IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, ALAPPUZHA
Friday the 8th day of October, 2021.
Filed on 07-08-2020
Present
- Sri.S.Santhosh Kumar BSc.,LL.B (President )
- Smt. P.R Sholy, B.A.L,LLB (Member)
In
CC/No.185/2020
between
Complainant:- Opposite party:-
Sri.Sunil George (Abraham Mathew) The Branch Manager
S/o George Life Insurance Corporation of
Parummottil House India, Branch No.2
Jawahar Bala Bhavan Road P.B No.5212, Sreevilasam
M.O.Ward, Alappuzha Building, Kidangamparambu
(Adv.Sri.P.V Thomas & Sri.S.Gopakumar) Alappuzha
(Adv.Sri.S.Devalal)
O R D E R
SRI. S.SANTHOSH KUMAR (PRESIDENT)
Complaint filed under Sec.35 of the Consumer Protection Act, 2019.
Material averments briefly stated are as follows:-
For the security of the complainant he had availed a LIC Jeevan Arogya (without profit) policy No.305073214 with coverage from 26.09.19 to 26.09.2046 and the premium as scheduled is being paid. The policy has got coverage of his wife also.
1. On 05.05.2020 at 7 PM while he was riding his scooter along with wife as pillion driver it fell in a pit at Mullackal and he sustained injuries. He was taken to the general hospital Alappuzha at 7.30 PM and had undergone treatment. He had sustained injuries on hand, face, lower limb etc. Thereafter he had undergone treatment with Health park hospital Alappuzha and later he was admitted in Sahrudaya hospital Alappuzha and had undergone treatment there as an inpatient for 8 days. Complainant had to pay an amount of Rs.15,980/- for the treatment and had to incur other expenses.
2. After discharge from the hospital complainant contacted the opposite party and filed a claim application for Rs.40,000/-. At the time of availing policy complainant had undergone all the medical checkup as directed by the opposite party by a medical doctor who is empanelled by the opposite party. Thereafter the policy was issued.
3. After receiving the claim form in the 4th week of May 2020 opposite party did not make any work on the claim form. Though contacted many times it was delayed by some lame excuses. The non processing of the claim form and non disbursement of the amount due in proper time and not taking a decision on the claim form referred by the complainant or intimating the reason for nonpayment etc. had caused to the complainant to suffer unendurable mental agony and financial exigencies. Till today opposite party had neither honored the claim nor had repudiated it. The non-processing of the claim or the inordinate delay amounts to deficiency in service. Hence the complainant is entitled for an amount of Rs.1,00,000/- as compensation, besides the amount of medical bills. Hence the complaint is filed for realizing the claim amount of Rs.40,000/- and Rs.1,00,000/- as compensation.
4. Opposite party filed a version through its manager divisional office Ernakulam mainly contenting as follows:-
The subject policy is different from the medical insurance policies offered by general insurance companies, which reimburse hospitalization expenses subject to terms and conditions. The policy taken out by the complainant offers predetermined benefits subject to terms and conditions and benefits are not expense oriented. The complaint praying for expenses is not sustained by any policy condition, it is not maintainable and as such is liable to be dismissed in limine.
5. The complaint is decidedly premature. The complainant has approached this Commission suppressing the true facts. Opposite party received the claim under LIC’s Jeevan Arogya policy on 02.06.2020. As part of the initial procedure of processing of the claim, papers were referred to the third party administrator (TPA) within no time. The claims are to be inevitably referred to the TPA as medical expertise is necessary for processing the claims for professional assistance is indispensable. Under condition 19 vii of the policy, the insured agrees to provide all necessary and accurate information to such authorized TPA and follow the processes and instructions as stipulated by such TPA for smooth administration of the policy.
6. On receiving the reference, the TPA required further clarification regarding certain important points such as, whether the insured was under the influence of alcohol at the time of injury, clarification from the doctor about the exact duration of illness (Diabetic mellitus), 1st consultation reports, with details of previous treatments surgery etc. The hospital records of the complainant reveal that he was admitted in the hospital and underwent wound debridement for infected traumatic wound of left lower limb and right upper arm. The diagnosis also shows type 2 diabetes mellitus. According to the complainant, the injury was sustained on 05.05.2020 but he was hospitalized as inpatient only on 11.05.2020. Within a short span the injury became an infected traumatic wound. The queries raised by the TPA were intimated from the branch office of the opposite party to the complainant by letter dtd.08.07.2020. However the complainant did not give any proper reply for the same. The reply received on 14.07.2020 was incomplete and inadequate to process the claim. Again the TPA called for particulars vide letter dated 24.07.2020 and reminders dtd. 08.08.2020 and 23.08.2020.
7. When the complainant failed to answer the queries despite repeated reminders, based on further investigation and analysis of medical reports collected from the concerned hospital a strong opinion was made out that the complainant had diabetes mellitus type-2 (chromic diabetic) much prior at least from 2017 ie, before the proposal for assurance dtd. 19.08.19. This vital material fact relating to health was deliberately suppressed from the proposal form thereby warranting cancellation of the contract as null and void with forfeiture of premia paid. Hence the policy is vitiated by the suppression of vital material fact at the time of proposing for assurance. The non co-operation of the complainant militates against conditions 19 vii and xi (e) of the contract of assurance. So the situation which fettered the opposite party from taking a final decision is one created by the inaction on the part of the complainant. Since this complaint is pending opposite party is constrained to reserve the final decision till a decision is taken by this Commission.
8. Complainant has not produced any document though he had undergone treatment at Health park hospital. The opposite party is not liable to reimburse the medical expenses incurred as claimed by the complainant as the benefits under the policy are not expense related; but benefit oriented. A medical examination result just before availing the policy, though unobjectionable is immaterial in a case where there is suppression of material facts in the proposal form. The previous medical records reveals that the complainant was undergoing treatment for type 2 diabetes mellitus as on 24.08.17 but it was suppressed in the proposal form. The wound even if proved to have occurred in an accident, it subsequently became infected traumatic wound solely because the complainant’s pre-existing disease of diabetes mellitus type 2.
9. The claim of Rs.40,000/- is not supported by any bill or policy condition. Complainant had submitted a bill for Rs.15,980/- only. The final decision was delayed due to the non furnishing of information sought by the opposite party as well as the TPA. Hence there is no deficiency in service on the part of the opposite party. Even if the policy is considered as valid and no conditions in the policy is violated the claim can be processed and claim amount can be calculated only on the basis of the requirements that have been called for from the complainant vide letters dtd. 24.07.2020, 08.08.2020 and 23.08.2020 which he has not submitted. Since there is no deficiency of service in dealing with the claim of the complainant the complaint may be dismissed with cost.
10. Points for determination are:-
1. Whether the complaint is premature?
2. Whether there is any deficiency of service from the side of opposite party as alleged ?
3. Whether the complainant is entitled to realize an amount of Rs.40,000/- being claim amount as prayed for?
4. Whether the complainant is entitled to realize an amount of Rs. 1,00,000/- as compensation as prayed for?
5. Reliefs and Costs?
11. Evidence in the consists of the oral evidence of PW1 and Ext.A1 to A7series from the side of the complainant and the oral evidence of RW1 and Ext.B1 to B15 from the side of opposite party.
12. Points No. 1 to 4:-
For the sake of convenience these points are considered together.
13. PW1 is the complainant in this case. He filed an affidavit in tune with the complaint and marked Ext.A1 to A4. Later as per order in IA 255/2021 Ext.A5 to A7 series were also marked. During cross examination Ext.B1 and B2 were marked..
14. RW1 is the manager (Legal) LIC of India, Ernakulam. She filed an affidavit in tune with the version and marked Ext.B3 to B15.
15. The case of PW1, the complainant is that as per Ext.A1 proposal dated 6/4/2019 he availed LIC Jeevan Arogiya Policy and the policy commenced from 26/9/2019 and it was valid till 26/9/2046. On 5/5/2020 while he was riding a scooter accompanied by his wife it fell on a pit at Mullackal, Alappuzha and the complainant along with his wife sustained injuries due to fall. Immediately complainant and his wife were taken to the nearby General Hospital and the complainant was treated in the OP as per Ext.A2 Op ticket. Thereafter he took treatment at Health Park Medical centre which is revealed from Ext.A6. However since there was no cure, on 11/5/2020 he was admitted at M/s Sahrudaya Hospital , Thathampally, Alappuzha and had under gone treatment as inpatient till 18/5/2020. He had incurred an amount of Rs. 32,857/- as per Ext.A7 series bills. He filed a claim application before the opposite party LIC of India. In spite of passage of considerable time his claim was not entertained and it was also not repudiated. Hence he has filed the complaint seeking the above mentioned reliefs. While the complaint was pending on 7/9/2020 he received Ext.A4 letter seeking certain clarifications. Opposite party filed version through the legal manager admitting the policy. However according to them the complaint was filed suppressing material facts. They received the claim on 2/6/2020 and as part of the procedure it was referred to the 3rd party administrator (TPA) without any delay. The 3rd party administrator (TPA) requested certain clarification to the complainant such as whether the insured was under influence of alcohol at the time of injury and clarification from the doctor about the exact duration of illness (Diabetes Mellitus) etc. Though clarification letters and reminders were issued there was no reply from the complainant and so the delay occurred. TPA called for particulars vide letter dated 24/7/2020 and reminders dated 8/8/2020 and 23/8/2020. On further investigation by the TPA and from medical records they had strong opinion that complainant had Diabetes Mellitus Type -2 prior at least from 2017 ie, much prior to the date of proposal for assurance dated 19/8/2019. Since there was suppression of material facts, opposite party is entitled to cancelation of the contract as null and void and forfeiture of premium paid. However the delay occurred since the complainant did not furnish replies to the queries of the TPA. While so on 7/8/2020 the complaint was filed before this Commission. Since the matter is sub judice it is kept pending by them. Hence according to them there is no deficiency of service and the complaint is only to be dismissed.
16. The fact that PW1 availed LIC Jeevan Arogya (without profit policy), on 26/9/2019 and it is valid upto 26/9/2046 is not in dispute since it is proved by Ext.A1. It is also an admitted fact that on 5/5/2020 PW1 sustained injuries since it is revealed from Ext.A2 OP ticket. (Ext.A5 Original) From Ext.A2, A3 and A6 it can be seen that PW1 had under gone treatment initially at General Hospital, Alappuzha thereafter Health Park Medical centre, Alappuzha and finally at the Sahrudaya Hospital, Alappuzha where he was admitted on 11/5/2020 and discharged on 18/5/2020. Ext.A7 series are the bills amounting to Rs.32,857/- incurred by PW1 at M/s Sahrudaya hospital, Alappuzha. According to PW1 since he was having a valid policy opposite party is liable to entertain the claim and pay the amount. Per contra according to RW1 immediately on getting the claim form they engaged the TPA (M/s Medsave Health Insurance TPA Ltd.) to investigate about the matter which is an accepted procedure. The TPA had sought clarifications vide Ext.B13 letter dated. 24/7/2020 with a copy to opposite party. Since there was no reply again Ext.B14 reminder No.1 was sent on 8/8/2020 and Ext.A4 reminder No.3 was sent on 7/9/2020. The opposite party also had sent Ext.B8 letter on 7/8/2020 seeking clarification. Hence according to the opposite party since the complainant did not reply for the clarifications sought by them as well as TPA the claim is pending.
17. In the version it is contended that the complaint is premature. The claim form furnished by the complainant was forwarded to the TPA and it is pending before them. They sought clarifications to the complainant and so far he has not replied for the same. Since the claim was not repudiated complainant is not having any cause of action and so the complaint is premature. The learned counsel appearing for the opposite party brought several reasons for the delay occurred in the processing the claim. It was contented that complainant took Ext.A1 policy on 26/9/2019 suppressing material facts. Ext.B1 is the proposal form dated 19/8/2019 which is seen received at the Branch Office 2 of Alappuzha on 13/8/2019. In page.4 (Q).no. 7 (ii) is Diabetes of raised blood sugar . The answer given by PW1 is ‘No’. As per the request of the opposite parties the medical records of PW1 was produced by M/s Sahrudaya hospital, Thathampally ant it was marked as Ext.X1 series. In Ext.X1 series on 20/8/2014 it is shown that Diabetes Mellitus (DM) – 5 years. Tablet zoryl M ½ -0- ½ (half – zero – half) was prescribed by the doctor. The FBS was 126 and the PPBS was 140. (Normal FBS is upto 110 and PPBS is upto 140) . So from Ext.X1 series it is pellucid that on 20/8/2014 PW1 was having Diabetes Mellitus for the last 5 years and the doctor prescribed a tablet for the same. In Ext.A5 (Ext.A2 copy) OP ticket issued on 5/5/2020 from General Hospital, Alappuzha it is mentioned that Known Type-2 DM. In Ext.A3 Discharge Summary of Sahrudaya Hospital also it is mentioned that patient is T2DM(Type-2 Diabetes Mellitus) So from Ext.X1 series it can be gathered that PW1 was having Diabetes Mellitus for 5 years and he was under medication which was suppressed in Ext. B1 proposal form which is seen furnished on 13/8/2019 for getting the policy. It was held by the Hon’ble Supreme Court in Satwant Kaur Sandhu Vs. New India Assurance Company Ltd. (2009 KHC 4898)
“The term “material fact” is not defined in the Act and therefore, it has been understood and explained by the Courts in general terms to mean as any fact which would influence the judgment of a prudent insurer in fixing the premium or determining whether he would like to accept the risk. Any fact which goes to the root of the Contract of Insurance and has a bearing on the risk involved would be “material”.
“ The upshot of the entire discussion is that in a Contract of Insurance, any fact which would influence the mind of a prudent insurer in deciding whether to accept or not to accept the risk is a “material fact”. If the Proposer has knowledge of such fact, he is obliged to disclose it particularly while answering questions in the proposal form. Needless to emphasis that any inaccurate answer will entitle the insurer to repudiate his liability because there is clear presumption that any information sought for in the proposal form is material for the purpose of entering into a Contract of Insurance.”
18. It was held by the Hon’ble Supreme Court in Reliance Life Insurance Company. Ltd. & Another Vs. Rekhaben Nareshbhai (2019 KHC6482)
“The expression “material” in the context of an insurance policy can be defined as any contingency or event that may have an impact upon the risk appetite or willingness of the insurer to provide insurance cover.”
19. Ext.B3 is the Policy Schedule issued to PW1. Definition .1 XVII reads as follows:-
“Disclosure to Information- The policy shall be void and all premium paid hereon shall be forfeited to the Company, in the event of misrepresentation, mis-description or non-disclosure of any material fact.”
20. So as held by the Hon’ble Supreme Court the non disclosure of the previous illness of Diabetes Mellitus (DM) enables the opposite party even to forfeit the premium paid. The contention that PW1 was not aware of these facts while filling the proposal form is unsustainable in view of the decision of the Hon’ble Mysore High Court in V.K.Srinivasa Shetty Vs. M/s Premier Life and General Insurance Company Ltd. (AIR 1958 Mysore 53). It was held
“ Now it is clear that a person who affixes his signature to a proposal which contains a statement which is not true, cannot ordinarily escape from the consequence arising there from by pleading that he chose to sign the proposal containing such statement without either reading or understanding it. That is because, in filling up the proposal form, the agent normally, ceases to act as agent of the insurer but becomes the agent of the insured and no agent can be assumed to have authority from the insurer to write the answer in the proposal form.”
21. It was contented by the learned counsel appearing for complainant that before Ext.B1 policy PW1 had undergone medical checkup by a panel of doctors of LIC and the policy was issued on the basis of medical certificate. If there was any previous disease it will find a place in the medical certificate. But such a contention cannot be accepted since PW1 himself admitted that at the time of examination by the doctor of LIC he was under medication and was taking one small tablet for sugar. Tablets are prescribed to control the diabetics and if examined after consuming medicine it will not reflect in the blood test. Such a contention is also unsustainable in view of the decision of the Hon’ble High Court of Kerala in P.Sarojam Vs. LIC of India (AIR 1986 Kerala 201). It was held
“ The mere fact that the Medical Officers of the LIC of India had certified the life assured as good is not of much consequence, in the light of the facts disclosed by evidence, that the certificates do not disclose the true state of affairs known to the insured who had submitted Ext.B7 and B8 proposals. The false answers to the questions in the proposal form given by the insured vitiate the contract of insurance and the defendant Corporation is entitled to repudiate the policies and decline payment there under.”
So from the above discussion it is crystal clear that there was non disclosure of material fact in the proposal form and the insurance policy was obtained.
22. From Ext.B13, B14 and B15 it can be seen that on 24/7/2020 a letter was issued to PW1 for clarification and Ext.B14 is reminder No.1 dated 8/8/2020 and Ext.B15 is reminder No.2 dated 23/8/2020. Complainant himself has produced Ext.A4 reminder No.3 dated 7/9/2020. PW1 had sent Ext.B5 undated reply to the opposite party to one of the query letters. It is seen received by the opposite party on 14/7/2020. So it can be seen that there was non co-operation from the part of PW1 by not furnishing the required clarifications and so it cannot be held that there is deficiency of service from the part of opposite parties in delaying the claim.
23. As stated earlier opposite party has neither allowed the claim nor it was repudiated. It is pending for getting necessary clarifications from the complainant. The complaint is seen filed on 7/8/2020 and thereafter opposite party has kept the file pending as subjudice since the matter is pending before this Commission. It is for the opposite party to take a decision either to allow the claim or to repudiate. In the light of the above discussion we have no hesitation to hold that the clarification sought by the TPA is genuine on the basis of the records which shows that PW1 had Diabetes Mellitus prior to the submission of proposal form and it was not disclosed. It is to be noted that even after sending a query letter seeking clarification and sending three reminders the queries are unanswered. So PW1 had also played his role to delay the processing. In said circumstances we can give only a direction to the opposite party to process the claim within a fixed period. It is for the opposite party either to allow the claim or to repudiate the same on the basis of the available facts. Since the opposite party has not passed any final order in the claim, we are not inclined to give any relief to the complainant. However a direction can be given to the opposite party to process the claim within a period of 2 month from the date of receipt of the copy of the order. We are making it clear that the complainant will co-operate with the TPA and will give necessary answers to their queries. Since no deficiency in service was proved against the opposite party complainant is not entitled for compensation. These points are found accordingly.
Point No.5:-
In the result complaint is allowed in part.
1. Opposite party is directed to process the claim immediately at any rate within a period of 60 days from the receipt of the copy of order. It is made clear that complainant will furnish necessary clarifications at the earliest for the queries/clarifications required by the TPA.
2. Parties are directed to bear their respective cost.
The order shall be complied within one month from the date of receipt of this order.
Dictated to the Confidential Assistant, transcribed by her corrected by me and pronounced in open Commission on this the 08th day of October, 2021.
Sd/-Sri.S.Santhosh Kumar (President)
Sd/-Smt.Sholy.P.R (Member)
Appendix:-Evidence of the complainant:-
PW1 - Sunil George(Complainant)
Ext.A1 - Copy of Policy Certificate.
Ext.A2 - Copy of OP Ticket
Ext.A3 - Discharge Summary, Sahrudaya Hospital
Ext.A4 - Reminder No.3
Ext.A5 - Original OP Ticket (G.H.Alappuzha).
Ext.A6 - Cash Invoices (3 Nos).
Ext.A7 - Medical Bills (33 Nos)
Evidence of the opposite parties:-
RW1 - Uma Thankachi.S( Witness))
Ext.B1 - Proposal Form Health Insurance Policy(LIC)
Ext.B2 - Check List (revised)
Ext.B3 - LIC’s Jeevan Arogya Polcy Schedule.
Ext.B4 - Copy of Jeevan Arogya Policy.
Ext.B5 - Undated reply letter.
Ext.B6 - Delegation of powers dtd. 22/7/2020
Ext.B7 - Delegation of powers dtd. 29/7/2021
Ext.B8 - Copy of letter dtd. 7/8/2020
Ext.B9 - Out ward Register
Ext.B10 - Postal Receipt
Ext.B11 - Postal Envelop
Ext.B12 - Guide Lines Jeevan Arogya Plan
Ext.B13 - Letter from TPA 24/7/2020
Ext.B14 - Letter from TPA dtd.8/8/2020
Ext.B15 - Letter from TPA dtd. 23/8/2020
Ext.X1 - Medical Record Sahrudaya Hospital, Alappuzha
//True Copy //
To
Complainant/Oppo. party/S.F.
By Order
Senior Superintendent
Typed by:- Br/-
Compared by:-
