State Consumer Disputes Redressal Commission
Veena Mahajan vs Aegon Religare Life Insurance Co. Ltd. on 3 February, 2017
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB
DAKSHIN MARG, SECTOR 37-A, CHANDIGARH.
First Appeal No.871 of 2014
Date of institution : 30.06.2014.
Order Reserved on: 31.01.2017.
Date of decision : 03.02.2017.
1. Veena Mahajan (Widow)
2. Vikas Mahajan (Son)
3. Vikram Mahajan (Son)
4. Prachi Mahajan (Daughter)
All legal heirs of Late Sh.Vijinder Pal Mahajan son of
Sh.Doonda Mal Mahajan, Resident of House No.50, Gali
No.6, Hukam Singh Road, Amritsar.
....Appellants/Complainants.
Versus
Aegon Religare Life Insurance Co. Limited, Mumbai, through its
Chairman/Managing Director/Principal Officer, service through its
branch office at SCO 26, First Floor, District Shopping Complex,
Ranjit Avenue, Amritsar.
....Respondent/Opposite party.
First Appeal against order dated
23.05.2014 of District Consumer
Disputes Redressal Forum, Amritsar.
Quorum:-
Shri Vinod Kumar Gupta, Presiding Member
Shri Harcharan Singh Guram, Member Present:-
For the appellants : Sh.Sukhandeep Singh,Advocate For the respondent : None HARCHARAN SINGH GURAM, MEMBER :
This appeal has been preferred by the appellants (the complainants in the complaint) against order dated 23.05.2014 passed by District Consumer Disputes Redressal Forum, Amritsar (in short, "District Forum") in consumer complaint No.371 dated First Appeal No.871 of 2014 2 17.05.2013 filed by Varinder Pal Mahajan under Section 12 of the Consumer Protection Act, 1986 and same was dismissed on the ground that the OP was justified in repudiating the claim of the complainant as per terms and conditions of the policy. The appellants of this appeal are legal heirs of the complainant in the original complaint and respondent of this appeal is opposite party before the District Forum and they be referred, as such hereinafter, for the sake of convenience.
2. Brief facts of the case are that the complainant-Vijinder Pal Mahajan since deceased took mediclaim policy No.612030063142 from the OP for himself and his wife Smt.Veena Mahajan. They paid premium of Rs.34,705/- to OP. This policy was having validity from 13.03.2012 till 13.03.2027. He averred that the OP issued the acknowledgement slip dated 06.03.2012 and no policy document was received by the complainant inspite of repeated requests made to OP. It was pleaded that his wife Smt. Veena Mahajan fell ill and was admitted in Medanta Medicity Hospital Gurgaon from 20.04.2012 to 29.04.2012 and total hospitalization for her treatment was to the tune of Rs.4,04,039/-. It was pleaded that his wife was covered for medical expenses upto the extent of Rs.4.90 Lacs. He averred that claim pertaining to his medical expenses of Rs.4,04,039/- was lodged with the OP. The OP instead of making the payment, repudiated the genuine claim vide its letter dated 07.08.2012 on the ground that there was a waiting period of 90 days for all benefits under the policy. He further pleaded that no such policy First Appeal No.871 of 2014 3 condition was ever conveyed to him by the OP. The OP invoked such policy condition and repudiated his genuine claim under exclusion clause of waiting period and on failure to get any relief from OP, he filed consumer complaint in District Forum and prayed directions be issued against OP. To settle insurance claim of his wife to the tune of Rs.4,04,039/- along with interest @ 12% p.a. from the date of claim as submitted with the OP till its actual realization. To pay Rs.50,000/- as damages on account of compensation for causing mental harassment, to pay litigation expenses as per the discretion of the District Forum.
3. Upon notice, the opposite party filed their written reply and took preliminary objections that the complaint filed by the complainant was not maintainable and liable to be dismissed as the complainant had tried to misguide and mislead the District Forum. No cause of action ever accrued in favour of the complainant to file the present complaint against it; he had not come to the Forum with clean hands and had suppressed the material facts; the complaint filed by the complainant amounts to breach of pious relationship of Uberrima Fides between him and the insurer. It was averred that since the proposer had concealed the material facts in the proposal form at the time of filling the form, the claim can be repudiated by the insurer. It was averred that the insured filled the proposal form and mis-stated material facts, which were within her knowledge, the same were required to be disclosed to the insurer, as such the insurance company was having a right to reject the claim of the insured under Section 45 of First Appeal No.871 of 2014 4 the Insurance Act, 1938. It was agitated that contract of insurance was based on trust and the person who obtained insurance is required to inform the complete details pertaining to his or her health including one's life style as the same would have an effect on the decision of the insurer to issue any insurance policy and therefore, any policy obtained by concealing material facts would be considered to have obtained the insurance policy by mis- representation/fraud and such contract of insurance becomes null and void and therefore, it had rightly denied the claim of cashless facility to the complainant. It was averred that the complainant created a false story in his complaint in order to mislead the Forum by mentioning false and frivolous facts in his complaint. It was averred that complainant had submitted his application for insurance vide form No.HP0103606 dated 15.03.2012 in his name and opted for annual mode for the payment of the premium. It was averred that on receipt of the application and required documents a policy bearing No.612030063142 was issued. The policy was delivered to the insured with immediate effect on the address provided by him in the proposal form through Blue Dart Courier vide POD No.44983176630. The said courier delivered the insurance policy to the complainant on 17.03.2012. It was further averred that at the time of entering into contract of insurance, the complainant was duly apprised the key feature of terms and conditions in detail and the complainant after having understood the same by taking cognizance of the terms and conditions of the policy, entered into the contract of insurance with First Appeal No.871 of 2014 5 it. It was agitated that the proposal form was filled on the basis of sales broucher and key feature of the insurer, which clearly explains the premium paying term and the same was in the knowledge of the complainant at the time of entering into insurance contract. It was pleaded that these terms and conditions were also reflected in the policy schedule, which was sent along with the policy documents to the complainant at the time of commencement of the policy. The terms and conditions mentioned in the policy were approved by IRDA. It was agitated that it issued the policy of the insurance on the basis of the proposal form filled as submitted by the complainant. It was submitted that the insurance contract was entered between the complainant as per the standard terms and conditions. It was further averred that amongst various clauses of the terms and conditions of the insurance agreement, as per clause 5.2 of the policy pertaining to waiting period, which is as under :-
5.2 Waiting Period We will not be liable to make any payment for any treatment, which commence or any diagnosis which is first made during any of the following waiting period unless such treatment is required to be the insured suffering an Accident.
Initial waiting period A waiting period of 90 days from the date of commencement/reinstatement of the policy is applicable for all benefits payable under this policy". First Appeal No.871 of 2014 6 It was averred that as per Clause No.6, number of exclusions were provided as per terms and conditions, which are as under :-
6. Exclusions We will not make any payment for any claim in respect of any insured directly or indirectly for, caused by, based on, arising out of or howsoever attributable to any of the following:-
• Any claim occurring as a result of Pre-existing conditions or their resultant complications unless stated in the proposal form and specifically accepted by the company and endorsed thereon.
• AIDS, HIV related complications or any Sexually Transmitted Diseases.
• Attempted suicide or self inflicted injury, irrespective of the mental condition.
• Hazardous sports or activities included but not limited to bungee jumping, mountaineering etc. • Any flying activity other than as a bonafide passenger. • Alcohol, drugs or any substance not prescribed by a Medical Practitioner.
• War, riots, civil commotion, strikes, civil war or service in the military or paramilitary forces of a country at war. • Criminal, unlawful or illegal activity participation. • Exposure to radioactive or nuclear fuel. • Diagnosis or treatment taken outside India. First Appeal No.871 of 2014 7 • Psychiatric or mental illness.
• Circumcision, any cosmetic procedures or Plastic Surgery.
• Pregnancy, childbirth or their complications, Abortion, Medical Termination of Pregnancy, Infertility or sex change operation.
• Organ Donation (Donor costs).
• Rehabilitation or convalescent care or Length beyond customary length of stay.
• Non-Allopathic treatment • Purely investigative procedure not resulting in any treatment or unreasonable failure to seek medical advice.
• Congenital conditions, genetic disorders or birth defects unless specifically covered. It was submitted that the wife of the complainant became ill on 20.04.2012 and she was advised to be admitted in the hospital.
She was admitted in the hospital with the complaints of breathlessness and was found to have severe Aortic Stenosis. She was operated for aortic valve replacement on 23.04.2012 in Medanta the Medicity, Gurgaon, Haryana. At the time of Discharge she was diagnosed being a patient of Severe AS. Type II Diabetes Mellitus (During Hospital Stay) Hypothyroidism (During hospital stay). It was averred that complainant applied for pre approval of the cashless facility to the Third Party Administrator i.e. First Appeal No.871 of 2014 8 Paramount Health Services (TPA) Pvt. Ltd. The same was declined by the TPA. It was pleaded that the questions in the proposal form and their respective replies by the life assured were replied in negative to questions No.3,4(a),7&8. Thus, he concealed material facts about her health from the insurance company. It was pleaded that she was admitted to the hospital after a gap of one month from the date of commencement of the policy. It was averred that in medical terms Aortic Stenosis (AS) means is a disease of narrowing of the aortic valve in the heart. This restricts blood flow through the valve. The heart then needs to contract harder as to pump blood into the aorta. More severe narrowing can cause symptoms and may lead to heart failure. Aortic stenosis means that when the aortic valve opens, it does not open fully. Therefore, there is a partial restriction of blood flow from the left ventricle into the aorta. Basically, the more narrowed the valve, the less blood that can get through, then more severe problem is likely to be there. The treatment was therefore of a very serious disease, sometimes even life threatening, therefore when the opposite parties were to consider the said proposal on 05.03.2012, to assess the risk on the life of the proposer the deceased life assured deliberately concealed the facts within his/her knowledge. In order to induce it to issue the said policy. It was pleaded that had the life insured given the above stated information correctly at the time of taking the said policy, it would not have issued the said policy to him/her. It was further pleaded that on receipt of the application with required documents a policy First Appeal No.871 of 2014 9 bearing No.612030063142 was issued and the said policy was delivered to the insured with immediate effect on the address provided by him in the proposal form. The said insurance contract was entered between themselves on the standard terms and conditions. It was specifically averred that policy document having policy No.612030063142 was issued along with complete terms and conditions and was delivered through Blue Dart Courier vide POD No.44983176630 and the same was delivered to the complainant on 17.03.2012. It was pleaded that as per the terms and conditions of the policy, the wife of the complainant was admitted in Medanta The Medicity, Gurgaon on 20.04.2012 and policy commencement date was 08.03.2012. As such, the claim falls within 90 days period. Thus, the claim was not admissible and was conveyed to the complainant vide letter dated 07.08.2012. It was pleaded that the complainant had opted the said policy after understanding the complete terms and conditions of the policy and now raised false and frivolous action against it. It was averred that on receipt of the claim, the same was examined and set into motion for its settlement procedure, during which concealments by the complainant were revealed and as per exclusionary clauses in the aforesaid policy terms and conditions squarely attracted to disallow any benefit as stipulated therein and denied all other averments alleged in the complaint and prayed that the same be dismissed with costs.
4. The parties were allowed by the learned District Forum to lead their evidence. In support of their averments, the First Appeal No.871 of 2014 10 complainant tendered in evidence copy of the policy acknowledgement Ex.C-1, copy of the repudiation letter Ex.C-2, copy of the hospital bills consisting of 8 pages Ex.C-3, affidavit of the complainant Ex.C-4 and closed the evidence. On the other hand, OP tendered in evidence affidavit of Sh.Jitin Parekh, authorized signatory Ex.OPW/1, copy of the resolution Ex.OP1, proposal form Ex.OP-2, terms and conditions Ex.OP-3, policy documents Ex.OP-4, discharge summary issued by M/s Medanta Hospital Ex.OP-5, letter dated 07.08.2012 Ex.OP-6 and closed the evidence. After going through the averments made in the complaint, written version filed by OPs, evidence and documents brought on the record and on hearing the counsels of parties, the District Forum dismissed the complaint of the complainant as referred above. Aggrieved by the impugned order passed by the District Forum, the appellants/complainants have filed the present appeal against the same.
5. Counsel for the appellant argued that copy of insurance policy was not supplied to the appellant and hence, the exclusion clause in the contract of the insurance policy is not binding upon him. He further argued that no proof of sending of insurance policy was ever produced by the respondent despite specific contention raised by the complainant that the insurance policy was never received by him. He argued that though there is an averment of the OP that the policy in question was delivered through Blue Dart Courier to the complainant. In order to prove their contention, no affidavit of any employee of Blue Dart Courier First Appeal No.871 of 2014 11 was produced who would have made a statement to have the effect that the policy was delivered to the complainant nor any acknowledgement slip for having received the article by the complainant through courier company was produced by the insurance company. He argued that since no policy document was received by the insured and argued that the terms and conditions as alleged to be part of the insurance policy were not binding upon the insured. He argued that policy was issued in the name of deceased Sh.Vijinder Pal Mahajan with his wife Mrs.Veena Mahajan as beneficiary and the same was never refused by the OP and the proper premium for insurance was paid by late complainant. He argued that as per the specific allegations made in the complaint in para No.4, no rebuttal to that contention was specifically there in their written reply in para No.2 and para No.4 in the reply filed by OP in the District Forum. He argued that Hon'ble National Consumer Disputes Redressal Commission, New Delhi in case of "Ashok Sharma Vs. National Insurance Co. Limited", in Revision Petition No. 2708 of 2013 held in para No.8 to the point of non-delivery of terms and conditions of the policy. He also cited Hon'ble Supreme Court's decision given in the matter of "United India Insurance Co. Limited Vs. M.K.J.Corporation" in Appeal (civil) 6075-6076 of 1995 (1996) 6 SCC 428 wherein the Apex court held that a fundamental principle of Insurance Law makes it that utmost good faith must be observed by the contracting parties. Good faith forbids either party from concealing what he privately knows, to draw the other First Appeal No.871 of 2014 12 into a bargain, from his ignorance of that fact and his believing the contrary. Just as the insured has a duty to disclose, "similarly, it is the duty of the insurers and their agents to disclose all material facts within their knowledge, since obligation of good faith applies to them equally with the assured and further argued that since the terms and conditions were not supplied even on repeated requests the same cannot be relied upon by the opposite party in order to report to repudiate the genuine claim of the wife of the deceased policy holder.
6. At the time of arguments, no one has appeared on behalf of the OP. In order to decide the controversy in hand, we have perused the record of the District Forum, which was called at the stage of admission and have perused the same. We find that the complainant had specifically alleged in his complaint in para No.2 that the OP had issued the acknowledgement slip dated 06.03.2012 and no policy document was received by the complainant till the time of filing the complaint inspite of repeated requests made to OP. We have also gone through the para No.4 of the complaint wherein it is mentioned as under :-
"It is pertinent to mention over here that no such policy terms and conditions has been conveyed to the complainant by the OP and by invoking such policy conditions and repudiating genuine claim of the complainant when the OP's own act is of deficiency in service."First Appeal No.871 of 2014 13
7. We have also examined the written reply filed by the OP in the District Forum wherein under para 9 sub para (ii) of the preliminary submissions states :-
"On receipt of the application and required documents a Policy bearing No.612030063142 was issued to the insured and the policy was delivered to the insured with immediate effect on the address provided by him on the proposal form, through Blue Dart Courier vide POD No.44983176630, which was delivered to the complainant on 17.03.2012."
We have also perused the parawise reply, wherein it has been stated as per the preliminary objections mentioned above. We have also perused the reply to para No.4 in the written reply wherein it has been mentioned that the complainant has opted the said policy after understanding the complete terms and conditions of the policy, hence cannot raise such false and frivolous allegations against it. From the written reply, it is evident that OPs are laying emphasis that the said policy terms and conditions were explained to him and sent to him through Blue Dart Courier vide POD No.44983176630. The said policy was delivered to the complainant on 17.03.2012. However, we do not find any evidence like the copy of delivery note pertaining to the delivery of policy, but terms and conditions of the policy sent by courier was placed on the record. No booking receipt of the courier was produced on the record. We find that the OP has taken a plea that the said policy terms and conditions were sent through Blue Dart First Appeal No.871 of 2014 14 Courier vide POD No.44983176630. As such, the OPs were required to produce booking receipt on the record to strengthen their averment. In absence of sending of the policy through Blue Dart Courier vide above referred POD No.44983176630 and no receipt for booking of article through courier agency was brought on record.
8. We are of the opinion that when a specific allegation was made in the complaint by the complainant that he had not received the terms and conditions of the policy nor the policy, then it was required on the part of the OP to produce evidence to prove their plea that said policy was delivered to the complainant on 17.03.2012 through the agency of Blue Dart Courier. We do not find any affidavit of any of the employee of the Blue Dart Courier inspite of contentions raised by the OP that the terms and conditions along with documents were delivered to the complainant on 17.03.2013 as stated in their reply. We find that the OP has taken a plea that the terms and conditions were explained to the deceased life assured at the time of filling-up the proposal form. As per the arguments put-forth by the counsel for the appellants that the terms and conditions of the policy were not duly informed at the time of filling-up of the proposal form to the complainant. We have perused the proposal form Ex.OP-2 and do not find that in this form, there was any stipulation that if the insurance policy is issued to the complainant then there would be 90 days waiting period from the date of commencement of the policy. In addition to this, we have also perused Ex.OP-3 and OP- First Appeal No.871 of 2014 15
4. From the perusal of these documents, we do not find on which date these two documents were printed by the OPs. No date is clearly visible which is printed on these documents from which it can be ascertained that on which date this policy was printed. Thus, we find that even from the record placed before the District Forum by the OP, we are unable to ascertain that the terms and conditions pertaining to the exclusion clause and waiting period to come into force of the policy were ever explained to the deceased life assured.
9. We have also examined Ex.C-1 placed on record which pertains to issuance of acknowledgement receipt No.9000390543 dated 06.03.2012. This page consists of only one page and does not contain any averment in it, from where it can be ascertained that policy terms and conditions were sent along with this acknowledgement. This receipt is printed on 10.03.2012, only policy number was mentioned and no other details of terms and conditions was mentioned therein. We have also perused the order passed by the District Forum, wherein it was stated that when the complainant was having the knowledge of the policy number than how he can deny non-receipt of the policy terms and conditions. We do not agree with the findings of the District Forum on this aspect. We find that policy number was duly mentioned by the OP in Ex.C-1, which is produced on the record, the complainant was having the knowledge of the policy number. We are of the opinion that the complainant was not supplied with the terms and conditions of the policy. We have also noted that the First Appeal No.871 of 2014 16 complainant in his complaint specifically has taken the plea that inspite of sending the repeated reminders and requested OPs to send him the policy terms and conditions, the same were not supplied by the OP and no cogent evidence for having sent the terms and conditions alongwith policy documents were placed on the record. As such, when terms and conditions of the standard policy, wherein exclusion clause was included, were neither a part of the contract of insurance nor disclosed to the appellant. We hold that it is a fundamental duty of both the insured as well as the insurer to disclose the true picture at the time of filling-up the proposal form and same binds the insurer to disclose of material facts in their knowledge in writing to the insured and any ambiguity on the part of any one of them will amount to nullifying the contract of insurance. In the instant case, no cogent evidence was placed on record by the OP for having dispatched the policy documents through Blue Dart Courier.
10. Sequel to the above observation, the appeal filed by the appellants is accepted and order of the District Forum is set- aside. We hereby direct the respondent/OP to pay the amount of Rs.4,04,039/- being the medical bills of the wife of the deceased insured to the LRs. We also direct the OP to pay a sum of Rs.40,000/- as compensation for causing harassment and mental agony to the legal heirs of the deceased policy holder as per the amended memo of parties filed in the District Forum along with litigation expenses of Rs.5,000/-. OP is directed to pay these amounts within 30 days from the date of receipt of copy of this First Appeal No.871 of 2014 17 order, failing which, they would pay interest @ 12% p.a. from the date of repudiation of the claim till actual payment.
11. The arguments in this case were heard on 31.01.2017 and the order was reserved. Now, the order be communicated to the parties under rules.
12. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(Vinod Kumar Gupta)
Presiding Member
February 03, 2017 (Harcharan Singh Guram)
Lb/- Member