Life Insurance Corporation Of India vs Saraswathi Kuncha

Dr. B.C. Gupta, J.

This revision petition has been filed under section 21(b) of the Consumer Protection Act, 1986 against the impugned order dated 30.01.2017, passed by the Telengana State Consumer Disputes Redressal Commission (hereinafter referred to as 'the State Commission') in First Appeal No. 221/2016, "The Chief Manager, Life Insurance Corporation of India (LIC) and Ors. versus Saraswathi Kuncha", vide which, while allowing the said appeal, the order dated 13.07.2016, passed by the District Forum III, Hyderabad, allowing the consumer complaint No. 284/2015, filed by the present respondent, was upheld.

Briefly stated, the facts of the case are that the complainant Saraswathi Kuncha was the holder of LIC Health Plus Plan Policy, bearing No. 645633310 with date of commencement as 23.06.2008.Under the policy, major surgical benefit of ₹2 lakh and a daily cash benefit of ₹1,000/- was admissible and the half-yearly premium for the policy was ₹4,500/-.It is stated that the said policy expired in the year 2009 for non-payment of premium.On her request to renew the policy, the LIC made her undergo medical examination from their empanelled Doctors, following which, she was asked to pay an additional premium of ₹5,000/- towards coverage for medical expenses, meaning thereby that she had to pay an annual premium of ₹14,000/- for the said policy, instead of ₹9,000/- being paid earlier.

It is stated that the insured suffered chest pain on 24.08.2014, following which, she was examined by Dr. Vijetha at People's Hospital Pragathi Nagar and then admitted in Prime Hospital on the same day.She has stated to have suffered heart attack, after which she was subjected to the procedure called PTCA + Stent to LAD. The complainant was discharged from the Hospital after treatment on 28.08.2014.She filed a claim with the LIC for a sum of ₹1,77,088/-, but she was paid a meagre sum of ₹2,600/- only towards hospitalisation cash benefit on 31.03.2015.The complainant filed the consumer complaint in question, seeking directions to the LIC to pay the claim in question.

The complaint was resisted by the LIC by filing a written version before the District Forum, in which they admitted the facts regarding issuance of the policy, and also stated that additional premium was charged, keeping in view the abnormality in the ECG and the past history of blood pressure for the last 10 years.The LIC stated that the complainant had submitted a claim for ₹2,33,881/- on 12.09.2014 towards hospital expenses.The said claim was denied due to the following reasons:-

"1. Pre-existing illness irrespective of prior medical treatment or advice (H01)

Any other rejections (not covering under the supplied list of rejections (L 99)

Surgeries not listed in the allowed surgeries (M01)"

It was further stated that the complainant was a known case of hypertension for the last 15 - 20 years and the same was not disclosed at the time of filling the proposal form.The claim had been rejected, taking into account the pre-existing disease, the non-disclosure of material facts and also because the said surgeries were not covered as per the terms and conditions of the policy.The Review Committee of the LIC decided to pay the hospitalisation cash benefit of ₹2,600/- to the complainant and the same was paid on 08.05.2015.The LIC stated that the list of eligible surgical procedures had been appended with the policy itself and since the surgery undergone by the complainant did not fall under that list, the claim could not be paid.It was further stated that the procedure CABG via open chest surgery, in which 2 or more coronary arteries must be bypassed, was covered under the policy.The complainant had, however, undergone PTCA + Stent to LAD, a procedure which was not covered under the Policy.

The District Forum, after taking into account the averments of the parties, partly allowed the consumer complaint vide their order dated 13.07.2016, according to which, the OP LIC was directed to pay a sum of ₹1.5 lakh to the complainant and a compensation of ₹3,000/-.Being aggrieved against the order of the District Forum, the OP LIC challenged the same by way of an appeal before the State Commission, and such appeal having been dismissed vide impugned order, the OP LIC is before this Commission by way of the present revision petition.

It was observed by the State Commission in the impugned order that when the appellant/LIC were admitting the claim for surgery of two or more arteries, their contention to disallow the claim for one artery was not sustainable.

During arguments before us, the learned counsel for the petitioner LIC has drawn attention to the copy of the repudiation letter dated 19.09.2014, saying that the treatment undergone by the complainant was not covered under the terms and conditions of the Policy.The learned counsel argued that the list of surgical procedures for which the claim was payable, had been appended with the Policy and since the procedure undergone by the complainant did not find mention in the same, the claim could not be paid.The husband of the respondent, who is her authorised representative, appeared in person and stated that the complainant had been duly examined by a panel of doctors appointed by the LIC and thereafter, the premium payable by her was increased.There was no evidence of any disease at the time of taking the policy and hence, the orders passed by the Consumer Fora below were in accordance with law and should be upheld.

We have examined the entire material on record and given a thoughtful consideration to the arguments advanced before us.

The main issue that merits consideration in the matter is whether the claim made by the complainant with the OP Insurance Company was payable or not under the terms and conditions governing the policy and whether the repudiation of the claim made by the OP was justified or not.One of the grounds upon which the claim was repudiated, is the existence of pre-existing disease to the complainant.It has been admitted by the OP Insurance Company in their written version to the complaint filed before the District Forum that a higher premium was charged after the revival of the policy, considering the abnormality in ECG and the past history of blood pressure for the last 10 years.It is evident, therefore, that the Insurance Company decided to revise the earlier premium from ₹9,000/- to ₹14,000/-, keeping in view the health condition of the complainant. There is no justification, therefore, for the Insurance Company to deny the payment of claim on the ground that the complainant was suffering from hypertension for the last many years. The allegation of non-disclosure of material facts about the complainant has also not been proved, because the entire facts concerning the health condition of the complainant came to the knowledge of the insurance company after the medical examination was conducted upon her at the time of revival of the policy. It is held, therefore, that the insurance company could not have repudiated the claim on grounds of pre-existing disease suffered by the complainant.

The next point for consideration in the matter is whether the procedure undergone by the complainant had been included in the "list of surgical procedures" appended with the insurance policy.It is interesting to observe that in the memo of revision petition as well as the synopsis filed alongwith, the petitioner insurance company have stated categorically that the procedure of 'Angioplasty' was specifically excluded under the policy, which covered bypass surgery only for coronary artery diseases.A perusal of the list of surgical procedures, however, mentions the following item at Sl. No. 7 of the said list:

"Coronary Angioplasty with stent implantation (2 or more) Coronary Arteries must be stented"

It is further stated that 40% of the sum assured shall be payable in the case of said procedure, whereas in the case of bypass surgery called CABG, 100% of the sum assured is payable.

It is evident, therefore, that the version given by the petitioner in the memo of revision petition is not correct that 'Angioplasty' was excluded from the list of permissible surgeries.

The next point for consideration is whether the claim was payable, if the procedure was done in one artery only, whereas the insurance policy says that the claim was payable to a partial extent provided two or more arteries were involved.Both the consumer fora below have taken the view that the contention of the Insurance Company for denying the claim for one artery was unsustainable.It is a settled legal proposition that the concurrent findings made by the Consumer Fora below should not be interfered in the exercise of revisional jurisdiction unless there is a material defect or error of jurisdiction in the orders passed by the Consumer Fora below.Such a view has been taken by the Hon'ble Supreme Court in the case of "Rubi Chandra Dutta vs United India Insurance Co. Ltd. [(2011) 11 SCC 269]". We find no sufficient grounds to take a different view from that taken by the Consumer Fora below on this issue. The payment of claim for stenting one artery only cannot be denied on any justifiable ground.

From the foregoing discussion, it becomes clear that the complainant should have been allowed 40% of the amount of claim as per the Policy terms & conditions, i.e., 40% of ₹2,33,881/- and we order accordingly. Such amount shall be payable to the complainant alongwith interest @9% p.a. from the date of filing the claim till realisation. Under the given facts and circumstances of the case, when the petitioner Insurance Company have not stated the correct facts in the memo of revision petition, we feel that an additional sum of ₹50,000/- shall be payable to the complainant by way of cost, because the complainant has been subjected to avoidable harassment by the OP Insurance Company. The payment in terms of this order shall be made within a period of 4 weeks, failing which, it shall carry interest @12% p.a. till realisation.