DR. S. M. KANTIKAR, MEMBER

1.       Brief facts are that the complainants, Gurbax Singh and his wife, Harvinder Kaur, bought, Senior Citizen Red Carpet Insurance Policy, from the Star Health & Allied Insurance Company Ltd. (OPs1 & 2), having coverage of, Rs.2,00,000/- each on 18-05-2008. The premium of Rs.9,500/- each was paid. The policy was renewed from time to time upto 20-05-2013. The Complainant no.2, Harvinder Kaur, had fallen in the bath room at her residence and suffered hair-line fracture in her wrist, for which she took treatment from a local doctor. Thereafter, in the month of December, 2011, she felt slight pain in her right shoulder. It was diagnosed as Frozen Shoulder. She had consulted five to six doctors and took treatment. The pain did not subside, therefore, MRI of right shoulder was conducted. It was diagnosed as Rotator Cuff Tear/Right Shoulder Impingement Syndrome/ Acromio-Clavicular Joint Arthiritis Right Shoulder. The surgery was advised to her, whereupon, she got admitted in Max Super Speciality Hospital at Mohali on 24-05-2012 and was operated on the next day. She was discharged from the hospital on 29-05-2012. She had incurred Rs.1,82,960.96/- as expenses towards her treatment. The complainant submitted claim form to OPs along with the discharge summary, bills, etc., but, the OPs vide letter dated 21-07-2012 repudiated the claim on the ground that complainant no.2 had been a known case of Parkinsonism since 2006. It was not disclosed by her at the time of filling the proposal form. Thus, it amounted to concealment/non-disclosure of the material fact. Moreover, OP-1 & 2 had cancelled the mediclaim policy of complainant no.2 and refunded the premium amount of Rs.9,500/-. Thus, the complainants alleged that the acts of the OPs amounted to deficiency in service and also an unfair trade practice. Therefore, the complainants filed a complaint before the District Consumer Disputes Redressal Forum, II, Chandigarh (for short “the District Forum”).

2.       The OPs 1 to 3 filed their joint written version and denied any illegality in the repudiation of the claim. The OPs submitted that at the time of inception of the policy, the complainants did not disclose in the proposal form that Harvinder Kaur had been suffering from Parkinsonism since 2006, and she was under treatment for the same. As per medical record of Dr. Bhatia’s Clinic, on 31-10-2011, she was taken to the said Clinic, after alleged fall in bathroom. She suffered fracture of lower end of radius and was treated conservatively by applying the POP sling. In the prescriptions, it was also mentioned as “Parkinsonism +”. Harvinder Kaur had also taken treatment at Silver Oak Hospital, Mohali on 25-03-2012 for ‘Right Shoulder Pain with Limitation’. In the medical record, the treating doctor at Silver Oak Hospital, Dr. Amit Singh had clearly mentioned as “Parkinsonism 2+” i.e. she was suffering from Parkinsonism since 2006. Thus, complainant no.2 had concealed the material fact, while filling the proposal form. The claim of complainant no.2 was rightly rejected under condition no.7 of the terms & conditions of the policy. The Max Hospital (OP-4) filed their written statement and submitted that, OP-4 was nowhere concerned with the repudiation of the claim. OP-4 admitted that the complainant no.2 was charged Rs.1,82,950/- towards medical expenses.

3.       On the basis of the pleadings and evidence, the District Forum allowed the complaint against OPs 1 to 3 and dismissed the complaint qua OP 4. The OPs 1 to 3 were directed jointly and severally to pay 70% of Rs.1,82,960/-, the amount claimed, alongwith Rs.35,000/- to the complainant as compensation and Rs.10,000/- as cost of litigation.

4.       Being aggrieved, OPs 1 to 3 filed an appeal before the State Consumer Disputes Redressal Commission, Chandigarh (for short “the State Commission”). The appeal was allowed and, consequently, the complaint was dismissed. Hence, this revision petition was filed by the complainants.

5.       We have heard the learned counsel for the parties. The learned counsel for the complainants submitted that the policy was in force and it was continuously being renewed since 21-05-2008. Harvinder Kaur took treatment for frozen Right shoulder after MRI investigation. The repudiation was on the baseless ground, that Harvinder Kaur was known case of Parkinsonism since 2006. There was no correlation between the present shoulder injury with Parkinsonism. Therefore, the repudiation was illegal and the cancellation of policy of complainant no.2 was also wrong on the part of the OPs. Counsel further submitted that during the hospitalisation of complainant no.2, a representative of OP-1 visited Max Hospital in order to assess the genuineness of the claim and expressed his complete satisfaction. The learned counsel for the OP submitted that the complainant no.2 was suffering from Parkinsonism from 2006, which is prior to inception of policy in question. This fact was not disclosed in the proposal form and hence, as per condition no.7 of the policy, the company was not liable to make any payment in respect of any claim.

6.       We gave our thoughtful consideration to the arguments advanced by both the parties, also perused the entire evidence and the medical record on the file. It is an admitted fact that the complainants took the insurance policy on 21-05-2008 and during subsistence of the policy, complainant no.2 underwent surgical treatment. The complainant’s mediclaim was repudiated by the OPs on the ground of material concealment as she was suffering from Parkinsonism since 2006.

7.       We have perused the policy and the terms & conditions. As per Exclusion Clause, the OP-3 was not liable to make any payments under the said policy in respect of expenses whatever incurred by insured person in connection with of or in respect of:

          (1)     All pre-existing diseases as defined in the policy, existing and suffered by the insured person for which treatment or advice was recommended or received during the immediate preceding 12 months from the date of proposal.

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          (5)     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.

          Bare perusal of the two sub clauses of exclusion (supra) shows that the complainant no.2 was still entitled for the claim to the extent of 50% to 70% even if there was pre-existing disease, immediately preceding 12 months from the date of her policy. Thus, the OPs should have treated the claim and offered partial settlement to the tune of 50% to 70%. Thus, it was a deficiency in service.

8.       It is also pertinent to note that the OPs have repudiated the claim and moreover cancelled the policy of complainant no.2 and refunded the premium of Rs.9,500/-. The OPs failed to follow the clause no.10 of the cancellation of the policy procedure. The relevant clause no.10 is reproduced as below.

          “10.    Cancellation: The company may at any time cancel this policy on grounds of misrepresentation, fraud, non-disclosure of material fact on non cooperation of the insured by sending the insured 30 days notice by registered letter at the insured’s last known address and in such event the company shall refund to the insured a pro-rata premium for unexpired period of insurance subject to there being no claim. The insured may at any time cancel this policy and in such event the Company shall allow refund of premium at Company’s short period rate only (table given here below) provided no claim has occurred up to the date of cancellation.”

          Thus, in the instant case, the OPs have never issued 30 days notice through registered post to the complainant no.2, it amounts to deficiency on the part of the OPs.

9.       We have perused one medical certificate issued by Dr. Swapnil Amit Singh of Max Hospital who treated the complainant no.2. It was mentioned that the surgery upon Harvinder Kaur was performed due to shoulder problem and it was completely different from Parkinsonism. We have perused the affidavit dated 23-08-2013 of Dr. Shailja Mathur. According to her, the complainant no.2 was suffering from Parkinson disease and, therefore, the claim was not permissible. It is pertinent to note that Dr. Shailja Mathur was not an expert to give the opinion in the instant case. She is qualified to be MBBS, PGDHM. Thus, she was neither Orthopaedic Surgeon nor a Neurologist/Neuro-Surgeon to opine about Parkinsonism or the ailment purported to have been suffered by Harvinder Kaur in the year 2006.

10.     We have perused the medical record of Max Hospital, Silver Oak Hospital and Dr. Bhatia’s Bone and Joint Care Clinic. It is transpired from the prescriptions of Dr. Bhatia and Silver Oak Hospital that Harvinder Kaur had Parkinsonism, but nothing was mentioned about the period how long she was suffering from Parkinsonism. Even the Max Super Speciality Hospital, recorded in past history about Parkinsons disease, but nothing is on record about the duration of the disease. Secondly, Parkinsonism is completely different from Rotator Cuff Tear. The pain and discomfort in the right shoulder of the complainant is unrelated to Parkinsonism. Moreover, as per her version, we cannot ignore that she was an elderly lady of 68 years and free from diseases like hypertension, diabetes, etc.. She used to walk three to four kilometres daily prior to her shoulder injury. Thus, Parkinsonism was not the cause of her shoulder injury or frozen shoulder. She was never hospitalized for the treatment of Parkinsonism. Therefore, in our view, the OPs have repudiated the claim illegally. In this regard, the law is very clear that as per Section 45 of the Insurance Act, 1938, the policy should not be called in question on the ground of mis-statement after two years, unless there is a concealment of material fact in a fraudulent manner.  

11.     We would like to rely upon the decision of Hon’ble Supreme Court in Civil Appeal No.8254 of 2015 in the case of Sulbha Prakash Motegaonkar & Ors. Vs. Life Insurance Corporation of India, decided on 05-10-2015. This was the case where the deceased died due to ischemic heart disease and myocardial infarction. There was a concealment of lumbar spondylitis with PID with sciatica and, therefore, the insurance company repudiated the claim. Hon’ble Supreme Court held that it was not the case of insurance company that the deceased was suffering from life threatening disease which could or did cause death of the insured. The Court observed as below:

          “We are of the opinion that the National Commission was in error in denying to the appellants the insurance claim and accepting the repudiation of the claim by the respondent. The death of the insured due to ischemic heart disease and myocardial infarction had nothing to do with his lumbar spondylitis with PID with sciatica. In our considered opinion, since the alleged concealment was not of such a nature as would disentitle the deceased from getting his life insured, the repudiation of the claim was incorrect and not justified.”

12.     Considering the entirety of the case, in our view, Harvinder Kaur suffered shoulder injury due to accidental fall and trauma. There is no correlation between Parkinsonism and the shoulder injury in the instant case. Even otherwise, the OP-insurance company failed to prove that the insured suffered shoulder injury due to Parkinsonism. In view of the recent judgement of the Hon’ble Supreme Court in the case (supra) we feel that the repudiation made by OP was unjustified. Therefore, we allow this revision petition and set aside the order of the State Commission. The OP shall comply with the order of the District Forum within four weeks from the date of receipt of copy of this order failing which the entire amount will carry further interest at the rate of 9% per annum till its realisation.

There shall be no order as to costs.