State Consumer Disputes Redressal Commission
Oriental Insurance Co. Ltd. vs Karam Singh on 24 April, 2018
2nd Additional Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB,
CHANDIGARH.
First Appeal No.854 of 2017
Date of institution: 21.12.2017
Date of Reserve : 18.04.2018
Date of Decision : 24.04.2018
Oriental Insurance Company, SCO 18-19, Chandigarh Road,
Hoshiarpur, now through its Regional Manager, SCO No.109-111,
Sector 17-D, Chandigarh.
.....Appellant/Opposite party
Versus
Karam Singh son of Piara Singh C/o Saini Motors, Scheme No.11,
Mahilpur Road, Hoshiarpur (Mobile No.94643-19220)
.......Respondent/complainant
First Appeal against order dated
02.11.2017 of District Consumer
Disputes Redressal Forum,
Hoshiarpur.
Quorum:
Mr. Gurcharan Singh Saran, Presiding Judicial Member
Mr. Rajinder Kumar Goyal, Member
Present:-
For the appellant : Sh.Vinod Chaudhari, Advocate
For the respondent : Sh.N.S.Nayyar, Advocate
Gurcharan Singh Saran, Presiding Judicial Member
ORDER
The appellant/opposite party (hereinafter referred to as 'opposite party') has filed the present appeal against the order dated 02.11.2017 passed by the District Consumer Disputes Redressal Forum, Hoshiarpur (hereinafter referred to as 'District Forum'), vide which the complaint filed by the complainant was partly accepted and opposite party was directed to pay/reimburse a sum of Rs.2,00,000/- i.e. the sum assured out of the total expenses incurred by the complainant on F.A. No. 854 of 2017 2 his treatment alongwith interest at the rate of 9% p.a. from the date of repudiation i.e. 03.07.2017 till realization and also to pay Rs.20,000/- as compensation for harassment and Rs.5,000/- as litigation expenses.
2. Complaint was filed by the complainant under Section 12 of the Consumer Protection Act, 1986 (hereinafter referred to as 'the Act') against the opposite party that the complainant has been regularly purchasing Mediclaim Policy from opposite party since 2010 for himself and his family members for a sum assured of Rs.2,00,000/- The complainant got renewed his policy on yearly basis as under:-
Term of Policy Policy Number
17.09.2011 to 16.09.2012 235490/48/2012/213
17.09.2012 to 16.09.2013 235403/48/2013/185
21.09.2013 to 20.09.2014 235400/48/2014/920
21.09.2014 to 20.09.2015 235400/48/2015/1174
However, due to some financial hardships, the complainant was not able to pay the renewal premiums before expiry of the policy for the year 2015-16. However, after sometime, the policy was got renewed further, for which policy No.235400/48/2016/1462 was issued after paying the premium of Rs.3,369/- after a gap of 40 days and the policy was valid for the period 30.10.2015 to 29.10.2016 and again policy got renewed from 30.10.2016 to 29.10.2017 for a sum of Rs.2,00,000/-. However, on 25.03.2017, the complainant was admitted in Orthonova Hospital, Jalandhar with a complaint of pain in both knee joints. He was diagnosed with Osteoarthiritis in both the knees and was advised replacement of knees. Surgery was performed F.A. No. 854 of 2017 3 upon the complainant, wherein both the knee joints were replaced and he was satisfactorily discharged on 31.03.2017. During hospitalization a sum of Rs.3,30,000/- was spent by the complainant. Medi claim of Rs.2,00,000/- was lodged with the opposite party. However, he was intimated vide letter dated 03.07.2017 that claim has been repudiated on the ground that "Pat suffered from Osteoarthritis, patient underwent B/L Osteoarthritis, policy is 2nd year of inception, joint replacement are excluded from the scope of the policy for 1st 36 months of the policy inception. Therefore, claim is not payable as per clause 4.2 (There is discontinuation in the renewal of policy from 20.09.2015-30.10.2015)". However, genuine claim of the complainant was repudiated on false and frivolous grounds. The policy was not in second year of inception and it was being renewed since 2011. Moreover, at the time of its issuance of the policy for the year 2015-16, it was not intimated to the complainant that it is not a renewed policy but a fresh policy at the time of issuing the policy. At the time of issuing the policy or renewal policy, the complainant was only supplied with the policy document consisting of policy schedule consisting of only two pages and at any time, the complainant was not apprised of the terms and conditions of the said policy nor the terms and conditions were ever supplied to him. Alleging deficiency in service on the part of the opposite party, this complaint has been filed by the complainant against the opposite party seeking directions against the opposite party to pay/ reimburse the sum of Rs.2,00,000/-; Rs.50,000/- as compensation and damages; Rs.20,000/- as costs of the complaint and litigation expenses and interest at the rate of 12% p.a. F.A. No. 854 of 2017 4
3. Upon notice, opposite party appeared and filed its written reply by taking preliminary objection that the claim of the complainant was repudiated by opposite party on the ground that the treatment of joint replacement is excluded from the scope of insurance policy for the first three years from the date of inception of the insurance policy as per clause 4.2 of the terms and conditions of the policy, therefore, the claim was rightly repudiated. On merits, issuance of the policy has been admitted and it has been stated that after the policy for the period 21.09.2014 to 20.09.2015, it was discontinued for a period of 40 days and thereafter the complainant purchased the new policy for the period 30.10.2015 to 29.10.2016 for the sum insured of Rs.2,00,000/-. The previous policy was effected from 30.10.2015 to 29.10.2016. With regard to the terms and conditions of the policy, it has been specifically mentioned in the policy itself, kindly visit our website www.orientalinsurance.org.in. Therefore, it was denied that the terms and conditions of the policy were not in the knowledge of the complainant. There is no deficiency in service on the part of the opposite party. Complaint is without merit, it be dismissed.
4. The parties tendered their evidences before the District Forum.
5. After going through the allegations as alleged in the complaint, written reply and evidences by the parties, the complaint filed by the complainant was allowed as referred above.
6. Aggrieved with the order passed by the learned District Forum, the appellant/opposite party has filed the present appeal. F.A. No. 854 of 2017 5
7. We have heard the counsel for the parties and perused the record carefully.
8. Firstly, it is to be determined whether policy for the year 2015-16 was a renewal policy or a new policy. No doubt that the complainant was taking the policy from 17.09.2011 onwards and it was continuous onwards upto 20.09.2015 but there is a gap of 40 days and further policy was issued on 30.10.2015 to 29.10.2016. The said policy is on the record as Ex.C-5, in which there is no previous policy number and it has not been mentioned that it is a renewal policy, therefore, it shall be taken as a new policy. Now the contention of the counsel for the opposite party is that under clause 4.2 of the policy terms and conditions joint replacement due to Degenerative condition is not payable for three years. Clause 4.2 is reproduced as under:-
"4.2 The expenses on treatment of following ailment/ diseases / surgeries for the specified periods are not payable if contracted and / or manifested during the currency of the policy.
If these diseases are pre-existing at the time of proposal the exclusion on 4.1 for pre-existing condition SHALL be applicable in such cases.
i Benign ENT disorders and surgeries i.e. 1 year
Tonsillectomy, Adenoidectomy, Mastoidectomy,
Tympanoplasty etc.
ii Polycystic ovarian diseases 1 year
iii Surgery of hernia 2 years
iv Surgery of hydrocele 2 years
v Non infective Arthritis 2 years
vi Undescendent Testes 2 years
vii Cataract 2 years
viii Surgery of benign prostatic hypertrophy 2 years
ix Hysterectomy for menorrhagia or fibromyoma or 2 years
myomectomy or prolapse of uterus
x Fissure / Fistula in anus 2 years
F.A. No. 854 of 2017 6
Xi Piles 2 years
xii Sinusitis and related disorders 2 years
xiii Surgery of gallbladder and bile duct excluding 2 years
malignancy.
xiv Surgery of genitor-urinary system excluding 2 years
malignancy.
xv Pilonidal Sinus 2 years
xvi Gout and Rheumatism 2 years
xvii Hypertension 2 years
xviii Diabetes 2 years
xix Calculus diseases. 2 years
xx Surgery for prolapsed inter vertebral disk unless 2 years
arising from accident
xxi Surgery of varicose veins and varicose ulcers 2 years
xxii Joint Replacement due to Degenerative 3 years
condition
xxiii Age related osteoarthritis and Osteoporosis. 3 years
If the continuity of the renewal is not maintained with the Company then subsequent cover SHALL be treated as fresh policy and clauses 4.1, 4.2, SHALL apply unless agreed by the Company and suitable endorsement passed on the policy. Similarly if the sum insured is enhanced subsequent to the inception of the policy, the exclusions 4.1 and 4.2 will apply afresh for the enhanced portion of the sum insured for the purpose of this section."
9. However, the contention of the complainant in the complaint is that the policy terms and conditions were never supplied to the complainant. It is also not the case of the opposite party that alongwith policy documents terms and conditions were supplied to the complainant but it was mentioned in the policy itself that for the detailed terms and conditions kindly visit our website www.orientalinsurance.org.in. Therefore, the policy itself as well as the written reply filed by the opposite party clearly indicates that for the terms and conditions they had referred to their website. In case, for F.A. No. 854 of 2017 7 the terms and conditions a reference has been given of the website, whether that is sufficient to say that policy terms and conditions were supplied and are in the notice of the complainant. In this regard, counsel for the complainant/respondent has referred to the judgment of this Commission decided on 09.11.2016, in which we have relied upon the judgment of the Hon'ble National Commission reported in 2014 (2) CLT 305 titled as "The Oriental Insurance Co. Ltd. Vs. Satpal Singh & Ors." wherein, it was observed that insured is not bound by the terms and conditions of insurance policy unless it is proved that policy was supplied to the insured by the insurance company. Mere terms and conditions posted on the website is not proved that policy was supplied to the insured.
In the judgment passed in Revision Petition No.2708 of 2013 "Ashok Sharma and Ors. Vs. National Insurance Co. Ltd." decided on 19.02.2016. Hon'ble National Commission has relied upon judgment of Hon'ble Supreme Court reported in (1996) 6 SCC 428 titled as "United India Insurance Co. Ltd. Vs. M.K.J. Corporation"
wherein it was observed as under:-
"It is a fundamental principle of Insurance Law that utmost good faith must be observed by the contracting parties. Good faith forbids either party from concealing (non-disclosure) what he privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary. Just as the insured has a duty to disclose, "similarly, it is the duty of the insurers and their agents to disclose all material facts within their F.A. No. 854 of 2017 8 knowledge, since obligation of good faith applies to them equally with the assured."
These judgments have not been controverted by the counsel for the appellant/opposite party. On the basis of the judgment referred above, we are of the opinion that it was obligatory on the part of the opposite party to supply the terms and conditions or specifically brought to the notice of the complainant-insured but no such evidence has been brought on record by the opposite party. In case, the terms and conditions were not supplied to the insured then opposite party cannot rely upon those terms and conditions to decide the claim of the complainant. In case, we do not read the terms and conditions of the policy then the treatment will be considered as taken during the subsistence of the policy. The sum insured is Rs.2,00,000/-, therefore, opposite party is under obligation to indemnify the complainant to the extent of Rs.2,00,000/- and the District Forum has rightly directed the opposite party to indemnify the complainant to the extent of Rs.2,00,000/-.
10. Another point has been raised by the counsel for the appellant/opposite party that in case opposite party is bound to pay the sum insured then the interest and compensation has been unnecessarily imposed upon the opposite party. Once the claim was lodged with the opposite party and opposite party from the date one was in the knowledge that the terms and conditions were not specifically brought to the knowledge of the insured and they had referred their website only in the policy itself. Generally, most of the F.A. No. 854 of 2017 9 people may not be knowing the computer or to open the website to go through the terms and conditions of the policy. In those circumstances, the claim should not have been repudiated and would have been paid on the first instance. In case, it would have been so then there was no question of interest and compensation but the opposite party not only repudiated the claim of the complainant but contested the claim before the District Forum. Even they were not satisfied with the decision of the District Forum and they filed the complainant and complainant had to contest the complaint as well as the appeal. In case, the amount was wrongly withheld by the opposite party then the opposite party is liable to pay it along with interest and the District Forum has allowed the interest at the rate of 9% p.a. and interest part is hereby affirmed. Over and above the interest Rs.20,000/- has allowed as compensation and Rs.5,000/- as litigation expenses. In case, despite paying the premium, the complainant has not been able to pay the genuine claim and complainant has to file the complaint and then to contest the appeal filed by the opposite party. In that situation, compensation of Rs.20,000/- and litigation expenses of Rs.5,000/- are quite reasonable.
11. No other point was argued by the counsel for the parties.
12. Sequel to above, we do not see any merit in the appeal and the same is hereby dismissed.
13. The appellant had deposited a sum of Rs.25,000/- at the time of filing of the appeal. It deposited another sum of Rs.1,75,000/- vide receipt dated 19.02.2018, in compliance of the order dated 25.01.2018. Both these sums, along with interest which has accrued F.A. No. 854 of 2017 10 thereon, if any, be remitted by the registry to the District Forum, after the expiry of 90 days of the sending of certified copy of the order to them. The complainant may approach the District Forum for the release of the above amount and the District Forum may pass an appropriate order in this regard.
14. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(GURCHARAN SINGH SARAN) Presiding Judicial Member (RAJINDER KUMAR GOYAL) Member April 24, 2018 parmod