MURALI LAL PODDAR vs United India Insurance Co. Ltd.

-UNSUCCESSFUL complainant is the appellant before us in this appeal which arises out of the judgment and order dated 23.7.2003 passed in complaint case No. 49/2001 on the file of the District Consumer Forum, Bokaro, whereby the complainant has been non-suited with respect to the mediclaim under the policy in question.

THE complainant obtained mediclaim policy on 31.3.1995 under the mediclaim scheme, initially from Oriental Insurance Company Limited being mediclaim policy No. MI SC/1344/95-96 for the period from 31.3.1996 to 30.3.1996. THE policy was again renewed on 23.9.1996 covering the period 31.3.1996 to 30.3.1997 which was again renewed for the period from 31.3.1997 to 30.3.1998. THE insured, thereafter, switched over to the respondent United India Insurance Co. Limited on 31.3.1998 for the period covering from 31.3.1998 to 30.3.1999 and, thereafter, the said policy was twice renewed for the period upto 10.4.2001. It is alleged that the insured while on business trip to Delhi had a breathing problem and accordingly he was admitted for medical examination on 11.5.2000 in Escort Heart Institute and Research Centre, New Delhi where he remained in the said hospital till 12.5.2000. After necessary examination, the insured was discharged with advice to undergo Open Heart Surgery for replacement of ''AORTIC'' Valve at the earliest. On return from Delhi he immediately informed the Insurance Company vide letter dated 16.5.2000 enclosing the medical expenditure bills for reimbursement of Rs. 15,750/- which, he had incurred while he was in the hospital. As per the doctor''s advice, he was again admitted to the hospital on 19.6.2000 where he has to undergo an Open Heart Surgery. After successful heart surgery, he was discharged from the hospital on 3.7.2000. THE insured claimed for total reimbursement of Rs. 2,41,860.45 including the aforesaid Rs. 15,750/- under the mediclaim policy in question. THE Divisional Manager of the respondent Insurance Company vide his letter dated 22.1.2001 expressed his inability to accept the mediclaim resulting the filing of this complaint before the District Consumer Forum, Bokaro, claiming Rs. 4,97,610/- including the compensation and cost of litigation. The Insurance Company appeared and filed their response denying the mediclaim under the exclusion clause of the policy to the effect that the insured has suppressed the pre-existing disease at the time of filing the proposal. The District Consumer Forum has accepted the contention of the Insurance Company and rejected the claim on the ground of suppression of material facts from the Insurance Company at the time of submitting the proposal for obtaining such policy. Aggrieved with the order, the instant appeal was filed before this Commission claiming the reimbursement of medical expenses.

Mr. Biswajit Mukherjee, learned Counsel for the appellant has vehemently argued that the reasons assigned while non-suiting the insured for the mediclaim are wholly illegal and unjustified inasmuch as the insured obtained the mediclaim policy initially from the Oriental Insurance Company as far back as in March, 1995, which was continued till 30.3.1998 and, thereafter, the insured switches over to United India Insurance Company which is a sister concern of General Insurance Company of India. The above said policy was renewed from time-to-time and during the subsistence of the policy, the insured was hospitalised in the Escort Heart Institute and Research Centre in Delhi where he had to undergo open heart surgery. According to Mr. Mukherjee, the last renewal of the policy, in question, by the respondent Insurance Company was in continuation of the original mediclaim policy obtained from the Oriental Insurance Company. According to Mr. Mukherjee if the last policy issued by the respondent Insurance Company is treated as in continuity of the initial policy. The so-called suppression of pre-existing disease will not arise either. Mr. Mukherjee further submits that the 2nd reason assigned by the District Forum while non-suiting the complainant on the ground of disease occurred within 30 days from the date of obtaining the policy will also not be a valid reason for the purpose of denying the claim under the policy. Mr. Mukherjee further submits that the repudiation of the mediclaim in terms of the execution clause is not sustainable in the eye of law inasmuch as the said terms and conditions of the policy has not been signed by the insured.

IN opposition, however, Mr. Alok Lal has supported the order passed by the learned District Forum and submits that the insured is not entitled to any claim under the policy, in question, in view of the fact that he was suffering from the disease relating to heart for the last two years. IN support of his contentions, Mr. Lal has relied upon the discharge summary, no doubt, discloses that Sri Poddar is a known hypertensive, a non-diabetic, smoker with pleasing personality. Having dyspnoea on exertion for the last two years and accordingly he was advised for further investigations. Mr. Alok Lal further submits that only seven days grace period is allowed for renewal of policy. However, in the instant case the delay is of 11 days and hence the insured will not get any benefit out of the policy in question. According to Mr. Lal, the claim is to be filed within 30 days but in the instant case, the claim has not been preferred within the stipulated period and hence no relief can be allowed to the insured. IN support of his contentions, Mr. Lal has relied upon the decision of Patna High Court in the case of Balkrishna Khirwal v. The New INdia Assurance Co. Ltd. The said decision arises out of the first appeal against the judgment and order passed in the suit wherein it has been held that the proposal form containing the statement of the insured is made on the basis of the contract of the insurance and if such statement is found to be incorrect such contract becomes void. Another decision has been relied upon by Mr. Lal in the case of V. Srinivasa Pillai v. Agent of Life INsurance Corporation of INdia and Another, reported in 1997 Madras 381, wherein it has been held that normally the contract of INsurance is based upon a good faith meaning thereby that the insured is supposed to answer to various queries and takes upon himself the responsibility to disclose true and faithful information about his past history. If, however, the insured has knowledge of fact, in that case, he should not suppress such facts by making false suggestion of suppressing the true fact. IN the case of Brahm Dutt Sharma v. Life INsurance Corporation of INdia reported in 1996 Allahabad 474, wherein it has been held that false declaration of the facts for obtaining the policy will render the policy invalid and unenforceable. Other decision, relied upon by Mr. Lal, of the National Commission reported in I (2003) CPJ page 70. Now let me consider the rival contentions of the parties raised in support of their respective stands. As stated above, the insured has obtained the mediclaim policy initially from the Oriental Insurance Company, a subsidiary Company of the General Insurance Company as far back as in March, 1995 which was renewed till 30.3.1998. The insured thereafter switched over to the respondent United India Insurance Company Ltd, where the policy remained in force till 10.4.2001. The subsequent renewal of the policy by the respondent Insurance Company is in continuation of the original policy, issued by the Oriental Insurance Company. In terms of the policy, if the subsequent mediclaim issued by the United India Insurance Company Limited is to be taken as fresh policy, then in that event, the insured is not liable to receive the bonus from the Insurance Company. On the contrary, if the issuance of mediclaim by the respondent United India Insurance Company is to be treated as in continuation of the original policy, the Insurance Company is bound to pay the bonus for these periods in terms thereof. Admittedly, the respondent United India Insurance Company Limited treated the policy in continuation of the original policy and accordingly granted the bonus to the insured. Had there been a fresh policy, the respondent Insurance Company could not have paid the bonus. The relevant clause of the policy is reproduced below for appreciation of the issue in hand. "1 ............. 2. Cumulative bonus will be lost if policy is not renewed on the date of expiry. In exceptional circumstances the seven days extension in period of renewal is permissible to be entitled for cumulative bonus although the policy is renewed only subject to Medical Examination and exclusion of disease."

THE terms and conditions as quoted above, clearly envisaged that provisions of bonus applicable only when the policy is continuous without break as stated above. Admittedly, the bonus was paid to the insured treating the subsequent policy in continuation of the initial one. Even if the discharge summary is to be accepted on its face value the insured was covered under the mediclaim policy right from March, 1995 till the date of his hospitalisation and, as such, the repudiation of the mediclaim of the insured on the ground of suppression of pre-existing diseases cannot sustain in the eye of law. No doubt, Mr. Alok Lal is right in his submission to the effect that suppression of pre-existing disease at the time of obtaining the policy will disentitle the insured for any relief but in the instant case, there has been no suppression of facts. THE insured, for the first time felt breathing problem while on business trip and got himself admitted in the hospital for investigation wherein he was advised to undergo open heart surgery. THE discharge summary, no doubt, says that he was having dyspnoea on exertion for the last two years which does not mean that the insured was fully aware of such disease before filing of the proposal. That apart, subsequent issuance of mediclaim policy is in continuation of the original one which was obtained in the year 1995. Even if it is assumed that the insured was suffering from such diseases for the last two years from the date of discharge from Escort Hospital in 2001, the same will not disentitle the insured because of the policy was obtained much before the expiry of two years. In view of the findings aforesaid, it is not necessary for me to decide other issues raised during hearing of this appeal. In the result, this appeal is allowed, the judgment and order passed by the District Forum is hereby set aside and the respondent United India Insurance Company Limited is directed to reimburse the bills submitted by the insured along with 9% interest from the date of repudiation till the date of realisation besides the respondent Insurance Company is directed to pay a compensation of Rs. 10,000/- along with cost assessed at Rs. 1,000/-. Both principal and compensation amount along with cost as aforesaid must be paid within two weeks from the date of receipt and/or production of copy of this order failing which the appellant will be at liberty to execute the order in accordance with law including the remedy available under Section 27 of Consumer Protection Act. However, in that event, he will be entitled to further interest at the rate of 18% per annum from the date of this order till the date of realisation. Let a copy of this order be sent to the parties and/or their respective Counsels forthwith for needful. Appeal allowed.