Whether mediclaim can be rejected on the ground that pre-existing disease not known to insured was not disclosed?

Dr. Kundnani seems to have changed his mind subsequently and given certificate on 04/01/2010 stating that the insured had been suffering from this problem not since last three years but for the past three months. Let us assume that this letter was issued with an intention to help the insured and that the insured was suffering from this problem for the past three years. Still, we fail to understand as to how mere complaints of persistent non-resolving pain in left leg could make a layman like the Complainant image that he was suffering from some disorder of nervous system, which he should have disclosed in the proposal form. Contention of the Learned Counsel for the Insurance Company, that such a pain observed when the insured was examined at the Bombay Hospital should be sufficient to attribute to the insured the knowledge that he was suffering from the ailment/disease when he submitted the proposal more than two years prior to the examination by the doctor, cannot at all be accepted. Hindsight is good but, hindsight cannot lead to taking the person back in the scale of time. What the patient came to know in the year 2009 could not have been imagined by him in the year 2008 when he filled-up the proposal form. Therefore, inference that insured knew of his disease and he had suppressed it or did not disclose it was thoroughly unwarranted. We may point out that the Insurance Ombudsman to whom the matter was taken up has merely observed that the ailment was possibly pre-existing. He had not come to the conclusion that the ailment was decidedly pre-existing. For repudiating a claim Insurance Company must show that the ailment was pre-existing to the knowledge of the insured and the insured suppressed material information.

State Consumer Disputes Redressal Commission

Mr. Ashok M. Ahuja vs United India Insurance Co. Ltd. ... on 10 December, 2013
Citation;2015(3) ALLMR(Journal)50

HON'ABLE MR. JUSTICE R.C.Chavan PRESIDENT   HON'ABLE MR. Dhanraj Khamatkar Member   PRESENT:

Mr. Deepak Ahuja, power-of-attorney holder for the Appellant     Adv. Asim S. Vidyarthi for the Respondents     ORAL ORDER   Per - Hon'ble Mr. Justice R. C. Chavan, President   This appeal filed by the Appellant/original Complainant, Mr. Ashok M. Ahuja (hereinafter referred to as 'the Complainant' for the sake of brevity) questions dismissal of Consumer Complaint No.519 of 2010 by the District Consumer Disputes Redressal Forum, Pune by an order dated 30/05/2012.

[2] Facts which are material for deciding this appeal are as under:-

Complainant had taken out a mediclaim insurance policy for himself from the Respondent No.1/original Opponent No.1 - United India Insurance Company Ltd. (hereinafter referred to as 'the Insurance Company' for the sake of brevity) for the period 27/06/2008 to 26/06/2009. Said insurance policy was renewed for the period from 27/06/2009 till 26/06/2010.

On 06/01/2010 the Complainant was admitted to the BombayHospital and on 07/01/2010 he underwent lumber decompression surgery. He was discharged from the hospital on 12/01/2010. He spent an amount of `3,08,043/- for this treatment and he lodged a claim with the Insurance Company for reimbursement of this amount. Insurance Company made necessary enquiries, caused the claim to be investigated and ultimately repudiated the claim on 17/02/2010.

This repudiation letter was, however, received by the Complainant on 07/04/2010. The Complainant then, filed a consumer complaint before the District Forum at Pune for recovery of an amount of `3,08,043/- together with interest thereon @ 18% p.a. besides an amount of `5,00,000/- by way of compensation towards physical and mental agony.

[3] This claim was contested the Insurance Company by filing a written version inter-alia contending that the Complainant was obliged to disclose if any other policy was taken out by him before taking the policy in question with effect from 27/06/2008 till 27/06/2009. It was also stated that the Complainant had suppressed the material information that he had taken out a MRI of lumbo-sacral spine on 09/10/2008. It was stated that the Complainant had suppressed that he was suffering from neurological 'claudication' for the past three years i.e. before the date of commencement of the policy. The Insurance Company relied on Clause No.4.1 of the terms & conditions of the policy for repudiating the Complainant's claim because the Complainant was suffering from an ailment for the past three years i.e. since before the date of commencement of the policy. It was also stated that the Complainant caused the words 'Three years' changed to 'Three months' in the medical certificate.

[4] After considering the rival contentions and the material tendered before the Forum, the Forum came to dismiss the complaint holding that the pre-existing disease is the one which was shown to have been existing during the period of 48 months before taking out the policy, and, as per the certificate of Bombay Hospital, the Complainant had such an ailment/disease for a period of at-least three years before the date of consultation in the Bombay Hospital.

Aggrieved thereby, the Complainant is before us.

[5] We have heard Appellant's son and power-of-attorney holder, Mr. Deepak Ahuja on behalf of the Appellant and Adv. Asim S. Vidyarthi on behalf of the Respondents and with their help we have also gone through the material placed on the record.

[6] Arguments advanced before us give rise to only the point for our determination as to whether the District Forum at Pune was in error in holding that the repudiation of the Complainant's claim by the Insurance Company was justified? Our answer is in the affirmative for the following reasons:-

[7] There is no dispute that the Complainant had taken out an insurance policy from the Insurance Company for the period from 27/06/2008 till 26/06/2009. Proposal form is fortunately produced on the record for our perusal and we were shocked to note that except for the first page having names of family members of the insured, the entire form was blank.

Learned Counsel for the Insurance Company sought to submit that the blank form indicates that the insured had suppressed information. Whether the insured could be said to have suppressed information is a question to which we shall come shortly. Question is whether the Insurance Company could provide an insurance cover on the basis of such blank proposal form and without insisting that particulars therein should be filled in by the insured? There is no justification as to why the Insurance Company provided insurance cover on the basis of such blank proposal form. If, this is how the Insurance Company chooses to provide an insurance cover then, the Insurance Company must not blame others for being made to suffer by the orders and decrees against it.

[8] Now, we come to the question as to whether the insured could be said to be suffering from pre-existing disease when he submitted the proposal for insurance on 27/06/2008.

Insurance Company so feels on the basis of pre-admission assessment on 26/11/2009 in the BombayHospital where following observations are recorded by Dr. Kundnani:-

"Complainants of Persistent Non Resolving (L) Leg Pain - 3 years - LBP off and on - Episodic Non Progressive .......Limitations ++++, Leg Pain - Increased walking, Claudication ++, walking distance < 10 min., numbness in Postero lateral leg + calf +.....Occasional R. leg also."

   

[9] Dr. Kundnani seems to have changed his mind subsequently and given certificate on 04/01/2010 stating that the insured had been suffering from this problem not since last three years but for the past three months. Let us assume that this letter was issued with an intention to help the insured and that the insured was suffering from this problem for the past three years. Still, we fail to understand as to how mere complaints of persistent non-resolving pain in left leg could make a layman like the Complainant image that he was suffering from some disorder of nervous system, which he should have disclosed in the proposal form. Contention of the Learned Counsel for the Insurance Company, that such a pain observed when the insured was examined at the Bombay Hospital should be sufficient to attribute to the insured the knowledge that he was suffering from the ailment/disease when he submitted the proposal more than two years prior to the examination by the doctor, cannot at all be accepted. Hindsight is good but, hindsight cannot lead to taking the person back in the scale of time. What the patient came to know in the year 2009 could not have been imagined by him in the year 2008 when he filled-up the proposal form. Therefore, inference that insured knew of his disease and he had suppressed it or did not disclose it was thoroughly unwarranted. We may point out that the Insurance Ombudsman to whom the matter was taken up has merely observed that the ailment was possibly pre-existing. He had not come to the conclusion that the ailment was decidedly pre-existing. For repudiating a claim Insurance Company must show that the ailment was pre-existing to the knowledge of the insured and the insured suppressed material information.

[10] There is another aspect to the matter. The Complainant seems to have sought some cashless facility in the year 2008 and had undergone MRI Scan as recommended by Dr. Parasnis on 09/10/2008. Now, report of this MRI Scan was with the Insurance Company because the Complainant had sought cashless service. If this report was with the Insurance Company, Insurance Company could have discovered while renewing the insurance policy that there was something amiss and the Complainant had suppressed certain things from the Insurance Company and the Insurance Company could have refused to renew the insurance policy. Insurance Company, without any hesitation, collects premia from the persons, who approach the insurance company with the hope that the insurance company will help them in times of difficulty, but later on insurance company feels no compunction when it declines to fulfillment of its commitments and raises all sorts of defence. This is extremely tragic.

[11] Since in our view the Complainant could not at all have known when he submitted the proposal form that he was suffering from any disorder of nervous system, it cannot be said that the Complainant was suffering from pre-existing ailment/disease which entitled the Insurance Company to repudiate his claim. We, therefore, answer the point in the affirmative and hold that the District Forum was not justified in holding that repudiation of the Complainant's claim by the Insurance Company was proper.

[12] This takes us to question of compensation. We feel that claim made by the Complainant of `3,08,043/- ought to have been honoured by the Insurance Company. We grant this amount. In addition to it we hold that the Insurance Company is also liable to pay to the Complainant a lumpsum amount quantified at `25,000/- towards compensation for mental harassment and costs of litigation. In the result, we hold accordingly and pass the following order:-

ORDER   Appeal is partly allowed.

Impugned order dated 30th May, 2012 passed by the District Consumer Disputes Redressal Forum, Pune in Consumer Complaint No.519 of 2010 is hereby set aside and it is substituted by following order:-

"Consumer complaint is partly allowed.

Respondent/original Opponent No.1 - United India Insurance Company Ltd., shall pay to the Appellant/original Complainant an amount of `3,08,043/- towards reimbursement of medical expenses together with interest thereon @ 9% p.a. as from date of insurance claim viz. 20th January, 2010 till the amount is paid within a period of forty-five days from today (since the order is passed in presence of the parties) besides an amount of `25,000/- by way of compensation and costs of the litigation."

   

Pronounced and dictated on 10th December, 2013       [HON'ABLE MR.

JUSTICE R.C.Chavan] PRESIDENT       [HON'ABLE MR.

Dhanraj Khamatkar] Member KVS

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