United India Insurance Co. Ltd. vs KAPIL KUMAR

THIS is Insurance Company''s appeal against the order dated 24.6.2003 passed by the District Forum, Almora whereby the complaint of the complainant was allowed.

THE brief facts of the case are that the complainant has filed a complaint with the allegations that he had taken a mediclaim policy on 21.10.1998 for a sum of Rs. 2,00,000/- (Rupees two lakhs). In the night of 31.5.1999/1.6.1999, he felt serious heart attack. He was hospitalized in Apollo hospital on 10.6.1999, wherein he spent a sum of Rs. 1,95,000/- (Rupees one lakh ninety-five thousand). He has spent a total sum of Rs. 2,08,939.95 (Rupees two lakhs eight thousand nine hundred thirty-nine and ninety five paise). He lodged his claim but his claim was repudiated. He gave a registered notice. THEreafter filed a complaint for recovery of Rs. 2,00,000/- (Rupees two lakhs) as mediclaim amount and 18% interest and also any other relief which can be granted to the complainant. The opposite party filed written statement. The insurance is admitted. It is further alleged that the complainant is not entitled to mediclaim amount because it is his duty to prove that he was not having heart attack before 21.10.1998. The complainant did not submit consent letter for the verification of medical expenses. He has taken the bills by fraud and misrepresentation. It is alleged that in the proposal form, the complainant has given wrong information. The declaration form as given by Dr. T.C. Gaur, B.A.M.S. at the time of proposal is not duly verified and he was not an authorized doctor to give medical history. It is admitted that the complainant has submitted medical bills of Rs. 1,89,000/- (Rupees one lac eighty-nine thousand).

After taking the evidence of the parties and hearing them, the learned Forum allowed the complaint to the extent that the complainant is entitled to Rs. 2,00,000/- (Rupees two lakhs) as amount of claim and Rs. 50,000/- (Rupees fifty thousand) as compensation and to pay interest @ 9% and if this amount is not paid within a month, the opposite party shall pay penal interest @ 12% and cost of litigation of Rs. 5,000/- (Rupees five thousand) was also allowed. Against this order the present appeal has been filed.

WE have heard the learned Counsels for the parties and gone through the records. The plea as taken by the Insurance Company that it was duty of the complainant to prove that he was not suffering from any disease from before 21.10.1998 is intenable. It is rather the duty of the Insurance Company to prove that the complainant was suffering from this disease from before 21.10.1998. He was in the knowledge of this disease and it is he who has suppressed this disease. It is the specific allegation of the Insurance Company that even from before 21.10.1998, the complainant was suffering from this disease. Therefore, the duty to prove this fact was squarely on the Insurance Company not on the complainant to prove in the negative. In the case of Life Insurance Corporation of India v. Smt. G.M. Channabasemma, reported in AIR 1991 Supreme Court 392, the Hon''ble Supreme Court has held that burden of proving that the insured had made false representations and suppressed material facts is undoubtedly on the Corporation. In the case of New India Assurance Co. v. P.P. Khanna, reported in II (1997) CPJ 1 (NC), the National Commission has held: "The onus probandi, in cases of fraudulent suppression of material facts rests heavily on party alleging fraud, namely the insurer. The insurer cannot avoid consequences of insurance contract by simply showing inaccuracy or falsity of statement. Burden is cast on the insurer to show that the statement was on a material matter or facts have been suppressed which it was material for the policy holder to disclose. It is further to be proved that the statement was fraudulently made by the policy holder with the knowledge of the falsity of statement or that the suppression was of material facts which has not been disclosed. The Courts will not be satisfied with proof which falls short of showing that intentional misrepresentation was made with the knowledge of perpetrating fraud."

Thus the plea that the complainant was suffering from such a disease was to be proved by the Insurance Company not by the complainant.

THE complainant was examined by the doctor at the time of proposal. It is not clear who has called the doctor but actually the doctors are called by the Insurance Company to examine the insured. THE B.A.M.S. degree is also a recognized degree. A doctor holding such degree is fully entitled to make examinations and even treat the patient. His report cannot be said to be false. THEre is no evidence of any earlier treatment, earlier disease, earlier prescription, earlier medicines and according to the complainant it is for the first time he suffered by his heart disease in the night of 31.5.1999 and 1.6.1999. Merely because the heart attack was serious and merely because the operation had to be conducted, it cannot be said that the complainant knew about the disease earlier or he was suffering from this disease from before taking the policy. Sometimes all of a sudden a person dies out of heart attack and nobody on earth knew that he was having any heart problem. There is no evidence of any suppression of any material fact. The complainant has also submitted bills of Rs. 1,85,000/- (Rupees one lakh eighty-five thousand). The Insurance Company was free to get it examined and investigate, there was no question of any consent. Secondly the learned Forum after examination of evidence that the expenses of complainant was of Rs. 2,00,000/- (Rupees two lakhs). This award of compensation of Rs. 2,00,000/- (Rupees two lakhs) as mediclaim amount is perfectly justified. A sum of Rs. 50,000/- (Rupees fifty thousand) as compensation has also been awarded along with interest @ 9%. Interest is nothing but is awarded as compensation on the main amount. A person cannot take both the reliefs, both interest as well as compensation at one and the same time. We are supported by the rulings reported in II (2000) CPJ 1 (SC), Ghaziabad Development Authority v. Union of India, III (2002) CPJ 124 (NC); Satelec Power Electronics v. HRDC, and IV (2003) CPJ 90=2003 (6) CLD SCDRC, Delhi, page 210, Rajpal Mahana v. National Insurance Co. Ltd. Therefore, the order of payment of Rs. 50,000/- (Rupees fifty thousand) as compensation is uncalled for. Even in his complaint, the complainant has not claimed any compensation of this type. He has only claimed that any relief, which can be considered, fit, may be given to him. The amount of compensation of Rs. 50,000/- (Rupees fifty thousand only) is to be quashed.

THE complainant has also been given penal interest @ 12% if the payment is not made within a month. Ever party has a right of appeal and the right of appeal cannot be defeated by passing these types of orders that the amount be paid within a month. One month''s time has been provided in the Act, if the appellant is desirous of availing his right of appeal and he is fully entitled to that. Without any reason, punitive interest cannot be given. It is, therefore, the order of payment of interest @ 12% if the amount is not paid within a month is also illegal and is to be quashed.

INTEREST was awarded from the date of complaint in the learned Forum, Nainital i.e., 27.3.2000, although it should have been awarded giving three months margin from the presentation of the claim, i.e., 6.7.1999, i.e., the interest should have been awarded from 6.10.1999 but since there is no appeal of the complainant, we do not want to interfere regarding date from which the interest shall be payable. Therefore, the interest shall be payable from 27.3.2000 the date on which the complaint was filed before the learned Forum, Nainital. The dispute was also raised on the amount of cost. The complaint was filed in District Forum, Nainital. It was contested there. Again it was transferred to Almora. The case was decided there. The parties have to spend a lot on litigation, therefore, cost of Rs. 5,000/- (Rupees five thousand only) cannot be said to be excessive. ORDER The appeal is hereby partly allowed and partly dismissed. The order of the learned Forum for payment of Rs. 2,00,000/- (Rupees two lakhs only) is hereby upheld. The order of payment of Rs. 50,000/- (Rupees fifty thousand only) as compensation is hereby quashed. The order of payment of interest @ 12% if the amount is not paid within a month is also quashed. The order of payment of cost of Rs. 5,000/- (Rupees five thousand only) is also upheld. Appeal partly allowed.