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Judgment
Challenge in this Revision Petition under Section 21 (b) of the Consumer Protection Act, 1986 (in short, 'the State Commission') is to the order dated 3.12.2013 passed by the Andhra Pradesh State Consumer Disputes Redressal Commission, Hyderabad (in short, 'the State Commission') in First Appeal No.630/2013 against CC/127/2012 passed by the District Consumer Forum, Guntur.
By the impugned order, the State Commission has allowed the Appeal preferred by the Insurance Company and set aside the order of the District Forum, consequently dismissing the Complaint.
Facts, in brief, are that the Complainant is an account holder of the second opposite party, namely, Andhra Bank (hereinafter referred to as, 'the Bank') and paid necessary premium to cover the risk of himself, his wife and his son in Arogyadan Medical Policy covering the period from 30.3.2011 to 29.3.2012. While, so, on 18.5.2011, the Complainant underwent CABG bypass surgery. Before undergoing the surgery, the Complainant had sent all the details to the third opposite party, namely, Good Health Plan Ltd., which is administrator, requesting cashless facility. The Complainant's request was rejected on the ground that there was a possibility of pre-existing disease. The Complainant spent an amount of Rs.2,35,000/- apart from other expenses and underwent said surgery on 18.5.2011 and was discharged on 29.5.2011. The Complainant was once again admitted in the hospital on 4.6.2011 due to the emergency condition. A claim was made to the third Opposite Party for reimbursement of the amount incurred by him but there was no response. On enquiry, Complainant came to know that his claim was repudiated on the ground of pre-existing disease. It was averred that the Complainant was hale and healthy and had no previous heart disease. The medi-claim policy was taken on 6.7.2006 and was renewed from time to time. Subsequently, the Complainant got issued a notice dated 4.4.2012 to the first Opposite Party (hereinafter referred to as, 'the Insurance Company) but there was no response. Hence, the Complainant approached the District Forum seeking direction to the Opposite Parties to pay an amount of Rs.2,35,000/- towards medi-claim expenses, Rs.50,000/- towards mental agony and Rs.10,000/- towards cost.
Insurance Company filed their Written Version admitting issuance of the policy to Andhra Bank account holders. It was admitted that the Complainant was a policy holder since five years and that the said policy was in force from 30.3.2011 to 29.3.2012. It was stated that the Complainant had made a claim of Rs.2,35,000/- through the third Opposite Party. The said claim was repudiated vide letter dated 5.8.2011 on the ground that the Complainant had suppressed the pre-existing disease. The Complainant was a known case of hyper tension, which is a strong risk factor to develop a coronary artery disease and as per exclusion clause 4.1 expenses incurred on pre-existing diseases are not payable for first-three years from inception of the policy.
It was further pleaded that there is a Memorandum of Understanding (MOU) entered into with the Bank with regard to issuance of group medi-claim insurance policies for Andhra Bank account holders and as per the said MOU, under Clause 3 (f), it is clearly mentioned that a grace period of 15 days is given for renewal of policy. If a renewal is made after 15 days, the policy will be treated as a fresh policy and accordingly the terms and conditions of a fresh policy would be made applicable. The claim was made on 5.5.2011 and had the policy been renewed on or before 23.3.2011, there would have been continuity and renewal benefits. The treatment was given for coronary artery disease 'Triple Vessel Disease', which is a pre-existing disease and, therefore, the repudiation is justified.
District Forum based on the evidence adduced, allowed the Complaint in part directing the Insurance Company to pay Rs.1,00,000/- with interest @ 9% p.a. from 5.8.2011 till the date of payment, together with cost of Rs.1000/-. While allowing the Complaint, the District Forum observed as follows: -
"Ex- B-2 agreement was in between the opposite 1 and 2. Terms of the said agreement cannot be known to insured like complainant. Separate certificate of insurance were given to individual account holders like complainant even through Ex. B-2 was in between the opposite parties 1 and 2. In Ex-A-7 (corresponding to Ex.A-5 proposal form) only the words "If renewed within 15 days from renewal date continuation of policy is given but any claim during the break period will not be entertained." Those words will amount to a caution to any proposer who in turn can follow. Such words did not find place in Exs. A-1 to A-3 i.e. earlier policies. Nowhere in Exs. A-1 to A-3 and A-7 it was mentioned that the insurer have supplied terms of Ex. B-2 and salient features of the AB Arogyadan medicalim policy (Ex. B-1) and if supplied the complainant ought to have known them. Under those circumstances, absence of above caution in my considered opinion is material lapse and amounted to deficiency of service."
The State Commission while allowing the appeal preferred by the Insurance Company observed as follows: -
Prior to the date of admission in Global Hospital, the first respondent applied for cashless facility which was refused by the appellant insurance company. The respondent no.1 had undergone treatment at Global Hospital Hyderabad during the period 18.5.2011 and again on 4.6.2011 for the treatment of CAD triple vessel disease and the hypertension and had coronary artery bypass grafting and he was discharged from the hospital whereupon claimed a sum of `2,35,000/-.
The appellant repudiated the claim on 5.8.2011 on the ground that pre-existing disease will not be covered for the first three years of the policy and the present policy is not in continuity of the earlier policy and there was gap of 21 days in obtaining the present policy.
Admittedly, the previous insurance policy was expired on 8.3.2011 and the present insurance policy was obtained on 30.3.2011. The learned counsel for the appellant has contended that there has been a gap of 20 days from the date the previous mediclaim policy was expired i.e., 8.3.2011 and till the date the present insurance policy was issued i.e., 30.3.2011. It is an admitted fact that if the mediclaim policy is obtained within 15 days from the date the previous mediclaim policy is expired, the present mediclaim policy is treated in continuity of the previous mediclaim policy.
The District Forum observed that the grace period of 15 days for renewal for the policy is treated as continuation of earlier previous policy is not mentioned in Exs.A1 to A3 i.e., previous policies and salient features of A.P.Arogyadan Mediclaim policy ought to have supplied to the respondent no.1. The District forum erred in holding that the present policy is in continuity of the previous policy as there is specific 7 days gap between the date of expiry of the previous policy and the date of issue of the present policy.
Learned counsel appearing for the Revision Petitioner vehemently argued that the Petitioner did not have any past history of any kind of heart disease; that on 11.5.2011 for the first time the Doctors, after conducting necessary test, identified that the Petitioner was suffering from heart ailment and suggested that he should undergo a CABG; that as per clause 3 (f) of the MOU entered into between the Insurance Company and the Petitioner, a grace period of 15 days is given for renewal and if the renewal is made after 15 days, the policy would be treated as a fresh policy and, therefore, in view of renewal of the policy beyond the 15 days' period, the terms and conditions of a fresh policy would be applicable.
Learned counsel appearing for the Respondent argued that the State Commission was right in giving the finding that the previous policy had expired on 8.3.2011 and the present policy was obtained on 30.3.2011 and there was a gap of 20 days from the date the previous medi-claim policy had expired i.e. 8.3.2011 and till date the present insurance policy was issued i.e. 30.3.2011 and that if the medi-claim policy is obtained within 15 days from the date the previous medi-claim policy had expired, the present policy would be treated in continuity of the previous policy. He further contended that the Petitioner herein had suppressed hyper tension which had direct nexus with the CABG surgery performed at Global Hospital and, therefore, the repudiation on the ground of pre-existing disease is justified.
For better understanding of the case, the policies initially taken from the Insurance Company are detailed as herein under: -
"1. First policy 06-07-2006 to 05-07-2007 (F)
Second policy 18-07-2007 to 17-07-2008 (F)
Third policy 18-07-2008 to 17-07-2009 (RI)... please note that here he got renewal status.
Fourth policy 09-03-2010 to 08-03-2011 (F)
Fifth policy 30-03-2011 to 29-03-2012 (F)"
The brief perusal of the letter dated 17.5.2011 issued by Good Health Plan Ltd. shows that the cashless facility was denied to the Petitioner on the ground that 'the possibility of pre-existing disease are not payable under policy norms.' Hence, the main ground for repudiation is that the Complainant had pre-existing disease. It is admitted that the Complainant had undergone the treatment and CABG was conducted at Global Hospitals and the discharge summary dated 15.5.2011 shows the diagnosis of 'CAD, triple vessel disease and hyper tension.' It is also the admitted fact that the Petitioner undergone coronary artery bypass grafting on 18.5.2011 and was discharged on 29.5.2011. The Insurance Company had repudiated the claim on 5.8.2011 on the following grounds: -
"1. A case of CAD-TVD.
Policy commences from 30.03.2011
Patient is known case of hypertension (as mentioned in discharge summary)
Hypertension is an strong risk factor to develop an coronary artery disease and it takes a long duration to develop lesions in three coronary arteries (TVD). Hence it is considered as a pre-existing disease.
As per the policy exclusions 4.1, expenses incurred on pre-existing diseases are not payable for first-three years from inception for policy.
We regret to convey that your claim is not payable for the above reasons. We have retained the docket for future reference in the event of your not being satisfied with our decision you may kindly approach the grievance department at the below address."
It may be seen from the record that the first policy was taken by the Petitioner herein in the year 2006 and the same was renewed till the year 2012. Clause 4.1 based on which the Insurance Company had repudiated the claim reads as follows: -
"All the disease/injuries which are pre-existing when the cover incepts for the first time. For the purpose of applying this condition, the date of inception of the initial Medical Policy taken from any of Indian Insurance Companies shall be taken, provided the renewals have been continuous and without any break. However, this exclusion will be deleted after 3 consecutive continuous claim free policy years, provided there was no hospitalization of the pre-existing ailment during these illegible years of insurance."
From the afore-noted condition, we are of the considered view that it can be construed that there were three consecutive continuous claim free policy years and, therefore, this exclusion cannot be relied upon by the Insurance Company. The Insurance Company is silent about the date of application for the issuance of the insurance policy. Admittedly, 15 days gap is allowed for considering it as a continuity. In the absence of any documentary evidence to establish that there was more than 15 days gap from the date of application, we are of the view that clause 4.1 squarely applies. If indeed it has to be treated a fresh policy, it is pertinent to mention that the Insurance Company has not even filed the proposal form to discharge their onus. For the aforesaid reasons, we are of the considered opinion, that the State Commission had erred in allowing the Appeal preferred by the Insurance Company. We set aside the order of the State Commission, confirm the order of the District Forum and direct the Insurance Company to pay an amount of Rs.1,00,000/- with interest @ 9% p.a. from 5.8.2011 till the date of realization together with cost of Rs.10,000/-.
In the result, the revision petition is allowed for the reasons mentioned above.