BEFORE THE IV ADDL DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, BENGALURU

1^ST FLOOR, BMTC, B-BLOCK, TTMC BUILDING, K.H ROAD, SHANTHINAGAR, BENGALURU – 560 027.

    25^th DAY OF MARCH 2021

O R D E R

SMT.PRATHIBHA. R.K., PRESIDENT

This complaint is filed by the complainant against the Opposite Party (hereinafter called as OP) under section 12 of the Consumer Protection Act, 1986.  The complainant prays to direct the OP to award a sum of Rs.1,52,691/- together with costs and interest @ 18% p.a from the date of claim and any other reliefs on an allegations of deficiency in service.

2.      The brief facts of complaint is as under:

Complainant is a senior citizen had obtained health insurance policy known as Senior Citizens Red Carpet Insurance Policy from OP.  The said policy valid from 31.03.2017 to 30.03.2018.  The complainant submitted that at the time of obtaining the policy he has not withheld any information and also has not made any misrepresentation to the OP.  The complainant further submitted that he met with road traffic accident on 13.12.2017 and he was admitted to the Rangadore Memorial Hospital, Shankarapuram, Bangalore and he was diagnosed to have sustained injuries such as fracture of right acetabular dome and was treated there at the hospital as an inpatient from 13.12.2017 to 21.12.2017.  The complainant was also treated for type 2 diabetes mellitus, hypertension and also interstitial lung disease.

Complainant further submitted that he approached the OP to avail cashless facility.  OP rejected the claim of the complainant on untenable and frivolous grounds by letter dated 16.12.2017.  That the complainant is a senior citizen and aged person had to arrange the amount for hospital charges and make payment of sum of Rs.99,700/-.  Complainant further submitted that OP had cancelled the insurance policy by its letter dated 25.01.2018 by sending the cheque for refund of the insurance premium.  The said cheque has not been encashed by complainant.  This act of the OP is much against the insurance laws and also OP practicing unhealthy and illegal ways to make illegal money by depriving the legitimate claim of the insured person.  Hence complainant approached this Commission. 

3. In response to the notice issued, OP appeared through their advocate and filed their version in brief as under:

OP submits that as per the terms and conditions of the policy specifically stated that the insurance company is not liable to pay in respect of any claim, if there is any misrepresentation and non-disclosure of material facts by the insured to the complainant.  The complainant has accepted the policy agreeing and being fully aware of such terms and conditions and executed the proposal form.

OP further submitted that the complainant was admitted to Rangadore Memorial Hospital on 14.12.2017 and raised a pre authorization request for the treatment of RTA (Road Traffic Accident) fracture of Right Acetabulam and inferior public ramus.  As per the pre authorization form, the treating hospital raised an amount of Rs.47,500/-.  That after scrutinized the documents submitted, the OP has observed that ‘As per the ICP of Rangadore Memorial Hospital, the insured patient had COPD more than 12 years’.  Since the complainant suffering from COPD prior to the inception of the first policy and same is not disclosed by the complainant in his proposal form which amounts to misrepresentation and non-disclosure of the material facts.

As per condition No.9 of the policy, “if there is any misrepresentation/non-disclosure of material facts whether by the insured person or by any other person acting on his behalf, the Company is not liable to make any payment in respect of any claim”.  Hence, pre authorization was repudiated and the same was informed to the complainant vide letters dated 14.12.2017 and 15.12.2017.  Further the OP also send letter dated 16.12.2017 to the complainant stating that, “we shall cancel the above policy as per the Condition No.13 of the policy” which reads as follows:

“The Company may cancel this policy on grounds of misrepresentation, fraud, moral hazard, non-disclosure of material fact as declared in the proposal form and/or claim form at the time of claim and non-co-operation of the insured by sending the insured 30 days notice by registered letter at the insured person’s last known address”.

OP further submitted that as per the terms and conditions, the OP has cancelled the policy and the premium amount of Rs.9,724/- was refunded vide DD No.660328 dated 23.01.2018 through letter dated 25.01.2018.

OP further submitted that in the case of a Senior Citizen Red Carpet Insurance Policy, medical examination is not insisted for joining the policy.  For joining the policy, the insured must be above sixty years of age.  As per the terms and conditions of the Senior Citizens Red Carpet Insurance Policy issued to the complainant, only those pre-existing diseases which are specifically declared by the proposer in the proposal form are covered under the policy.  So it is compulsory that the information regarding the health of the insured must be provided in the proposal form for the OP to provide coverage with suitable co-payment i.e., 50% of each and every claim arising out of all pre-existing diseases as defined in the policy and 30% in case of all other claims, which are to be borne by the insured.

OP further submitted that non-disclosure of the material facts of pre-existing disease the policy stood void.  Hence OP has repudiated the claim.  There is no any deficiency of service on the part of OP.  Rest of the allegations made by the complainant is denied by OP.  Hence OP prayed for dismissal of the complaint with exemplary costs.

4. In the course of enquiry into the complaint, the complainant and the OP have filed their affidavit reproducing what they have stated in their respective complaint and objections.  Complainant has submitted written arguments.  Complainant and OP have produced certain documents.  We have heard the arguments of complainant and OP and we have gone through the oral and documentary evidence of both parties scrupulously and posted the case for order.

5. Based on the above materials, the following points arise for our consideration;  

1. Whether the complainant has proved that there is deficiency in service on the part of the OP, if so, whether complainant is entitled for the relief sought for?

2.  What order?

6. Our findings on the above points are as under:

Point No.1:  Affirmative in part

Point No.2:  As per the order below

REASONS

7. Point No.1:- On perusal of the pleadings, evidence and documents produced by both the parties, it is an admitted fact that, the complainant obtained Red Carpet Health Insurance Policy from OP.  It is also an admitted fact that the said policy is valid from 31.03.2017 to 30.03.2018.  It is also admitted fact that the complainant met with road traffic accident on 13.12.2017 and was sustained injuries such as fracture of right acetabular dome.  The complainant admitted to Rangadore Memorial Hospital, Shankarapuram, Bangalore as an inpatient from 13.12.2017 to 21.12.2017.

8. The case of the complainant is that at the time of admitting the hospital, the complainant approached the OP for cashless facility.  But OP has illegally repudiated the claim of the complainant.

9. Per contra OP submitted that the complainant has suppressed the material facts at the time of obtaining the policy.  The said fact came to their knowledge after looking into the documents produced by the hospital.  The complainant was suffering from COPD prior to inception of the first policy and same was not disclosed in the proposal form which amounts to misrepresentation/non-disclosure of material facts and it is against the terms and conditions of clause-9 of the policy.  Hence OP has repudiated the claim of the complainant as per the policy terms and condition No.9.  Further as per condition No.13 if the insurer misrepresented, fraud, moral hazard, non-disclosure of material fact in the proposal form, the OP is at liberty to cancel the said policy.  Hence OP has cancelled the policy and refunded the premium amount of Rs.9,724/- to the complainant.  Hence there is no deficiency of service on the part of OP.

10. On perusal of the repudiation letter dated 16.12.2017/Ex-A5 which reads here as under:

We wish to bring your kind attention that during the scrutiny of the above claim papers, we observe that you have NOT declared the details; COPD (relating to Mr/Mrs.Mr.NATARAJ T V), which were found to be pre existing at the time of taking the policy for the first time during 31-MAR-14 to 30-MAR-15.  This amounts to non disclosure of material facts.

We draw your attention to condition no.11 in the Policy clause which reads as follows.

The Company may cancel this policy on grounds of misrepresentation, fraud, moral hazard, non disclosure of material fact as declared in the proposal form and/or claim form at the time of claim and non co-operation of the insured by sending the insured 30 days notice by registered letter at the insured person’s last known address.

11. Further on perusal of the discharge summary dated 13.12.2017/Ex-A3 wherein it is seen that the complainant is suffering from Type 2 diabetes mellitus, hypertension & interstitial lung disease.  The OP has not produced any evidence or no documentary proof to show that the complainant has undergone a medical treatment for the said disease prior to the inception of the policy i.e., on 31.03.2014.  Therefore when there is no reliable piece of document to show that the complainant has pre-existing disease much prior to the obtaining of the policy.  The contention of OP cannot be acceptable as the complainant is suffering from COPD prior to inception of the policy.

12. Admittedly the complainant had admitted to the hospital due to which he has sustained injury in the road traffic accident on 13.12.2017 and he was diagnosed for the fracture of right acetabular dome (conservatively managed) and treated at the hospital as an inpatient from 13.12.2017 to 21.12.2017 and he has not taken treatment for COPD.  Now the OP cannot escape from their liability by paying the medical expenses and repudiated the claim of the complainant by stating that the complainant was suffering from COPD.  Moreover complainant is a senior citizen and obtained the Senior Citizens’ Red Carpet Insurance Policy from OP.  It is the duty of the OP to take medical examination report at the time of issuing the policy.

13. Be that as it may, the Hon’ble Consumer Disputes Redressal Commission, Rajasthan, Jaipur has held in Appeal No.2079/2005 in a case between United India Insurance Co. Ltd., V/s Narendra Kumar as under:

19. Apart from this, it may be stated here that the disease hypertension, which means tension or tonus that is greater than normal, a condition in which the patient has a higher blood pressure than that judged to be normal, cannot be treated as a disease in the same manner as the diseases such as kidney, heart and brain, which directly affect the life span of a person and apart from this, hypertension is not a permanent disease and it some times increases and sometimes it reduces and thus, non mentioning of such type of disease in the declaration form would not amount to mis-statement in real sense. From this point of view also, repudiation of claim of the complainant respondent by the appellants was not justified.

14.  In view of the facts and circumstances of the case and the citation referred above, we are of the opinion that, the complainant is successful in proving the deficiency of service on the part of OP.  Therefore, we feel it appropriate to direct the OP to pay the medical expenses incurred by the complainant a sum of Rs.99,700/- together with interest @ 9% p.a from the date of repudiation till the date of realization along with litigation cost of Rs.10,000/- to the complainant.  Accordingly, we answer the point no.1 affirmative in part.

          15. Point No.2: In the result, we passed the following:         

  O R D E R

1) The complaint filed by the complainant is allowed in part.

2) OP is directed to pay the medical expenses incurred by the complainant a sum of Rs.99,700/- together with interest @ 9% p.a from the date of repudiation till the date of realization along with litigation cost of Rs.10,000/- to the complainant.

3) This order is to be complied by the OP within 45 days from the date of receipt of this order.

4) Supply free copy of this order to both the parties.

(Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Commission on this 25^th day of March 2021)

Witnesses examined on behalf of the complainant by way of affidavit:

T.V Nataraj.

Copies of documents produced on behalf of complainant:

Witnesses examined on behalf of the OP by way of affidavit:

Pushpavathi.

Documents produced on behalf of Opposite Party:

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