BEFORE THE DAKSHINA KANNADA DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, MANGALORE

                                                               Dated this the 29^th of December 2010

PRESENT

                                                 SMT. ASHA SHETTY           :   PRESIDENT

                                                                      SMT.LAVANYA M. RAI       :   MEMBER

                                                                      SRI. ARUN KUMAR K.        :   MEMBER

COMPLAINT NO.200/2010

(Admitted on 17.07.2010)

C. Padmanabha Shetty,

Aged about 65 years,

So. C. Chandraraja Shetty,

Chennavara House, Palthady Village,

Puttur Taluk,

Dakshina Kannada.                 …….. COMPLAINANT

(Advocate for the Complainant: Sri.D.Shambhu Bhat).

          VERSUS

1. Chief Executive Officer,

Yashaswini  Trust,

Yashaswini Health Care Scheme,

M.S. Building, 6^th Floor,

III Gate, Vidhana Veethi,

Bangalore.

(Advocate for Opposite Party No.1: Sri.Thimmayya P.)

2. Manager,

Puttur Primary Co-operative Agricultural

      and Rural Development Bank Ltd.,

Puttur, Dakshina Kannada.    ……. OPPOSITE PARTIES

(Advocate for the Opposite Party No.2: Sri.Suraj Lal Shetty)

ORDER DELIVERED BY PRESIDENT SMT. ASHA SHETTY:

1.       This complaint is filed under Section 12 of the Consumer Protection Act alleging deficiency in service against the Opposite Parties claiming certain reliefs. 

The brief facts of the case are as under:

The wife of the Complainant Smt.Sunanda is the member of Yashaswini Health Scheme of the 1^st Opposite Party as per membership No.7135.  The limit of coverage is Rs.2,00,000/- per individual with a sub-limit of Rs.1,00,000/- per surgery per individual per annum.   

It is stated that, the aforesaid Smt.Sunanda had undergone operation for Cholecystectomy at Yenepoya Hospital, Deralakatta, Mangalore.  She was admitted in the said hospital from 31.8.2008 to 25.9.2008 and spent Rs.1,11,203/- towards the treatment.  It is stated that, the Complainant approached the 2^nd Opposite Party with consolidated bill and submitted the claim papers but the Opposite Party refused to receive the claim of the Complainant for no valid reasons.  It is stated that, the wife of the Complainant died on 20.01.2009.  Thereafter, the claim paper submitted by the Complainant by registered post to the 1^st Opposite Party but the 1^st Opposite Party failed to consider the same.  The Complainant has issued a legal notice dated 08.04.2010, despite of that the Opposite Parties failed to comply the same.

It is further alleged that, the membership receipt issued by the Opposite Party is vague and does not contain the details such as name of the network hospitals or the information with regard to pre-authorization procedure, diseases covered, pre-conditions etc.  It is stated that, the Opposite Party has not even issued the policy certificate to the Complainant or to the aforesaid Smt.Sunanda.  The membership receipt issued by the Opposite Party does not disclose the details of the mediclaim insurance policy and contended that, the Opposite Parties are duty bound to pay the claim but they have not considered the claim of the Complainant amounts to deficiency and hence the above complaint is filed before this Forum under Section 12 of the Consumer Protection Act 1986 (herein after referred to as ‘the Act’) seeking direction from this Forum to the Opposite Parties to pay Rs.1,11,203/- along with interest at 12% p.a. from 31.08.2008 till the date of payment and also claimed Rs.15,000/- as compensation and cost of the proceedings.

2.       Version notice served to the Opposite Parties by RPAD. Opposite Parties appeared through their counsel filed separate version.

Opposite Party No.1 admitted the membership of the Complainant’s wife but it is denied that the wife of the Complainant Smt.Sunanda undergone an operation for Cholecystectomy at Yenepoya Hospital, Deralakatta, Mangalore and taken treatment and spent Rs.1,11,203/-.  It is stated that, the Opposite Party No.1 is a trust created by the Government to help the farmers by paying the amount fixed by it for different surgery and treatment through network hospital.  It is an arrangement made by the Government to help the farmers through the 1^st Opposite Party trust.  In order to avail the benefits of the Yashaswini Scheme, the member has to follow the procedures prescribed under the scheme.  It is further stated that, as per the procedure of the Yashaswini Co-operative Farmers Health Care Scheme the member should inform and submit the membership card to the network hospital before admitting the hospital.  The network hospitals after treatments sending the bills to F.H.P.L.  After verifying the bill sent by the network hospital the F.H.P.L. recommending the same for the 1^st Opposite Party trust.  The trust is passing the bill in its meeting and sending the amount to F.H.P.L. account. Thereafter, F.H.P.L.  sending the bill amount to the concerned network hospitals.  The wife of the Complainant admitted to Yenepoya Medical College Hospital, Deralakatta, Mangalore which is not listed hospital, hence the Complainant is not entitled any hospital expenses under the Yashaswini Scheme. 

It is stated that, before joining the scheme the 2^nd Opposite Party stated the benefits available in a scheme and also terms and conditions of the scheme.  The Complainant after agreeing with the terms and conditions obtained the membership and contended that there is no deficiency and prayed for dismissal of the complaint. 

Opposite Party No.2 contended that, Complainant is not a consumer in relation to this Opposite Party.  This Opposite Party is only acted an agent on behalf of the principal i.e., Opposite Party No.1 and this Opposite Party is not liable to pay any amount claimed by the Complainant.  As per the insurance scheme, the 1^st Opposite Party will reimburse the medical expenses of the surgical operation to the members.  Thus, this Opposite Party is unnecessary party and prayed for dismissal of the complaint. 

3.       In view of the above said facts, the points now that arise for our consideration in this case are as under:

1. Whether the Complainant proves that the Opposite Parties committed deficiency in service?

2. If so, whether the Complainant is entitled for the reliefs claimed?

3. What order?

4.         In support of the complaint, Sri.C.Padmanabha Shetty (CW1) filed affidavit reiterating what has been stated in the complaint and answered the interrogatories served on him.   Ex C1 to C6 were marked for the Complainant as listed in the annexure.   One Sri.Poovappa (RW1), Chief Executive Officer of the Opposite Party No.1 and one Sri.M.Dhanakeerthi Shetty (RW2), working as Managerof Opposite Party No.2 filed counter affidavits and answered the interrogatories served on them.  Ex R1 to R4 were marked for the Opposite Parties as listed in the annexure.   Opposite Party No.1 filed notes of arguments.

          We have considered the notes/oral arguments submitted by the learned counsels and also considered the materials that was placed before this Forum and answer the points are as follows:

                       Point No.(i): Affirmative.

                       Point No.(ii) & (iii): As per the final order.   

Reasons

5.  Point No. (i) to (iii):

In the instant case, the facts which are not in dispute is that, the Yashaswini scheme is a benevolent Insurance Health Scheme introduced by the Government of Karnataka to provide medical assistance to Co-operative farmers and their family members in the year 2003.  It is also admitted that, the Complainant’s wife Smt.Sunanda is the member of the 1^st Opposite Party as per membership No.7135 dated 29.04.2008. As per the above Insurance Scheme, the 1^st Opposite Party i.e., a trust formed by the Government of Karnataka undertaken to reimburse the medical expenses of the members by introducing Yashaswini Scheme to the farmers herein the Complainant. 

Now the point in dispute between the parties before this Forum is that, the Complainant contended that, the Opposite Parties not reimbursed the medical expenses under the scheme and also contended that, the Opposite Parties not issued the insurance policy which containing all the details which includes the name of the network hospital or the information with regard to pre-authorization procedure, diseases covered and pre-conditions. The membership receipt issued by the Opposite Parties is vague and does not give any vital details of mediclaim insurance policy as contemplated under the scheme. 

The Opposite Parties interalia contended that, to avail benefit under Yashaswini scheme, the beneficiary has to follow the procedures prescribed under the scheme.  In order to claim any amount under the scheme, the member has to undergo operation in any of the network hospital earmarked by the trust.  In the receipt issued to the members clearly mentioned that, the member has to take treatment only at network hospital.  In instant case, Yenepoya Medical College Hospital Nithyananda Nagar, Deralakatte, Mangalore is not listed hospital hence the claim is not entertainable. 

In order to prove the case of the Complainant, the Complainant has filed oral evidence by way of affidavit and produced Ex C1 to C6.  Opposite Parties also filed evidence by way of affidavits and produced Ex R1 to R4.

We have heard the counsels for the parties and perused the oral as well as documentary evidence available on record, wherein, the Ex C1 and C2 are the membership receipts show that, the Complainant’s wife Smt.Sunanda is the member of the Yashaswini Scheme introduced by the Government of Karnataka issued by the Opposite Party No.1.  The Ex C3 is the discharge summary dated 31.08.2008 shows that, on 08.09.2008 Complainant’s wife Smt.Sunanda has undergone an operation for cholecystectomy at Yenepoya Hospital, Deralakatte, Mangalore and discharged on 25.09.2008.  The Ex C4 is the copy of the patient final bill dated 25.09.2008 for Rs.28,645/- issued by the above said hospital.  The Ex C5 and C6 are the medical bills and receipts show that the Complainant has spent Rs.37,161.85.  However, the Ex R1 is the trust deed shows that, the member has to follow certain procedure i.e., to avail the benefit one has to undergo treatment in network hospitals.   The Ex R2 produced by Opposite Parties reveals certain names of the hospitals i.e., 19 in numbers.  No doubt, in the above said list the name of the Yenepoya Medical College Hospital Deralakatte, Mangalore is not forthcoming. The above said notification was issued by the Opposite Party No.1 dated 27.01.2010 but there is no document produced to show that, the above said notification was brought to the knowledge of the beneficiaries/members herein the Complainant. In other words, the notification issued by the 1^st Opposite Party was not brought into the knowledge of the Complainant.  We have observed that, the Opposite Parties failed to disclose the hospital names either in the brochure or in the identity card or in the beneficiary receipt issued by the Opposite Parties.  Mere mentioning in the trust deed is not sufficient but it has to reach to the members.  But, the Ex C1 and C2 are the vital documents issued by the Opposite Party in proof of the membership does not contain any particulars which includes the name of the recognized hospital or does not say how pre-authorization is to be obtained, which are the diseases covered, what are the pre-conditions and who has to obtain pre-authorization. No doubt, in the absence of the above details, it is very difficult for the beneficiaries to go in search of the network hospitals when they fell sick.  It is further significant to note that, the Opposite Parties failed to disclose the hospital names either in the brochure or in the I.D. card or in the beneficiary receipt issued by the Opposite Parties.  In the absence of any disclosure of the hospitals to the beneficiaries herein the Complainant, he/she cannot take advantage/benefit of the policy.  It is a settled rule that, the terms and conditions must be in the knowledge of the beneficiary/member of the Yashasvini Scheme that they should go or avail service only with the notified hospitals.  In the absence of any such disclosure either in the I.D. card or in the beneficiary receipts or in the brochure, it is very difficult for the beneficiaries go in search of the hospitals as stated supra. 

It is a settled law that, in case, the Opposite Parties suppresses any proof, concealment of any material facts it adversely affects the policy.  The Regulation 3 of the Insurance Regulatory and Development Authority (Protection of Policy Holder’s Interests) Regulations, 2002, framed by Insurance Regulatory and Development authority (IRDA) in exercise of powers under Section 114 (A) of the Insurance Act,  1938, read with Sections 14 and 26 of the Insurance Regulatory and Development Authority Act 1999 – the exclusion clauses - if not explained they are not binding on the insured – those exclusion clauses are required to be ignored while considering the claim of the insured. (Reported in S.C. & National Commission Consumer Law Cases 2005-2008).  That means, the exclusion clauses if not explained they are not binding on the insured, those exclusion clauses are required to be ignored while considering the claim of the insured.  The above citation is self-explanatory. 

Similarly in the instant case, though the Opposite Parties introduced Yashaswini Scheme for the benefit of the poor farmers, it is the bounden duty of the Opposite Parties to explain/disclose the hospital names to the beneficiaries to get the benefits.  It is to be stated that, the above said scheme is a benevolent scheme started by the Government of Karnataka to provide medical assistance to the poor farmers and to protect the interest of the members of the Yashaswini Scheme holders.  The Opposite Party should see that, the terms of the Insurance Scheme do not operate harshly against the insured and in favour of the insurer.  A prospectus of insurance product are required to clearly state the scope of benefits, the extent of insurance cover and in explicit manner explain the warranties, exceptions and conditions of the insurance cover and the product shall be clearly spelt out with regard to their scope of benefits and also it is made very clear under the regulation that, insurer or its agent or other intermediary shall provide all material information in respect of the proposed cover to the insured. 

From the above, it is amply clear that, the Regulatory Authorities taken much care to protect the interest of the consumers.  Under such circumstances, the scheme introduced by the trust or agent or companies/Government shall protect the interest of the beneficiaries/consumers herein the Complainant.  In our view, the unexplained or unnoticed information regarding the hospitals would not be binding to the insured.  The reason being, the regulations are mandatory in nature so as to protect the consumer’s interest.  It is a well settled law that, when a statute or regulations provides for a manner in which a particular thing must be done, then that thing must be done in that manner only.  The Rule of Law laid down in Taylor vs. Taylor 1876 1 Ch.D 426 has been founded on sound principle and well recognized and followed by courts in India for several decades.  The principle laid down is that, “if a statute has conferred a power to do an act and has laid down the method in which that power has to be exercised, it necessarily prohibits the doing of the act in any other manner than that which has been prescribed”.   The principle behind the rule is that if these were not so, the statutory provision might as well would have not been enacted.  [III (2007) CPJ 34 (NC)]. 

Similarly, in the present case, though the Government introduced the benevolent scheme, it cannot overlook the Regulation laid down under the Insurance Regulatory and Development Authority (Protection of Policy Holder’s Interest), Regulations, 2002, framed by Insurance Regulatory and Development Authority in exercise of powers under Section 114(A) of the Insurance Act, 1938 read with Sections 14 and 26 of the Insurance Regularly and Development Authorities Act, 1999.  Thus, it is the duty of the Opposite Parties to disclose the hospital names notified by the Government under the scheme while issuing the Identity Card or beneficiary receipt or the brochure.  But in the present case, the Opposite Parties failed to discharge their duty to disclose the hospital names or to bring within the knowledge of the Complainant to get the benefit while issuing the Identity Card or related documents or subsequently.  There is no material evidence produced before this FORA to show that, the details of the network hospitals were issued/disclosed to the Complainant/Complainant’s wife till this date.  No such information furnished to the Complainant/Complainant’s wife till this date which amounts to deficiency in service/unfair trade practice. 

In view of the above discussion, we are of the considered opinion that, though the Opposite Parties received the membership fee under the Yashaswini Scheme and admitted that, the Complainant’s wife is one of the member under the Yashaswini Scheme and the said scheme is valid to avail medical benefits for one year, but the Opposite Party No.1 not reimbursed the medical expenses stating that, the Complainant’s wife has not followed the procedures prescribed under the scheme without serving the terms and conditions/vital details of the hospitals and other information amounts to unfair trade practice and deficiency as stated supra.  Under that circumstances, we direct the Opposite Party No.1 to reimburse Rs.65,806.85 to the Complainant towards the medical expenses as per Ex C4 to C6 and also pay compensation of Rs.5,000/- for the harassment and inconvenience caused to the Complainant.  Further Rs.1,000/- awarded as cost of the litigation expenses. Payment shall be made within 30 days from the date of this order.

There is no deficiency on the part of the Opposite Party No.2 hence complaint against Opposite Party No.2 is hereby dismissed.

6.       In the result, we pass the following:                          

ORDER

The complaint is partly allowed.  Opposite Party No.1 is directed to reimburse the medical expenses of Rs.65,806.85 (Rupees sixty five thousand eight hundred six and paise eighty five only) to the Complainant and further directed to pay Rs.5,000/- (Rupees five thousand only) as compensation and Rs.1,000/- (Rupees one thousand only) as cost of the litigation expenses. Payment shall be made within 30 days from the date of this order.

           On failure to pay the aforementioned amount within the stipulated time as mentioned above the Opposite Party No.1 is directed to pay interest at the rate of 10% p.a. on the total amount from the date of failure till the date of payment.

          Complaint against Opposite Party No.2 is hereby dismissed.

The copy of this order as per the statutory requirements be forwarded to the parties free of charge and therefore the file be consigned to record.

(Page No.1 to 14 dictated to the Stenographer typed by her, revised and pronounced in the open court on this the 29^th day of December 2010.)   

PRESIDENT                    MEMBER                              MEMBER

ANNEXURE

Witnesses examined on behalf of the Complainant:

CW1 – Sri.C.Padmanabha Shetty – Complainant.

Documents produced on behalf of the Complainant:

Ex C1 –                : Membership receipt of Smt.Sunanda P. Shetty.

Ex C2 – 29.04.2008: Receipt for payment of Rs.130/-.

Ex C3 – 25.09.2008: Discharge summary issued by Yenepoya Medical College Hospital pertaining to Mrs.Sunanda Shetty.

Ex C4 – 25.09.2008: Consolidated bill for Rs.28,645/- issued by Yenepoya Medical College Hospital.

Ex C5 – 06.02.2010: Bill issued by Dr.Harishchandra B for Rs.15,000/-.

Ex C6 -                   : Medical bills for Rs.36,933/- (68 in numbers).

Witnesses examined on behalf of the Opposite Parties:

RW1 – Sri.Poovappa, Chief Executive Officer of the Opposite Party No.1.

RW2 – Sri.M.Dhanakeerthi Shetty, working as Manager of Opposite Party No.2.

Documents produced on behalf of the Opposite Parties: 

Ex R1 – 10.11.2003: Copy of the Trust Deed.

Ex R2 -                 : Copy of the list of the Network Hospitals.

Ex R3 -                 : Pamphlet issued to the Complainant while joining the scheme.

Ex R4 -                 :  Copy of the receipt issued to the beneficiary.

Dated:29.12.2010                            PRESIDENT