State Consumer Disputes Redressal Commission
Life Insurance Corporation Of India & ... vs Rajinder Singh Daurka on 6 February, 2024
STATE CONSUMER DISPUTES REDRESSALCOMMISSION,
PUNJAB, CHANDIGARH
First Appeal No.85 of 2022
Date of institution : 08.02.2022
Date of Reserve : 23.01.2024
Date of Decision : 06.02.2024
1. Life Insurance Corporation of India, Branch Banga Road,
Nawanshahar, Distt. SBS Nagar, through its Branch Manager.
2. Life Insurance Corporation of India, Health Department, 2nd Floor,
'Jeewan Parkash, Model Town Road, Division Office, Jalandhar,
through its Sr.Divisional Manager.
3. Life Insurance Corporation of India, 5th Floor, West Wing,
Yogakshema, Jeevan Bima Marg, Nariman Point, Mumbai,
Maharashtra, through its Chairman.
The Appellants are now through Shri Rajesh Bhatia, Manager
(L&HPF), Life Insurance Corporation of India, Sector 17,
Chandigarh.
.......Appellants/Opposite Parties
Versus
Rajinder Singh Daurka, son of Sh.Dalel Singh, resident of Village
Souna, Tehsil Nawanshahr, Distt. SBS Nagar, Punjab.
.......Respondent/Complainant
First Appeal under Section 41 of the
Consumer Protection Act, 2019
against the Order dated 23.12.2021
passed by the District Consumer
Disputes Redressal Commission,
SBS Nagar in CC No.08 of 2021.
Quorum:-
Hon'ble Mrs. Justice Daya Chaudhary, President
Ms. Simarjot Kaur, 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 Present :-
F.A.No.85 of 20222
For the appellants : Mr.Deepak Arora, Advocate
For the respondent : Sh.Sarju Puri, Advocate
SIMARJOT KAUR, MEMBER
This Appeal has been filed by the Appellants/Opposite parties under Section 41 of the Consumer Protection Act, 2019 (in short 'The Act') being aggrieved by the impugned Order dated 23.12.2021 passed by the District Consumer Disputes Redressal Commission, SBS Nagar (in short 'the District Commission') whereby the Complaint of the Complainant had been partly allowed.
2. It would be apposite to mention that hereinafter the parties will be referred, as had been arrayed before the District Commission.
3. Briefly, the facts of the case as made out by the complainant before the District Commission are that the Complainant had purchased a Jeevan Arogya Policy bearing No.134206025 from the OPs as Health Insurance Policy for himself and for his minor daughters Jaspreet and Simran. The Policy had commenced w.e.f. 28.10.2016. He had paid an amount of Rs.7622/- as premium to cover their future medical expenses. The Complainant had paid the premiums regularly and had also paid the total four premiums amounting to Rs.30,488/- till October 2019. At the time of purchase of policy, the Complainant had disclosed his all previous cured ailments to the agent of OPs. The Complainant had signed/put thumb impression on the proposal form by believing the agent that he had rightly filled up all the information. The factum of amputation of leg of the Complainant was visible which any person he contacted could see. The question of concealing the same did not arise. In the F.A.No.85 of 2022 3 month of May, 2020, the Complainant had pain in his abdomen and in the diagnoses, it was found that there was a stone in the gall bladder and urine pipe. The doctor had advised him for removal of gall bladder and stone from the urine pipe. On advice of the doctor, the Complainant had undergone treatment/operation from DMC, Hospital, Ludhiana. The Complainant had incurred an amount of Rs.1,63,675.31 on his treatment. The Complainant being a handicapped person was not doing any kind of work and was fully dependent on his father and upon his small ancestral land. The bill of hospital was paid by him after collecting the amount from his relatives and friends with the hope that on receiving the claim from OPs, he would return the same. After the treatment, the Complainant had lodged his claim with the OPs and had also submitted all the relevant documents as required by the OPs. The OPs had repudiated the claim of the Complainant vide letter dated 24.12.2020 on the ground of concealment of pre-existing disease. It was averred in the Complaint that rejection of claim was arbitrary and was based on wrong ground that the Complainant had concealed his previous history of ailment at the time of purchase of policy. If there was any such intention on the part of Complainant, then he would not have submitted the summary record himself of Kidney Hospital, Jalandhar. Said treatment was not a part of the treatment at DMC, Hospital, Ludhiana for which he had lodged the insurance claim. The Complainant was never supplied any terms and conditions as referred in the repudiation letter dated 24.12.2020 and it was also not a part of the policy documents as well which were received by him. Clause H-1 and M-02 were not applicable in the case of Complainant F.A.No.85 of 2022 4 as both clauses referred to "pre-existing" illness/ailment was not related to "Pre-existed" illness/ailment. The said clauses were not applicable as any pre-existed ailments, if any, had already been cured. As per the letter dated 24.12.2020, the policy was declared void since 22.12.2020 and not prior to that. If the OPs had declared the same as void, then they had no right to retain/receive the amount of premium paid by the Complainant. The OPs had also violated the provisions of Indian Contract Act. There was 'deficiency in service' on the part of OPs while repudiating the claim of the Complainant. Hence, the Complaint filed by the Complainant with the prayer that OPs be directed to pay an amount of Rs.1,63,675.31 towards expenses incurred on his treatment as per the bills dated 15.06.2020 and 11.07.2020, being fully insured/covered under the Policy No.134206025 which had commenced from 28.10.2016. Further the OPs may be directed to pay the said amount along with interest @ 12% P.A. and an amount of Rs.50,000/- as compensation on account of 'deficiency in service' and Rs.20,000/- as litigation expenses.
4. Upon issuance of notice, the OPs filed their written reply by raising certain preliminary objections that the Complaint was not maintainable. The relief sought in the Complaint was in violation of terms and conditions of the policy. The terms and conditions were based on the Insurance Contract which was paramount in the eyes of law, as such both the parties could not go beyond the terms and conditions of the contract. The complainant had not come to the District Commission with clean hands. It was also mentioned in the reply that the policy No.134206025 with DOC 28.10.2016, Plan Term F.A.No.85 of 2022 5 904-40-40 with nominee:- Smt.Baljinder Kaur (wife) and FUP:
15.10.2020 was issued to the Complainant. It was also mentioned in the reply that the said policy was not a Medi-Claim policy but Health Insurance Plan. It had offered fixed benefits as per the policy conditions irrespective of the quantum of expense incurred by the policy holders on his/her treatment. There was no provision of reimbursement of actual expenses of treatment under Health Insurance Plan. The Complainant had lodged a claim on 28.07.2020 at Branch Office- Nawanshahr related to his treatment for the period from 11.06.2020 to 15.06.2020 for major operation of Endo-Laser URS at DMC, Ludhiana. The hospital treatment form and relevant record were also submitted by the Complainant. The claim was lodged by the Complainant after a lapse of one month. He had also mentioned the reason for delayed submission of claim papers on 03.10.2020. After registration of claim by the Complainant, it was forwarded to TPA i.e. Ms.Genins India Insurance TPA Limited, Noida, Uttar Pradesh for its settlement. The hospital record of DMCH, Ludhiana had revealed the past medical/surgical history of URS in 2016 i.e. History of BKA I/V/O Trauma; K/C/OT2DM:H/OLAP CHOLE (BILE). The Complainant had submitted the record of the previous treatment undertaken in the year 2016 from Kidney Hospital Jalandhar. Considering the said record, the TPA had recommended for repudiation of the claim. It was discovered from the said record that the life assured/Complainant was having history of amputation of leg in the year 1999 with diabetic treatment since 2008. He had also undergone surgery of renal stone in May, 2016. However, these material facts were not disclosed by the Complainant at the time of F.A.No.85 of 2022 6 filing up of proposal in October, 2016. Therefore, the claim of the complainant was repudiated on the ground of non-disclosure of material information at the time of taking the policy. As per the terms and conditions of the policy, the claim of the Complainant was not payable. As such, the policy contract had become void from the date of decision of Competent Authority dated 22.12.2020 based on terms and conditions of the policy. The complaint was also bad for mis-
joinder/non-joinder of necessary parties. Other averments made in the Complaint were denied by the OPs and dismissal of the Complaint was prayed for.
5. By considering the averments made in the Complaint as well as in the reply thereof, the Complaint filed by the Complainant was partly allowed vide order dated 23.12.2021 passed by the District Commission. The relevant part of said order is reproduced as under:-
"In view of our above discussion, the opposite parties failed to prove that the insured was suffering from aforesaid pre-existing diseases before taking the insurance policy. Thus, the claim of the complainant was wrongly and illegally repudiated. There is no ground or justification to repudiate the claim.
Accordingly, the complaint is partly allowed and the OPs are directed to claim of the complainant amounting to Rs.1,63,675.31 alongwith interest @ 6% P.A. from the date of filing claim till realization. Further, the OPs are directed to pay a compensation of Rs.5,000/- for mental harassment and agony and also directed to pay litigation expenses of Rs.2,000/-."
6. The appellants/OPs have filed the present appeal being aggrieved by the order dated 23.12.2021 passed by the District Commission by raising a number of arguments.
F.A.No.85 of 20227
7. Mr.Deepak Arora, Advocate, learned counsel for the appellants has submitted that there is difference between Health Insurance and Medi-Claim Policy, Jeevan Arogya Policy taken by the Life Assured was not Medi-Claim Policy but Health Insurance Policy. LIC, India had offered only Health Insurance but the General and Health Insurance Companies offered Medi-Claim Policies. The treatment expenses were part of benefits under Medi-Claim Policies of GIC, India and could be claimed or awarded under Medical Insurance policy issued by LIC of India. The OPs in no way were guilty of any 'deficiency in service'. The Complainant had failed to provide any cogent evidence with regard to wrong repudiation of claim/deficiency in service. He had only submitted an affidavit to this effect. The Complainant got his treatment from the Kidney Hospital & Life Line Medical Institutions, Jalandhar w.e.f. 06.05.2016 to 05.05.2016, for 'Rt. Mid. Ureteric Stone with Rt. Mod. HDUN', as per the discharge summary of the said Hospital. He was operated upon on 04.05.2016 for URS (Uretero Renoscopy) prior to commencement of the policy on 28.10.2016. It clearly emerged that he got health insurance policy after 24 days of the said treatment/operation. He had not disclosed/mentioned these facts in the proposal form, which amounted to suppression of material facts.
8. Learned counsel has also submitted that at the time of admission in the Kidney hospital it was recorded 'Pain right flank off and on' and further history of (H/O) similar pain since 6 years off and on. Further in the personal history/past history/family history, it was mentioned that P/H/O (Previous History of ) DM2 x 2008, which F.A.No.85 of 2022 8 shows that he had been suffering from Diabetes Mellitus 2, since 2008, i.e. for the last more than eight years prior to taking up the policy. The Complainant had undergone Sonography on 26.04.2016, wherein it was reported by the Radiologist Dr.Rita M.D. (Radio- Diagnosis) "Expression: Cholelithiass with chronic cholexcystitis. RT uretic calculus with mild RT. Hydroureter with mild RT. Hydronephrosis. B.L. Renal lithiasis and enlarged prostrate GR 1." This report pertained to period of 6 months prior the commencement of the policy. Thus, diseases suffered by the Complainant, were in his knowledge. Said diseases had occurred during the period less than one year before commencement of the Insurance policy. The Complainant had not disclosed about his amputation in the proposal form as well. Learned counsel has also submitted that as per clause 1 (xii) of the policy disclosure of ailments/injuries/treatment taken/medical advice taken etc. within 04 years prior to taking of health insurance policy, which was not disclosed by the Complainant. All other allegations alleged by the Complainant in the complaint were also denied. Learned counsel has relied upon judgments of Hon'ble Supreme Court of case titled as "Reliance Life Insurance Co. Ltd. Vs. Rekhaben Nareshbhai Rathod", Civil Appeal No.4261 of 2019, decided on 24.04.2019, "Satwant Kaur Sandhu Vs. New India Assurance Company Limited", decided on 10.07.2009, in support of his arguments.
9. Mr.Sarju Puri, Advocate, learned counsel for the respondent has submitted that the Respondent/Complainant had purchased a Jeevan Arogya Health Insurance Policy on 28.10.2016 F.A.No.85 of 2022 9 against a premium for an amount of Rs.7622/-. Thereafter, he had regularly been paying the annual premium which was to the tune of Rs.30,488/- till October, 2019. Despite being a rustic villager, the Respondent/Complainant had disclosed all the previous ailments to the agent of the Corporation. He had signed the Proposal Form in good faith which was submitted to the OPs. Learned counsel has further submitted that on following the medical advice with regard to his abdominal pain in May, 2020, the Respondent/Complainant was operated upon at Dayanand Medical College and Hospital, Ludhiana. He had incurred an expense of Rs.1,63,675.31/-. Despite lodging his Insurance Claim, the Appellants/OPs had repudiated the claim on 24.12.2020 on the ground of concealment of pre-existing disease even though the Respondent/Complainant had made a full disclosure to that effect. He had never ever received the salient terms and conditions of the Insurance Policy. Thus, the Respondent/Complainant was entitled to an amount of the said bill along with damages and litigation of costs to the tune of Rs.50,000/- and Rs.20,000/- respectively. Learned counsel has also submitted that the all the relevant record pertaining to previous ailments/treatment was very much a part of the record submitted to the Ops. Therefore, there is no cogent material available on record to show that the Respondent/Complainant had indulged in deliberate concealment of facts. It would be evident from the record that there was no connection between the current/claimed medical condition of the Respondent/Complainant and the earlier medical issues/treatments of the Respondent/Complainant. The Complainant had fully recovered/cured from pervious ailments availed by him. F.A.No.85 of 2022 10
10. We have heard the oral arguments raised by learned counsel for both the parties. We have also perused the order dated 23.12.2021 as well as all the relevant documents available on the file.
11. Facts relating to the filing of Complaint by the complainant before the District Commission, thereof, the oral arguments raised by learned counsel for the parties and passing of impugned order dated 23.12.2021 by the District Commission, thereafter filing of present appeal before this Commission by the appellants/OPs are not in dispute.
12. Admittedly, the Complainant had purchased policy i.e. Jeevan Arogya Policy from the OPs which had commenced from 28.10.2016 (Ex.C-1). He kept paying the renewal premiums regularly (Ex.C-2, Ex.C-3). The Complainant had pain in abdomen and he was admitted at DMCH, Ludhiana on 11.06.2020 and was discharged on 15.06.2020 (as per discharge summary Ex.C-7). He was operated upon for Right Ureteric Calculus with Gall Stone Disease. He was also treated for F/U/C/O Right URS with DJ Stent in SITU meaning thereby that patient underwent Stent Removal under SGA (Short General Anesthesia) on 11.07.2020 (part of Ex.C-7). He was discharged on the same day. For the said two treatments he had paid an amount of Rs.1,63,675.31 (Ex.C-5 and Ex.C-6).
13. Now the issue for determination before us as to whether the Appellants had rightly repudiated the claim of the Respondent/Complainant or not?
F.A.No.85 of 202211
14. We have perused the documents/record available on the file with the assistance of learned counsel for the parties. The Complainant had lodged the said claim with the OPs for which an objection was raised by the OPs with regard to late submission of Health claim of Policy No.134206025. The Complainant had replied to the same and had requested to condone the delay citing the reason of outbreak of COVID-19 dated 03.10.2020 (Ex.OP-4). The claim of the Complainant was repudiated vide letter dated 24.12.2020 (Ex.C-4) in which the following reason was cited, which reads as under:
From the answers given in the proposal form submitted and the declaration given in the proposal by you while obtaining the health Insurance cover under the policy, we observe that you have suppressed the details pertaining to the pre-existing condition/disease i.e. as per the hospital record of Kidney Hospital, Jalandhar you were Patient of diabetes since 2008, underwent renal stone surgery in May, 2016 & leg amputation in 1999.
The said policy was declared void w.e.f. 22.12.2020 (Ex.C-4).
15. During the course of arguments the learned counsel for the Appellants/OPs had raised objections with respect to the present complaint and has submitted that the Complainant was operated upon on 04.05.2016 for URS (Uretero Renoscopy) was performed on him prior to the commencement of policy i.e. on 28.10.2016. He has further submitted that just after 24 days of said treatment/operation, he took the Health Insurance Policy and had not disclosed these facts. The above said objection raised by learned Counsel for the F.A.No.85 of 2022 12 Appellants is baseless as there was a gap of more than five months between the period when he had undergone the operation on 04.05.2016 and had purchased the said policy on 28.10.2016.
16. As per version of the Counsel for the Appellants said repudiation of the claim was based on the terms and conditions of the policy, especially with regard to Clause 1 (xii) which is reproduced as under:-
Pre-Existing Disease/Condition- Any condition, ailment or injury related conditions for which you had signs or symptoms, and/or were diagnosed, and/or received medical advice/treatment within 48 months prior to the date of commencement of the policy.
As per the version of Counsel for the Respondent/Complainant, the Respondent/Complainant had disclosed his previous medical history which had already been cured. The learned counsel for the Respondent/Complainant has also contended that the Appellants failed to differentiate between pre-existing and pre-existed illness/ailments. Meaning thereby the disease/ailment which had already been cured before purchasing the policy and the current disease/ailment for which he had lodged a claim. There was no connection between them.
17. The claim of the Complainant was repudiated by the OPs on the ground of pre-existing condition/treatment/amputation of the Complainant as mentioned in the written version. On perusal of the relevant documents relating to the previous treatment of the Complainant, it has been observed by us that he had fully recovered from his problem of Ureteric Stone by undergoing surgery of Uretero F.A.No.85 of 2022 13 Renoscopy. The fact of his amputation of his right leg could not have been concealed as handicap of a person is an obvious condition and it could not go unnoticed by the agent, who had filled up the proposal form. The medical record of both the treatments undertaken by the Complainant has been perused and it has transpired that there was no connection between his previous cured condition and the treatment undertaken by him at DMCH, Ludhiana for which the claim was lodged. The fact about his concealment of condition of diabetes cannot be taken as ground for repudiation as the proposal form was filled up by the agent. The District Commission has also examined this fact in detail which is reproduced as under:-
13. 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 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 diseases, in question, were pre-existing disease. 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.
18. Moreover, it has been argued by learned counsel for the Respondent/Complainant that the proposal form (Ex.OP-3) was filled up by the agent and all the details were supplied to the said agent by the Complainant. The Complainant being an illiterate person had trusted the agent and assumed that all the information given by him was incorporated in the said proposal form. The said proposal form had been perused thoroughly and some doubtful facts have emerged. F.A.No.85 of 2022 14 The thumb impression was put on the proposal form and nowhere it has been mentioned as to whose thumb impression it was. The normal practice is that the details like name of the person who has put his/her thumb impression are recorded under "RTI" (Right Thumb Impression). Though it has transpired that the said thumb impression could be that of the insured spouse (Ex.OP-3/Annexure C i.e. Addendum to Proposal Form). Said proposal form had been signed by the Complainant. Said proposal form was signed by the minor daughter of the Complainant namely Jaspreet Kaur under the caption of Major Members to be insured, whereas the daughter was minor. In the Proposal Form itself it had been mentioned that it was to be signed by Major Members which implies that the minor member of the family was not to put his/her signature. Meaning thereby the said agent had hurriedly and casually filled up the proposal form. It can be safely deduced that the necessary information provided by the Complainant had not been incorporated into the form by the agent. Even the name of the official/agent, who had filled up the form is not legible and only the initial i.e. S.K. can be deciphered. The above said facts raise suspicion on the authenticity of the proposal form.
19. Learned counsel for the Respondent/Complainant has vehemently contended that the terms and conditions were not supplied to the Complainant at the time of commencement of policy. It has been alleged in the complaint that only policy papers were received by the Complainant. The OPs have failed to provide any cogent evidence that the complete set of terms and conditions were received by the Complainant at any point or they were explained to F.A.No.85 of 2022 15 the insured. The case file has been perused thoroughly and it has been observed by us that no record of dispatch/receipt of the policy has been tendered by the Appellants/OPs. The contention of the learned counsel for the Appellants that the benefit under Medi-claim policy and Health Insurance Plan are different and there is no provision of reimbursement of actual expenses of treatment under Health Insurance Plan. Said reason could not be a sufficient ground for repudiation of claim. Therefore the said ground taken by learned Counsel is not acceptable and justified. The District Commission had rightly given the following observation, which reads as under:-
12. Furthermore, it is the specific plea of the complainant that the terms and conditions of the Insurance Policy were never conveyed/supplied to them and only the Certificate of Insurance, is alleged to have been sent. Although, the Insurance Company has alleged that all the terms and conditions of the Insurance Policy was supplied to the insured, but no cogent and convincing evidence, such as dispatch number, postal receipt etc., has been produced on record to prove this fact. Hon'ble Supreme Court in case Modern Insulators Ltd. v. Oriental Insurance Co. Ltd. (2000) 2 SCC 734 reversed the order of the Hon'ble National Commission, observing that it failed to consider the fact that the terms and conditions of the Insurance Company were not supplied to the insured and upheld the order of the State Commission, allowing the claim. Thus, when the insured was not aware about the terms and conditions of the Insurance Policy, then the question of concealment of material facts can also not be raised. It is the duty of the Insurance Company to bring all the terms and conditions of the Insurance Policy to the specific notice of the insured. In the absence of notice of the terms and conditions of the policy, the same cannot be enforced upon the insured.
20. From the above said facts and reasons as mentioned above, it emerges that the District Commission had rightly passed a well-reasoned order and no interference is required. We do not find any merit in the contentions raised by learned counsel for the Appellants, therefore, the Appeal filed by the Appellants is hereby F.A.No.85 of 2022 16 dismissed and the order dated 23.12.2021 passed by the District Commission is upheld.
21. The appellants had deposited an amount of Rs.90,786/- at the time of filing the appeal with this Commission and deposited an amount of Rs.89,709/- in compliance with the order dated 24.02.2022. The said amounts, along with interest, which has accrued on the amount deposited by the appellants, if any, shall be remitted by the Registry to the District Commission after the expiry of 45 days of sending of certified copy of the order to the parties. The concerned parties may approach the District Commission for release of the same and the District Commission may pass the appropriate order in this regard, in accordance with law.
22. Since the main case has been disposed of, so all the pending miscellaneous applications, if any, are accordingly, disposed of.
23. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(JUSTICE DAYA CHAUDHARY) PRESIDENT (SIMARJOT KAUR) MEMBER February 06, 2024 (Rupinder 2)