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Rajesh Bhatia S/o Late Harbans Lal v. ICICI Lombard General Insurance Company Ltd.

District Consumer Disputes Redressal Commission

Feb 9, 2021

Judgment

Subsequent
References

CaseIQ

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Summary of Opinion: District Consumer Disputes Redressal Commission, Jalandhar — Rajesh Bhatia v. ICICI Lombard General Insurance Company Limited et al.

Factual and Procedural Background

The complainant, Rajesh Bhatia, purchased a health insurance policy (Secure Mind Medi claim, Certificate No. 4065/FICL/121737690/00/000) effective from 20.09.2016 to 19.09.2020 with sum assured Rs.1,00,000/- and paid a premium of Rs.2,877.58. On 09.04.2017 he attended Apollo Hospital, Amritsar, where he was advised admission and subsequently diagnosed with a liver disease. He remained admitted until 18.04.2017 and incurred medical expenses of Rs.77,652/-. He submitted a claim for reimbursement to the insurer (OP-1) and received a requisition for additional information from OP-3 on 07.07.2017, which he furnished. The claim was repudiated by the insurers by letter dated 11.10.2017 on the ground of a pre-existing disease.

The complainant filed Complaint No.208 dated 14.05.2018 under the Consumer Protection Act before the District Consumer Disputes Redressal Commission, Jalandhar. OPs No.1 and 2 appeared and filed a joint written reply. OP-3 did not appear and was proceeded against ex parte. Evidence was adduced: the complainant tendered an affidavit (Ex.CW1/A) and documents Ex.C-1 to Ex.C-11; OPs No.1 & 2 tendered an affidavit of Apurva Sharma (Ex.O-A) and documents Ex.O-1 to Ex.O-8. The Commission heard arguments and reserved its decision, delivering the order dated 09.02.2021.

Legal Issues Presented

Whether the insurer was justified in repudiating the complainant's claim on the ground that the disease was pre-existing at the time of proposal/issuance of the policy.
Whether the complainant had concealed material facts concerning his health at the time of obtaining the insurance policy.
Whether, in the absence of proof that policy terms and conditions were supplied to the insured, the insurer could rely on those terms to repudiate the claim.
What relief, if any, the complainant is entitled to for repudiation of claim and alleged deficiency of service/unfair trade practice.

Arguments of the Parties

Complainant's Arguments

The complainant denied any knowledge of a pre-existing liver disease at the time the policy was obtained and asserted that he did not deliberately conceal any material fact regarding his health.
The complainant contended OPs failed to produce evidence proving the disease was pre-existing at the time of obtaining the policy or at the time of filing the revival/major revival form.
It was argued that the policy terms and conditions were not supplied to the complainant, and therefore those terms could not be invoked against him to withhold the claim unless it was shown that the terms had been furnished to him.
Prayed for reimbursement of Rs.77,652/- and compensation of Rs.3,00,000/- for mental tension and harassment (as per the complaint).

Opposite Parties' (OP No.1 & 2) Arguments

The insurers alleged the complainant was a known case of Chronic Liver Disease (CLD) due to recurrent hepatitis leading to CLD, and that symptoms and history pre-dated the policy inception and therefore constituted a pre-existing disease within the policy exclusion period.
The insurers relied on medical certificates and diagnostic reports (including ultrasound reports dated 05.07.2016 and 21.01.2017, treating doctor certificates dated 09.04.2017 and 09.09.2017, and hospital discharge summary) to assert that the complainant had a history of liver disease for the prior two years.
They maintained the complainant concealed material facts in the proposal form and made false statements; therefore repudiation under the policy terms was justified.
Prayed for dismissal of the complaint with costs, asserting no deficiency or negligence on their part.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Hon'ble Himachal Pradesh State Consumer Disputes Redressal Commission, Shimla — ICICI Lombard General Insurance Company Ltd. v. Jasbir Singh, 2014 (1) CLT 220	Illustration of a repudiation on the ground of suppression of a pre-existing disease (hypertension) and discussion whether such conditions are lifestyle diseases controllable with medication.	The Commission noted this judgment and stated it "followed the above observations," treating it as a relevant precedent in considering the complainant's claim and the insurers' repudiation grounds.
CA 3397/2020 — Bajaj Allianz v. Dalbir Kaur (cited)	Cited by OPs' counsel (exact principle from the citation not elaborated in the opinion text).	Referenced by the insurers' counsel during arguments; the Commission's order records the citation but does not elaborate on specific application beyond noting reliance placed by parties on various authorities.
SC 2776/2006, Life Insurance Corporation of India & Ors. v. Smt. Asha Goel & Anr. (also cited: 2001 ACJ 806; AIR 2008 SC 424; CA No.3944 of 2019 @ SLP (C) No.5001/2019)	Authorities concerning suppression of material facts and repudiation by life insurers (specific principles not separately detailed in the text).	Cited by counsel for OPs in support of the insurers' position. The Commission's order records the citation among authorities relied upon during argument but does not reproduce a distinct holding from these citations.
2010 (1) C.P.J. 77 ; 2010 (2) CLT 121 ; 2008 (52) R.C.R. (Civil) 243	Authorities dealing with Consumer Protection Act, 1986 s.15 — life insurance; suppression of material facts; treatment of medical certificates; and circumstances where entries filled by agents render policyholders not solely blameworthy for concealment.	The Commission expressly placed reliance on these authorities and reproduced relevant portions (as recorded in the opinion) to support the view that medical certificates are not necessarily conclusive, entries filled by agents may absolve policy-holders of blame, and past medical history cannot be the sole basis for repudiation without adequate evidence (for example, an affidavit from the certifying doctor).

Court's Reasoning and Analysis

The Commission proceeded by reciting the factual matrix: policy inception 20.09.2016, hospital admission and treatment from 09.04.2017 to 18.04.2017, and claim for Rs.77,652/- which was repudiated on 11.10.2017 on the ground of a pre-existing disease.

The insurers' case rested on documentary medical evidence and treating doctor certificates which, they contended, showed a prior history of Chronic Liver Disease (including ascites and cirrhosis) for about two years prior to admission and within 48 months of the policy inception—thus invoking the policy exclusion for pre-existing disease.

The complainant disputed knowledge of any such disease at the relevant time, denied concealment, and asserted that the insurers had not produced evidence showing the policy terms and conditions had been supplied to him and hence the insurers could not rely on those provisions to deny the claim.

In resolving the dispute, the Commission reviewed the evidence on record (complainant's bills and documents Ex.C-1 to Ex.C-11; OPs' documents Ex.O-1 to Ex.O-8) and the authorities cited by the parties. The Commission placed particular reliance on consumer/insurance precedents (as listed above) emphasizing that:

Medical certificates are not conclusive in themselves where contradictions exist.
Where proposal forms or entries are filled in by agents, policyholders should not be automatically blamed for concealment if the entries were not properly scrutinized by the insurer or its agents.
Past medical history cannot be the sole ground for repudiation of a claim in the absence of further adequate proof, for example an affidavit from the certifying doctor corroborating that the disease was pre-existing at the relevant time.

Applying those principles to the facts and evidence on record, the Commission concluded that the insurers had not sufficiently established the complainant's deliberate concealment of a pre-existing disease to justify repudiation in full. The Commission therefore found it appropriate to partly allow the complaint and grant monetary relief to the complainant.

Holding and Implications

HOLDING: The complaint is PARTLY ALLOWED.

Direct orders issued by the Commission (as recorded in the opinion):

The insurers (OPs) are directed to reimburse the complainant Rs.77,652/-, being the amount actually spent by him on treatment (as per Ex.C-2 and Ex.C-3).
The insurers are further directed to pay Rs.10,000/- as a consolidated amount of compensation for mental and physical harassment caused to the complainant.
The insurers are ordered to deposit Rs.5,000/- (an estimated rough amount) with the legal aid account of the Commission.
Copies of the order were directed to be supplied to the parties free of cost; the file to be indexed and consigned to the record room after due compliance.

Implications: The direct effect of the decision is restoration to the complainant of the treatment expenses and a modest compensation award, together with a small deposit to the Commission's legal aid account. The Commission relied on prior consumer/insurance authorities to decline to uphold a complete repudiation where insurers have not conclusively proven material suppression by the insured. The opinion does not purport to set a new binding precedent beyond applying and following the cited authorities; no broader rule beyond the direct relief to the parties is declared in the text of the order.

ANNOUNCED IN OPEN COMMISSION on 09 February 2021. (Kuljit Singh) President; (Jyotsna) Member.

This summary is based exclusively on the information contained in the provided opinion. No information was added beyond what appears in the opinion text.

Show all summary ...

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, JALANDHAR. Complaint No.208 of 14.05.2018 Date of Decision:09.02.2021 Rajesh Bhatia S/o Late Harbans Lal R/o ED-300, Dhann Mohalla, Old Railway Road, Jalandhar. ..........Complainant Versus ICICI Lombard General Insurance Company Limited, 2 Floor, Nirmal Complex, (Swagatnd Palace), Plot No.EH-198, G.T. Road, Jalandhar through its Branch Manager. ICICI Lombard General Insurance Company Limited, ICICI Bank Towers Bandra Kurla Complex, Mumbai 400051 through its Chairman. IL Health Care, PA Claims, ICICI Bank Tower, Plot No.12, Financial District, Nanakgamguda, Gachibowli, Hyderabad (A.P.) 500032 through its Incharge. ... Opposite Parties Complaint Under the Consumer Protection Act. Before: Sh. Kuljit Singh (President) Smt. Jyotsna (Member) COUNSEL FOR THE PARTIES: For complainant : Sh.Rakesh Sharma, Advocate For Op No.1&2 : Sh.R.K. Sharma, Advocate For OP-3 : Ex parte Order Kuljit Singh (President) The instant complaint has been filed by the complainant, wherein he alleged that complainantin the month of Sept. 2016 purchased Secure Mind Medi claim Insurance Policy certificate No.4065/FICL/121737690/00/000 for his life from the OP-1 and paid Rs.2877.58 Ps being the insurance premium for the period 20.09.2016 to 19.09.2020 and accordingly, the OP-2 issued insurance policy to complainant. Unfortunately, the complainant become sick and went to Apollo Hospital Amritsar for his checkup on 09.04.2017 and concerned doctor advised the complainant for admission in hospital for proper diagnose. Doctor diagnosed a lever disease after performing the various investigation/tests in the hospital and accordingly for the treatment of diagnosed disease, complainant remained admitted in the hospital upto 18.04.2017. Complainant incurred an amount of Rs.77652/- during treatment at the time of admission in hospital. Complainant visited the OP No.1 and filled up form for reimbursement of claim of Rs.77652/- and submitted the original bills with claim form. Complainant received a letter dated 07.07.2017 issued by OP-3 wherein certain information was required for reimbursement of claim. The complainant furnished the requisite information. Complainant shocked when he received a letter dated 11.10.2017 where in OPs repudiated the claim of complainant. In this way, there is deficiency in service, negligence and unfair trade practice on the part of OPs for non-reimbursement. Lastly prayer has been made that OPs be directed to pay Rs.3,00,000/- as compensation for mental tension, harassment. Notice of the complaint was given to the OPs and accordingly, OPs No.1 & 2 appeared through its counsel and filed joint written reply, whereby contested the complaint by taking preliminary objections that thecomplaint is not maintainable; claim is for reimbursement of the expenses on treatment from Apollo Hospital, Amritsar from 09.04.2017 to 18.04.2017. The complainant was admitted in Apollo Hospital Amritsar as a known case of Chronic Liver Disease due to recurrent and frequent Hepatitis leading to Chronic Liver disease (CLD). The treading doctor on the date of admission of complainant with Apolo Hospital Amritsar has given certificate date 09.04.2017 to the effect that complainant presented with jaundice and protrusion of abdomen from last two months and that the complainant is known case of Chronic Liver Disease with Ascites and there is past history of recurrent and frequent Hepatitis due to Chronic Liver Disease for last two years (Alcoholic Liver Disease). The treating doctor has also given certificate to this effect on 09.09.2017. The fact and history of liver disease of complainant is corroborated by U/s Scan whole abdomen dated 05.07.2016 by Kapoor Scanning Centre, Jalandhar and Ultra Sound study of abdomen report dated 21.01.2017 by Golden Diagnostics, Amritsar and Scan report dated 21.01.2017 of Golden Diagnostic Amritsar. The questionnaire filled by treating doctor dated 29.09.2017 also shows that the complainant is known case of Alcoholic Liver Disease from last two years. The discharge card of Apollo Hospital dated 18.04.2017 also reveals that complainant was admitted with the cirrhosis of Liver and final diagnosis of decompensated Liver Disease Cirrhosis from last two years which fall prior to and within 48 months from the date of policy inception on 20.09.2016 and is pre-existing disease, as such claim of the complainant was repudiated vide letter dated 11.10.2017 on the ground of pre-existing disease that any insured event arising on account of the or in connection with any pre-existing disease is not payable as per terms and conditions of insurance policy after due application of mind. There is no deficiency on the part of OPs. On merits, the OPs have reproduced all averments as submitted under preliminary objection. Other averments of the complaint are denied and prayed for dismissal of complaint with costs. Upon notice OP-3 has failed to appear and ultimately proceeded against ex parte vide order dated 20.06.2018. In order to prove the case of the complainant, the counsel for the complainant tendered into evidence affidavit complainant Ex.CW1/Aalongwith documents Ex.C-1 to Ex.C-11 and closed the evidence. In order to rebut the evidence of the complainant, the counsel for OP No.1&2 tendered affidavit of Apurva Sharma Ex.O-A alongwith some documents Ex.O-1 to Ex.O-8 and then closed the evidence. We have heard the argument from learned counsel for the respective parties and also gone through the case file very carefully. During arguments the contentions of parties are similar to the pleadings, so no need to reiterate the same. The facts of the case, in brief, are that the complainant had taken an insurance policy bearing No.4065/FICL/121737690/00/000 from OPs with sum assured of Rs.1,00,000/- valid from 20.09.2016 to 19.09.2020. The become sick and went to Apollo Hospital Amritsar for his checkup on 09.04.2017 and concerned doctor advised the complainant for admission in hospital for proper diagnose. Doctor diagnosed a lever disease after performing the various investigation/tests in the hospital and accordingly for the treatment of diagnosed disease, complainant remained admitted in the hospital upto 18.04.2017. Complainant spent an amount of Rs.77,652/- as per Ex.C-2 and Ex.C-3 during treatment at the time of admission in hospital. Complainant lodged reimbursement of claim of Rs.77652/- and which was repudiated by OPs vide letter dated 11.10.2017. The OPs argued the matter, inter alia, on the ground that while submitting the proposal form for getting the policy, the insured had not correctly stated about his state of health as at that the complainant was admitted in Apollo Hospital Amritsar as a known case of Chronic Liver Disease due to recurrent and frequent Hepatitis leading to Chronic Liver disease (CLD). The treading doctor on the date of admission of complainant with Apollo Hospital Amritsar has given certificate date 09.04.2017 to the effect that complainant presented with jaundice and protrusion of abdomen from last two months and that the complainant is known case of Chronic Liver Disease with Ascites and there is past history of recurrent and frequent Hepatitis due to Chronic Liver Disease for last two years (Alcoholic Liver Disease). The treating doctor has also given certificate to this effect on 09.09.2017. The fact and history of liver disease of complainant is corroborated by U/s Scan whole abdomen dated 05.07.2016 by Kapoor Scanning Centre, Jalandhar and Ultra Sound study of abdomen report dated 21.01.2017 by Golden Diagnostics, Amritsar and Scan report dated 21.01.2017 of Golden Diagnostic Amritsar. The questionnaire filled by treating doctor dated 29.09.2017 also shows that the complainant is known case of Alcoholic Liver Disease from last two years. He had concealed the material facts regarding his health and did not disclose them in his proposal form and made fake statements deliberately and, as such, the claim was rightly rejected. The learned counsel for OPs argued that Insurance Policy was obtained by making material concealment of pre-existing disease. As such, his claim is rightly rejected as per terms and conditions of the Insurance Policy. On it, the learned counsel for complainant argued that it is wrong that complainant was having any knowledge of any such disease. The complainant never concealed any fact regarding his health from the OPs. Moreover, OPs have not produced any evidence in support of their allegations that disease of complainant was preexisting at the time of filing major revival form. The OPs only made baseless allegations without any evidence. Further, the learned counsel for the complainant vehemently argued that since the policy terms and conditions were not supplied to the complainants, as such these terms and conditions are not binding upon the complainant and the opposite party/insurance company cannot withhold the claim unless and until it is proved on the file that the terms and conditions were duly supplied to the complainant. There is no evidence on the file to the effect that the said terms and conditions were ever supplied or brought into the knowledge of the insured at the time of insurance. So far as preexisting disease is concerned, there is judgment of the Honble Himachal Pradesh State Consumer Disputes Redressal Commission, Shimla ICICI Lombard General Insurance Company Ltd. Versus Jasbir Singh, 2014 (1) CLT 220 followed the above observations. In that case, claim was repudiated on the ground that the insured suppressed pre-existing disease of hypertension at the time of filling the proposal form. Insured medically examined by the empanelled medical officer of the insurance company before issuing the insurance policy. It was held that hypertension is a life style disease and easily controllable with conservative medicines.. Counsel for OPs reliance on CA 3397/2020, Bajaj Allianz VsDalbir Kaur, SC 2776/2006, Life Insurance Corporation of India & Ors VsSmt.Asha Goel &Anr (2001 ACJ 806, AIR 2008 SC 424, CA No.3944 of 2019 @ SLP (C) No.5001/2019. Further, we place reliance on 2010(1) C.P.J. 77 : 2010(2) CLT 121 : 2008(52) R.C.R.(Civil) 243 and relevant portion is reproduced as Consumer Protection Act, 1986 Section 15 Life Insurance - Suppression of Material Facts - Insurance claim repudiated - Forum held that all the questions were replied correctly by the insured, but correct information was not filled up by the agent - Medical Certificate produced on record cannot be treated as conclusive evidence, as facts given by doctor were contradictory in itself LIC and it's agents played foul with the proposer and the proposals are not scrutinised properly - Where the entries are filled by agents, policy holders should not be blamed for concealing the information - Past history of policy holder cannot be made basis for repudiation of claim, in the absence of affidavit of the certifying doctor - Order of Forum upheld - Appeal of LIC dismissed. In view of our above discussion and judgment (Supra), we partly allow the present complaint and order the OPs to reimburse the complainant Rs.77,652/- as spent by him on his treatment. Further direct the OPs to pay a sum of Rs.10,000/- as consolidated amount of compensation for causing mental and physical harassment to the complainant. The OPs have no right to keep and misappropriate the public money. It must go back to the public. We, therefore, order that the OPs will deposit a sum of Rs.5,000/, the estimate rough amount, with the legal aid account of this Commission.

13. Copies of the order be supplied to the parties free of cost, as per Rules. File be indexed and consigned to the record room its due compliance. ANNOUNCED IN THE OPEN COMMISSION :

9 Day of February 2021th (Kuljit Singh) President (Jyotsna) Member [ Kuljit Singh] PRESIDENT [ Jyotsna] MEMBER