BEFORE THE KARNATAKA STATE CONSUMER DISPUTES REDRESSAL COMMISSION, BANGALORE.

DATED THIS THE 8^th DAY OF MAY 2023

PRESENT

MR. RAVISHANKAR                           : JUDICIAL MEMBER

MRS. SUNITA CHANNABASAPPA BAGEWADI          :  MEMBER

CONSUMER COMPLAINT NO. 30/2021

V/s

ORDER

Mr. RAVISHANKAR, JUDICIAL MEMBER

1.      This is a complaint filed by the complainant praying for a direction against the Opposite Party No.3 to pay Rs.40,52,540/- with interest at 24% p.a. from the date of failure, till payment towards the pending claim amount from 2015 to 2019.  Further prayed to direct the Opposite Party No.4 to pay Rs.19,86,571/- to the complainant towards the claim under RSBY from 2014 to 2019 with interest at 24% p.a. from the date of failure, till payment.  Further prayed to direct the Opposite Party No.6 to pay Rs.8,10,750/- to the complainant with interest at 24% p.a. from the date of failure, till payment.  Further prayed to direct the Opposite Party No.5 to pay Rs.46,24,212/- to the complainant with interest at 24% p.a. from the date of failure, till payment along with pecuniary damages and litigation expenses.

2.      The averments in the complaint are as hereunder;

It is the case of the complainant that complainant is a reputed Institution of Medical College consisting a Hospital located in Mangalore providing a health care service.  The institution hospital undertakes to provide the service in a precise, reliable and professional manner to the satisfaction of the general public within the regulated manner.  The Opposite Party Nos. 1 and 2 are representing Government Bodies on behalf of Karnataka State.  As per the Government of India directive, introduced Rashtriya Swasthya Bhima Yojana (RSBY Health Scheme) in order to provide service of health benefit to the BPL beneficiaries.  This health benefit to the BPL families as approved by Government of India was implemented through three main insurance companies i.e. opposite party no.3,4 and 5 in the five clusters of Karnataka districts allotted to them as per signed MOU.  These three companies had engaged the services of third party administration for effective implementation.  The premium amount (state and central) were paid to these three main insurance companies according to the BPL enrolment data in each districts as per the rate quoted by them as per BPL Card for each of the years after transfer from the Labour Department to SAST.

3.      Insurer (Opposite Party No.3) has entered into MOU with the government of Karnataka/ INDIA, wherein, it has been agreed to provide the health insurance services to identified beneficiary families covered under Rashtriya Swasthya Bhima Yojana introduced by the Government of India.  It is submitted that under the above scheme, number of hospitals empanelled to provide health care service to identified beneficiaries and the complainant also one among the empanelled hospital.  The Complainant hospital also extended medical facilities and treatment to beneficiaries as covered under RSBY policy on terms and conditions agreed between them and provided packages for specified interventions mentioned in the MOU (Copy of the MOU produced herewith as document No.1).  The Opposite Parties appointed the third party administrator who are registered with the insurance regulatory and development authority and appointed by the insurer for the enrolment / claims services to the identified beneficiaries under Rashtriya Swasthya Bhima Yojana.

4.      It is submitted that, the bills issued by the complainant could be audited on a case to case basis as and when necessary through insurer / audit team as agreed under the MOU.  It is also noted that with the preauthorization/approval by the opposite parties complainant treated the patients under the above scheme and submitted/raised their claim, but the opposite parties are filed to reimburse the amount till date.  It is humbly submitted that the beneficiaries will be identified by the complainant on the basis of smart card issued to them.  The smartcard shall have the photograph and fingerprint details of the beneficiaries. The smartcard would be read by the smartcard reader.  The patients/relative’s fingerprints would also be captured by the biometric scanner. 

5.      It is submitted that, the complainant hospital had treated the patients and raised the bills with the opposite parties on time but the opposite parties failed to reimburse the amount as claimed by the complainant from 2015 to 2018.  The complainant hospital after completion of the treatment submitted online claim report along with the discharge summary in accordance with the rates as prescribed in the MOU on a daily basis right from 2015 to 2018.  Infact the opposite parties will have to take a decision and settle the claim within one month in case the insurer decided to reject the claim then that decision also will need to be taken within one month.  It is humbly submitted that, the complainant hospital treated number of patients and raised the bill with the opposite parties but the opposite parties paid some of the bill in part and total outstanding from 1.4.2015 unto 31.3.2018 are of rupees 1,22,22,186/- (One crore twenty two lakh twenty two thousand and one hundred and eighty six).  The details of the claim pending by each opposite parties under the scheme mentioned here below:

1. The Opposite Party No.3 is liable to pay the pending for settlement of the claims from 2015 to 2019 the total outstanding amount are Rs.40,52,540/= lakhs (2015-2016=1,66,752/-lakhs, 2016-2017=8,71,362/- lakhs, 2017-2018 = 18,34,314/-,  2018-2019=11,80,112/-).
2. Opposite Party No.4 ICICI Lombard insurance co. ltd is liable to pay total outstanding amount of Rs.19,86,571/- lakh (2014-2015=114750/=, 2015-2016=7,26,672/- 2016 - 2017=2,09,762/-, 2017-2018=4,33,975/-, 2018 to 2019=5,01,412/=)
3. Opposite  Party No.5 - IFFCO – TOKIO Insurance Company Limited is liable to pay total outstanding amount of Rs.46,24,212/- (2015-2016=4,31,700/- lakhs, 2016-2017=15,87,787/-, 2017-2018= 22,82,675/-, 2018-2019=3,22,050/-).
4. Opposite Party No.6 is liable to pay total outstanding amount of Rs.8,10,750/- lakhs (2014-2015=6,09,250/-, 2015-2016=2,01,500/-)

6.      Since the insurance companies are appointed under the single scheme introduced by the Govt of India called Rastriya Swasthya Bhima Yojana, all the opposite parties are made parties under common complainant and liable for the amount due under the policy and opposite party No 1 and 2 introduced the scheme also necessary parties to adjudicate the matter in controversy along with other opposite parties liable to pay the outstanding amount.  The opposite parties are not fully settled the claims from 2014 till date and opposite party No 2 assured the payment by calling upon the details of pending amount but failed to pay and hence they are jointly and severally liable to pay under scheme.  The complainant in respect of the pending claims approached all the opposite parties several times other than number of communications, the complainant also continued through the telephonic communication in respect of the claims of RSBY scheme and requested all the opposite parties to clear the amount.  Thereafter finally on 14.1.2019 Suvarna Arogya Suraksha Trust i.e. the Opposite Party No.1 issued a letter, wherein, the first opposite party called all the network hospitals to furnish details through format furnished by them and also asked the complainant/empanelled network hospitals to submit the pending claim details to the executive director SAST within 25.1.2019.  Accordingly the Complainant Hospital compiled the direction and submitted the pending claim towards the settlement of claim amount under the scheme.  In fact the claim was more than the list submitted to the opposite party number one despite the opposite parties failed to pay the amount till this date which shows the negligence and service rendered by them which amounts to deficiency of service.  But the opposite parties have not rejected the claim till this date nor settled the claim amounts owing to deficiency in service.

7.      The Complainant is a Medical Hospital institution and spent large sum of amount to treat the beneficiaries but the opposite parties shall indemnify the amount as per the memorandum of agreement entered between them under the scheme.  Therefore the non-payment of the claim amounts to deficiency in service and unfair trade practice.  Hence, the complaint.

8.      After service of notice, the Opposite Party Nos. 1, 3, 4, 5 & 6 appeared through counsel and Opposite Party Nos. 1, 3, 4 & 5 filed their version to the main petition.  The Opposite Party No.6 not filed version and the version of Opposite Party No.6 is taken as not filed on 16.09.2021.  Inspite of service of notice, the Opposite Party No.2 & 7 are absent, hence, placed exparte. 

9.      In the version, Opposite Party No.1, 3 to 5 admitted that the RSBY Scheme was implemented jointly by Central and State through the insurance companies and third party administrator (TPA) to provide health insurance facilities to the beneficiaries in empanelled hospitals which was managed by the Labour Department before 01.04.2016 and later on transferred from Labour Department to Health Department.  It is also an admitted fact that MOU existed between the Complainant Hospital and Opposite Party No.3 New India Assurance Company Limited.  It is also and admitted fact that Opposite Party Nos. 3, 4, 5 & 6 are the cluster of Karnataka State.  Further, the Opposite Party No.1 contended that MOU is between the Complainant Hospital and Insurance Company and the payments to be hospital are made by the insurance company only.  There is no role of Opposite Party No.1/SAST.  Further, the SAST/Opposite Party No.1 has intimated the concerned insurance companies to settle the pending bills towards the Complainant Hospital as per the letter No.HFW/SAST/ RSBY/CR-06/2017-18/18-19 dt.08.06.2018 and prayed to dismiss the complaint against him.

10.    The Opposite Party No.3 contended that as per Sec. 2 (7) of Consumer Protection Act, 2019, the Complainant Hospital is not a ‘Consumer’ and the nature of claim is recovery of the money for which the complainant has to approach Civil Court.  Further, it is barred by pecuniary jurisdiction as the value of the goods and services paid as consideration does not exceeds Rs. One Crore.  Further contended that the amount claimed by the complainant from the Opposite Party No.3 has already paid as per records and audit and it is a detailed examination through trial and cannot be examined by summary proceedings of this nature.  Further contended that issues relating to the pending premium was addressed to the Government of Karnataka, the Opposite Party Nos. 1 & 2 by Opposite Party No.3 vide letter dt.31.02.2018, 30.04.2018, 24.09.2018 and also by dt.11.01.2019 and in response Opposite Party No.1 had issued a letter No.HFW 78 PRS 2019 dt. 15.04.2019 stating that the balance amount to be released to NIA is Rs.40,25,52,564/- and also suggested that the UTR number of insurance companies was not reflecting in the State Nodal Agency (SNA) Portal hence, there is no any fault on his part and prayed to dismiss the complaint against him.

11.    The Opposite Party No.4 contended that the Complainant Hospital is not a Consumer and the complaint is not attracts the pecuniary jurisdiction of this Commission and the complaint is not comes under the purview of the Consumer Protection Act, 2019, but, it is a recovery of money, hence, the complainant has to approach Civil Court.  Further, the Opposite Party No.4 contended that as per the agreed contract if the treatment was given with prior permission from the Opposite Party No.4, then, the claim is liable to pay the same from their pocket.  Further, the complainant has not provided the beneficiary details, smart card, pre-authorization letter and medical bills belongs to each beneficiary and without the details, the Opposite Party No.4 is not at all settled the claims.  Further, the Opposite Party No.4 was issued policy covering risk for the year 2014-2015 and 2015-2016 and subsequent order he has not issued any policy to the complainant hospital and prayed to dismiss the complaint.

12.    The Opposite Party No.5 contended that there is no privity of contract between the complainant and the Opposite Party No.5 and the nature of the complaint is for recovery of money which was not come under the purview of the Consumer Protection Act, 2019.  Further, as per the MOU if the complainant is having any disputes or grievance as records the term of policy, same will have to be settled before arbitrary.  Further, in the absence of details regarding the list of beneficiaries, the type of services the complainant hospital cannot claim the amount from the Opposite Party No.4 and RSBY Scheme was closed as on 31.08.2018.  Hence, the claim made by the Complainant Hospital for the year 2019 is baseless and in the absence of proof prayed to dismiss the complaint.

13.    The complainant has filed his affidavit evidence and documents at Ex.C1 to C7 are marked.  The Opposite Party Nos. 3, 4, & 5 filed affidavit evidence and marked documents at Ex.R1 to R24.  The Opposite Party No.1 not filed his affidavit evidence.  Heard from both sides.

14.    On perusal, the following points will arise for our consideration;

(i)       Whether the complaint proved the alleged deficiency in service on the part of the Opposite Parties?

(ii)      Whether the complainant is entitled for any reliefs as prayed?

            (iii)     What order?

          15.    The findings to the above points are;

                   (i)       Affirmative

                   (ii)      Partly affirmative

                   (iii)     As per final order

REASONS

16.    Perused the contents of the complaint, objections of the Opposite Parties, affidavit evidence of both parties and documents produced by both parties, we noticed that the Opposite Parties have admitted that the Government of India introduced a Scheme commenced in the year 2008 requiring private insurance companies to provide health insurance covered to an extent of Rs.30,000/- on a floater and cashless basis through an established network of health care provided to RSBY Scheme.  It is also admitted by the Opposite Parties that Opposite Party No.3, 4, 5 & 6 are insurance companies who are the clusters of Karnataka State.  On perusal of the objections of the Opposite Parties, we noticed that all the Opposite Parties are raised the same issues such as the complainant is not a ‘Consumer’, the Commission has no pecuniary jurisdiction and the complaint is barred by limitation as per the Consumer Protection Act, 2019, hence, the complaint is not maintainable.

17.    Coming to the point of ‘Consumer’. As per Consumer Protection Act, 2019, the definition of ‘Consumer’ reads as under;

“CONSUMER” means any person who–

1. buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or

2. hires or avails of any service for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such service other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first-mentioned person, but does not include a person who avails of such service for any commercial purpose.

(a)      the expression “commercial purpose” does not include use by a person of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self-employment;

(b)      The expressions “buys any goods” and “hires or avails any services” includes offline or online transactions through electronic means or by teleshopping or direct selling or multi-level marketing.

In view of the consideration in the present case, the Complainant Hospital has filed a complaint u/s 39 of the Consumer Protection Act, 2019 and there is MOU between the Complainant Hospital, Government and Insurance Company wherein Opposite Party Nos. 3 to 6 are agreed and undertake to indemnify the cashless health insurance services to the beneficiaries up to Rs.30,000/- covered under RSBY Scheme introduced by Government of India.  Hence, as per the Consumer Protection Act, 2019, the complainant is a ‘Consumer’ and the Opposite Parties are ‘Service Providers” and even though furnishing the details of the beneficiaries through format of beneficiaries as per direction of the Opposite Party No.1 and submitting the pending claims towards settlement within 25.01.2019 the Opposite Party Nos. 3 to 6 have not settled the claim of the Hospital which is deficiency in service on the part of the Opposite Parties.  Hence, the complaint filed by the Complainant Hospital comes within the purview of the Consumer Protection Act, 2019.

          18.    Now coming to the limitation point.  Sec.69 of the Consumer Protection Act, 2019 reads as under

LIMITATION PERIOD

(1)     The District Commission, the State Commission or the National Commission shall not admit a complaint unless it is filed within two years from the date on which the cause of action has arisen.

(2)     Notwithstanding anything contained in sub-section (1), a complaint may be entertained after the period specified in sub-section (1), if the complainant satisfies the District Commission, the State Commission or the National Commission, as the case may be, that he had sufficient cause for not filing the complaint within such period:

PROVIDED that no such complaint shall be entertained unless the District Commission or the State Commission or the National Commission, as the case may be, records its reasons for condoning such delay.

19.    On perusal of the documents, we noticed that RSBY launched in the year 2008 and closed in the year 2018 and the claim amount was partly paid by the Opposite Parties to the complainant and the claims were pending from 2015 till 2018.  Moreover till this date, the Opposite Parties have neither rejected the claims nor settled the claims of the Complainant Hospital.  The cause of action starts from repudiation of the claims.  Further, as per the contention of the Opposite Party No.3 that the issues relating to the pending premium was addressed to the Government of Karnataka, Opposite Party Nos. 1 & 2 by Opposite Party No.3 vide letter dt.31.02.2018, 30.04.2018, 24.09.2018 and also 11.01.2019 and in response Opposite Party No.1 had issued letter dt. 15.04.2019 stating that the balance to be released NIA is Rs.497.52 lakhs as against insurance company calculation of Rs.40,25,52,564/- means still the claim is pending.  If the Opposite Parties have neither rejected the claims of the Complainant Hospital nor settled the claims till today, there is a continuous cause of action.  Moreover, the Opposite Party No.1 on 14.01.2019 called upon the network hospitals who submitted the pending claims to settle and the complainant has submitted the claim before 25.01.2019.  Hence, in our opinion the complaint filed by the complainant is well within time.

20.    Now coming to the point of jurisdiction.  Sec.47 of the Consumer Protection Act, 2019 reads as under;

JURISDICTION OF STATE COMMISSION

(1)     Subject to the other provisions of this Act, the State Commission shall have jurisdiction –

(a)      to entertain –

(i)       complaints where the value of the goods or services paid as consideration, exceeds rupees 50 lakhs, but does not exceed rupees two crore:

PROVIDED that where the Central Government deems it necessary so to do, it may prescribe such other value, as it deems fit;

(ii)      complaints against unfair contracts, where the value of goods or services paid as consideration does not exceed ten crore rupees;

(iii)     appeals against the orders of any District Commission within the State; and

(b)      to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any District Commission within the State, where it appears to the State Commission that such District Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested or has acted in exercise of its jurisdiction illegally or with material irregularity.

(2)     The jurisdiction, powers and authority of the State Commission may be exercised by Benches thereof, and a Bench may be constituted by the President with one or more members as the President may deem fit.

In view of the consideration in the present case, the Scheme is introduced in the year 2008 and closed in the year 2018 and the complainant trusted and promise of the Opposite Parties provided medical services to the beneficiaries under RSBY Scheme introduced by Government of India and spent large sum of amount and up to 2018 claim of Rs.1,07,13,676/- was pending from Opposite Party Nos. 3, 4, 5 & 6.  Hence, in our opinion, the complaint is within the pecuniary jurisdiction of the State Commission as per the Consumer Protection Act, 2019.

          21.    Further the Opposite Party No.4 contended that as per MOU if the treatment was given without prior permission, the Opposite Party No.4 is not liable to pay.  However, the beneficiaries will be identified by the Complainant Hospital on the basis of smart card issued to them.  The smart card shall have the photograph and the fingerprint details of the beneficiaries.  The smart card would be read by the smart card reader.  The patients or relatives fingerprints would also be captured by Bio Metric Section.  Moreover, before taking patient for treatment, the hospital had taken pre-authorization approval for cashless facility and after approval, the Opposite Parties have given UTR number and without UTR number, the hospitals cannot give treatment to the patients under RSBY Scheme.  Hence, the contention of the Opposite Party No.4 that the Complainant Hospital has not taken the prior permission to the treatment is not believable and acceptable.  Further, the Opposite Party No.4 contended that as per MOU if the Complainant Hospital is having any disputes as records the term of policy some will be settled before the arbitrary.  In our view, the Consumer Protection Act, 2019 is the additional remedy to the consumers.  The option is left to the parties either choose arbitration or Consumer Protection Act, 2019.  Moreover, the parties cannot decide the jurisdiction of the Court.  Hence, it is not compulsory to the parties to settle the disputes before Arbitrator.

22.    On perusal of the documents produced by both parties, we noticed that the complainant has submitted all the details of beneficiaries as per the letter of Opposite Party No.1 dt.25.01.2019.  However, the Opposite Parties have not settled the claim of the Complainant Hospital because as per the contention of Opposite Party No.3, he has issued a letter to the Government of Karnataka dt.31.12.2018, 30.04.2018, 24.09.2018 and 11.01.2019 regarding the issues relating to the pending premium the Opposite Party Nos. 1 & 2 suggested that UTR number of Opposite Party Nos. 3 to 6 was not reflecting in the said Nodal Agency Portal.  As per the terms and conditions of MOU, before treating the patients, the Complainant Hospital had taken pre-authorization approval for cashless facility from the Opposite Parties and the Opposite Parties have given Unique Transaction Number (UTR) for the patients and also all details uploaded in the official website, without the UTR hospitals cannot treat the patients.  Such being the case, it is the duty of the Opposite Party insurance company to maintain the claim pending status of the Complainant Hospital.  Moreover, the identification of beneficiaries on the basis of smart card issued to them on which reveals photographs and fingerprint details of beneficiaries. 

23.    Such being the case, the repudiation of the claims without any reason by the insurance company is not just and proper.  The insurance company cannot denied the claim only for the Government has not paid the premiums and it was pending.  If the Government has not paid the premiums, the Opposite Party insurance company should not give authorization to the complainant for the treatment to the beneficiaries.  The Opposite Parties cannot discharge their liability.  Hence, considering all the facts and discussion made here, we are of the opinion that the complainant is a ‘Consumer’ as per the Consumer Protection Act, 2019 and the complaint filed by the complainant is well within Limitation and this Commission has pecuniary jurisdiction to adjudicate the complaint.  It is a well settled legal position that inspite of repeated requests, the Opposite Party Nos. 3 to 6 who are the insurance company and cluster of RSBY Scheme have not settled the claim of the complainant amounts to deficiency in service on the part of the Opposite Parties.  Moreover, on perusal of the order sheet, we noticed that the Opposite Party No.1 has filed objection, but, not filed affidavit evidence.  Inspite of service of notice, the Opposite Party Nos. 2 & 7 not appeared, hence, placed exparte.  Mere filing of the objection of Opposite Party No.1, without the affidavit evidence there is no weigtage to the contention of the Opposite Party No.1.  Hence, we considered that the Opposite Party Nos.1, 2 & 7 have admitted the allegation made by the Complainant Hospital. Moreover, the Opposite Party No.2 has assured the payment by calling the details of pending amount, but, failed.  Hence, the Opposite Party Nos. 1, 2 & 7 are liable to pay the compensation to the complainant.  Hence, considering the facts, discussion made here, we are of the opinion that the complainant has proved the alleged deficiency in service on the part of the Opposite Parties.  Hence, the following;

ORDER

The complaint is allowed.

The Opposite Party No.3 is directed to pay a sum of Rs.40,15,312/- to the Complainant Hospital with interest at 9% p.a. from the year 2015, till the date of payment.

The Opposite Party No.4 is directed to pay a sum of Rs.19,75,733/- to the Complainant Hospital along with interest at 9% p.a. from the year 2015, till payment.

The Opposite Party Nos.5 is directed to pay a sum of Rs.44,45,062/- to the Complainant Hospital  along with interest at 9% p.a. from the year 2015, till payment.

The Opposite Party No.6 is directed to pay a sum of Rs.2,41,000/- to the Complainant Hospital along with interest at 9% p.a. from the year 2015, till payment.

Further all the Opposite Parties are directed to pay a compensation of Rs.1,00,000/- each and costs of Rs.25,000/- to the Complainant Hospital.

The Opposite Parties are granted 45 days time from the date of receipt of this Order to comply the same.  Forward free copies to both the parties. 

                  Sd/-                                                                 Sd/-

MEMBER                                           JUDICIAL MEMBER

KCS*