National Consumer Disputes Redressal
Lic Of India & Ors. vs Pathivada Mrutyunjaya Rao on 21 October, 2011
NATIONAL CONSUMER DISPUTES REDRESSAL
COMMISSION
NEW DELHI
REVISION
PETITION NO. 2835 OF 2007
(Against order dtd. 30.04.2007 in appeal no. 351/2005
of the
State Commission, A.P.)
Life Insurance
Corporation of India & Ors.
........
Petitioner (s)
Vs.
Pathivada Mrutyunjaya Rao
........
Respondent (s)
BEFORE:
HON'BLE MR. JUSTICE
ASHOK BHAN, PRESIDENT
HONBLE MRS. VINEETA RAI,
MEMBER
For
Petitioners : Mr. Mohinder
Singh, Advocate
For
Respondent : Mr. Y. Rajagopala
Rao, Advocate with
Mr. Hitendra Nath Ratia, Advocate
Pronounced on 21st October,
2011
ORDER
PER VINEETA RAI, MEMBER The present revision has been filed by Life Insurance Corporation of India (hereinafter referred to as Petitioner No.1) and three other offices of the Petitioner/Insurance Corporation (hereinafter referred to as Petitioners No.2, 3 and 4) being aggrieved by the order of the State Consumer Disputes Redressal Commission, Andhra Pradesh (hereinafter referred to as the State Commission) in Appeal No.2144/2004 in favour of Pathivada Mrutyunjaya Rao who was the Respondent therein.
Facts Respondent/complainant had obtained an Asha Deep policy from the Petitioner No.2 (LIC of India Corporation, Andhra Pradesh) for an assured sum of Rs.1 Lac, the date of maturity being 28.02.2016. Quarterly premium was Rs.484/-. In July 1998, Respondent suffered cardiac problem and was referred to Nizams Institute of Medical Sciences, Hyderabad from 24.07.1998 to 12.08.1998 where he underwent a surgery for Coronory Ortial Canula of the heart and incurred a sum of Rs.1,28,331/- apart from sum of Rs.30,000/- towards transportation. Complainant submitted his claim to the respondent for payment of medical bills but received no response. Being aggrieved, complainant filed a complaint before the District Forum.
Petitioners No.1-3 remained ex parte before the District Forum. Petitioner No.2 filed its counter affidavit admitting the policy for the sum of Rs.1 lakh; it also admitted that the petitioner had received the letter dated 28.09.1998 informing that the respondent was operated upon at Nizams Institute of Medical Sciences, Hyderabad. Rest of the allegations were denied. According to the Petitioner/Insurance Corporation, the Discharge Summary revealed that there was Calcified congenital bicuspid aortic valve with severe Aortic Stenosis. Moderate AR NSR No. NSR NO CHF, good L.V. function and the operation was done as per Nizams institute of medical Sciences, Hyderabad is AVR with No. 21 mm Med. Tronic Valve. Since, Valvular disease of the heart as stated above was not covered under clause 11 (b) of the concerned insurance policy which only covered heart by-pass surgery therefore, the Petitioner/Insurance Corporation was not liable to reimburse the expenses incurred by the respondent and the claim was rightly repudiated.
District Forum allowed the complaint and directed the petitioner to pay the policy amount of Rs.1 lakh to the respondent together with compensation of Rs.1,000/- and costs of Rs.1,000/-.
Aggrieved by the order passed by the District Forum, petitioner filed an appeal before the State Commission. The State Commission upheld the order of the District Forum by observing as follows:
In the instant case the complainant suffered from Calcified congenital bicuspid aortic valve with severe Aortic Stenosis for which Aortic Valve replacement was done. Dr. A. N. Srinivas, M. D., D. M., Consultant Cardiologist, Apollo Hospitals, Visakapatnam has certified in Ex. A12 that Aortic Valve replacement is a kind of open heart surgery. Ex. A13 is the certificate given by Dr. B. Ram Babu, Asisstant professor in K.G.H. Hospital, Visakapatnam also stated that Aortic Valve replacement is an open heart surgery.
Taking into consideration these medical reports, we are of the considered opinion that the Opposite Parties was not justified in repudiating the claim taking umbrage under Clause 11(b) of the policy. Therefore, we see no reason to interfere with the well considered order of the District Forum and we are also of the view that the Opposite Parties are liable to pay the entire policy amount. We also note that the District Forum has not awarded any interest.
Hence, the present revision petition.
Counsel for the petitioner has brought to our notice that Clause 11 (b) fell for interpretation before a Bench of this Commission in Revision Petition No.1588 of 2010 in which it has been held that replacement of the heart valves is a kind of open heart surgery and was covered under clause 11 (b) of the terms of the policy. That in view of decision of this Commission in the aforesaid case (supra) the petitioner does not press the point that the surgery undergone by the respondent was excluded under Clause 11
(b) of the policy. Counsel for the Petitioner further brought to our notice that the benefits under Clause 11(b) of the policy have to be disbursed in the following terms:
(i) Immediate payment of 50% of the sum assured.
(ii) Payment of balance 50% of the sum assured along with vested bonus, if any, in the event of the Life Assured surviving the stipulated date of maturity or at his death, if earlier.
(iii) Payment of an amount equal to 10% of the sum assured, every year, commencing from the Policy anniversary falling on or immediately after the date of eligibility for Benefit(B) and ending with the Policy anniversary preceding the stipulated date of maturity or the date of death of the life assured, whichever is earlier.
(iv) Waiver of premiums, if any, (including accident) due from the policy anniversary falling on or immediately after the date of eligibility for Benefit (B).
In view of the above specific provisions, Counsel for Petitioner contended that the Fora below erred in directing the Petitioner to pay the insured sum of Rs.1 lakh to the Respondent together with damage and compensation of Rs.1,000/- and cost of Rs.1,000/-.
Counsel for Respondent while agreeing that the payment of the policy amount should be made as per the terms and conditions of the policy noted above, confirmed that 50% of the sum assured had already been paid by the Petitioner to the Respondent. However, regarding payment of an amount equal to 10% of the assured sum every year as stipulated in Clause 3 of the said policy, Counsel for Respondent contended that this had become due from 12.8.1998 and, therefore, it would be necessary for Petitioner to pay the arrears from that date along with suitable interest upto 2016 i.e. till the stipulated date of maturity.
We have heard learned Counsel for both parties. We find substance in the submission that the benefits under clause 11(b) have to be disbursed as per the schedule given in the policy and that the learned Fora below erred in directing the Petitioner to pay Rs.1 lakh along with compensation and costs of Rs.1,000/- each. The order of the District Forum in this connection is modified as follows:
(i) Regarding payment of 50% of the sum assured, as per the conditions of the policy, Petitioners were required to pay 50% of the sum assured which, it is now not disputed, has already been paid by Petitioner to the Respondent.
Regarding the remaining amount, the Petitioners are directed to disburse the further benefits in terms of the schedule attached to the policy reproduced earlier in the following manner:
(i) Payment of the balance 50% of the sum assured along with compensation, bonus, if any in the event of the life assured surviving the stipulated date of maturity or at his death, if earlier.
(ii) Payment of an equal amount of 10% of the sum assured every year from 12.8.1998 i.e. date of the surgery upto 28.02.2016 which is the stipulated date of maturity of the life assured or the death whichever is earlier. The Petitioners are, therefore, required to calculate and pay the arrears already due from 12.8.1998 till date which would carry interest @ 9% per annum. Thereafter, 10% of the sum assured would be paid on the stipulated dates every year without interest.
The revision petition is disposed of with the above directions.
Sd/-
....
(ASHOK BHAN J.) PRESIDENT Sd/-
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(VINEETA RAI) MEMBER /sks/