This complaint coming up before us for hearing on 13-05-14                                in the presence of Sri K.V.R.H.Prasad, advocate for complainant                         and of Sri G. Srinivas, advocate for opposite party, upon perusing the material on record, after hearing both sides and having stood over till this day for consideration this Forum made the following:-

O R D E R

Per Sri A. Hazarath Rao,  President:-      The complainant filed this complaint under section 12 of the Consumer Protection Act seeking insured amount of Rs.3,00,000/- together with interest @12% p.a., from the date of complaint and Rs.1,00,000/- as damages due to deficiency of service and for costs.

2.   In brief the averments of the complaint are these:

          The complainant took health insurance policy for himself and his wife Sarojini Devi from the opposite party and it covered reimbursement of medical expenses in case of hospitalization. The said insurance policy bearing No.41281/HP/74857437/00/000 with AL.No.110100187864, UHID No.100611447 covered the risk from 26-10-12 to 25-10-13.   The said Sarojini Devi got severe pain in left femur and was struggling to walk with pain and as such she was shifted to Royal hospital, Vijayawada on 23-02-13.   On examination of x-rays and other investigations doctors advised immediate operation.   The complainant admitted his wife on 28-02-13 and she was operated on the same day and was discharged on 02-03-13.   The doctors at Royal Hospital, Vijayawada advised expert treatment.  In the investigation it was diagnosed that the insured was suffering from cancer.   The insured got admitted in KIMS, Hyderabad on 04-03-13 for expert treatment.   The complainant submitted claim form, request letter and other investigation bills in original on 07-03-13 to the opposite party who in turn sought additional information on 21-03-13.   The complainant after obtaining additional information from Royal Hospital, Vijayawada submitted information with all required documents to the opposite party under claim No.220100221955.   The complainant’s request for pre-authorization of cashless access was denied by the opposite party on the standard exclusive reason with remarks patient is known case of hypertension since five years and diabetes since six months same was not disclosed at the time of policy inception, hence as per policy T&C – part-III of the schedule.   The opposite party while issuing the said policy sent the complainant and his wife to its authorised laboratory for investigation and later after verifying the medical reports issued insurance policy.  The disease cancer was not related to either hypertension or diabetes.   The insured again joined in KIMS on 03-04-13 for second cycle of hemotherapy.   The complainant on 15-04-13 filed claim statement with the opposite party for Rs.4,22,000/- and limited to Rs.3,00,000/- only.  The opposite party on 22-04-13 received a termination notice from the opposite party. The complainant on 02-05-13 gave suitable reply.   The complainant’s wife was not suffering from hypertension since three years as mentioned in OP chit the stray word mentioned in the OP chit is not binding on the opposite party. The treatment for complainant’s wife for cancer is not related to the disease of hypertension and diabetes.  The repudiation of claim by the opposite party is unjust.   The opposite party collected the premium at Mangalagiri within the jurisdiction of this Forum.   The complaint therefore be allowed.    

3.   The contention of the opposite party in nutshell is hereunder:

          The complaint is barred by limitation.   The opposite party did not commit any deficiency of service.   The complainant is guilty of suppression of material facts.   The life assured intentionally and fraudulently suppressed material information regarding health condition and obtained policies without giving any scope for proper assessment of risk.   As soon as the complainant applied for pre-authorization for admission at KIMS the opposite party got information from the admission request note that the insured is a known case of hypertension since five years and diabetes in six months and from the certificate of Dr. T.Pratap Reddy dated 07-03-13 that the insured is a known case of hypertension since December, 2010 and diabetic since six months and from the consultation paper dated 1^st December of Sri Venkateswara Nursing Home that the insured has been advised antihypertensive medication and consulted during the months of January, 2011; March, 201; May, 2012; August, 2012; October, 2012 and December, 2012.   The insured had undergone medical examination at the lab advised by the opposite party during which there was no disclosure of hypertension and BP as the insured was already taking medicines.     The opposite party issued a notice of fifteen days for termination of the contract of the insurance

and the opposite party issued a premium refund  cheque bearing No.149916 dated 10-05-13 for Rs.11,212/- which the complainant received.   Thus the opposite party has rightly terminated the insurance policy.   The opposite party rejected the complainant’s claim on valid grounds.   The complaint therefore may be dismissed.

6.  Exs.A-1 to A-22 and Exs.B-1 to B-16 on behalf of the complainant and opposite party were marked. 

7.   Now the points that arose for consideration in this complaint are:

          1.  Whether the complaint is barred by time?

2. Whether the rejection of claim by the opposite party amounted to                      deficiency in service?

          3.  Whether the complainant is entitled to claim damages and if so to                              what amount?

          4.  To what relief?

8.   POINT No.1:-   The subject insurance policy covered the risk for the period from 26-10-12 to 25-10-13.   As the complaint was filed on 25-06-13 it is well in time.   We therefore answer this point against the opposite party.

9.   POINT No.2:-   The opposite party resisted the claim on two grounds i.e.,  1) The suppression of material facts regarding health condition and                2) Termination of insurance.   The burden is on the opposite party to prove the suppression of material facts as rightly contended by the learned counsel for the complainant. 

10.   The contention of the opposite party that contract of insurance is based on the principle of Uberrimae fidei is well founded by number of judicial pronouncements.    In Shnyni Valsan Pombally vs. State Bank of India & another 2014 (1) CPJ 387 (NC) held that it is a well settled proposition of law that a contract of insurance is based on the principle of utmost good faith – Uberrimae fidei, applicable to both parties. The rule of non disclosure of material facts vitiating a policy still holds the field.  The bargaining position of the parties in a contract of insurance is unequal.  The insured knows all the facts, the insurer is unaware anything which may be material to the risk. Very often it is the insured who is the sole person who has this knowledge.  The insurer may not even have the means to find out the facts which would materially affect the risk.  The law therefore, enjoins on the insured an absolute duty to disclose correctly all material facts which are within his personal knowledge or which he ought to have known had he made reasonable enquiries.   A contract of insurance therefore can be repudiated for non disclosure of material facts. 

11.    In the above case the National Consumer Disputes Redressal Commission relied upon the decision reported in Satwant Kaur Sandhu vs. New India Assurance Company 2009 (4) CPJ 8 (SC) regarding the expression material fact wherein it was held

“It has to be understood 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” and if the proposer has knowledge of such fact, he is obliged to disclose it, particularly while answering questions in the proposal form.   Any inaccurate answer will entitle the insurer to repudiate their 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”.         

12.    The opposite party conducting clinical investigations on                        Smt V. Sarojini Devi w/o Ram Gopal Goud  before issuing subject policy is not disputed.  The learned counsel for the opposite party relied on Ex.A-8 i.e., xerox copy of out patient card dated 04-03-13 issued by KIMS, Hyderabad.  In page 2 of Ex.A-8 it was mentioned that Smt V. Sarojini Devi w/o Ram Gopal Goud was on medication for HTN since three years and was suffering from DM on OHA since six months.   Under those circumstances, the contention of the opposite party that clinical investigations done on Smt V. Sarojini Devi did not disclose hypertension and BP as she was taking medicines for hypertension since 2010 is having considerable force.   The contention of the learned counsel for the complainant that the opposite party did not file any investigation report of the said Sarojini Devi is devoid of merit in view of the observations made by KIMS in Ex.A-8.  

13.  Ex.A-8 disclosed that the Sarojini Devi was on medication for hypertension since three years prior to 04-03-13 i.e., even before issuing the policy.  In A11 (=Ex.B-16) notice dated 15-04-13 the complainant mentioned that the said Sarojini Devi was suffering from minor hypertension since 01-12-10 and was not regular.   The averments of the complaint and contents of Ex.A-11 revealed that the insured suppressed the fact of the said Sarojini Devi suffering from hypertension prior to issuing the policy.   The disease cancer for which the said Sarojini Devi took treatment has nothing to do with hypertension as rightly contended by the learned counsel for the complainant.

14.    In Life Insurance Corporation of India and others vs. Nita Bharadwaj 2014 (1) CPJ 409 (NC)  it was held that it is immaterial whether cause of death had any nexus or not with the disease suffered and suppressed by the insured. 

15.    In Neetu Namdhari vs. Life Insurance Corporation of India and others 2014 (1) CPJ 442 (NC) and Manjinder Kaur vs. Life Insurance Corporation of India and another 2014 (1) CPJ 3 (NC) it was held that answers given by life assured which were within his knowledge in a fraudulent manner amounted to suppression of material facts and results in vitiating contract of insurance. 

16.    The opposite party in its version contended that it terminated the policy in question and refunded the premium of Rs.11,212/- to the complainant by way of cheque bearing No.149916 dated 10-05-13 and the complainant in turn received the same.  The opposite party did not file any document to prove the same and relied on the chief affidavit of the complainant filed later wherein the said averment was not denied.  But the opposite party in Ex.B-9 letter dated 20-06-13 addressed to the complainant did not mention about the encashment of the said cheque by the complainant.  Under those circumstances, mere silence on behalf of the complainant does not amount to proof in our considered opinion. It can therefore be inferred that the opposite party failed to substantiate its contention about termination of policy and the complainant encashing the cheque.

17.  The above decisions supported the contention of the opposite party.   we therefore opine that the insured  suppressed the fact of the said Sarojini Devi suffering from hypertension even prior to obtaining the policy in question though aware.    For the discussion made supra, we answer this point against the complainant.

18.  POINT No.3:   In view of findings on point no.2, the complainant in our considered opinion is not entitled to any amount as damages.   We therefore answer this point also against the complainant.

19.  POINT No.4:   In view of above findings, in the result the complaint is dismissed without costs.

Typed to my dictation by Junior Stenographer, corrected by us and pronounced in the open Forum dated this the 16^th day of May, 2014.

MEMBER                                 MEMBER                                          PRESIDENT

APPENDIX OF EVIDENCE

DOCUMENTS MARKED

For Complainant:

For opposite parties:  

PRESIDENT

NB:   The parties are required to collect the extra sets within a month after receipt of this order either personally or through their advocate as otherwise the extra sets shall be weeded out.