State Consumer Disputes Redressal Commission
Oriental Insurance Co.Ltd. vs Pooja Chopra & Others on 6 October, 2023
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH.
First Appeal No.173 of 2021
Date of institution : 22.04.2021
Reserved On : 14.09.2023
Date of decision : 06.10.2023
The Oriental Insurance Co. Ltd., CB02-SCO-50, PUDA Complex,
Ladowali Road, Jalandhar-144001, through its Branch Manager.
....Appellant/OP No.1
Versus
1. Mrs. Pooja Chopra, aged 59 years, w/o Bikramjit Chopra, s/o
Late Sh. Girdhari Lal, R/o 603, Rishi Nagar, Jalandhar.
2. Birkramjit Chopra s/o Late Sh. Girdhari Lal, R/o 603, Rishi
Nagar, Jalandhar.
....Respondents/Complainants
3. Medi Assist India TPA Pvt. Ltd., 49, Shilpa Vidya Buildings, First
Floor, Shakti Industrial Layout, 3rd Phase, J.P. Nagar, Bangalore-
560078, through its Director/Authorized Officer.
4. Punjab National Bank, Urban Estate, Phase-II, Jalandhar-
144022, through its Branch Manager.
....Respondents/OPs No.2 & 3
First Appeal under Section 41 of the
Consumer Protection Act, 2019 against the
order dated 23.02.2021 passed by the
District Consumer Disputes Redressal
Commission, Jalandhar.
Quorum:-
Hon'ble Mrs. Justice Daya Chaudhary, President
Ms. Simarjot Kaur, Member
First Appeal No.173 of 2021 2
1) Whether Reporters of the Newspapers
may be allowed to see the Judgment? Yes/No
2) To be referred to the Reporters or not? Yes/No
3) Whether judgment should be reported
in the Digest? Yes/No
Present:-
For the appellant : Sh. Harsh Chopra, Advocate
For respondents No.1 & 2 : Sh. Munish Goel, Advocate
For respondents No.3 & 4 : None.
JUSTICE DAYA CHAUDHARY, PRESIDENT
Appellant/OP No.1 i.e. the Oriental Insurance Co. Ltd. has filed the present appeal through its Branch Manager under Section 41 of the Consumer Protection Act, 2019 being aggrieved by the order dated 23.02.2021 passed by the District Consumer Disputes Redressal Commission, Jalandhar (in short, "the District Commission"), whereby the complaint filed by respondents No.1 & 2/complainants was allowed by directing OPs No.1 & 2 jointly and severally to reimburse the mediclaim amount of ₹2,64,294/- to the complainants along with interest at the rate of 5% from the date of lodging the claim till its realization. The complainants were also held entitled for compensation of ₹20,000/- as well as litigation expenses. OPs No.1 & 2 were further directed to deposit an amount of ₹5,000/- as costs in the Consumer Legal Aid Account maintained by the District Commission.
First Appeal No.173 of 2021 3
2. It would be apposite to mention here that hereinafter the parties will be referred, as have been arrayed before the District Commission.
3. Briefly, the facts of the case of the complainants as made out in the complaint filed by them before the District Commission are that they were allured by the OPs and by believing them, the complainants had obtained Mediclaim PNB-Oriental Royal Mediclaim Policy (with family floater), which was available for the account holders/employees of Punjab National Bank stated to be called as 'Mediclaim Insurance Policy'. Said policy was covering the risk to reimburse/indemnify the expenses to the insured persons while admitted in the hospital and also for medical/surgical treatment in any Hospital/Nursing Home or any Domiciliary Hospitalization for any disease suffered by the complainant or any ailment/injury sustained by the insured persons during the policy period up to the limit of the sum assured from OP No.1 through its Authorized Agent OP No.3 for a period as mentioned in the Policy Schedule No.119425 dated 15.04.2015 to be renewed w.e.f. 05.05.2015 to 04.05.2016. Further it was mentioned that the complainants were insured under the said Mediclaim Insurance Policy since the year 2013 without any gap/break. The policy number was allotted and the schedule of payment of amount was also mentioned. Further it was mentioned that the total premium was ₹6,830/-, which was deducted from the Saving First Appeal No.173 of 2021 4 Bank Account of complainant No.2 maintained with OP No.3-Punjab National Bank for remittance to OP No.1 by renewal and it was accepted after satisfying the continued insurability and without verifying the credentials of the insured persons. Further it was mentioned that OP No.1 had issued/delivered to the complainants only a Cover Note and Policy Schedule of Mediclaim Insurance Policy from inception of the risk coverage and about its renewal. However, the policy documents were not issued/delivered to the complainants during the tenure of the policy, whereas it was mandatory on the part of OP No.1. Further it was mentioned that the OPs had agreed and undertaken to reimburse the medical and surgical expenses for accident/ailment/sickness during the tenure of the policy without any deduction. Mrs. Puja Chopra, complainant No.1 being wife of complainant No.2 had consulted one Dr. G.S. Jammu, Jammu Hospital, Kapurthala Road, Jalandhar with complaints of Morbid Obesity, Breathlessness, Knee Pain and Early Onset of Type II Diabetes Mellitus and after clinical tests, it was advised for Gastric Bypass Surgery. Complainant No.1 was admitted in the said Hospital on 02.07.2015 and was discharged on 04.07.2015. An amount of ₹2,64,294/- was charged towards surgery and complainant No.2 had paid the said amount to the Hospital authorities. All the relevant documents regarding payment of the amount, copies of prescription slips, examination reports, Discharge Summary etc. were First Appeal No.173 of 2021 5 attached/annexed with the complaint. Complainant No.2 had submitted the claim of an amount of ₹2,64,294/- incurred towards medical and surgical expenses and all necessary formalities were completed, but OP No.2 vide letter dated 24.09.2015 had repudiated the mediclaim reimbursement of said amount by relying upon the Exclusion Clause 4.16 of the policy.
4. The complaint was filed for issuance of direction to the OPs to reimburse the mediclaim amount of ₹2,64,294/- along with interest at the rate of 12% per annum from the date of lodging the claim till its actual payment along with compensation of ₹50,000/- for causing mental harassment as well as ₹10,000/- as litigation expenses.
5. Upon issuing notice to OP No.1, he put in appearance and filed separate reply by raising certain preliminary objections stating therein that there was no 'deficiency in service' on its part and the claim of the complainants was not payable and it was rightly repudiated as per Exclusion Clause 4.16 of the policy. Other averments as made in the complaint were specifically denied.
6. However, OP No.2 did not appear despite service of notice and as such he was proceeded ex parte vide order dated 23.01.2019.
7. OP No.3 had appeared and filed written reply by raising certain preliminary objections regarding the maintainability of the complaint and also that there was no cause of action to file the First Appeal No.173 of 2021 6 complaint. Other averments as made in the complaint were specifically denied.
8. By considering the contents of the complaint and reply thereof filed by OPs No.1 & 3, the complaint was allowed by the District Commission vide order dated 23.02.2021, which is subject matter of challenge in the present appeal. The relevant portion of said order as mentioned in Para-12 is reproduced as under:
"12. Keeping in view the totality of the facts and circumstances of the case, it is well settled that the insurance companies who is taking specific plea about repudiation of any claim is to prove that the exclusion clause was explained the consumers. When OPs failed to prove this fact they cannot derive any benefit from this exclusion clause. As such, the OPs wrongly repudiated the claim of the complainants. Therefore, we allowed the complaint of the complainants and OPs no.1 and 2 are directed to reimburse the mediclaim amount of Rs.2,64,294/- to the complainants along with interest @ 5% from the date of lodging the claim till its realization jointly and severally. The complainants are entitled Rs.20,000/- as compensation and litigation expenses. The opposite parties No. 1 and 2 are also directed to deposit Rs.5000/- as costs in the Consumer Legal Aid Account maintained by this Commission. Both the opposite parties No. 1 and 2 jointly and severally liable to comply with the above mentioned order."
9. Said order dated 23.02.2021 passed by the District Commission has been challenged by the appellant/OP No.1 by way of filing the present appeal by raising a number of arguments.
10. Mr. Harsh Chopra, learned counsel for the appellant/OP No.1 has submitted that the District Commission while allowing the complaint has not taken into consideration the reply filed the appellant to the complaint and the legal arguments raised at the time of hearing of the complaint. The claim of the complainants was rejected in view of Exclusion Clause 4.16 of the terms and conditions First Appeal No.173 of 2021 7 of the policy and it was wrongly observed that the terms and conditions of the policy were not supplied. Learned counsel has further submitted that while contesting the complaint, OP No.1 had specifically stated that all the documents containing all the terms and conditions were supplied to the complainants. The complainants did not file any rejoinder to the said reply of the appellant, which clearly shows that the contentions of the appellant as mentioned in the reply were accepted and remained unrebutted. Learned counsel has further submitted that the District Commission has not taken into consideration a material fact that in case the complainants were aggrieved by the action of the appellant in not supplying the policy terms and conditions, they could have agitated immediately after the receipt of the policy but they remained silent for a number of years and no efforts were made by them by asking to supply the terms and conditions. The plea of non- supply of the policy terms and conditions was only an afterthought. Learned counsel has also submitted that the complainants had taken the policy twice much earlier in between the period starting from 05.05.2015 to 04.05.2016. The complaint was filed after a long period and prior to that, no such objection was raised. Learned counsel has also relied upon the following judgments in support of his contentions:
i) Barak Cold Storage Pvt. Ltd. v. United India Insurance Co.
Ltd.CC No.102 of 2004 decided on 14.12.2018 (NC); and
ii) FA No.198 of 2020 (Oriental Insurance Co. Ltd. v. Deepak Mittal & Anr.) decided on 10.11.2020 (Punjab State Commission).
First Appeal No.173 of 2021 8
11. Mr. Munish Goel, learned counsel for respondents No.1 & 2/complainants has submitted that the impugned order passed by the District Commission is based on proper appreciation of the evidence available on the record. The terms and conditions of the policy including the Exclusion Clause were never supplied to the complainants and even no evidence was produced to prove that the terms and conditions were ever supplied to the complainants. The appellant/OP No.1 had agreed and undertaken to reimburse/indemnify the insured for medical and surgical expenses, ailments, accidents and surgical operations etc. The rejoinder was filed to the reply filed by the OPs, which has been placed on record as available at Page No.39 to 47 of the record of the District Commission. It has been proved on record that the claim was wrongly repudiated and now the appeal is also liable to be dismissed.
12. Respondents No.3 & 4/OPs No.1 & 2 had not appeared in the appeal before this Commission despite service of notice.
13. Heard the arguments raised by learned counsel for the appellant as well as respondents No.1 & 2/complainants. We have also carefully perused the impugned order passed by the District Commission and all other documents available on the file.
14. Facts regarding filing of the complaint by the complainants before the District Commission, reply thereto filed by the OPs No.1 & First Appeal No.173 of 2021 9 3, allowing of said complaint and thereafter filing of the present appeal by the appellant/OP no.1 before this Commission are not in dispute.
15. Admittedly, the complainants had obtained a Mediclaim Insurance Policy from the appellant, which was valid for the period w.e.f. 05.05.2015 to 04.05.2016. During the period of said policy, complainant No.1 was admitted in Dr. G.S. Jammu Hospital, Kapurthala Road, Jalandhar on 02.07.2015 and was discharged on 04.07.2015 after performing surgery. An amount of ₹2,64,294/- was incurred on her treatment in the said Hospital. The claim lodged by the complainants was repudiated by the appellant vide letter dated 24.09.2015 on the basis of Exclusion Clause 4.16. Said Clause is reproduced as under:
"4.2: The expenses on treatment of following ailment/diseases/surgeries for the specified periods are not payable if contracted/or manifested during the currency of the policy. If these diseases are pre-existing at the time of proposal the Exclusion No.4.1 for pre-existing condition shall be applicable in such cases:
......................................................... ......................................................... 4.16: Treatment of obesity or condition arising therefrom (including morbid obesity) and any other weight control programme, services or supplies etc."
16. The terms and conditions of the policy containing the Exclusion Clause are part of record and have not been disputed by any of the parties. As per stand of the appellant/OP No.1, the terms and conditions of the policy were supplied to the insured, whereas as First Appeal No.173 of 2021 10 per version of the complainants, the terms and conditions were never supplied to them.
17. The question for disposal of the present appeal is as to whether the terms and conditions of the policy were supplied or not?
18. This fact can be proved by way of adducing any evidence in support of the contentions of the appellant. However, no such evidence has been produced by the appellant either before the District Commission or before this Commission to prove that the terms and conditions of the policy were ever supplied to the complainants. No evidence such as dispatch number, postal receipts etc., has been produced on record to prove this fact. Hon'ble Supreme Court in case Modern Insulators Ltd. v. Oriental Insurance Co. Ltd. (2000) 2 SCC 734 had reversed the order of the Hon'ble National, observing that it had failed to consider the fact that the terms and conditions of the Insurance Policy were not supplied to the insured and the order of the State Commission, allowing the claim, was upheld. It is the duty of the Insurance Company to bring all the terms and conditions of the Insurance Policy to the notice of the insured either against proper receipt or against any proof by placing on record some document/receipt to show that it was sent to the insured. However, the appellant/OP No.1 had failed to prove as to when and how these terms and conditions were sent and the insured had received the same First Appeal No.173 of 2021 11 against proper signatures by acknowledging any receipt, otherwise the same cannot be enforced.
19. The Hon'ble Supreme Court in the case titled as Manmohan Nanda v. United Insurance Co. Ltd. (2022) 4 SCC 582, has emphasized upon the duty of the insurer and the insured to disclose any material facts. The relevant portion of said judgment as mentioned in Para-34 is reproduced as under:
"34. Just as the insured has a duty to disclose all material facts, the insurer must also inform the insured about the terms and conditions of the policy that is going to be issued to him and must strictly conform to the statements in the proposal form or prospectus, or those made through his agents. Thus, the principle of utmost good faith imposes meaningful reciprocal duties owed by the insured to the insurer and vice versa. This inherent duty of disclosure was a common law duty of good faith originally founded in equity but has later been statutorily recognised as noted above. It is also open to the parties entering into a contract to extend the duty or restrict it by the terms of the contract."
20. It is also relevant to mention that the Insurance Company while relying upon the Exclusion Clause is required to bring it to the knowledge of the insured and failure to do so would estop the Insurance Company from placing reliance upon it. The Hon'ble Supreme Court in the case titled as Bharat Watch Company v. National Insurance Co. Ltd. 2019 (6) SCC 212 has held in Paras No.7 to 10 as under:
First Appeal No.173 of 2021 12
"7. The basic issue which has been canvassed on behalf of the appellant before this Court is that the conditions of exclusion under the policy document were not handed over to the appellant by the insurer and in the absence of the appellant being made aware of the terms of the exclusion, it is not open to the insurer to rely upon the exclusionary clauses. Hence, it was urged that the decision in United India Insurance Co. Ltd. v. Harchand Rai Chandan Lal, (2004) 8 SCC 644, will have no application since there was no dispute in that case that the policy document was issued to the insured.
8. This submission is sought to be answered by the learned counsel appearing on behalf of the insurer by adverting to the fact that SCDRC construed the terms of the exclusion. SCDRC, however, did not notice the decision of this Court, and hence, NCDRC was (it was urged) justified in correcting the error having regard to the law laid down by this Court. The learned counsel urged that the appellant has been insuring its goods for nearly ten years and it is improbable that the appellant was not aware of the exclusion.
9. We find from the judgment of the District Forum that it was the specific contention of the appellant that the exclusionary conditions in the policy document had not been communicated by the insurer as a result of which the terms and conditions of the exclusion were never communicated. The fact that there was a contract of insurance is not in dispute and has never been in dispute. The only issue is whether the exclusionary conditions were communicated to the appellant. The District Forum came to a specific finding of fact that the insurer did not furnish the terms and conditions of the exclusion and special conditions to the appellant and hence, they were not binding. When the case travelled to SCDRC, there was a finding of fact again that the conditions of exclusion were not supplied to the complainant.
10. Having held this, SCDRC also came to the conclusion that the exclusion would in any event not be attracted. The finding of SCDRC in regard to the interpretation of such an exclusionary clause is evidently contrary to the law laid down by this Court in Harchand Rai (supra). However, the relevance of that interpretation would have First Appeal No.173 of 2021 13 arisen provided the conditions of exclusion were provided to the insured. NCDRC missed the concurrent findings of both the District Forum and SCDRC that the terms of exclusion were not made known to the insured. If those conditions were not made known to the insured, as is the concurrent finding, there was no occasion for NCDRC to render a decision on the effect of such an exclusion."
21. Clause 3(2) of the Insurance Regulatory and Development Authority (Protection of Policy Holder's Interests, Regulation 2002) Regulations, 2002 is also relevant in the present context, which is reproduced as under:
"3. Point of Sale:
(2) An insurer or its agent or other intermediary shall provide all material information in respect of a proposed cover to the prospect to enable the prospect to decide on the best cover that would be in his or her interest."
22. By relying upon said Clause 3(2) of the Regulations, 2002 issued by the Insurance Regulatory and Development Authority (IRDA), the Hon'ble Supreme Court in the case titled as M/s Texco Marketing Pvt. Ltd. v. Tata AIG General Insurance Co. Ltd. & Ors. Civil Appeal No.8249 of 2022 decided on 09.11.2022, has held in Para-21 as under:
"21. On a discussion of the aforesaid principle, we would conclude that there is an onerous responsibility on the part of the insurer while dealing with an exclusion 13 clause. We may only add that the insurer is statutorily mandated as per Clause 3(ii) of the Insurance Regulatory and Development Authority (Protection of Policy Holder's Interests, Regulation 2002) Act dated 16.10.2002 (hereinafter referred to as IRDA Regulation, 2002) to the effect First Appeal No.173 of 2021 14 that the insurer and his agent are duty bound to provide all material information in respect of a policy to the insured to enable him to decide on the best cover that would be in his interest. Further, sub-clause (iv) of Clause 3 mandates that if proposal form is not filled by the insured, a certificate has to be incorporated at the end of the said form that all the contents of the form and documents have been fully explained to the insured and made him to understand. Similarly, Clause 4 enjoins a duty upon the insurer to furnish a copy of the proposal form within thirty days of the acceptance, free of charge. Any non-compliance, obviously would lead to the irresistible conclusion that the offending clause, be it an exclusion clause, cannot be pressed into service by the insurer against the insured as he may not be in knowhow of the same."
23. In view of the above discussion as well as the law as laid down in the above noted judgments, it is apparent that in case the terms and conditions, including the Exclusion Clause, were not supplied to the insured, the same cannot be enforced upon. The order passed by the District Commission is based on proper appreciation of the evidence available on the record. The judgments relied upon by learned counsel for the appellant/OP No.1 are distinguishable and are not applicable to the facts and circumstances of the present case.
24. Accordingly, finding no force in the arguments raised by learned counsel for the appellant, the appeal being devoid of any merit is hereby dismissed and the impugned order dated 23.02.2021 passed by the District Commission is upheld. First Appeal No.173 of 2021 15
25. Since the main case has been disposed of, so all the pending Miscellaneous Applications, if any, are accordingly disposed of.
26. The appellant had deposited a sum of ₹25,000/- plus ₹1,58,024/- at the time of filing of the appeal. Said amounts, along with interest which has accrued thereon, if any, shall be remitted by the Registry to the District Commission forthwith. Respondents No.1 & 2/complainants may approach the District Commission for the release of the same and the District Commission may pass appropriate order in this regard in accordance with law.
27. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(JUSTICE DAYA CHAUDHARY) PRESIDENT (SIMARJOT KAUR) MEMBER October 06, 2023.
(Gurmeet S)