DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION CAMP COURT AT LUDHIANA
RBT/Consumer Complaint No.463 of 2018
Date of institution: 26.07.2018
Date of Decision: 20.06.2022
Kalim Khan son of Mohammad Israil Khan, Proprietor of M/s A.S. Enterprises, 796/13, New Madhopuri, Circular Road, Ludhiana
….Complainant
Versus
- United India Insurance Company Limited, Branch office Savitri Complex-I, G.T. Road, Dholewal, Ludhiana
- The Branch Manager, United India Insurance Company Limited, Branch Office, Savitri Complex-I, G.T. Road, Dholewal, Ludhiana
- United India Insurance Company Limited, Regional Office at 136, Feroze Gandhi Market, Ludhiana
……..Opposite Parties
Complaint under Consumer Protection Act.
Quorum: Shri Ranjit Singh, President.
Mrs. Ranvir Kaur, Member
Present: Sh. Amandeep Singh, Adv. for complainant
Sh. D.R. Rampal, Adv. for Ops No.1 to 3
OP No.4 exparte
Order dictated by :- Shri Ranjit Singh, President
Order
The present order of ours will dispose of the above complaint filed under Consumer Protection Act, by the complainant against the Opposite Parties on the ground that the complainant is running a factory unit under the name and style of M/s A.S. Enterprises at 796/13, New Madhopuri, Circular Road, Ludhiana and the complainant is the sole proprietor of the above noted factory unit. Relating factory unit goods of the complainant were fully insured with the OP vide policy bearing Noo.2010021117P106091450 dated 21.7.2017. The insurance premium was debited by the complainant in the account of the opposite parties on 20.07.2017 and the policy was provided by the opposite parties to the complainant ion 01.08.2017. OP No.4 i.e. Indian Bank, Branch Dugri, District Ludhiana sanctioned a loan to the complainant regarding business mentioned above after inspection by their officials of the premises of the complainant and stocks in the first week of July 2017. The sanction letter of OCC limit was issued on 12.7.2017. Copy of the insurance policy was provided to the complainant on 01.08.2017 and in the mean time, unfortunately fire incident happened on intervening night of 28th/29th July 2017. The insurance company vide their letter reference No.154 dated 4.8.2017 decline to register the claim stating happening of fife incident at B-5-797/14, Circular Road, Ludhiana is different from the location covered by our referred policy, when insurance company failed to provide any cover note or any intimation about details of insurance policy being covered until 1.8.2017. that too upon telephonic intimation of incident of fire at the warehouse to the insurance company by the OP No.4. Neither I was aware of name of insurance company also. It is further alleged that after that it came to the knowledge of the complainant as well as OP4 i.e. Indian Bank, that the address of premises insured under the above noted policy has been wrongly mentioned by the opposite parties and as such, in this regard the OP No.4 write a letter to the opposite parties vide letter dated 21.9.2017. The contents of the said letter are as under:-
“ We would like to state here that we provided details of said account to your representative on 21.8.2017 along with 55 mother proposal to be insured. The said policy was received by our representative of our bank on 1.8.2017, reflecting incomplete/incorrect details regarding property supposed to be insured. Before we could taken up issue for correction, unfortunately, the fire incident happened in the intervening period”.
For the purpose of record, it is mentioned here that account in question is new and the bank account was opened only 14.7.2017 and C limit was disbursed thereafter. We also confirm that we have inspected their property on 7.7.2017 as part of verification process prior to sanction of OCC Limit and disbursement of loan amount. During the inspection stocks were available in the property. All the related documents are available with our branch, which can be referred in case of need. We request you to depute your representative to our branch to collect related documents for amendment in the said policy with regard to correction in the address of property that was supposed to be insured. It may also be noted here that as declared by the party, the location mentioned in the policy is no longer in use as ware house. Unfortunately, a fire incident was happened in the above noted factory unit of the complainant in the intervening night of 28th/29th July, 2017 and at that time, the factory unit of the complainant was duly insured with you the Ops vide insurance policy. Thereafter, the complainant lodged his claim with the Ops vide letter dated 29.09.2017, which delivered to the OP No.3 on 3.10.2017 and also provided all the necessary documents to the Ops by visiting the offices of the Ops time and again but the Ops failed to settle the claim of the complainant and vide their letter dated 4.8.2017 for the reason that policy does not cover this loss, so the Ops are unable to register the claim and dispute the surveyor. The aforesaid act of the opposite parties amounts to deficiency in service, unfair trade practice and it has caused mental as well as physical agony and also caused inconvenience to the complainant. Vide instant complaint, the complainant has sought the following reliefs:-
- To direct the Ops to pay Rs.11,36,105/- along with interest @ 24% per annum as claim amount
- To direct the Ops to pay the amount of Rs.5,00,000/- as compensation
- Any other relief as per facts or circumstances of the case be also allowed if Hon’ble Forum thinks so necessary for the proper disposal of the complaint
- Upon notice, the O.P. No.1 has filed written reply taking preliminary objections; that the complaint is not maintainable; that the complaint is false and frivolous one; that the complaint is bad for non joinder and misjoinder of the necessary parties; that the complainant has no locus standi to file the present complaint; that the complaint is also barred by time; that the parties are governed by terms and condition of the insurance policy. The said policy has not completed three years since its inception. On merits, it is stated that the claim of wife of the complainant was not covered under the said policy and competent doctors of OP2 minutely scrutinized the claim of the wife of the complainant and they recommended to treat the said claim as no claim vide recommendation dated 12.2.2016 to OP1 and OP1 also after going through the terms and conditions of the insurance policy and documents available on record scrutinized the claim and found that the claim is not maintainable and the same was repudiated as no claim by OP1. The such type of cases are being dealt with by Park Mediclaim TPA OP2 on behalf of National Insurance Company Limited. The papers concerning to treatment of Manjeet Kaur wife of complainant were also sent to the OP2 and OP2 vide letter dated 1.11.2017 demanded certain documents and thereafter reminders were sent to the complainant by OP2 and vide letter dated 27.1.2016 the OP2 has sent the file to OP1 for treatment the said file as NO claim. The complainant sent one letter dated 1.2.2016 and along with said letter one certificate bearing reference of DMC Hospital, unit DMC Heart institute dated 28.1.2016 was sent.
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- challenging the veracity of the complaint on the ground of maintainability & suppressed the material facts. On merits, it is averred that policy under question Health Companion Silver bearing No.30490500201600 was issued by the OP company on the basis of the information provided by the assured to the company. In case the policy holder wants to continue with the policy than on the payment of next years premium a different policy number issued. Since the information provided by the assured was established to be incorrect by the OP company, hence, the OP was well within its right to repudiate the said claim of the complainant. Since the answering OP have acted within the four corners of the statutory provisions, no case of deficiency in services can be said to have arisen. It is further averred that repudiation of claim under the subject policy was on the grounds of misstatement of information, suppression of material information and furnishing of false information in the proposal form. The assured was treated for CVA acute infact from DMC and Hospital, Ludhiana. As such, the OP company has rightly repudiated the claim preferred by the complainant. Insurance contracts are contracts based on utmost good faith. By concealing material facts in the proposal forum, the OP was denied of the opportunity to assess the risk under the proposal. It is the primary duty of the assured to disclose all the facts truly and correctly in the proposal form. The OP was led to issue the policy by suppression of material facts. It is further stated that in an insurance contract, the principle of good faith has to be adhered to and it is primary duty of the assured to disclose all the facts truly and correctly in the proposal form. Thus, it is reiterated that OP was misled to issue the policy by suppression of material facts. OP submits the claim has been rightly rejected purely on the basis of documentary evidence of suppression of material facts by the assured in the proposals for insurance. Thus, alleging no deficiency in service on its part has prayed for the dismissal of complaint in total.
3. The complainant has tendered certain documents in the shape of evidence Ex.C1 to Ex.C12 and closed the evidence. On the other hand, the OPs has tendered certain documents in the shape of evidence.
4. We have heard learned counsel for the parties at considerable length and have also examined the record of the case.
5. Complainant purchased one Insurance policy No.30490500201600 dated 08.01.2017 under the name of Family First Silver and the same was renewed for the period from 08.01.2017 to 07.01.2018 and paid the premium Rs.22527/- to the OP. During the existence of the policy period, complainant admitted in emergency in DMC Ludhiana due to falls while going to bathroom due to complaint of weakness of right side of body and she remained admitted for the period of 31.05.2017 to 27.06.2017. The doctors of DMC Hospital, Ludhiana in discharge certificate under the head Treatment disclosed as under:-
“ Patient was assessed, evaluated & diagnosed as a case of CVA Accute Infract left MCA Territory with Type 11 DM/HTN with h/o Epolepsy with bilateral Carotid Plaque (left 90% and right 20% and she underwent surgery (left FTP Decompressive craniectomy + FTP duroplasty)
After emergency admission in the hospital on 31.05.2017, the complainant informed Mr. Gurdip Singh, Manager on his mobile on 31.05.2017 to provide cashless facility. But during the stay in the hospital by the insured Pinki Rani, OP vide SMS dated 05.06.2017 informed the complainant that policy has been cancelled due to non disclosure of material facts.
6. Opposite parties admitted the policy as well as premium paid by complainant. It is also admitted by opposite parties that complainant filed the claim that complainant was diagnosed and admitted in the hospital for the period from 31.05.2017 to 27.06.2017. But during the course of investigation and assessment of claim, it was revealed that complainant did not provide true and correct information while filling up the proposal form with respect to her medical history. Complainant was suffering from Hypertension and Diabetes Mellitus since 4 years and Seizures since 2 years prior to the risk of commencement date but he had not disclosed it in the proposal form. Hence, her claim is repudiated on the ground of concealment of material facts.
7. The question to be decided is, whether the repudiation of the claims of the complainant on the above referred grounds is valid and legal or not?
The complaint was contested by the Ops denying all the allegations of deficiency in service leveled against them and admitting the issuance of the subject insurance policies to the complainant.
The learned counsel for the Ops repudiated the claim on the ground of pre existing disease of the complainant. The Hon’ble National Commission in this point has laid down the law in “Satish Chander Madan Versus Bajaj Allianz General Insurance Co. Ltd.”, I (2016) CPJ 613 (NC), has observed that Hypertension is a common disease and it can be controlled by medication and it is not necessary that person suffering from hypertension would always suffer a heart attack and repudiation on account of HTN as pre-existing disease is not justified. The same decision is observed by Hon’ble State Commission Punjab, Chandigarh in Order dated 26.04.2017 passed in First Appeal No.836 of 2016 titled “Reliance Health Insurance Company Ltd. Versus Subhash Chander Aggarwal” which is as under:
“Consumer Protection Act, 1986 Sections 2 (1) (g) and 15 Medical claim – Repudiation and cancellation of policy and refund on ground of concealment of pre - existing disease hypertension – Deficiency in service – Complaint before District Forum allowed – Challenged – Whether Hypertension is a disease which is required to be referred in proposal form – Hypertension is a common disease and it can be controlled by medication and it is not necessary that person suffering from hypertension would always suffer a heart attack and repudiation on account of pre - existing disease was not justified – Therefore, ground that complainant suffering from hypertension not corroborated on basis of evidence on record – Further, as per terms and conditions of policy, OPs failed to prove on record that complainant before taking policy was suffering from any pre - existing disease which was concealed by him at time of taking policy – Originally mediclaim policy taken by complainant from Star Health and Allied Insurance Co. Ltd. – In year 2010 and he shifted to OPs in year 2013 on representation of representative of OPs – It was continuous policy – In year 2011 he had some problem of Hypertension, it was after 2010 when mediclaim policy was taken for first time by complainant from Star Health and Allied Insurance Co. Ltd. and then shifted to OPs – Therefore, it is not pre-existing disease – No material information was concealed by insured at time of taking policy – Claim was wrongly repudiated by OP on a frivolous ground for which they did not have any evidence – Hence, appeal dismissed with cost of Rs.10,000/- - (2016) CP 613 (NC), Relied on.”
8. Furthermore, in these days, Hypertension is considered as normal wear and tear. The Hon’ble Delhi State Consumer Disputes Redressal Commission, New Delhi in case Life Insurance Corporation of India Vs Sudha Jain 2007(2) CLT 423 has dawn conclusions in para 9 of the order and the relevant clause is 9(iii) which is reproduced as under:-
“Malaise of hypertension, diabetes occasional pain cold, headache, arthritis and the 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 are controllable on day to day basis by standard medication and cannot be used as concealment of pre existing disease for repudiation of the insurance claim unless an 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.
9. Moreover, even non disclosing of insured being a patient of Hypertension/diabetes did not amount to suppression of material facts they being a lifestyle diseases, so as to entitle the insurer to repudiate the claim as held by our own High Court in case Veena Sharma Vs Life Insurance Corporation of India 1999 (1) R.C.R. (Civil) 646.
10. Disease that can be easily detected by subjecting the insured to basic tests like blood test, ECG, etc., the insured is not supposed to disclose such disease because of otherwise leading a normal and healthy life and cannot be branded as diseased person. Insurance Company cannot take advantage of its act of omission and commission as it is under obligation to ensure before issuing medi-claim policy whether a person is fit to be insured or not. It appears that Insurance Companies don’t discharge this obligation as half of the population is suffering from such malaises and they would be left with no or very little business. Thus any attempt on the part of the insurer to repudiate the claim for such non-disclosure is not permissible nor is ‘exclusion clause’ invoceable. Claim of any insured should not be and cannot be repudiated by taking a clue or remote reference to any so-called disease from the discharge summary of the insured by invoking the ‘exclusion clause’ or non-disclosure of pre-existing disease’ unless the insured had concealed his hospitalization or operation for the said disease undertaken in the reasonable near proximity as referred above. Day-to-day history or history of several years of some or the other physical problem one may face occasionally without having landed for hospitalization or operation for the disease cannot be used for repudiating the claim. For instance an insured had suffered from a particular disease for which he was hospitalized or operated upon 5, 10 to 20 years ago and since then had been living healthy and normal life cannot be accused of concealment of pre-existing disease while taking mediclaim policy as after being cured of the disease, he does not suffer from any ‘disease’ much less the ‘pre-existing disease’. For instance to say that insured has concealed the fact that he was having pain in the chest off and on for years but has never been diagnosed or operated upon for heart disease but suddenly lands up in the hospital for the said purpose and, therefore is disentitled for claim bares dubious design of the insurer to defeat the rightful claim of the insured on flimsy ground. Instances are not rare where people suffer a massive attack without having even been hospitalised or operated upon at any age say for 20 years or so. Non-disclosure of hospitalisation/or operation for disease that too in the reasonable proximity of the date of mediclaim policy is the only ground on which insured claim can be repudiated and on no other ground.
11. Even otherwise, with the fast growing business competition among the Insurance Companies, unhealthy practices develop to get maximum benefits and profits. It is not a case of a businessman, trader or an educated employed person but that of a common poor man. He puts his hard earned small savings in such schemes with a hope and aspiration that in case of accident or death, he or his family shall get some immediate financial assistance but in most of the cases, he is left cheated when his claim is rejected with just a stroke of pen that he concealed some material facts at the time of signing proposal form or the claim was not properly submitted before the Insurance Company or the claim is against the terms & conditions of the policy. That apart the agent of the company is required to explain all the details and conditions of the insurance policy sought by the customer. A common man is not supposed to know all the niceties and technicalities of law. Once accepting the premium and having entered into an agreement without verifying the facts, the Insurance Company cannot riggle out of the liability merely by saying that the contract was made by misrepresentation and concealment. The insurance policies should not be issued and repudiated in such a casual mechanical manner. The policy entails the liability on both sides. It is rather exploitation of the customer and more or less fraud on the public. Such practice should be strongly deprecated.
12. So, after considering all the facts, documents on file and the law laid down by Hon’ble higher authorities, it is held that the genuine claim of the complainant was wrongly, illegally and arbitrarily repudiated by the opposite parties
13. In view of the discussion made above, present complaint is allowed against opposite parties and directed to pay Rs.3,65,000/- to the complainant with interest @ 7.5% per annum from the date of repudiation of claim i.e. 05.06.2017 alongwith Rs.30,000/- for harassment and Rs.20,000/- as litigation expenses. This order is directed to be complied with within a period of thirty days from the date of receipt of copy of this order. Free certified copies of this order be sent to the parties, as per rules. The files be consigned to record room.
April 07, 2022
(Ranjit Singh)
President
(Ranvir Kaur)
