P.Srinivasulu Chetty vs Diners Club International

AGGRIEVED by the order of the State Commission, the Petitioner in this case Shri P Srinivasulu Chetty has filed a Revision Petition under Section 21 (B) of the Consumer Protection Act, 1986, against M/s Diners Club International and New India Insurance Co. Ltd. (Respondents No.1 and 2 herein)

THE brief facts of the case according to the Petitioner are as follows: "THE Petitioner was a card holder of the Diners Club International since 1983, which was valid upto March 2010. THE Diners Club (Respondent No.1) offered a comprehensive family medical insurance programme known as Club Solace, especially for its members as agent of New India Insurance Co. Ltd., (Respondent No. 2). Petitioner took the facility of Club Solace (hereinafter referred to as the Health Policy) in February 1993 which was renewed every year through Respondent No. 1. In December 1996, the Petitioner wrote to Respondent No. 1 that since he had not received any intimation regarding renewal of the Health Policy for the period February 2000 to January 2001 he requested for the same, since he did not want the policy to lapse. In response, Respondent No. 1 informed him that while processing the application it was found that the card account of the Petitioner needed to be regularized; therefore, they were not in a position to accommodate the application. According to the Petitioner this was a false assertion since, the Petitioners account with Respondent No. 1 had been duly renewed. On 03.03.2000, Respondent No.1 again wrote to the Petitioner stating that it was not possible to renew the Health Policy from February 2000, because the renewal form from the Petitioner was not received within the specified time. However, the said Policy was subsequently renewed with effect from April 2000."

In May 2000, following the death of his son (in April 2000), his wife P Rajamma was suddenly hospitalized, and the Petitioner spent Rs.1,90,163/- on her treatment. Since the medical insurance cover under the policy was for Rs.1,10,000/- Petitioner submitted a claim to Respondent No. 1, limited to that amount. In September, 2000, Petitioner also under went a cataract operation on which he spent an amount of Rs.16,281/-. Claim for this was also sent through Respondent No.1 to Respondent No.2.

Respondent No.2 rejected the claim of the Petitioners spouse on the following grounds: From the copies of previous medi-claim policies submitted we note that the insured was covered under medi-claim policy from 01.02.1993 to 31.01.1994 and from 01.02.1995 to 31.01.2000. The present policy has commenced from 01.04.2000. Since there is break in cover from 01.02.2000 to 31.03.2000, the present policy commencing after the break will be treated as fresh/ first year policy and diseases contracted prior to inception of policy will be treated as pre-existing diseases. Our medi-claim policy excludes claims arising out of pre-existing disease i.e. diseases existing prior to inception of policy. Since the subject claim is in respect of pre-existing diseases we, regret to inform you that we are unable to entertain your claim.

THE claim for the cataract surgery of the Respondent was also repudiated on the grounds that the health policy specifically excluded cataract from being under medical insurance cover. Aggrieved by these actions on the part of Respondent Nos.1 and 2, Petitioner filed a complaint before the District Forum, Chittoor which was dismissed on 04.02.2003. Petitioner thereafter filed an appeal before the State Commission under Section 12 of the CP Act. State Commission in its order inter-alia gave the following findings: (i) The medi-claim insurance sought by Respondent No. 1 for cataract surgery is specifically excluded as per clause 4 of the medi-claim policy and therefore, the complainant is not entitled to any claim in respect of this surgery. (ii) Regarding the case of Petitioners wife, since the Respondents (on whom there was the onus to do so) failed to file any medical records to show that the Petitioners wife was suffering from any pre-existing diseases, it cannot be concluded that she was suffering from any pre-existing diseases prior to April 2000 as contended by Respondents. (iii) There was delay on the part of the Petitioner in sending the required form for renewal of the policy and the Respondents could not therefore be blamed for non-renewal of the policy in time. The fault lay with the Petitioner. The State Commission, therefore, upheld the order of the District Forum to the extent that there was a break in the Health policy from 01.02.2000 to 31.03.2000 and that the present policy which commenced from 01.04.2000 was indeed a fresh policy. Aggrieved by the order of the State Commission, Petitioner has filed this present Revision Petition before us. Counsel for all three parties were present on 4th August 2010.

COUNSEL for the Petitioner while reiterating the facts made in his written submission stated that the State Commission had itself given a clear finding that the Respondents had failed to prove that Petitioners wife suffered from any pre-existing diseases. Further the diseases for which the Petitioner was hospitalized in May 2000 are not covered under the exclusion clause of the medi-claim policy. The fact that in the past also Petitioner had never submitted any medi-claims for the disease for which his wife was hospitalized in May 2000 lends also credence to the fact that these were not pre-existing diseases. Further, there is no dispute that the present claims are for the period when the Petitioner was covered under the new policy. Under these circumstances, the claims were wrongly repudiated by Respondent No. 2. COUNSEL for Respondent No. 2 inter-alia pleaded that the diseases for which Petitioners spouse was hospitalized in May 2000 included respiratory failure, Bronchial Asthma, renal impairment and cholelithiasis, none of which could have developed suddenly. Besides bronchial asthma is the same disease as bronchitis and asthma which is specifically excluded from being covered under the said Medical Insurance Policy. Therefore, on these grounds also repudiation of the claim was justified. We have considered the submissions made by the Ld COUNSEL and also gone through the relevant documents on record. We note that the State Commission has already given a clear finding to the effect that no evidence was produced by the Respondent No. 2 to prove that Petitioners wife was earlier suffering from any of the diseases for which she was hospitalized, while the onus to provide this evidence was squarely with Respondent No. 2. Therefore, the contention of the Respondent No. 2 that Petitioners wife was suffering from pre-existing diseases and was not eligible for reimbursement has not been proved. We therefore, agree with the finding of the State Commission on this issue and conclude that repudiation of medi-claim on the grounds of pre-existing diseases by the Respondent No.2 is without just cause. Respondent No. 2 claims that another reason why the policy was repudiated was because Petitioners wife was suffering from diseases which figure in the exclusion list of the medi-claim policy. In this connection, it would be relevant to quote from the hospital records about the diseases for which the patient was hospitalized. These are as follows: Respiratory failure, Bronchial Asthma, actue Cholelithiasis and renal impairment. Respondent No.2 could not produce any medical authority/ evidence to prove that Bronchitis and Asthma combined together are in fact the same disease as bronchial asthma. On the other hand principles of Contra Proferentum (the ambuigity of doctrine) clearly states that in interpreting the documents, ambiguities are to be construed unfavourably to the drafter. The terms and conditions of the Insurance Company, in this case, having been made by Respondent No. 2 cannot be interpreted to benefit ambiguity, in a bid to reject the genuine medi-claim of the Petitioner. Also it is important to record that the Petitioners wife was hospitalized for other diseases; like renal failure and cholelithiasis which in any case do not figure in the exclusion list of the Respondent No.2s - medical insurance policy. All these coupled with the fact that hospitalization occurred when the petitioners spouse was covered under the new medi-claim policy with effect from 01.04.2000 and hospitalization occurred after the stipulated period of 30 days of issuance of this policy, convinces us that Respondent No. 2 had no ground for repudiating the medical insurance claim of the Petitioners spouse. Respondent No.2 is therefore, directed to re-process the medical claim of the Petitioners wife in the light of the above- mentioned findings. Final settlement amount made by Respondent No.2 be intimated to this Commission. Regarding Petitioner No.1s cataract surgery we agree with the submissions made by Respondent No. 2 that since it is clearly excluded from the medical insurance cover, repudiation of this claim by Respondent No. 2 was justified. Regarding, facts pertaining to the lapsing of the Petitioners medical insurance policy, and issuance of a fresh policy in 01.04.2000 the State Commission has concluded that this occurred because, the Petitioner sent the renewal form to the Respondents after the stipulated period. Thus the responsibility for the lapse lies with the Petitioner. We have gone through the records of the case and it is evident from that Petitioner had requested Respondent No.1 for this renewal form well in time i.e. on 11.12.1999. It is unfortunate that Respondents took their own time in attending to this request and that also on technical trivialities. Responsibility for non-renewal of the policy therefore cannot rest on the shoulders of the Petitioner alone and the Respondents must share blame for not processing the request in a timely manner and that too for an old and long standing client. Viewing the facts in its enterity, we are of the view that the Respondent was made to go through unnecessary harassment particularly in respect of the medi-claim of his spouse. Therefore, apart from re-processing the medi-claim as ordered above, Respondent No. 2 also needs to compensate the Petitioner for the harassment and mental agony that he suffered. We therefore, direct the Respondent No. 2 to pay a sum of Rs.15,000/- as costs to the Petitioner within a period of four weeks. Ordered accordingly.