Oriental Insurance Co. Ltd. vs K.J. HOSPITAL

THIS is a Revision Petition against the Order dated the 17th August, 1992 passed by the State Consumer Disputes Redressal Commission, Madras in A.P. No. 250 of 1990 by which the order of District Forum, Madras was set aside and the present Revision Petitioner, M/s. Oriental Insurance Co. Ltd. was ordered to pay Rs : 82,000/- to claimant No. 1 with interest at the rate of 12 per cent per annum from 19th December, 1989 till payment. Costs were also awarded to the claimants.

THE brief facts are that the complainant No. 2, Mr. A. Samsukani, (Now Respondent No. 2) had taken a med-i-claim policy from the petitioner-company for the period from 14th October, 1988 to 13th October, 1989 for the benefit of his son S.Aliar. However, on the expiry of the said period of the policy it was not renewed immediately. It was renewed after a gap of a couple of days i.e. from 17.10.1989 to 16.10.1990. THE said Aliar was admitted in the first Respondent''s hospital i.e. M/s. K.J. Hospital (which was complaint No. 1 in the complainant) on 8th November, 1989 and it was found that he was suffering from Aortic Regurgitation, mild pulmonary Hypertension, Mild Mitral Regurgitation and Rheumatic Etiology. He was advised to undergo Aortic Valve Replacement. THE 1st Complainant sent a letter to the Insurance Company to know whether the patient was entitled for reimbursement. THEre was no. reply and as the matter was urgent the Insurance Company was contacted on phone and the 1st Complainant is alleged to have been informed that the patient was entitled to the benefits under the med-i-claim policy. Consequently, he was operated upon on 9th December, 1989. THE Hospital lodged a claim for Rs. 82,000/- under the med-i-claim policy with the Insurance Company. THE claim was rejected on the ground that the policy then in force was not a renewed policy but a fresh one and as the illness of the patient occurred within a month from the date of the commencement of the policy, the claim was not maintainable. Aggrieved thereby, the complainants filed the complaint under the Consumer Protection Act, 1986, before the District Forum, Madras claiming Rs. 82,000/- from the Insurance Company. The complaint was contested by the Insurance Company and the main ground was that it was a fresh policy as it was taken after a break of a couple of days on the expiry of the previous policy and, therefore, in view of the exclusion clauses, the Hospital was not entitled to claim under the policy. The Exclusion Clause reads as follows : "Any Disease suffered by the insured person during the first 30 days from the commencement date of the policy. This exclusion shall not however apply. In the opinion of panel of medical practitioners, constituted by the Company for the purpose, the insured person could not have known the existence of the disease or any symptoms thereof at the time of making the proposal for insurance to the company. This shall not however apply in case of the insured person having been covered under this scheme with any of the Indian Insurance Companies for a continuous period of 12 months preceding, without any break."

The District Forum held that as the claim of the Complainant has been duly considered by the Insurance Company and thereafter rejected, therefore, there was no deficiency in the rendering of service on the part of the Insurance Company and as such the complaint was not maintainable. Accordingly, the Complaint was rejected. The Complainants were directed to approach Civil Court to get appropriate remedy. Feeling aggrieved against that Order, the complainants filed an appeal before the State Commission. As noticed earlier, the said appeal was accepted and complaint was allowed.

FEELING aggrieved of the Order of the State Commission, the Insurance Company has come belore this Commission by preferring this Revision Petition. As this is a Revision Petition we need not discuss the case in detail because it has been lucidly discussed by the State Commission and all the points raised by the parties have been duly considered. It is not the case of the Revision petitioner that any of the points raised by it before the State Commission has not been considered.

AS mentioned above, the contention of the Insurance Company is that it was not a renewal policy and in fact it was a new policy because the subsequent policy was taken after a break of couple of days after the expiry of the period of earlier policy. This point has been considered by the State Commission and has been found in favour of the Insurance Company. The main dispute is with respect to the Exclusion Clause as the illness was detected within 30 days of the insurance policy. The contention of the Insurance Company is that the claimants are not entitled to claim anything under the policy. We may mention here that there is an agree ment entered into between the 1st Complainant, K.J. Hospital and four subsidiaries of General Insurance Corporation of India, namely 1. National Insurance Co. Ltd.; 2. New India Assurance Co. Ltd.; 3. Oriental Insurance Co. Ltd.; and 4. United India Insurance Co. Ltd. under which a tie-up arrangement has been entered into in respect of the med-i-claim policy insurance scheme formulated by the General Insurance Corporation of India. This tie-up arrangement gives facilities to the insured patient to seek admission in getting treatment in the said hospital. Credit facility is to be given to the insured by the Hospital as per the certificate issued by the Insurance Company which shall be produced by the insured to the Hospital to avail of the facilities.

IN the present case the INsurance Company issued a certificate in favour of the insured. IN this certificate no mention was made by the INsurance Company about the Exclusion Clause. It was in pursuance of this certificate that the Hospital had admitted the insured in the Hospital and rendered treatment. It is averred in the complaint that the Hospital first wrote letter on 30.11.1989 informing the INsurance Company about the condition of Ali and also enquire if the patient was eligible for surgery under the policy and whether the amount would be reimbursed under category ''one''. When no reply was received from the INsurance Company, the Hospital contacted the INsurance Company on phone as the patient required immediate operation and they were said to have been informed that the patient was entitled to benefits under the med-i-claim policy and only thereafter the insured was operated upon on 9th December, 1989. This averment contained in the complaint has not been rebutted in the counter filed by the INsurance Company. Thus it is clear that the Hospital had admitted the 2nd Complainant''s son in their Hospital on 8th November, 1990 and given him the required treatment by operation in pursuance of the certificate and the oral clearance given by the INsurance Company. The State Commission was thus justified in holding that the INsurance Company was now debarred from relying upon the Exclusion Clause in view of the principles of promissory estoppel. We may further mention that subsequent to the operation the Hospital has certified that the disease for which operation was effected could not have been discovered earlier and it was not a pre-existing illness. The INsurance Company has not lead any evidence to falsify the certificate. Under the Exclusion Clause the INsurance Company is entitled to have an opinion of a panel of medical practitioners for deciding if the insured could have known the existence of the disease or any symptoms there of at the time of making the proposal for insurance. Such a panel could have been constituted when the Hospital contacted the INsurence Company or after they issued the said certificate. Hence, we are of the opinion that in the circumstances of the case the INsurance Company cannot be allowed to take shelter under the Exclusion Clause for repudiating the claim. Accordingly we do not find any force in the present Revision Petition and dismiss the same with costs which we assess at Rs. 1,500/

ORDER Y. Krishan, Member-The facts of the case had been set out in full detail in the majority order above and do not need to be repeated. The crucial question is whether the statement of respondent No. 1 K.J. Hospital that it had telephonically ascertained from the Insurance Company that the patient was entitled to the benefits under the medi-claim policy and that because there was no rebuttal of this averment in the counter filed by the Insurance Company, the liability under med-i-claim policy can be legitimately fastened on the appellant. Insurance Company.

The Draft Agreement for the Tie-up arrangements with the Hospitals under the med-i-claim is at page 17 of the paper book. In terms of Clause 2 of the said agreement, the credit facility to be given to the Insured person by the hospital shall be given as per the certificate issued by the Insurance Company in favour of the Insured person which shall be produced by the Insured person to the hospital to avail this facility "In Clause 3 it has laid down that in emergency cases the Insured person shall be taken from him. Later, before the discharge of the Insurance Company showing the limits of benefits available under the policy to him, the hospital shall afford credit to his bill to that extent".

IT is abundantly clear that the Tie-up agreement excludes credit facility under the policy of insurance without production of the certificate of insurance either at the time of admission or of discharge. He was, therefore, wrong on the part of the hospital to have obtained oral confirmation on telephone of the policy coverage in this case. In any case, even if there was oral commitment on the part of the appellant. Insurance Company it cannot stop it from repudiating its liability being specifically in contravention of the Tie-up agreement. The Respondents in its version have further emphasised that the Exclusion Clause is not automatic inasmuch as it would be attracted only if the opinion of panel of Medical Practitioners constituted by the Appellant. Insurance Company for the purpose indicates that the insured could have known the existence of the disease or symptoms thereof at the time of making the proposal for insurance. In my opinion the Respondent is not entitled to plead that the Exclusion Clause in the contract of insurance is not attracted inasmuch as it is. not a party to the contract. The complainant in this case is K.G. Hospital and not the insurer. As such the Hospital cannot plead that the ouster clause is not attracted. Besides, the claim of the complainant was based on the fact that according to him the policy of insurance was a renewal policy and not a fresh policy. If it was a renewal policy, the ouster will not automatically apply and the question of the panel of Medical Practitioners to be constituted by the appellant would not arise. As the Appellant has emphasised it is the Hospital which is making the claim of the recovery on the basis of the Tie-up arrangements : the Respondent No. 2 has made no claim.

IN view of the above, the order of the State Commission is set aside and the appeal succeeds. There is no order as to costs. Revision dismissed with costs.