National Insurance Company Ltd. vs SUKLA DUTTA

THIS appeal arises out of the order of the District Forum, Kolkata, Unit-1, whereby the appellant (National Insurance Company Ltd.) has been directed to pay Rs. 76,406.85/- for medical expenses incurred by the respondent along with interest at the rate of 18% with effect from 25.8.1998, being the date of submission of her claim till the date of actual payment. The appellant has been further directed to pay a sum of Rs. 10,000/- by way of compensation to the respondent. The relevant facts necessary to be set out here are that the respondent took a mediclaim policy with the appellant-company. The respondent suffered a back pain which had turned in Lumber Canal Stenosis due to inter-vertebral disc leading to low back pain. The respondent incurred expenses for the disease. Afterwards she lodged the claim for a sum of Rs. 76,406.85/- before the Company. But the company repudiated her claim on the ground that her ailment was a pre-existing one and it was not disclosed in the proposal Form. After repudiation she filed the case before the Forum and prayed for a direction upon the Company to pay an amount of Rs. 76,406.85/- along with interest and other relief.

BEING dissatisfied with the above order the company preferred this appeal. Learned Counsel for the appellant submits that the disease in question was pre-existing one and the respondent had undergone a laminectomy in the same region in 1993 and the current surgery in 1998 is a sequel to her earlier illness involving lumber spine which is excluded as per specific restriction imposed on the policy. So the claim is not payable under the clause of the terms and condition of the revised medi-claim policy. For these reasons the Company repudiated her claim. According to the appellant such bona fide repudiation is not deficiency in service on the part of the Company. So the order is erroneous, illegal and liable to be set aside. On careful perusal of all the papers we notice that the respondent was a policy holder in respect of a revised mediclaim policy for the period from 1.3.1998 to 28.2.1999 for Rs. 1,50,000/- under the National Insurance Company. In November, 1997 the respondent was investigated for his low back pain and diagnosed as a case of Spondylotesthesis (instability of L4 and L5 Vertebra) and one operation was done on 20.4.1998. After her recovery from the ailment she lodged her claim with the Insurance Company on 25.8.1998 in connection with her medical expenses for a sum of Rs. 76,406.85/-. After preferring the claim the respondent was kept waiting without any intimation or without any settlement of the claim from the part of the Insurance Company. She made various correspondences through letters dated 27.11.1998, 15.12.1998, and 25.1.1999 in the name of the Senior Branch Manager, requesting him to settle the claim. On 23.2.1999 through a letter the Insurance Company repudiated the claim on the ground that the disease in question was pre-existing and at the time of taking the policy.

Learned Counsel for the appellant submits that the respondent had undergone a laminectomy in the same region in 1993 and the current surgery in 1998 is a sequel of her earlier illness involving lumber spine, which is excluded as per the specific restriction imposed on the policy. As her ailment was a pre-existing one, the claim is not payable under the Clause 4.1 of the condition of the revised mediclaim policy.

IT is an admitted fact that the respondent was once operated on 5.2.1993 for spondylotic lumber canal stenosis. The medical certificate dated 29.3.1993 written by Dr. N. Bhoumik, filed by the respondent reflects that she was medically fit to resume her usual activities. We also perused another medical certificate written by Dr. S. Dasgupta which shows that the respondent''s low back pain was started only from November, 1997. After the first operation on 5.2.1993, she was well from January, 1993 to October 1997. The doctor also specifically mentioned that "the cause of pain on 1993 and 1997-98 were different. Thus the two operations done on 5.2.1993 and 20.4.1998 were quite different." Learned Counsel for the appellant pointed out clause No. 4.1 of the terms and conditions of the revised mediclaim policy. It says that-''Such diseases which have been in existence at the time of proposing this insurance. Pre-existing conditions means any injury which existed prior to the effective date of this insurance. Pre-existing condition also means any sickness or its symptoms which existed prior to the insured person had knowledge that the symptoms were relating to the sickness. Complications arising from pre-existing disease will be considered part of that pre-existing condition.

IN this regard we are of the opinion that nobody knows when she/he will suffer from any kind of sudden pain or disease requiring operation; it does not mean that it was pre-existing. According to the medical certificate of Dr. S. Dasgupta, it is crystal clear that two operations were quite different in nature. So the INsurance Company fails to prove that there was a nexus between the two operations. Moreover, the INsurance Company did not file the proposal form in the Commission and even in the Forum also. So, we hold that the disease in question was not pre-existing one. Learned Counsel for the respondent highlights the clause No. 3.0 of the terms and conditions of the mediclaim policy which indicates that ''Any one illness will be deemed to mean continuous period of illness and it include relapse within 45 days from the date of last consulation with the hospital/Nursing Home where treatment has been taken. Occurrence of some illness after a lapse of 45 days as stated above will be considered as fresh illness for the purpose of this policy. In this context we are of the view that after the first operation on 5.2.1993 she was examined by Dr. N. Bhoumick on 29.3.1993 and duly certified that medically she was fit. After a lapse of 5 years the second operation was done on 20.4.1998 in connection with a totally different ailment than the 1993 operation. Moreover, it is quite absurd that a person having such pain cannot wait for about 5 years or more to have some claim settled by the Insurance Company. So, we considered the second operation as fresh illness as it was made not only after the lapse of 45 days from the date of last consultation with the Nursing Home/hospital but after a lapse of 5 years.

LEARNED Counsel of the respondent submits that the Insurance Company repudiated the claim after a long delay. We find that the respondent lodged her claim on 25.8.1998 with the Company, and it repudiated the same on 23.2.1999. In the meantime several correspondences were made on behalf of the respondent to the company, requesting it to settle her claim (vide letters dated 27.11.1998, 15.12.1998 and 25.1.1999). But the appellant did not bother to give her reply.

IN this regard, the observation of the Hon''ble Supreme Court by an order dated 21.8.1996 [reported in III (1996) CPJ 8 (SC)] is that, ''The reasonable period of taking decision of the claim by the insurer is three months''. IN the present appeal 6 (six) months have elapsed for taking decision to reject the claim. We think that such repudiation of the claim is unjust and arbitrary and deficiency in service on the part of the INsurance Company. But, however, we are of the view that awarding a sum of Rs. 1,000/- is sound excessive and both ends of justice would be met if it is assessed at a sum of Rs. 1,000/- only. So, for such deficiency in service the present appellant is directed to pay a sum of Rs. 1,000/- by way of compensation to the respondent. Similarly, the rate of interest awarded at 18% is quite on the higher side. In the present matter the material period was from 1998 to 1999. Taking into account the prevalent market interest rates during that period we think that an interest rate of 10% p.a. would be just and proper. So, we reduce the rate of interest to 10% p.a. The appellant is liable to pay the interest @ 10% p.a.

Hence, it is ordered that the National Insurance Company shall pay Rs. 76,406.85/- together with interest @ 10% with effect from 23.2.1999 along with the compensation of Rs. 1,000/- to the respondent within two months from the date of this order.

THUS, the appeal partly succeeds on contest and is allowed in part. With the above modification the appeal is disposed of. Appeal partly allowed.