Padma Pandey, Member
1. The facts in brief are that the complainant, in the year 2011, had purchased health insurance policy bearing no.30054948201504, named Family First Gold (cashless treatment) for his entire family members i.e. for himself, his father, mother, spouse and two sons, which was got renewed from time to time, on making payment of premium. It was stated that during the period of subsistence of the said policy i.e. 10.10.2015 to 09.10.2016, mother of the complainant took treatment and also got done investigations at various Hospitals, for her right mouth (Buccal Mucosa) carcinoma, squamous cell, Keratinizing type, which had been diagnosed by the Surgical Pathology Department of the PGI Chandigarh vide report dated 11.03.2016, for which an amount of Rs.15,81,499/- was spent by him (complainant), which included regular follow-ups with the Doctors concerned. However, when claim for medical reimbursement of the said amount was raised before the opposite parties, it was repudiated by them, vide letter dated 15.04.2016 Annexure C-4, on the ground that there had been a non-disclosure of pre-existing illness/medical conditions on the part of the insured, at the time of filling up proposal form, for obtaining the said policy. It was further stated that not only as above, even the insurance policy, in question, was illegally canceled by the opposite parties and also they forfeited the premium paid. It was further stated that, thereafter, several emails were exchanged between the parties and ultimately vide letter dated 01.06.2016 Annexure C-6, the opposite parties informed the complainant that her mother (insured) was having a history of ulcer in oral cavity in the year 2009 and also history of tuberculosis in the year 2001.
It was further stated that, on the other hand, at the time of issuance of the said Policy, Medical Examiner namely Dr.Prem Chand, M.B.B.S., deputed by the opposite parties, declared that there is nothing, which might unfavorably affect insurability, as far as the insurance policy, in question, is concerned. Even the gums, teeth and tongue of the mother of the complainant was declared as healthy. It was further stated that, as far as the history of ulcer in the oral cavity in the mouth of mother of the complainant, is concerned, it was reported in the year 2009, yet, as per Surgical Pathology Report dated 27.06.2009 issued by the PGIMER, Chandigarh, there was no evidence of dysplasia or malignance and as such was found non-carcinogenic.
By stating that the act of the opposite parties in repudiating the genuine claim filed by the complainant, in respect of her mother’s treatment aforesaid, and also terminating the policy, in question, amounts to deficiency in providing and adoption of unfair trade practice, the present complaint has been filed by him, directing them (opposite parties) to restore the policy, in question, pay the claim amount, alongwith compensation, litigation expenses etc.
2. In the reply filed by the opposite parties, factual matrix of the case, with regard to obtaining of health insurance policy, as mentioned by the complainant, in his complaint; renewal thereof from time to time till 2015 on payment of premium; treatment of mother of the complainant etc. were admitted. However, it was stated that the mother of the complainant/insured had concealed the material facts with regard to preexisting disease, at the time of filling up proposal form. It was further stated that the mother of the complainant did not disclose the correct information about her health, deliberately, that she had been suffering from tuberculosis since 2001 and was under treatment for the same. It was further stated that, furthermore, the mother of the complainant also did not disclose that she had Ulcer in her oral cavity since 2009, which was revealed during biopsy, and was under treatment for the same also. It was further stated that, before issuance of the policy, in question, the opposite parties had conducted general tests like blood, urine, ECG etc. of the insured, based on the information provided in the proposal form. It was further stated that under above circumstances, the claim, in question, was rightly repudiated by the opposite parties. Pecuniary jurisdiction of this Commission was also challenged. It was further stated that the claim raised by the complainant was only for an amount of Rs.7,00,023/-, whereas, in order to mislead this Commission, the total claim has been shown to be Rs.15,81,499/-.
3. The complainant filed rejoinder wherein, all the averments contained in the complaint were reiterated and those in the written statement filed by the opposite parties, were rebutted.
4. The contesting parties, led evidence in support of their case and also raised arguments in terms of pleadings noted in earlier part of this order, which were heard, in detail.
5. The first question, that falls for consideration, is, as to whether, this Commission has pecuniary jurisdiction to entertain this complaint or not. It may be stated here that as per Section 17 (1) (a) of the Act, the State Consumer Disputes Redressal Commission shall have pecuniary jurisdiction to entertain any complaint, complaints where the value of the goods or services and compensation, if any, claimed exceeds rupees twenty lakhs but does not exceed rupees one crore. It was also so elucidated elaborately by Large Bench of the National Commission in the case titled as Ambrish Kumar Shukla and 21 ors. Vs. Ferrous Infrastructure Pvt. Ltd., Consumer Case No.97 of 2016, decided on 07.10.2016. Relevant part of the said order reads thus:-'It is evident from a bare perusal of Sections 21, 17 and 11 of the Consumer Protection Act that it’s the value of the goods or services and the compensation, if any, claimed which determines the pecuniary jurisdiction of the Consumer Forum. The Act does not envisage determination of the pecuniary jurisdiction based upon the cost of removing the deficiencies in the goods purchased or the services to be rendered to the consumer. Therefore, the cost of removing the defects or deficiencies in the goods or the services would have no bearing on the determination of the pecuniary jurisdiction. If the aggregate of the value of the goods purchased or the services hired or availed of by a consumer, when added to the compensation, if any, claimed in the complaint by him, exceeds Rs. 1.00 crore, it is this Commission alone which would have the pecuniary jurisdiction to entertain the complaint. For instance if a person purchases a machine for more than Rs.1.00 crore, a manufacturing defect is found in the machine and the cost of removing the said defect is Rs.10.00 lacs, it is the aggregate of the sale consideration paid by the consumer for the machine and compensation, if any, claimed in the complaint which would determine the pecuniary jurisdiction of the Consumer Forum. Similarly, if for instance, a house is sold for more than Rs.1.00 crore, certain defects are found in the house, and the cost of removing those defects is Rs.5.00 lacs, the complaint would have to be filed before this Commission, the value of the services itself being more than Rs.1.00 crore. 'In the present case also, no doubt, the complainant has raised dispute with regard to non-settlement of the claim, amounting to Rs.15,81,499/- (Rs.7,00,023/- plus future medical expenses), plus compensation to the tune of Rs.5 lacs, yet, it is evident from the policy document/insurance certificate (at page 29 of the file) that the total sum insured i.e. value of the goods purchased i.e. the sum assured in respect of the insurance policy in question, out of which the present dispute arose with regard to non-settlement of claim, was to the tune of Rs.27 lacs.At the same time, in the complaint, a prayer has also been made by the complainant, to issue directions to the opposite parties, to restore the said policy, having total sum assured value to the tune of Rs.27 lacs.
Thus, taking from any angle, it can be said that this Commission has pecuniary jurisdiction to entertain and decide this complaint. Plea taken by Counsel for the opposite parties, in this regard, therefore, being devoid of merit is rejected.
6. Now coming to the merits of the case, Counsel for the opposite parties, has vehemently contended that issuance of policy was a result of fraud committed by the insured. When proposal form was filled up, the insured did not disclose the correct information about her health deliberately, that she had been suffering from tuberculosis since 2001 and was under treatment for the same and also that she had Ulcer in her oral cavity since 2009, which was revealed through biopsy, and was under treatment for the same also. To prove the above fact, reference was made to the Patient Admission Record, prepared by the Hospital concerned on 25.03.2016 (Annexure R-4 colly.), where the insured had undergone some treatment related to her right mouth (Buccal Mucosa) carcinoma, and remained admitted. The said record was provided by the insured herself, alongwith the claim form. It was argued that since it has been proved that the insured was suffering from epilepsy 15 years ago and also tuberculosis 13-14 years ago, for which she took treatment, and this fact was never disclosed by her, at the time of filling the proposal form and obtaining the insurance policy, in her favour, as such, it amounts to concealment of material facts, as a result whereof, the claim was rightly repudiated by the opposite parties and also since the policy, in question, was obtained by fraud, it was further rightly cancelled by the opposite parties.We have gone through the documents on record and are not inclined to accept the argument raised. It may be stated here that except Patient Admission Record, prepared by the Hospital concerned on 25.03.2016 (Annexure R-4 colly.), where the insured had undergone some treatment related to her right mouth (Buccal Mucosa) carcinoma, and remained admitted, there is no other evidence on record to prove that the insured was suffering from any disease, as alleged. However, not even a slightest evidence has been brought on record to prove the factum of her suffering from epilepsy or tuberculosis and who was the person who had disclosed that fact of her suffering from epilepsy or tuberculosis to the doctor, who prepared the said record.
7. The claim of insured was denied vide letter dated 15.04.2016 by the opposite parties, only on account of non-disclosure of her alleged preexisting illness i.e. epilepsy and tuberculosis. We are of the view that the burden was on the opposite parties, to prove that the insured had concealed material fact of her pre-existing disease at the time of taking the policy. There is no other document on record except the Patient Admission Record, prepared by the Hospital concerned on 25.03.2016, where she was admitted and remained under treatment. As per the said Patient Admission Record, the alleged past history was epilepsy and tuberculosis, as far as back in 2001, for which she had taken treatment for some time. The opposite parties have failed to produce on record any document to show that the insured was and is still suffering from the said disease. The opposite parties have further failed to get further information from the hospital, as to whether the doctor who recorded the past history recorded the said information on the basis of the information given by the insured or her relative or some medical prescriptions were consulted. It was the duty of the opposite parties to prove who supplied this information to the hospital. It was also the duty of the opposite parties to conduct a thorough enquiry about the previous treatment of alleged epilepsy or tuberculosis obtained by the complainant. However, no such enquiry was conducted. Even the affidavit of the doctor who recorded the said history has not been produced on record. So, merely on the basis of past history mentioned in the Patient Admission Record, prepared by the Hospital concerned on 25.03.2016, it cannot be said that the insured was suffering from epilepsy or tuberculosis at the time of taking the policy and she has intentionally concealed the said material fact. In United India Insurance Co. Ltd. & Anr. Vs. S.K. Gandhi, 2015 (2) CLT 71 (NC), the insurance company had not placed on record either the discharge summary of the complainant or any medical document signed by the doctors who treated him in Kailash Hospital, to show that the complainant, when he was admitted to the said hospital, had himself stated that he was suffering from hypertension from last 8-9 years. In that case it was held that it is quite possible that the complainant, despite suffering from hypertension was not actually aware of the same and he cannot be accused of misstatement or concealment. Onus was upon the insurance company to prove that he had made a misrepresentation while obtaining the insurance policy and since the insurance company failed, it was held that it was liable to pay to the complainant to the extent of sum insured by it. In Satish Chander Madan Vs. M/s Bajaj Allianz General Insurance Co. Ltd., 2016 (1) CPJ 613 (NC) it was held that hypertension is a common ailment and it can be controlled by medication and it is not necessary that person suffering from hypertension would always suffer a heart attack. It was further held that treatment for heart problem cannot be termed as claim in respect of pre-existing disease and the insurance company was held liable. In Oriental Insurance Co. Ltd. Vs. Naresh Sharma & Ors., 2015 (2) PLR 75, the Hon’ble Punjab and Haryana High Court held that the exclusion clause has to be read to the benefit of patient in genuine circumstances. Where respondent was admitted in hospital suffering from headache, giddiness and hypertension, his claim cannot be rejected on the basis of exclusion clause. Reliance can also be placed on a Division Bench judgment of Hon’ble Punjab and Haryana High Court in CWP No.9738 of 2008-Life Insurance Corporation of India Vs. Permanent Lok Adalat & Anr. decided on 17.10.2008, wherein it was held that the duty to disclose is limited to the facts within the knowledge of the assured, a mistaken statement about a material fact made honestly, that is, with belief in its truth, will not affect the validity of the contract. Reliance was also placed upon a decision of Division Bench of Hon’ble Madras High Court in All India General Insurance Co. Ltd. & Anr. Vs. S.P. Maheshwari, AIR 1960 Madras 484 wherein it was found that the answers to the questions are representations and a false representation will not operate to vitiate the contract or avoid the policy unless the fact is actually, material or clearly intended to be made material by the agreement between the parties. The insurer can avoid the policy only by proving that the statement is false or fraudulent or that it was false and material to the risk. It was further observed as under :-'In the present case, there is no proof of the insured having been suffering from hypertension for a period of 10 years and assuming it to be so, hypertension is a disease which can escape attention of a person and is required to be diagnosed by experts.'
8. So, in the present case, the opposite parties have failed to produce cogent evidence to prove that prior to the date of taking the policy, the insured was suffering from epilepsy or tuberculosis and was getting any treatment and that fact was in her knowledge and she intentionally concealed the same. There is no dispute with regard to the law laid down in the judgments referred by Counsel for the opposite parties, but, the same are not applicable to the facts of the present case because in the present case the opposite parties have failed to produce cogent evidence to the effect that the insured had knowledge of epilepsy or tuberculosis and had intentionally concealed the treatment thereof.
9. Furthermore, there is another document named Medical Examination Report dated 06.10.2011 Annexure C-7, which reveals that at the time of issuance of the said policy, Dr.Prem Chand, M.B.B.S, (Retd.), SMOC, Regd No.14440 was deputed by the opposite parties, to carry out medical examination of the insured with regard to her health, lifestyle or character, which might unfavorably affect insurability or any point, which he suggests further information be obtained from her (insured). The said Doctor was also asked to give his remarks e.g. clinical impression, suggestions, recommendations etc., to which he answered in 'NO' meaning thereby that the said Doctor was satisfied, as far as the health of the insured was concerned.
10. Not only as above, it has also come on record that the age of the insured, at the relevant time of obtaining the said policy, was above 45 years. In that event, as per instructions issued by Insurance Regulatory & Development Authority of India (IRDAI), it was duty of the opposite parties to put the insured to thorough medical examination. In the case of National Insurance Company Ltd. Vs Harbirinder Singh, Appeal No.220 of 2016 decided on 30.9.2016, this Commission noting above said fact and failure on the part of insurance company to get thorough medical examination of the insured before issuance of mediclaim insurance policy, dismissed appeal filed by the insurance company by observing as under:'To deny claim raised by the complainant, reliance has been placed upon self declaration form R-2 (page-74 of the original paper book). The said declaration form has been signed by Saranbir Kaur on 5.2.2013. There is nothing on record to show that Policy was issued to the complainant and his wife on the said date, by believing above document. The policy infact was issued on 13.2.2013. The appellants have failed to co-relate the said declaration form with the policy (C2), referred to above. A note is appended on the said declaration form that it needs to be filled up if the age of the member is above 45 years. The complainant and his wife both are older than the said age. There is noting on record to show that before insurance policy was issued to them, the appellants got them medically examined, which as per instructions issued by Insurance Regulatory & Development Authority of India (IRDAI) is must in such like cases. This Commission in M/s Max Bupa Health Insurance Co. Ltd. Vs Rakesh Walia, Appeal No.191 of 2016 decided on 18.8.2016, in similar circumstances dismissed appeal filed by M/s Max Bupa Health Insurance Co. Ltd. against complainant observing that as per IRDAI Regulations, it is mandatory in case of issue of mediclaim policy in favour of a person more than 45 years of age, to get him thoroughly examined. In that case actually medical examination was got done. However, insured was not put to thorough medical examination which led to this Commission to observe that in such cases, insurance company has to suffer the consequences.'
11. Similar view was taken by this Commission in the case of M/s Max Bupa Health Insurance Co. Ltd. Vs Rakesh Walia, Appeal No.191 of 2016 decided on 18.8.2016, wherein it was also stated that if contrary to the instructions issued by IRDAI, an insured above the age of 45 years, was not put to thorough medical examination, claim raised after issuance of insurance of policy cannot be rejected on account of non-disclosure of the fact of pre-existing disease when policy was obtained.Thus, under above circumstances, if the opposite parties themselves, failed to adhere the instructions issued by Insurance Regulatory & Development Authority of India (IRDAI), by putting the insured to thorough medical examination, being her age more than 45 years, and were interested in collecting premium from the complainant, as such, now at this stage, they cannot evade their liability, especially, in the face of Medical Examination Report dated 06.10.2011 Annexure C-7, of Dr.Prem Chand, M.B.B.S, (Retd.), SMOC, Regd No.14440, referred to above.
It is therefore held that repudiation of genuine claim to the tune of Rs.7,00,023/-, raised by the complainant, was not justified and this act amounted to deficiency in providing service and adoption of unfair trade practice on the part of the opposite parties. Not only as above, deficiency in rendering service and adoption of unfair trade practice is writ large as they, thereafter, cancelled the insurance policy, in question, on similar ground.
12. Now the question arises, as to what amount, the complainant is entitled to. It may be stated here that, it is an admitted case, that, in the first instance, the complainant had raised the claim amounting to Rs.7,00,023/-, vide claim form, at page 54 of the file. It was also mentioned by the complainant, at the bottom of the said claim form that 'Post hospitalization is still going on and Radiation as suggested by Dr.Sanjay Sharma will be starting in 2nd week of May 2016. It is significant to mention here that the said claim of Rs.7,00,023/-, was raised by the complainant, which amount was spent by him on the part treatment of her mother (the insured), taken in Lilavati Hospital and Research Centre, Mumbai for 'carcinoma Squamous cell Keratinizing', for the period from 25.03.2016 to 05.04.2016. Admittedly, the said claim was rejected by the opposite parties, on the ground, referred to above. However, in this complaint, the complainant had also prayed for making payment of the amount of Rs.8,81,476/- spent by him (over and above the amount of Rs.7,00,023/-), for further treatment of the insured after 05.04.2016, on the ground that since the insurance policy, in question, has been cancelled by the opposite parties, as such, the remaining amount over and above Rs.7,00,023/-, totaling to Rs.15,81,499/- be also awarded to him.First coming to the amount of Rs.7,00,023/-, it may be stated here that once it has been held above, that the opposite parties were wrong in repudiating the said claim amount, and also that the insurance policy, in question, was wrongly cancelled by them (opposite parties) as such, the complainant is entitled to the amount of Rs.7,00,023/-, alongwith interest.As far the remaining amount of Rs.8,81,476/-, referred to above, is concerned, it may be stated here that since, the complainant failed to place on record any document to prove that claim in respect of the said amount was
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raised before the opposite parties and the same has been repudiated by them, as such, any dispute with regard to the same cannot be entertained by this Commission, at this stage. At the time of arguments, it was contended by Counsel for the complainant that had the claim in respect of said amount been raised before the opposite parties, the same would have also been repudiated by them, on similar grounds. It may be stated here that this Commission is not bound to grant relief to the consumers, on presumptions and assumptions. To get relief, the party concerned has to prove its case, by placing on record, cogent and convincing documents. As such, relief claimed by the complainant, in respect of amount of Rs.8,81,476/- is declined at this stage, being premature. However, in the interest of justice, the complainant is at liberty to file complaint in respect of any amount, legally due to him, over and above Rs.7,00,023/- in respect of the policy, in dispute, if the same when raised is repudiated by the opposite parties, illegally, which shall be decided as per facts and will have no binding effect of the findings passed in this order. 13. No other point, was urged, by the contesting parties. 14. For the reasons recorded above, this complaint is partly accepted, with costs, with following directions to the opposite parties:- i. To restore the policy, in question, in favour of the complainant and his family members, referred to above, after adjusting the premium, if any, already paid by him and/or on receiving payment of premium, if due towards him. ii. To pay an amount of Rs.7,00,023/- to the complainant, alongwith interest @9% p.a. from the date of its repudiation. iii. To pay compensation, in the sum of Rs.75,000/- for causing mental agony and physical harassment to the complainant. iv. To pay cost of litigation to the tune of Rs.33,000/- to the complainant. v. This order shall be complied within a period of 45 days, from the date of receipt of certified copy thereof, failing which the amount at Sr.No.(ii) above, shall further carry penal interest @12% from the date of default i.e. after expiry of 45 days and the amount at Sr.Nos.(iii) and (iv) shall carry interest @9% p.a. from the date of filing of this complaint till realization. 15. Certified Copies of this order be sent to the parties, free of charge. 16. The file be consigned to Record Room, after completion.