State Consumer Disputes Redressal Commission
Oriental Insurance Company Ltd. vs Sunil Kumar on 7 April, 2017
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH.
First Appeal No.927 of 2015
Date of institution : 19.08.2015
Date of decision : 07.04.2017
The Oriental Insurance Company Ltd., Bajakhana Road, Jaitu,
District Faridkot, through Manager, OIC Ltd., Surendra Building,
SCO 109-111, Sector 17-D, Chandigarh-110017.
....Appellant/Opposite Parties
Versus
Sunil Kumar S/o Amar Nath, R/o Gali Dina Dudh Wali, Jaitu, Tehsil
Jaitu, Distt. Faridkot.
....Respondent/Complainant
First Appeal against the order dated
30.06.2015 of the District Consumer
Disputes Redressal Forum, Faridkot.
Quorum:-
Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President
Mr. Harcharan Singh Guram, Member.
Present:-
For the appellant : Sh. Deepak Chaudhary, Advocate For the respondent : Sh. Harinder Sharma, Advocate JUSTICE PARAMJEET SINGH DHALIWAL, PRESIDENT The instant appeal has been filed by the appellant/opposite parties against the order dated 30.06.2015 passed by District Consumer Disputes Redressal Forum, Faridkot (in short, "the District Forum"), whereby the complaint filed by the respondent/complainant, under Section 12 of the Consumer Protection Act, 1986, was allowed and the opposite parties were directed to pay the claim amount i.e. ₹69,269/- to the complainant, along with interest at the rate of 9% per annum from the date of lodging the claim till realization. They were further directed to pay ₹10,000/-, as compensation and ₹5,000/-, as litigation expenses. First Appeal No.927 of 2015 2
2. It would be apposite to mention that hereinafter the parties will be referred, as have been arrayed before the District Forum.
3. Detailed facts have already been given in the impugned order. However, the relevant facts for the disposal of the present appeal, in nutshell, are that the complainant purchased General Insurance Policy for ₹5,00,000/- for himself and his wife. The policy covered the medical treatment expenses of the insured persons. In August, 2014, wife of the complainant felt some problem and after diagnosing from the Beams Hospital Pvt. Ltd., Amritsar, she was found to be suffering from 'primary infertility with multiple fibroid uterus'. She underwent 'hysteroscopic Myomectomy' and since then, she is regularly taking the treatment, which is very expensive. Intimation about the diagnosis was given to the opposite parties immediately on phone. The claim form was also submitted to them in writing. The officials of the Company made inquiries and the complainant completed the formalities to recover the medical claim, as per the policy, but nothing was done. The complainant made requests to the opposite parties to do the needful, but of no use. The said policy was valid upto 02.12.2014. Feeling harassed due to non-settlement of the claim, the complainant filed the complaint before the District Forum, alleging deficiency in service and unfair trade practice on the part of the opposite parties and sought the following directions to the opposite parties: First Appeal No.927 of 2015 3
i) to pay ₹69,629/- as medical claim, along with interest at the rate of 12% per annum from the date of treatment till realization;
ii) to pay ₹20,000/-, as compensation; and
iii) to pay ₹10,000/-, as litigation expenses.
4. Upon notice, opposite parties appeared and filed reply, taking preliminary objections that complicated questions of fact and law are involved in the complaint, which cannot be decided in summary manner. The complaint is not maintainable. On merits, they admitted that "Happy Family Floater Policy" was issued in the name of the complainant and his wife. His wife was hospitalized in Beams Hospital, Amritsar from 21.08.2014 to 23.08.2014 with diagnosis of 'primary infertility with multiple fibroid uterus' and she underwent diagnostic 'hysteroscopy with laparoscopic myomectomy'. It was further pleaded that as per the exclusion clause 4.3 of the policy, the disease of the wife of the complainant does not cover the expenses on treatment of sterility, any fertility, sub-fertility and surgery of genito urinal system. Hence, the claim was not admissible. The claim of the complainant was rightly repudiated. Denying other allegations of the complaint, it was prayed that the complaint be dismissed.
5. Both the sides produced evidence in support of their respective averments before the District Forum, which after going through the same and hearing learned counsel on their behalf, allowed the complaint, vide impugned order. Hence, this appeal. First Appeal No.927 of 2015 4
6. We have heard learned counsel for the parties and have carefully gone through the records of the case.
7. Learned counsel for the appellant/opposite parties vehemently contended that the District Forum passed the impugned order, without properly appreciating the evidence on the record. As per clause 4.3 of the policy, the disease of the wife of the complainant was not covered for the treatment taken by her from Beams Hospital, Amritsar with regard to diagnostic hysteroscopy with laparoscopic myomectomy. He further contended that since the exclusion clause specifically excluded the disease of the wife of the complainant, so the claim was not payable under the policy. The claim of the complainant fell under the said exclusion clause and was rightly repudiated. The complainant was aware of the exclusion clause. Learned counsel for the opposite parties relied upon the prospectus, wherein the entire conditions have been mentioned and prayed that the appeal be allowed and the impugned order be set aside. In support of his arguments, he relied upon the following authorities:
i) General Assurance Society Ltd. v. Chandmull Jain & Another 1966 AIR (SC) 1644; and
ii) M/s BHS Industries v. Export Credit Guarantee Corp. & Anr. 2015 (3) CPJ 1;
8. On the other hand, learned counsel for the complainant contended that the terms and conditions of the policy were not explained to him. The cover note and the policy, which were issued First Appeal No.927 of 2015 5 to him, were not accompanied by any terms or conditions. Therefore, he is not bound by those terms and conditions, including exclusion clause 4.3. He further submitted that the insurance companies charge premium from the insured persons, but when their turn to pay the claim comes, they reject the claim on flimsy grounds. The wife of the complainant felt some problem and after diagnosing from the Beams Hospital Pvt. Ltd., Amritsar, she was found to be suffering from 'primary infertility with multiple fibroid uterus'. She underwent 'hysteroscopic Myomectomy' and since then, she is regularly taking the treatment. The claim with regard to medical expenses lodged in this regard was wrongly repudiated by the opposite parties, vide letter Ex.C-2. The District Forum has passed a legal and valid order and the appeal is liable to be dismissed.
9. We have given thoughtful consideration to the contentions raised by the learned counsel for the parties and have minutely scanned the entire record.
10. The only ground for repudiation of the claim of the complainant is that the disease, for which the wife of the complainant took treatment, is excluded, in view of exclusion clause 4.3 of the policy. The perusal of the District Forum's record shows that the complainant has placed on record the insurance policy Ex.C-5 to Ex.C-7. Letter of repudiation dated 08.12.2014 Ex.C-2. All the allegations of the complaint have been supported by the affidavit of the complainant Ex.C-1. The opposite parties have First Appeal No.927 of 2015 6 also placed on record affidavit of Sh. S.K. Sharma, Divisional Manager as Ex.OP-1, "Happy Family Floater Policy Schedule, Ex.OP-2 and prospectus of Mediclaim Insurance Policy Ex.OP-3. Ex.C-7 and Ex.OP-2 are the same document i.e. cover note. Perusal of these documents clearly indicates that there is no reference to the exclusion clause 4.3 therein. The same is mentioned in a separate document i.e. Prospectus Ex.OP-3, which has not been got signed from the complainant. Unless the terms and conditions of the policy are specifically explained or got signed from the insured person and other beneficiaries, the same cannot be enforced against them; as has been held in catena of judgments. Since there is categorical finding recorded by the District Forum that the terms of the policy were never read over and explained to the complainant, hence the same cannot operate against the complainant. Even in the documents Ex.C-5 to Ex.C-7, which have been issued by the insurance company, there is no reference about the alleged exclusion clause. It is settled law that while entering into a contract, if there is any exclusion clause, the same must be mentioned in the cover note and the policy. The prospectus cannot be read as a part of the cover note, unless it is specifically brought to the notice of the insured.
11. It is also relevant to mention here that Section 19 of the General Insurance Business Nationalization Act, 1972 states that it shall be the duty of every Insurance Company to carry on general First Appeal No.927 of 2015 7 insurance business so as to develop it to the best advantage of the community. The denial of medical expenses reimbursement is utterly arbitrary on the ground that disease in question was excluded as per exclusion clause. It is mere an excuse to escape liability and is not bona fide intention of the insurance company. Fairness and non-arbitrariness are considered as two immutable pillars supporting the equity principle, an unshakable threshold of State and public behavior. Any policy in the realm of insurance company should be informed, fair and non-arbitrary. When the insurance policy has exclusions/conditions to repudiate the claim or limit the liability, the same must be specifically brought to the notice of the insured and are required to be got signed to show that such exclusions and conditions have been brought to his/her notice.
12. The need for interpreting a contract always arises in two situations, (i) when a gap is needed to be filled in the contract and (ii) an ambiguity is needed to be resolved in the contract, then to find out correct intention of the contract, spirit behind it is required to be considered. Normally, the insurance policy is a contract of adhesion, in which other party is left with hardly any bargaining power as compared to the insurer. Insurance contracts are standard form contracts and are drafted by the insurance company and as such, insurance company is at higher footing than the insured. The benefit of such clause, as exclusion clause, would go to the insured, unless the same is explained in clear terms by the insurer. In such circumstances, the tribunal would be more First Appeal No.927 of 2015 8 oriented towards the interpretation, which goes against the party, who has inserted/drafted the disputed clause in the agreement/contract. The adjudicating authority is required to look into, whether the intention of the party is to exclude or limit liability has been appropriately explained to the other party or not. This Commission while interpreting insurance agreement is to honour the intention of the parties, who have signed the agreement. Even if the agreement had general exclusion/condition for misrepresentation still fraudulent misrepresentation and non- disclosure may not be there. The innocent and negligent misrepresentations are to be ignored.
13. Reliance in this respect can be placed on National Insurance Company Ltd. v. Radhey Shyam Balwada & Anr. 2014 (2) CPJ 201 (NC), in which in Para No.7 (relevant portion), it was held as follows:
"Also, there is no evidence on record to show that condition No.3.1 and the exclusion clause was explained to the complainant-insured, at the time of submission of the proposal form by him. The customer avails the Mediclaim insurance policy, with the hope that medical treatment expenses will be reimbursed by the insurer. Therefore, insurer (OP) also has duty to act in good faith, which obliges him to enter into the contract, without concealing the material fact like exclusion clause. We feel that the act of the OP is unjust and unfair towards the complainant, who took the said policy since 2003 and was renewing it from time to time, since then." First Appeal No.927 of 2015 9
14. There is no dispute to the law laid down in the authorities cited by learned counsel for the appellant. However, the ratio of the law laid down by the Hon'ble National Commission in the above noted authority fully applies to the facts and circumstances of the present case. The claim of the complainant was wrongly repudiated by the opposite parties and the District Forum has passed a well reasoned order.
15. In view of above discussion, the appeal is dismissed and the impugned order is upheld.
16. The appellant had deposited a sum of ₹25,000/- at the time of filing of the appeal. It deposited another sum of Rs.20,432/- vide receipt dated 16.09.2015, in compliance of the order dated 26.08.2015. Both these sums, along with interest which has accrued thereon, if any, be remitted by the registry to the respondent/complainant, by way of a crossed cheque/demand draft after the expiry of 45 days of the sending of certified copy of the order to them.
17. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT (HARCHARAN SINGH GURAM) MEMBER April 07, 2017.
(Gurmeet S)