PER JUSICE R.C. JAIN, PRESIDING MEMBER

Aggrieved by the order dated 05.7.2012 passed by the Karnataka State Consumer Disputes Redressal Commission, Bangalore (for short the ‘State Commission’) in Appeal No. 727 of 2007.  The Aviva Life Insurance Co. India Pvt. Ltd. (opposite party before the District Forum) has filed the present petition purportedly under Section 21(b) of the Consumer Protection Act, 1986.  The appeal before the State Commission was filed against the order of the II Additional District Consumer Disputes Redressal Forum, Bangalore Urban District dated 15.03.2007 in C.C. No. 424 of 2006.  By that order the District Forum had allowed the complaint and directed the insurance company to pay a sum of Rs. 2,10,000/- to the complainant in terms of the lifelong policy issued to the complainant within one month from the date of communication of the copy of the order along with Rs. 5,000/- as the cost of the proceedings.  Aggrieved by the said order, the insurance company filed appeal but without any success and hence the present petition.

2.      We have heard Mr. Priyadarshi Gopal, learned counsel for the petitioner and Mr. Anand Sanjay M. Nuli, Advocate learned counsel for the respondent-complainant and have considered their submissions.  The facts and circumstances leading to the complaint have been amply noted in the order of the District Forum and need no repetition in detail at our end.  The consumer dispute raised by the complainant was in regard to the non-settlement of the insurance claim lodged by the complainant on the insurance company seeking insurance claim for sum of Rs. 2,10,000/- towards the reimbursement of Rs. 1,19,725/- which the complainant incurred in connection with the Aortic Valve with 21 MM Medtronic hall Aotic valve Posterior.  The claim was repudiated by the insurance company on twin grounds i.e. (i) the disease for which the complainant for the treatment have incurred the expenses was not the “Critical Illness” and therefore not covered under the policy and (ii) being that the complainant was guilty of suppression of material facts in regard to his health conditions inasmuch as even before taking of the policy he was suffering from a certain heart disease which he failed to disclose in the proposal form submitted by the complainant at the time of taking the policy.  Going by the facts and circumstances of the case and the material brought on record held that the insurance company was guilty of deficiency in service as is unjustifiably fails to settle the claim of the complainant by observing as under:

          “Thereafter, the opposite parties repudiated claim of the complainant on the ground that the claim is not covered as per Article 9 of the policy. According to the opposite parties surgery for Aortic Valve Replacement with 21 MM Medtronic hall aortic Valve Posterior (Aortic Valve Replacement) under went by the complainant on 15.09.2004 does not come within the Critical Illness Rider.  It is not in dispute that Life Long Policy issued to the complainant by the opposite parties cover critical illness.  However, details of the critical illness are given in the policy.  Article 9 covers critical illness which include Heart Attack, Stroke, Cancer Terminal (End-Stage) Kidney Failure, Major Organ Transplant and 9.6 Coronary Artery Bye-pass Surgery Requiring Extracorporal Blood Circulation.  It is true replacement of valve is not included in the Article 9.6.  However, the definitions included in the critical illness cannot be considered exhaustive and requirement of valve replacement definitely constitutes critical illness.  If valve replacement was not to be done by means of surgery ultimately patient would die and therefore, valve replacement comes within the definition of critical illness.  Therefore, the opposite parties are not justified in repudiating the claim of the complainant.  The object of securing insurance policy is to meet unforeseen situation when a person is required to incur medical expenses like the present complainant.  The Insurance Company is required to interpret the terms and conditions of the policy in accordance with the object for which the policy was issued.  When the opposite parties cover critical illness in the policy the valve replacement surgery has to be considered to be critical illness though it is not specifically defined in article No.9.  This is in accordance with the object for which the policy was issued.  The complainant claimed sum assured of Rs. 2,10,000/- and compensation of Rs. 50,000/- in terms of policy.  The opposite parties are liable to pay sum assured in policy which was Rs. 2,10,000/-.  Under the peculiar circumstances of the case awarding of separate compensation may not be necessary.  Hence, we pass the following:

            The complaint is allowed.  The opposite parties are directed to pay Rs. 2,10,000/- to the complainant in terms of Life Long Policy issued to the complainant within one month from the date of communication of the copy of the order along with Rs. 5,000/- being the cost of the proceedings.”

3.      It would appear that before the State Commission a plea was raised on behalf of the appellant-insurance company reiterated its plea that insurance company was not liable to reimburse the cost of replacement of the valve as the illness with which the complainant suffered was not ‘Critical Illness’ within the meaning of Article-9 of the conditions of the policy.  The said plea of the insurance company was answered by the State Commission as under:

          “The learned counsel appearing for the insurance company submitted the valve replacement cannot be considered as the critical illness so as to award compensation under Article 9 of the conditions of the policy.  Article 9 of the policy reads as follows:

            Article 9 – Covered Events – Critical Illness Definitions:

            A covered event occurs when the insured in the case of single life or one of the insured’s in the case of joint life is diagnosed as having one of the Critical illness defined below, or at the moment when one of the surgical operations listed below has been performed.  In addition to the criteria below having been fulfilled, the diagnosis, with supporting documentation, must have been recorded in the insured’s medical records held by the medical centre in which the diagnosis was made, or by the examining registered and qualified medical practitioner who hold an appointment as a specialist consultant.

9.1 : Heart Attack

            Heart attack is the death of a portion of the heart muscle as a result of abrupt interruption of adequate blood supply to the area.  The diagnosis must be evidenced by all of the following criteria:

a)    A history of typical chest pain;

b)    New electrocardiographic changes in keeping with recent symptomathology and laboratory verification of acute myocardial infarction;

c)    An elevation in cardiac enzyme levels (CK level two times higher than the upper range of normal limit, accompanied by either the elevation of CK-MB, AST and LDH, or the elevation of troponin).

The Covered Event occurs at the moment when all of the above stated criteria have been evidenced.

It is not in dispute that the complainant underwent a surgery for valve replacement in Manipal hospital.  Valve replacement is relating to the heart in which the system regulates the blood supply to the heart.

The very word used under article 9.1 referred to above proves that heart attack is nothing but the death of a portion of heart muscle.

If the valve replacement is only to regulate the blood supply to the heart then necessarily he was suffering from a critical illness relating to the heart.   Therefore, in our view the DF is right in allowing the complaint of the complainant.  In the result, we pass the following:

Application filed for condonation of delay and the appeal are dismissed.

The amount deposited by the appellant/Insurance Company in this appeal before this Commission be transferred to the DF to enable the DF to pay the same to the complainant after due notice to him”

4.      Learned counsel for the petitioner-insurance company would assail the findings and orders of the fora below primarily on the ground that the same are not based on the correct and proper appreciation of the facts and circumstances of the case and evidence and material placed on record, in particular, the terms and conditions of the policy.  It was contended that from the material on record, it is manifest that the complainant was suffering from a heart disease for more than one year prior to the taking of the policy as is evident from the record of the hospital but he concealed the said fact in the proposal form and rather gave a declaration that he was not suffering from any kind of disease relating to the heart, which was false to the knowledge of the complainant.  It cannot be denied that in the first certificate issued by the Manipal Heart Foundation where the complainant underwent the procedure of replacement of his heart valve, had recorded  about the complainant having been suffering from hypertension etc., for about two years prior to the date of his admission in the said hospital but we cannot loose sight of the important fact that in a later certificate issued by the Manipal Heart Foundation dated 15.3.2005 this position was clarified and it was made clear that there was a typographical error in the discharge summary as the period of ‘two years’ was mentioned therein which should be read as ‘two months’.  That would clearly show that the complainant was not suffering from any heart ailment which was required to be declared at the time of making the proposal.  He was encountered with the said heart disease after several months of the taking of the policy.  In view of this it cannot be said that there was any suppression of material facts by the complainant at the time of taking the policy.  Consequently it cannot be said that the contract of insurance was not based on the ‘Uberrimaefadie’ i.e. utmost good faith.   The District Forum was therefore justified in taking the view which it had taken atleast in regard to the unjustifiable repudiation of the claim on that ground.

5.      The learned counsel next contended that the replacement of valve is not covered under the heading of ‘Critical Illness’ definitions appearing in Article-9.  In our view this aspect has been fully discussed by the fora below and going by the nature of the disease which required a replacement of the valve cannot be in denial of the position that the said disease fell under the “critical illness” appearing in Article – 9 of the conditions of the policy.  We must therefore, reject both the contentions of the learned counsel for the petitioner-insurance company and uphold the finding of the fora below in that behalf.

6.      Even after doing so, the question which remains to be considered is as to whether the fora below were justified in awarding the compensation of Rs. 2,10,000/- with interest to the complainant.  There is no denial of the factual position that the complainant had taken the insurance policy in the sum of Rs. 2,10,000/-.  At the same time, it is the case of the complainant that he had incurred total expenditure of Rs. 1,19,725/- as per the cash bill issued by the Manipal Heart Foundation in connection with the replacement of his Aortic Valve.  Once as per the complainant’s own showing, he has incurred the above expenditure to the above extent, we see no earthly reasons why the fora below have awarded a compensation of Rs. 2,10,000/- i.e. the sum insured.  In our view, the insurance company was liable to reimburse the petitioner a sum of Rs. 1,19,725/- at the best.  The fora below have therefore, committed a grave error in allowing the claim in the sum of Rs. 2,10,000/- to the complainant.  The orders therefore need to be modified in that behalf.

7.      In the result the revision petition is partly allowed and the impugned orders passed by the fora below are modified to the extent that the insurance company is directed to pay the sum of Rs. 1,19,725/- (rounded off to Rs. 1,20,000/- ) along with interest @ 6% per annum from the date of filing of the complaint till payment, besides cost of
Rs. 10,000/- throughout the proceedings.  The amount, if not already paid, shall be paid within a period of six weeks from the date of this order, failing which the rate of interest shall stand enhanced to 12% per annum.