Ex-P A R T E O R D E R
PER SHRI. S.B.DHUMAL - HON’BLE PRESIDENT :
1) In brief consumer dispute is as under –
Opposite Party No.1 & 2 are Branch Office of the Oriental Insurance Co. Ltd. Opposite Party No.1 is situated at Churchgate and Opposite Party No.2 is situated at Ballard Estate, Mumbai. Opposite Party No.3 is a TPA Oriental Insurance Co. Ltd. About in the year 1995, the Complainant had obtained Individual Mediclaim Policy from the Opposite Party Oriental Insurance Co. Ltd. on due payment of premium. Thereafter, the Complainant renewed aforesaid mediclaim policy year after year till 2010 on payment of necessary premium. The Complainant has attached copies of mediclaim policies alongwith complaint marked as Exh. ‘C1’ collectively.
2) It is submitted that as per the terms and conditions of the mediclaim policy for every claim year a policy holder becomes entitled for 5% Cumulative Bonus and accordingly the Complainant received benefit of Cumulative Bonus. The Complainant has given particulars of Cumulative Bonus in the complaint para no.5. It is stated that in the year 2005-2006, the Complainant was entitled to cumulative bonus of Rs.4,23,200/-.
3) It is submitted by the Complainant even though he was entitled for Cumulative Bonus to be carried forward for the year 2006-07, 2007-08, 2008-09 but after 2005-2006 Opposite Parties has unilaterally, arbitrarily, unlawfully and illegally had not shown the Cumulative Bonus from the year 2006 onward in the policy of the Complainant. Moreover the Cumulative Bonus of Rs.4,23,200/- which was earned by the Complainant during the period of 10 years was unlawfully, cancelled/deducted for no reasons. The Complainant has annexed copies of insurance policy for the year 2006-2007, 2008-2009.
4) It is submitted that before deduction of huge amount of Rs.4,23,200/- which was earned as cumulative bonus by the Complainant, without giving any prior intimation and without consent of the Complainant is illegal and it amounts to unfair trade practice on the part of Opposite Parties under the Consumer Protection Act, 1986. As per provisions of Insurance Act, 1938, it is mandatory to take prior consent of policy holder before making any change in the terms and conditions of the policy. Opposite Party has violated provisions of the Insurance Act, 1938 and unilaterally & unlawfully deducted huge sum of Rs.4,23,200/- i.e. Cumulative Bonus earned by the Complainant for no claim bonus for the period of 10 years.
5) It is contended that inspite of repeated oral request of the Complainant to correct the policy and reverse back Cumulative Bonus in the Complainant’s policy, no steps were taken by the Opposite Party for reasons best known to them. The Complainant by letter dtd.13/10/08, 31/10/08 and E-mail dtd.01/11/08, 06/11/08, 07/11/08 and 01/12/08 called explanation from the Opposite Party for deduction of huge sum of Rs.4,23,300/-. After long follow up the Opposite Party replied vide their reply dtd.26/12/08 wherein Opposite Party mentioned that policy have been amended and Cumulative Bonus have been adjusted with SI and claim with difference between Cumulative Bonus and SI “have been waived”. It is alleged by the Complainant that reply given by the Opposite Party is highly diplomatic and merely standard reply with no justification and therefore Complainant made an application dtd.09/02/09 under Right to Information Act, 2005, which Opposite Party has replied vide their letter dtd.13/02/09 alongwith enclosures of new terms and conditions. The Complainant has annexed Opposite Party’s reply and new terms and conditions of policy alongwith complaint which are collectively marked as ‘C-5’. For the first time Opposite Party provided new terms and conditions to the Complainant after the Complainant made an application under Right to Information Act, 2005. Opposite Party with malafide intention and ulterior motive suppressed the material fact of amendment in the policy, “terms and conditions” without consent of the Complainant and keeping in Complainant in dark for almost 4 years. The Complainant addressed letter dtd.26/03/09 to the Opposite Party seeking detail explanation. Opposite Party vide their letter dtd.19/05/09 informed the Complainant that “Cumulative Bonus” have been removed as there is no provision for Cumulative Bonus under Insurance Regulatory and Development Authority, 2002. Reply given by the Opposite Party is totally false.
6) Thereafter the Complainant on 30/06/09 made an application under Right to Information Act, 2005 for seeking clarification/explanation form IRDA which was replied by IRDA vide their letter dtd.24/07/09. The Complainant has annexed copy of letter received from IRDA alongwith complaint at Exh.‘C-7’. According to the Complainant, as per provision of Insurance Regulatory and Development Authority, 2002 and Insurance Act, 1938 it is mandatory for the Insurance Company to give prior written intimation to the policy holder about the change in the terms and conditions of the policy. Any terms and conditions in the policy can be altered only after taking consent of the policy holder. In this case the Complainant’s consent was not taken by the Opposite Parties for alteration/modification of terms and conditions of mediclaim policy. The Opposite Party has unilaterally changed the entire terms and conditions without consent of the Complainant and deprived the Complainant of huge Cumulative Bonus of Rs.4,23,200/- which he had earned ‘No Claim Bonus’ for 10 years.
7) The Complainant renewed mediclaim policy year after year without any break and therefore, it is highly unjustified to withdraw Cumulative Bonus without any reasons. As per the Complainant if the Cumulative Bonus had been continued the Complainant would have been entitled for reimbursement of medical expenses of Rs.7,11,600/-. The Opposite Parties have caused grave damage and reduced and restricted Complainant’s claim up to 5 Lacs only. The Opposite Party has violated guidelines of the IRDA. Instead of rectifying the mistake, Opposite Party has given false reply and concocted story and it amounts to deficiency in service on the part of Opposite Parties. Hence, the Complainant has filed this complaint. The Complainant has prayed to declare that the Opposite Parties are guilty of deficient in service and of unfair trade practice.
8) The Complainant has prayed to direct Opposite Parties to include the entry of Cumulative Bonus amount of Rs.4,23,200/-in the insurance policy of the Complainant for the year 2006-07, 2007-08 and 20008-09. The Complainant has requested Opposite Parties to pay to the Complainant an amount of Rs.5 Lacs as compensation for mental agony and stress. Further the Complainant has asked Rs.50,000/- towards cost of this proceeding and incidental expenses from the Opposite Party.
9) The Complainant has filed affidavit in support of the complaint and produced copies of documents as per list of documents.
10) Opposite Party No.1 to 3 were duly served with the notice of this complaint by RPAD. Inspite of service of notice, Opposite Party No.1 & 2 have not appeared before this Forum and therefore, on 28/12/2010, ex-parte order was passed against the Opposite Party No.1 & 2. Subsequently, Opposite Party No.3 Raksha TPA joined as Opposite Party No.3. As per order of this Forum dtd.02/02/2010 notice of this complaint was sent to the Opposite Party No.3 and it was duly served by RPAD. Inspite of service with notice Opposite Party No.3 has not appeared before this Forum. So ex-parte order was passed against Opposite Party No.3. The Complainant has filed additional affidavit of evidence. On 23/05/2011, we heard oral submission of Ld.Advocate for the Complainant.
11) It is submitted that in the year 1995, the Complainant obtained Individual Mediclaim Insurance Policy from Opposite Party – Oriental Insurance Co. Ltd., on payment of necessary premium and thereafter aforesaid policy was renewed year after year after payment of necessary premium. The Complainant has produced copies of the Insurance policies from the year 1995 till 01/11/06. It appears that initially on 09/10/1995, the Complainant obtained Mediclaim Policy form the Oriental Insurance Co. Ltd. The said policy was renewed form time to time by Ballard Estate Branch of Oriental Insurance Co. Ltd. In the 1st policy name of only Complainant Anil is recorded as Insured. In the 2nd policy which was renewed by Ballard Estate Branch of Oriental Insurance Co. Ltd., name of Complainant as well as Aniket and Rajan were recorded as Insured. In the 3rd policy Cumulative Bonus is recorded against their name as Rs.61,600/- each. In the 4th policy Cumulative Bonus is recorded against the name of Complainant is Rs.1,36,600/-. In the 5th policy Cumulative Bonus is recorded against the name of Insured is Rs.1,86,500/- respectively. In the 6th policy Cumulative Bonus is recorded against the name of Insured No.1 & 2 is Rs.2,11,600/- respectively.
12) It is submitted by the Ld.Advocate for the Complainant that the Complainant renewed the said mediclaim policy for further period for 02/11/06 to 01/11/07. However, in the said policy Cumulative Bonus is not shown. In the earlier policy sum assured is shown as 5 Lac each and said sum assured is carried forward. The Complainant had produced copies of the insurance policy from 02/11/06 till 01/11/09 in which there is no column of Cumulative Bonus and Cumulative Bonus is not recorded against the name of Insured. It is submitted that in the year 2006, Opposite Party has unilaterally, illegally and arbitrarily modified terms and conditions of the mediclaim policy without any information to the Complainant and without consent of the Complainant. An amount of Cumulative Bonus of Rs.4,23,200/- was deducted. The Complainant thereafter wrote several letters to the Opposite Party but there was no proper response from the Opposite Party. Opposite Party vide E-mail dtd.26/12/08 informed that in view of amendments in the Mediclaim Policy issued by Oriental Insurance Co., the concept of Cumulative Bonus is withdrawn and has been replaced by a discount in the premium called as Early Entry Discount, which is given if the policy is claim free etc. It was informed to the Complainant that -
“Please note that maximum SI available under the policy is Rs.5 Lacs only. As per modified mediclaim policy guidelines w.e.f.15/09/06, during the renewal of the period 2006/07 CB earned has been clubbed with the S.I. As one time benefit, the corresponding difference in premium for the CB earned has been waived.”
It is submitted that aforesaid reply given by the Opposite Party was false so the Complainant made an application under Right to Information Act, 2005 to the Central Public Information Officer of Opposite Parties and sought necessary information. Oriental Insurance Co. on 13/02/2009 sent reply alongwith modified terms and conditions of Mediclaim Insurance Policy.
13) It is submitted that complaint was not satisfied with the reply given by the Opposite Party therefore, the Complainant made an application under the Right to Information Act to the IRDA and IRDA vide their letter dtd.24/07/09 has given reply to the Complainant. The Complainant’s advocate has referred to copy of letter dtd.24/07/09 received from IRDA. It is pointed out that IRDA has informed the Complainant “revision in mediclaim policy of Oriental Insurance Co. Ltd. was allowed to years back. The revised mediclaim policy of Oriental Insurance Co. Ltd. offered an early entry discount in lieu of system of Cumulative Bonus. The Company also made time provision to allow to enhancement in sum insured at renewal by including earned Cumulative Bonus.” It is submitted that IRDA is regulatory authority and as per reply of IRDA, Opposite Party be directed to add Cumulative Bonus in the sum assured in the Complainant’s policy. From 02/11/06, onwards necessary compensation be awarded to the Complainant for mental agony and harassment. Further the Complainant’s advocate has requested for cost of this proceeding.
14) Ld.Advocate for the Complainant has referred to the decision of the Hon’ble Supreme Court in the matter of United India Insurance Co. Ltd. V/s. Manubhai Dharmasinhbhai Gajera, reported in 2008 CTJ 794 (Supreme Court)(CP), in which the Hon’ble Supreme Court has held that “There is a distinction between a private player and a public sector insurance company in the insurance field. Whereas a private player is only bound by the statutory regulations operating in the field, the public sector insurance companies are also bound by the directions issued by the General Insurance Corporation as also the Central Government.”
15) It is submitted by the Ld.Advocate for the Complainant that renewal of policy is on always the same terms and conditions. In this case the Complainant’s policy was renewed from the 02/11/96 till 01/11/09 without any break. However, from 02/11/06, the Opposite Party has changed terms and conditions of the policy without previous notice to the Complainant and without consent of the Complainant and thereby caused financial loss to the Complainant as Cumulative Bonus of Rs.4,23,200/- earned by the Complainant was cancelled in the policy issued for the period from 02/11/06 onwards.
16) It is true generally renewal of policy is on the same terms and conditions unless otherwise agreed upon between the parties. In the instant case, the Opposite Party has modified terms and conditions of the policy from 02/11/06 that too without consent of the Complainant. However, it appears from the document produced by the Complainant that the Opposite Party before modifying terms and conditions of the policy and obtained approval of IRDA. IRDA is a regulatory authority which has given approval for modification of terms and conditions of the policy. It appears from the letter dtd.24/07/09 of IRDA which is a reply to the Complainant’s application under Right to Information Act, 1995 that revision in mediclaim policy was allowed by IRDA as Oriental Insurance Co. Ltd. offered an early entry discount in lieu of system of Cumulative Bonus, the Company also made a one time provision to allow enhancement in sum insured at renewal by including earned Cumulative Bonus. The Complainant has produced copy of mediclaim insurance policy supplied by the Opposite Party alongwith letter dtd.13/02/09. It appears that in the aforesaid mediclaim policy which came into effect from 15/09/06 there was no provision of Cumulative Bonus. Further it is to be noted that in policy column no.10 under the head of sum assured it is stated that “The Company’s liability in respect of all claims admitted during the period of insurance shall not exceed the sum insured opted by the insured person. Minimum sum insured is Rs.50,000/- and in multiples of Rs.25,000/- upto Rs.2,00,000/-. Beyond the sum insured of Rs.2,00,000/- in multiples of Rs.50,000/- upto Rs.5,00,000/-.” The Opposite Party in reply to the Complainant’s letters has informed the Complainant that maximum limit of sum assured under this policy is of Rs.5,00,000/-. So Complainant’s request to include Cumulative Bonus in sum assured cannot be granted.
17) Present case is peculiar in which from 02/11/02 the Opposite Party has given sum assured of Rs.5 Lacs to Insured No.1 i.e. present Complainant and sum assured of Rs.5 Lacs to Insured No.2 Aniket. In the policy for the period 02/11/05 to 02/11/06 sum assured stated against names of both the Insured is Rs.5 Lacs each and Cumulative Bonus recorded against the Insured No.1 is Rs.2,11,600/- and Insured No.2 is Rs.2,11,600/-. Amount of Cumulative Bonus if included in the already sum assured of 5 Lacs each, it will exceed limit of sum assured under the policy given to the Complainant from 02/11/06. This Forum has no right to re-write contract between the parties. It is clear from the evidence on record that from 02/11/2006 the Opposite Party amended the terms and conditions of the policy that too without notice to the Complainant. In amended terms and conditions of the policy there is no provision of cumulative bonus. The Complainant had earned cumulative bonus from 1995 and it was abolished in the new amended policy. It appears from the letters of the Opposite Party that on inquiry made by the Complainant, Opposite Party informed the Complainant that as per the guidelines of IRDA they amended terms and conditions of the policy and they have given benefit of early entry discount and enhancement of sum assured in lieu of earlier cumulative bonus. Answers given by Opposite Party to the Complainant are vague and stereotype. Opposite Party has not specifically stated what benefit was given to the Complainant in lieu of cumulative bonus. Prior to the amendment of the policy the Opposite Party had given sum assured of Rs.5 Lacs to the Complainant and another beneficiary of the said policy therefore, after amendment terms and conditions of the policy sum assured given to the Complainant was not enhanced as policy given to the Complainant was of maximum sum assured of Rs.5 Lacs. There is no evidence to show that any other benefit was given to the Complainant in lieu of cumulative bonus. At the time of giving amended policy for the period 02/11/06 to 01/11/07 amount of cumulative bonus was deducted from the policy as there is no provision of cumulative bonus in the new policy and it has caused injustice and financial loss to the Complainant.
18) The Complainant has accepted new policy from 02/11/2006, 02/11/2007 & 02/11/2008. This Forum has no powers to declare terms and conditions of the contract between the parties as null & void. Therefore, the Complainant’s prayer to direct Opposite Party to include amount of Cumulative Bonus in the sum assured cannot be granted.
19) The modified terms and conditions have caused injustice to the Complainant and therefore, it will be just and proper to direct Opposite Parties to reimburse loss of Rs.4,23,200/- caused to the Complainant by adopting some other permissible measures. It appears from the policy for the period from 02/11/04 to 01/11/05 that out of basic premium of Rs.10,748, the Opposite Party had given family discount and recovered premium of Rs.9,63,073/-. It appears from the policy for the period 02/11/05 to 01/11/06 net premium was of Rs.9,600/-. The Opposite Party has given family discount of Rs.1,074.80 paise to the Complainant and recovered net premium of Rs.9,673/-. Considering the loss of cumulative bonus of Rs.4,23,200/- suffered by the Complainant, it will be just and proper to direct Opposite Parties to collect nominal premium of Rs.100/- p.a. from the Complainant for renewal of the policy for further period and the Opposite Party shall give additional benefit to the Complainant by increasing limit of indemnity stated in the policy or any other permissible measures to reimburse the total loss of cumulative bonus of Rs.4,23,200/- to the Complainant.
20) The Complainant has prayed for compensation of Rs.5 Lacs towards mental agony & stress and Rs.50,000/- towards cost of this litigation. The amount of compensation and cost of litigation claimed by the Complainant is exorbitant. We think it just to direct Opposite Party No.1 & 2 to pay to the Complainant Rs.10,000/- as compensation for mental agony and Rs.5,000/- as cost of this litigation.
21) The Policy is not issued by Opposite Party No.3. Opposite Party No.3 has not taken any decision regarding settlement of the claim. The Complainant has not proved any deficiency in service of Opposite Party No.3. Therefore, complaint deserves to be dismissed with cost against Opposite Party No.3.
22) For the reasons discussed above, we pass following order -
O R D E R
i. Complaint No.314/2009 is partly allowed against Opposite Party No.1 & 2 only.
ii. Opposite Party No.1 & 2 are directed to reimburse jointly and/or severally loss of Rs.4,23,200/- (Rs. Four Lac
Twenty Three Thousand Two Hundred Only) caused to the Complainant by cancellation of Cumulative
Bonus by collecting nominal premium of Rs.100/- p.a. for renewal of policy for further period and by
exceeding limit of indemnity stated in the policy or by any other measures permissible under the law.
iii. Opposite Party No.1 & 2 shall pay jointly and/or severally an amount of Rs.10,000/- (Rs. Ten Thousand Only) as
compensation for mental agony & stress and Rs.5,000/-(Rs. Five Thousand Only) towards cost of this
proceeding to the Complainant.
iv. Complaint is dismissed with cost against Opposite Party No.3.
v. Opposite Party No.1 & 2 shall take steps to comply with the order within one year from the date of receipt of
this order.
vi. Certified copies of this order be furnished to the parties.
