NEW INDIA ASSURANCE CO. LTD. vs Rajeev Agarwal And Ors.

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REVISION Petition No. 2350 of 2012 has been filed against the judgment dated 02.03.2012 of the Karnataka State Consumer Disputes Redressal Commission, Bangalore (''the State Commission'') in appeal No. 4613 of 2010. The brief facts of the case as per the respondent/complainant are that the respondent was approached by the agent of the petitioner/opposite party/Insurance Company and was shown various colourful brochures and allured for buying its product. Being swayed away, the respondent has purchased a policy of Medi Claim for himself and that of his family members with effect from 30.10.2007 which was renewed from time to time.

DURING the covered period of insurance year 31.10.2008 to 30.10.2009 the respondent did suffer from ill health. For the first time the respondent approached a Doctor, who advised him to undergo tests and treatment at a higher centre. Accordingly, the respondent approached Yashodhara Super Speciality Hospital, Sholapur wherein he was admitted as an inpatient on 11.06.2009 and was diagnosed with a case of DVT with moderate Pulmonary Embolism. The respondent was discharged on 15.08.2009 and thereafter the respondent was under regular follow -up treatment at various hospitals at Sholapur and Hyderabad.

THE respondent on admission was asked to pay the charges for hospitalisation. The respondent submitted the cash less policy certificate. The hospital authorities admitted him and informed the respondent who in turn took its own time and thus the treatment was delayed. Thereafter they suddenly informed that in this case, they are not giving the nod to the hospital authorities for treatment of the respondent under the cash less policy. Anyhow with great difficulty he could manage to get loans from friends and relatives and got the treatment. The petitioner was informed about the admission and treatment over phone and after discharge, the complaint submitted the claim form together with all the records, case papers, bills worth Rs. 83,436.17 paise and called upon the petitioner to reimburse him the medi claim to the extent of the sum assured for his health which was Rs. 75,000/ -.

THE petitioner instead of settling the claim, after more than six months wrote a letter contending that the respondent has to contact its agent for the settlement of the claim.

THE respondent having no other alternative approached the District Forum for the deficiency in service and claimed a sum of Rs. 3,00,000/ - which also included the damages for the mental tension and hardship the respondent has suffered at the time of need. Therefore, the respondent has prayed that the petitioner be directed to pay to the respondent in all sum of Rs. 3,00,000/ - (which includes a sum of Rs. 75,000/ - towards the insured policy and a sum of Rs. 2,25,000/ - towards damages including interest which the respondent has paid to his friends and relatives) together with interest @ 2% per annum from the date of the complaint until realisation with costs in the ends of justice.

THE petitioner/opposite party in their counter to the main petition before the District Consumer Disputes Redressal Commission, Raichur (''the District Forum'') stated that the respondent had taken the Janta Medi -claim policy and had paid premium after realising all the terms and conditions of the policy. As the insurance was with effect from 31.10.2007 which was valid till 30.10.2009 and also knowing the fact that the said policy issued by the petitioner/New India Assurance Co. Ltd., having TPA (Third party administrator as per clause 3.8) with the Medi Assist India Pvt. Ltd., which is a TPA company with New India Assurance Co. Ltd., and the said Medi Assist India Pvt. Co. Ltd., is a third party administrator for settlement of claims on behalf of New India Assurance Co. Ltd., as such this fact is fully aware by the respondent from the terms and conditions of the policy. The respondent should have directly approached the said Medi Assist India Pvt., Ltd., as per the terms and conditions of the policy which were mentioned in the policy. The third party administrator was the Medi Assist India Pvt. Ltd., and the said company was the proper authority to settle the claim and dispute in question or had the power to repudiate the claim as per clause 13 of the terms and conditions. Further, cash less facilities as per clause 12 of the policy conditions have to be availed by adopting the procedure as per clause 12. But the respondent applied for reimbursement of claim.

THE claim of the respondent was made within the 2nd year of the policy cover for his treatment when he was diagnosed for the deep vein thrombosis. As per the medical notes of the Care Hospital the respondent was having pre -existing disease, i.e., "varicose veins since three years". As per the policy, pre -existing ailments can be considered only after four claim free years of cover. The respondent was admitted for taking treatment for deep vein thrombosis while was a complication directly related to the pre -existing disease of varicose veins as such the claim of the respondent was repudiated under the pre -existing clause 4.1. For the treatment for varicose veins and complications was also not payable during the first 24 months of the policy cover hence this claim also was repudiated under clause 4.3. This policy excludes pre -existing condition of the disease for which company is not liable to indemnify the insured. In this case the third party administrator (Clause No. 3.8 of the terms and conditions), i.e., Medi Assist India Pvt. Ltd., acts as claim handler for the New India Assurance Co. Ltd., who has seen all the papers of the treatment of the respondent and came to the conclusion that the disease of the respondent was pre -existing hence repudiated the claim as stated above and also same was communicated to the respondent through letter dated 17.08.2009. The pre -existing disease as stated above were not revealed by the respondent at the time of taking out this insurance, therefore a clear non -disclosure of material facts would render policy as null and void and the said suppression of material facts of pre -existing disease which was excluded from the terms of policy. In view of the above facts and circumstances there was no deficiency in service on the part of the petitioner since the petitioner suitably answered the letters of the respondent but the respondent had taken the policy by suppressing the pre -existing disease in order to defraud the petitioner in getting false compensation by wrongful means.

THE District Forum, Raichur partially allowed the complaint. In its order dated 05.08.2010 it observed as follows: "9. On -going through the pleadings of the parties and their respective evidences and documents it discloses that parties are not in dispute on the following points.

1) The complainant subscribed Janata Medi Claim Policy from opposite No -1 Insurance Company by paying premium with effect from 31 -10 -07 it valid up to 30 -10 -07 as opposite No -1 admitted it in Para - 4 & 5 of its written version.

2) It is undisputed fact by opposite No -1 Insurance Company and opposite No -2 Medi Assist Private Ltd., that, complainant admitted and took treatment on 11 -06 -09 as in patient in Yashodhara Super Specialty Hospital, Sholapur and discharged on 15 -06 -09 for DVT with Moderate Pulmonary Embolism as well as he took treatment for the said disease in Hyderabad.

3) It is further undisputed fact that, the claim of complainant was repudiated under clause No. 4.1 and 4.3 of the terms and conditions of the Insurance Policy by alleging that, complainant is suffering from Varicose Veins since three years prior to taking the policy and also he known a case of diabetic, hypertension, asthma since prior to three years of the policy, but he not disclosed pre -existing disease in his proposal form for taking the policy and thereby there is a suppression of material facts.

4) Proposal form of complainant was accepted and opposite No -1 Insurance Company issued policy after getting the medical examination of its own doctor.

WE have perused the entire facts brought to our notice in reference to the section 45 of the Insurance Act. As regards to fraudulent suppression of material facts by policyholder and repudiation of the claim by the Insurance Company in such cases, it is for the insurance company to prove that the information given by the complainant in his proposal form fraudulently, fully knowing well that the statement given by him in his proposal form are false or otherwise he intentional suppressed the pre -existing disease with an intention to get wrongful gain out of that statement. Now the main contention of opposite No -1 is that, complainant is suffering from DVT with Moderate Pulmonary Embolism as on 11 -06 -09. No doubt, it might be within three years prior to the date of taking the policy. In the said circumstances, now we have to see whether such disease is of such serious nature wherein the complainant tried to make mis -use of the policy for to get monetary benefit in getting treatment. The learned advocate for opposite No -1 produced Medical Literature to know the type of nature of disease DVT. It is a medical term which is known as Deep Vein Thrombosis. The said disease is in respect of blood clot in the deep venous system at leg, it is not dangerous to life itself at first stage. The situation becomes life threatening only if a piece of blood clot breaks off, travels downstream through the heart into the pulmonary circulation system and lodged in the lung. This is curable disease after full treatment. Now considering such type of nature and using of complicated medical terms in respect of the disease. We cannot believe that, complainant might be knowing fully well about the nature of the disease and it consequence prior to signing the proposal form we may get the knowledge of the disease only by going through the literature and case papers but an ordinary man like complainant might not be knowing consequences such disease Deep Vein Thrombosis. Insurance Company not noticed such disease at the time of issuance of policy. Further there are no documents and other circumstances to show that, complainant intentionally subscribed that policy only with intention to get wrongful gain out of that policy, as such we are of the view that, repudiation of the claim of complainant by opposite No -1 and opposite No -2 on this ground is not correct. Other grounds regarding suffering from Diabetic, Hypertension, Astama etc., is not consider for the reason that, Yashodhara Hospital, Sholapur gave certificate Ex. P -5 that complainant is not suffering from diseases. Hence we are of the view that, repudiating the claim of complainant on that ground amounts to deficiency in their services. 16. As regards to violation of clause 4.1 and 4.3 of terms and conditions of the policy as submitted we are of the view that, in view of the facts and circumstances stated above there cannot be any violation of such conditions such contentions might be the contentions for defences by opposite No -1 thereby we answered Point No. 1 in affirmative.

As regards to the quantum of amount claimed by the complainant is concerned, he has produced Medical Literature Yashodhara Super Specialty Hospital, Sholapur and medical bills of Raichur, Hyderabad and other places which totally works out more than the amount covered under the policy, at the time of arguments the learned advocate for complainant gave up his claim excess to the policy amount and requested us to direct the complainant to make the full amount covered under the policy. Under the said circumstances, we are of the view that the complainant is entitled for to recover an amount of Rs. 75,000/ - from opposite Nos. 1 & 2 jointly and severally which is an amount spent by him for his treatment at various hospitals.

A lumpsum amount of Rs. 3,000/ - is awarded to the complainant towards deficiency in service by opposites another lumpsum amount of Rs. 3,000/ - is awarded to the complainant towards cost of this litigation. Hence the complainant is totally entitled to recover 81,000/ - from opposites Nos. 1 & 2 jointly and severally as opposite No -2 steps in the shoes of opposite No. 1.

The complainant is also entitled to recover future interest at the rate of 9% p.a. on the total sum of Rs. 81,000/ - from the date of this complaint till realization of the full amount. Accordingly we answered Point No. 2.

ORDER

The complaint filed by the complainant is partly allowed with cost. The complainant is entitled to recover a total amount of Rs. 81,000/ - from opposite Nos. 1 & 2 jointly and severally.

The complainant is also entitled to recover future interest at the rate of 9% p.a. on the above total sum of Rs. 81,000/ - from the date of the complaint till realization of the full amount.

Opposite Nos. 1 & 2 is granted one month time to comply the above order from the date of this judgment for to make the payment".

Aggrieved by the order of the District Forum the petitioner filed an appeal before the State Commission. The State Commission while dismissing the appeal held that:

"9. Of course, the DF has not believed the contention taken by the OPs that the complainant has intentionally and willfully with a fraudulent intention suppressed the preexisting disease that is DVT but, burden lies on the OPs only to prove. The Insurance Company has not noticed such disease at the time of issuance of the policy and the OPs have not investigated the matter about the treatment taken by him for the DVT prior to taking of the policy. Ex. P -5 is the certificate issued by Yashodhara Super Specialty Hospital, Sholapur discloses that the complainant was not suffering from any diseases. Opposite Party 1 and 2 have taken different stand with regard to the payment of medical expenses incurred by the complainant. Of course, the complainant has placed material to show that initially he had taken treatment in Yashodhara Super Specialty Hospital, Sholapur and to that effect he has produced medical bills for having purchased the medicines. Therefore, considering the facts and circumstances of the case, the DF has rightly passed the impugned order. Viewed from any angle, it may be said that the appellant and the Opposite Party 2 have utterly failed to prove that the complainant has fraudulently suppressed his pre -existing disease of DVT and in our view, the order under challenge has no factual or legal infirmity to interfere from this commission. Accordingly, we pass the following:

ORDER

Appeal is dismissed confirming the order under challenge passed by the DF, Raichur in Complaint No. (DCFR) CC. 27/2010 dated 05.08.2010. No order as to costs".

Hence, the present revision petition.

WE have heard the learned counsel for the parties and have carefully gone through the records of the case.

LEARNED counsel for the petitioner contended that the State Commission erred in upholding the order of the District Forum and failing to appreciate that even otherwise also it was immaterial whether respondent No. 1 was aware of the pre -existing disease or its complications or not. The State Commission also erred in upholding the order of the District Forum by failing to appreciate that the repudiation of the claim was done by the duly licensed IRDA TPA manner by experts (doctors.) Learned counsel for respondent No. 1 has however contended that the lower fora has correctly appreciated the case and correctly allowed the complaint.

THE claim of the respondent was rejected on the following grounds: "4.1. Pre -existing disease/condition: The company shall not be liable to make any payment under this policy in respect of all disease/injuries/conditions, which are pre -existing when the cover incepts for the first time (except as shown hereunder). Any complication arising from pre -existing disease/ailment/injury will be considered as a part of pre -existing condition. This exclusion will be declared after four consecutive claim free policy year provided there was no hospitalization for the pre -existing disease/ailment/condition/injury during the said four years of insurance with our company.

The claim pertains to medical management, varicose veins, moderate pulmonary embolism, DM, HTN, Asthma Aashurdhara Hospital from DOA 11.06.2009 to DOD 15.06.2009 on verification of the papers it is noted that the complaints related to above mentioned diagnosis varicose veins since three years and known case of hypertension asthma. As the insurance is with effect from 21.10.2007 the complainant''s ailments were existing commencement of the policy. Hence, the claim stands repudiated under the exclusion 4.1 of the policy. E also reserve the right to repudiate the claim under any other grounds available to us subsequently."

WE are not convinced by the argument of the learned counsel for the petitioner and the reason given for repudiation of the claim. Learned counsel for the petitioner has drawn our attention to the out -patient card on record of the Care Hospital which showed that the patient had history of Varicose Veins since three years. He was diagnosed and treated for DVT Pulmonary Embolism from 11.06.2009 to 26.06.2009. The outpatient card of the Care Hospital dated 02.07.2009 clearly records that the patient never had any complaint regarding his lower limbs.

VARICOSE Veins are veins that have become enlarged and twisted. The terms commonly refers to the veins on the leg, although the varicose veins can occur elsewhere. Veins have pairs of leaflet valves to prevent blood from flowing backwards. Leg muscles pump the veins to return the blood to the heart against the effects of gravity. When the veins become varicose, the leaflets of the values no longer meet properly and the values do not work. This allows blood to flow backwards and they enlarge even more. Severe long standing varicose veins can lead to leg swelling, venous eczema, skin thickening and ulceration. Life threatening complications are uncommon, but varicose veins may be confused with deep vein thrombosis which may be life threatening. Deep Vein thrombosis on the other hand is the formation of a blood clot predominantly in the legs. Pulmonary embolism is a life threatening Complications are caused by the detachment of clot that travels to the lungs. As per the medical literature varicose veins is not a known cause for DVT.

THE petitioner has also failed to put on record any evidence to support their allegation that while filling up the proposal form, the respondent/complainant had deliberately/intentionally suppressed the fact that he was suffering from varicose veins. There is no column in the form against which same could have been written. Further, the petitioner has not placed on record any document to establish that the respondent had been suffering from Varicose Veins and had either consulted a doctor or taken treatment for the said disease. Regarding the allegation of the petitioner that the respondent was also suffering from hypertension and diabetes and yet concealed the facts, no such evidence has been placed on record and neither has the same been mentioned in any of the treatment records placed on file. Here it is also pertinent to mention that Dr. Ramesh Agarwal in his medical certificate has clearly record that the respondent was suffering from Thrombosis c Pulmonary Embolism giving a risk of hypertension. However, there was no complication of any pre -existing disease but of sudden onset. The Hon''ble Supreme Court in Mrs. Rubi (Chandra) Dutta v. M/s. United India Insurance Co. Ltd., : 2011 (3) Scale 654 has observed: "Also, it is to be noted that the revisional powers of the National Commission are derived from Section 21(b) of the Act, under which the said power can be exercised only if there is some prima facie jurisdictional error appearing in the impugned order, and only then, may the same be set aside. In our considered opinion there was no jurisdictional error or miscarriage of justice, which could have warranted the National Commission to have taken a different view than what was taken by the two Forums. The decision of the National Commission rests not on the basis of some legal principle that was ignored by the Courts below, but on a different (and in our opinion, an erroneous) interpretation of the same set of facts. This is not the manner in which revisional powers should be invoked. In this view of the matter, we are of the considered opinion that the jurisdiction conferred on the National Commission under Section 21(b) of the Act has been transgressed. It was not a case where such a view could have been taken by setting aside the concurrent findings of two fora."

THUS , we find that no jurisdictional or legal error has been shown to us in the impugned order to call for interference in the exercise of powers under Section 21(b) of Act. The order of the State Commission does not call for any interference nor does it suffer from any infirmity or erroneous exercise of jurisdiction or material irregularity. Thus, the present revision petition is hereby, dismissed with no order as to cost.