic Mellitus in the proposal form. As per the declaration given by the complainant, the opposite party had issued the policy schedule after endorsing Diabetes Mellitus as pre-existing disease. It is submitted that the complainant was admitted at Travancore Medical College & Hospital, Kollam on 01.11.2014 for the treatment of Diabetes Mellitus/Diabetic Neuropathy, Hypertension, Old CVA, Cellulites @LL, DVT @ LL, Candidial Intertrigo & after treatment he was discharged on 11.11.2014.After the treatments were over, complainant has submitted completed claim from with medical certificate, discharge Summary, Bills for Rs.51527/- Rupees fifty one thousand and five hundred twenty seven) , and lab reports. The treating doctor clearly recorded in the claim from with medical certificate that the patient is a known case of Diabetes mellitus, Hypertension, Old CVA. The discharge summary clearly reveals that the patient is a known case of Diabetes mellitus, Hypertension, Old CVA. As a part of claim verification, the company collected previous treatment records from the Ananthapuri Hospital as Research Institute Thiruvananthapuram. From the records, it is noted that the complainant was
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admitted in this hospital on 13.08.2012 and had undergone treatment for CVA-multi infract state, Systemic Hypertension, Type II Diabetes Mellitus. Moreover it clearly noted that his ECG shows “T inversion V4-V-6 VS VI-V-3 And Echo report shows mild LV Systolic function and Mild MR. The MRI Brain report dated 24.07.2012 shows Acute right high posterior paritetal infract with diffusion restriction, Acute Lacunar sized infracts with diffusion restriction in right frontal white matter, temporal gyri and external capsule. Chronic right Lentiform nucleus infarct. Based on the available medical records, it is evident
that the complainant had been suffering from Old CVA, Cardiac illness, hypertension, before the inception of policy which was not revealed in the proposal form at the time of inception of policy. The insured had suppressed his previous treatment received during August 2012, in the proposal form. This material fact was suppressed in the proposal form issued at the time of inception of the policy. In the proposal form under the required mandatory details of the person seeking to be insured, in a specific column named ‘Medical History’, the complainant has not disclosed of having suffered from any disease/illness irrespective of whether hospitalization or not as on the date of submission of the proposal. It is submitted that the insured has mentioned only DM(Diabetes Mellitus) in the proposal from in the medical history column to the specific question that “Has the proposed person/s suffered from any disease/illness irrespective of whether hospitalized or not or sustained any accident in the past 12 months or before 12 months”? The insured has answered ”DM” in the “before 12 months column” and ‘NO’ in the past 12 months column. In the additional questionnaire annexed to the proposal from, specific diseases like Cancer, Chronic Kidney Disease (CKD), CVA/Brain Stroke, Alzheimer disease and Parkinson’s disease required on open disclosure. The complainant not only failed to disclose his medical history, but in a further malafide act answered specific ‘No’ to the diseases mentioned in the additional questionnaire. Hence
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it amounts to Suppression of Material facts which makes the contract void ab initio. It is submitted that as per the treatment records, it is clear that the complainant was aware about the CVA prior to the inception of the policy. As the insured has wilfully suppressed the pre-existing disease in the proposal form (Expect Diabetes mellitus), which is the basis of contract at the time of taking the policy, the company repudiated the claim and the decision was communicated to the complainant by registered AD letter dated 15.01.2015. Later the complainant had sent a letter to the company for re-viewing the claim.
Considering the letter as an appeal against decision of the company, the claim review committee re-opened and reviewed the claim and sent a detained reply to the insured on 25.04.2015 showing that there was suppression of Old CVA, hypertension and hence the contract is void from the beginning. Later the complainant approached Insurance Ombudsman and the Insurance Ombudsman after considering all the facts of the case had dismissed the complaint vide order dated 04.01.2016 and upheld the decision of repudiation. The Hon’ble Insurance Ombudsman in its order had clearly stated that “There is a vast difference in accepting the risk on a senior citizen who has history of DM and a senior citizen with history of CVA-Multi infract state, SHTN & DM. In fact in the latter case, the respondent insurer would most likely not issue a policy at all. All insurance contracts are on the basis of “ubarrimae fides” or utmost good faith. A failure on any parties to the contract not adhering to the same can make the contract “void abinitio” ie, from the beginning. In this case there is indisputable evidence with the respondent insurer to prove that there is clear suppression of material facts while proposing insurance. Hence the repudiation of claim is correct and justified”. The answers given by the insured in fraudulent manner amounts to suppression of material facts, which were knowledge of insured, resulted into vitiating contract of insurance. A contract of insurance is based on utmost good faith and the proposer is expected to
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reveal all the true state of facts regarding health condition of the insured. Fully believing the representation made by the insured in his proposal from the insurance policy is issued. If information deposed by the insured is subsequently found incorrect or faulty the insurance policy will be void to the extent of such wrong or incorrect information. The repudiation made by the opposite party was as per the terms and conditions of the policy and hence there is no deficiency of service or negligence on the part of opposite party. The complainant is not at all entitled to any of the reliefs as prayed in the complaint. It is the opposite party who is entitled for cost and compensatory cost from the complainant for having lodged such false and frivolous complaint. There is no deficiency in service or unfair trade practice on the part of these opposite parties and hence no cause of action arises against this opposite party. The complainant filed in this case is on experimental basis and without any bonafides.
In view of the above pleadings the points that arise or consideration are:-
- Whether there is any suppression of material fact by the complainant while taking insurance policy?
- Whether there is any deficiency in service or unfair trade practice on the part of the opposite parties?
- Reliefs and costs.
Evidence on the side of the complainant consists of the oral evidence of PW1 and Ext.P1 to P7 documents . Evidence on the side of the opposite parties consists of the oral evidence of DW1 and Ext.D1 to D7 documents.
Point No.1 & 2
For avoiding repetition of discussion of materials these two points are considered together. The complainant has been examined as PW1. He re-iterated the averments in the complaint and affirmed those aspects during cross examination by the learner counsel for the opposite parties. He further proves
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Ext.P1 to P7 documents. The following facts are undisputed rather admitted in this case. The complainant is a senior citizen that he had already taken his 1st Health Insurance Policy with the opposite party Insurance Company on 14.01.2013 and on expiry of the previous policy the complainant renewed the Insurance policy from 14.01.2014 to 13.01.2015 and the complainant was insured for Rs.1,00,000/- for medical treatment expenses under ‘Senior Citizens Red Carpet Insurance Policy’. Ext.P1 is the policy issued by the opposite parties in favour of the complainant which assures senior citizens having the age group 60-74 for getting Insurance coverage even those persons having previous illness. It is further admitted that the complainant was admitted at Travancore Medical college and Hospital, Kollam on 1.11.2014 and discharged on 11.11.2014 which is evident from Ext.P2 discharge summary. It is also an admitted fact that the complainant has submitted Ext.P3 claim form dated 13.11.2014 along with Ext.P4 series medical bills. But admittedly on 15.01.2015 the Insurance Company repudiated the claim by issuing Ext.P5 letter alleging that there are suppression of illness while taking policy. The repudiation of the claim vide Ext.P5 letter is admittedly the cause of action to file the complaint herein. According to the complainant the reasons stated in Ext.P5 letter to repudiate the claim are incorrect and hence they have taken up the matter before the review committee which also dismissed the claim vide Ext.P6 letter. According to the complainant the repudiation of claim by the Insurance Company and rejection of the claim by the review committee are not proper in the light of terms and conditions stated in Ext.P7 wherein there is no stipulation that the person taking the policy should make a declaration of his health condition. In the circumstances according to the learned counsel for the complainant the rejection of claim by the opposite parties is not legal and proper.
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It is brought out in evidence that Ext.P7 pamphlet is issued and distributed by the opposite parties soliciting customers where in it is stated that ‘Senior Citizens Red Carpet Insurance Policy’. 60 apX 74 hb-kp-h-sc-bp-Å-hÀ¡vþ \ne-hn-epÅ Akp-J-§Ä¡pw ]cn-c£ e`n-¡p¶ {]tXyI medical check up Bh-i-y-an-Ã. The learner counsel for the complainant has argued that the complainant has taken the policy on the basis of the representation made by the opposite parties in Ext.P7 pamphlet/notice and now the opposite party Insurance Company cannot turn round and say that the content in Ext.P7 is not
applicable to them. They have also no case that Ext.P7 has been issued by somebody else without the knowledge of the opposite parties.
The learner counsel for the opposite parties has argued that insurance is a contract of uberi mefadi- on good faith. The insurance policy is issued on the basis of proposal or declaration made by the proposer. However in the medical history column of Ext.D2 proposal from the complainant would admit “diabetic mellitus” only and on the basis of that declaration Ext.P1 policy was issued
wherein diabetic mellitus is stated as pre existing disease as on the date of commencement of the policy. However the complainant has suppressed his old status of cerebral vascular accident, which had arisen as stroke, for which he has received treatment from the Ananthapuri Hospital, Trivandrum. According to the learned counsel for the opposite parties the admission of PW1 during cross examination Ext.P2 medical certificate and Ext,D5 and Ext.D6 medical records would clearly establish that the complainant has sustained CVA-stroke as early in August 2012 and thereafter he obtained policy from the opposite parties on 14.01.2013 after suppressing material facts. Hence according to the learned counsel for the opposite parties there was pre existing disease for the complainant which has nexus with the present treatment taken at Travancore Medical College Hospital, Kollam .
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The learner counsel for the complainant by relying on Ext.P7 notice/leaflet published by the 1st opposite party insurance company has argued that the insurance agent has supplied Ext.P7 notice on behalf of opposite parties and canvassed the policy on the basis of the terms and conditions stipulated in Ext.P7 notice and the complainant has decided to join the insurance policy and paid the premium and thereupon the opposite party has obtained signature of the complainant on the proposal form, declaration etc. and filled up the same according to their whims and fancies so as to deny the benefit of insurance policy to the complainant. In the circumstances the contention of the opposite parties that the complainant was having pre existing disease and that fact was suppressed would come within the purview of unfair trade practice on the part of the opposite parties.
We may examine the above contention in the light of the terms and conditions stated in Ext.P7 and the definition of unfair trade practice stated under clause (r) of subsection (1) of Section 2 of the Consumer Protection Act 1986. Accordingly unfair trade practice means ‘a trade practice which for the purpose of promoting the sale or for the provision of any service adopted any unfair method or unfair or deceptive practice including the practice of making any statement whether orally or in writing or by visible representation which falsely represent that the service are of a particular standard quality or grade’. Here in this case it is seen declared in 2nd page of Ext.P7 notice that ‘NnInÕm Nne-hp-IÄ hÀ²n¨p-h-cp¶ kml-N-c-y-¯n Bip-]-{Xn-I-fn Star Health sâ C³jp-d³kv ]cn-c-£-bn-eqsS FÃm-hn[ NnInÕv Nne-hp-Ifpw e`n-¡p-¶p’. Further down it is stated that ‘{]tal _m[n-XÀ¡v `mhn-bn hcm-hp¶ AÔ-X, hy-¡-IÄ¡p-m-Ip¶ XI-cm-dp-IÄ, Imep-IÄ¡p-m-Ip¶ AÄkÀ apX-emb Akp-J-§Ä¡v NnInÕ e`n-¡p¶ {]tXyI ]mt¡Pv’
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It is also stated further down in Ext.P7 notice that 60 apX 74 hb-Êp-h-sc-bp-Å-hÀ¡v \ne-hn-epÅ Akp-J-§Ä¡pw ]cn-c£ e`n-¡p¶ {]tXyI C³jp-d³kv t]mfnkn (saUn¡Â sN¡¸v Bh-i-y-an-Ã). There is nothing in Ext.P7 notice that the persons taking policy has to declare the exixting or pre-existing disease nor made any particular declaration or furnish any medical history. The person joining the policy is also not expected to undergo any medical check-up as it is clearly excluded in Ext.P7. DW1 has admitted that Ext.P7 has been issued by the opposite party insurance company and the terms and conditions stipulated there are binding on opposite parties.
In view of the above representations in Ext.P7 notice and as persuaded by the insurance agent the complainant has taken the policy. Now the contention of the opposite parties that the complainant has not declared his medical status and suppressed material facts while submitting the proposal form and declaration is devoid of any merit especially when there is no such stipulations in Ext.P7 notice. Hence there is no merit in contenting that the complainant is not eligible to get any treatment expenses. What is exempted from the cover of the policy as per Ext.P7 is the expenses met by the policy holder for the 1st 30 days treatment. It is clearly stated in Ext.P7 notice that there is policy cover for all the existing diseases. Existing disease means existing from a previous date and not started a fresh during the period of cover of the policy. In the circumstances we have no hesitation to hold that there is clear unfair trade practice on the part of the opposite parties.
As the complainant is entitled to get policy cover for all existing diseases including pre existing diseases repudiation of the claim by the opposite parties on the ground that there is material of suppression of fact is not legal and proper. Hence there is deficiency in service on the part of the opposite parties. The points answered accordingly.
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Point No.3
In view of the reasons stated under point No.1&2 the complainant is entitled to get policy cover and get refunded the medical expenses covered by Ext.P4 medical bills amounting Rs.51,527/- with interest and costs.
It is also brought out in evidence that as the claim has been repudiated illegally the complainant has sustained mental harassment and agony apart from monitory loss. Therefore the complainant is entitled to get compensation also.
In the result the complaint stands allowed in the following terms.
The opposite parties are directed to pay Rs.51,527/- being medical expenses under the Senior Citizen Red Carpet Insurance Policy along with interest @ 9% per annum from the date of complaint ie, 20.02.2016 till realisation.
The opposite parties No.1&2 are also directed to pay compensation to the tune of Rs.10,000/- and costs Rs.2000/- .
If the opposite parties fail to comply with above directions within 45 days from today the complainant is allowed to realise the amount of Rs.61,527/- with interest @ 12% per annum from the date of complaint till realisation with costs Rs.2000/- from the opposite party No.1&12 jointly and severally and from their assets.
Dictated to the Confidential Assistant Smt.Deepa.S transcribed and typed by her corrected by me and pronounced in the Open Forum on this the 15th day of May 2018.
E.M.Muhammed Ibrahim:Sd/-
President
M.Praveen Kumar:Sd/-
Member
Forwarded/by Order
Senior Superintendent
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INDEX
Witnesses Examined for the Complainant
Ext. PW1 : S.Muraleedharan Pillai
Documents marked for the complainant
Ext.P1 : Copy of Policy certificate
Ext.P2 : Copy of Discharge Summary
Ext.P3 : Copy of claim form
Ext.P4(1) : Copy of bill
Ext.P4(2) : Copy of bill
Ext.P5 : Copy of letter dated 15.01.15
Ext.P6 : Copy of letter dated 25.04.15
Ext.P7 : Copy of notice
Witness examined for the opposite parties
Ext.DW1 : Manu Mohan
Documents marked for the opposite parties
Ext.D1 : Policy copy along with policy condition
Ext.D2 : Proposal form
Ext.D3 : Discharge summary
Ext.D4 : Claim form dated 17.11.2014
Ext.D5 : Medical Records of Ananthapuri Hospital
Ext.D6 : Copy of MRI Report
Ext.D7 : Copy of the award dated 04.01.2016 of the Insurance
Ombudsman, Kochi
E.M.Muhammed Ibrahim:Sd/-
President
M.Praveen Kumar:Sd/-
Member
Forwarded/by Order
Senior Superintendent
