State Consumer Disputes Redressal Commission
Care Health Insurance Co. Ltd. vs Mrs. Adarsh Nayyar on 10 December, 2024
Additional Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH.
First Appeal No. 510 of 2022
Date of institution : 10.06.2022
Reserved on : 22.11.2024
Date of Decision : 10.12.2024
Care Health Insurance Ltd. having its Registered Office at 5th Floor,
19, Chawla House, New Place, New Delhi 110019 through its Branch
Manager.
(incorporated vide Certificate dated 19.08.2020)
(Earlier known as Religare Health Insurance Company Limited)
....Appellant/Opposite Party No.1
Versus
1. Adarsh Nayyar S/o Sh. Ramesh Nayyar R/o 26/5, Jagat Jyoti
Complex, Rani Ka Bagh, Amritsar.
....Respondent No.1/Complainant
2. Punjab National Bank through its Chairman/Managing
Director/Principal Officer Service, having its Branch Office at Rani Ka
Bagh, Amritsar.
....Respondent No.2/OP No.2
First Appeal under Section 41 of the
Consumer Protection Act, 2019 against the
order dated 11.04.2022 passed by the District
Consumer Disputes Redressal Commission,
Amritsar.
Quorum:-
Mrs. Kiran Sibal, Presiding Member
Mr. Vishav Kant Garg, Member
1) Whether Reporters of the Newspapers may be allowed to see the Judgment? Yes/No
2) To be referred to the Reporters or not? Yes/No
3) Whether judgment should be reported in the Digest? Yes/No First Appeal No. 510 of 2022 2 Present:-
For the appellant : Ms. Niharika Goel, proxy for
Sh. P.M. Goyal, Advocate
For respondent No.1 : Sh. CVS Papta, Advocate
For respondent No.2 : Ex-parte
VISHAV KANT GARG, MEMBER :
Appellant/OP No.1 i.e. Care Health Ins. Co. Ltd., has filed the present Appeal challenging the impugned order dated 11.04.2022 passed by the District Consumer Disputes Redressal Commission, Amritsar (in short, "the District Commission"), whereby the Complaint filed by the Respondent/Complainant was allowed.
2. It would be apposite to mention here that hereinafter the parties will be referred, as were arrayed before the District Commission.
3. Briefly, the facts of the case as made out by the Respondent/Complainant in the Complaint filed before the District Commission are that she had purchased the Mediclaim Insurance Policy since long by hiring the services of OP No.2-PNB. She had purchased the last policy from New India Assurance Co. Ltd., valid for the period 31.03.2019 to 30.03.2020. As on 30.03.2020, due to Covid-19 impact lockdown had been imposed in the Country, therefore, when the Complainant approached the officials of OP No.2 for the renewal of the Mediclaim Insurance Policy, they told her to come after lockdown relaxations. OP No.2 received the renewal premium of Rs.15,391/- and sent the same to OP No.1 on 28.04.2020. Inspite of receiving the said renewal premium by OP No.1, they failed to issue the Insurance Policy. Whereas OP No.1 had sent her Welcome Messages on her mobile. Later on 04.07.2020, OP No.1 had informed the Complainant about the cancellation of her request i.e. after expiry of 65 days from the date of First Appeal No. 510 of 2022 3 receiving the premium. The Complainant sent communication to the OP No.1 asking them to inform the reason for cancellation of the policy to which OP No.1 replied that there was cancellation request, upon which the policy had been cancelled. The Complainant had never sent any such request to the OP No.1. The said act of the OP No.1 unilaterally refusing to issue the Mediclaim Policy to her after receiving the premium is against the principles of natural justice.
4. Stating the act of the opposite parties to be a case of 'deficiency in service' and 'unfair trade practice', it was prayed in the Complaint that the OP No.1 be directed to issue the Insurance Policy as applied by the Complainant and also to pay compensation of Rs.4,50,000/- for suffering harassment and mental agony at the hands of OP No.1.
5. Upon issuance of notice in the Complaint, the Appellants/OP No.1 has appeared and filed its written statement stating therein that with the intention to port his current Group PNB Policy of New India Assurance Company, the Complainant has approached the office of OP No.1 for the same. However, due to Covid-19 restrictions, Branch Office of OP No.1 was not properly functional. Thereafter, the Complainant approached OP No.1 in the end of April, 2020, where she met Mr. Anil Kumar and Mr. Varinder Singh. Said officials after considering her request informed the Complainant that as she had approached very late, therefore, there are very less chances to port the said policy, which had already stood expired on 30.03.2020. Said request of the Complainant had been sent by the Branch Office of OP No.1 to the Department on 13.05.2020 to which reply had been received mentioning that 'portability cannot be allowed'. It was pleaded that as the Complainant wanted to port her policy, therefore, she was required to approach 45 days before the renewal date of the earlier policy, however, she had approached one month after the expiry of earlier First Appeal No. 510 of 2022 4 policy. As such, the request of portability of the policy had been declined and her complete premium of Rs.15,391/- had been refunded. In this regard, cancellation letter dated 06.07.2020 had been issued. Under Clause 2 of Schedule 1, the Company has no liability to issue the Insurance Policy with 'portability benefits'. There was no deficiency in service or unfair trade practice on the part of the OP No.1 as they rejected the request of the Complainant as per their rights. It was prayed that the Complaint being devoid of any merit, may be dismissed.
6. OP No.2 in its reply admitted that the Complainant had earlier purchased New India Flexi Floater Group Mediclaim Policy from The New India Assurance Company through OP No.2. The said policy was valid for the period 31.03.2019 to 30.03.2020. It was denied that the Complainant was advised on telephone to come after the relaxation of the lockdown or to port her policy with OP No.1-Company. It was pleaded that on 30.03.2020 i.e. the date of expiry of earlier policy of the Complainant, the Branches of PNB were opened. It was also pleaded that when in the month of April, 2020, the Complainant approached the OP-Bank, she was informed that tie-up of PNB with New India Assurance Co. Ltd. had been ceased by the Bank. On the request of the Complainant, officials of OP No.2 sent her premium to OP No.1. There was neither any deficiency in service nor unfair act on the part of this OP. It was prayed that the Complaint be dismissed qua OP No.1.
7. After considering the contention of the parties, the Complaint was allowed by the District Commission vide its order dated 11.04.2022. The relevant portion of said order is as under:
"13. In view of the above discussion, we allow the complaint and the opposite party is directed to release the policy for the period the complainant has made the premium amount of Rs. 15391/- on 28.04.2020 which the opposite party has cancelled on 4.7.2020 and First Appeal No. 510 of 2022 5 the said policy is deemed to be in continuous condition when the opposite party has received the premium though later on credited to the account of the complainant and the complainant is directed to make payment of premium of Rs.15,391/- to the opposite party within 15 days from the date of receipt of copy of this order and thereafter opposite party No. 1 is directed to release the policy within further period of 15 days from receipt of premium from the complainant. To meet the ends of justice, complainant is also entitled to compensation of Rs. 5000/- and litigation expenses of Rs.3000/- to the complainant which the opposite party No. 1 is liable to pay to the complainant. However, complaint against opposite party No. 2 stands dismissed as no relief is sought against opposite party No. 2..."
8. The aforesaid order has been challenged by the Appellant/OP No.1 by way of filing the present Appeal by raising a number of grounds/arguments.
9. Ms. Niharika Goel, Advocate, learned proxy Counsel for the Appellant has submitted that as the Complainant wanted to port her earlier policy with OP No.1, she had to approach atleast 45 days before the expiry of earlier policy. The Complainant had approached the OP No.1 after expiry of her earlier policy, so her request for porting her mediclaim policy with same benefits had been declined and premium had been refunded in her account. In this regard, she was informed vide letter dated 06.07.2020. It was provided under Schedule I of IRDAI (Health Insurance) Regulations, 2016 that the Insurer may refuse to offer portability if the policyholder fails to approach the new insurer at least 45 days before the premium renewal date. As per above condition, the Appellant had no liability/binding to issue the policy with portability benefits to the Complainant, who had approached after 30 days from the expiry of earlier policy. As per above Regulations, the Complainant had to approach for portability between 30.01.2020 till 15.02.2020, whereas she had approached on 28.04.2020. The District Commission while passing the First Appeal No. 510 of 2022 6 impugned order had ignored the portability guidelines and relied upon the judgments, which had been passed on different lines. It was prayed that the Appeal be accepted and the impugned order be set aside.
10. On the other hand, Sh. CVS Papta, Advocate learned Counsel for Respondent No.1 has argued that as complete lockdown has been imposed in the Country from 24.03.2020, therefore, it was not possible for the Complainant to move to the Bank at that time and renew her Health Insurance Policy. The Complainant had purchased the Mediclaim Policy from last several years and her last policy expired during the imposition of lockdown in the country, therefore, it was impossible for her to approach the Bank and renew her policy in time. When the Complainant approached officials of OP No.2-Bank, they informed her that their tie-up with The New India Assurance Co. Ltd. had ceased and now they tied up with Religare Health Insurance Co. Ltd. On their advice, the Complainant was ready to port her policy with Religare Health Insurance Co. Ltd. and deposited Rs.15,391/- as premium. After deposit of the premium, the Complainant had received welcome message on her mobile number, confirming that she had been insured. However, the Appellant/OP No.1 has failed to issue the policy cover to the Complainant and later cancelled the policy on 04.07.2020, after the lapse of 65 days. On approaching, the Appellant informed her that there was cancellation request on her part whereas the Complainant had never sent any such request to OP No.1. It was argued that during Covid-19 impact, the Government of India/IRDA relaxed many conditions to secure the insurance benefits of the Insured persons and the guidelines regarding approaching 45 days in advance for portability of the Health Insurance Policy had also been relaxed. It was binding on the Insurance Company to convey its decision within 15 days to the customer if they had rejected the First Appeal No. 510 of 2022 7 proposal of the customer whereas they took 65 days time to it. Due to said reason, the Complainant has failed to renew her earlier policy with same benefits. The District Commission has rightly concluded that as the OP No.1 had accepted the premium, they cannot deny the issuance of policy on portability basis after such a long gap. The impugned order passed by the District Commission is a well-reasoned order, clearly describing the monopoly of the Insurance Companies and prayed for affirming the same.
11. We have heard the arguments of learned Counsel for the parties and have also carefully perused the impugned order passed by the District Commission, written arguments submitted by the Respondent No. 1 and all the relevant documents available on the file. We have also gone through the judgments cited by both the parties.
12. It is not disputed fact between the parties that the Complainant had earlier insured under New India Flexi Floater Group Mediclaim Policy, valid from 31.03.2019 to 30.03.2020. It is also undisputed thing that during March, 2020, lockdown had been imposed in the country due to impact of Covid-19.
13. In the present case, the earlier policy of the Complainant had been expired on 30.03.2020, which had not been renewed by her within time. On contacting her Bank i.e. Punjab National Bank by the Complainant, she was informed that the Bank had ceased its tie-up with The New India Assurance Co. Ltd. so unable to renew her policy with that Company. On such an issue, the Complainant showed her willingness to port her policy with Religare Health Insurance (now Care Health Insurance Co. Ltd.) and deposited the premium of Rs.15,391/- with the Appellant on 28.04.2020. The Appellant had not allowed the portability of her earlier policy and rejected her request to issue the policy. Later on 06.07.2020 First Appeal No. 510 of 2022 8 (Ex.OP-1/5), the Appellant had refunded the said premium in the account of the Complainant.
14. The stand of the Appellant for rejecting her proposal is that for porting the policy, the Complainant had to apply atleast 45 days earlier before the expiry of existing policy. The Appellant after considering the proposal of the Complainant, did not found the same suitable and rejected her proposal. The said action had been taken by them as per right granted under Schedule 1 of the Insurance Regulatory and Development Authority of India (Health Insurance) Regulations, 2016.
15. The Counsel for Respondent No.1 argued that the Appellant/OP No.1 had neither immediately issued the policy to the Complainant nor informed about the cancellation of her proposal. The said act had been done by the Appellant after a lapse of 65 days on 06.07.2020. The Appellant had informed the reason of rejection of her proposal that there was cancellation request on her part. The Complainant denied that she had sent any such request to the appellant/OP No.1.
16. Now the point for consideration is as to whether the rejection of the proposal of the Complainant, by the Appellant/OP No.1 is right or not?
17. It is an admitted case of the Complainant that her earlier policy had expired on 30.03.2020 and she had applied for porting the same with the Appellant on 28.04.2020 and deposited the premium of Rs.15,391/-. The Appellant after considering her proposal, rejected the same on 06.07.2020 and refunded the premium in her account. The Appellant's stated that as per Schedule I of IRDAI (Health Insurance) Regulations, 2016, which are related to portability stated that if any policyholder wishes to port her policy to another Insurance Company, he/she can apply for the same at least 45 days but not more than 60 days, before the due date of First Appeal No. 510 of 2022 9 premium of earlier policy. The Clause-2 of Schedule-1 of the above said Regulations also provides the option to the Insurance Company not to offer the portability if policyholder fails to approach within that period. Therefore, from these Regulations, it is clear that it is the duty of the policyholder to apply at least 45 days prior to the expiry of earlier policy with the Insurance Company, if she wishes to port her earlier policy. As the said period of expiry relates to Covid-19 impact, so we are also trying to find out whether the IRDA had issued any instructions providing relaxation to the policyholders for porting the policy or not. In this way, we find that on 01.01.2020 & 11.06.2020 the IRDA had issued Guidelines on Migration and Portability of Health Insurance Policies. In the said Guidelines, under Clause No. 7, the IRDA had reduced the said period upto 30 days only i.e. before the premium renewal date of his/her existing policy. In the said Guidelines, however, option/right has been provided to the Insurer to consider even less than 30 days period, if they are willing to do so. So from these Regulations and Guidelines, it is clear that prior to expiry of the earlier policy, policyholder can apply for portability of the same but no relaxation had been provided in the case of expiry of the earlier policy. Further under Clause 9 (ii) of the said Guidelines, it was specifically suggested to the policyholder that he/she will initiate action to approach the insured to exercise migration option well before the renewal date to avoid any break in the policy coverage. Therefore, it is clear that in no circumstance, any relaxation has been provided to the policyholder to apply for portability after the expiry of his/her earlier policy. If the Complainant wanted to port his earlier policy with the policy of another Company, as per above instructions he was to apply with the said Company atleast 30 days before the expiry of the policy in existence First Appeal No. 510 of 2022 10 i.e. 30.03.2020 because 30 days before that date, no Covid restrictions were imposed in the Country.
18. Now the next point for consideration is as to whether rejection of her proposal after 65 days was negligence?
19. As it is clear that the said period relates to Covid-19 impact, therefore, during said period, the Offices had been operated with less manpower or some of the staff had worked from their Homes. So in these circumstances, the scrutiny of the proposal of the Complainant takes much time than the required time and in these circumstances we do not find any negligence or delay on the part of the Appellant in rejecting the proposal of the Respondent No.1. It is obligatory on the part of the Complainant to approach to the Appellant in advance, if she wishes to port her policy with them. Therefore, no benefit can be granted to the Respondent No.1 on this count.
20. We have gone through the impugned order and reveals that the District Commission while allowing the complaint, observed that the contention of the Appellant/OP No.1 was an afterthought that the Complainant was required to apply for portability before 45 days of the expiry of earlier policy and the Complainant had suffered loss with the rejection of her proposal form as she was in that age when the risk was high. When no instructions/guidelines of the IRDA are available by which the expired policy can be allowed to port with another Company then how the Appellant will accept her proposal. The judgments relied upon by the District Commission were on some different footings whereas the issue for consideration in the present case is different one. However, the judgment of the Hon'ble Supreme Court titled "LIC Vs. Vasireddy Comalavall Kamba and Others", AIR 1984 1014 relied upon by the Appellant's support their case wherein it was observed that only acceptance of the First Appeal No. 510 of 2022 11 premium cannot construed as acceptance of the proposal form, the same only completes when the policy was communicated to the Proposer.
21. As the Appellant/OP No.1 had dealt with the proposal form of the Complainant as per the instructions issued in IRDAI (Health Insurance) Regulations, 2016, therefore, there was no 'deficiency in service' or 'unfair trade practice' established on the part of the Appellant/OP No.1 and we hold that the proposal form of the Complainant had rightly been rejected by the Appellant-Insurance Company.
22. Keeping in view the aforesaid observations, we deem it appropriate to set-aside the impugned order passed by the District Commission. Accordingly, the present Appeal is allowed and the impugned order dated 11.04.2022 is set-aside. Consequently, the Complaint filed by the Complainant is dismissed for the reasons referred above. No order as to costs.
23. Since the main case has been disposed off, so all the pending Miscellaneous Applications, if any, are accordingly disposed off.
24. The Appellant had deposited a sum of Rs.4,000/- at the time of filing of the Appeal. Said amount, along with interest which has accrued thereon, if any, shall be remitted by the Registry to the Appellant, by way of a crossed cheque/demand draft after the expiry of limitation period in accordance with law.
25. The Appeal could not be decided within the statutory period due to heavy pendency of Court Cases.
(KIRAN SIBAL) PRESIDING MEMBER (VISHAV KANT GARG) MEMBER December 10, 2024.
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