Order by:
Smt.Priti Malhotra, President
1. The complainants have filed the instant complaint under section 35 of the Consumer Protection Act, 2019 stating that on the allurement of the agents of the Opposite Parties, the complainants purchased ‘Family Health Optima Insurance Plan’ Policy bearing No.P/211222/01/2023/009008, valid for the period w.e.f. 02.12.2022 till Midnight of 01.12.2023 from Opposite Parties against the paid up premium of Rs.15,428/- vide which complainant No.1 Sushmit Kumar Sharma (self), as well as his wife i.e. complainant No.2 Saruchi Sharma (Spouse), as well as their dependent children namely Abhishek Sharma and Srishti Sharma are insured for Basic Floater Sum Insured of Rs.5 lakhs besides Recharge Benefit of Rs.1,50,000/- and in this way, the complainants are insured for covering any medical expenses upto the extent of Rs.6,50,000/-. Unfortunately, during the policy period, in the month of March, 2023 complainant No.2 Saruchi Sharma (One of the Insured) felt some uneasiness and she immediately got her medical check-up from different hospitals and ultimately, she got herself checked up from Dayanand Medical College & Hospital, Ludhiana, where she was diagnosed as ‘patient of IBD’ and got admitted in Dayanand Medical College & Hospital, Ludhiana and remained admitted in the hospital for the period 08.06.2023 to 24.06.2023. Alleged that before the admission in Dayanand Medical College & Hospital. Ludhiana, the complainants asked the officials of Opposite Parties for the cashless treatment under the policy, but the local officials of the Opposite Parties told that for want of some formalities, there may occur some delay in sending their case for cashless treatment to their higher authority and advised the complainants to get the treatment from their own pocket. In this regard, the complainants also received letter dated 09.06.2023 in response to the cashless treatment and the concerned officials of the Opposite Parties told that further evaluation is required. Alleged further that complainants spent Rs.5,23,356/- in the said hospital. Later on complainant no.2 was referred to Postgraduate Institute of Medical Education and Research, Chandigarh (PGIMER) where she also remained admitted for the period w.e.f. 24.06.2023 to 01.07.2023 and in that hospital, the complainants spent more than Rs.87,960/- and in this way, the complainants spent Rs.6,11,316/- in both the aforesaid hospitals. Not only this, complainant No.2 (insured) is still taking the post treatment and spending huge amount which is also recoverable from the Opposite Parties under the terms of the policy. After discharge from the hospital, the complainants have lodged the claim for the reimbursement of the medical bills with the Opposite Parties and also completed all the required formalities, but the Opposite Parties did not pay any amount to Complainants, but however vide letter dated 19.08.2023, they repudiated the claim of the complainants on the ground of non disclosure of detail 'Crohn Disease, but allegations are totally wrong and incorrect and baseless. Complainants also served a legal notice dated 20.09.2023 upon the Opposite Parties, but to no effect. Alleged that aforesaid act of the Opposite Parties is illegal, unwarranted and uncalled for and due to non-payment of the claim, complainants have suffered mental tension and harassment. Hence, this complaint. Vide instant complaints, the complainants have sought the following reliefs:-
a) Opposite Parties may be directed to pay a sum of Rs.6,11,316/- on account of medical expenses paid to treating hospitals alongwith interest @ 18% p.a. from the date of payment to the treating hospitals till its actual realization.
b) To pay an amount of Rs.2,00,000/- as compensation on account of mental tension and harassment and for deficiency in service.
c) To pay an amount of Rs.20,000/- as cost of complaint.
d) To pay an amount of Rs.21,000/- as cost of legal notice.
e) And any other relief which this Commission may deem fit and proper be granted to the complainants in the interest of justice and equity.
2. Opposite Parties appeared through counsel and contested the complaint by filing written reply taking preliminary objections therein inter alia that the present complaint is filed without any cause of action, as the claim of the complainants was denied by the answering Opposite Parties on the ground of Pre-existing disease & Non-Disclosure of material facts. Averred that the present complaint pertains to insurance claim under ‘Family Health Optima Insurance Policy’ bearing No. P/211222/01/2023/009008 valid from 02.12.2022 to 01.12.2023 covering the complainant self, Saruchi sharma spouse and dependent children Abhishek Sharma, Shrishti sharma, for a sum of Rs 5,00,000/-. This is a first year fresh policy. However it is submitted that the aforesaid insurance policy was issued to the insured by the answering Opposite Party subject to the terms and conditions of the insurance policy. The complainants had accepted the policy agreeing and being fully aware of such terms and conditions and executed the proposal form. Averred further that the insured preferred claim in the 1st year of the policy. The insured has requested for cashless and submitted the documents for hospitalization on 08.06.2023 in Dayanand Medical College and Medical Hospital towards the treatment of ‘IBD CROHNS’. However, it was observed from the hospital records that the insured patient has the above disease which is a longstanding ailment. Thus Opposite parties were not able to ascertain the duration of the disease based on the documents/details submitted by insured. Thereafter, the insured has lodged the claim for reimbursement with Opposite Parties and it has been observed from the discharge summary of the above hospital that the insured patient is symptomatic of the above disease from the year 2015, which is prior to inception of the medical insurance policy. The present admission and treatment of the insured patient is for non disclosed disease. At the time of inception of insurance policy, insured has not disclosed the above mentioned medical history/health details in the proposal form which amounts to misrepresentation / non-disclosure of material facts. As per Condition No.1, of the policy issued to insured, 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. As per Condition No. 7, the policy is also liable to be cancelled. Hence, the claim was rejected and the same was informed to the insured vide letter dated 19.08.2023. Averred further that an endorsement P/211222/01/2023/009008/4 dated 26.09.2023 was passed mentioning that following insured person covered under the policy stands deleted from the coverage w.e.f. 26-Sep-23 due to non disclosure of Pre existing Disease". Deleted Insured Person Name: Saruchi Sharma".
Averred further that as per complaint copy and Discharge Summary patient was referred to PGI and spent an amount of Rs. 87900/-, but insured has not submitted any record or bills of PGI. Further, as per claim form, amount claimed is Rs.5,23,356/- and as per complaint copy, the complainants have claimed an amount of Rs.6,11,316/-, which is totally contradictory to the documents on record. Furthermore, the claim of Rs. 2,00,000/- towards damages, reveals that the complainants are highly vexatious and more abuse of benevolent provision of Consumer Protection Act. Averred further that the Proposer, in the Proposal form has affirmed that the Insured person was in Good health and that he has not consulted or taken treatment which could be gathered from the following:-
1. Are you in good health and free from physical and mental disease or infirmity. If not give details - Yes
2. Have you consulted / taken treatment/been admitted for any illness/disease/ injury/Surgery - If yes, details - No
4. Have you ever suffered or suffering from any of the following
j) Disease of Stomach, Intestine, Liver, Gall bladder / Pancreas, Kidney, Urinary bladder, Urinary Tract Diseases - If Yes, since when - No
From the above findings, it is clearly evident that the insured is well aware of the past medical history of the insured person and failed to disclose the same in the proposal form, which amounts to non disclosure of material facts thus violating the Cardinal Principle of the Insurance. Averred further that the complainants have got no cause of action and locus-standi to file the present complaint; the instant complaint is neither maintainable in law nor on facts; no deficient services have been rendered by the answering Opposite Parties alleged by the complainants. On merits, all other allegations made in the complaint are denied and a prayer for dismissal of the complaint is made.
3. In order to prove his case, the complainants have placed on record affidavit of complainant no.1 Ex.C1 alongwith copies of documents Ex.C2 to Ex.C215.
4. On the other hand, Opposite Parties have placed on record affidavit of Sh.Sumit Kumar, Senior Manager, Star Health & Allied Insurance Co. Ltd. as Ex.OP1,2/A alongwith copies of documents Ex.OP1,2/1 to Ex.OP1,2/13.
5. We have heard the ld. counsel for both the parties, gone through the written arguments submitted on behalf of complainants and also gone through the record.
6. It is well proved on record that the complainants are the holders of Insurance policy namely “Family Health Optima Insurance Policy” having no.P/211222/01/2023/009008 for the period 02.12.2022 to 01.12.2023 and during the policy period, complainant no.2 suffered from ‘IBD Crohns Disease’ and got admitted in Dayanand Medical College and Hospital, Ludhiana for the period 08.06.2023 to 24.06.2023. Record is evident of the fact that during the hospitalization, the complainants applied for cashless treatment with Opposite Parties. On receipt of the cashless request, the Opposite Parties raised query on authorization for cashless treatment vide letter dated 09.06.2023 and also issued another letter dated 09.06.2023 (Ex.C9), vide which, they denied the pre authorization request for cashless treatment. There is also another letter dated 14.06.2023, vide which, the Opposite Parties also denied the preauthorization request for cashless treatment (Ex.OP1,2/6). It is admitted that when the complainants lodged the claim for the reimbursement of the expenses incurred at the said hospital, then vide letter dated 19.08.2023, the Opposite Parties repudiated the claim of the complainants. It is also admitted and proved on record that after having discharged from Dayanand Medical Hospital, Ludhiana complainant no.2 got admitted in PGI, Chandigarh and remained admitted in the said hospital for the period 26.06.2023 to 01.07.2023.
7. Ex.OP1,2/11 is evident of the fact that the Opposite Parties repudiated the claim of the complainants on the ground of non disclosure of material facts by complainant no.2 about her health. For the sake of convenience, the repudiation letter dated 19.08.2023 is reproduced as under:-
“We have processed the claim records relating to the above insured-patient seeking reimbursement of hospitalization expenses for treatment of IBD Crohns.
It is observed from the discharge summary of the above hospital that the insured patient is symptomatic of the above disease from the year 2015 which is prior to inception of the medical insurance policy. The present admission and treatment of the insured patient is for non disclosed disease.
At the time of inception of your policy which is from 02.12.2022 to 01.12.2023, you have not disclosed the above mentioned medical history/health details of the insured-person in the proposal from which amounts to misrepresentation/non disclosure of material facts.
As per Condition No.1 of the policy issued to you, 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.
As per Condition No.7, the policy is also liable to be cancelled and necessary action will be taken by our Corporate Office.
We therefore regret to inform you that for the reasons stated above we are unable to settle your claim under the above policy and we hereby repudiate your claim.”
8. The above said ground so taken by the Opposite Parties for the repudiation of the claim of the complainants is not genuine, as there is no record on file showing that complainant no.2 was suffering from said disease since, 2015. In the discharge summary only it is mentioned that she has been suffering from abdomen pain, since 2015, but there is nowhere mentioned that complainant no.2 has ever diagnosed with IBD Crohns Disease or ever taken the treatment for the same. Further the version of the Opposite Parties that complainantno.2/insured is well aware about her disease and did not disclose the same to Opposite Parties is also not maintainable, as if the complainant no.2 was well aware about her disease, then what was the necessity for complainant no.2 to get conducted her medical tests again by spending a huge amount. Record is evident of the fact that only thorough investigation leads to the diagnosis of the ailment suffered by complainant no.2 and not otherwise on the basis of any previous record or history as is been alleged by the Opposite Parties. Further the Opposite Parties have not placed on record any document showing that complainant no.2 was suffering from IBD Crohns Disease prior to inception of the policy and ever taken the treatment for the same. Moreover, the onus to prove that the insured was suffering from any pre-existing disease as per settled law is on the Opposite Party. For this observations we are well guided by judgments of Hon’ble National Consumer Disputes Redressal Commission in case titled Reliance Life Insurance Co. Ltd & Anr. v. Tarun Kumar Sudhir Halder in Revision Petition No. 2097 of 2019 has also held so:-
"The Insurance Company has not filed any evidence to show that the DLA was taking treatment for the disease prior to filling up of the proposal form. Even if there was disease inside the body, but the life insured did not know about the disease and was not taking any treatment for the same, the insurance claim cannot be denied on mere presumption that the life assured might be suffering from pre-existing disease. Thus, on merits, I am convinced on the (FA-383/2016) PAGE 8 OF 10 basis of the entries in the Medical Attendant Certificate that the disease was complained for the first time by the DLA on 22.06.2011, which is much after the date of the proposal form. The onus to prove the pre-existing disease lies on the Insurance Company and no supporting documents have been filed by the Insurance Company in support of their assertion.
In the present case, the Opposite Parties have not produced any documentary evidence/expert medical opinion in support of its case. Hence, the repudiation of the claim of the complainants by Opposite Parties is not justified.
9. It is pertinent to mention here that vide instant complaint, the complainants claimed the amount of Rs.6,11,316/- as medical expenses incurred at Dayanand Medical College and Hospital, Ludhiana as well as PGI, Chandigarh, but the perusal of the record reveals that there is only one proposal form on record (Ex.OP1,2/7), vide which, the complainants claimed the amount of Rs.5,23,356/- with regard the expenses incurred by the complainants at Dayanand Medical College and Hospital, Ludhiana and there is no claim form on record, vide which, the complainants claimed the amount spent by them at PGI, Chandigarh.
10. From the above discussion, we allow the instant complaint in part and direct the Opposite Parties to pay the claim for medical expenses incurred by the complainants for the treatment undertaken by complainant no.2 at Dayanand Medical College and Hospital, Ludhiana for the hospitalization period 08.06.2023 to 24.06.2023 (including pre and post hospitalization charges) on submission of relevant documents and medical bills by complainants. Further in order to facilitate, the complainants are hereby directed to submit the relevant documents alongwith photocopies of medical bills to the Opposite Parties. Opposite Parties are further directed to settle and pay the claim next within 30 days from receipt of the copies of bills/documents from the complainants. Opposite Parties are also directed to pay compository costs of Rs.20,000/-(Rupees Twenty Thousand only) as compensation and litigation expenses to the complainants for rendering deficient services. The pending application(s), if any also stands disposed of. The compliance of this order be made by the Opposite Parties within 30 days from the date of receipt of copy of this order, failing which, the Opposite Parties are further burdened with additional cost of Rs.20,000/-(Rupees Twenty Thousand only) to be paid to the complainants for non compliance of the order. Copies of the order be furnished to the parties free of costs. File is ordered to be consigned to the record room.
Announced on Open Commission
