Amitava Dutta vs NATIONAL INSURANCE COMPANY LIMITED

AGGRIEVED by the order dated 10.06.2008 passed by the State Consumer Disputes Redressal Commission, West Bengal (for short "the State Commission") in S.C. Case No. 446 of 2007, the National Insurance Company Limited preferred this Revision Petition under Section 21(b) of the Consumer Protection Act, 1986 (for short "the Act"). By the impugned order, the State Commission has allowed the Appeal and set aside the order passed by the District Consumer Forum, Calcutta Unit -I on 29.3.2007 in C.C. No. 176 of 2005 (for short "the District Forum"). By the said order, the District Forum had awarded against the Petitioners a sum of Rs. 5,140/ - with interest @ 8% per annum and Rs. 1,000/ - as compensation and costs of Rs. 500/ -.

THE brief facts of the case, according to the Petitioner who was the original Complainant before the District Forum, are that the Complainant had obtained a Medi -claim Insurance Policy, dated 31.3.2003 through Golden Trust Financial Services, covering the period from 31.3.2003 to 30.3.2004. This Policy covered the following family members of the insured: Insured Person(s) Age Sum Assured ( in Rs. )

Amitava Datta 48 years 35,000/ -

Sipra Datta 40 years 35,000/ -

Polly Datta 42 years 35,000/ -

Ankitava Datta 1 year 35,000/ -

WHILE so, on 18.3.2003, the Complainant''s sister suddenly suffered from a heel abscess and was treated at Dum Dum Municipal Specialised Hospital, Kolkata and was operated on 21.3.2003 and once again on 28.3.2003, for which treatment, an amount of Rs. 5,139.45/ - was spent. On 11.8.2003, the Complainant claimed the said amount from the Insurance Company and submitted all the particulars. The Insurance Company vide their letter dated 19.5.2004 repudiated the Complainant''s claim on the ground that the Claimant had suppressed pre -existing disease of heel abscess. The Complainant pleaded that the illness was first detected on 18.3.2003 whereas the risk of insurance coverage began from 31.3.2003. The Complainant averred that medi -claim premium of Rs. 1,648/ - was first deposited on 10.3.2003 through Opposite Party no. 3, their agent. The Insurance Company issued a certificate after 21 days from the date of receipt of the premium amount. The claimant suffered from heel abscess on 18.3.2003 which is subsequent to the deposit of the medi -claim premium. The Complainant averred that he is entitled to reimbursement of the insurance amount for Rs. 5,139.45/ -, which are the medical expenses incurred by his sister. The act of the Insurance Company in repudiating the claim on the ground of pre -existing disease amounts to deficiency of service and therefore, the Claimant seeks direction to the Insurance Company to pay the medi -claim amount of Rs. 5,139.54/ - together with interest @ 18% per annum from 11.8.2003 till the date of realisation.

OPPOSITE Party nos. 1 and 2 received notices in the complaint but did not choose to appear before the District Forum.

OPPOSITE Party No. 3, Golden Trust Financial Services, filed their written version and pleaded that, with a view to getting insurance coverage for all its members, it had entered into an agreement with National Insurance Company and collected the premium from its members and remitted the same to the Insurance Company which issued the necessary certificate of policy. Its role is only that of a facilitator and it immediately forwarded the claim papers of the Complainant to the Insurance Company who acknowledged receipt on 11.8.2003. The exclusive authority with regard to settlement or repudiation of the claim lies with the Insurance Company and therefore, no deficiency of service can be attributed to this Opposite Party.

THE District Forum based on the evidence, allowed the complaint and directed the Opposite Party nos. 1 and 2 to pay Rs. 5,140/ - along with interest @ 8% per annum together with compensation of Rs. 1,000/ - and costs of Rs. 500/ -.

AGGRIEVED by this order, the first Opposite Party/Insurance Company preferred an Appeal before the State Commission and the Commission held that the proximity and the date of admission to the hospital is so close that it becomes difficult to brush aside the contentions of the Appellant -Insurance Company that the disease was pre -existing. Based on this reasoning, the Appeal preferred by the Insurance Company was allowed and the order of the District Forum was set aside.

HENCE , the present Revision Petition. The learned Amicus Curiae representing the Petitioner and the learned counsel for Respondent 3 made their oral submissions. None appeared for the Respondent/Insurance Company.

THE learned Amicus Curiae for the Petitioner submitted that the premium was paid by the Petitioner on 10.3.2003 and the claimant discovered the heel abscess only on 18.3.2003 and was subsequently operated upon on 21.3.2003 and on 28.3.2003. The Petitioner incurred an expenditure of Rs. 5,139.45/ - in connection with this treatment for which a claim for reimbursement of the said amount was submitted on 11.8.2003, but the Respondent Insurance/Insurance Company vide their letter dated 19.5.2004 repudiated the claim on the ground that the Petitioner suppressed pre -existing disease. They reasoned that the policy coverage was from 31.3.2003 whereas the insured had foot infection on 18.3.2003, which is prior to the issuance of the policy.

THE repudiation letter dated 19.5.2004 reads as follows: "This refers to hospitalisation claim submitted by you. On scrutiny of papers we observe that the claim is not admissible on the following ground (s): You have incurred expenses towards treatment of pre -existing disease. In terms of policy exclusions for pre -existing disease the said expenses are not admissible under the policy, which please note. The claimant had been suffering from the ailments before the commencement of date of Insurance coverage.Policy cover granted from 31.3.2003First detection ofailment 18.3.2003. You have incurred expenses towards treatment of such disease which is excluded during the first year of the operation of the policy. You have incurred expenses for your disease/operation during first 30 days of commencement period of insurance cover. You have consulted a surgeon specialist who performed your operation. This indicates that you had prior knowledge of your existing disease. Since you have not furnished all the treatment papers prior to consultation with a surgeon/specialist, your claim warrants repudiation. Not payable due to ..".

WE observe from the afore -mentioned repudiation letter that the Insurance Company while stating that the Claimant had been suffering ''from the ailments'' before the commencement of date of insurance coverage, did not specify the ''nature of ailment'' which was suppressed. This letter does not even mention under which exclusion clause ''pre -existing diseases'' have been defined and/or excluded. The law on this subject has been very clearly enunciated by the Hon''ble Supreme Court in Balwinder Kaur vs. Life Insurance Corporation, Civil Appeal No. 7969 of 2010 in which case, the claim had been repudiated on the ground that the insured had suppressed chronic liver illness and had given incorrect answers to the queries in the proposal form. The Hon''ble Apex Court reversed the orders of the National Commission and held as follows: "The onus to prove that the deceased had obtained policy by suppressing facts relating to his illness was on the Corporation, but no tangible evidence was produced on its behalf to prove that the deceased was suffering from serious liver ailment at the time of taking policy and he had deliberately suppressed this fact. Undisputedly, the policy was issued on 29.3.1998. The deceased must have filled the proforma some time prior to that date. Therefore, the Corporation ought to have produced evidence to prove that as on the date of filing the proforma, the deceased was suffering from the said ailment. The Corporation had failed to do so.

IT is well settled law that the onus is on the insurer to prove that the policy holder had suppressed a fact which was material to disclose. It is pertinent to note that in the instant case the Respondents did not file any proposal form or any declaration statement to prove the suppression of any pre -existing disease. The learned counsel for the third Respondent submitted that "No declaration" was asked for by the Insurance Company prior to issuance of the policy to its members. When there is no declaration given by the insured herein, it cannot be stated that the insured had made any inaccurate or false statements or deliberately suppressed pre -existing disease of ''foot infection''. The claimant was initially treated for foot abscess on 18.3.2003 which is subsequent to 10.3.2003, the date on which the premium was paid. The Respondent/Insurance Company failed to file any expert medical or credible evidence in support of their case. Further, in the absence of any affidavit by the treating doctor that the patient had a history of foot abscess, it cannot be construed that the Claimant had wilfully suppressed any pre -existing disease. Only on the basis of assumptions and presumptions the claim made under the Policy was repudiated. Therefore, in the absence of any material on record to establish that Claimant had any knowledge of ''foot abscess'' prior to issuance of the policy, the act of the Opposite Party in repudiating the claim on the ground of pre -existing disease amounts to deficiency of service.

WE , therefore, allow this Revision Petition and set aside the order of the State Commission. We direct the Insurance Company, i.e. Respondent nos. 1 and 2 to pay the claim amount with interest @ 12% per annum from the date of repudiation till the date of realisation within four weeks from the date of receipt of this order failing which the amount would carry an interest of 15% per annum. We also award costs of Rs. 10,000/ -. The role of the third Respondent is only that of a facilitator and no deficiency of service is attributed to hem. Hence, case against the third Respondent, is dismissed.

BEFORE parting with the case, we place on record our appreciation for the valuable assistance rendered by Ms. Surekha Raman, the learned Amicus Curiae. She may be paid a sum of Rs. 7,500/ -, as out of pocket expenses, if not already paid, from Consumer Legal Aid Account for the assistance rendered by her to this Commission.