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.186/2010

(Admitted on 03.07.2010)

Mr.Kuriakose,

So. Thomas,

Aged about 46 years,

RA. Madhava Sheril House,

Nelyadi Post, Puttur,

Dakshina Kannada.                           …….. COMPLAINANT

(Advocate for the Complainant: Sri.Sanjay D.)

          VERSUS

1. Chief Executive Officer,

Yashaswini Co-operative Farmers

   Health Care Scheme,

Now at 6^th Floor, M.S. Building,

Co-operative Secretariat,

Ambedkar Veedi,

Bangalore – 575 001.

2. Manager,

Family Health Plan Ltd.,

No.45, Millers Road,

Vasanthanagar,

Bangalore – 52.

(Advocate for Opposite Party No.1 & 2: Sri.Thimmayya P.)

3. Manager,

Nelyadi Service Co-operative Bank,

Puttur Taluk, Dakshina Kannada.     ……. OPPOSITE PARTIES

(Advocate for the Opposite Party No.3: Sri.Rajesh K.G.)

                                      ***************

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:

Complainant is the member of Yashaswini Co-operative Farmers Health Care Scheme with the 1^st and 3^rd Opposite Parties as per receipt No.2064248 for the year 2009.  The Complainant has paid Rs.150/- to the 3^rd Opposite Party to become the member of the 1^st Opposite Party as per receipt dated 09.05.2009.  As per the Medical Insurance Scheme, the 1^st Opposite Party will reimburse the medical expenses to the members. 

When the matter stood thus, the Complainant was admitted to Dhanvanthari Hospital Puttur for Hernia Operation on 22.06.2009 and was operated on the same day and discharged on 25.06.2009. The Complainant has incurred medical expenses of Rs.12,445/- to the above said operation.  Thereafter the Complainant has gone to the 3^rd Opposite Party with original document but the 3^rd Opposite Party refused to receive the claim.  Thereafter, the Complainant has sent the claim through registered notice dated 6.08.2009 but the 2^nd and 3^rd Opposite Parties have issued false reply. 

The another allegation of the Complainant is that, the membership receipt issued by the Opposite Parties is vague and does not contain the following details i.e., the name of the network hospitals, how the pre-authorization is to be obtained, which are the diseases covered, what are the pre-conditions and who has to obtain pre-authorization.  It is further submitted that, the Opposite Parties not issued the policy certificate and the receipt issued by the Opposite Party does not give or contains vital details of the mediclaim insurance policy.  Hence it is stated that, the non-payment of the claim by the Opposite Parties 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.12,445/- along with interest at 12% p.a. from 25.06.2009 till 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 and 2 admitted that, the Complainant is a member of the Yashaswini Co-operative Farmers Health Care Scheme of the 1^st Opposite Party and has paid Rs.150/- as membership to the 3^rd Opposite Party as per receipt No.2064248 for the year 2009 and it is valid for one year. 

The Opposite Party No.1 and 2 admitted that, the Complainant was admitted to Dhanvanthari Hospital Puttur on 22.06.2009 for Hernia Operation but denied that the Complainant has spent Rs.12,445/- and he has gone to the 3^rd Opposite Party with original documents for claiming the amount and the same was refused to receive the claim.  It is also denied that, the membership receipt issued by the Opposite Party is vague and does not contain the details as alleged in the complaint and further denied that, the Opposite Party has not issued the policy. 

However, it is submitted that the complaint is bad for non-joinder of necessary party because the Complainant not made the hospital as a party to the proceedings where he has taken treatment.

It is further submitted that, the 1^st Opposite Party is not Insurance, it is a trust formed by the Government of Karnataka to help the co-operative farmers in the year 2003.  In the trust deed, it is clearly mentioned the procedure for availing medical benefits.  As per the trust deed, the Complainant has to take treatment in network hospitals.  Dhanvanthari Hospital is not listed in the network hospital hence, the Complainant is not entitled any claim. 

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. is sending the bill amount to the concerned network hospitals.  The Complainant admitted to Dhanvanthari hospital Puttur, which is not listed hospital, hence the Complainant is not entitled any hospital expenses under the Yashaswini Scheme. 

Opposite Party No.3 admitted that, the Complainant had paid the premium to Yashaswini Co-operative Farmers Health Care Scheme and became the member of the said society and this Opposite Party has nothing to do with the liability to pay – reimburse the expenditure incurred on his health as per the said scheme.  It is stated that, this Opposite Party is not aware of any ailment, period of treatment and not contacted this Opposite Party for immediate help and contended that there is no deficiency on the part of this Opposite 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 complaint is bad for non-joinder of necessary party?

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

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

4. What order?

4.         In support of the complaint, Mr.Kuriakose (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, one Smt.Sathyashree (RW2), Manager of the Opposite Party No.2 and one Mr.M.R.Yadapadithaya (RW3), Chief Executive Officer of the Opposite Party No.3 filed counter affidavit and answered the interrogatories served on them.  Ex R1 to R4 were marked for the Opposite Parties as listed in the annexure.   Both parties produced notes of arguments along with citations.

          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) to (iv): As per the final order.  

Reasons

5.  Point No. (i):

As far as point No.(i) is concerned, the Opposite Parties took a contention that, the complaint is bad for non-joinder of necessary party as the hospital not made as a party to the proceedings where he has taken treatment which cannot be considered because there is no contractual relationship between the Complainant and the treating hospital.  The contract is with the Opposite Parties and not with the hospital.  Hence, point No.(i) held in favour of the Complainant. 

Point No.(ii) to (iv):

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 is the member of the 1^st and 3^rd Opposite Party as per receipt No.2064248 dated 09.05.2009 and it is valid for one year (as per Ex C1). 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 are 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, Dhanvanthari Hospital 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 is the membership receipt shows that, the Complainant is the member of the Yashaswini Scheme introduced by the Government of Karnataka issued by the Opposite Party No.1.  The Ex C2 is the copy of the discharge summary dated 22.06.2009 shows that, on 22.06.2009 under GA the right inguinal mesh hernioplasty was done, which shows that, the Complainant admitted to the above said illness to the hospital on 22.06.2009 and discharged on 25.06.2009.  The Ex C3 is the copy of the consolidated bill dated 25.06.2009 for Rs.12,445/- issued by the above said hospital.  The Ex C4 is the registered legal notice dated 06.08.2009 calling upon the Opposite Parties to reimburse the medical expenses spent by him.  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 Dhanvanthari Hospital Puttur 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 which is the vital document 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 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 till this date.  No such information furnished to the Complainant 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 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 Parties not reimbursed the medical expenses stating that, the Complainant 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 and 2 to reimburse Rs.12,445/- to the Complainant towards the medical expenses as per Ex C3 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.3 hence complaint against Opposite Party No.3 is hereby dismissed.

6.       In the result, we pass the following:                          

ORDER

The complaint is partly allowed.  Opposite Party No.1 and 2 are hereby directed to reimburse the medical expenses of Rs.12,445/- (Rupees twelve thousand four hundred and forty 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 and 2 are 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.3 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 15 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 – Mr.Kuriakose – Complainant.

Documents produced on behalf of the Complainant:

Ex C1 – 09.05.2009: Copy of the membership receipts (it contains 2 pages).

Ex C2 –  22.06.2009: Original discharge summary issued by Dhanvanthari Hospital, Puttur.

Ex C3 – 25.06.2009: Original consolidated bill.

Ex C4 – 06.08.2009: Lawyer’s notice sent to the Opposite Parties on behalf of the Complainant.

Ex C5 – 07.09.2009: Reply of the Opposite Party No.3.

Ex C6 – 14.09.2009: Reply of the Opposite Party No.2.

Witnesses examined on behalf of the Opposite Parties:

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

RW2 – Smt.Sathyashree, Manager of the Opposite Party No.2.

RW3 – Mr.M.R.Yadapadithaya, Chief Executive Officer of the Opposite Party No.3.

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 Complainant by the 3^rd Opposite Party.

Dated:29.12.2010                            PRESIDENT