National Consumer Disputes Redressal
National Insurance Co. Ltd. vs Krishna Devi & 4 Ors. on 27 February, 2015
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 406 OF 2013 (Against the Order dated 06/03/2013 in Complaint No. 59/2012 of the State Commission Chandigarh) 1. NATIONAL INSURANCE CO. LTD. DELHI REGIONAL OFFICE-I, JEEVAN BHARATI, TOWER-II, LEVEL-IV, 124, CONNAUGHT CIRCUS, NEW DELHI-110001 ...........Appellant(s) Versus 1. KRISHNA DEVI & 4 ORS. W/O. SH. SUDESH KUMAR, R/O. H NO. 275-4, GAUSHALA ROAD, WARD NO. 4, BUDHLADA, MANSA 2. M/S. KARVAT TRAVEL SERVICES PVT. LTD., Cabin No. 302, 3rd Floor, SCO No. 60-62, Sector-17 CHANDIGARH 3. M/S. KARVAT TRAVEL SERVICES PVT. LTD., 26-A, Madhu Estate, 1st Floor, Pandurang Budhakar Marg, Opp. Century Mills Worly Mumbai - 400 013 4. HERITAGE HEALTH TPA PVT. LTD. 1102, RAHEJA CHAMBERS, FREE PRESS JOURNAM ROAD, NARIMAN POINT MUMBAI 5. CORRIS-MIAMI-USA 11900, BISCAYNE BLBD # 803, MIAMI FL33181, UNITED STATES OF AMERICA, ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE D.K. JAIN, PRESIDENT HON'BLE MR. VINAY KUMAR, MEMBER HON'BLE MRS. M. SHREESHA, MEMBER For the Appellant : For the Appellant :Dr. Sushil Kumar Gupta, Advocate For the Respondent : For the Respondents :Mr. Akash Tyagi, Advocate for R-1 For other Respondents : N E M O Dated : 27 Feb 2015 ORDER D.K. JAIN, J., PRESIDENT Delay condoned.
This First Appeal, under Section 19 of the Consumer Protection Act, 1986 (for short "the Act"), has been filed by the National Insurance Company Ltd., (for short "the Insurance Company") against order dated 06.03.2013, passed by the State Consumer Disputes Redressal Commission, UT Chandigarh (for short "the State Commission"), in Complaint Case No. 59 of 2012. By the impugned order, the State Commission, while dismissing the Complaint against Opposite Parties No. 1, 2, 4 and 5, has directed Opposite Party No.3, i.e. the Insurance Company to pay to Respondent No.1/Complainant :
(i) US$ 56700.89, (₹28,35,044.50) along with interest @9% per annum from 03.08.2012, the date of repudiation of the claim, till realization;
(ii) ₹1,00,000/- as compensation for mental agony and physical harassment; and (iii) ₹20,000/- as litigation costs.
While granting 60 days time to the Insurance Company to comply with the aforesaid directions, the State Commission has further directed that, in case, it fails to pay the awarded amounts to the Complainant within the time granted, the amount mentioned at direction No. (i) above shall carry interest @ 12% per annum, instead of 9%, from the date of repudiation of the claim till realization and the amount mentioned at direction No. (ii) above shall carry interest @ 12% per annum for the period of default till realization.
2. The facts, in brief, giving rise to the present Appeal are as follows:
The Complainant was to visit the United State of America (USA) in the month of November/December, 2011. Before taking a mediclaim policy, she made inquiries from Karvat Travel Services Pvt. Ltd. at Chandigarh, (for short "Karvat") Opposite Party No.1, on whose behalf, one Piyush Kaushik sent an email dated 15.11.2011 to the Complainant, offering her certain policies. The Complainant opted for the Group Overseas Travel Insurance Policy and paid a sum of ₹16,345/- as premium against Invoice No. 498311 dated 13.12.2011. On receiving the said amount, Karvat issued a letter dated 13.12.2011, to the Complainant, informing her that apart from other benefits as their "privileged" TrawellTag member, she would also get an overseas mediclaim policy, underwritten by National Insurance Company Ltd; the Petitioner herein. Policy cover, issued by the Insurance Company, was also forwarded with the letter. Since the particulars on the cover have material bearing on the main issue involved in the case, the same are reproduced below:-
Customer Name Krishna Devi Telephone Nos.0
Home Address H. No. 275/4, Gaushala Road, Ward No. 4, Budh Lada, Distt. Mansa - 151502.
TrawellTag Number 7720644 TrawellTag Assist Number 110060020150 Date of issue:
13-12-2011 Insurance Policy No. 251100/48/11/0570000017/NR/PB/ BRCHD/piyush/NR/PB/BRCDH/60020150 Trawelltag No. 7720644 Authentication Code: 1560523900 CUSTOMER DETAILS Proper Name:
Birth Date:
Krishna Devi 17.07.1942 Passport No. E4834875 POLICY DETAILS No. of Days:
Departure Date:
Certificate Exclusions:92
15-12-2011 Not Disclosed Geographical Coverage:
Arrival Date:
Amount:
Including USA and Canada(Worldwide) 15-03-2012 16345 POLICY COVERAGE DETAILS COVERAGES (USD) DEDUCTIBLES (USD) COVERAGES (USD) DEDUCTIBLES (USD) Medical Expenses, Evacuation and Repatriation 250000 100 Emergency Dental cover 225 0 Personal Accidental Death 25000 0 Loss of Baggage (Checked in baggage) 1000 0 Delay of Baggage (More than 12Hrs) 100 0 Loss of Passport 250 25 Personal Liability 200000 100 Bounced Hotel Booking 1000 10% Hijeck Distress Allowance(Per day 50 max 6 days) 300 0 Hospital Daily Allownace Per day $ 10 100 0 AD and D Common Carrier 2500 0 Golfer Hole in One 500 0 Child Escort 1000 0
3. Part II of the policy cover, contained confirmation of availability of insurance. The material portion of the said document, on which strong reliance is placed by the Insurance Company reads as follows:
"IMPORTANT: The coverage provided is subject to the policy's Terms and conditions. Any pre-existing Medical condition/Ailments declared or undeclared will be excluded from the policy. Proposer above the age of 70, and who do not submit medical documents will get a restricted coverage as per the policy terms & conditions.
Medical & accidental coverage for insured above the age of 60 yrs is subject to per illness limit as stated in the policy terms & conditions.........."
DECLARATION: I hereby declare and warrant that all statements and information furnished in the above schedule of insurance are true and complete. If found that the said statements & information furnished/stated is incorrect or untrue in any respect or manner whatsoever, I agree and acknowledge that the insurance company shall not be liable in any manner whatsoever in respect of the insurance coverage under this policy. I have read, understood and agreed to accept the policy subject to the terms & conditions provided with the policy kit and exclusions as prescribed herein by the Insurance Company. I hereby give my consent to Kavat Travel Services Pvt. Ltd. (TrawellTag) to arrange this insurance policy on my behalf through National Insurance Company Ltd." (underlined for emphasis)
4. The policy was valid for 92 days commencing 15.12.2011. The maximum coverage for medical expenses/evacuation and repatriation in USA was US$250000. It was a cashless medical insurance policy.
5. After receiving the policy, the Complainant left for USA on 15.12.2011. Unfortunately, on 03.02.2012, she suddenly slipped from the stairs and was rushed to Scottsdale HLTH Shea-IP Hospital. She was attended to by Dr. Amar Parkash Sharma, a physician at the hospital. Her pre-operative diagnosis was "Right intertrochanteric hip fracture" and was recommended "Intramedullary rodding, right hip." The surgery was performed by Dr. John Corey on 04.02.2012. Her stay in the said hospital was from 03.02.2012 to 10.02.2012. The bill for the said procedure and hospitalization was for $56704.89. On the request of the Complainant, Dr. Amar Parkash Sharma, the consulting physician, sent an email, dated 11.02.2012, along with other necessary papers relating to her treatment to one Coris-Miami, Opposite Party No.5, in the Complaint, USA Agent of Heritage Health TPA Pvt. Ltd. (OP No.4), the local agents of the Insurance Company. However, there was no response to the said communication from the Insurance Company. On her return to India, the Complainant, vide her emails, dated 13.04.2012, 14.04.2012, 16.04.2012 and 17.04.2012 requested Opposite Parties No. 4 and 5 to reimburse the amount expended by her on treatment abroad, but the same did not evoke any response. On 25.04.2012, at the behest of Opposite Party No.4, Karvat enquired from the Complainant whether Dr. Amar Parkash Sharma (the first consultant doctor) was related to her. In response thereto, Dr. Sharma himself sent an email, dated 27.04.2012, intimating them that he was not related to her by blood. Subsequently, the Complainant was informed by Karvat, vide email dated 21.05.2012, that claim was under process. However, Opposite Party No.4, the Agent of the Insurance Company, vide letter dated 03.08.2012, curtly conveyed their inability to assist the Complainant in the matter. It was stated that since the Complainant was aunt of the wife of the attending doctor, Dr. Sharma, the claim was not admissible. Material portion of the letter of repudiation reads as under:-
"From the documents submitted with us, we learn that you suffered the following complaints during your trip abroad:-
PRESENTING COMPLAINTS : FALL RIGHT HIP PAIN DIAGNOSIS/ES : RIGHT INTERTROCH-
ANTERIC HIP FRACTURE PAST MEDICAL HISTROY : NONE POLICY EXCLUSION : PREXISTING CONDI- TION AND RELATED AILMENT.
We quote herebelow the following definitions as per the terms and conditions of the policy:
PHYSICIAN means a person legally qualified to practice in medicine or surgery including other legally qualified medical practitioner duly licensed by their respective jurisdiction which person is not a member of the insured persons' family.
We note from the claim documents that Dr. Sharma Amar Prakash was the attending physician and the insured Mrs. Krishna Devi is Dr. Sharma's wife's aunt.(sic) Since the attending doctor and insured are the member of the family we shall not consider the claim admissible.
We regret our inability to assist you in this matter." (Emphasis supplied)
6. Being aggrieved, the Complainant issued a legal notice to the Opposite Parties, challenging the repudiation of her claim, inter alia asserting that: (i) Dr. Sharma was not a member of her family; (ii) she had received only the cover note of the policy in question, in which family had not been defined, and no terms and conditions of the said policy had been furnished to her; and (iii) she was not treated by Dr. Amar Parkash Sharma but by Dr. John Corey, who had performed the surgical procedure for open reduction and internal fixation with rod placement. Having failed to elicit any response to the notice, the Complainant filed the complaint before the State Commission.
7. On evaluation of the evidence adduced by the Complainant, the Insurance Company and Karvat, by a well reasoned order, the State Commission came to the conclusion that Insurance Company was certainly deficient in rendering service to the Complainant in repudiating her claim. The State Commission rejected the stand of the Insurance Company that since the Complainant was treated by a doctor, who was a family member, the claim was not admissible, observing thus:
"12. The question arises, as to whether, repudiation of the claim of the complainant, on the ground, that Dr. Amar Parkash Sharma, being closely related to her (complainant), is legal and valid or not. As is evident, from the record, the complainant is the aunt of the wife of Dr. Amar Parkash Sharma. As stated above, Dr. Amar Parkash Sharma, did not conduct the operation of the complainant, for the fracture, she suffered, on account of fall from the staircase, in U.S.A. At the time of arguments, the terms and conditions of the Overseas Travel Insurance Policy, Annexure-AX, were produced. The definition of Physician, in Annexure-AX is given as under:-
'PHYSICIAN means a person legally qualified to practice in medicine or surgery including other legally qualified medical practitioner duly licensed by their respective jurisdiction which person is not a member of the insured persons' family.'
13. From the afore-extracted definition of Physician, it is evident, that he (Physician) should not be a member of the insured person's family. The Counsel for the complainant also produced a copy of the 'Reckoner a Guide to General Insurance' which is Annexure-AY, according to which, the family means as under:-
'FAMILY MEANS: Self, Spouse & two dependent children up-to an age of 25 years. Parents are not covered.'
14. By no stretch of imagination, it, therefore, could be said that Dr. Amar Parkash Sharma, Primary Care Physician, who only got admitted the complainant, to the hospital, aforesaid but did not conduct her operation, and, on the other hand, Dr. John Corey conducted the operation, was a member of the family of the complainant. The mere fact that the complainant is the aunt of the wife of Dr. Amar Parkash Sharma, did not bring him (Dr. Amar Parkash Sharma), within the definition of a member of her (complainant) family. Under these circumstances, the repudiation of claim of the complainant by Opposite Party No. 3, through Opposite Party No. 4, was completely illegal and invalid. The complainant is entitled to US$56,704.89, the actual expenses incurred by her, on her medical treatment aforesaid. However, the complainant, in paragraph number 26 of the complaint, has claimed US$56,700.89, which, after conversion into Indian currency @₹50/- per dollar, (as per the calculation of the complainant came to be ₹31,18,548.89Ps) in-fact ₹28,35,044.50Ps. By not making the payment of this amount, to the complainant, Opposite Party No. 3, was certainly deficient, in rendering service." (Emphasis supplied)
8. Thus, the State Commission has returned a clear finding that though the name of Dr. Amar Parkash Sharma was mentioned in the discharge summary as Primary Care Physician; in fact, the Complainant was under the treatment of Dr. John Corey, who had performed surgery on her. Holding the repudiation of the claim, preferred by the Complainant as illegal and invalid, the State Commission has partly allowed the complaint and awarded the aforestated compensation. Hence the Appeal.
9. We have heard Dr. Sushil Kumar Gupta, Ld. Counsel appearing for the Insurance Company and Mr. Akash Tyagi, Ld. Counsel for the Complainant and perused the material documents on record. In our opinion, the appeal is devoid of any substance and deserves to be dismissed.
10. As noticed above, the sole ground for repudiation of the claim for reimbursement of the expenses expended on treatment for the hip fracture, sustained on account of the fall from the stairs, was that the attending doctor viz., Dr. Amar Parkash Sharma, was the family member of the Complainant and thus, excluded from the category of a "Physician" as defined in the policy. In short, the stand of the Insurance Company was that since the Complainant was treated by a "Physician", who allegedly was her family member, as per the terms and conditions of the policy, expenditure incurred on treatment by a family member was not covered under the policy. A bare perusal of the documents, relating to the treatment of the Complainant at Scottsdale Hospital, falsifies the stand of the Insurance Company and its agent. It is manifest from the history of Complainant's illness, narrated in the "Confidential Patient Information", prepared by the Hospital, that Dr. Amar Parkash Sharma was only the Primary Care Physician and not the doctor treating her for the fracture sustained by her. Indubitably, the surgery/procedure for the hip fracture was performed by the Surgeon, Dr. John Corey and not by Dr. Amar Parkash Sharma, a Physician. Therefore, we are in complete agreement with the State Commission that, by no stretch of imagination, mere admission of the Complainant in the Hospital by Dr. Amar Parkash Sharma could be construed as treatment by a family member, falling within the ambit of excluded category of the Physician, as defined in the policy. Having realized the hollowness of the ground on which, the claim was rejected, in this appeal, the Insurance Company has attempted to justify repudiation of the claim on an absolutely new ground, viz, the Complainant being 70 years of age at the time of issue of policy, as per clauses 9 and 10 of the policy, the liability of the Insurance Company was limited to US$25000.
11. In our opinion, the stand of the Insurance Company is stated to be rejected for more than one reason. Firstly, it is settled position in law that in an appeal the parties cannot be permitted to urge new facts (see: Modern Insulators Ltd. Vs. Oriental Insurance Co. Ltd. (2000) 2 SCC 734) In the instant case, as noted above, the claim was repudiated by the Insurance Company only on the afore-stated sole ground and the said ground having failed the test of judicial scrutiny, the Insurance Company is estopped from picking up yet another ground in order to somehow vindicate its stand, more so, when the claim was considered, the terms and conditions of the policy, which are now being pressed into service, were very much within its knowledge. In its written version, there was not even a whisper of such a fact. Besides, at the relevant time, no offer was made by the Insurance Company or its agent to pay even US$25000. Secondly, it is trite law that a contract of insurance is based on the principle of utmost faith - uberrimae fidei - applicable to both parties. The doctrine not only forbids either party from non-disclosure of the facts which the parties know; it equally binds both the parties to the terms of contract drawn on the basis of the facts disclosed. In the instant case, while obtaining the policy, the Complainant disclosed her date of birth, which is recorded on the policy cover, extracted above. Thus, while issuing the policy, the Insurance Company as well as its agent (O.P No.4) were fully aware of the age of the Complainant and, if because of age factor the assured cover for Medical expenses etc. could not exceed US$25000, it was incumbent upon the Insurance Company to apprise her about it. But regretfully, the Insurance Company collected higher premium on coverage assured amount of US$250000. It is not the case of the Insurance Company that the insured had concealed her age at the time of filling up the proposal form. Unfortunately, even their Agent (O.P.No.4) who had been authorized by the Complainant to obtain policy on her behalf from the Insurance Company did not bother to explain to her that because of her age, her medical insurance cover would not exceed US$25000. Obviously, had this condition been disclosed to her, the agent would have also lost some amount of commission on account of lesser premium. It needs little emphasis that if an insured is expected to read and understand the terms and conditions mentioned in a policy, in fine print, before entering into the insurance contract, the insurer and its agent is equally obliged to carefully go through the information furnished in the proposal form and advise the insured accordingly before accepting the proposal and issuing the policy. In our view, being aware of the date of birth of the insured, it was incumbent upon the Insurance Company to apprise her about its limited liability under the policy before accepting the proposal and the premium. We are convinced that collection of excess premium from the Complainant on coverage assured amount of US$250000 and earning of higher commission by its Agent, not only tantamounts to unfair trade practice, it is equally unethical. It may not be out of place to observe at this juncture that it is high time that in a consumer oriented market, the rule of Caveat Emptor (Let the buyer beware) must give way to the rule Caveat Venditor (Let the seller beware).
12. In our opinion, therefore, in the absence of any allegation of concealment of any relevant fact, let alone a material fact, by the insured, having accepted premium on assured sum of US$250000, with full knowledge of the age of the insured, the Insurance Company was definitely deficient in rendering service to the Complainant by repudiating her claim on the afore-stated grounds.
13. For the aforegoing reasons, we uphold the impugned order and dismiss the appeal, with costs quantified at ₹50,000/-, in additional to what has been awarded by the State Commission. The amount deposited by the Insurance Company in this Commission, in terms of order dated 12.09.2013, if not already withdrawn, shall be released to Respondent No.1/Complainant forthwith. The balance amount due in terms of the order of the State Commission shall be paid to the Complainant within four weeks of the date of receipt of a copy of this order. However, the statutory deposit of ₹35,000/- shall be transferred to the Consumer Welfare Fund.
......................J D.K. JAIN PRESIDENT ...................... VINAY KUMAR MEMBER ...................... M. SHREESHA MEMBER