State Consumer Disputes Redressal Commission
Mr. Rajiv Sharma vs Religare Health Insurance Com.Ltd on 11 October, 2023
FA/118/2020 D.O.D.: 11.10.2023
MR. RAJIV SHARMA VS. RELIGARE HEALTH INSURANCE CO. LTD.
IN THE DELHI STATE CONSUMER DISPUTES REDRESSAL
COMMISSION
Date of Institution:24.09.2020
Date of Hearing: 10.05.2023
Date of Decision: 11.10.2023
FIRST APPEAL NO. -118/2020
IN THE MATTER OF
MR. RAJIV SHARMA,
S/O LATE MR. P.C. SHARMA,
R/O C-702, GEETANJALI APARTMENT,
KARKARDOOMA, NEW DELHI-110092.
(Through: Mr. Masood Hussain, Advocate)
...Appellant
VERSUS
RELIGARE HEALTH INSURANCE CO. LTD.,
Regd. Office: D-3, P3B, District Centre,
Saket, New Delhi-110017.
(Through: Mr. Sanjay K. Chadda, Advocate)
...Respondent
ALLOWED PAGE 1 OF 13
FA/118/2020 D.O.D.: 11.10.2023
MR. RAJIV SHARMA VS. RELIGARE HEALTH INSURANCE CO. LTD.
CORAM:
HON'BLE JUSTICE SANGITA DHINGRA SEHGAL (PRESIDENT)
HON'BLE MS. PINKI, MEMBER (JUDICIAL)
HO'BLE MR. J.P. AGRAWAL, MEMBER (GENERAL)
Present: Mr. Subodh Jha, counsel for the Appellant.
None for the Respondent.
PER: HON'BLE JUSTICE SANGITA DHINGRA SEHGAL,
PRESIDENT
JUDGMENT
1. The brief facts of the case as per the District Commission record are:
"1. As stated the case of the complainant in nutshell is that the complainant purchased an Insurance Policy on 31.12.15 from Religare Health Insurance Company Ltd. hereinafter referred to as OP. The said policy was issued for the period from 30.12.15 to 29.12.16 and providing coverage upto Rs.8,00,000/-.
1. It is next averred that on 08.03.2016 the complainant got ill and was admitted in National Hospital Bhopal due to back and chest pain. Thereafter, he was referred to Max Hospital Saket New Delhi for further evaluation and management where he was operated on 16.03.2016 and was discharged from the hospital on 26.03.2016. Pursuant to the treatment the complainant filed the claim for medical reimbursement amounting to Rs.6.38 lakhs on 06.05.2016 along with the Hospital charges and Medicine bills. After consistent follow up, the complainant was informed by OP on 11.05.2016 that his claim has been rejected on account of non-disclosure of material facts/ pre-existing ailments at the time of ALLOWED PAGE 2 OF 13 FA/118/2020 D.O.D.: 11.10.2023 MR. RAJIV SHARMA VS. RELIGARE HEALTH INSURANCE CO. LTD.
proposal. It is averred that the complainant clarified to the OP that he had no pre-existing ailment or disease prior to the said treatment taken in the hospital. Despite reminders and follow-ups the claim of the complainant was finally rejected on 20.06 2016 without any reasonable ground.
2. Aggrieved, the complainant approached this Forum with the prayer that OP be directed to pay the complainant amount of Rs.6.38 lacs along with interest @18% PA from the date of due till realization and to pay a sum of Rs.1,00,000/- towards harassment and mental agony and Rs.25,000/- towards cost of litigation."
2. The District Commission after taking into consideration the material available on record passed the order dated 06.02.2020, whereby it held as under:
"On perusal of the pleadings it is noticed that complainant has been denying the fact that he had Hypertension and Diabetes. Rather, after having received the repudiation letter from OP, complainant again stated that he had no pre-existing disease. We are of the opinion that the complainant's stand in the complaint is apparently false as during his treatment in Bhopal and Max Hospital he had himself disclosed that he had pre-existing ailments and was taking medicine for the same. Complainant in his pleadings had made false assertions and is found to be cooking up stories. The legal notice sent by the complainant through his counsel also states that he was neither suffering from hypertension nor and diabetes.
Further in rejoinder the complainant has stated that he signed a blank proposal form which was subsequently filled up by Executive of OP. This Forum is the opinion that the complainant is trying to wriggle out of the signed contract by saying that he had left it blank. No prudent man would sign ALLOWED PAGE 3 OF 13 FA/118/2020 D.O.D.: 11.10.2023 MR. RAJIV SHARMA VS. RELIGARE HEALTH INSURANCE CO. LTD.
blank documents. By leaving the document blank he has given an authority to OP to fill in the blanks and by signing the documents, he is now bound by the contract arrived at.
There is no denying the fact that the Contracts of Insurance is contract of Uberrimaefidei, and by not declaring correct and accurate information even when it is specifically asked complainant is guilty of breach of the principle of utmost good faith. In this regard, the apex court in Satwant Kaur Sandhu vs. New India Assurance Co. Ltd. (2009)8 SCC 316(2009) 8 SCC 316, it has been observed by the Supreme Court that the expression "material fact is to be understood in general terms to mean as any fact which would influence the judgment of a prudent Insurer, in deciding whether to accept the risk or not. If the proposer has knowledge of such fact, he is obliged to disclose it particularly while answering questions in the proposal form. Any inaccurate answer will entitle the Insurer to repudiate their liability because there is clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance, which is based on the principle of utmost faith uberrima fides. Good faith forbids either party from non-disclosure of the facts which the party privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary. (See: United India Insurance Co. Ltd. Vs. M.K.J. Corporation [(1996) 6 SCC 428].
In Subinoy Majumdar vs. Life Insurance Corporation pronounced in May, 2016 while uploading the orders of the State Commission, the Hon'ble National Commission has relied on the judgment of Satwant Kaur Sandhu. The essence of judgment is that irrespective of the fact that some diseases like Diabetes are attributed to life style of a person but if they are not disclosed at the time of taking the policy and stand material to the policy, the insurance company can repudiate ALLOWED PAGE 4 OF 13 FA/118/2020 D.O.D.: 11.10.2023 MR. RAJIV SHARMA VS. RELIGARE HEALTH INSURANCE CO. LTD.
the claim on the ground of non-disclosure and the same cannot be held as a deficiency in service.
Sequel to the above discussion, we are of the view that OP is justified in repudiating the claim and have not committed any deficiency in service in doing so. Resultantly the complaint is dismissed with no order as to costs."
3. Aggrieved by the aforesaid order of the District Commission, the Appellant/Complainant has preferred the present appeal contending that the District Commission has failed to appreciate the documents produced before that Commission. The Appellant further submitted that the Respondent company is not justified in repudiating the claim of the Appellant on the basis of pre-existing disease as the same has no connection with the treatment taken by the Appellant. Pressing the aforesaid contention, the Appellant prayed for setting aside the order of the District Commission.
4. The Respondent, on the other hand has failed to file the reply to present Appeal till date.
5. We have perused the material available on record and heard the counsel appeared on behalf of the Appellant.
6. The main question of consideration before us is whether the Respondent is justified in repudiating the claim of the Appellant on the ground that the Appellant had suffered from pre-existing disease while getting insured against the said policy.
7. Perusal of record shows that the Appellant was admitted to the National Hospital Bhopal due to sudden pain in chest and back and got discharged from the said Hospital on 12.03.2016 and thereafter referred to Max Hospital Saket, New Delhi for further evaluation and management under the care and supervision of Dr. Ajay Lall on account of thick pus in the ALLOWED PAGE 5 OF 13 FA/118/2020 D.O.D.: 11.10.2023 MR. RAJIV SHARMA VS. RELIGARE HEALTH INSURANCE CO. LTD.
chest (Empyema) and was operated for the same on 16.03.2016. Further, the Appellant has sent the hand written declaration issued by the treating doctor which reflects that the operation conducted by the treating doctor has no connection with the pre-existing condition. The said declaration has been reproduced below for the ready reference herein:
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MR. RAJIV SHARMA VS. RELIGARE HEALTH INSURANCE CO. LTD.
8. Moreover, on the concept, meaning and import of word disease, pre-
existing disease in reference to medical insurance policy, this Commission has drawn following ten conclusions in a highly extensive, dissecting manner in their decision in First Appeal no. 482 of 2005 titled as Pradeep Kumar Garg Vs. National Insurance Co. Ltd. decided on 01.08.2008. These are as under:
a. Disease means a serious derangement of health or chronic deep-seated disease frequently one that is ultimately fatal for which an insured must have been hospitalized or operated upon in the near proximity of obtaining the mediclaim policy.
b. Such a disease should not only be existing at the time of taking the policy but also should have existed in the near proximity. If the insured had been hospitalized or operated upon for the said disease in the near past, say, six months or a year he is supposed to disclose the said fact to rule out the failure of his claim on the ground of concealment of information as to pre-existing disease. c. Malaise of hypertension, diabetes, occasional pain, cold, headache, arthritis and the like in the body are normal wear and tear of modern day life which is full of tension at the place of work, in or out of the house and are controllable on day to day basis by standard medication and cannot be used as concealment of pre-existing disease for repudiation of the insurance claim unless an insured in the near proximity of taking of the policy is hospitalized or operated upon for the treatment of these diseases or any other disease.
d. If insured had been even otherwise living normal and healthy life and attending to his duties and daily chores like any other person and is not declared as a diseased person as referred above he cannot be held guilty for concealment of any disease, the medical terminology of which is even not known to an educated person unless he is hospitalized and operated upon for a particular disease in the near proximity of date of insurance policy say few days or months.
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MR. RAJIV SHARMA VS. RELIGARE HEALTH INSURANCE CO. LTD.
e. Disease that can be easily detected by subjecting the insured to basic tests like blood tests, ECG etc. the insured is not supposed to disclose such disease because of otherwise leading a normal and healthy life and cannot be branded as diseased person.
f. Insurance company cannot take advantage of its act of omission and commission as it is under obligation to ensure before issuing medi-claim policy whether a person is fit to be insured or not. It appears that insurance companies don't discharge this obligation as half of the population is suffering from such malaises and they would be left with no or very little business.
Thus any attempt on the part of the insurer to repudiate the claim for such non-disclosure is not permissible, nor is exclusion clause invokable.
g. Claim of any insured should not be cannot be repudiated by taking a clue or remote reference to any so called disease from the discharge summary of the insured had concealed his hospitalisation or operation for the said disease undertaken in the reasonable near proximity as referred above.
h. Day to day history or history of several years of some or the other physical problem one may face occasionally without having landed for hospitalisation or operation for the disease cannot be used for repudiating the claim. For instance an insured had suffered from a particular disease for which he was hospitalised or operated upon 5, 10 to 20 years ago and since then had been living healthy and normal life cannot be accused of concealment of pre- existing disease while taking mediclaim policy as after being cured of the disease, he does not suffer from any disease much less the pre-existing disease while taking mediclaim policy as after being cured of the disease, he does not suffer from any disease much less the pre-existing disease.
i. For instance to pay that insured has concealed the fact that he was having pain in the chest off and on for years but has never diagnosed or operated upon for heart disease but suddenly lands up in the hospital for the said ALLOWED PAGE 8 OF 13 FA/118/2020 D.O.D.: 11.10.2023 MR. RAJIV SHARMA VS. RELIGARE HEALTH INSURANCE CO. LTD.
purpose and therefore is disentitled for claim bares dubious design of the insurer to defeat the rightful claim of the insured on flimsy ground. Instances are not rare where people suffer a massive attack without having even been hospitalised or operated upon at any age say for 20 years or so.
Non-instance of hospitalisation/or operation for disease that too in the reasonable proximity of the date of mediclaim policy is the only ground on which insured claim can be repudiated and on no other ground."
9. This Commission has taken a view in that case that unless and until a person is hospitalised or undergoes operation for a particular disease in the near proximity of obtaining insurance policy or any disease for which he has never been hospitalised or undergone operation is not a pre-
existing disease. If a person conceals the factum of his hospitalisation of a particular disease or operation undergone by him in the near proximity of obtaining the insurance policy, only then it can be termed a concealment of factum of disease and doctrine of good faith under Section 45 of the Insurance Act can then alone be pressed in by Insurance company and not otherwise. Doctrine of good faith is two way traffic and not a one way traffic. If the Insurance Company takes benefit of doctrine of good faith, then they have to accept whatever the insured declares and should not subject the insured to medical test and get certificate from the doctor on the panel that the insured possesses sound and good health and is entitled to medi-claim insurance policy. Such a certificate will be meaningless and of no relevance as to the state of health of a person.
10. We additionally deem it appropriate to refer to Revision Petition No. 3557 of 2013 titled as "Sunil Kumar Sharma vs. TATA AIG Life Insurance Company and Ors" decided on 01.03.2021, wherein the ALLOWED PAGE 9 OF 13 FA/118/2020 D.O.D.: 11.10.2023 MR. RAJIV SHARMA VS. RELIGARE HEALTH INSURANCE CO. LTD.
Hon'ble National Commission has dealt the issue of pre existing disease and held as follows:
"14. Moreover the claim had been repudiated only on the ground that the insured was suffering from diabetes for a long time. So far as life style diseases like diabetes and high blood pressure are concerned, Hon'ble High Court of Delhi in Hari Om Agarwal Vs. Oriental Insurance Co. Ltd., W.P.(C) No. 656 of 2007, decided on 17.09.2007 held as under:
"Insurance-Mediclaim-Reimbursement-Present Petition filed for appropriate directions to respondent to reimburse expenses incurred by him for his medical treatment, in accordance with policy of insurance-Held, there is no dispute that diabetes was a condition at time of submission of proposal, so was hyper tension-Petitioner was advised to undergo ECG, which he did-Insurer accepted proposal and issued cover note-It is universally known that hypertension and diabetes can lead to a host of ailments, such as stroke, cardiac disease, renal failure, liver complications depending upon varied factors-That implies that there is probability of such ailments, equally they can arise in non-diabetics or those without hypertension-It would be apparent that giving a textual effect to Clause 4.1 of policy would in most such cases render mediclaim cover meaningless-Policy would be reduced to a contract with no content, in event of happening of contingency-Therefore Clause 4.1 of policy cannot be allowed to override insurer's primary liability-Main purpose rule would have to be pressed into service-Insurer renewed policy after petitioner underwent CABG procedure- Therefore refusal by insurer to process and reimburse petitioner's claim is arbitrary and unreasonable-As a state agency, it has to set standards of model behaviour; its attitude here has displayed a contrary tendency-Therefore direction issued to respondent to process petitioner's claim, and ensure that he is reimbursed for procedure undergone ALLOWED PAGE 10 OF 13 FA/118/2020 D.O.D.: 11.10.2023 MR. RAJIV SHARMA VS. RELIGARE HEALTH INSURANCE CO. LTD.
by him according to claim lodged with it, within six weeks and petition allowed."
15. In RP No. 4461 of 2012, Neelam Chopra Vs. Life Insurance Corporation of India & Ors., decided on 08.10.2018, (NC), it was held that:
"11. From the above, it is clear that the insurance claim cannot be denied on the ground of these life style diseases that are so common. However, it does not give any right to the person insured to suppress information in respect of such diseases. The person insured may suffer consequences in terms of the reduced claims.
14. Moreover, the non-disclosure of information in respect of this life style disease of diabetes, will not totally disentitle the complainant for indemnification of the claim in the light of the judgment of Hon'ble High Court of Delhi in Hari Om Agarwal Vs. Oriental Insurance Co. Ltd., (supra)."
16. Based on the above discussion, I am of the opinion that the Insurance Company had not been able to prove beyond doubt that the Complainant was suffering from diabetes before filing of the proposal form. It is also to be noted that the Insurance Company had given Insurance to a person of 66 years of age without any preliminary medical examination which could have definitely revealed whether the proposer was suffering from diabetes or not. It is commonly known that a person of 66 years of age has a high probability of suffering from common lifestyle diseases like diabetes and hypertension. If the company is ready to take the risk at this age of the proposer, without any preliminary medical examination, then the company should be ready to honour the claim also because the chances of death of such persons are more during the currency of the Policy."
11. From the aforesaid settled law, it is clear that the common lifestyle disease like diabetes and hypertension, cannot be treated as pre existing ALLOWED PAGE 11 OF 13 FA/118/2020 D.O.D.: 11.10.2023 MR. RAJIV SHARMA VS. RELIGARE HEALTH INSURANCE CO. LTD.
diseases, therefore, cannot be a ground of repudiation of the claim by Insurance companies. Returning to the facts of the present case, the Respondent has repudiated the claim of the Appellant on the basis of the common lifestyle disease i.e. Diabetes and hypertension.
12. Further, it is well settled law that the Insurance company before issuing the policy should have examined the person through medical tests in order to check whether the person is suffering from any pre existing diseases. However, in present case, the Respondent has failed to show any evidence that any medical tests or examination was done, before issuing the said policy in question.
13. From the aforesaid discussion, it is clear that the Respondent was not justified in repudiating the claim of the Appellant on the basis of Pre- Existing Disease.
14. Consequently, we hold that the District Commission erred in dismissing the complaint of the Appellant on the ground that there is no deficiency on part of the Respondent. Therefore, we set aside the order dated 06.02.2020 passed by the District Consumer Disputes Redressal Commission-II, Udyog Sadan, New Delhi - 110016.
15. Keeping in view the facts and circumstances of the present case, the Respondents are directed to pay a sum of Rs. 6,38,000/- (Cost of Medical Expenses) to the Appellant along with simple interest @ 6% p.a. calculated from 06.05.2016 (being the date on which the said claim of the Appellant was repudiated) till 11.10.2023 (being the date of the present judgment).
16. The directions mentioned in para 15 shall be complied by the Respondent within two months from the date of Judgment. In case of failure to ALLOWED PAGE 12 OF 13 FA/118/2020 D.O.D.: 11.10.2023 MR. RAJIV SHARMA VS. RELIGARE HEALTH INSURANCE CO. LTD.
comply with the same within two months, the entire amount would entail a penalty of 9% p.a. till the actual realization of amount.
17. Application(s) pending, if any, stands disposed of in terms of the aforesaid judgment.
18. The judgment be uploaded forthwith on the website of the commission for the perusal of the parties.
19. File be consigned to record room along with a copy of this Judgment.
(JUSTICE SANGITA DHINGRA SEHGAL) PRESIDENT (PINKI) MEMBER (JUDICIAL) (J.P. AGRAWAL) MEMBER (GENERAL) Pronounced On:
11.10.2023 ALLOWED PAGE 13 OF 13