State Consumer Disputes Redressal Commission
Rulda Singh vs United India Insurance Company Limited on 19 September, 2017
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH.
Consumer Complaint No.401 of 2016
Date of institution : 21.12.2016
Date of decision : 19.09.2017
Ruldha Singh, aged 73 years, son of Sh. Lakhvir Singh, R/o House
No.33, Guru Nanak Nagar, Badungar, Patiala, District Patiala, Punjab.
....Complainant
Versus
1. United India Insurance Company Limited, Rani Hospital, G.T.
Road, opp. General Bus Stand, Khanna, District Ludhiana,
Punjab, through its Senior Divisional Manager.
2. Heritage Health, TPA Private Ltd., 54-A, Ground Floor, Andheri
Kurla Road, Chakala, Andheri East, Mumbai, through its Director.
....Opposite Parties
Consumer Complaint under Section 17 of
the Consumer Protection Act, 1986.
Quorum:-
Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President
Mrs. Kiran Sibal, Member.
Present:-
For the complainant : Sh. Rahul Rampal, Advocate For opposite party No.1: Sh. Vinod Gupta, Advocate For opposite party No.2: Ex parte.
JUSTICE PARAMJEET SINGH DHALIWAL, PRESIDENT :
Facts of the Complaint The complainant has filed this complaint, under Section 17 of the Consumer Protection Act, 1986, against the opposite parties, seeking following reliefs against them:Consumer Complaint No.401 of 2016 2
i) The opposite parties be held guilty of deficiency in service and unfair trade practice for repudiating the claim of the complainant under "Overseas Mediclaim Policy" upto $50,000 (Australian Dollars), as was the sum assured under the policy, which makes upto ₹25,23,000/-;
ii) The opposite parties be directed to pay interest at an appropriate rate, as this Commission may deem fit;
iii) To pay damages to the extent of ₹2,00,000/-, on account of mental agony and harassment; along with
iv) Litigation expenses of ₹55,000/-.
Brief facts, as set out in the complaint, are that the complainant travelled to Australia in the year 2014 and had obtained an "Overseas Mediclaim Policy", from opposite party No.1, but no claim was lodged under that policy, as the complainant had returned without any health or other problem. He again visited Australia in December, 2015 and again took the said policy from opposite party No.1. As a pre-condition for taking the said policy, he also underwent medical examination with Dr. J.R. Sachdeva at Patiala and also got himself medially examined from Ashoka Clinical Laboratory. He also got conduced his ECG test and submitted all the test reports to opposite party No.1, who issued "Overseas Mediclaim Policy", which was valid from 08.12.2015 to 06.03.2016. A premium of ₹4,616/- was charged and policy No.2006002815P110396371 was issued, under which the sum assured for 'illness and/or treatment following accident deductible' was Consumer Complaint No.401 of 2016 3 $50,000 (Australian Dollars). Unfortunately, the complainant suffered a heart attack on 05.02.2016 in Australia and was treated upon at Alfred Hospital Carnegie, Australia. He was discharged therefrom on 10.02.2016. After the discharge, he again suffered leprosy attack and was again hospitalized at the said hospital. After the admission of the complainant, the hospital authorities duly informed the opposite parties and got filled the form for pre-authorization of treatment on cashless basis. The complainant spent $1,18,339 on his treatment at the said hospital. Thereafter, he submitted the claim to the opposite parties, along with all the necessary documents and bills, but the same was repudiated by them on flimsy, illegal and arbitrary ground of pre- existing disease, vide letter dated 03.05.2016. The complainant also approached the Grievance Cell of the opposite parties in this regard, but to no effect. In fact, there was no past history of any heart problem of the complainant, nor there was any proof with the opposite parties to prove that the complainant was suffering from pre-existing disease, which could have resulted in heart stroke or leprosy attack. The act and conduct of the opposite parties amounted to deficiency in service and unfair trade practice, which caused enormous mental tension and harassment to him. Hence, this complaint.
Defence of the Opposite Parties
2. Upon notice, opposite party No.1 appeared and filed reply to the complaint, whereas opposite party No.2 was proceeded against ex parte.
Consumer Complaint No.401 of 2016 4
3. Opposite party No.1, in its reply raised the preliminary objection that the complaint is not maintainable before this Commission, as number of disputed facts are involved therein; which are required to be proved, through detailed evidence, under the Evidence Act, for which thorough investigation is required. On merits, obtaining of the "Overseas Mediclaim Policy", in question, by the complainant from it was admitted. It was denied that the complainant suffered heart attack and was hospitalized in Australia. It was pleaded that no evidence has been produced in this regard and only some bills have been produced. Even those bills do not bear any signatures. The claim of the complainant was rightly repudiated, as it was a case of pre-existing disease. The complainant was treated for Myocardial Infarction on 5th and 16th February and for stroke on 18.02.2016. He had a past medical history of Hypercholesterolemia, Hypertension & Diabetes, which are directly related to heart stroke. The compensation claimed by him did not fall under the exclusion clause, under which it was specifically mentioned that the Company would not pay for the pre-existing disease. Moreover, the complainant has been given chance to produce some more documents and if the claim is found correct on the basis of the first documents, that would be considered. The reasons given in the repudiation letter are based on the expert advice given by opposite party No.2. It was proved that the medical record submitted by the complainant at the time of taking the policy was false and fabricated and was created only to get the policy. All Consumer Complaint No.401 of 2016 5 other allegations of the complainant were denied and it was prayed that the complaint be dismissed, with costs.
Evidence of the Parties
4. To prove his claim, the complainant tendered in evidence his own affidavit as Ex.C-A, along with documents Ex.C-1 to Ex.C-5, including Ex.C-4A to Ex.C-4Z and Ex.C-4AA & Ex.C-4AB.
5. Opposite party No.1, in its evidence, tendered affidavit of Sh. Sunil Kakkar, Assistant Manager, as Ex.OP-1/A. Contentions of the Parties
6. We have heard learned counsel for the complainant and opposite party No.1, as opposite party No.2 was proceeded against ex parte, and have also gone through the record carefully.
7. Learned counsel for the complainant vehemently contended that the claim of the complainant was wrongly and illegally repudiated by the opposite parties. The complainant got conducted various tests, as per reports Ex.C-2C, before obtaining the policy, in question, and nothing abnormal about his health was found therein. The complainant suffered sudden heart attack in Australia and was hospitalized in a hospital there under the existing policy, in question, and spent substantial amount on his treatment. However, the opposite parties, instead of paying the genuine claim, repudiated the same on a baseless ground of pre-existing disease. The opposite parties committed grave deficiency in service and, thus, the complaint deserves be allowed and all the directions, as prayed for therein, may be issued to the opposite parties.
Consumer Complaint No.401 of 2016 6
8. Per contra, learned counsel for opposite party No.1 vehemently contended that the claim of the complainant was rightly repudiated, as he was having past history of Hypercholesterolemia, Hypertension & Diabetes, which are directly related to heart stroke and as per the exclusion clause of the policy, the same are not covered under the policy. Moreover, the medical bills submitted by the complainant are not signed by any person to prove their authenticity. The decision of repudiation is based upon expert advice given by the opposite party No.2. There is no deficiency in on the part of opposite party No.1 and the complaint is liable to be dismissed with costs. Consideration of Contentions
9. We have given our thoughtful consideration to the respective contentions raised by the learned counsel for the parties.
10. Admittedly, the complainant obtained "Overseas Mediclaim B & H Policy", Ex.C-1, from opposite party No.1; which was valid from 08.12.2015 to 06.03.2016. The complainant visited Australia and on 05.02.2016, he suffered sudden heart attack and he was hospitalized there. The complainant lodged the claim with the opposite parties, which was repudiated, vide letter dated 03.05.2016 Ex.C-5, issued by opposite party No.2, on the ground that the complainant was having the past medical history of Hypercholesterolemia, Hypertension & Diabetes.
11. In view of the rival contentions of the parties, the following questions arise for determination, for disposal of this appeal: Consumer Complaint No.401 of 2016 7
i) Whether the claim of the complainant was legally and validly repudiated by the opposite parties on the ground that he was having the past medical history of above referred diseases and that the same are directly related to heart stroke?
ii) Whether opposite party No.2-TPA was competent to repudiate the claim of the complainant?
In Re: Question No.(i)
12. The point is no more res-integra. In the case Bajaj Allianz Life Insurance Co. Ltd. & Ors. Vs. Raj Kumar III (2014) CPJ 221 (NC), it was held by the Hon'ble National Commission that usually, the authorized doctor of the Insurance Company examines the insured to assess the fitness and after complete satisfaction, the policy is issued. It was held that the Insurance Company wrongly repudiated the claim of the complainant.
13. Hon'ble Supreme Court in case P. Vankat Naidu Vs. Life Insurance Corporation of India & Anr. IV (2011) CPJ 6 (SC) 6 held in Paras No.6 and 7 as follows:
6. We have heard learned counsel for the parties and carefully perused the record. In our view, the finding recorded by the District Forum and the State Commission that the respondents had failed to prove that the deceased has suppressed information relating to his illness was based on correct appreciation of the oral and documentary evidence produced by the parties and the National Commission committed serious illegality by upsetting the said findings on a wholly unfounded assumption that the deceased has Consumer Complaint No.401 of 2016 8 suppressed information relating to hospitalization and treatment.
7. Since the respondents had come out with the case that the deceased did not disclose correct facts relating to his illness, it was for them to produce cogent evidence to prove the allegation. However, as found by the District Forum and the State Commission, the respondents did not produce any tangible evidence to prove that the deceased had withheld information about his hospitalization and treatment.
Therefore, the National Commission was not justified in interfering with the concurrent finding recorded by the District Forum and the State Commission by making a wild guesswork that the deceased had suppressed the facts relating to his illness."
14. Hon'ble National Commission in Satish Chander Madan Vs. Bajaj Allianz General Insurance Co. Ltd. I (2016) CPJ 613 (NC) held that hypertension is common ailment and it can be controlled by medication and it is not necessary that a person suffering from hypertension would always suffer a heart attack. In paras No.8 to 10 it was held as follows:
8. Learned Counsel for the respondent has contended that as per the terms and conditions of the insurance contract, the Insurance Company was not required to reimburse the petitioner complainant for expenses incurred by him on pre-
existing disease. Learned Counsel has argued that from the medical report of the petitioner, it is clear that the petitioner was suffering from hypertension prior to the purchase of the insurance policy and since hypertension has a direct nexus with heart ailment, the respondent Insurance Company was justified in repudiating the insurance claim in view of the exclusion clause which excluded the expenses incurred on Consumer Complaint No.401 of 2016 9 pre-existing disease.
9. We do not find merit in the above contention. On perusal of the copy of the medical report of the petitioner dated 4.6.2010 issued by Dr. David P. Lipkin as also the letter of the doctor dated 7.6.2010 addressed to Dr. M. Fertleman of Wellington Hospital would show that as per the observations of Dr. David P. Lipkin, the petitioner had a previous history of hypertension and he was on BP medicine Telmisartan. The above referred reports do not mention that the petitioner disclosed any previous history of heart problem. Therefore, the only fact established by the above reports is that the petitioner prior to obtaining insurance policy was having history of hypertension. This, however, does not lead to conclusion that petitioner was also having previous history of heart problem. Therefore, the insurance claim submitted by the complainant for treatment of his heart problem cannot be termed as a claim in respect of a pre existing disease. Thus, repudiation of insurance claim by the respondent opposite party is not justified.
10. Learned Counsel for the respondent has contended that it is established on record that the petitioner was having a previous history of hypertension and since hypertension can lead to heart problem, the respondent was justified in repudiating the claim on the ground that the heart problem suffered by the petitioner was caused by pre existing hypertension. There is no merit in this contention. Hypertension is a common ailment and it can be controlled by medication and it is not necessary that a person suffering from hypertension would always suffer a heart attack. Therefore, the argument advanced by respondent is far fetched and is liable to be rejected."
Consumer Complaint No.401 of 2016 10
15. Further in Civil Writ Petition No.20040 of 2008 decided on 17.12.2008 (Max New York Life Ins. Co. Ltd. Vs Insurance Ombudsman, Chandigarh & Anr.), our own High Court held that hypertension is a disease, which could escape attention of a person and is required to be diagnosed by experts.
16. Further in case "Veena Sharma Vs. Life Insurance Corporation of India" 1999 (1) R.C.R. (Civil) 646, Hon'ble Punjab & Haryana High Court held that mere non-mentioning of insured being a patient of hypertension did not amount to suppression of material facts, so as to entitle the respondent to repudiate the claim.
17. Hon'ble Delhi State Consumer Disputes Redressal Commission, New Delhi in case Life Insurance Corporation of India Vs. Sudha Jain 2007(2) CLT 423 has drawn conclusions in para 9 of the order and the relevant clause is 9(iii), which is reproduced as under:-
"9(iii) Malaise of hypertension, diabetes occasional pain, cold, headache, arthritis and the like in the body are normal wear and tear of modern day life which is full of tension at the place of work, in and out of the house and are controllable on day-to-day basis by standard medication and cannot be used as concealment of pre-existing disease for repudiation of the insurance claim unless an insured in the near proximity of taking of the policy is hospitalized or operated upon for the treatment of these diseases or any other disease."
18. In case New India Assurance Company Limited Versus Smt. Usha Yadav & others 2008(3) R.C.R. (Civil) 111, the Hon'ble Consumer Complaint No.401 of 2016 11 Punjab & Haryana High Court expressed its anguish and observed as follows:-
"It seems that the Insurance Companies are only interested in earning the premiums, which are rather too stiff now a days, but are not keen and are found to be evasive to discharge their liability. In large number of cases, the Insurance Companies make the effected people to fight for getting their genuine claims. The insurance Companies in such cases rely upon clauses of the agreements, which a person is generally made to sign on dotted lines at the time of obtaining policy. This is, thus, pressed into service to either repudiate the claim or to reject the same. The Insurance Companies normally build their case on such clauses of the policy, but would adopt methods which would not be governed by the strict conditions contained in the policy."
19. It is also relevant to mention here that Section 19 of the General Insurance Business (Nationalization) Act, 1972 states that it shall be the duty of every Insurance Company to carry on general insurance business so as to develop it to the best advantage of the community. The denial of medical expenses reimbursement is utterly arbitrary on the ground that disease in question was pre-existing disease. It is mere an excuse to escape liability and is not bona fide intention of the insurance company. Fairness and non-arbitrariness are considered as two immutable pillars supporting the equity principle, an unshakable threshold of State and public behavior. Any policy in the realm of insurance company should be informed, fair and non-arbitrary. When the insurance policy has exclusions/conditions to repudiate the claim or limit the liability, the same must be specifically brought to the Consumer Complaint No.401 of 2016 12 notice of the insured and are required to be got signed to show that such exclusions and conditions have been brought to his/her notice.
20. The need for interpreting a contract always arises in two situations, (i) when a gap is needed to be filled in the contract and (ii) an ambiguity is needed to be resolved in the contract, then to find out correct intention of the contract, spirit behind it is required to be considered. Normally, the insurance policy is a contract of adhesion in which other party is left with hardly any bargaining power as compared to the insurer. Insurance contracts are standard form contracts and are drafted by the insurance company and as such, insurance company is at higher footing than the insured. The benefit of such clause, as exclusion clause, would go to the insured unless the same is explained in clear terms by the insurer. In such circumstances, the tribunal would be more oriented towards the interpretation which goes against the party who has inserted/drafted the disputed clause in the agreement/contract. The adjudicating authority is required to look into whether the intention of the party is to exclude or limit liability has been appropriately explained to the other party or not. This Commission while interpreting insurance agreement is to honour the intention of the parties, who have signed the agreement. Even if the agreement had general exclusion/condition for misrepresentation still fraudulent misrepresentation and non-disclosure may not be there. The innocent and negligent misrepresentations are to be ignored. Consumer Complaint No.401 of 2016 13
21. In view of above reasoning, the answer of Question No.(i) is given in negative, holding that the claim was wrongly and illegally repudiated by the opposite party No.2 on the above referred ground. In Re: Question No.(ii)
22. In this case, the claim was rejected by opposite party No.2- TPA, vide letter dated 03.05.2016, Ex.C-5. Admittedly, the complainant was insured with opposite party No.1. Opposite party No.2-TPA is acting like agents, which identify the Preferred Provider Network (PPN) list of hospitals, which offer cashless claim settlement. The same is done on behalf of the Insurance Company. The TPA rejects the claim, citing certain deficiencies and actually the insurance Co. does not pay the amount.
23. Health Services to be provided by the TPA have been specified in IRDAI (THIRD PARTY ADMINISTRATORS-HEALTH SERVICES) REGULATIONS, 2016, issued vide Notification F. No.IRDAI/REG/5/117/2016, Dated 14.3.2016 and the same read as under:-
"Health services by TPA
3. (1) A TPA may render the following services to an insurer under an agreement in connection with health insurance business:
a. servicing of claims under health insurance policies by way of pre-authorization of cashless treatment or settlement of claims other than cashless claims or both, as per the underlying terms and conditions of the respective policy and within the framework of the guidelines issued by the insurers for settlement of claims.
b. servicing of claims for Hospitalization cover, if any, under Personal Accident Policy and domestic travel policy. c. facilitating carrying out of pre-insurance medical examinations in connection with underwriting of health insurance policies: Provided that a TPA can extend this service for life insurance policies also Consumer Complaint No.401 of 2016 14 d. health services matters of foreign travel policies and health policies issued by Indian insurers covering medical treatment or hospitalization outside India e. servicing of health services matters of foreign travel policies issued by foreign insurers for policyholders who are travelling to India:
Provided that such services shall be restricted to the health services required to be attended to during the course of the visit or the stay of the policyholders in India. f. servicing of non-insurance healthcare schemes as mentioned in Regulation 22 (3) of these Regulations g. any other services as may be mentioned by the Authority. (2) While performing the services as indicated at Regulation 3 (1) of these regulations, a TPA shall not a. Directly make payment in respect of claims b. Reject or repudiate any of the claims directly c. Handle or service claims other than hospitalization cover under a personal accident policy d. Procure or solicit insurance business directly or indirectly e. Offer any service directly to the policyholder or insured or to any other person unless such service is in accordance with the terms and conditions of the policy contract and the agreement entered into in terms of these regulations. (3) A TPA can provide health services to more than one insurer. Similarly an insurer may engage more than one TPA for providing health services to its policyholders or claimants."
24. A perusal of Regulation 3(2) (b) of the above health services to be provided by TPA specifically reveals that while performing the services as indicated at Regulation 3(1) of these Consumer Complaint No.401 of 2016 15 Regulations, a TPA shall not reject or repudiate any of the claims directly. In the present case the claim has been repudiated and the cashless service was denied by TPA, vide letter dated 03.05.2016, Ex.C-5, which is in violation of the above said Regulations of the IRDAI. The duties and responsibilities of the Insurance Companies and TPA were also discussed by the Hon'ble Bombay High Court, in Public Interest Litigation No.12 of 2011 (Gaurang Dinesh Damani vs. Union of India & Ors.) in order dated 13.08.2015. It is a common practice that the TPA gives daily targets to its staff for approving claims, where they sanction total money in a day for and all the claims should not exceed particular limit. The hospital bill cannot be settled on the basis of targets fixed by the Insurance Companies. Otherwise, the TPAs have no authority to reject the claim. Such power lies, exclusively with the Insurance Companies. The TPA can only process the claim and forward the same to the Insurance Company and the competent authority of the Insurance Company is to decide about the same.
25. Thus, we are of the opinion that the claim of the complainant was illegally and arbitrarily rejected by the TPA, against the aforesaid instructions of the IRDA. Since the Insurance Companies use the PPN or hospitals empanelled by the TPA and, resultantly, TPA ask the hospital to give commission on every claim, if they want to be enrolled in PPN. This has been observed by the regulators. Resultantly, the patients/consumers are over-charged by the hospitals, since they have to pay some commissions to TPAs to Consumer Complaint No.401 of 2016 16 use the power on behalf of the Insurance Companies. They have no right to solicit business, like agents for the Insurance Companies. Their only job is to serve and process the claims. Accepting and rejecting the claims at their own by the TPAs is illegal, arbitrary, null & void and is not sustainable in the eyes of law.
26. In view of above reasoning, answer to Question No.(ii) is given in negative, holding that opposite party No.2-TPA had no right to repudiate the claim of the complainant. The competent authority of Insurance Company is only competent to pas orders, accepting or rejecting the insurance claim.
Conclusion
27. Accordingly, we have reached at the conclusion that the claim of the complainant was wrongly, illegally and arbitrarily repudiated by opposite party No.2. Even otherwise, opposite party No.1 has produced only affidavit of Sh. Sunil Kakkar, Assistant Manager, as Ex.OP-1/A and except that, no document/evidence has been produced by opposite party No.1 to prove that the complainant was having any past history of above referred diseases. The complainant has produced on record various receipts of the medical expenses as Ex.C-4 (colly.) and has sought payment of $1,18,338 (Australian Dollars). However, under the insurance policy, Ex.C-1, the sum assured for 'illness and/or treatment following accident deductible' is $50,000. As such, the complainant is entitled to the amount spent by him on his treatment to the extent of the sum assured under the policy, in question, along with interest and compensation. Consumer Complaint No.401 of 2016 17
28. Sequel to our above discussion, the complaint is allowed and the following directions are issued to the opposite parties:
i) Opposite party No.1 is directed to pay the sum equivalent to Indian Rupee of US $50,000 to the complainant, along with interest at the rate of 9% per annum from the date of submission of the claim till realization;
ii) Opposite party No.2 is directed to pay ₹50,000/-, as compensation to the complainant, as opposite party No.2 has exercised the jurisdiction, without any authority; and
iii) Opposite parties No.1 & 2 are jointly directed to pay ₹22,000/-, as litigation expenses.
29. The opposite parties are directed to comply with the order within 30 days of the receipt of certified copy of the order.
30. The complaint could not be decided within the stipulated timeframe, due to heavy pendency of Court cases.
(JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT (MRS. KIRAN SIBAL) MEMBER September 19, 2017.
(Gurmeet S)