National Consumer Disputes Redressal
K. Manivannan vs Religare Health Insurance Company Ltd. on 13 October, 2023
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 252 OF 2018 1. K. MANIVANNAN ...........Complainant(s) Versus 1. RELIGARE HEALTH INSURANCE COMPANY LTD. Rep. by its Manager, Vipual tech Square, Tower C,3rd Floor, Golf Course Road, Sec-43, GURGAON-122009 ...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE A. P. SAHI,PRESIDENT
FOR THE COMPLAINANT : APPEARED AT THE TIME OF ARGUMENTS
MR. K. LENIN DEVA SASHAYA VINOBER, ADVOCATE MR. K. MANIVANNAN, IN-PERSON FOR THE OPP. PARTY : APPEARED AT THE TIME OF ARGUMENTS
MS. SUMAN BAGGA, ADVOCATE
Dated : 13 October 2023 ORDER
A. P. SAHI, J (PRESIDENT)
1. This is an Original Complaint praying for a direction to the Opposite Party / Insurance Company to pay a sum of Rs.1,10,00,000/- together with interest as well as the balance claim amount together with costs and such other reliefs as may be found admissible to the Complainant. The Complainant, as disclosed in Para 14, had instituted a Claim Petition on the subject matter on 02.08.2017, Consumer Complaint No. 246 of 2017 before the State Commission but withdrew it looking to the pecuniary claim whereupon the present complaint has been filed.
2. The Complainant took a Health Insurance Policy from the Opposite Party for an insured sum of Rs.3,00,00,000/- coupled with accidental, hospitalization (add on benefits) for Rs.5,00,000/-. The duration of the policy is from 07.12.2014 to 06.12.2015. The Complainant set up and was running a Micro-enterprise in the name and style of Gnana's Hotel, a restaurant in Coimbatore with a loan support from the Bank of India and had also purchased a Food Trailer for a Mobile Food unit for branching out his business.
3. Unfortunately as per the Complainant he met with an accident while he was cooking in the kitchen on 25.10.2015 when the cooking utensil containing hot oil slipped and fell on the Complainant causing severe burn injuries on the hands and the lower portion of the body. He was immediately admitted to K. G. Hospital, Coimbatore for treatment and an accident was also registered with Vadavalli Police Station, Coimbatore. The Opposite Party was also duly intimated about this incident. The Complainant was treated at the K. G. Hospital from 25.10.2015 to 20.11.2015 and during his stay certain medical expenses to the tune of Rs.30,000/- and then again for Rs.10,072/- was sanctioned by the Opposite Party. Upon being discharged, the Complainant was treated at Sri Ramakrishna Hospital as well whereafter he went plastic surgery in the same hospital. The Complainant had to undertake physiotherapy courses for almost a year in order to recover from the wounds on his upper and lower limbs of left hand.
4. It would be appropriate to state at this stage that the discharge summary of the Complainant from K. G. Hospital dated 20.11.2015 is on record along with discharge summary from Sri Ramakrishna Hospital dated 04.12.2015. It is also to be placed on record that certification was issued on 11.12.2015 by Dr. N. Arumugam recording the nature of the burn injuries followed by another document by the same doctor on 12.12.2015 indicating that the burns were of II and III degree and the total burnt surface area extended from 50% - 60%. The Complainant also underwent plastic surgery in Sri Ramakrishna Hospital and discharge summary dated 21.01.2016 is also on record.
5. From the documents on record, it is found that a communication dated 03.02.2016 was issued by the Opposite Party informing the Complainant that his claim has been approved for Rs.10,00,000/- and that the payment offer was towards full and final settlement of the claim. The letter is extracted here as under:
"Subject: Payment against Claim Reference Number : 90174002, Proposer Name: Manivannan K.
Dear Sir / Madam,
This is inform you that the claim has been approved. Please refer Annexure 1 for policy and claim details.
Claimed Amount:Rs.10,00,000/-.
Approved Amount (in Rupees): 10,00,000/-.
NEFT No/Date: 4440U16033483587 /02-02-2016
The payment is towards full and final settlement of the claim made.
Should you require any assistance, please write to us as [email protected] or call 1860-500-4488."
6. The disposal of the claim of the Complainant nowhere indicates any such consideration of the documents referred to in paragraph no. 3 above.
7. It appears that after having received the treatment and after having received the amount of Rs.10,00,000/- as indicted above, the Complainant moved an Application before the Opposite Party on 16.12.2016 stating therein that the calculation for award of compensation has been incorrectly made inasmuch as the Complainant has suffered III degree burn injuries and 70% permanent partial disability. Consequently in terms of the policy and keeping in view the schedules as applicable the assessment should be made appropriately and commensurate claim should be awarded. The said letter dated 16.12.2016 has a bearing on many issues and therefore is extracted here as under:
"Sub: Claiming Insured Amount.
Respected Sir,
I have insured myself in your Insurance Company under policy No. 10174520 sum insured for Rs.3 Crore. I met with fire accident on 25.10.2015 and admitted in KG Hospital, Coimbatore with 50% - 60% of III degree 30% and 20% of II degree burn injure. I loss my all five fingers and wrist and Elbow functioning of my left hand, total permanent partial disability is 70% you have paid Rs.10,00,000/- (ten Lakhs Only) (02-02-2016) on calculating 20% II degree burn injury only. But whereas I have sustained by 30% of III degree burn injury and 70% of permanent partial Disablement. Hence your liable to pay third degree burns of 30% as against burn benefit as per 2.9 benefit 9 of the contract, and I have loss of all fingers of left hand 40% as per 2.3 benefit 3 of permanent partial disablement. Hence I request you to fulfil you liable and do the needful as soon as possible. The Copy of the policy, IT returns, PAN Card, Licence Copy, Cheque copy, disability certificate, burns injury certificate issued by Dr. N. Arumugam M. S. MCh (Plastic) are enclosed.
Thanking You."
8. There is another document which needs reference namely, ' Disability Certificate' dated 23.11.2016 issued by Dr. K. Kamalanathan Chief Civil Surgeon, Coimbatore Medical College and Hospital, Coimbatore assessing total permanent disability to the extent of 70% registering the percentage of disability suffered in the left upper limb, lower limb and hands.
9. The Opposite Party / Insurance Company vide letter dated 05.02.2017 repudiated the claim of the Complainant by the following order:
"Subject:- Rejection of Claim (Claim No.: 90174002)
Dear Sir/Madam,
We have reviewed the claim (Claim No.: 90174002 in the name of "Manivannan K.") filed by you pertaining to Health Insurance Policy (#10174520), and hereby inform you that the claim is not payable as per policy terms & conditions. For ease of your perusal we have listed the reason for denial below:
MIXED BURN MAXIMUM 2ND DEGREE BURN
CLAIM ALRADY SETTLE
For any assistance, please call 1860-500-4488 or write to [email protected]
We at Religare Health Insurance Company Limiter always want to be fair on our processing an settlement of claims.
With warm regards.
10. The Complainant then sent an e-mail clearly stating therein that the rejection aforesaid records mixed II degree burns and further that the claim had already been settled is incorrect as the Complainant had suffered III degree burns and was suffering from 70% permanent partial disablement hence the calculation is wrong and the needful be done. The Insurance Company after receiving this mail informed the Complainant that they were working on it and would inform the Complainant accordingly. On 31.10.2017 the following communication was received by the Complainant through mail stating that the claim has been decided and not payable as demanded. The same is extracted here as under:
"Dear Sir/Madam,
We have reviewed the claim (Claim No.: 90174002-01) filed by "Manivannan K." pertaining to Health Insurance Policy (#10174520) and hereby inform you that the claim is not payable as per policy terms & Conditions. For ease of your perusal we have listed the reason for denial below:-
MIXED BURN, MAXIMUM 2ND DEGREE BURN CLAIM ALREADY SETTLED
For any assistance, please feel free to write to us at [email protected] or call us on 1860-500-4488.
We at Religare Health Insurance Company Limited always want to be fair in our processing and settlement of claims.
We have decided to repudiate your claim after due consideration of the facts and circumstances.
In case of any disagreement, you may first write to our Complaints Unit or to our Branch office.
Thanks and Regards"
11. Again on 01.11.2017, the Complainant / Claimant was informed that the Insurance Company was working with their team for the rejection letter which will be sent shortly. In some and substance the Insurance Company had foreclosed the matter at its end with a clear denial of no further scope of payment.
12. The Complainant instituted the present Complaint on 24.01.2018 on which notice was issued on 09.02.2018 after admitting the same.
13. It appears that the Written Reply was filed on behalf of the Opposite Party on 11.04.2018 taking objections to the claim raised including an objection that the Complainant had not disclosed his correct status of income and therefore the claim was not admissible as demanded in view of the documents and information available as well as the norms prescribed for issuing an Insurance policy. The Complainant had not disclosed his correct income and therefore was not entitled to a coverage of Rs.3,00,00,000/- for which the policy was issued. According to the Opposite Party the annual income of the Complainant as per his Income Tax Returns and other documents relating to business did not permit the issuance of a policy the coverage whereof could be beyond Rupees One Crore. Consequently on the strength thereof the Insurance Company took a stand that an award of Rupees Ten Lakhs was made being 50% of the admissible amount for II degree burn injuries the maximum whereof is Rupees Twenty Lakhs.
14. It has also been urged that since there was no permanent disability document or any other evidence on the date of assessment of the claim, the claim of the Complainant as demanded had no basis.
15. It appears in the meantime the Complainant got his disability verified by a notified and authorised medical authority as per Government Rules and a certificate was issued on 02.08.2018 indicating 81% permanent physical impairment / disability. This document was brought on record through the additional document filed along with the Rejoinder dated 18.11.2018 filed by the Complainant.
16. On receipt of this document, learned Counsel for the Opposite Party has in the Affidavit of Evidence filed on its behalf on 15.10.2019 reiterated the stand taken but has stated in Paragraph No. 10, the contents of which are as follows:
"10. That the Complainant in the instant complaint is primarily seeking claim for Permanent Partial Disablement which is yet to be settled. The Complainant has also submitted a certificate dated 23-Nov-2016 purpotedly issued by Dr. Major K. Kamalanathan, Chief Civil Surgeon, Coimbatore Medical College and Hospital, Coimbatore specifying the % of disability to be 70%. In this regard, it is stated that the Complainant till the date of filing of the Complaint had not filed the permanent partial disability certificate purportedly issued by Dr. K. Kamalanathan with the Respondent Company. It is only at the stage of filing of the present Complaint, the Complainant had brought the said Certificate and the Respondent Company had no opportunity to process and evaluate the claim with regard to the said certificate. The Respondent company was required to assess the authenticity of the said Certificate in order to accept its liability in the present Claim. The claim and the present Complaint in this regard is premature.
The Respondent Company however had opportunity to assess the Certificate of Disability dated 2-Aug-18 post reception of the Rejoinder documents. On assessment of the Disability Certificate dated 2-Aug-18, the Respondent Company concluded that the Complainant had suffered Permanent Total Disability (PTD) towards "Total and irrevocable loss of use of a hand or a foot". Accordingly the Complainant is admissible to 50 percent (%) of the Sum Insured towards the disability incurred as per Clause 2.2(IV) of the Policy Terms and Conditions.
17. This is followed by a statement to the same effect in Paragraph No. 5 and 6 of the brief synopsis dated 29.06.2022, which are as follows:
6. That the respondent company however, had the opportunity to assess the certificate of disability dated 02.08.2018 post receipt pf the rejoinder documents. On assessment of the disability certificate dated 02.08.2018 (Ex.R-5 also Ex.C-14) the Respondent company concluded that the complainant had suffered permanent total disability (PTD) 'Total and irrevocable loss of use of a hand or a foot'. Accordingly, the complainant is admissible to 50% of the sum insured towards the disability incurred as per clause 2.2 (IV) of the policy terms and conditions."
18. Inspite of the aforesaid indications the matter was contested by the learned Counsel for the Opposite Party stating therein that the maximum limit of burn injury is provided for in the schedule of the policy according to which the admissibility of the amount of Rs.10,00,000/- has already been paid and was justified when the claim was settled in the absence of the disability certificate dated 02.08.2018 which has been filed in the present proceedings.
19. The claim of the Complainant is being resisted also on the strength of the Health Insurance underwriting manual of the Opposite Party / Company on the ground of incorrect disclosure of income stated to be in line and in accordance with the IRDA Guidelines. It is in the said background that the present Complaint has been argued by the learned Counsel for the Parties.
20. Having considered the aforesaid aspects, a reference to the relevant provisions of the policy needs to be recorded. The cover note/policy certificate enclosed with it prescribes the benefits that are available on certain contingencies. This schedule is part and parcel of the policy issued on 11.12.2014 and at column no.3, Permanent Partial Disablement benefit is admissible as per Clause 2.3 of the terms and conditions of the policy. Further at Serial No. 9 under the heading 'BURNS', the maximum permissible benefit is ₹20,00,000/- (Rupees Twenty Lakhs). 'Burns' are further classified and quantified by the terms and conditions provided in Clause 2.9.
21. It is, thus, clear from the above mentioned Clauses that if it is a burn injury, then in that event, as per Clause 2.9 (a), a third degree burn injury upto 30% of the total body surface area, the amount payable would be 80% of the sum insured specified in the benefit appended to the Policy Certificate. If it is second degree burn injury of 30% or more of the total body surface area then the payable amount is 50%.
22. In the instant case, the pleadings, synopsis of arguments as well as the arguments advanced by the learned Counsel for the Insurance Company is to the effect that there was no Permanent Disability Certificate at that time when the assessment was being made as the Certificate was not available to the Insurance Company. The only document, as per treatment, which was available, was assessed as a second degree mixed burn injury and therefore, according to the Clauses referred to above, 50% of ₹20,00,000/- (Rupees Twenty Lakhs only), i.e., ₹10,00,000/- (Rupees Ten Lakhs only) was settled on 03.02.2016 in the light of the evidence that was in existence. Thus the argument is that the claim was rightly settled in terms of the aforesaid Clauses and the status of the burn injuries was second degree burn injuries.
23. The said argument has to be tested on the strength of the documents which were available, even if the Disability Certificate dated 02.08.2018 was not existing on that day. For this, the first document which needs to be observed, is the letter dated 16.12.2016 through which the Complainant staked his claim after having received an amount of ₹10,00,000/- (Rupees Ten Lakhs only). This letter is quoted in paragraph (7) hereinabove and a perusal thereof would indicate that it refers to the Disability Certificate and Burn Injury Certificate issued by Dr. N. Arumugam enclosed therewith. There is no denial by the Insurance Company of the receipt of these documents along with said letter. These documents were issued by the attending doctor of the same hospital, namely K. G. Hospital, where he was treated from 25.10.2015 to 20.11.2015. What they have denied is the Disability Certificate dated 28.11.2016 of 70% of disability issued by Dr. K. Kamalanathan not having been received by them. Even assuming the said fact to be true, though not established, yet neither the contents of the letter nor the certificates dated 11.12.2015 and 12.12.2015 issued by Dr. N. Arumugam have been denied or contradicted. The letter also indicates a clear assertion of the nature of loss of permanent partial disability suffered due to the said burn injuries. It categorically recites the nature of injuries and the loss and disablement of the fingers with the locomotor disability of the function of the left hand that are nothing else but an assertion in support whereof the discharge summary from K. G. Hospital and certificates of Dr. N. Arumugam are placed on record. The discharge summary dated 20.11.2015 has not been denied which categorically records total burnt surface area 50% with mixed second and third degree burns. However, it states extensive IInd degree burns of all extremities and recites critical mixed type II and III degree patches in both lower limbs and both upper limbs upto elbow. Thus, the reflection of III degree burn is contained in the opinion of the Plastic Surgeon and the Neurologist which is followed by the discharge summary dated 04.12.2015 issued by Sri Ramakrishna Hospital where further surgery was conducted. On local examination, the said summary records II and III degree burns including front and back of both forearms, both lower limbs and other regions with contractors of right elbow and palm as well as fingers of left hand.
24. The certificates referred to in the letter of the Complainant noted above are also on record, issued by Dr. N. Arumugam on 11.12.2015 and 12.12.2015. These two certificates certify the burn injuries of a Mixed Type of II and III degree with a total burn surface area of 50% to 60%. These Certificates and documents have neither been disputed nor denied and as such non-consideration and ignorance of such documents is evident in the rejection of the claim which was done subsequently vide letter dated 05.02.2017. The conclusion drawn is that there was a Mixed Type burn II degree injury. This conclusion of the Insurance company is contrary to the weight of the evidence led by the Complainant which could not be controverted or contradicted nor it could be demonstrated even through the affidavits and the evidence filed before this Commission. Consequently, the rejection on this ground suffers from non-consideration of relevant material on record.
25. The assumption, thus, of the 50% of benefit under Clause 2.9 of the policy treating it to be second degree injury is, therefore, ruled out. Even otherwise the calculation of ₹10,00,000/- (Rupees Ten Lakhs only) @ 50% was incorrect as the weight of evidence clearly indicates that the Complainant had suffered third degree burn injuries and was, therefore, entitled to 80% of the claim amount which comes to ₹16,00,000 (Rupees Sixteen Lakhs only). On this count also, the rejection suffers from an infirmity of the violation of the terms and conditions of the policy itself.
26. A dispute has been raised about the Disability Certificate dated 23.11.2016 issued by Dr. K. Kamalanathan recording 70% disability of left hand who is the Chief Civil Surgeon and professor and Head of Orthopedics, Coimbatore Medical College and Hospital. This Certificate dated 23.11.2016 is on record. The denial is that the same was not received. The said Disability Certificate is followed by another Certificate by the same Dr. Arumugam of K. G. Hospital who has assessed the disability and issued the Certificate on 14.12.2016.
27. The disability certificate issued by Dr. Kamalanathan has been filed alongwith the Complaint in 2018 itself. At least knowledge of this certificate to the Opposite Party during the pendency of the Complaint cannot be denied. The Opposite Party itself undertook the task of getting the last certificate dated 02.08.2018 issued by Dr. B. Palanisamy, that was filed with the Rejoinder during the pendency of this Complaint, verified as is admitted to them (Pr. 16 & 17 hereinabove). The Certificate issued by Dr. Kamalanathan and Dr. Palanisamy are of and from the same hospital, namely CMC Hospital, Coimbatore. It is not understood as to why the insurance company selectively chose to verify the certificate dated 02.08.2018 and not the certificate dated 23.11.2016 when both have been issued from the same C.M.C. Hospital and by doctors of the same hospital. Instead the company is harping on not having received it earlier as alleged. An inference therefore can be drawn that the insurance company was unsuccessfully trying to defy a vital evidence by their own deficiency in not assessing documents which ultimately go on to prove the permanent disability of the Complainant that now stands admitted by the Insurance company as recorded hereinabove. There is no explanation either in the pleadings or the evidence for this lapse on their part that tends to establish that they simply ignored important and unrebuttable evidence relied on by the Complainant.
28. At this stage, the argument advanced on behalf of the Insurance Company that there was no disability assessed at the stage of the settlement of the claim on 05.12.2017, even if accepted though not proved, the said certification in no way is contrary to the discharge summary and the treatment given to the Complainant, as noted earlier and which documents have not been disputed.
29. It is then contended by the learned Counsel for the Insurance Company that till the patient received his treatment, it may not have been possible to assess the final nature of disability. This argument deserves to be accepted in as much as the treatment prolonged for a long time, almost for 10 months and therefore, it would be safe to assume that the disabilities that have been finally recorded later on, the previous certificates above reflect the correct picture and the opinions expressed therein are confirmed. This stands substantiated and corroborated the admission of the Insurance company now on record, after the last Certificate dated 02.08.2018 has been issued by a Government Hospital which was got verified by the Insurance Company. Paragraph 10 and 11 of the affidavit of evidence dated 15.10.2019 admits the permanent total disability of the Complainant. Thus, there remains now no dispute to be adjudicated after this admission that the Complainant has suffered Permanent Total Disability on account of the burn injuries sustained by him in the accident dated 25.10.2015 and therefore, he is entitled to be treated within the category of a beneficiary of the policy under Permanent Total Disability as per Clause 2.2(a)(IV).
30. Consequently, since now during the pendency of the Complaint, it has been admitted by the Insurance Company that there is Permanent Partial Disablement, then Clause 2.2(a)(IV) of the policy has to be applied. A perusal of the list of insured events under the said Clause refers to several contingencies that have been detailed therein. Serial No. 2.2(a)(IV) recites as follows:
S.No. Insured Events Amount payable = % of the Sum Insured specified in the Policy Certificate against benefit 2 IV Total irrecoverable loss of use of a hand or a foot without physical separation 50%
31. The Insurance Company has, however, confined this total disability benefit to be available only to the extent of 50% of the sum insured.
32. The permanent physical disablement as a consequence of post burn injuries is locomotor disability in nature and extends to 81%. The Certificate dated 02.08.2018 has been issued by Dr. B. Palanisamy, Civil Asst. Surgeon/Sr. Resident, Department of Physical Medicine and Rehabilitation, CMC Hospital, Coimbatore. Accordingly, the claim now stands established for the nature of the benefit to which the Complainant is finally entitled, namely, Permanent Total Disability as medically certified and is undisputed on this count by the learned Counsel for the Insurance Company.
33. One of the Arguments which has been additionally advanced and which does not form part of any of the rejection letters is an allegation of non-disclosure of the correct income by the Complainant in the proposal form or even thereafter. To support this argument, learned Counsel for the Insurance Company contends that the Income Tax Returns and other documents that are on record would demonstrate that the Complainant had not disclosed his correct income at the stage of proposing the policy or else the maximum insured amount on the available status of income of the Complainant as on the date of the policy would not cross ₹1,00,00,000/- (Rupees One Crore only).
34. This argument is a subsequent improvement through the pleadings before this Commission attempting to reduce the now admitted liability that arises out of the certification of 81% locomotor disability of the left hand which falls within the Permanent Total Disability category. If the argument is accepted than it would be 50% of Rupees One Crore i.e. Rupees Fifty Lakhs. If the argument is not accepted then the liability would be 50% of Rupees Three Crores as per the policy that is Rupees One Crore Fifty Lakhs. Another consequence would be the calculation of interest on the amount payable and period for which it would be payable. The Affidavit in evidence of the Insurance Company narrates this more specifically in Paragraph No.11 thereof with a further offer to refund the premium paid to the extent of the amount payable for a coverage of Rupees One Crore.
35. It is clear that the proposal form was accepted and the full premium of insured amount of ₹3,00,00,000/- (Rupees Three Crores only) has been realized as endorsed in the policy. This policy was neither cancelled nor withdrawn and according to the Complainant was even subsequently renewed and was continuing. The Paragraph No.-17 of the Affidavit of Evidence is extracted herein under:-
"That having accepted the premium amount of Rs.65,861/- for the period from 07.12.2014 to 06.12.2015 for the insured amount of Rs.3,00,00,000 (Rupees Three Crores), accidently during the currency there was a claim for cashless hospitalization in the month of November, 2015 and another claim on 04.12.2015 for burn injuries and reimbursement of hospitalization under add-on benefit, which were processed by the opposite party after collecting relevant document as per clause 5.4. Subsequently, for the following year, premium of Rs.67,115 was accepted and the same policy for the period 08.12.2015 to 07.12.2016 was issued to the Complainant/claimant herein. Therefore, the opposite party is not justified in raising baseless allegations of misrepresentation in the proposal form at this stage."
36. The letter settling the claim on 03.02.2016 and rejecting letters onwards nowhere indicates any repudiation of the claim on the alleged ground of non-disclosure of correct income. There is a lot of mail correspondence between the Complainant and the Insurance Company even subsequent to the rejection dated 05.02.2017 that are on record, namely, the mail of the Complainant dated 07.02.2017 and its response by the Opposite Party dated 15.02.2017 followed by response on 20.02.2017 and again on 31.10.2017 and 01.11.2017 in respect of the rejection. There is not even a whisper about the claim being repudiated on the ground of incorrect disclosure of income or suppression of any fact in spite of the said claim having been examined, reviewed and also shared with the respective team that was constituted by the Insurance Company for the issuance of rejection letter as reflected in the mail dated 01.11.2017.
37. It is, therefore, apparent that this plea has now been advanced through the affidavit of evidence contained in para 3 and 10 of the same dated 18.10.2019 where the allegation is that the Complainant had obtained the policy with a higher sum insured by misrepresenting his annual income. It is alleged therein that the Complainant had disclosed the annual income of ₹20,00,000/- (Rupees Twenty Lakhs only) but according to the ITR for the FY 2015-2016, the annual income of the Complainant is mentioned only as ₹4,05,000/-. This they have pointed out from the Income Tax Return filed by the Complainant himself.
38. To support this argument, learned Counsel has relied on the underwriting manual of the Insurance company which is stated to be in tune with the IRDA guidelines. It is contended that the underwriting grid in Clause 2.2 spells out the criteria for evaluation on the basis of annual income and as a thumb rule, the sum insured is to be restricted to a multiple of the annual income as per the grid indicated therein. It, however, provides that the underwriting may be relaxed to the extent of the value of the liability or the asset in certain contingencies and the maximum eligibility may be equal to the net worth of the individual if the customer is able to provide any such evidence. This is subject to all proposals being at the underwriter's discretion and it can call for any pertinent document wherever any need is felt.
39. What is to be noted is clause 6.1 of the said policy which empowers the Insurance Company to cancel the policy on any ground of misrepresentation, misdescription, non-disclosure or fraud of any material particulars by giving 15 days' notice in writing the policy holder on his last noted address. There is nothing on record to indicate that even a remote attempt was made to do so. The discretion was exercised to accept the proposal. As noted above, no notice for cancelling the policy was given to the policy holder for misrepresentation, mis-description or non-disclosure of any material particulars or material information or incorrect document.
40. Further, the Complainant with this allegation, has clearly come out by asserting that not only the policy remained intact without any objection which was valid for the period 07.12.2014 to 06.12.2015 that was processed on full enquiry but even thereafter the Opposite Parties went in for renewal for another term from 08.12.2015 to 07.12.2016. This assertion in Paragraph No. 17 of the Evidence through Affidavit dated 12.11.2018 has no-where been controverted. If there was any doubt regarding the income slab of the Complainant or about the net worth of the assets of the Complainant, the Insurance company could have called upon the Complainant to explain the same but at no stage was this attempted. There is one more important feature to be noticed. The Complainant lodged his claim through the letter dated 16.12.2016 wherein he enclosed the copy of his relevant Income tax Returns and Pan Card. While finalizing and rejecting the additional claim of the Complainant, over and above Rupees ten Lakhs that was paid, none of the letters of rejection or repudiation cast any doubt on the Income tax Returns or other documents nor the same is a reason for rejection. Thus to say that there was any suppression or misrepresentation about income does not commend itself for any acceptance. The fact of the Complainant status and income was well known to the insurance company, hence the allegation is not sustainable.
41. Not only this, the Complainant has through the Affidavit dated 24.01.2023 brought on record the financial status of his business and other assets together with valuation reports demonstrating his net worth. These documents were entertained after orders reserving judgment on a previous occasion by another Bench were passed on 30.12.2022. The Opposite Party was given a month's time vide order dated 13.02.2023 to file rebuttal with a final opportunity of two weeks on 26.07.2023 but no rebuttal or Affidavit has been filed or was forthcoming on the date when judgment was reserved by this Bench at the conclusion of hearing on 13.09.2023. The said documents including the Chartered Accountants Certification on appraisal nowhere diminishes the financial status of the Complainant rather they confirm the stability and prospects of business as well as the presumptive income of the Complainant on the basis whereof the policies were after due acceptance issued and also renewed for a sum of Rupees Three Crores which in the opinion of this Commission does not disqualify the Complainant to receive the fruits of the insurance risk covered under the policy.
42. Another argument that has been advanced on behalf of the Opposite Party is of offering refund of the premium on the premise of treating the insured amount of Rupees One Crore. This benevolence is bereft of legality and unacceptable on facts. Once the policy has outlived its tenure and matured, and has neither been cancelled, rescinded or even suspended, it is not understandable as to under which provision of the Insurance Act 1938, the IRDA Regulations or the terms of the policy this could be achieved. Learned Counsel has advanced this argument but could not in any way substantiate it. As noted above the policy was again renewed on fall premium of Rs.67,115/- for another year with effect from 08.12.2015 to 07.12.2016 which period has also ended without demur. There is no legal yardstick demonstrated by which this concession of subsidizing the premium on a matured policy could be attempted. This appears to be a suggestion deployed to avoid and escape the liability of the risk covered which now stands established as discussed herein above.
43. The Insurance Company, therefore, has proceeded an unfair manner and has clearly adopted the arguments to somehow or the other dislodge the genuine claim of the Complainant resulting in serious deficiency of service and unfair trade practice as it is established that none of the documents or evidences relied by the claimant have been appropriately addressed and assessed. The Insurance Company, therefore, is liable to reimburse the insured amount as per its own policy to the tune of ₹1,50,00,000/- (Rupees One Crore and Fifty Lakhs only) on the assured sum of Rupees Three Crores together with such additional benefits to which the Complainant is entitled under the policy subject to the deductions of the amount already paid.
44. The Insurance Company has on principle in terms of the policy accepted the admissibility of a maximum amount of Rupees Five Lakhs under the head 'Accidental Hospitalization'. The claimant in his Application IA 1470 of 2023 filed on 24.01.2023 has given details in Paragraph No.-8 thereof which has not been rebutted by the Opposite Party as noted above. The said para is extracted here as under:-
That under the Add-on Medical Claim, the OP is yet to pay the pending medical bills of Rs.1,12,391/- (Total Medical Expense Incurred Rs.5,01,373/- - Rs.3,88,982/- of Total Amount paid by Insurance Company), Rs.1,02,377/- payable to Sri Ramakrishna Hospital and Rs.10,014/- payable to KG Hospital, the Complainant paid it and is entitled to the same. A copy of the medical bills is annexed here as ANNEXURE C-21 (Colly).
45. Thus the Complainant is also entitled to a sum of Rs.1,12,391/- on that head count.
46. Consequently, deducting the amount of Rupees Ten Lakhs from the amount of Rs.1.5 crore payable as insured amount, the claimant shall be paid Rs.1.40 crores (Rupees One Crore Forty Lakhs Only) plus the balance of the Hospitalization expenses of Rs.1,12,391/- as indicated above by the Insurance Company to the Complainant within a period of two months from today, together with 9% p.a. interest thereon from the date of maturity of the claim as demanded vide letter dated 16.12.2016 till the date of actual payment. In the event of any default, the said rate of interest shall stand enhanced to 12% p.a. on the expiry of two months from today.
47. The Consumer Complaint is accordingly allowed subject to the directions hereinabove.
.........................J A. P. SAHI PRESIDENT