State Consumer Disputes Redressal Commission
Neeraj Jain vs Apollo Munich Health Insurance Co. Ltd. on 30 July, 2024
FA-361/2018 NEERAJ JAIN VS. HDFC ERGO D.O.D: 30.07.2024
IN THE DELHI STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Date of Institution : 06.08.2018
Date of Reserving the order : 05.07.2024
Date of Decision : 30.07.2024
FIRST APPEAL NO.- 361/2018
IN THE MATTER OF
NEERAJ JAIN
13/27, Shakti Nagar
Near Nagia Park,
New Delhi-110007
(Through: Mr Gaurav Chauhan, Advocate)
.....Appellant
VERSUS
Appollo Munich Health Insurance Co. Ltd.,
Having Branch office at:
29/17, Nagia Park Circle,
Shakti Nagar, Delhi-110007
Now,
HDFC Ergo General Insurance Company Ltd.
Having office at:
2E/25, Ist Floor,
Jhandewalan Extension,
New Delhi-110055
(Through: Ms Simran Verma, Advocate )
....Respondent
Allowed
PAGE 1 OF 14
FA-361/2018 NEERAJ JAIN VS. HDFC ERGO D.O.D: 30.07.2024
CORAM:
HON‟BLE MS. PINKI, MEMBER (JUDICIAL)
HON‟BLE MS. BIMLA KUMARI, MEMBER (FEMALE)
1. Whether reporters of local newspapers be allowed to see the judgment?
Yes
2. To be referred to the reporters or not? Yes
Present: None for the appellant
None for the respondent
HON‟BLE MS. BIMLA KUMARI, MEMBER (FEMALE)
ORDER
1. By this judgment, we shall dispose of the appeal which has been filed by the appellant against the impugned order dated 30.05.2018 passed by District Consumer Dispute Redressal Forum, Tis Hazari in complaint case no. 51/2017.
2. Brief facts as per the complaint are that the complainant obtained "Easy Health Insurance policy" bearing no. 110800/11051/AA00186809-01 valid w.e.f 05.02.2016 to 04.02.2017 by renewing his old policy. The complainant paid a premium of Rs 12,118/-. The said policy covered the complainant, his wife Mrs Shalini Jain and Son Sh. Sanyam Jain. On 22.12.2016, Sh. Sanyam Jain, Son of the complainant, who was also insured under the policy, suffered high grade fever, loose motion, vomiting and nausea etc. He was admitted in Fortis Hospital, Shalimar Bagh, Delhi and was discharged on 29.12.2016. It was alleged in the complaint that as per the discharge summary, Sh. Sanyam Jain, was suffering from jaundice and was under the treatment Allowed PAGE 2 OF 14 FA-361/2018 NEERAJ JAIN VS. HDFC ERGO D.O.D: 30.07.2024 of Mr Rajeev Gupta and Dr Jeewan Aggarwal who diagnosed him with enteric fever with thrombocytopenia with hepatitis. The complainant incurred a sum of Rs to 2,27,982/- on the treatment of his son as the opposite party had denied cashless request but stated that it would entertain the entire claim of reimbursement of expenses, when all the details and relevant documents would be sent to the opposite party by the complainant. On 05.01.2017 the complainant sent his claim with all the relevant documents to the opposite party but the opposite party rejected the claim of the complainant on the false ground of non-disclosure of facts. It was alleged by the complainant that his son Sh. Sanyam Jain had suffered „Nephrotic syndrome‟ at the age of 2 years and was completely cured. The opposite party not only repudiated his claim but also cancelled the policy. He prayed to the District Forum that directions be given to the opposite party to pay a sum of Rs 2,27,982/- as well as compensation and cost and also prayed for directions to the opposite party for renewal of the policy.
3. The opposite party filed written statement, wherein it admitted the factum of taking policy by the complainant on 05.02.2015. The policy was ported from United India Insurance Co. Ltd. The complainant signed and submitted the proposal form after going through the terms and conditions of the policy. The details of the policy were also explained to the complainant by the insurance Agent/ Sale representative. On 23.12.2016 cashless request was received from Fortis Hospital Shalimar Bagh, regarding the treatment of insured Mr Sanyam Jain, with estimated cost of Rs 41,250/- with 3 day‟s stay in the hospital. After going through the documents, the opposite party found that the documents were not sufficient to process the cashless claim. The opposite party vide letter dated 24.12.2016 raised the query Allowed PAGE 3 OF 14 FA-361/2018 NEERAJ JAIN VS. HDFC ERGO D.O.D: 30.07.2024 and requested the complainant to provide all past treatment records, taken at the age of 2 years, related to the Nephrotic Syndrome. After going through the documents the opposite party came to know that Mr Sanyam Jain was having Nephrotic Syndrome and non-disclosure of Nephrotic Syndrome by the complainant may have an impact on the policy and therefore cashless approval was not feasible at that juncture. Later on, the claim of the complainant was repudiated, on account of suppression of material facts by the opposite party, vide letter dated 10.01.2017. The opposite party in its written statement prayed for dismissal of the complaint.
4. The complainant as well as opposite party filed their evidence before the District Forum as well as written argument.
5. After going through the material on record and hearing counsel for the parties, the Learned District Forum passed the following order:-
"5. The controversy involved in the present case is as to whether the complainant is entitled to the claim sought in the present complaint or not. The repudiation letter dated 01.02.2017 would show that rejection of claim of the complainant preceded on the premise that complainant was a known case of Nephrotic Syndrome since age of 2 years which was not revealed by taking the policy in the proposal form, therefore, the claim was repudiated due to non- disclosure and concealment of material facts under condition VII j of policy terms and conditions. The discharge summary would show that patient remained admitted in the Hospital Allowed PAGE 4 OF 14 FA-361/2018 NEERAJ JAIN VS. HDFC ERGO D.O.D: 30.07.2024 from 22.12.2016 to 29.12.2016 with diagnosis of Enteric Fever with Thrombocytopenia with Hepatitis. The history of present illness reads that complainant, 19 years old, male known case of nephritic syndrome, admitted with complains of high grade fever with episodes of loose motion, vomiting and nausea. The O.P on the basis of the treatment received by complainant came to the conclusion that he was a known case of kidney related disease which was not disclosed in the proposal form, thus amounted to concealment of material fact. The perusal of the complaint shows that it has been categorically admitted by complainant himself that he had suffered nephrotic syndrome at the age of 2 years only and problem was completely cured and he never took any medicine or any treatment in respect of nephrotic syndrome. However, the complainant has not placed on record any convincing evidence that his son was completely cured at the age of 2 years and the disease never relapsed. No explanation is coming forth from the side of complainant as to what prevented him from disclosing the disease of nephrotic syndrome at the age of 2 years in the proposal form at the time of inception of the policy. It is now well settled law by catena of decision by higher courts that contract of insurance is a contract of bonafide where both parties are obliged to disclose true facts to each other. Non-disclosure of material fact would breach the contract. In case titled I (2000) CPJ 1 (SC) M/s Modern Insulators Ltd. Vs Oriental Insurance Co. Ltd., it was held that it is the fundamental principle of insurance law, that utmost good faith, must be observed by Allowed PAGE 5 OF 14 FA-361/2018 NEERAJ JAIN VS. HDFC ERGO D.O.D: 30.07.2024 the contracting parties, and good faith forbids either party, from non-disclosure of the facts, which the parties knew. The insured has a duty to disclose all the facts, and similarly it was the duty of the insurance company, and its agents, to disclose all the material facts, in their knowledge, as obligation of good faith applies to both equally.
6. We have gone through the Section A of the Proposal Form requires that the insured has to disclose as to whether he ever suffered any of the diseases which includes kidney related illness. The complainant has indicated in the proposal form that he never ever suffered kidney related disease and this kind of mis-representation and concealment of material fact would certainly go to the root of the insurance contract and in such a situation insurance company cannot be forced to oblige the insurance policy. It is now well settled law that where parties have entered into a contract on the basis of terms and conditions, in such a situation it would be the terms and conditions which would prevail. The Hon'ble Supreme Court in case titled Export Credit Guarntee Corpn. Of India Ltd. Vs. Garg Sons International 2013 STPL (Web) 36 SC, held as under:
"It is a settled legal proposition that while construing the terms of a contract of insurance, the words used therein must be given paramount importance and it is not open for the court to add, delete or substitute any word. It is also well settled, that since upon issuance of an insurance policy, the insurer undertakes to indemnify the loss suffered by the Allowed PAGE 6 OF 14 FA-361/2018 NEERAJ JAIN VS. HDFC ERGO D.O.D: 30.07.2024 insured on account of risks covered by the policy, its terms have to be strictly construed in order to determine the extent of the liability of the insurer. Therefore, the endeavor of the court should always be to interpret the words used in the contract in the manner that will best express the intention of the parties. (Vide: M/s/ Suraj Mal Ram Niwas Oil Mills (P) Ltd. Vs. United India Insurance Co. Ltd., (2010)10 SCC
567)."
"Thus, it is not permissible for the court to substitute the terms of the contract itself, under the grab of construing terms incorporated in the agreement of insurance. No exception can be made on the ground of equity. The liberal attitude adopted by the court, by way of which it interferes in the terms of an insurance agreement, is not permitted. The same must certainly not be extended to the extent of substituting words that were never intended to form a part of the agreement."
7. Keeping in view of the aforesaid discussion and circumstances of the case, we are of the considered view that O.P cannot be held for any kind of deficiency in service as alleged by complainant. Therefore, the complaint is dismissed. There is no order as to cost. File be consigned to record room.
Copy of this order be sent to the parties as per rules.
Announced this 30th day of May 2018."
6. It is the case of the appellant that Learned District Forum has acted illegally while exercising the jurisdiction.
Allowed PAGE 7 OF 14 FA-361/2018 NEERAJ JAIN VS. HDFC ERGO D.O.D: 30.07.2024 The evidence has been mis-appreciated by the Learned District Forum and the provisions of law were also mis-applied. The Learned District Forum erred in holding that the disease, which never existed after the age of two years, should have been disclosed by the complainant at the time of purchasing the policy. The impugned order dated 30.05.2018 is based on the premise that the discharge summary showed that Mr Sanyam Jain was patient of Nephrotic Syndrome and presumed that the illness still continued and hence amounted to concealment. Learned District Forum ignored the fact that any ailment occurring at the age of 2 years and was immediately cured will have no relevance in the issuance of the policy. Learned District Forum erred in holding that the complainant could not place any convincing evidence, the said disease never relapsed. The onus was on the opposite party to disprove the fact that said disease never relapsed. Since the disease never surfaced after the age of 2 years, there was no document, with the complainant which could be placed on record by him. The impound order passed by Learned District Forum is not in consonance with the scheme of Consumer Protection Act. The District Forum did not consider the plight of the complainant, due to refusal of claim by the opposite party on flimsy ground. The Learned District Forum also did not consider that as per the insurance laws any pre-existing disease is admissible after four years. Even if, that scheme is applied then the policy was in force much more than four years and his claim should have been admitted on that ground alone. The appellant had prayed that the impugned order dated 30.05.2018 passed by the Learned District Forum be set aside.
7. The respondent has filed reply to the appeal, wherein it has prayed for dismissal of the appeal by submitting that the appeal is an abuse of the process of law and has been filed by the Allowed PAGE 8 OF 14 FA-361/2018 NEERAJ JAIN VS. HDFC ERGO D.O.D: 30.07.2024 appellant with the sole purpose of harassing and pressurizing the respondent to submit to the unreasonable and mischievous demands of the appellant. There is no infirmity in the impugned order passed by the District Forum which has been passed in view of the terms and conditions of the insurance policy. The appeal filed by the appellant is devoid of merits. There has been no deficiency in service on the part of the opposite party as held by the Learned District Forum. The appellant instead of discharging his obligations to disclose material information sought in the proposal form has chosen to make frivolous allegations against the respondent. The appellant is not entitled to any relief as he has not approached the commission with clean hands. The respondent company acts as a custodian of the public funds. In order to protect the interest of policy holders, it has to be vigilant, to ensure that only admissible claims under the policy are paid by the respondent. The respondent cannot do injustice to genuine policy holders by allowing ingeneous and invalid claims.
8. The appellant as well as the respondent have filed the written arguments.
9. We have gone through the material on road record.
10. In the present case along with appeal the appellant has also filed an application under section 5 of the Limitation Act for condonation of delay in filing the appeal.
11. However, the respondent did not file reply to the application.
Allowed PAGE 9 OF 14 FA-361/2018 NEERAJ JAIN VS. HDFC ERGO D.O.D: 30.07.2024
12. It is the case of the appellant in this application that impugned order was passed on 30.05.2018 but the certified copy of the order was provided to him on 03.07.2018. If the period of limitation is reckoned from 04.07.2018 then there is no delay in filing the appeal.
13. Now, perusal of the impugned order shows that Learned District Forum prepared the certified copy of impugned order on 02.07.2018. In these circumstances, we find substance in the submissions of the appellant that the certified copy of the impugned order was given to him on 03.07.2018. The appellant has filed the appeal on 06.08.2018. There is delay of only 2 days in filing the appeal. Since, the respondent has not preferred to file reply to appeal and the delay is only of 2 days, the said delay is hereby condoned. Accordingly, the application moved by the appellant U/s 5 of the Limitation Act is hereby allowed.
14. In the present case, during the pendency of case the appellant moved an application U/s 151 CPC for substitution of the name of the respondent from M/s Apollo Munich Health Insurance Company Limited to M/s HDFC Ergo Health Insurance Company Limited. Since, the respondent company was merged with M/s HDFC Ergo Health Insurance Company Limited, the application moved by the appellant was allowed. The amended memo of parties was also filed by the appellant.
15. Now, the question that rises for consideration is whether there is any illegality and material irregularity in the impugned order passed by the Learned District Forum, Allowed PAGE 10 OF 14 FA-361/2018 NEERAJ JAIN VS. HDFC ERGO D.O.D: 30.07.2024
16. It is the case of respondent that there is no illegality in the impugned order as Learned District Forum passed the impugned order in view of the terms and conditions of the policy. The appellant did not disclose the true facts and suppressed material facts while submitting the proposal forum and thus violated the terms and conditions of the policy.
17. On the other hand, it is the case of the appellant that his son Mr Sanyam Jain had suffered nephrotic syndrome at the age of 2 years. Thereafter he never, suffered that problem and therefore it was not necessary for him to disclose that fact in the proposal forum at the time of obtaining the policy in question.
To resolve this issue we would like to refer to the judgment of Hon‟ble Supreme Court in Civil Appeal 3821/2024 titled as Mahakali Sujatha Vs The Branch Manager, Future Generali India Life Insurance Company Limited & Anr. 2024 INSC 296 decided on 10.04.2024, wherein Supreme Court inter alia held that :-
"In the context of insurance contracts, the burden is on the insurer to prove the allegation of non- disclosure of a material fact and that the non- disclosure was fraudulent. Thus, the burden of proving the fact, which excludes the liability of the insurer to pay compensation, lies on the insurer alone and no one else."
17. In the above referred case, Hon‟ble Supreme Court has dealt with the term "material fact" and observed that "any fact which has a bearing on the very foundation of the contract of Allowed PAGE 11 OF 14 FA-361/2018 NEERAJ JAIN VS. HDFC ERGO D.O.D: 30.07.2024 insurance and the risk to be covered under the policy would be "material fact".
18. Now, the perusal of the discharge summary page 87 of the reply to the appeal shows that the son of the appellant Mr Sanyam Jain was admitted in Fortis Hospital, Shalimar Bagh on 22.12.2016 with the diagnosis "Enteric fever with Thrombocytopenia with Hepatitis". Further, as per the discharge summary the son of the appellant, Mr Sanyam Jain was having past history of Nephritic Syndrome, which means Mr Sanyam Jain was nephritic. It is also worth noting that Mr Sanyam Jain suffered from kidney disease at the age of 2 years as per query letter sent by the respondent to Fortis Hospital page 64 of reply. But at the time of admission in Fortis Hospital, at the age of 19 years old, he was not having any kidney disease and was suffering from high grade fever/Entric fever/Typhoid with inflammation of liver and platelets counts in blood were at lower side. In other words, he was not suffering from kidney disease at the time of his admission in the hospital. It is further worth noting that the appellant has categorically deposed that the nephritic syndrome was completely cured after the age of 2 years and his son Mr Sanyam Jain never surfaced that problem after the age of 2 years and therefore he was not having documents in that regard. In such a situation, we are of the considered view that the appellant had duly discharged his burden of proof and the onus was on the respondent to prove that the son of the appellant was suffering from nephritic syndrome at the age of 19 years also and the complainant had suppressed that fact by not disclosing the same at the time of the submitting the proposal form to the respondent company.
Allowed PAGE 12 OF 14 FA-361/2018 NEERAJ JAIN VS. HDFC ERGO D.O.D: 30.07.2024
19. We are of the considered view that „Nephritic Syndrome‟ and „Hepatitis‟ are different diseases and the „Hepatitis‟ from which the son of the appellant was suffering at the time of his admission had no connection with the earlier disease of „Nephritic Syndrome‟. In these circumstances, we are of the considered view that the Learned District Forum was not right in holding that no explanation was furnished by the appellant as to what prevented him from disclosing the disease of Nephritic Syndrome at the age of 2 years in proposal form at the time of inception of the policy. Since, the son of the appellant was not suffering from kidney disease at the time of his admission in Fortis Hospital, in these circumstances, it cannot be said that there was concealment of material fact and the appellant was not entitled to any relief.
20. In view of the above discussion, we are of the considered view that Learned District Forum was not right in dismissing the complaint of the appellant by holding that there was no deficiency in service on the part of the respondent.
Further, We would also like to refer to the judgment of Hon‟ble Supreme Court in Oriental Insurance Co. Ltd. vs M/S Ozma Shipping Company & Anr Civil appeal no.6289 of 2001 decided on 25.08.2009, wherein it was held that,
17. Before parting with this case we would like to observe that the insurance companies in genuine and bona fide claims, the insurers should not adopt the attitude of avoiding payments on one pretext or the other. This attitude puts a serious question mark on their credibility and trustworthiness of the insurance companies. Incidentally by adopting honest approach and attitude, the insurance companies would be able to save enormous litigation costs and the interest liability.
Allowed PAGE 13 OF 14 FA-361/2018 NEERAJ JAIN VS. HDFC ERGO D.O.D: 30.07.2024
21. Consequently, the appeal filed by the appellant is allowed.
22. The impugned order dated 30.05.2018 passed by the Learned District Forum, North Shalimar Bagh is hereby set aside.
23. The respondent is directed to pay a sum of Rs 2,27,982/- to the appellant within a period of three months from the date of this order. It is made clear that if the said sum of Rs 2,27,982/- is not paid by the respondent within a period of three months from the date of this judgment, the said amount shall carry an interest at the rate of 6% per annum from the date of this order till realisation.
24. However, in the facts and circumstances of the case the parties shall bear their own costs.
25. Applications pending, if any, stand disposed of in terms of the aforesaid judgment.
26. A copy of this judgment be provided to all the parties free of cost as mandated by the Consumer Protection Act, 1986.
27. The judgment be uploaded forthwith on the website of the commission for the perusal of the parties.
28. Appeal file be consigned to record room along with a copy of this Judgment.
29. Trial court record, if any, be sent back along with copy of this Judgment.
(PINKI) Member (Judicial) (BIMLA KUMARI) Member (Female) PRONOUNCED ON 30.07.2024 Allowed PAGE 14 OF 14