ORDER
(Passed this on-07th December, 2016)
Shri Shekhar P. Muley, President.
01. This is a complaint of deficiency in service in respect of payment of premium of insurance policy of the complainant by the Opposite Party, Bank of Baroda.
02. Facts in short are that the complainant No.-1 is the father of the complainant No.-2. The complainant No.-1 has a saving bank a/c No. 33590100001721 with the O.P.- 1 since 22.11.2010. The O.P. floated a policy known as ¨Baroda Health¨ exclusively for its a/c holders. Cashless hospitalization facility in network hospitals is one of its features. He therefore took the said policy for an amount of Rs.-5 lakh with annual premium Rs.6950/-. The said policy was issued by National Insurance Company and it was a medi claim policy, which covers the complainant No.-1 and his family. The policy period was from 03/12/2011 to 02/12/2012. His first policy was also existing and both the policies were styled as ¨Baroda Health Policy¨. The said policy was due for renewal on 03/12/2012. The complainant No.-1 issued a cheque for Rs.6950/- for renewal of the policy on 23/11/2012 to the O.P.-1. The cheque was debited to his account and pay order was issued in favour of the insurance company. But to his shock, the OP failed to submit the pay order to the insurance company. Resultantly, the policy could not be renewed and remained in lapsed condition. He made requests but except getting assurances nothing was done.
The complainant No.-2 met with an accident on 19/12/2012. He had sustained serious injuries and was operated upon. The complainants incurred expenses of Rs.-3 lakh which includes medicine, special diet, check up, visiting fees of doctor, etc. The complainant No.-2 was also covered under the policy. Therefore claim was made for paying the expenses to the hospital. But no cashless facility was granted, as the policy was in lapsed condition on the date of accident. It was due to fault on the part of the O.P. According to the complainants since premium for renewal was paid well before due date, the policy stood revived on 23/12/2012 itself and they are entitled to all benefits accrued from the said policy from that date itself. The policy was later revived on 20/12/2012 for which the O.P. issued fresh pay order for Rs.7079/- on 20/12/2012 by debiting it from the a/c of complainant No.-1. Thereafter the policy was renewed from 20/12/2012 to 19/12/2013 i.e after a lapse of 25 days. The insurance company then issued him policy, which covered his wife and the complainant No.-2. It is alleged, denial of cashless facility even though all formalities were complied with, amounts to deficiency in service of the O.P. Thus a claim is made for all benefits accrued under the policy with effect from 23/12/2012 with 18% interest, for payment medical expenses Rs.-3 lakh of the complainant No.-2, and compensation and litigation cost.
03. The O.P. contested the complaint by filing written version at Ex.-9. It may be stated that earlier the complainant No.-2 was not a party to the case and therefore an objection was taken regarding non joinder of necessary party. Later he was allowed to be joined as the complainant No.-2. Further, it is stated, the ¨Baroda Health Policy¨ was launched for account holders of the O.P. It was available at a very low premium and on single premium insured person obtains cover for a family of self, spouse and 2 dependent children. Earning son and married daughter are not covered. It is admitted that the complainant No.-1 being its account holder was granted insurance cover for his family for the period mentioned by the complainants. However, unless the premium along with applicable service tax is paid, insurance policy cannot be issued. In the year 2012-13 the Govt. of India increased service tax from 10.30% to 12.36%, which is made known to everybody through newspapers, Television, etc. Thus the complainant No.1 was expected to issue a cheque of Rs.7079/- towards premium including service tax for insurance cover of Rs.-5 lakh. However he issued the cheque for Rs.6950/- without including increased tax. Although the cheque was encashed, it could not be paid for renewal of the policy. The OP advised him to pay difference amount, but he was not ready. Hence, for this reason the policy could not be renewed from 3/12/2012.
Thereafter when the complainant No.-1 approached the O.P. after the accident of the complainant No.-2 and insisted for renewal of the policy, an amount of Rs.7079/- was debited to his account as per his instruction and the policy was renewed from 20/12/2012 to 19/12/2013. The earlier amount Rs.6950/- given by the complainant was duly credited to his account. Thus the complainant himself was to blame for non renewal of the policy and the O.P. was not at fault. The complaint is filed claiming compensation on account of alleged accident of the complainant No.-2 and his hospitalization and medical expenses. But the complainant No.-2 being major and not dependent he is not entitled to reimbursement under the policy. This fact was not disclosed to the O.P., otherwise name of the complainant No.-2 would not have been included in the policy. The complainants have thus suppressed material facts and so, not entitled to compensation. Denying any deficiency in its service, it is urged to dismiss the complaint.
04. We have heard the arguments of the counsels in detail. Also perused documents. Rejoinder notes of argument and other materials placed on record. We record our findings and reason thereupon as under.
FINDINGS AND REASONS
05. After hearing the learned counsels,a small question, which arose for our determination, is whether the lapsed policy on receipt of delayed premium can be said to have been revived from back date. Another question needs to be considered is whether the complainant No.-2 is entitled to get benefits under the policy and as per its terms, when it was in lapsed condition.
06. Most of the facts as narrated in the complaint are not disputed by the O.P., barring its liability for delayed payment of premium. The period of policy in question was from 03/12/2011 to 02/12/2012. A single premium was payable, which was Rs.6950/- including tax. It was due for renewal from 03/12/2012. Admittedly the complainant had issued a cheque of Rs.-6950/- to the O.P. on 23/11/2012, well before the due date. The O.P. has not denied encashment of the cheque by it, but it was not paid to the insurance company. The reason given is that in the Financial Year-2012-13 service tax was increased, therefore total premium was also increased to Rs.-7079/-. The complainant was, therefore, asked to pay increased premium, but he refused to pay. In this respect, the complainants´ contention is that the O.P. should have intimated to them about increase in premium. But it was not communicated, so it was the deficiency in its service for which the complainants cannot be put to loss.
07. In reply, the counsel for the O.P. took us through the proposal form given by the complainant No.-1 to emphasize his contention that the complainant No.-1 had agreed and given declaration that the policy would be based on the premium rates at the time of renewal and in the event of revision of Service Tax rates, he agreed to pay the difference in Service Tax amount. While we agree that there cannot be a dispute about the terms and condition once the same are accepted and agreed to by the parties, the question is should any change in the rate of service tax applicable on premium be intimated to the insured beforehand. The answer should definitely be in the affirmative. There is no evidence from the O.P. that the revised/increased service tax was communicated to the complainant. It is stated that intimation about increase in service tax was given to all customers through newspapers and Television. So, it appears, the complainants were not individually communicated about revised service tax before he issued the cheque for renewal of the policy. The cheque was given 10 days before the due date and the O.P. could have asked the complainants to pay more for service tax before encashing the cheque during those 10 days. It is also not clarified from which date service tax was revised. Since the complainant No.-1 has paid the revised premium and got the policy revived, he could have paid it earlier had he been asked to.
08. The policy taken by the complainant No.-1 was a health policy by which medical health insurance cover was given to him and his family. Term of such policy is annual and is required to be renewed every year, otherwise it gets lapsed. If any changes take place in premium, tax, or terms and conditions of the policy, it becomes the duty of the insurance company as well as of the O.P. to intimate its customers. We do not approve of the way of communication through newspaper or TV, though it can be one way of communication to people at large, but insurance companies and banks shall also take care to inform its customers individually, particularly to those who pay well before due date.
09. The counsel for the complainants vehementally contended that since the premium was paid by cheque on 23/11/2012 to the O.P., renewal of the policy should be reckoned from 23/11/2012. The counsel further contended, since the complainants have done their part to renew the policy and the O.P. also encashed the premium cheque, all the benefits of the policy should be given from 23/11/2012 i.e. when cheque was issued. We have our own reservation on this contention. Firstly, the previous policy period was going to be expired on midnight of 02/12/2012, so renewal could not have been from earlier date. Secondly, as said before, the policy being a medi claim policy, it remains in force for a year and has to be renewed every year. Like life insurance policy no grace period is provided under medi claim policy for late payment of premium. The medi claim policy starts from the date the premium is paid and not from back date when previous policy terminates, if delay occurs in payment of premium. Even though the O.P. was at fault in not informing about change in the premium, yet as per the terms of the policy it was revived only from the date of receipt of the premium. Insurance company was not expected to renew the policy even before it received the premium. The concept of contract in essence envisages a proposal, acceptance and passing of consideration. In the absence of any consideration there can be no contract. The insurer agrees to pay the damages arising out of any accident by taking a chance that no accident might happen. Motivation of the insurance business would turn to be the profit in case no damage occurs. Such business of the insurance company can be carried out on only with the premium paid by the insured. The only profit, if at all the insurance company makes, of the insurance business is the premium paid when no accident or damage occurs. As such, to ask the insurance company to bear the entire loss of damage of insured without the company receiving a pie towards premium is contrary to the principles of equity. We do not understand why the insurance company is not joined in the proceeding. It may not be a necessary party as no deficiency is alleged against it, but as proper party it could have been joined. Because the complainants are claiming benefits under the policy and it is only the insurance company which can consider the claim. Therefore, in this
case, since the insurance company received premium for renewal on 20/12/2012 the policy stood revived from 20/12/2012 and not from 23/11/2012.
10. The counsel for the O.P. in his argument has pointed out the salient features of the policy. Apart from having very low premium and cashless hospitalization facility, the policy gives cover to a family of four including self, spouse and 2 dependent children. He put emphasis on the words ¨dependent children¨ while contending that the complainant No.-2 was not only major but independent person and therefore not entitled to claim benefits under the policy as a son of the complainant No.1. Here it may be stated that originally the complainant No.-2 was not the party to the proceeding and therefore no medical papers of his treatment were filed on record. When the O.P. raised preliminary objection about his non joinder even though he was major and his medical expenses are being claimed, the complainant No.-1 joined his son as the complainant No.-2 and later filed medical papers of treatment. The counsel for the complainants contended that it is not strictly expenses but compensation is claimed on account of deficiency in service. Because another objection of the counsel for the O.P. is that after the vehicular accident of the complainant No.-2, he had instituted a claim u/s 166 of the Motor Vehicle Act before the Motor Accident Claim Tribunal, Nagpur. It is therefore contended that the complainants cannot claim compensation on account of medical expenses twice on same cause of action. The counsel for the complainants strongly refuting this allegations, contended, the claim under the M.V. Act was totally different as it was filed for claiming actual expenses incurred on treatment and future expenses and for partial disability. Besides, it was claimed not from the OP but from the insurance company of the vehicle and its owner. In the present case compensation is being claimed for deficiency in service and so both the proceedings are different. We partially agree with this submission. It is correct that the claim under the M.V. Act was made against different persons on account of injury and disability suffered in a vehicular accident. But the claim was not restricted to only non pecuniary damages, but pecuniary damages were also claimed in which medical expenses were included. Same medical expenses are claimed in this complaint also. Therefore we do not completely agree with the counsel for the complainants.
11. In the claim petition before the MACT the complainant No.2 has shown himself as a earning person. It is stated in the petition that he is self employed and his monthly income is Rs.-15,000/-. While claiming pecuniary damages, it is stated that due to accident he lost one year of business and in future he would be unable to do work and therefore claimed Rs.3 lakh. Pertinently, this claim was made when the policy was renewed. If his statement in the petition made on solemn affirmation is accepted, the contention of the counsel for the O.P. will also have to be accepted. The policy terms debar such child of an insured from the benefits, who is not dependent on the insured. The complainant No.-2 in his petition has said about loss of his business for one year due to accident. The petition was filed on 04/07/2013. So, an inference can be drawn from this statement that he was doing business at least since July 2012 or even prior to that. That means when the policy was due for renewal on 03/12/2012 and during subsistence of that policy, the complainant No.-2 was in business and was not dependent. He has made all these statements on affirmation and so he cannot resile from them. The age of the complainant No.-2 is not germane to the issue. Majority or minority of a person is not made an exclusion from the benefits. Considering the
terms of the policy, we must hold that the complainants are not entitled to claim compensation under the policy, for, the complainant No.-2 is not dependent.
12. The O.P. accuses the complainants of fraud and suppression of material facts to include the complainant No.-2 in the policy. He, therefore, contended that such person is not entitled to be heard on the merits of his grievance and, in any case, such person in not entitled to any relief. Reliance is placed on Ramjas Foundation & Othrs v/s Union of India (2010) 14 SCC 38. While we agree about suppression of material fact, we refrain our self from commenting upon the allegation of fraud. Fraud is a criminal act done with an intention to defraud other and it has to be established with evidence. Though, from the documents suppression of fact is made out, that itself does not, ipso facto, prove criminal intention. There could be other reasons, like ignorance or inadvertence in making a claim. The counsel for the O.P. further pointed out the Circular issued by Wealth Management Services, Baroda Corporate, Mumbai on ¨Baroda Health¨ Medi claim Policy, which provides salient features of the policy. It specifically mentions non -earning son / daughter is considered dependent. The counsel for the
complainant said that it was not supplied to the complainants and also denied that earning son / daughter are not covered under the policy. The Circular, in fact, does not spell out anything new. Whatever features of the policy are mentioned therein are also mentioned in the document No.-1 filed by the complainants and they are aware of the same. According to the counsel for the complainants if non earning son/daughter is considered dependent, it does not mean that earning son/daughter is not covered under the policy. Such interpretation of the clause is incomprehensible. When it is provided that non earning son/ daughter is considered dependent, conversely it means earning son/ daughter is not considered dependent and so not covered under the policy. The counsel further submits that in the proposal form all required information was given and nothing was suppressed. What is submitted is correct, but in the proposal form there is no column about earning/non earning member. It is the term of the policy and it is in knowledge of the complainants as they have filed the product copy themselves. So, it does not mean they had given all information of the complainant No.-2. Submissions are also made from both sides about age of the complainant No.-2. In our opinion age is not a factor to be considered for entitlement of policy benefits. If a
person even though major but dependent, he is covered under the policy, and if he is minor but is earning then he is not covered. This appears to be the peculiarity of the policy.
13. The counsel for the O.P. further argued about not furnishing bills regarding medical treatment of the complainant No.-2. He submits, since medical expenses are being claimed, bills should have been produced. Countering this submission, counsel for the complainants submitted claim petition before MACT has nothing to do with the present case. Because the claim petition before MACT was filed for compensation on account of physical disability, whereas the consumer complaint is filed for reimbursement of medical expenses. At the cost of repetition we reiterate that in claim petition under the Head ¨Pecuniary damages¨ all medical expenses were claimed. Therefore there is no substance in the submission.
14. To sum up, as per the policy features, health cover is given to the insured and his family of 4 including dependent son/daughter. The complainant No.-2 was not dependent and therefore, as per the terms, he was not covered under the policy. Even if it is assumed that the policy was valid when accident took place, he was still not entitled to benefits as he was self employed and not dependent. Therefore the complaint is liable to be be dismissed. Hence, we pass the following order-
ORDER
- The complaint is dismissed with no order as to cost.
2.
parties.
