State Consumer Disputes Redressal Commission
Ashok Kumar vs Apollo Munich Health Insurance Co. Ltd on 23 August, 2013
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH First Appeal No. : 349 of 2013 Date of Institution : 12.8.2013 Date of Decision 23.8.2013 Ashok Kumar S/o late Sh. Nank Chand r/o # 3066, Sector 29-D, Tribune colony, Chandigarh. Appellant--- V e r s u s 1. Apollo Munich Health Insurance Co. Ltd. through its Zonal Manager, S.C.O.No.50-51, Sector-34, Chandigarh. 2. Apollo Munich Health Insurance Co. Ltd. through its Branch Manager, S.C.O.No.50-51, Sector-34, Chandigarh. 3. Apollo Munich Health Insurance Co. Ltd. through its Authorized Officer, S.C.O.No.50-51, Sector-34, Chandigarh. ....Respondents--- Appeal under Section 15 of the Consumer Protection Act, 1986. BEFORE: JUSTICE SHAM SUNDER (RETD.), PRESIDENT. SH. DEV RAJ, MEMBER.
Argued by: Sh. Satish Jaswal, Advocate for the appellant.
PER JUSTICE SHAM SUNDER (RETD.), PRESIDENT This appeal is directed against the order dated 3.7.2013, rendered by the District Consumer Disputes Redressal Forum-I, UT, Chandigarh (hereinafter to be called as the District Forum only) vide which, it dismissed the complaint, filed by the complainant (now appellant).
2The brief fact of the case, are that the complainant obtained Medi-Claim Optima Restore Insurance Policy, for the period from 27.06.2012 to 26.06.2013, from the Opposite Parties, after making the payment of a premium of Rs.15775/-. The said policy covered the expenses incurred by the insured person on his treatment of any disease or bodily injury through accident, during the period of insurance. Before issuance of the said policy, the Opposite Parties got conducted a complete medical check-up of the complainant from its authorized Centre, and it was only after satisfying about the physical, mental and his health conditions that the Policy was issued.
3It was stated that on 22.01.2013, the complainant developed chest pain, heaviness, gastritis and associated restlessness. He was admitted to Silver Oaks Hospital, Mohali. The Opposite Parties were immediately informed regarding the hospitalization of the complainant. The complainant was discharged on 24.01.2013. He remained in the hospital under the complete supervision and treatment of Dr. Akhil Bhargava. The complainant handed over the claim form alongwith the original bills, treatment certificates, reports as well as discharge summary to the Opposite Parties vide claim intimation No.107137. The complainant received a letter dated 24.01.2013 annexure C-5, from the Opposite Parties, vide which they introduced an additional exclusion clause for Cervical Spondylitis.
4The Opposite Parties refused to consider the claim of the complainant and repudiated the same vide letter dated 12.02.2013 (annexure C-6). It was further stated that at the time of inception of policy, there was no such clause, that the expenses on Cervical Spondylitis were not covered. The complainant was admitted in the hospital due to chest pain and restlessness and no treatment for Spondylitis was given, as per record. It was further stated that the claim of the complainant was illegally and arbitrary repudiated by the Opposite Parties. . It was further stated that the aforesaid acts of the Opposite Parties, amounted to deficiency, in rendering service, as also indulgence into unfair trade practice. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed 5 In their joint reply, the Opposite Parties, admitted that the complainant vide proposal form dated 25.06.2012, had taken a Health Insurance Policy but he did not disclose the fact that he had already been suffering from Cervical Spondylitis from March, 2012. It was further stated that non-disclosure of material fact, on the part of the complainant, disentitled him to any benefit under the Policy. It was further stated that the Policy alongwith the terms and conditions were duly signed and delivered to the complainant. As per Section 4 (d) of the policy, pre-existing conditions were not covered until 36 months of the continuous coverage had lapsed. It was further stated that in the present case a pre-authorization form for cashless facility was received on 22.01.2013 on behalf of the complainant through Silver Oaks Hospital, Mohali for the alleged treatment of the complainant with OPD Sheet dated 22.01.2013 with diagnosis of Cervical Spondylitis and suspicion of Angina to be ruled out.. It was further stated that as per the OPD sheet dated 22.01.2013, the complainant was a known case of Spondylitis which reasonably led to the suspicion of existence of Spondylitis prior to policy. The admission of the complainant was made at 12.00 P.M. and there was no condition which required active treatment except for chest pain. It was further stated that all the investigations were done on the same day, and found to be normal excluding X-ray neck which showed cervical (C5-C6) degeneration. A clarification was required from the treating Hospital about the Cervical problem of the complainant. The treating doctor vide certificate dated 23.01.2013 informed that the complainant was not a known case of hypertension nor he had a heart disease but there was nothing related to duration of Spondylitis. Thereafter vide another letter annexure R-5, the treating Hospital forwarded two papers of past treatment of spondylitis i.e. OPD consultation card dated 19.03.2012 and X-Ray report dated 19.03.2012 suggesting that the complainant was suffering from Cervical Spondylitis. Since the past medical history of spondylitis was not disclosed to the Opposite Parties, therefore, the cashless facility was denied vide letter dated 24.01.2013. It was further stated that the Opposite Parties decided to review the policy in the light of newly discovered past medical condition of the complainant and he vide endorsement letter dated 24.01.2013 was asked either to permanently exclude from coverage all costs and consequences of Cervical Spondylitis or to cancel the Policy and get refund of premium. However, the complainant after reviewing the said endorsement voluntarily opted to continue the Policy with permanently excluding Cervical Spondylitis from coverage. The complainant after endorsement dated 24.01.2013, before communicating his acceptance, submitted his claim to the TPA of the Opposite Parties on 02.02.2013 for Rs.22,547/- relating to his admission between 22.01.2013 to 24.01.2013 at Silver Oaks Hospital, Mohali. It was further stated that the documents relating to the complainant admission showed that no active line of treatment was administered to him and out of total bill of Rs.22,547/-, the medicines were only for Rs.457/-. It clearly suggested that the investigations constituted for major portion of the bill. It was further stated that in view of the fact that the admission of the complainant related to Spondylitis which was pre-existing and was not disclosed to the Opposite Parties, and the admission was primarily for investigation and evaluation, as such, his claim was repudiated vide letter dated 12.02.2013. It was further stated that on the fresh request of the complainant, the claim was reopened for review, but the same was again repudiated vide letter dated 21.03.2013. It was further stated that the repudiation of claim, by the Opposite Parties was legal and valid. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Parties, nor they indulged into unfair trade practice. The remaining averments, were denied, being wrong.
6The Parties led evidence, in support of their case.
7After hearing the Counsel for the parties, and, on going through the evidence, and record of the case, the District Forum dismissed the complaint, as stated above, in the opening para of the instant order.
8Feeling aggrieved, the instant appeal, has been filed by the appellant/complainant 9 We have heard the Counsel for the appellant/complainant, at the preliminary stage, and have gone through the evidence, and record of the case, carefully.
10The Counsel for the appellant/complainant submitted that, at the time of issuance of Optima Restore Insurance Policy Annexure C-1, to the complainant nothing was explained to him and his signatures were obtained on the blank proposal form. He further submitted that the complainant was told that the Policy covered every kind of disease. He further submitted that before the Policy was issued, the complainant was subjected to medical check up from the authorized Centre of the Opposite Parties, and he was found fit. It was only after proper and complete medical check up, that the Policy, in question, was issued and he paid the premium. He further submitted that the complainant was only admitted in Silver Oaks Hospital Mohali, for chest pain, heaviness, gastritis and restlessness and no treatment for Cervical Spondylitis was given. He further submitted that the discharge summary Annexure C-4 clearly revealed that the complainant was admitted in Silver Oaks Hospital Mohali for two days i.e. from 22.1.2013 to 24.1.2013. He further submitted that the complainant neither concealed any fact, nor was guilty of non-disclosure of material fact, at the time of filling up the proposal form and obtaining the Policy. He further submitted that the District Forum wrongly dismissed the complaint, by not properly appreciating the facts and circumstances of the case.
11After giving our thoughtful consideration, to the contentions advanced by the Counsel for the appellant, and the evidence, on record, we are of the considered opinion, that the appeal is liable to be dismissed, at the preliminary stage, for the reasons to be recorded hereinafter. It has been repeatedly held that the contract of insurance falls in the category of contract of UBERRIMAE FIDEI meaning thereby, a contract of utmost good faith, between the parties. When information, on a specific aspect, is asked for, in the proposal form, the insured is under a solemn obligation, to make a true and full disclosure of the same (information), on the subject, which is within his knowledge. Of course, obligation to disclose, extends only to the facts, which are known to the assured, and not to what he ought to have known. The Hon`ble Supreme Court of India in United Insurance Co. Ltd. Vs. M.K.J. Corporation, III (1996) CPJ 8 (SC)= (1996) 6 SCC 428, laid down the principle of law, that it is a fundamental principle of Insurance Law, that utmost good faith must be observed, by the contracting parties. Good faith forbids either party from non-disclosure of the facts, which the party privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing to the contrary. To the similar effect, the principle of law, was laid down in Modern Insulators Ltd. Vs. Oriental Insurance Co. Ltd., II (2000) SLT 323 = I (2000) CPJ 1 (SC). In P.C. Chacko and Anr. Vs. Chairman, Life Insurance Corporation of India and Ors, III(2008) CPJ 78 (SC), it was observed as under:-
11 Section 45 of the Insurance Act reads as under:-
45. Policy not to be called in question on ground of mis-statement after two years- No policy of life insurance effected before the commencement of this Act shall after the expiry of two years from the date of commencement of this Act and no policy of life insurance effected after the coming into force of this Act shall after the expiry of two years from the date on which it was effected, be called in question by an insurer on the ground that a statement made in the proposal for insurance or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the policy, was inaccurate or false, unless the insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policy-holder and that the policy-holder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose.
Provided that nothing in this section shall prevent the insurer from calling for proof of age at any time if he is entitled to do so, and no policy shall be deemed to be called in question merely because the terms of the policy are adjusted on subsequent proof that the age of the life insured was incorrectly stated in the proposal form.
12. Section 45 postulates repudiation of such policy within a period of two years. By reason of the aforementioned provision, a period of limitation of two years had, thus, been specified and on the expiry thereof the policy was not capable of being called in question, inter alia on the ground that certain facts have been suppressed which were material to disclose or that it was fraudulently been made by the policy holder or that the policy holder knew at the time of making it that the statement was false. Statute, therefore, itself provides for the limitation for valid repudiation of an insurance policy. It takes into account the social security aspect of the matter.
13.There are three conditions for application of Second Part of Section 45 of the Insurance Act which are:
(a) the statement must be on a material matter or must suppress facts which it was material to disclose;
(b) the suppression must be fraudulently made by the policy-holder; and
(c) the policy-holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose.12
The purpose of taking a Policy of Insurance is not, in our opinion, very material. It may serve the purpose of social security, but then the same should not be obtained with a fraudulent act, by the insured. Proposal can be repudiated, if a fraudulent act is discovered. The proposer must show that his intention was bonafide. It must appear from the face of the record. In a case of this nature, it was not necessary for the insurer to establish that the suppression was fraudulently made by the policy holder or that he must have been aware at the time of making the statement that the same was false or that the fact was suppressed which was material to disclose. A deliberate wrong answer, which has a great bearing, on the contract of Insurance, if discovered, may lead to the Policy being vitiated in law.
13In Rampreeti Yadav Vs. U.P.Board of High School & Intermediate Education & Ors, V(2003) SCT 394= JT 2003 (Supplt.I) SC 25, the principle of law, laid down, was to the effect, that it is well settled that mis-representation itself amounts to fraud, in some cases.
14Keeping in view the principle of law, laid down, in the aforesaid cases, it is to be seen, as to whether, in the instant case, the insured, at the time of taking the Insurance Policy, suppressed the material facts, or had made a wrong declaration or not. The proposal form copy whereof is Annexure R-1, was duly signed by the complainant, before the policy was issued, in his favour. Under Section 6 of the proposal form relating to Medical and Life Style Information of the proposed insured, a number of questions were put to him. One of the questions under Section 6(viii), put to him, was as to whether, he ever suffered from/suffering from Arthritis, Spondylosis or any other disorder of the muscle/bone/joint. In answer to this question, the complainant tick marked No. Meaning thereby that he stated that he was not suffering from Arthritis, Spondylosis or any other disorder of the muscle/bone/joint. The insured signed the declaration, declaring that the statement made by him, in the proposal form, was true and complete in all respects. The allegation of the complainant to the effect that his signatures were obtained, on the blank proposal form, cannot be said to be correct. It is settled principle of law that once a person has signed a document, he is presumed to have read and understood the contents thereof, unless he proves to the contrary, on the basis of cogent and convincing evidence. No cogent and convincing evidence was produced by the complainant, to rebut the presumption that he signed the proposal form, after reading the contents thereof. The allegation of the complainant that proposal form was blank, therefore, being not supported by any evidence was rightly rejected by the District Forum. Annexure C-4 discharge summary of the complainant from the Hospital shows that he was admitted therein on 22.1.2013 with the complaint of headache (on and off), chest pain (retro sterna) radiating to back, heaviness, congestion chest X 2-3 months, Gastritis and associated restlessness. The diagnosis further revealed that the complainant had been a case of Spondylitis since March, 2012. According to the investigation conducted during the admission of the complainant in Silver Oaks Hospital, Mohali, all the investigation reports except X-Ray Cervical Spine were normal. However, X-ray Cervical spine showed C5-6 disc degeneration with mild OA changes. Copy of the diagnosis dated 19.03.2012, Annexure R-6 and copy of the X-ray report dated 19.03.2012, Annexure R-8 at pages 78 & 79 of the District Forum file relating to Chandigarh Medical & Research Centre and the New Diagnostic Centre, Chandigarh respectively, clearly revealed that the complainant had pain left half of body since noon on 19.03.2012 and X-ray of Cervical Spine was advised. The X-ray report showed mild osteoporosis of the visualized bones and findings were suggestive of Cervical Spondylosis. The diagnosis slip annexure R-6, revealed that the complainant was prescribed certain medicines, and he was referred to Cervical unit. Accordingly, it was established from the evidence, on record, that the complainant had been suffering from Spondylitis since March, 2012, but at the time of filling up of proposal form, annexure R-1, for obtaining Optima Restore Insurance Policy, he concealed this material fact, from the Opposite Parties. The complainant though knowing fully well that he had been suffering from Spondylitis concealed this factum, in other words he did not intentionally and deliberately disclose this factum, at the time of filling up the proposal form, and signing the same, by giving answer in the negative, to the question, referred to above. Since he obtained the Policy, in question, by concealing the material fact, with regard to his health though he was suffering from Spondylitis, it means that he obtained the same by committing fraud and, as such, the said Policy stood vitiated. The complainant, thus, was not entitled to any of the benefits as per Section 5(u) of Annexure R-2, terms and conditions of the Policy. The principle of law, laid down, in the aforesaid authorities is applicable to the instant case.
15Not only this, as per Annexure R-2, terms and conditions of the Policy, under Section 4
(d) relating to exclusion pre existing conditions were not to be covered, until 36 months of continuous coverage had lapsed, since the inception of the first Optima Restore Policy with the Opposite Parties. As stated above, the complainant did not disclose that he was suffering from Spondylitis at the time of filling up the proposal form, in other words, he concealed this factum from the insurer, at the time filling up the proposal form, and issuance of the Policy, in question, in the month of June, 2012. As such, the Spondylitis from which the complainant was suffering, being pre-existing condition, as per Section 4 (d) of the terms and conditions of the policy, was not to be covered under the same, until the expiry of 36 months of continuous coverage, from the date of its inception, with the Opposite Parties. Under these circumstances, the complaint was also not entitled to any claim amount, in terms of Section 4(d) of the Policy, in question. The Opposite Parties, thus, legally and validly repudiated the claim of the complainant, on the aforesaid grounds.
16No doubt, it was submitted by the Counsel for the appellant, that before issuance of the Policy, the complainant was subjected to medical examination, by the authorized doctor of the Opposite Parties, and only after due satisfaction, they (Opposite Parties) issued the same. The mere fact that the complainant was subjected to medical examination, before the issuance of Policy, in question, at the instance of the insurer did not absolve him of his duty of disclosure of material fact, that he was suffering from Spondylitis. Since he concealed this very fact, and, on the other hand, in the proposal form, gave answer, in the negative, to the question, as to whether, he had ever suffered or was suffering from Spondylitis, he breached the utmost good faith on which the contract of Insurance was based. Under these circumstances, such a plea taken by the appellant, is devoid of merit and the same stands rejected.
17The District Forum was right in holding that the Opposite Parties, were neither deficient, in rendering service, nor indulged into unfair trade practice, by legally and validly repudiating the claim of the complainant.
18No other point, was urged, by the Counsel for the appellant.
19In view of the above discussion, it is held that the order passed by the District Forum, being based on the correct appreciation of evidence, and law, on the point, does not suffer from any illegality or perversity, warranting the interference of this Commission.
20For the reasons recorded above, the appeal, being devoid of merit, must fail, and the same is dismissed, at the preliminary stage, with no order as to costs. The order of the District Forum is upheld.
21Certified copies of this order, be sent to the parties, free of charge.
22The file be consigned to Record Room, after completion Pronounced.
August 23, 2013 Sd/-
[JUSTICE SHAM SUNDER (RETD.)] PRESIDENT Sd/-
[DEV RAJ] MEMBER MP