State Consumer Disputes Redressal Commission
Iffco Tokio Gen.Ins.Co.Ltd. vs Paramount Health Services Ltd on 26 July, 2022
Details DD MM YY
Date of Judgment 26 07 2022
Date of filing 04 07 2014
Duration 22 00 08
IN THE CONSUMER DISPUTES REDRESSAL COMMISSION
GUJARAT STATE, AHMEDABAD
FIRST APPEAL NO. 1286 of 2014
Court No. 1
IIFCO-Tokio General Ins. Co.,
Surat, through its
Corporate Health Claims Team
Plot No.3, Sector 29
Gurgaon
Haryana ...Appellant
Vs
1. Paramount Health Services (TPA) Ltd.
1st Floor, 103, Mangal Ashish Apt.
31, Samatrao Colony
Opp. Ami Surgical Hospital
Vadodara.
2. Kamlesh V. Suratvala
Siddharth Vila,
B-02/302, Dipa Complex
Adajan Patiya, Surat ...Respondents
Coram : Justice V. P. Patel, President
Ms. A.C. Raval, Member
Mr. R. N. Mehta, Member APPERANCE : Mr. V.P. Nanvaty, advocate for the appellant.
Mr. Aditya Davda, advocate for respondents Richa A-1286-14 Page 1 of 10 Order per Mr. R N Mehta, Member
1. IIFCO Tokio Insurance Company Ltd., the appellant herein preferred this appeal being aggrieved by the order dated 19.3.2014 in CC No. 632/2011 before the District Forum Surat (Addl.) The District forum directed the appellant to pay sum of Rs. 55,531/- with the 9% interest from the date of complaint. And also Rs. 2000/- by way of compensation for the harassment and cost of Rs. 1000/-.
2. We have heard Learned Advocate Mr. Darshil Parikh for Mr. V. P. Nanavaty for the appellant and Mr. Aditya Davda for original complainant/respondent.
3. For the convenience, the parties are addressed as per it's original nomenclature.
4. It was the case of complainant before the District Forum that the complainant had taken Individual Medishield Policy for the period from 27.3.2008 to 26.3.2009 covering the risk of complainant and his family members. It was also the case of complainant that earlier he had taken medi claim policy known as Hospitalization and domiciliary hospitalization policy from the New India Assurance Co. Ltd. since 1998 and it was continuously renewed without break therein. It was also the case of complainant that the complainant had earned cumulative bonus since there was no break in insurance and claim during the aforesaid period. The complainant's son Mr. Jigar was insured for Rs. 100,000/- with the opposite party and was admitted at V.A.D.T nursing home Mumbai on 24.6.2010 and was operated for "Right Ear Stapedectomy" and was discharged on 26.6.2010. The complainant has incurred the expenses of Rs. 55,531./- which he had claimed from the opponent insurance company. However opponent insurance company repudiated his claim vide letter dated 2.8.2010. Being aggrieved by the Richa A-1286-14 Page 2 of 10 said rejection of claim the complainant had moved a complaint before the District Forum Surat.
5. After admission, the District Commission issued notice to other side and on receipt of the said notice, the advocate for the opponent, appeared and filed detail reply contending therein that repudiation was justified. It was contended that the complainant had not disclosed that he had taken treatment, when the policy of New India Assurance was in force. The insurance company also contended that it is not true that it has arbitrarily repudiated the claim of the insured, but it was repudiated because illness was specifically excluded under clause of the policy. It is also not true that complainant have any legal entitlement under the policy because there is specific exclusion clause for "pre existing" conditions up to 36 months. The policy is in third year and therefore it was specifically excluded under the policy. The District Forum decided the matter on the basis of the documentary evidence on record and passed the order which is under challenge.
6. Mr. Darshil Parikh for Mr. V. P. Nanavaty drawn our attention at pg 37 of the record which is the first policy that was issued by the present appellant for the period from 27.3.2008 to 26.3.2009. This document shows that the policy (Individual Medisheild Policy) clearly mentions, it is a "new business" for the present appellant. Mr. Parikh states that it is not in dispute that the first policy of appellant was taken by the complainant in the year 2008. The complainant might have taken continuous polices from the New India Assurance co. Ltd. But so far the present appellant is concerned it was the first insurance policy. Considering the documents on record and when there is no specific dispute with regard to the period of insurance, it can be held that the first policy with the opponent was taken in year 2008. The another submission which Mr. Parikh has submitted is that if, we consider the first policy in 2008, than obviously in year 2010 (if policy renewed Richa A-1286-14 Page 3 of 10 periodically) it will be the third policy. So the exclusion clause applicable in the present case which is 36 months from the date of first insurance with the appellant. In support of this Mr. Parikh has drawn our attention at the exclusion clause which is produced at pg no. 92 which reads as under:
"1. Any conditions defined as pre-existing Diseases in the policy, until 36 months of continuous coverage have elapsed, since inception of the first policy with us. This exclusion will also apply to any complications arising from pre existing condition/ailment/disease/injuries. Such complications will be considered as a part of the pre-existing health condition for disease."
7. From the aforesaid it is clear that unless and until 36 months have been passed with the present appellant, pre existing disease in the policy is excluded. Now question arises for adjudication is whether it was a "pre existing" disease when the proposal was first made in the year 2008?
8. Mr. Darshil Parikh also drawn our attention to the case paper submitted by the complainant before the insurance company for the process of the claim. Pg no. 40 is the Individual Medishield Policy claim form. This claim form was submitted by the complainant along with the details of bills and treatment for claiming the insured amount. In column no. 4 of the said form there is a question regarding nature of diseases/illness contracted or injury suffered. The complainant had answered "right ear" that is mention. In column 5 the date of injury sustained or disease or illness was contacted the complainant had answered the date is 21.4.2006. The complainant also had mentioned therein the date of hospitization under the present policy and the name of doctor and also the hospital. The another document which Mr. Parikh has referred at pg no. 43. This document is a Mediclaim Medical Richa A-1286-14 Page 4 of 10 Report (MMR). This reports belongs to Mr. Jigar Suratwala wherein the questions as under:
Question Answer
5. When the patient approached you for the 21.4.2006
first in connection with present disease
suffered?
6. Date of first consultation 21.4.2006
7.Details of previous history of Past history Lt. ear
disease/surgery a patient operated here on
2.5.2006
9. Present disease suffered Right Ear
Ostosclerosis
9. Duration of present diseases suffered is mention about 5 years. This documents is signed by complainant himself as well as the Dr. Ashim A. Desai who has rendered the treatment to insured. From these documents it is amply clear that Mr. Jigar Suratwala was suffering from the ailment since 2006. Now when the complainant himself was aware of the sufferings, he ought not to have suppressed this material information at the time of first inception of the policy.
10. At this point of time Mr. Aditya Davda submitted that although the complainant insured had continuous policy since 1998. There was no claim during the subsistance of the New India Assurance Policies and therefore he was having credit of cumulative bonus. Mr. Darshil Parikh counter to this drawn our attention to the policies which were produced before the District Forum. He has categorically drawn our attention in the policy of New India Assurance which is at pg no. 57 for the period from 27.3.2007 to mid night of 26.3.2008 and in this policy against the name of insured Mr. Jigar the cumulative bonus is shown 0%. He also referred the another policy which is at pg no. 55 for the period from 2005 to 2006 of New India Assurance in this policy against the name of Richa A-1286-14 Page 5 of 10 Mr. Jigar cumulative bonus was shown as 5%. He also referred policy at pg no. 23 for the period from 2003 to 2004 wherein the cumulative bonus was shown as 25%. This means upto 2004 there was no history of any ailment. When the cumulative bonus shows 0% meaning thereby the claim has been entertained by the insurance company in the previous year policy. This is exactly what it corroborate with document called MMR report. In 2006, the insured was taking treatment from Dr. Ashim Desai who has certified it. Now this corroboration makes it clear that in the year 2008 Mr. Jigar was suffering from the ailment or illness for which he had taken the treatment in the year 2006. If the treatment is taken in 2006 obviously it can be considered as the pre existing condition in the year 2008.
11. At this juncture Mr. Aditya Davda submitted that the treatment once taken cannot be considered as "pre existing" condition unless the same illness is continuous. To counter this submission Mr. Darshil Parikh has placed on record the medical literature at pg no. 105 which reads as under: "The middle ear is the area behind the ear drum and it contains tiny bones that amplify sound waves. Otosclerosis is characterised by the abnormal formation of bone within the middle ear that stops these tiny bones from vibrating. This causes hearing loss because the sound waves can't reach the inner ear.
Otoscelrosis tends to target one ear at first, but both ears are generally affected, eventually."
The treatment for Otosclerosis is mentioned at pg no. 106 which also includes surgery. Even at pg no. 43 which is MMR report the doctor as specifically mentioned as per given duration "chronic". This means the condition of the patient insured was suffering from chronic illnesses and therefore it can be said a "pre existing" condition in the year of 2008. Important here is the exclusion clause. The insurance company has specifically mentioned that 36 months (i.e. 3 years) is a waiting period for "pre existing" condition with this company.
Richa A-1286-14 Page 6 of 10Therefore the claim put by the complainant was within the third year policy and therefore not payable as submitted by Mr. Parikh. We have perused the condition and are in agreement with Mr. Parikh. If the complainant's son illness was "chronic" and is "pre existing" at the time of taking the first policy with the present appellant company in that case, obviously claim is not payable and it can be said that there was no arbitrary repudiation of the claim by the insurance company. Mr. Davda submits that this policy was taken under the portability clause. We do not want to enter into the said controversy since the condition is amply clear that the policy has waiting period of 36 months from the date of the inception of the first policy. Mr. Parikh also submitted that when insurer was different, policy, terms & condition were different and in such a case portability benefits cannot be given. However cumulative bonus can be given if the insured is entitle. In this case it has been given in the first policy. Therefore the claim is not payable.
12. In support of his submission Mr. Davda has relied upon two judgments (1) (2001) 6 SCC 477 Biman Krishna Bose v/s United India Insurance Co. Ltd. & Anr. In this judgment according to Mr. Davda a Supreme Court has clarified as to what is effect of renewal of policy.
"5. A renewal of an insurance policy means repetition of the original policy. When renewed, the policy is extended and the renewed policy in the identical terms from a different date of its expiration comes into force. In common parlance, by renewal, the old policy is revived and it is sort of a substitution of obligations under the old policy unless such policy provides otherwise. It may be that on renewal, a new contract comes into being, but the said contract is on the same terms and conditions as that of the original policy. Where an insurance company which has exclusive privilege to carry on insurance business has refused to renew the mediclaim policy of an insured on extraneous and irrelevant consideration, any disease which an insured had contacted during the period when the policy was not renewed, such decease cannot be covered under a fresh insurance policy in view of the exclusion clause. The exclusion clause provides that the pre-existing diseases would not be covered under the fresh insurance policy. If we take the view that the mediclaim policy cannot be renewed with retrospective effect, it would give handle to the insurance company to refuse the renewal of the policy on extraneous consideration thereby Richa A-1286-14 Page 7 of 10 deprive the claim of insured for treatment of diseases which have appeared during the relevant time and further deprive the insured for all time to come to cover those diseases under an insurance policy by virtue of the exclusion clause. This being the disastrous effect of wrongful refusal of renewal of the insurance policy, the mischief and harm done to the insured must be remedied. We are, therefore, of the view that once it is found that the act of an insurance company was arbitrary in refusing to renew the policy, the policy is required to be renewed with effect from the date when it fell due for its renewal."
On aforesaid observation of the Hon'ble Apex Court, Mr. Davda submits that since the policies where renewed from 1998 till the date of incident, the complainant is entitled for the benefits of the policy. We are not in agreement with the submission which is canvassed by Mr. Davda because if it is renewal, a new contract comes into for the same contract, on the same terms and conditions as it replaces original policy that is what Supreme Court has observed. Whereas in the instant case, the policies are different, the nature of coverage are different and the insurer is different. Under such circumstances, it cannot be said that it was a renewal of continuous policy. The another judgment which Mr. Davda has referred is 2018 SCC Online NCDRC 842 in case of Varsha Trivedi v/s New India Assurance Co. Ltd. dated 24.05.2018 which reads as under:
"8. We, further, would like to rely upon the decision of the Hon'ble Supreme Court in New India Assurance Co. Vs. Kiran Singh, 2004 ACJ SC 1176 whereby the Apex Court has held that insurance is covenant of good faith. The insurance company should bear in mind that they are the trustees of the public. Often even genuine claims are being hotly contested in a routine manner by dragging the parties to the court, wasting enormous time and money for the claimant to get their claim settled. In another case, Biman Krishna Bose Vs. United India Insurance Co., 2001 (6) SCC 477, the Hon'ble Supreme Court made observations on important aspects of renewal of mediclaim policy. It was held that renewal of an insurance policy means repetition of the original policy. When renewed, the policy is extended and the renewed policy in the identical terms from a different date of its expiration comes into force. In common parlance, by renewal, the old policy is revived and it is a sort of substitution of obligations under the old policy unless such policy provides otherwise.Richa A-1286-14 Page 8 of 10
9. In our view, the State Commission has failed to consider that, since there was no change in the terms of the policy, the renewed policy itself would fall under the ambit of continued policy and, therefore, the policy clause no.4.3 is inapplicable in the instant case. Since there was no fresh medical examination conducted by the insurer, such policy shall not be a fresh policy, but it should be treated as continued policy. Further, we cannot overlook the fact that the State Commission has decided the appeal ex-parte against the complainant."
13. What Supreme Court has said that has been clarified by the National Commission in aforesaid judgment. In addition to that the words used is "renewal of insurance" policy means "repetition of original policy." When renewed the policy, it is extended and for the identical terms for a different date of expiration comes into clause. This makes it clear the terms and condition should be identical. Whereas in the instant case, the terms and condition of both the policies of two different insurer, are not same and therefore it cannot be said a continuous or renewed policy so as to entitle the complainant to claim under the policy.
14. For the above stated reasons, we categorically held that the complainant was not entitle for reimbursement of the expenses incurred for the treatment of his son as the policy was in third year and excluded under the contract of insurance. Needless to say that the terms and condition of the contract is require to be given due weightage while deciding the cases of deficiency in services and therefore we set aside order passed by the learned District Commission in complaint and allow the appeal as under.
ORDER A) Appeal no. 1286 of 2014 is hereby allowed.
B) The order passed by the Consumer Disputes Redressal Forum, Surat (Add.) in Consumer Complaint No. 632/11 dated 19.3.2014 is hereby set aside and original complaint stands dismissed.
Richa A-1286-14 Page 9 of 10C) There shall be no order as to cost.
D) Office is directed to verify the amount deposited by the appellant in appeal No. 1286/14, CMA No. 833/14 and if found deposited, refund the same with interest, if any, accrued on the deposit to the appellant by issuing A/c. payee cheque in the name of the appellant. The A/c. payee cheque may be handed over to the attending advocate after following due procedure and verification.
E) The office is directed to send certified copy of this judgment to the parties. Registry is also further directed to send a copy of this judgment to the DCDRC Surat (Addl.) through Email in PDF format for taking necessary action.
Pronounced in the open court on 26th July, 2022.
[Mr. R. N. Mehta] [Ms. A. C. Raval] [Mr. Justice V. P. Patel]
Member Member President
Richa A-1286-14 Page 10 of 10