Jharkhand

Bokaro

CC/17/81

Bidyotama Devi - Complainant(s)

Versus

the Oriental Insurance Co. Ltd. - Opp.Party(s)

P.N. Jha

23 Apr 2022

ORDER

District Consumer Commission, Bokaro.

Case No. 81/2017

 Date of Filing-22-05-2017

 Date of Order-23-04-2022

1. Smt Bidyotama Devi

Resident of  Qr.NO.- 2178, Sector-4/F, Bokaro Steel City.

2. Shived Prakash S/o Late Laxmi Narayan Sahu

R/o Qr.NO. 2478, Sector-4/F, Sector-4, B.S.City, District- Bokaro.

                                      Vr.

1. The Oriental Insurance Co. Ltd.

Regd. Head Office A-25/27 Asaf Ali Road, New Delhi 110002,

Branch Office- B-1, Second Floor City Centre Sector- IV, Bokaro Steel City 827004

2.  Punjab National Bank, Marketing Division Head Office- 5^th Floor Bhikhaiji Cama Place, New Delhi-110007

Circle Office- Sector-IV, Bokaro Steel City, P.O. Bokaro Steel City

3.  M/s Medi Assist., Shilpa Vidaya III Floor, 49, First Main Road, Sarakki Industrial Layout III stage J.P. Nagar, Bangalore- 110001

Present:-

          Shri Jai Prakash Narayan Pandey, President

Shri Bhawani Prasad Lal Das, Member

            Smt. Baby Kumari, Member

                                                -Order-

1. Complainant has filed this case with prayer for direction to O.Ps. for payment of Rs. 87,630.90/- on account of Medical expense of complainant No.1 with interest @ 18% from 12.12.2014 and to pay Rs. 1,00,000/- & Rs. 10,000/- as compensation and litigation cost respectively to them.
2. Complainant’s case in brief is that the complainant No. 1 being   account holder of O.P. No.2 Punjab National Bank (in short PNB) obtained mediclaim policy ( Family Floater) from Oriental Insurance Co. Ltd. which was being provided to the accounts holder/employees of the PNB. who deposited Rs. 3,259 /- as premium of the policy on 13.04.2011 and provided policy paper commencing/valid from 13.04.2011 to 12.04.2012 vide policy No. 332701/48/2012/27 which was renewed time to time with some intermittent gap due to delay in transmission of premium by the Bank to the insurance co. Further case is that the complainant No. 2 namely Shri Ved Prakash being employee of PNB was regularly making payment of premium and other charges by cheque to the Bank for onward transmission to the Insurance co. Further case is that original policy was renewed vide policy No. 332900/48/2013/23 for the period from 19.04.2012 to 18.04.2013, 25.04.2013 to 24.04.2014 and from 30.04.2014 to 29.04.2015. Further case is that for the period of 25.04.2013 to 24.04.2014 cheque was forwarded on 22.04.2014, for the period from 30.04.2014 to 29.04.2015 policy was ought to be renewed on 25.04.2014. In this way there was no delay on the part of the complainant rather it may be on the part of Bank concerned. Further case is that complainant No.1 suffered from serious ailments for which she was admitted at Christian Medical College, Vellore (in short CMC) from 14.11.2014 to 29.11.2014 for which due information was given to O.Ps. but facility of cashless treatment was  not provided, anyhow payment of Rs. 87,630.90 was made by the complainant and thereafter, claim for payment was made, which was declined on the ground of pre-existing disease which was excluded under policy because her policy was treated as new policy by the insurance co. though it was in continuation of previous policy. Hence this case has been filed.
3.  O.Ps. appeared, amongst them O.P. No.1 has filed W.S. mentioning therein that present case is not maintainable, there is no cause of action of the case, complaint is barred by limitation, complainant is not the consumer of the O.P. Further reply of the insurance co. is that both parties are required to obey the terms and conditions of the insurance policy and any policy is being issued for one year which is required to be renewed before the last date of expiry else it will not be treated as or renewed in case premium is not deposited before expiry of the term of the policy. Further reply is that as per complaint petition there is only one complainant of the case hence in which capacity the presence of complainant No.2 Sr. Branch Manager of PNB Shri Ved Prakash appears to be a fishy matter. It is correct that the claim of the complainant has been repudiated because it was not admissible. Further reply is that non of the premium was received before the Insurance co. on last expiry date of the previous policy and case of the complainant is violation of clause 4.1, 4.2, 5.3, 7 (a) and 7(b) of the contract. Further reply is that the complainant was treated with many old age illness along with Polyarthralgia of last 20 years and many other problems for last 2 to 8 years which are not covered in first year of the policy as per clause 4.1.  As per discharge summary age of the complainant differs. Further reply is that complainant obtained policy in the year 2011, 2012 and 2013 from PNB Ranchi and policy for the year 2014 from PNB Goh office in this way there is change of the broker/agent of the policy which changes the basis ingredients of the policy which was initially issued for Rs. 2,00,000/- and in the year 2014 it was for Rs. 3,00,000/- hence it also changing the ingredients of the policy of renewal. Further reply is that complainant was covered for the first policy from 13.04.2011 to 12.04.2012 thereafter, with a gap of 7 days from 19.04.2012 to 18.04.2013 thereafter, with a gap of 7 days from 25.04.2013 to 24.04.2014 and thereafter with a gap of 6 days from 30.04.2014 to 29.04.2015 which is disclosing that policy is not in continuation. Further reply is that as per para VI  (3) of the complaint petition initially amount of claim was raised Rs. 9,87,630.90 and in the paragraph No. 7 the expended amount is Rs. 87,630/- which is different and gives fishy. Further reply is that O.P. No.2 was being requested by the complainant to regulate the policy from earlier date and since son of the complainant No.1 is Sr. Manager of the PNB hence he tried to help the complainant out of way. Further reply is that there may be any deficiency on the part of O.P. No.2 he may be panelized for it. The facts which have not been specifically admitted have been denied by the insurance co.
4.  On behalf of O.P. No.2 PNB reply has been filed mentioning therein that complainant has not approached this Forum with clean hand and suppressed the material facts and her petition deserve to be dismissed which is not disclosing the cause of action of the case. Further reply is that policy concerned was issued by O.P. No.1 which was annually renewed on payment of premium amount though this O.P. and O.P. No.1 is liable to pay the claim and there is no cause of action against this O.P.
5.  From pleadings of the parties following questions are to be determined by this Commission:-

1. Whether alleged Mediclaim Policy is in continuation of  original policy ?
2. Whether repudiation of claim by the O.P. Insurance co. is justifiable or not?

6.          It argued on behalf of the complainant that as per settled law

   the Insurance   policy in question is not the new policy rather it is in continuation of first policy issued in the year  2011. Further it is argued that if there is any delay in transmission of the premium amount then it has been caused by the PNB and it has not been caused by the complainant. Learned Counsel for the complainant has placed reliance on the principles laid down by the Hon’ble National Consumer Disputes Redressal Commission, New Delhi reported in (2003) 2 CPJ (NC) 199 Jagmohan Bhatia Vs. Oriental Insurance Co. Ltd., (2011) 3 CPJ (NC) 490 Oriental Insurance Co. Vs. Shri  Ram Kumar Garg and it is submitted that in view of Principle laid down in those cases the policy will be treated as old policy issued in the year 2011 and renewed time to time.

7. On the other hand learned Counsel for the O.P. Insurance Co. has argued that there is no prompt and timely renewal of the policy by the complainant who changed the Branch as well as insured money  and policy was not regular and continuous hence it cannot be said that it was renewed policy rather it will be treated as new policy. Further it is submitted that there is suppression of material facts in respect to previous disease as apparent from the discharge summary of the claimant. It is also submitted that since policy is being treated as new policy hence the claim will come under exclusion clause of the policy in respect to exiting disease hence complainant is not entitled to get any relief and her claim has been rightly repudiated.
8.  Learned Counsel for the O.P. PNB has mainly argued in support of the case of the complainant.
9.  On the basis of pleadings of the parties it is apparent that following facts are either  admitted or not disputed by the parties:-

1. That complainant is account holder of the PNB and complainant No.2 is an employee of the PNB.
2. That in capacity of the employee as well as account holder of the PNB complainant has obtained insurance policy vide policy No. 332701/48/2012/27 by payment of premium Rs. 3259/- on 13.04.2011 and said policy was valid from 13.04.2011 to 12.04.2012.
3. That same policy was renewed by the O.P. Insurance Co. on receipt of the premium from the complainant with the gap of 7 or 6 days from its last date of enforcement.
4. That on each occasion related to renewal of the policy, policy bond was issued by the complainant.

E. That lastly Insurance policy was renewed for the period from 30.04.2014 to 29.04.2015.

6. That complainant No.1 was admitted in the CMC Vellore on 14.11.2014 for treatment and discharged on 29.11.2014.
7. That Insurance policy was firstly commenced in the year 2011 and it was renewed time to time and it was renewed for fourth time for the period for 2014-15.
8. That for the treatment of complainant No.1 payment of Rs. 87630.90 was made by the complainant to the hospital concerned.

10. In light of above admitted facts we would like to discuss the matter in respect to law and facts related to this case. It is apparent that on occasion of issuance of the insurance policy first time in the year 2011 complainant was required to fill up the proposal form and to perform other formalities for acceptance by the insurance co. and issuance of the policy bond.

11. At this place law is very much settled by the Hon’ble Supreme Court in reported case of Jacob Punnen and Ors. Vs. United India Insurance Co. Ltd. reported in MANU/SC/1212/2021. Para 23,24,44 & 45 of that veryreported Judgmentare important in this case which are as follow:-

 

“23. This Court next proceeds to address itself to the second question, namely what are the duties of an insurer, when a policy holder seeks renewal of an existing policy. The insurer here contends that the consumer was under an obligation to inquire about the terms of the policy, and any changes that might have been introduced, in the standard terms. It was urged that the Appellants, in the facts of this case, should have inquired from the concerned agent; since they omitted to do so, they were bound by the terms of the policy.

24. A striking feature of insurance law, is the principle of uberrima fide (duty of utmost good faith) which applies to both the insured as well as one who seeks indemnity and cover. In United India Insurance Co. Ltd. v. M.K.J. Corporation MANU/SC/0113/1997 : 1996 (6) SCC 428 this Court underlined the importance of this principle, and its application to the insurer, in the following terms:

It is a fundamental principle of Insurance law that utmost good faith must be observed by the contracting parties. Good faith forbids either party from concealing (non-disclosure) what he privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary. Just as the insured has a duty to disclose, similarly, it is the duty of the insurers and their agents to disclose all material facts within their knowledge, since obligation of good faith applies to them equally with the assured. The duty of good faith is of a continuing nature. After the completion of the contract, no material alteration can be made in its terms except by mutual consent. The materiality of a fact is judged by the circumstances existing at the time when the contract is concluded.

44. In Biman Krishna Bose v. United India Insurance Co. Ltd. MANU/SC/0948/2001 : (2001) 6 SCC 477 this Court inter alia held as follows:

5. A renewal of an insurance policy means repetition of the original policy. When renewed, the policy is extended and the renewed policy in identical terms from a different date of its expiration comes into force. In common parlance, by renewal, the old policy is revived and it is sort of a substitution of obligations under the old policy unless such policy provides otherwise. It may be that on renewal, a new contract comes into being, but the said contract is on the same terms and conditions as that of the original policy. Where an insurance company which has exclusive privilege to carry on insurance business has refused to renew the mediclaim policy of an insured on extraneous and irrelevant considerations, any disease which an insured had contacted during the period when the policy was not renewed, such disease cannot be covered under a fresh insurance policy in view of the exclusion clause. The exclusion Clause provides that the pre-existing diseases would not be covered under the fresh insurance policy. If we take the view that the mediclaim policy cannot be renewed with retrospective effect, it would give handle to the Insurance Company to refuse the renewal of the policy on extraneous consideration thereby deprive the claim of the insured for treatment of diseases which have appeared during the relevant time and further deprive the insured for all time to come to cover those diseases under an insurance policy by virtue of the exclusion clause. This being the disastrous effect of wrongful refusal of renewal of the insurance policy, the mischief and harm done to the insured must be remedied. We are, therefore, of the view that once it is found that the act of an insurance company was arbitrary in refusing to renew the policy, the policy is required to be renewed with effect from the date when it fell due for its renewal.

45. Proceeding on the basis of the principles enunciated thereunder, a renewal of the contract would ordinarily, undoubtedly involve the expectation of replication of the terms of the original contract and what is more, the actual continuation of the terms. However, as noted, the actual contract may provide otherwise. The terms of the renewed contract of insurance may be located in the actual contract of insurance. A renewed contract of insurance may provide terms which are different from the terms of the original contract of insurance.”

12.         Applying the above laid down principles we are trying to discuss about the nature of renewal of the policy particularly in this case. In this case at the time of opening of the policy complainant was required to fill up the proposal form and to perform other formalities but thereafter, she was only required to deposit the renewal premium of the policy. But she was never asked by the O.Ps. to fill up fresh proposal form etc. In this way policy has been renewed on the basis of proposal form produced for the first time in year 2011 along with cheque dt. 13.04.2011.  On each time policy bond has been issued as renewed policy paper hence O.P. Insurance co. cannot  be permitted to say against the act which has already been done by it. The Policy has never been issued afresh rather on all time it has been renewed though with gap of very short period which  will be treated as grace period and during that very period there will be no coverage of the policy. In any view of the matter it cannot be said that the policy under question was a fresh or new policy.

13.         In view of the principles laid down by Hon’ble Supreme Court as mentioned above as well as the principles laid down by the Hon’ble National Consumers Disputes Redressal Commission, New Delhi in the reported cases of (2003) 2 CPJ (NC) 191 & (2011) 3 CPJ (NC) 490 we are having no hesitation to hold that the policy under question shall be treated as policy in continuation of the policy which commenced on 13.04.2011 and it will never be treated as new or fresh policy. Hence on the basis of above discussion it is apparent that repudiation of the claim of the complainant is against the provisions of law and it is not justifiable rather complainants are entitled to get relief as claimed as because the exclusion period as argued has already been completed on completion  of the first policy period i.e. from, 13.04.2011 to 12.04.2012. Accordingly both points are being decided in favour of the complainant and against the O.P. Insurance co.

14.  

O.P. No. 1 Oriental Insurance Co. Ltd. is directed to pay Rs. 87,630.90 /- to the complainant No.1 as payment made to CMC Vellore on her treatment within 60 days from today, failing which this O.P. No.1 will pay interest @ 10% per annum on above amount from 22.05.2017 (i.e. the date on which complaint was registered) till realization of the said amount. O.P. No.1 is further directed to pay Rs. 10,000/- as compensation and Rs. 5000/- as litigation cost respectively to the complainant within 60 days from today.