BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM AT BANGALORE URBAN

 13^th DAY OF NOVEMBER 2015

O R D E R

SRI. P.V SINGRI, PRESIDENT

The complainant has filed this complaint U/s.12 of the Consumer Protection Act, 1986 against the Opposite Parties (herein after referred as OPs) with a prayer to direct the OPs to honour the claim of Rs.48,197/- with interest and damages in a sum of Rs.2,00,000/- with litigation cost.

2. The brief averments made in the complaint are as under:

The complainant is an insurer in the OP-2 and the OP-1 is the 3^rd party Administrator of the Insurance Company.  The complainant is a medi claim group insurance policy holder of Indian Overseas Bank from the year 2005 and the same is continued till today without any break.  On 26.12.2013 the complainant got admitted to St. Philomina’s Hospital, Bangalore for pain and swelling on the left foot and doctors surgically removed the abscess.  The complainant was under the hospital care and was discharged on 29.12.2013.  That after the discharge and the follow up treatment the complainant submitted a bill of Rs.48,197/- to the OP-1 on 08.01.2014 enclosing all the original bills with claim form.  That even after a month the complainant did not receive any information about the claim.  Therefore, the complainant called OP-1 many times and also approached them personally and finally he was informed that his claim is under process.  That the complainant thereafter got issued a legal notice dated 22.02.2014 calling upon the OPs to settle the claim within 7 days and the said notice was served on them on 24.02.2014.  That the OP-1 sent a letter dated 10.02.2014 which was served on the complainant on 28.02.2014 rejecting the claim of the complainant on untenable grounds.  That the complainant has not suppressed any facts of ailment and also the said policy is a continuous policy under the group medi claim of Indian Overseas Bank.  That there is no break in the policy and the Bank has changed various insurance companies as per their policies without any inconvenience to the policy holder.  The OPs have rejected the claim without there being any valid cause.  The OPs have failed to discharge their duties and commitments.

For the aforesaid reasons, the complainant pray for an order directing the OPs to honour the claim of Rs.48,197/- together with interest @ 18% p.a from the date of claim till the date of settlement and further direct them to pay him damages to the tune of Rs.2,00,000/- for deficiency in service and for having caused loss to him, for the mental agony and embarrassment together with costs of litigation.

3. Despite service of notice, OP-1 remained absent and was placed ex-parte. 

OP-2 in response to the notice appeared through their advocate and filed their version contending in brief as under:

That this OP during the course of its business had issued IOB Health Care plus Policy in favour of complainant for a period of one year from 11.09.2013 to 10.09.2014.  The liability of this OP under the policy is subject to its terms, conditions and exclusions.  During the validity of the policy, the complainant made a claim for reimbursement of certain medical expenses and hospitalization charges at St Philomena’s Hospital, Bangalore during December 2013.

After the receipt of the claim of the complainant and documents submitted by him along with the claim, it was noticed that the complainant was a known patient of Diabetes Mellitus since 20 years and he was under regular medication for the same even prior to the taking policy from this OP.  The treatment under went by the complainant was for the abscess of left foot which was directly as a result of Diabetes which was pre-existing.  That the complainant did not disclose that he was suffering from Diabetes for the period of 20 years when he made the proposal with this OP for health insurance and acted against the principles of good faith on which the insurance contract is built.  That the non-disclosure of the material fact such as pre-existing disease or ailment at the time of making proposal amounts to forfeiture of the policy as per the provisions of Insurance Act 1938.  That the policy shall be void and premium paid shall be forfeited in the event of mis-description, misrepresentation and non disclosure of any material facts.

That the policy issued in favour of the complainant for the first time was on 11.09.2009.  Under the provisions of the Insurance Policies, the pre-existing disease and related complication due to pre-existing disease or not covered for the first three years and the insured will get benefit of covering the pre-existing disease and related complication from the fourth year if insured has not filed any claim during first three years.  In the case of the complainant this OP has settled two claims made by him.  That this OP having noticed that the treatment under went for the disease is due to complication of the pre-existing disease Diabetes, repudiated the claim as the same fell out side the purview and scope of the policy.  This OP has acted upon clause-1 of the policy while repudiating the claim.  The repudiation was done after thoroughly following the terms, conditions and exclusions of the policy and not with an intention to deprive or to harass the complainant.  That there is no deficiency of service on the part of this OP.  That only after thorough investigation the claim of the complainant has been repudiated.  Therefore, the complaint is not maintainable.

For the aforesaid reasons, the OP-2 pray for dismissal of the complaint with costs.

4. On the rival contention of both the parties, the points that arise for our determination in this case are as under:

5. The complainant filed his affidavit evidence to substantiate the allegations made in the complaint and placed reliance on certain documents.  OP-2 though filed its version but failed to lead any evidence in support of the averments made in the version.  The complainant also filed his written arguments.  OP-2 remained continuously absent subsequent to filing of the complaint.

6. Perused the allegations made in the complaint, the averments made in the version, the sworn testimony of the complainant and the various documents produced.

7. Our answer to the above points are as under:

REASONS

8.  It is not in dispute that the complainant was issued with a IOB Health Care plus Policy for the period from 11.09.2013 to 10.09.2014.  It is also not in dispute that the complainant is a Mediclaim Group Insurance Policy Holder of Indian Overseas Bank since from the year 2005 and the same has continued even on the date of filing of this complaint.  It is also not in dispute that the complainant was admitted to St Philomena’s Hospital, Bangalore for the pain and swelling on the left foot and a surgery was done for removing Abscess and thereafter the complainant was discharged on 29.12.2013 and after discharge he was treated for wound as an out patient.  The complainant has produced relevant policy documents and the various bills issued by St Philomena’s Hospital.

9. The complainant after the discharge submitted a bill for Rs.48,197/- to OP-1 on 08.01.2014 enclosing original bills with claim form.  Since the complainant did not receive any information from the OP-1 till 20^th February, 2014 as to the status of his claim he got issued a legal notice dated 22.02.2014 calling upon OPs to settle his claim.  In the mean while the complainant received a letter on 28.02.2014 from OP-1 dated 10.02.2014 rejecting his claim.  Aggrieved by the rejection of his claim, the complainant has approached this Forum.

10. The complainant has submitted his claim to OP-1 who is third party Administrator of OP-2 Insurance Company.  It is OP-1 who has repudiated the claim of the complainant at the insistence of OP-2.  However, OP-1 remained absent despite service of notice and failed to contest the claim put forth by complainant.  Though OP-2 filed their version but failed to substantiate the averments made in the version by leading oral or documentary evidence.

11. The complainant has produced the copy of IOB Health Care plus Policy schedule consisting of two sheets issued by OP-2.  He has also produced the copy of ID card issued by OP-1 which is valid from 11.09.2009.  It can be seen from the averments made in the version that the claim of the complainant repudiated on the ground that he did not disclose the pre-existing disease i.e., Diabetes Mellitus with which he was suffering for the last 20 years at the time of making proposal for the Insurance Policy.  It is averred by the OP-2 that under the provisions of Insurance Policy, the pre-existing diseases and related complications due to pre-existing diseases are not covered for the first three years and the insured will get the benefit of covering the pre-existing diseases and related complications due to pre-existing diseases from the fourth year, if insured has not filed any claim during first three years.  It is further averred that in the case of complainant the OP-2 has settled two claims made by him earlier.  Therefore, it is contended that the complainant is not entitled to the claim submitted by him.  OP-2 except filing version did not produce any documents including the proposal form submitted by the complainant as well as the entire policy documents to ascertain as to whether the averments made in para.11 of the version are in conformity with the terms and conditions of the policy.  It is also averred by the OP-2 that the complainant did not declare the pre-existing diabetes at the time of obtaining policy.  This was denied by the complainant and it was argued that in the past the very same OP has settled his two claims one in the year 2011 wherein it has been clearly stated that the complainant is suffering diabetes type-2 for the last 15 years.

12. The complainant has produced the copy of previous claim made in the year 2011.  The OP-2 also admits the settlement of the claim.  The discharge summary enclosed with the said claim made in the year 2011 clearly mentions that the complainant is a known case of Diabetes Mellitus since 15 years.  Thus, it is quite clear that the OP-2 was very well aware of the fact that the complainant is a known case of Diabetes Mellitus for the last 15 years during the year 2011 itself.  The policy under which the present claim is made is for the period from 11.09.2013 to 10.09.2014.  Thus, it is evident that at the time of issuing the policy, the OP-2 was very well aware of the fact that the complainant is a known case of diabetes mellitus for the last 20 years as on the date of issuing the policy in question.  Therefore, OP-2 is certainly not justified in repudiating the claim of complainant for the reason that the complainant has suppressed his ailment of Diabetes Mellitus at the time of obtaining the policy in the month of September 2013.

13. In the letter of repudiation issued by OP-1 it is contended that the claim of the complainant is rejected in pursuance of clause-1 of the policy.  Further it is mentioned in the said repudiation letter dated 10.02.2014 that the claim has been repudiated for the reason that the complainant has not disclosed his ailment Diabetes Mellitus with which he is suffering from last 20 years at the time of obtaining policy on 11.09.2013.  OP-2 was directed by us to produce the entire policy documents to enable us to understand the terms and conditions governing the said policy.  However, OP-2 did not produce the entire policy documents.  Therefore, in absence of the entire policy documents, we are unable to accept the contention of OP-2 that the repudiation of the claim of the complainant has been done in accordance with the terms and conditions governing the said policy.

14. As already stated above the claim submitted by the complainant in the year 2011 itself, it has been clearly mentioned that the complainant is a known case of DM (Diabetes Mellitus) therefore it cannot be said that the complainant has not disclosed the said ailment while obtaining the policy on 11.09.2013.  Thus looking from any angle, we don’t find any justification for the OPs in repudiating the claim of the complainant.  The conduct of OPs in repudiating the claim of the complainant without valid reasons certainly amounts to gross deficiency in service. 

15. Therefore, we are of the opinion that the apart from honouring the claim of the complainant the OPs have to be directed to pay interest on the said amount @ 12% p.a from the date of claim till the date of realization.  The repudiation of claim without valid reasons must have caused anxiety, mental agony to the complainant.  Therefore, the OPs have to be directed to pay a compensation of Rs.25,000/.  The order could not be passed within the stipulated time due to heavy pendency.

16. In view of the discussions made above, we proceed to pass the following:      

O R D E R

The complaint filed by the complainant U/s.12 of the Consumer Protection Act, 1986 is allowed in part.  The OPs are directed to pay a sum of Rs.48,197/- to the complainant towards his claim together with interest @ 12% p.a from 08.01.2014 till the date of realization.  Further the OPs are directed to pay a compensation of Rs.25,000/- towards deficiency in service on their part together with litigation cost of Rs.4,000/-.

The OPs shall comply the order passed by this Forum within six weeks from the date of communication.

          Send the copy of the order to both the parties free of costs.

(Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Forum on this 13^th day of November 2015)

MEMBER                            MEMBER                    PRESIDENT

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Witnesses examined on behalf of the complainant dated 22.01.2015.

1. Mr.P. Baskaran Chandran

Documents produced by the complainant:

Witnesses examined on behalf of the Opposite parties - Nil

MEMBER                            MEMBER                    PRESIDENT

Vln*