State Consumer Disputes Redressal Commission
National Insurance Company Limited ... vs P Venkateswara Hande Hyderabad on 9 June, 2013
BEFORE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD FA 1280 OF 2013 against CC 231 OF 2013 on the file of the District Consumer Forum I, Hyderabad Between: 01. The Branch Manager National Insurance Company Limited Branch office: 5-8-799/02, Lakshmiraj complex Jawahar road, Nizamabad -503 001. Appellant/Opposite party. And 01.P. Venkateswara Hande, s/o P. Seshappa hande Aged about 54 years, R/o 2-1-421 & 424/101, Street No. 4, Nallakunta, Hyderabad 44. 02.Smt. P. Anupama Hande, w/o P. V. Hande, Aged about 46 years, R/o 2-1-421 & 424/101, Street No. 4, Nallakunta, Hyderabad 44. Respondents/complainants Counsel for the Appellants : M/s. M. Haribabu Counsel for the Respondents : Served FA 43 OF 2014 against CC 455 OF 2012 on the file of the District Consumer Forum II, Hyderabad Between: 01. The Divisional Manager National Insurance Company Limited Branch office: 4-8-799/02, Lakshmiraj complex Jawahar road, Nizamabad -503 001. 02. M/s. Heritage Health Services Pvt. Ltd Rep. by Manager D. No. 1007, 10TH Floor, Babu Khan estate Basheerbagh, Hyderabad Appellants/Opposite parties 1 & 2 And 01.P. Venkateswara Hande, s/o P. Seshappa hande Aged about 54 years, R/o 2-1-421 & 424/101, Street No. 4, Nallakunta, Hyderabad 44. 02.Smt. P. Anupama Hande, w/o P. V. Hande, Aged about 46 years, R/o 2-1-421 & 424/101, Street No. 4, Nallakunta, Hyderabad 44. Respondents/complainants Counsel for the Appellants : M/s. M. Haribabu Counsel for the Respondents : M/s. T. L. K. Sharma QUORUM: HONBLE SRI JUSTICE GOPALA KRISHNA TAMADA, PRESIDENT AND SRI R. LAKSHMINARASIMHA RAO, HONBLE MEMBER
Monday, the Nin1th Day of June, TWO THOUSAND FOURTEEN Oral Order :
( As per Sri R. Lakshminarasimha Rao , Honble Member ) ***
01. Both appeals arise out of similar facts and same circumstances. F.A.No. 1280 of 2013 is directed against the order dated 30.09.2013 in C.C.No.231 of 2013 whereby the appellant was directed to renew the insurance policy as per the existing terms and conditions while the appeal in F.A.No. 43 of 2014 is filed challenging the award for reimbursement of the medical expenditure incurred by the second respondent. As such both appeals are disposed of by common order.
02.The respondents obtained individual medi claim insurance policy bearing no. 551302/48/09/8500000907 for the period commencing from 12.3.2010 to 11.03.2011. The appellant no.1 has also issued Domiciliary Hospitalization Benefit Policy bearing No.2004 /15130248048500000621 dated 12.03.2004. The second respondent fell ill in the month of June, 2006 and she was admitted in Sridhar Nursing Home at Shivamogga in Karnataka State. She had undergone medical treatment as inpatient in the Nursing Home from 08.06.2006 to 16.06.2006. The appellant no. 1 reimbursed the medical expenditure incurred by the second respondent.
03.The second respondent again fell ill in the month of March, 2008 and she was admitted to Asha Hospital at Hyderabad on 19.03.2008 and she was discharged therefrom on 26.03.2008. She was diagnosed to have suffered from paranoid schizophrenia and stated to have incurred a sum of Rs.15,000/- towards hospitalization charges. The appellant no. 1 repudiated the claim on the premise that paranoid schizophrenia is excluded from the coverage of risk by the required terms of insurance policy. The respondents field complaint in CC No. 18/2011 before the District Forum which has been pending for disposal
04.The second respondent again fell sick and undergone treatment as inpatient at Asha hospital from 16.06.2010 to 28.06.2010. She is said to have incurred medical expenditure an amount of Rs.29,772/-. The first appellant repudiated the claim on 29.11.2010 and the respondents approached the office of the Ombudsman for Andhra Pradesh, Karnataka and Yanam by filing complaint No. I.O.( Hyd)G-11-03670-2010-11 stating that the insurance policy was issued basing on the proposal form and agreement dated 12.3.2004 between the respondents and the appellants and the respondents were told that the original terms and conditions would be applicable to the renewed insurance policies.
05.The respondents submitted that they have been continuously obtaining the insurance policies with effect from 12.3.2004 and got them periodically renewed as also that the terms and conditions of the declaration dated 12.3.2004 had been in force for the subsequently issued insurance policies. They had contended that any change or alternation of terms and conditions of the insurance policy without mutual consent of the insured and the insurance company and without being evidenced by endorsement on the policy are untenable, invalid and illegal. The first appellant reimbursed the hospitalization charges incurred for treatment of psychotic disorder suffered by the respondent no. 2 .
06.The first appellant resisted the claim on the premise that it had issued individual mediclaim insurance policy in favour of the respondent no. 1 and 2 for the period from 12.3.2010 to 11.03.2011. The appellant no. 1 has to implement the guidelines of the IRDA and honour the contractual obligations in terms of the insurance policy. The terms and conditions of the mediclaim policy of the appellant no. 1 and tariff has been revised w.e.f. 01.04.2007. The contract of insurance is on an year to year basis. The respondents were explained of the change in terms and conditions of the revised insurance policy
07.The appellant no. 1 has submitted that its liability would arise subject to the terms and conditions of the contract of insurance, such as exceptions, limitations and guidelines of IRDA. Repudiation of the claim is made in accordance with the terms and conditions of the insurance policy. The second respondent suffered from preexisting disease and the appellant no. 1 informed them of the non admissibility of the claim. The first respondent is an advocate by profession and he was eager to know the terms and conditions of the document. The Insurance Ombudsman dismissed the complaint of the respondents as the claim of the respondent is a speculative litigation. There was no deficiency in service on the part of the appellant no. 1 and thus prayed for dismissal of the complaint.
08.The second appellant had not chosen to contest the claim.
09.In support of his claim the first respondent filed his affidavit and the documents, Ex. A-1 to A-11 and on behalf of the appellant- Insurance company its divisional manager filed his affidavit and Insurance policy, Ex. B-1
10.The District Forum has allowed the complaint on the premise that the appellant no. 1 issued renewed insurance policy and by virtue of the original terms of the policy, the appellants are liable to indemnify the respondents of the medical expenditure she had incurred for the treatment of Paranoid Schizophrenia. The District Forum awarded an amount of Rs.29,772/- along with interest @ 9% p.a. and Rs.3,000/- towards compensation and Rs.2,000/- towards costs.
11.Aggrieved by the order of the District Forum the opposite parties filed appeal contending that the terms of the insurance policy are binding on the parties and the revised terms and conditions of the insurance policy came into force from 1.4.2007 and they were accepted by the respondents without any objection. The respondents are aware of the revised terms and conditions of insurance policy. The District Forum has no jurisdiction to entertain the complaint as no cause of action for filing complaint occurred within its jurisdiction at Hyderabad. The policy was renewed at the branch office at Nizamabad and the claim of the respondents was rejected by the branch office, Nizamabad. The District Forum at Nizamabad has jurisdiction to entertain the complaint.
12.The point for consideration is whether the order of the District Forum suffers from mis-appreciation of facts or law ?
13.The issuance of insurance policy bearing No. 551302/48/09/8500000907 in the year 2004 and it being renewed from year to year till 2010 without any break or interruption, the second respondent suffering from psychotic disorder viz., paranoid Schizophrenia and her undergoing treatment therefor as also settlement of the claim thereof, have not been under any dispute between the parties. The second respondent was hospitalized with the same illness i.e, Paranoid schizophrenia and she was treated as inpatient in Asha Hospital from 16.606.2010 to 28.06.2010.
14. The claim submitted for reimbursement of medical expenditure incurred by the second respondent for treatment of psychotic disorder in Sridhar Nursing Home was settled by the first appellant through their TPA . The first appellant repudiated the claim submitted relating to the expenditure incurred of Rs.29,772/- for the treatment of the second respondent in Asha Hospital, Hyderabad from 15.06.2010 to 28.06.2010 on the premise that the revised terms of the insurance policy excluded coverage of psychiatric and psychosomatic disorders which the second respondent was suffering from for a period of five years.
15. The learned counsel for the appellants has contended that the direction for renewal of the insurance policy on the basis of the original terms of the insurance policy is arbitrary and the terms of the insurance policy were revised in 2007 whereas the respondents questioned the same in 2013 by filing CCNo.231 of 2013. In other words he challenged the order of the District Forum on the ground that the complaint is not filed within the period of limitation and the claim cannot be settled basing on the terms of the insurance policy dated 06.07.2010.
16. The appellants had settled the claim filed earlier for reimbursement of the amount incurred for treatment of paranoid schizophrenia. The appellants had not raised the plea of limitation or application of revised terms of the insurance policy. The appellant no.1 had complied with the order passed by the District Forum-II, Hyderabad. The first respondent has stated in his affidavit filed in I.A.No.2997 of 2014 before this Commission that the appellant no.1 had settled the claim in terms of the order of the District Forum in CC 455 of 2012 and the appellant had not raised any objection nor did it file appeal against the order of the District Forum. He has stated:
It is submitted that in a quite similar case where the petitioners company endeavored to evade their liability to cover the original policy referred risk to the Respondents herein, we have filed C.C. No. 18 of 2011 in the Honble District Consumer Disputes Redressal Forum II against the same Petitioners herein and the said case was ordered in our favour on 30/09/2013. The order at question in this Appeals in almost akin to the said order. The above said order dated 30/09/2013 rendered in CC No. 18 of 2011 was compiled by the Petitioners herein and it became final by depositing Rs.25,692/- though pay order No. 192376 Dated ; 10/04/2012 in E.A. No. 18 of 2013. On 14/05/2013 the Honble District Consumer Disputes Redressal Forum II at Hyderabad made a docket order in E.A. 18 of 2013 O.P. Deposited the entire amount with interest hence E. P. is closed. Petitioner is liberty to draw the amount after giving notice to other side.
Thus, the appellants cannot say that the revised terms of Insurance policy only are applicable to the coverage of risk relating to psychiatric or psychosomatic disorders. We find substance in the contention of the respondents that no endorsement to the effect is made in the cover notes issued by the first appellant and they establish that the insurance policy was renewed as per the terms and conditions of proposal form and declaration dated 12.3.2004 . In the first page of the cover note the exclusion column indicates none of the exclusions.
17. In Dr. T. Suresh Vs. oriental Insurance Company Limited reported in 2010 (1) ALD 536, the Honble High Court of Andhra Pradesh had an occasion to consider application of terms of the original policy to the period during which it has been renewed year after year. The High Court held that any change of terms of the insurance policy which is renewed regularly would not apply and it is the terms and conditions of the original policy would be in the operation of the field. The High Court observed :
The very first sentence gives an indication that in cases the premium is paid without delay, renewal becomes a matter of course. It is not alleged that the petitioner delayed the payment of premium at any pint of time. Once the policy was taken and it is being renewed from time to time. it virtually becomes a continues phenomenon, and any change as to the coverage that takes place in between, would not apply to the policy holder. The change, as regards coverage, may apply t those persons who take out a policy for the first time or where, their existing policy is elapsed and a necessity has arisen to take out a fresh policy, after it.
For the foregoing reasons, the writ petition is allowed directing that (a) the petitioner shall be entitled for reimbursement for the diseases that are included in the policy taken out by him n 21.03.200, and that exclusion of any disease from the list does not affect the rights of the petitioner to claim reimbursement ; (b) The petitioner shall be entitled for the renewal is paid within the stipulated time.
This however, shall be subject to the right of the respondents to refuse the renewal on any other grounds that are available for them in law. There shall be no order as to costs
18. The appellant honoured the claim for reimbursement of medical expenditure incurred for treatment of paranoid schizophrenia of the second respondent during subsistence of the renewed Mediclaim Insurance Policy. In the aforementioned decision, it was held that any modification of terms of insurance policy during its renewal made from time to time will not have application to the claim which has to be processed basing on the terms of the insurance policy issued for the first time. Thus, the appellant is estopped from contending that the disease and treatment thereof, viz. paranoid schizophrenia is excluded from the scope of risk by the revised terms of the insurance policy.
19. The learned counsel for the appellant-insurance company has contended that the District Forum has no territorial jurisdiction to entertain the complaint and it is the District Forum Nizamabad within whose jurisdiction the branch office of the Insurance Company which issued the insurance policy has been carrying on its business, alone can try the complaint. He has placed reliance on the decision in Sony Surgical vs National Insurance Company Ltd (2010)1 SCC 135 and Union Bank of India vs Seppy rally OY CDJ 1999 SC 582. The respondents contended that the claim was repudiated by the second appellant at Hyderabad and they had paid the premium regularly through demand draft/cheque at Hyderabad and thus the District Forum-II has jurisdiction to try the matter.
20. The Territorial Jurisdiction of a court is its authority over certain territory or geographical area. Sections 16 to 18 of CPC deal with the jurisdiction of the courts in respect of the suits relating to immovable properties and section 19 of CPC provides for the jurisdiction of the court for institution of suits in relation to the movable property while section 20 of CPC decides the jurisdiction of the court in relation to the place where the defendant resides. Section 11(2) (a) of the C.P.Act confers jurisdiction on the Consumer Fora providing for institution of complaint within whose jurisdiction the opposite party or each of the opposite parties (at the time of institution of the complaint) reside, carries on business or has a branch office or personally works for gain or cause of action wholly or in part arises. Section 11(2) of the Consumer Protection Act reads as under:
11. Jurisdiction of the District Forum.(1) Subject to the other provisions of this Act, the District Forum shall have jurisdiction to entertain complaints where the value of the goods or services and the compensation, if any, claimed ''does not exceed rupees twenty lakhs.
(2) A complaint shall be instituted in a District Forum within the local limits of whose jurisdiction,
(a)the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or carries on business or has a branch office or personally works for gain, or
(b)any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or carries on business or has a branch office, or personally works for gain, provided that in such case either the permission of the District Forum is given, or the opposite parties who do not reside, or carry on business or have a branch office, or personally work for gain, as the case may be, acquiesce in such institution; or
(c) the cause of action, wholly or in part, arises.
21. The second appellant is the intermediary who would decide as to whether the claim can be repudiated or settled. Though the final decision making power vest with the first appellant insurance company, it is the second appellant in effect plays vital role in claim settlement and in case of cashless treatment, it is the decision of the second appellant that would end in refusal or acceptance of the liability of the first appellant. The second appellant carries on its business at Hyderabad and it had processed the claim at Hyderabad and opined that the claim is not payable in view of exclusionary terms of the renewed insurance policy. Thus, not only one of the opposite parties resides within the jurisdiction of the District Forum, Hyderabad, part of cause of action arose at Hyderabad. Therefore, it cannot be said that the District Forum has no territorial jurisdiction to entertain the complaint.
22. In Sony surgical (supra), the Honble Supreme Court was considering the jurisdiction of the Forum in respect of dispute relating to repudiation of claim arising out of damage caused to the insured machinery on account of Fire Accident. The Supreme Court held that the District Forum within whose jurisdiction the branch office of the insurance company issued the insurance policy will have territorial jurisdiction. There was no occasion for the Apex Court to consider jurisdiction of the Forum within whose jurisdiction one of the opposite parties reside and part of cause of action arose as in that case there was no Third Party Administrator as in the instant case.
23 Union Bank of India(supra) is a case wherein the question that fell for consideration of the Supreme Court was whether there was any deficiency in service on the part of the Bank and whether cause of action arose within the jurisdiction of Delhi State Commission. M/s Dany Dairy and Food Engineers Ltd entered into agreement with the complainant for supply for evaporator systems worth of Rs.25,98,473/- and under the agreement, the complainant was to make 100% advance payment to M/s Dany Dairy and Food Engineers Ltd on the condition of M/s Dany Dairy and Food Engineers Ltd furnishing bank guarantee.
24 M/s Dany Dairy and Food Engineers Ltd was carrying on its business operations at at Saharanpur in Utter Pradesh. On request of M/s Dany Dairy and Food Engineers Ltd, the Union Bank of India, Saharanpur branch gave bank guarantee for a sum of Rs.25,98,475/- on 19.12.1989 in favour of the complainant and the bank guarantee was reduced on 14.08.1989 to Rs.10,53,735/-.On invocation of the bank guarantee, the Bank sought for clarification from M/s Dany Dairy and Food Engineers Ltd for payment of the amount and thereafter the Bank sought for permission from RBI to pay the amount in foreign currency. Attributing negligence to the Bank, the complainant filed the complaint on the premise of delay on the part of the Bank.
25 The Supreme Court held that there was no negligence on the part of the Bank in making payment of bank guarantee and it held that even if the complainant suffered any loss it was not on account of any negligence of the Bank.In regard to jurisdiction of the State Commission, it was held that M/s Dany Dairy and Food Engineers Ltd approached Saharanpur Branch of the Bank to provide bank guaranteed at Saharanpur and the bank guarantee was invoked at Saharanpur and payment was made by Saharanpur branch of the Bank which is situated in Utter Pradesh and thus no part of cause of action arose in Delhi.
26. As mentioned above, the facts of the cases and those of the case on hand are 26different. The second appellant who is the third party administrator and the agent for the purpose of the insurance contract has been carrying on its business at Hyderabad and it repudiated the claim at Hyderabad as also it has been carrying on its business at Hyderabad. Therefore, the decisions are of no assistance to the case of the appellant-insurance company. We do not find any infirmity in the order of the District Forum. As such the appeal is liable to be dismissed.
27 In the result, both appeals are dismissed confirming the order of the District Forum. There shall be no separate order as to costs. Time for compliance four weeks.
PRESIDENT MEMBER DATED : 09 .06.2014.