National Consumer Disputes Redressal
Star Health & Allied Insurance Company ... vs Ranjan Mohaparta on 4 September, 2024
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 668 OF 2022 (Against the Order dated 08/07/2022 in Complaint No. 19/2018 of the State Commission Orissa) 1. STAR HEALTH & ALLIED INSURANCE COMPANY LTD. 1ST FLOOR, HIMALAYAYA HOUSE, 23, K.G. MARG, NEW DELHI-110001 ...........Appellant(s) Versus 1. RANJAN MOHAPARTA S/O. LATE MR. RADHAKANTA MOHAPATRA, FLAT NO. A/D-7-1, BLOCK-A, CHANDRAMA HOUSE, COMPLEX, KHARAVELA NAGAR, UNIT-3, BHUBANESWARE, ODISHA ...........Respondent(s)
BEFORE: HON'BLE MR. SUBHASH CHANDRA,PRESIDING MEMBER HON'BLE DR. SADHNA SHANKER,MEMBER
FOR THE APPELLANT :
Dated : 04 September 2024 ORDER
BEFORE:
HON'BLE MR. SUBHASH CHANDRA, PRESIDING MEMBER
HON'BLE DR. SADHNA SHANKER, MEMBER
For the Appellant Mr Ashwary Kathed, Proxy Counsel for
Mr Navneet Kumar, Advocate
For the Respondent Mr Neil Hildreth, Advocate and
Mr Kshitiz Arya, Advocate
ORDER
PER SUBHASH CHANDRA
1. This appeal under Section 19 of the Consumer Protection Act, 1986 (in short, the "Act") is directed against the order dated 08.07.2022 of the Odisha State Consumer Disputes Redressal Commission, Cuttack in Complaint no. 19 of 2018 allowing the complaint in part and directing the opposite party (appellant herein) to pay the complainant (respondent herein) Rs 3,20,000/- as hospitalization charges, Rs 15,00,000/- towards compensation, Rs 5,00,000/- as punitive damages and Rs 25,000/- towards costs within 45 days of the order.
2. We have heard the learned counsel for the parties and perused the records. The delay of 33 days in the filing of the appeal was considered in light of the application seeking condonation of the delay. For the reasons stated therein, the delay was condoned in the interest of justice.
3. The relevant facts of the case, in brief, are that the appellant, who is a health insurance company, had approved a "Senior Citizens Red Carpet Health Insurance Policy" in respect of the respondent with effect from 05.04.2016 for a sum assured of Rs 10,00,000/- against receipt of premium of Rs 25,875/-. Under the scheme, the respondent was declared as suffering from diabetes and hypertension as pre-existing diseases and was eligible for treatment, including hospitalization, subject to terms and conditions. The respondent was admitted to the Intensive Care Unit (ICU) of the Apollo Hospital, Bhubaneshwar on 10.01.2018 for fever with diagnosis of diabetes melitus, lobar pneumonia and DCM. Respondent applied to the appellant for pre-authorization for cashless facility of treatment under the Policy on 11.01.2018. The respondent asked for details of past hospital discharge from SAAOL Heart Centre of 21.05.2016 with duration of treatment of COPD and Rheumatoid Arthritis (RA) and statement from the treating consultant along with past treatment details and first prescription and investigation reports including x-ray, PFT, blood reports and temperature chart. On 12.01.2018 appellant asked for a letter from the treating doctor clarifying when COPD and RA were diagnosed was asked for. On 16.01.2018 the appellant conveyed to the respondent that "As per hospital documents patient has COPD with seropositive rheumatoid arthritis. Duration and past treatment details of the above not provided. It is not possible to establish duration of COPD and rheumatoid arthritis in cashless. We regret that cashless is denied. Please go for reimbursement." Thereafter, the reimbursement claim preferred under the Policy was also repudiated. Respondent filed a complaint before the State Commission which was disposed of, on contest, by order dated 08.07.2022 which is impugned before us.
4. On behalf of the appellant it was argued that under the terms of the Policy, cashless treatment was available to policy holders under the "co-payment" clause which required payment of 50% of the bill for existing diseases and 30% of each and every claim for all other claims. It was contended that the appellant had acted as per the policy and sought details of previous treatment and hospitalization which was not provided and therefore the cashless facility and subsequently the reimbursement was not approved. It was contended that the requisite documents were not provided by the respondent during pre-authorization request and subsequently when reminder letters were sent on 01.03.2018 and 16.03.2018. It was averred that the State Commission had erred in not appreciating the treatment record of the respondent which revealed that he was a known case of rheumatoid arthritis and COPD and had not discussed this aspect in the order, especially since the documents had not been denied by the respondent. It was also contended that the respondent had not filed the affidavit of the treating doctor at Apollo Hospital in support of his arguments that the hospitalization was not related to either RA or COPD. It was submitted that the State Commission failed to appreciate that as per condition no. 4 failure to provide requisite documents amounted to violation of policy conditions and therefore repudiation was justified. According to the appellant the respondent was responsible for not cooperating with them in the reimbursement of his claim. It was also submitted that the impugned order had directed payment of medical reimbursement and imposed excessive and unwarranted compensation (Rs 15,00,000/-), punitive costs (Rs 5,00,000/-) and high rate of interest (12%). It was argued that the State Commission incorrectly relied upon the judgment in Gurmel Singh Vs. Branch Manager, National Insurance Co, Ltd., Civil Appeal No. 4071/2022), the ratio of which did not apply to the case and that the Policy was a contract which had to be strictly interpreted as held by the Hon'ble Supreme Court in Export Credit Guarantee Corp. of India Vs. Garg Sons International, (2013) 3 (1) SCALE 410. It was therefore prayed that the appeal be allowed, and the impugned order set aside.
5. Per contra, it is the case of the respondents that the contentions of the appellant were unfounded since the pre-authorization for cashless treatment was rejected on superfluous and arbitrary grounds that it was not possible to establish duration of Chronic Obstructive Pulmonary Disease (COPD) and Rheumatoid Arthritis (RA) which was not related to the respondent's condition for which he was admitted to the hospital. It was submitted that the appellant's case that the respondent was suffering from COPD and RA was incorrect as he had no such medical history and was therefore unrelated to the processing of the claim for hospitalization and subsequently reimbursement. Respondent had been admitted to the hospital on account of high fever, chills and rigors in an emergency situation and was admitted to the ICU being a senior citizen aged 67 years and, in view of his vulnerable state with no support except his wife, the respondent had requested for cashless facility. It was the respondent's case that despite the Policy providing for cashless facility, the same was denied to him by asking for unrelated documents which was a deficiency in service and unfair trade practice on part of the appellant. It was submitted that the Policy was advertised as a 'Red Carpet' health insurance policy which came with a high premium but when a legitimate claim was preferred the same was denied on flimsy grounds. It was therefore submitted that the appellant failed to meet its commitment as an insurer under the policy by requisitioning documents that were completely unrelated to his health condition/hospitalization. It was submitted that the asking for records relating to therapy sessions at Saaol Hospital two years prior were unrelated to the cause of his hospitalization and were asked for intentionally in order to turn down the request for pre-authorization and, later, re-imbursement. It was submitted that the Policy was based on uberrima fidei or utmost good faith and that diabetes and hypertension having been declared as pre-existing illnesses, the Policy attracted significantly higher annual premium which had been accepted by the appellant. It was contended that the onus of proving that the respondent suffered from COPD and RA lay on the appellant which had not been discharged through any documentary evidence. It was argued that the appellant acted with malicious intent since it sought unrelated and extraneous documents knowing full well that they either did not exist or were beyond the control of the respondent to produce to deny his legitimate claim. It was further argued that the appellant failed to discharge even its admitted liability. According to the respondent, the State Commission's reliance on Gurmel Singh (supra) was valid as the ratio in that case squarely applied to the instant case as it had been held that an insurance company cannot become too technical and act arbitrarily by refusing to settle claims on grounds of non-submission of documents beyond the control of the insured.
6. It is evident that the respondent was hospitalised on 11.01.2018 for complaint of high fever, chills and rigor and a request for pre-authorization for hospitalisation was made to the appellant under the Policy named Senior Citizens Red Carpet Health Insurance Policy which was admittedly approved in his name. Under this policy, respondent was eligible for treatment as an inpatient in a hospital for both pre-existing and declared illnesses/diseases of diabetes and hypertension and other ailments on the basis of a co-payment cashless scheme which required the respondent to pay 50% in case of pre-existing diseases and 30% for other treatments and to seek reimbursement subsequently. Respondent's request for pre-authorisation for hospitalisation was responded to by the appellant which sought details of medical treatment in another hospital nearly two years prior to the pre-authorization request. This included various investigation and test reports including x-ray and the request was turned down on the ground that the documents sought for had not been provided. The subsequent claim for re-imbursement was also turned down for the same reason. Appellant contends that the respondent was responsible for not complying with the terms of the Policy and that the contract of insurance as per settled law has to be interpreted as agreed between the parties. The impugned order is challenged on the ground that there was no appreciation of the above facts by the State Commission and that the award was excessive and unjustified. Respondent has argued that the appellant acted in a mala fide manner in order to deny him the benefit under the Policy by asking for and insisting on submission of records that were entirely unrelated to the cause of hospitalization and in refusing pre-authorization for hospitalization and thereafter re-imbursement which amounted to unfair trade practice and deficiency in service.
7. From the foregoing it is manifest that the Policy was designed for senior citizens. The Policy therefore had features that were designed to factor in the special requirements of diseases and illnesses that afflict the aged. It was further marketed as a 'Red Carpet' Policy that connoted that it would provide special and expedited services as the policy holder belonged to a special class of (senior) citizens through a heightened sensitivity to their requirements. It also conveyed that the service under the policy would be as provided to privileged customers as connoted through the moniker 'Red Carpet'. The facts of the case on hand, however, indicate that the appellant as the insurer delayed and thereafter denied pre-hospitalization authorization by insisting on production of documents pertaining to a treatment availed two years prior. It has not been established by the appellant how the documents sought were material to the hospitalization of the respondent. If the respondent had been admitted for RA and COPD in Apollo Hospital, the requisitioning of the documents would have been germane to the processing of the case by the appellants. In the absence of any documents being brought on record to support this, the contention of the respondent that these were unnecessarily being sought to deny him the facility of cashless treatment in the hospital thereby gets credence. In this context, the reliance placed by the State Commission on Gurmel Singh (supra) notwithstanding the judgment in Garg Sons International (supra) cannot be found fault with. The appeal is therefore liable to be disallowed.
8. In the instant case, not only did the appellant fail to provide privileged facilitation in Medicare for senior citizens despite promising to do so through a policy promoted on such a promise, it is also liable for deficiency in service in that it rejected a claim for cashless admission in the hospital based on co-payment basis as per its own terms and conditions by linking it to documents that were not relevant when the policy holder was admitted in the ICU, but also subsequently at the stage of re-imbursement by again insisting on such documentation. However, insofar as the award re-imbursement of medical expenses, compensation, punitive damages and costs by the State Commission is concerned, while it is manifest that the appellant is liable for both unfair trade practice and deficiency in service, we consider it appropriate to modify the order of the State Commission us under:
(i) appellant shall re-imburse the respondent the sum of Rs 3,20,000/- with compensation for deficiency in service and unfair trade practice in the form of interest @ 10% p.a. from the date of discharge from the hospital till the date of this order within 6 weeks, failing which the amount shall be paid with interest @ 12% till the date of realization;
(ii) appellant shall also pay the respondent litigation charges of Rs 1,00,000/- within 6 weeks;
(iii) punitive charges of Rs 5,00,000/- is modified to Rs 2,00,000/- which shall be deposited in the Legal Aid Account of the State Commission with the directions that the same be used by it to promote consumer awareness relating to medical re-imbursement matters;
(iv) the direction regarding compensation of Rs 15,00,000/- is set aside as compensation by way of interest awarded at (i) above subsumes all compensations.
9. The appeal is disposed of with these directions. Pending IAs, if any, also stand disposed of with this order.
...................................... SUBHASH CHANDRA PRESIDING MEMBER ............................................. DR. SADHNA SHANKER MEMBER