Haryana

Ambala

CC/206/2022

Anita Singla - Complainant(s)

Versus

The Star Health and allied Inss Co Ltd - Opp.Party(s)

Rajneesh Raizada

22 Oct 2024

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, AMBALA.

Complaint case no.	:	206 of 2022
Date of Institution	:	15.06.2022
Date of decision	:	22.10.2024

Anita Singla aged about 61 years wife of Late Shri Arvind Kumar resident of #37/9, Near Dr. Suman Nursing Home, Ladwa, District Kurukshetra (Haryana) Presently residing at House No.2808, Eqbal Ganj Road, Kacha Bazar, Ambala Cantt., District Ambala (Haryana). 

          ……. Complainant

                                                Versus

1. The Star Health and Allied Insurance Company Limited, SCO 180, 1-3, 3^rd Floor, Minerva Complex, Rai Market, Ambala Cantt., District Ambala (Haryana)-133001.  

 

2. The Star Health and Allied Insurance Company Limited, Sri Balaji Complex, 15, White Road, Chennai-600014.

 

….…. Opposite Parties

Before:        Smt. Neena Sandhu, President.

                      Smt. Ruby Sharma, Member.           

Present:       Shri Neeraj Raizada, Advocate, counsel for the complainant.

                    Shri Mohinder Bindal, Advocate, counsel for the OPs.

Order:         Smt. Neena Sandhu, President.

                   Complainant has filed this complaint under Section 35 of the Consumer Protection Act, 2019 (hereinafter referred to as ‘the Act’) against the Opposite Parties (hereinafter referred to as ‘OPs’) praying for issuance of following directions to them:-

1. To compensate the complainant for the loss suffered by her restricted to Rs.10,000/-, as per the terms and conditions of the policy. 
2. To pay the interest amount charged by the bank from the complainant.
3. To pay Rs.2,00,000/-, as litigation expenses.
4. To pay Rs.10,00,000/- as compensation for harassment, mental agony and torture suffered by the complainant.
5. To pay Rs.10,00,000/- for unfair trade practice adopted on account of settlement of loss by deviating the policy conditions.
6. To pay interest as per IRDA rules for settling the claim after 30 days and pay 2% additional interest over and above the bank interest.
7. To penalize the OPs for ignoring the procedure and guidelines of the IRDA for settlement of claim.  
382.  

Grant any other relief, which this Hon’ble Commission may deem fit.

2.             Brief facts of the case are that the complainant Ms. Anita Singla wife of late Shri Arvind Kumar, was co-insured alongwith her husband Arvind Kumar in Family Health Optima Insurance Plan bearing Policy No.P/211120/01/2019/006724, covering the risks from 16.02.2019 to 15.02.2020 issued by OP i.e M/s Star Health and Allied Insurance Company Limited. Her husband Arvind Kumar was covered against the referred policy, granted by OP covering the risk of all health insurance coverage. The proposal form bearing No.8127861 dated 16.02.2019 was filled up and insurance policy bearing No.P/211120/01/2019/006724 was issued covering the risk from 16.02.2020 to 15.02.2021 with coverage for floater sum insured of Rs.10,00,000/-. The policy was initiated by the OPs covering the risk as per the regular renewal from the Oriental Insurance Company Ltd. expiring on 14.02.2017 and National Insurance Company Ltd. covering 5 Lacs sum insured each. It is also for record that the policy was ported as per IRDA rules, as a regular renewal without any break, which confirms the inclusion of all risks covered under the policies. The said policies were mediclaim insurance policies vide which the insured was covered from 17.01.2006 to the date till he fell ill, against general insurance policies previously taken upto 19.01.2017 and was even having double insurance from Oriental Insurance Company Ltd. also from 05.02.2014 onwards till it was renewed by M/s Star Insurance Company Ltd. for Rs.10,00,000/- instead of sum insured of Rs.5,00,000/- for the previous policy taken from 2014 to 2017 from National Insurance Company Ltd. and the insurance policy taken from Oriental Insurance Company Ltd., for the period from 05.02.214 to 15.02.2019, for another Rs.5,00,000/- yearly. In this way, the insured had taken one policy from Star Health Insurance Company Limited, for sum insured of Rs.10 Lacs, in the year 2019.  Unfortunately, the insured Arvind Kumar, fell sick and on 20.01.2020 he took treatment from Alchemist Hospital and on 03.02.2020 from PGI and lateron was admitted in Alchemist Hospital from 12.02.2020 to 18.02.2020 and thereafter he remained admitted in PGI from 18.02.2020 to 27.02.2024, where his toe was amputated. After his discharge, from PGI, he was again admitted in Alchemist hospital on 05.03.2020 and unfortunately died there on 26.03.2020. The husband of the complainant was required to pay the necessary expenses for his treatment on day to day basis, which were to be paid by the insurance company but it did not do so and the family was burdened to bear the expenses incurred on his treatment. Keeping in view the dire need of money for the treatment and being covered under the policy, requests were made to the insurance company vide several letters, to provide cashless facility but it declined the said requests, by ignoring this fact that the insured had taken the policy from 2006 onwards. The OPs instead of providing immediate cashless facility to the insured as per terms of the policy and procedure of IRDA, illegally rejected the authorization for cashless treatment only on the pretext that Mr. Arvind Kumar was on Steroids since July 2018, which is prior to porting the policy, whereas the patient was not at all responsible, neither he was having any knowledge of medicines. As a regular policy holder, he was paying the renewal premium every time and was adopting the procedure to consult the qualified doctors for any ailment and as such in the year 2018 also if any medicine was given by the qualified doctors he had taken the same and had not taken any medicine own his own being a non medico person. Moreover he was taking the mediclaim policies regularly and got ported as per rules of general insurance of IRDA. He submitted the proposal form without concealing anything, all the colums of the proposal form were filled up truthfully but the OPs denied the claim with false and illegal objections, in violation of the contract of the policy. The insured was duly covered under the policy but when OPs refused to provide the cashless facility then the insured and his wife borrowed the money from their own sources to save the life of the insured. The refusal of the claim not only increased the medical problem of the deceased but has also created health issues for the wife of the insured too, who remained under great stress and has now become a regular patient of B.P. and other ailments. It is further stated that even after the best efforts and best treatment given to the husband of the complainant, he could not survive and breathed his last on 26.03.2020 at Alchemist Hospital, Sector-21, Panchkula. Thereafter the complainant prayed for indemnifying the expenses incurred on the treatment of her husband as per the policy coverage which he had taken since 2006 without any break. There was no response and the OPs verbally referred that they had closed the file disowning the liability by mentioning that the claim is found not admissible without any rhyme or reason. Whereas the insured had complied with all the formalities for porting the policy as per IRDA instructions and took the policy from the OPs by paying the full premium as consideration of contract and the ailment from which he was suffering, fell well within the scope of the policy for settlement of all expenses to be borne. It is further stated that the widow of the insured being co-insured got the policy again renewed from 16.02.2020 to 15.02.2021 by paying huge premium amount, when the husband of the complainant was taking treatment with the hope that everything will be all right, inspite of denial of the cashless facility by the insurance company. The OPs renewed the policy by charging premium of Rs.26,445/- with Rs.2,380/- CGST plus SGST Rs.2,380/- charging Rs.31,205/- again assured verbally that the medical expenses incurred on treatment will be made good off as they fall well within the admissibility continuing the risks for the period from 16.02.2020 to 15.02.2021. It is further stated that if the policy was not in order, how the same could have been renewed on the same terms and conditions and the action itself confirms the malafide and frivolous act of the OPs. The said act of the OPs was unethical, illegal and to cheat the clients. It is further stated that the OPs are cheating the people by assuring that  they do follow the procedure of IRDA and porting the policy by adopting proper procedure. It is further stated that to avoid the responsibility, the OPs did not reply to the application dated 01.06.2021 filed by the complainant under Right to information Act, 2005, vide which, complainant sought copy of letter of repudiation of claim, the conditions and rules for repudiation of claim. The OPs did not even bother to file reply to the legal notice served upon them.   Due to said act and conduct of the OPs, complainant has been put to great harassment, mental pain and agony, besides financial loss and the OPs are thus not only liable to pay all the medical expenses incurred on the treatment of the husband of the complainant, as per the terms and conditions of the policy, but also liable to compensate the complainant for the mental agony and physical harassment suffered by the complainant and are also liable to pay the litigation expenses. Hence, the present complaint.
3.           Upon notice, OPs appeared and filed written version wherein they raised preliminary objections with regard to maintainability and cause of action etc. On merits, while admitting the factual matrix of the case with regard to issuance of the insurance policy in question, it has been stated that it is the deceased husband of the complainant himself who is responsible for the non-payment. As a matter of fact, the husband of the complainant by concealing and suppressing true and material facts about his pre-existing ailment (as mentioned in his treatment records) procured the insurance policy illegally from the OPs with the sole aim to extract compensation from the OPs which he was legally not entitled to. The deceased husband of the complaint availed Family Health Optima Insurance Plan for the period from 16.02.2019 to 15.02.2020 for sum insured of Rs.10,00,000/- and the said insurance policy was ported from other insurance company. During the period of this first insurance policy with the answering OP, one claim with regard to the treatment of Shri Arvind Kumar by way of pre-authorization and cashless request was received from the Alchemist Hospital, Panchkula admitted there on 13.02.2020 regarding his treatment for CKD/ILD with sepsis shock, lower respiratory tract infection and multiple organ dysfunction syndrome with an approximate treatment cost of Rs.63,000/-. As per the documents received from the hospital, it was revealed that the husband of the complainant Shri Arvind Kumar was admitted in Alchemist Hospital, Panchkula on 13.02.2020 suffering from Nephropathy and Interstitial Lung Disease etc. and shown to be on steroids since July, 2018 which shows that the patient was suffering and symptomatic prior to porting to the Star health Insurance Policy under issue which he availed for the period from 16.02.2019 to 15.02.2020. The terms and conditions of the policy were explained to the complainant at the time of proposing policy and the same was served to the complainant alongwith the Policy Schedule. Moreover it is clearly stated in the policy schedule “THE INSURANCE UNDER THIS POLICY IS SUBJECT TO CONDITIONS, CLAUSES, WARRANTIES EXCLUSIONS ETC., ATTACHED.” It is further stated that the Policy is contractual in nature and the claims arising therein are subject to the terms and conditions forming part of the policy. The complainant had accepted the policy being fully aware of such terms and conditions and executed the proposal form. Since the husband of the complaint had disclosed in the proposal form only about his two pre-existing diseases i.e Disbetes & Hypertension as well as about his cataract surgery and the OPs after due consideration accepted the same and also incorporated in insurance policy as pre-existing diseases with coverage without any exception was extended to him, hence, on the basis of declaration in the proposal form, the policy was issued by relying upon the medical status as declared in the proposal form, by the complainant. It is relevant to mention here that porting of a insurance policy is a prerogative of the insurance company to accept the proposal or not and had the husband of the complainant disclosed his lung related ailment in the proposal form than the answering OP would not have accepted the proposal or accepted it on certain conditions and exceptions. Under the insurance contract utmost good faith must be observed by the contracting parties and good faith forbids either party from non-disclosure of the facts which the party knows. The insured has a duty to disclose each and every information and material fact about pre-existing ailment and about his health at the time of availing the policy, which were specifically asked in the proposal form. It will be relevant to place on record that the insured has a duty to disclose all material facts in proposal form while buying an insurance Policy. 19(2) of Protection of Policy Holder Regulations 2017 read as under: “The requirements of “disclosure of material information” regarding a proposal or policy apply, under these regulations, both to the insurer and insured.” The proposal, declaration given by the Proposer (Insured) forms the basis of the contract between the proposer and the company. The Proposer, the proposal form has affirmed that the insured person was in Good health and that he has not consulted or taken treatment which could be gathered from the following:

1. Is the person proposed for insurance in good health and free from physical and mental disease or infirmity. If not given details-Yes.

2. Has the person proposed for insurance consulted/diagnosed/taken treatment/been admitted for any illness/injury, if yes, give details-No

4. Has the person proposed for insurance ever suffered or suffering from any of   the following:

a) Diabetes Mellitus-If yes, since when-Yes.

b) High BP, Cholesterol- If yes, since when-Yes.

e) Tuberculosis, asthma, other respiratory infections-if yes, since when-“No

m) Any other Problem (Please specify)- No. (Cataract surgery both eyes 2013)

 

From the medical record and above findings, it is clearly evident that the husband of the complainant was well aware of his past medical history being on steroids since July, 2018 for his interstitial lung disease and nephrology which he failed to disclose in the proposal form while porting the policy, amounting to non-discloser of material facts thus violated the Principle of the insurance, making the contract of insurance voidable and unenforceable. The insured has omitted to disclose the material facts about his health at the time of porting of the policy, which amounts to violation of the terms and conditions of the insurance policy. As the insurance contract is based on utmost good faith, therefore, it is the duty of the proposer to disclose all the material facts about health to the insurer so that the insurer has the opportunity to evaluate the material facts and to decide whether to accept the proposal or not. In case of health insurance contracts, disclosure of health details are the material facts. Insured has to disclose all his past medical history in the proposal form, which is material fact for the assessment of risk and issuing medical insurance policy to the insured. Since the husband of the complainant had intentionally and deliberately concealed and suppressed the material facts about his pre-existing ailments and illness to take illegal benefits of policy from the OPs, hence the claim was rightly and legally not maintainable and payable. The entire medical/treatment record was considered in detail by the competent authority and after scrutinizing and elaborating the whole facts, situation, records and the evidence, it was found and established that the insured concealed his ailment/disease and treatment while getting the insurance policy from the OPs which has been proved to be a pre-existing disease. At the time of porting the policy, the husband of the complainant did not disclose his complete medical history/health details in the proposal form and other documents which amounts to misrepresentation/non-disclosure of material facts. As per Condition No.6 of the policy, if there is any misrepresentation/non-disclosure of material facts whether by the insured person or any other person acting on his behalf, the company is not liable to make any payment in respect of any claim. Considering the facts and medical record, the cashless claim request was rejected and duly informed to the concerned hospital and insured vide letter dated 15.02.2020. Moreover, by invoking the condition No.12, the policy in respect of Shri Arvind Kumar stands deleted from the coverage w.e.f 28.03.2020 due to non disclosure of pre-existing disease. The complainant in order to put undue pressure filed this false complaint by exploiting the process of law, hence the present complaint deserves dismissal on this score. The Hon'ble Supreme Court in Satwant Kaur & Others V/s New India Assurance Co. Ltd (2009) 8 SCC 316 has held that: " Any fact which would influence the mind of a prudent insurer in deciding whether to accept or not to accept the risk is a material fact. If the proposer has knowledge of such fact, he is obliged to disclose it particularly while answering questions in the proposal form. Needless to emphasise that any inaccurate answer will entitle the insurer to repudiate his liability because there is clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance. Since, there is no relation of consumer in between the parties therefore, the policy in respect of the complainant has been already deleted from the coverage w.e.f 28.03.2020, as per condition No.12 of the policy due to non-disclosure of pre-existing disease. Rest of the averments of the complainant were denied by the OPs and prayed for dismissal of the present complaint with costs.

4.           Learned counsel for the complainant tendered affidavit of complainant as Annexure C-A alongwith documents as Annexure C-1 to C-34 and closed the evidence on behalf of complainant. On the other hand, learned counsel for the OPs tendered affidavit of Sumit Kumar Sharma, Senior Manager, Star Health and Allied Insurance Co. Ltd., New Delhi as Annexure OP-A alongwith documents as Annexure OP-1 to OP-16 and closed the evidence on behalf of the OPs.
5.           We have heard the learned counsel for the parties and have also carefully gone through the case file.
6.           Learned counsel for the complainant submitted that though the insured died during pendency of the policy in question and he was never suffering from any pre-existing disease of nephropathy and interstitial lung disease (ILD) as alleged by the OPs, but was taking some medicines as prescribed by the doctors, yet, after his death, the genuine claim filed by his wife being co-insured, has been repudiated by the OPs on flimsy grounds, which act amounts to deficiency in providing service, negligence and adoption of unfair trade practice on their part. 
7.           On the contrary, the learned counsel for the OPs submitted that because the insured-deceased, at the time of porting the policy in question had concealed material facts from the OPs  with regard to his pre-existing disease i.e. nephropathy and interstitial lung disease (ILD), which he was previously suffering from, at the time of filling proposal form, and was taking medicines for the same since 2018 therefore, the claim in question was rightly repudiated, strictly as per terms and conditions of the insurance policy.
8.           The question which falls for consideration is, as to whether, the claim of the complainant was rightly rejected by the OPs- insurance company or not. Before proceeding further, it is significant to mention here that in Satwant Kaur Sandhu vs. New India Assurance Co. Ltd, (2009) 8 SCC 316 the Hon’ble Supreme Court held that under a contract of insurance, the insured is under a “solemn obligation” to make a true and full disclosure of information asked for in the proposal form. Relevant part of the said order is reproduced hereunder:- 

“18…Nonetheless, it is a contract of insurance falling in the category of contract uberrimae fidei, meaning a contract of utmost good faith on the part of the assured. Thus, it needs little emphasis that when an information on a specific aspect is asked for in the proposal form, an assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge. It is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not. Of course, the obligation to disclose extends only to facts which are known to the applicant and not to what he ought to have known. The obligation to disclose necessarily depends upon the knowledge one possesses. His opinion of the materiality of that knowledge is of no moment…”

 

9.           In the present case, it is coming out from the medial record of Alchemist Hospital, Panchkula, Annexure OP-10 colly, that the insured had been suffering from nephropathy and ILD and was on steroids since July 2018. This fact is also found mentioned in the Patient Death Summary dated 26.03.2020, Annexure C-32. Thus, it is coming out from the record that before the insured-deceased switched on to the present policy, he got himself admitted in the said Hospital and again took treatment for ILD, and kidney disease. It may be stated here that the policy of life insurance is based upon the principle of “uberrimae fidei”, i.e., utmost good faith. When a specific fact is asked for in the proposal form, an assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within the best of his knowledge. In the present case as well, the insured was under obligation to make complete and honest disclosure of all the facts and materials at the time of filling of the proposal form but against the Column No.1, of the proposal form Annexure OP-1, Has the person proposed for insurance consulted/diagnosed/taken treatment/been admitted for any illness/injury, it has been answered by the insured in the negative i.e. NO. However, it is culled out from the medical record, referred to above, that the insured had concealed the material facts of his treatment at the time of filling up the proposal form, qua nephropathy and ILD. Thus, in our considered opinion, the insurance policy in question was obtained by the insured by concealing the material facts about his health and had given incomplete disclosure of the information, which was within the knowledge of the insured and as such, the present case, attracts the principle of law laid down in  Satwant Kaur Sandhu v New India Assurance Co. Ltd. case supra
10.           It is therefore held that since the complainant has failed to prove her case, as such, no relief can be granted to her in that regard. Resultantly, this complaint stands dismissed with no order as to cost.  Certified copies of the order be sent to the parties concerned, as per rules.  File be annexed and consigned to the record room.

  Announced:- 22.10.2024

 

	(Ruby Sharma)	(Neena Sandhu)
	Member	President