Sri Shyamal Gupta, Member

Feeling aggrieved and dissatisfied with the impugned order, by which the complaint case has been dismissed by the Ld. District Forum, Appellants/Complainants, Sri Gouri Shankar Agarwal and Smt. Anita Agarwal have preferred this Appeal u/s 15 of the Consumer Protection Act, 1986.

The facts leading to the present Appeal, in a nutshell, are as under: The Appellants initially obtained one health insurance policy from the United India Insurance Co. Ltd.  in the year 2004 and subsequently, shifted the same to the Respondent Insurance Company in the year 2014.  In the year 2016, the Appellant No. 2 underwent breast surgery.  As the Respondent Insurer refused to foot the relevant bills concerning such treatment of the Appellant No. 2, aggrieved with such decision, the complaint case was filed.

Ld. Advocate for the Appellants submitted that the Respondent Insurer had no right to repudiate the subject claim alleging non-disclosure of the history of hypothyroidism (17 years) and breast tumor surgery (27 years ago) of the Appellant No. 2 as the treating Oncologist in unequivocal terms confirmed that the present breast cancer had got no connection with such medical conditions. 

He further contended that in accordance with the terms and conditions of the policy in question, all pre-existing medical conditions stood covered after 48 months since inception of the policy. 

Drawing the attention of this Bench to Clause No. 6 of IRDAI Circular dated 09-09-2011, Ld. Advocate for the Appellants averred that in terms of the said Circular, it was mandatory on the part of the Respondent Insurer to ascertain medical and claim history of the concerned policyholder from the previous Insurer.  As such, whether any particular information was omitted by the Insured, was totally inconsequential. 

He also argued that the afore-mentioned statutory circular also provides details of information which are required to be disclosed at the time of porting and as such, seeking any additional information as condition precedent for porting, was unenforceable and could not alter the position of the Insured at the time of porting. 

The Ld. Advocate concluded his submission contending inter alia that from the policy document being issued by the Respondent itself, it is apparent that the policy could be cancelled only in case of practice of fraud and/or non-disclosure of material information.  In the instant case, non-disclosure of a surgery 27 years back which had no connection with the present medical condition of the Appellant No. 2 and further non-disclosure of hypothyroidism which too got covered automatically following expiry of the cooling period as envisaged under the policy due to continuous renewal of the same since the year 2004 could not be treated as material so far as the present ailment is concerned. 

Ld. Advocate for the Respondent, on the other hand, submitted that while filling up the proposal form, the Appellants intentionally did not disclose any previous ailment of the Appellant No. 2.  From the investigation report as well as the indoor case record, it transpired that the Appellant No. 2 had past medical history of breast tumor and underwent breast surgery related to such tumor and further that she was a known case of hypothyroidism for the last 17-18 years. Taking strong exception to such mala fide conduct of the Appellants, acting upon the terms and conditions of the policy in question, not only the instant claim was repudiated, but also the concerned insurance policy was cancelled.

Besides hearing the rival contentions of the parties, we have also gone through the documents on record.

Admittedly, the Appellant No. 2 went under the knife 27 years back for excision of breast tumor.  It is also not in dispute that the Appellant No. 2 was a known case of hypothyroidism. 

Against such backdrop, the moot point for consideration is whether repudiation of the subject claim over non-disclosure of above medical condition of the Appellant No. 2 was in order or not.

In accordance with the policy terms and conditions, there is a cooling period of 4 years in respect of pre-existing diseases.  Afterwards, the Insurance Company cannot deny settlement of any claim on the ground of pre-existing disease.

In terms of the IRDAI Circular dated 09-09-2011, in case the policyholder chooses to switch from one Insurer to another, he is entitled to get all accrued benefits of the previous policy, including the benefit gained by the Insured for pre-existing conditions.

In this case, the mediclaim policy was acquired by the Appellants for the first time in the year 2004 from United India Insurance Company Limited. Thus, going by the terms and conditions of the said policy, no claim, irrespective of whether the same was having any nexus with previous medical conditions, i.e., excision of breast tumor and hypothyroidism, could be turned down post 2008 and in this case, the claim was lodged in the year 2016. Needless to say, the Respondent had no legal authority to repudiate the subject claim, let alone cancel the subject policy.

Furthermore, the treating Oncologist, by issuing a Certificate dated 11-05-2016 clarified that the past history of breast lump excision 27 years back and history of hypothyroidism since 17 years were not related to the present diagnosis of Carcinoma Breast. No counter expert opinion is advanced from the side of the Respondent in order to negate such opinion of the specialist doctor.  Accordingly, we cannot treat such non-disclosure of past medical condition of the Appellant No. 2 as material suppression of fact.

We have also noted from the aforesaid IRDAI Circular that, within 7 days of receipt of the portability form, the incumbent Insurance Company is required to address the existing Insurance Company seeking details of medical history and claim history of the concerned policyholder.  There is no clarity as to why the Respondent did not follow suit.   It becomes absolutely clear, therefore, that the Respondent itself was at fault.

By overlooking all these facts, the Ld. District Forum committed gross error in dismissing the complaint case.  We find enough merit in this Appeal.

Hence,

O R D E R E D

The Appeal stands allowed on contest against the Respondent. The impugned order is hereby set aside.

The Respondent shall restore the insurance policy with effect from the date of cancellation of the same immediately on receipt of due premium amount from the Appellants for which it must make due communication with the Appellants intimating them about the amount being payable by them.

Respondent shall settle the instant claim within 40 days from this day.  The Respondent shall also pay a sum of Rs. 1,00,000/- and another sum of Rs. 15,000/- as compensation and litigation cost, respectively. 

In case of non-compliance of the above order in toto within the aforementioned stipulated time frame, the Respondent shall be liable to pay simple interest @ 9% p.a. over the claim amount for the entire period of default to the Appellants.