DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II

U.T. CHANDIGARH

[Complaint Case No: 80 of 2010]

                                                         Date of Institution : 09.02.2010

                                                           Date of Decision     :25.04.2011

Sh. Ankush Sharma son of Late Sh. C. K. Sharma, Proposer of Insurance of Smt. Prem Lata, resident of House No.3455, Sector 15-D, Chandigarh.

                                                                   ---Complainant.

V E R S U S

1. The Manager/Authorised Authority, Medical Claim Entertainment Cell, Royal Sundaram Alliance Insurance Company Limited, Claims Department, Sundaram Towers, 45 & 46, Whites Road, Chennai – 600 014.

2.      The Manager/Authorised Authority, Royal Sundaram Alliance Insurance company Limited, S.C.O. No.11, 1^st Floor, Madhya Marg, Sector 26, Chandigarh – 160 026.

---Opposite Parties.

BEFORE:   SHRI LAKSHMAN SHARMA        PRESIDENT

                SHRI ASHOK RAJ BHANDARI     MEMBER

                SMT. MADHU MUTNEJA            MEMBER

Argued By:Sh. Sandeep Bhardwaj, Advocate for the complainant.

                   Sh. K. K. Verma, Advocate for the OPs.

PER LAKSHMAN SHARMA, PRESIDENT

                   Sh. Ankush Sharma has filed this complaint under Section 12 of the Consumer Protection Act, 1986 praying for the following reliefs:-

(i)       To pay Rs.4,200/- to the complainant in connection with the medical treatment of the patient (complainant’s mother) with interest @12% per annum under the medical insurance policy.

(ii)      To pay Rs.40,000/- as exemplary costs for harassment, mental agony and litigation charges.

2.                In brief, the case of the complainant is that he got his mother namely Smt. Prem Lata insured for medical treatment vide Hospital Cash Insurance Policy No.HCSBIL0007 from the OPs. Initially, the policy was taken for the year 2008-2009. Later on it was renewed for the year 2009-2010 on payment of premium of Rs.1,943/-. According to the complainant, as per the terms and conditions of the policy, the insured was entitled to a sum of Rs.2,000/- for every 24 hours of hospitalization plus Rs.100/- as cumulative bonus on daily benefit.

                   The case of the complainant is that on 4.9.2009, the mother of the complainant namely Smt. Prem Lata got some problem as some blood came out of her nose. She was taken to Government Multispeciality Hospital, Sector 16, Chandigarh. The doctor diagnosed that she was suffering from high Blood Pressure. She was given treatment and was discharged. Thereafter, on 14.10.2009, Smt. Prem Lata again suffered problem. She was again taken to Government Multispeciality Hospital, Sector 16, Chandigarh. She was admitted and given treatment. She was discharged on 16.10.2009. The complainant informed the OP regarding hospitalization of Smt. Prem Lata vide Annexure C-4. On 10.11.2009, the complainant submitted his claim regarding hospitalization of Smt. Prem Lata along with all the relevant documents. However, on 20.11.2009, he received a letter whereby he was required to explain some queries mentioned in the said letter. According to the complainant, he answered all the queries vide letter dated 26.11.2009. Thereafter, another letter was received on 5.12.2009 whereby some queries were again put for being answered. The complainant also answered the said queries vide letter dated 8.12.2009 and attached all the relevant documents. Despite it, to the utter surprise of the complainant, he received letter dated 24.12.2009 whereby the claim was repudiated on the ground the insured had suppressed the material facts regarding her ailment. According to the complainant, the repudiation of the claim is absolutely illegal as no material fact was ever concealed from the OPs. In fact, according to the complainant, he and his mother came to know about high Blood Pressure only on 4.9.2009 when Smt. Prem Lata was taken to Government Multispeciality Hospital, Sector 16, Chandigarh for treatment. Thus, repudiation of claim, according to the complainant, is absolutely illegal and amounts to deficiency in service on the part of OPs.

                   In these circumstances, the present complaint has been filed seeking the reliefs mentioned above.

3.                In the reply filed by OPs, it has been admitted that the complainant had taken Hospital Cash Insurance Policy No.HCSBIL0007 for the period 2009-2010 in the name of Smt. Prem Lata. It has also been admitted that as per the terms of the said policy, Smt. Prem Lata was entitled to a sum of Rs.2,000/- for every 24 hour hospitalization, and the said policy was subject to other terms and conditions of the policy. The case of OPs is that on receipt of claim made by the complainant, letters were sent to him for answering certain queries but the complainant did not answer the said queries properly and deliberately suppressed the material facts. It has further been pleaded that as per the documents sent by the complainant regarding hospitalization of Smt. Prem Lata, the insured was a known case of Hypertension and Aortic Valve disease. The complainant refused to answer the queries regarding the period since she was suffering from such ailment and failed to produce the investigation reports. Therefore, the claim of the complainant was denied. Thus, according to the OPs, the claim was repudiated because of suppression of material facts. In these circumstances, the complaint deserves dismissal.

4.                We have heard the learned counsel for the parties and have gone through the entire record placed on file including the written arguments filed by the complainant.

5.                Annexure C-10 is the letter dated 24.12.2009 whereby the claim of the complainant was repudiated by the OPs. The relevant portion of the said letter reads as under: -

“Discharge summary reveals that patient got admitted with high blood pressure. Medical record also reveals that patient is a known case of hypertension & aortic valve disease i.e. patient is already suffering from hypertension and aortic valve disease. But query reply claims that it was diagnosed at the time of admission. Hence, insured is suppressing the material facts. We reproduce the relevant condition under the policy for your ready reference.

The Company shall not be liable to make any payment under this Policy in respect of any expenses whatsoever incurred by any Insured Person in connection with or in respect of.

This policy shall be void and all premium paid hereon shall be forfeited to the Company in the event of mis-representation, mis-description or non-disclosure of any material fact.”

6.                From perusal of the said letter, it is apparent that as per the OPs, the Discharge Summary reveals that the patient was a known case of Hypertension and Aortic Valve disease. Thus, according to OPs, the patient was suffering from Hypertension and Aortic Valve disease at the time of filling up the proposal form, and the complainant did not answer the queries properly. So, the claim was repudiated. Annexures C-6 and C-8 are the letters written by the complainant answering the queries put by the OPs. From the above said letters, it is apparent that the complainant had informed the OPs in clear terms that the complainant or Smt. Prem Lata were not aware of the diseases (Hypertension and Aortic Valve) prior to 4.9.2009. They came to know about this disease for the first time on 4.9.2009 when Smt. Prem Lata was taken to the hospital. The document at Page 19 (Part of Annexure C-5) is the Discharge Certificate showing the case summary and treatment given to Smt. Prem Lata. In this document, nowhere it has been mentioned that Smt. Prem Lata is an old case of Hypertension and Aortic Valve disease. The OPs have failed to place on record any document to prove that Smt. Prem Lata was suffering from Hypertension and Aortic Valve disease at the time of submitting the proposal form or prior thereto. There is no document on record to show that the complainant has suppressed material facts. In these circumstances, the repudiation of the claim is illegal and amounts to deficiency in service. Therefore, in terms of the policy, the complainant is entitled to Rs.4,200/-.

7.                In view of the above discussion, the present complaint is allowed and the OPs are directed as under: -

(i)       to pay an amount of Rs.4,200/- to the complainant in terms of Hospital Cash Insurance Policy No.HCSBIL0007.

(ii)      to pay an amount of Rs.3,000/- to the complainant as compensation for harassment and mental agony;

(iii)     to pay an amount of Rs.3,000/- as litigation costs.

8.                The above order be complied with by the OPs within a period of 30 days from the date of receipt of its certified copy, failing which OPs shall pay the aforementioned amount of Rs.7,200/- along with interest @18% per annum from the date of filing of the complaint i.e.09.02.2010 till the date of actual payment besides costs of litigation of Rs.3,000/-.

9.                Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

25^th April 2011.

Sd/-

 (LAKSHMAN SHARMA)

PRESIDENT

Sd/-

(ASHOK RAJ BHANDARI)

MEMBER

Sd/-

(MADHU MUTNEJA)

MEMBER

Ad/-

C.C.No.80 of   2010

Argued By: None.

                                                ---

                   Arguments heard on 21.04.2011.  The case was reserved for orders. As per separate detailed order of even date, this complaint has been allowed. After compliance file be consigned.

Announced.

25.04.2011          Member              President             Member

Civil Miscellaneous No.105 of 2010

(Ankush Sharma Vs. Royal Sundaram Alliance Ins. Co.)

In C.C.No.80 of   2010

Argued By: None.

                                                ---

                   The complainant has filed the present miscellaneous application under Section 151 C.P.C. for issuing directions to the OPs not to cancel the Insurance Policy No.CSS000093500010 issued in the name of Smt. Prem Lata. The complainant has pleaded that the OPs have no right to cancel the policy in view of the law laid down by the Hon’ble Delhi High Court in the judgment report as “Akshay Kumar Paul and another Versus New India Assurance Co. Ltd.,”, 2009 CTJ 125 (Delhi High Court)(CP), in which it was held by the Hon’ble High Court as under: -

“An insurance company cannot refuse renewal of a mediclaim policy on the ground that during the pendency of that policy, the insured had contacted a disease.”

                   The complainant has averred that the action on the part of OPs in canceling the insurance policy is illegal and unlawful because the insured had taken the insurance policy in the year 2008-2009 and the same was renewed in the year 2009-2010, which means that the OPs had renewed the above said policy for second year also.

                   No reply was filed despite several opportunities were given.

Civil Miscellaneous No.105 of 2010

(Ankush Sharma Vs. Royal Sundaram Alliance Ins. Co.)

…..

                   Keeping in view the ratio of the judgment quoted above and also the fact that the present complaint was instituted on 9.2.2010 whereas the cancellation letter carries the date of 10.2.2010, clearly show that the cancellation has taken placed during the pendency of the complaint. Even in the letter of cancellation, the reason given by the OPs is as under: -

“The Policy shall be void and all premium paid hereon shall be forfeited to the Company, in the event of misrepresentation, mis-description on non disclosure of any material fact.”

                   The reason given by the OPs for cancellation of the policy is the subject matter of the present complaint. Therefore, the OPs should not have cancelled the policy after the complaint is instituted in this Forum. The act of cancellation of the policy is patently illegal and therefore, the request made by the complainant for restoration of the policy in question is wholly justifiable and reasonable.

                   Keeping in view the above discussion, we allow the present application of the complainant and the insurance policy in question stands restored.

Announced.

                        Sd/-                     Sd/-                               Sd/-

[MADHU MUTNEJA]      [LAKSHMAN SHARMA]      [ASHOK RAJ BHANDARI]

Member                  President                        Member

                                               (25.04.2011)