CONSUMER DISPUTES REDRESSAL COMMISSION – X

GOVERNMENT OF N.C.T. OF DELHI

Udyog Sadan, C – 22 & 23, Institutional Area

(Behind Qutub Hotel)

New Delhi – 110016

Case No.11/2018

PREM PRAKASH KHOSLA

S/O SH MANOHAR LAL KHOSLA

R/O B-1403, BPTP FREEDOM PARK LIFE HARYANA-122001                     ….........COMPLAINANT

                                                       VS

UNITED INDIA INSURANCE CO. LTD.

407, 4^TH FLOOR, RAJA HOUSE

30/31 NEHRU PLACE,

NEW DELHI-110019                                                                                       ............RESPONDENTS

                                                                                                              DATE OF INSTITUTION-16/01/2018

                                                                                                              DATE OF ORDER- 10/03/2022.

RASHMI BANSAL- MEMBER

1. Complainant has filed this complaint against the opposite parties(hereinafter referred as OPs)underSection12oftheConsumerProtection Act, 1986 on the averments that he had purchased an overseas Travel Mediclaim insurance policy from OP2, through its agent OP1, bearing policy number 1600–2616–992415073, for the period of 01.08.2017 to 13.11.2017 and also paid a premium amount of Rs. 16,678/- and thereafter, along with his wife left India on 01.08.2017 for United Kingdom. At the time of taking the said policy the complainant was assured by the OP that it was a cashless policy and at the time of admission in the hospital the complainant will not have to pay any money and the hospital authorities would claim from the OP. The policy cover provided for all pre-existing inclusions under life threatening condition, medical expenses, evacuation and repatriation along with other assurances.
2. During his stay in United Kingdom, the complainant has suddenly developed headaches, vomiting, vision loss and slurred speech due to posterior brain stroke and he was admitted in the Leeds hospital at St James’s University Hospital Beckett Street Leeds UK on 05.09.2017 in ICU and was subsequently discharged on 22.09.2017.
3. It is stated by the complainant that at the time of admission, the complainant gave the travel Mediclaim insurance policy to the hospital authorities, who sent the estimate to OP for approval which was declined by OP on the ground that the claim is not payable due to complication of past medical history of hypertension. That the complainant during his admission from 05.09.2017 to 22.09.2017 in the hospital had spent 7572 UK pounds on his medical treatment as well as on the hospitalization. Complainant claim for reimbursement of above stated amount from OP was declined via its email dated 03.10.2017 on the same ground earlier stated.
4. It is stated by the complainant that the refusal for reimbursement by the OP is totally unjustified and amounts to deficiency of service as agreed upon by the OP at the time of issuing the said Travel Mediclaim Insurance Policy to the complainant when the policy was still subsisting. Complainant’s efforts to settle the claim with the OP went in vain as OP had neglected and avoided the complainant for settling the claim and to make the payment of medical treatment expenses. Alleging the above said act and the conduct of the OP as gross deficiency in services and unfair trade practice within the meaning of Consumer Protection Act, 1986, complainant prays  for reimbursement of the medical expenses of 7572 UK pounds incurred by the complainant, along with interest at the rate 24% per annum from the date of admission in the hospitalization i.e. 05.09.2017 till it’s realization along with the damages and compensation of Rs.1,00,00/-  for dereliction of duty and deficiency of service and cost of proceedings of Rs.55,000/ -.
5. Complainant has relied on Life Insurance Corporation of India versus Smt. Mithilesh,Appeal no FA 456/2005, decided on 22.01.2009and “Oriental insurance Company Limited versus Mr Vidya sagar Bora and others,” Appeal no. FA 08/98, decided on 13.03.2008, passed by Hon'ble Delhi State Consumer Dispute Redressal Commission where in, inter- alia,  it was observed that hypertension, diabetes, occasional pain, cold, headache, arthritis and like in the body are normal wear and tear of modern day life which is full of tension at the place of work, in and out of the house and or controllable or on day to day basis for standard medication and cannot be used as concealment of pre-existing disease for the repudiation of insurance claim unless the insured, in the near proximity of taking of the policy, is hospitalized or operated upon for the treatment of these diseases or any other disease. If the insured had been even otherwise living normal and healthy life and attending to his duties and daily chores like any other person and is not declared as a diseased person as referred above he cannot be held guilty for concealment of any disease, the medical terminology of which is even not known to an educated person unless he is hospitalized and operated upon for a particular disease in the near proximity update of insurance policy say few days or months…..”

The complainant in support of his case has filed following documents:

1. Travel Mediclaim insurance policy as exhibit PW1/A.
2. Passport along with visa as exhibit PW1/B.
3. Air ticket as exhibit PW1/C.
4. The copy of discharge summary dated 22.09.2017 and other medical records as exhibit PW1/D.
5. The copy of authorization request as well as the query letter and denial email dated 03.10.2017 of cashless facility letter exhibited as PW1/E (colly).
6. The copy of medical expenses bill exhibited as exhibit PW 1/F.

6. OP has filed written statement praying for the dismissal of the complaint with cost, alleging, inter alia, that the claim of the complainant is against the law as well as facts on the record and that complainant has not approached the Hon'ble forum with clean hands. It is submitted by OP that in the insurance policies, company rely upon professional recommendation and decision of Third-Party Administrator (TPA), which is required to be followed by company under the provisions of IRDA Regulations.  TPA has repudiated the present claim being non-admissible on the ground that complainant had a past medical history of hypertension. The pre-existing conditions and related ailments are not payable vide clause no. 12 (C) of the policy which reads as follows: 

12 (c):Pre-existing Conditions: Pre-existing conditions means ant sickness/illness, which existed prior to the effective date of the insurance including whether or not the insured person had knowledge that symptoms were related to the sickness/illness. Complication arising from a pre-existing condition will also be considered part of the pre-existing condition.

The OP has filed Repudiation letter dated 18.02.2019 exhibited as DW1/1 in support and relied upon Hon'ble Supreme Court of India M/s Suraj Mal Ram Niwas oil Millsversus United India insurance Co Ltd, 2010, wherein it was stated that in construing the terms of a contract of insurance, the words used therein must be given paramount, and it is not open for the court to add, delete or substitute any words.

7. Both the parties have filed their evidence by way of affidavit and written submissions. 
8. We have heard the counsel for the parties and have carefully gone through the pleadings of the parties, evidence and documents on the record.
9. Initially the case was filed against two parties, M/s Karvat Cover – More Assist Pvt. Ltd and Trawelling Cover More as OP1 and M/s United India Insurance Co. Ltd as OP2.  OP1 was proceeded Ex Parte vide order dated 28.05.2019. Complainant has also filed an amended memo of parties for making United India Insurance Co. Ltd. as the only OP through its authorized corporate agent M/s Karvat Cover -More Assist Pvt Ltd and Trawelling Cover More.
10. This is not in dispute that complainant has taken overseas travel insurance policy bearing number 0216002616992415073 issued by OP2 through OP1 for the period of 01.08.2017–13.11.2017 and had gone to UK to visit his son. This is also not disputed that claimant was diagnosed with brain stroke and admitted at St James’s University Hospital Beckett Street Leeds UK on 05.09.2017 in ICU and was subsequently discharged on 22.09.2017.
11.  This is also not in dispute that before beginning the treatment, intimation was given to the OP for permission for cashless treatment by health authorities of UK, which was declined by OP on the ground that the claim is not payable due to complication of past history and further, vide email dated 03.10.2017 also refused reimbursement of the expenditure as claimed by complainant. The repudiation letter dated 18.02.2019 (Ex Dw1/1) mentions that complainant had a past medical history of Hypertension, hence the claim is repudiated as per Clause 12 (c) of the policy terms and conditions.
12. The Discharge Advice Note dated 22.09.2017 (Exhibit PW1/D) of St. James University Hospital mentioned medical history of Hypertension, and nothing was mentioned so as to reveal that primary reason of brain stroke to complainant was hypertension. OP has also not produced any significant document or direct evidence to show that the complainant was having past history of hypertension and that was the cause for the brain stroke suffered by the complainant on 05.09.2017 or that the complainant had any pre­existing related illness, disease or condition. No doubt that pre-existing condition has been referred in Clause 12(c) of the policy but it should be relevant with the disease suffered by the insured.
13. It has been observed by the Hon'ble National Commission in the III 2014 CPJ 340 (NC) New India Assurance Company Limited through its duly Constituted Attorney, Manager versus Rakesh Kumar that people can live months/years without knowing the disease and it is diagnosed accidentally after routine checkup and on that ground repudiation is not justified.
14. In cases of life style diseases, the Hon'ble NCDRC has been taking view that life style disease like Hypertension / diabetes are daily routine life style disease and so common in India that the whole insurance claim cannot be rejected on this ground and held that the non-disclosure of information in respect of this life style disease of diabetes, will not totally disentitle the complainant for indemnification of the claim.
15. In this regard, Hon'ble High Court of Delhi in Hari Om Agarwal Vs. Oriental Insurance Co. Ltd., W.P.(C) No.656 of 2007, found that it is universally known that hypertension and diabetes can lead to a host of ailments, such as stroke, cardiac disease, renal failure, liver complications depending upon varied factors. That implies that there is probability of such ailments, equally they can arise in non-diabetics or those without hypertension. It would be apparent that giving a textual effect to Clause 4.1 of policy would in most such cases render Mediclaim cover meaningless. Policy would be reduced to a contract with no content, in event of happening of contingency. Therefore Clause 4.1 of policy cannot be allowed to override insurer's primary liability and held that repudiation of a claim towards treatment for a heart attack on the ground of pre­-existing ailment of diabetes, which was disclosed, was illegal because the object of the insurance policy was to “cater to medical expenses incurred by the assured” and therefore the exclusion clause could be overridden in light of the object.
16. In RP No.4461 of 2012, Neelam Chopra Vs. Life Insurance Corporation of India & Ors., decided on 08.10.2018, (NC) it has been held by NCDRC that,

"11. From the above, it is clear that the insurance claim cannot be denied on the ground of these life style diseases that are so common. However, it does not give any right to the person insured to suppress information in respect of such diseases. The person insured may suffer consequences in terms of the reduced claims.

14. Moreover, the non-disclosure of information in respect of this life style disease of diabetes, will not totally disentitle the complainant for indemnification of the claim in the light of the judgement of Hon'ble High Court of Delhi in Hari Om Agarwal Vs. Oriental Insurance Co. Ltd., (supra)."

17. This is settled principle of law that the contracts of insurance are governed by the principle of utmost good faith. The duty of mutual fair dealing requires all parties to a contract to be fair and open with each other to create and maintain trust between them.Every beneficial policy or the contract of insurance has to be interpreted and given a beneficial meaning. Contract of insurance is always for the benefit of the insured and any other approach, which is not in consonance with the beneficial interpretation or ingredient, is bad in law.
18. In a recent judgment, the Hon'ble Supreme Court of India in Manmohan Nanda vs. United India Assurance Co. Ltd. & Anr, civil appeal NO.8386/2015 vide its order dated 06.12.2021, has observed that while diabetes mellitus­II is a risk factor for a cardiac ailment in a person, it is not a hard and fast rule that every person having diabetes mellitus­II would necessarily suffer from a cardiac disease. Conversely, a person who does not suffer from diabetes mellitus­II can also suffer from a cardiac ailment. Any ailment, sickness or injury of which the proposer had positive knowledge of, and which may require imminent medical attention whilst on tour abroad and during the term of the policy had to be disclosed. If the proposer had no knowledge of any ailment he had, obviously there could be no disclosure of any ailment or sickness which would require medical attention whilst on tour abroad. Hon'ble Supreme Court, while allowing the claim of the insurer, deduced important principles, reads as follows:

“52 (i)…..

(ii)……..

(iv)…….

(v). The insurance company has the right to seek details regarding medical condition, if any, of the proposed by getting the proposer examined by one of its empanelled doctors. If, on the consideration of the medical report, the insurance company is satisfied about the medical condition of the proposer and that there is no risk of pre­ - existing illness, and on such satisfaction it has issued the policy, it cannot thereafter, contend that there was a possible pre - ­existing illness or sickness which has led to the claim being made by the insured and for that reason repudiate the claim.

(vi)….

(vii) In other words, a prudent insurer has to gauge the possible risk that the policy would have to cover and accordingly decide to either accept the proposal form and issue a policy or decline to do so. Such an exercise is dependent on the queries made in the proposal form and the answer to the said queries given by the proposer.”

It was held that :

“69. The object of seeking a Mediclaim policy is to seek indemnification in respect of a sudden illness or sickness which is not expected or imminent and which may occur overseas. If the insured suffers a sudden sickness or ailment which is not expressly excluded under the policy, a duty is cast on the insurer to indemnify the appellant for the expenses incurred thereunder.

70. Hence in the instant case, the repudiation of the policy by the respondent insurance company was illegal and not in accordance with law. Consequently, the appellant is entitled to be indemnified under the policy. In view of the aforesaid discussion, we hold that the Commission was not right in dismissing the complaint filed by the appellant herein.”

19. After considering the above mentioned judgements, this commission is of the view that the OP has insured the complainant after being apprised and satisfied itself about the medical condition of the complainant and thereafter issued policy to him. The OP did not find the medical condition of the complainant as a risk factor for any possible life threatening medical emergency during the term of the policy so as to decline acceptance of the proposal form and issuance of the policy. Admission in ICU itself shows that there was the urgency of admission of the complainant into the hospital, since it’s been assessed by doctors as life threatening. The terms of the policy appear to be highly tilted towards insurance companies, providing them an easy way out to shrug off their responsibilities towards insurer. Insurance company cannot take advantage of its acts of omissions and commissions as it is under obligation to ensure before issuing insurance policy whether a person is fit to be ensured or not. It appears that OP is failed to discharge its obligation towards complainant. In the instant case, the only ground for repudiation of claim of complainant is past medical history of Hypertension, which in view of the above mentioned judgments, cannot be a ground for repudiation of claim of the complainant, it being the normal wear and tear of the routine life in today’s modern life. Had Hypertension and diabetes be treated as disease then more than 50% of the population shall be excluded from the policy benefit. The insured can only disclose what is known to him, and is not under a duty to disclose facts which he did not know and which he could not reasonably be expected to know at the material time.Thus, any attempt on the part of insurer to repudiate the claim for such non-disclosure cannot be permitted nor the exclusion clause can be invoked.
20. The complainant has taken the travel medi-claim policy from OP to keep himself indemnified in respect of a sudden illness or sickness that is not expected or imminent and that may occur overseas. The complainant has suffered sudden brain stroke on 05.09.2017, which is not expressly excluded under the policy, a duty is cast on the OP to indemnify the complainant for the expenses incurred thereunder. The policy (Ex- PW1/A) clearly mentions the details of claim which includes medical expenses, evacuation and repatriation for the sum insured USD 50,000 with deductible amount USD 0. Viewed from the aforesaid perspective,  this commission is of the view that OP cannot repudiate the claim on the ground that complainant had the past medical history of the hypertension. The insurer has issued the policy upon its complete satisfaction. In the absence of any evidence on record placed by OP, the treatment availed by the complainant for brain stroke in United Kingdom, cannot be termed as direct result of hypertension so as to be labelled as pre-existing disease.  Hence, in our considered view, the OP was not right in repudiating the policy in question. The repudiation is illegal and not in accordance with law. Consequently, the complainant is entitled to be indemnified under the policy.
21. Sequel to the above, the complaint  is allowed in the following terms:
    1. The OP is directed to indemnify the complainant regarding the expenses incurred by him towards his medical treatment amounting to 7572 UK pounds along with the interest of 6% p.a. (INR)from date of refusal of the claim of the complaint i.e. 03.10.2017 within three months from the date of the order received by OP, failing which the amount of 7572 UK pounds will yield an interest at the rate 9% per annum (INR) from the date of refusal of the claim i.e. 03.10.2017 by the OP till the realisation of the amount;
    2. Since the expenses incurred by the complainant was in terms of UK Pounds, and the claim would be paid in terms of Indian Rupees, the exchange rate as it existed on the date of refusal of the claim of the complainant i.e. 03.10.2017 shall be reckoned for the purpose of determining the conversion rate of UK Pounds into Indian Rupees vide Meenakshi Saxena & Anr. Vs. ECGC Limited (formerly known as Export Credit Guarantee Corporation of India Limited) & Anr. – (2018) 7 SCC 479;
    3. The complainant is also entitled to Rs.50,000/- for damages and compensation for non - payment of admissible claim against the policy and further entitled to Rs. 25,000/- as cost of litigation, payable by the OP within three months from the date of receipt of the order by OP, failing which  the above said amount shall carry interest @6% p.a. till the date of realisation;

The consumer complaint could not be decided within the statutory period due to heavy pendency of Court cases.

(Dr. RAJENDER DHAR)         (RASHMI BANSAL)      (MONIKA A SRIVASTAVA)

     MEMBER                                MEMBER                          PRESIDENT