State Consumer Disputes Redressal Commission
Vinod Kumar vs Sbi General Insurance Company Ltd. on 24 August, 2023
Daily Order STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA First Appeal No.41 of 2022 Date of Institution: 10.02.2022 Date of order: 24.08.2023 Vinod Kumar S/o Sh. Jai Singh, R/o H.No.125, Ward No.1, Mohali Kazian, village and Post Office Sadhaura, Distt. Yamuna Nagar. .....Appellant Versus 1. S.B.I. General Insurance Company Ltd., Sadhaura, District Yamuna Nagar through its Branch Manager. 2. S.B.I. General Insurance Company Ltd., Natraj, 101, 201 and 301, Junction of Western Express Highway and Andheri Kurla Road, Andheri (East), Mumbai-400069 through its Manager. .....Respondents CORAM: S.P.Sood, Judicial Member
Present:- Mr.AmitKohar, Advocate for theappellant. Mr.J.P.Nahar,Advocate for the respondents. ORDER S P SOOD, JUDICIAL MEMBER:
The present appeal No.41 of 2022has been filed against the order dated 19.10.2021 of the District Consumer Disputes Redressal Forum, Yamuna Nagar(In short Now "District Commission") in complaint case No.22 of 2019, which was allowed.
2. The brief facts put forth by complainant in this case are thathe purchased a family floater insurance policy from the opposite party No.1 for his family including himself valid from 26.07.2017 to 25.07.2018. The total sum assured happened to be Rs.12,00,000/-. However his wife had to be hospitalised for the first time on 06.06.2018 in Alchemist Hospital, Panchkula. The treating doctor issued certificate on 11.06.2018 certifying that his wife had "Aneurismal subarachnoid hemorrhage". She was drowsy at the time of admission and not fit to give any history".Unfortunately during continuation of the insurance policy, wife of the complainant expired on 11.06.2018 in Alchemist Hospital, Panchkula where she had reported for severe headache. Following this development, complainant filed claim with OP NO.1, but, it was rejected on the ground that his wife has been a case of chronic hypertension for the last five years and it was not disclosed and even related ailments were also not covered under the policy till four years from inception of the insurance policy. Thus there was deficiency in service on the part of the OPs, hence the complaint.
3. Notice issued to the OPs and they appeared and filed written statement admitting the issuance of the insurance policy with several terms and conditions. The intimation about admission of the wife of the complainant in the hospital was admitted but as per the OPs claim of the complainant was rightly repudiated on the ground that hiswife was suffering frompre existing disease. The denial of cashless facility was duly informed to complainant by Alchemist Hospital, Panchkula vide letter dated 09.06.2018. The TPA vide its letter dated 09.06.2018 acknowledged of admitting complainant's wife to the hospital and also advised him that denial of authorization in cashless facility did not imply denial of treatment and did not in any way, prevent patient/insured from seeking necessary medical hospitalization, claiming for reimbursement, but complainant did not lodged any claim for reimbursement of medical expenditure.Thus, there being no deficiency in service on the part of the OPsand requested to dismiss the complaint.
4. After hearing both the parties, the learned District Commission, Yamuna Nagarhas allowed the complaint vide order dated 19.10.2021, which is as under:-
"Hence, due to the reasons stated hereinbefore, complaint is accepted against respondent, holding it liable to pay punitive damages in the sum of Rs.50,000/- to compensate the complainant in all heads and respondent is directed to make the payment of amount of punitive damages to the complainant within the period of 40 days, from the date this order, in default of it, respondent shall be liable to pay simple interest @ 7% per annum on the award amount, from the date of order till its actual realization. It is made clear, this order shall have no bearing on the claim of the complainant, if he raised for incurring of medical expenditure, during the period of hospitalization in Alchemist Hospital, Panchkula for the period of 06.06.2018 to 11.06.2018."
5. Feeling aggrieved therefrom, complainant-appellant has preferred this appeal.
6. These argumentswere advanced by Sh.AmitKohar, Advocate for the appellants as well as Sh.J.P.Nahar, Advocate for the respondent. With their kind assistance the entire record of appeal as well as original record of the District Commission including whatever evidence has been led on behalf of both the parties has also been properly perused and examined.
7. Learned counsel for the appellants vehemently argued thatduring continuation of the family floater insurance policy, the wife of the complainant has expired during her treatment in Alchemist Hospital and opposite party has wrongly repudiated the claim of the complainant and he be entitled for the claim amount as well as medical expenses as prayed for.
8. Learned counsel for the respondents vehemently argued that the claim of the complainant has rightly been repudiated on the ground that patient was hypertensive since five years and it was pre existing disease which was not disclosed at time and further according to the policy her ailments were not covered upto four years from the policy inception. As such complainant was not entitled for any claim amount.
9. It is true that complainant had purchased a family floater insurance policy from the opposite party No.1, which was valid from 26.07.2017 to 25.07.2018. It is also true that total sum assured under this policy was Rs.12,00,000/-. It is also true that the wife of complainant had to be admitted in the hospital for the first time on 06.06.2018 in Alchemist Hospital, Panchkula. The treating doctor issued certificate on 11.06.2018 certifying that complainant's wife had "Aneurismal subarachnoid hemorrhage". She was exhausted at the time of admission and could not give any history". During the continuation of the insurance policy, the wife of the complainant expired on 11.06.2018 in Alchemist Hospital, Panchkula due to severe headache. Firstly at the time of admission, she did not admit that she was having pre existing disease. Perusal of the file shows that the complainant has spent huge amount towards medical expenditure for treatment of his wife. As per Ex. C-5, the patient had aneurysmal subarachnoid haemorrhage and she was drowsy at the time of admission and not fit to give any history. When she did not give any history of pre-existing disease to the treatment doctors, the OP on his own decided that wife of the complainant was having pre existing disease.
10. It is a matter of common experience, insurance companies often repudiate claims on grounds of non-disclosure of material information by the consumer. However they conveniently forget that there is an even greater statutory obligation cast on them to give full information to the consumer about the products they sell.
The responsibilities of the insurer towards full disclosure is even more because (a) the Insurance Regulatory and Development Authority's (IRDA) Regulation on the protection of Policyholders' Interests' specifically mandates this and (b) the contracts of insurance, which are 'Adhesion Contracts' or 'Standard Form Contracts' are drawn up unilaterally by the dominant party-the insurer. The consumer, being the weaker party has no bargaining power, nor knowledge of the terms of the contract. So, the apex court has often said that these contracts, therefore, demand a very high degree of fairness, good faith and disclousure on the part of the insurer.
Here are two cases where the Supreme Court has reminded insurers of their obligation in this regard and warned them against violations. The two cases also show-case the kind of unfair practices indulged in by insurers.
In Texco Marketing Pvt. Ltd. Vs TATA AIG General Insurance (CA No. 8249 of 2022, date of judgment: November, 9, 2022), for example the insurance company insured after due inspection, a shop located in a basement under the Standard Fire and Special Perils Policy, despite the fact that the policy specifically excluded basements. Subsequently, following a fire, when the policyholder made a claim, the insurer repudiated it on the basis of the exclusion clause! While ruling in favour of the consumer, the apex court observed that first and foremost, the insurer did not bring the exclusion clause to the notice of the consumer. And then, despite having knowledge of the exclusion clause, it insured the basement and received the premium benefits. After this, repudiating the policyholder's claim on the basis of the exclusion clause was certainly an unfair trade practice. "This view is fortified by the finding that the exclusion clause is an unfair term, going against the very object of the contract, making it otherwise un-executable from its inception," the apex court said.
Some of the observations of the court in this case would go a long way in upholding the rights of the policyholders. For example, the court made it clear that an exclusion clause, if not brought to the notice of the consumer by the insurer or agent, would not be binding on the consumer. Similarly, an unfair term in an insurance contact would be un-executable. The Supreme Court also reminded insurers that an exclusion clause "is not a leverage or safeguard for the insurer, but is meant to be pressed into service on a contingency, being a contract of speculation".
Said the court: "Before we part with this case, we would like to extend a word of caution to all the insurance companies on the mandatory compliance of Clause (3) and (4) of IRDA Regulation, 2022. Any non-compliance on the part of the insurance companies would take away their right to plead repudiation of contract by placing reliance upon any of the terms and conditions included thereunder".
11. The repudiation of the claim is invalid and wrong. The learned District Commission has only granted compensation to the complainant, even the complainant have a right for medical expenses, which have been spent on his wife. The complainant is entitled for the medical expenses.
12. Since the complainant has not violated any terms and conditions of the insurance policy,he was entitled for the reimbursement of medical expenses. Hence, impugned order dated 19.10.2021 is modified to the extent that the complainant is entitled for Rs.3,60,000/- which was spent on the patient. Rest of the impugned order is maintained. With the above modification, the appeal stands disposed of.
13. Applications pending, if any stand disposed of in terms of the aforesaid judgment.
14. A copy of this judgement be provided to all the parties free of cost as mandated by the Consumer Protection Act, 1986/2019. The judgement be uploaded forthwith on the website of the commission for the perusal of the parties.
15. File be consigned to record room.
24th August, 2023 S. P. Sood Judicial Member S.K (Pvt. Secy.)