Star Health and Allied Insurance Company Limited vs The Chairman,Permanent Lok Adalat

Ritu Bahri, J.—Challenge in this petition is to the award dated 16.12.2013 (Annexure P3) passed by the Chairman, Permanent Lok Adalat, Gurgaon whereby the petitioner-Insurance Company has been directed to make a payment of Rs. 60,000/- along with interest at the rate of 9% per annum to the insurer. The complainant was having a mediclaim family policy bearing No. P/161117/01/2010/001084 for the period from 18.8.2009 to 17.8.2010 which was subsequently renewed from 31.8.2010 to 30.8.2011. The petitioner-Insurance Company opposed the claim of the insurer on the ground that in the 2nd year of operation of the cover the disease fell under the exclusion clause 3 of the policy. The treatment of intervertebral disc prolapse fell under 2 year exclusion except if it was due to trauma. The Permanent Lok Adalat made efforts for conciliation but the same could not be effected. The company made an offer of Rs. 60,000/- as full and final settlement.

The complainant had taken the family policy of mediclaim from the petitioner. The claim has been allowed by making reference to a Division Bench judgment of this Court in Iffco Tokio General Insurance Company Ltd. Vs. Permanent Lok Adalat (Public Utility Services), Gurgaon and Others, where the insurer had taken a mediclaim policy. The claim of the insurer was being denied on the ground that he was suffering from heart disease for the last 8 years and it was a case of pre-existing disease covered under the aforementioned Exclusion Clause of the policy. The Division Bench did not accept the plea of the Insurance Company on the ground that the insurer had been making the payment for the last 3 years successively and by applying the principle of interpretation, known as ''contra proferentem'' which means that if there is any ambiguity in a clause excluding liability it should be construed against the proferens and in favour of the party against whom the clause is pleaded, Treating the clause to be unfair, the claim of the insurer was accepted and the appeal was dismissed. In paragraph 5 the Division Bench observed as under:--

"5. Having heard learned counsel for the petitioner appellant we are of the considered view that no interference of this Court would be warranted in the view taken by the learned Single Judge as well as the Lok Adalat. The law is well settled with regard to the exclusion clauses in standard ''forms of contracts. When the bargaining powers of the parties is unequal and a consumer has no real freedom to contract then such a power may be considered unfair. The principle deducible from various precedents is that the Courts would not enforce and when called upon to do so, strike down such an unfair and unreasonable clause in a contract, entered into between parties who are not equal in bargaining power. For instance, the above principle would apply where the inequality of bargaining power is the result of the great disparity in the economic strength of the contracting parties. It would also apply where a man has no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a set of rules as part of the contract, however unfair, unreasonable and unconscionable a clause in that contract or form or rules may be. The types of contract to which the principle formulated above applies to terms which are so unfair and unreasonable that they shock the conscience of the Court. They are opposed to public policy and require to be adjudged void. In that regard we may place reliance on the judgment of Hon''ble the Supreme Court rendered in the case of Central Inland Water Transport Corporation Limited and Another Vs. Brojo Nath Ganguly and Another,

In the present case, the insurer had taken this policy on 18.8.2009 to 17.8.2010. Subsequently, it was renewed from 31.8.2010 to 30.8.2011 and during this period the complainant fell ill and he was diagnosed Intervertebral Disc Prolapse L4-L5. The stand of the Insurance Company that as per the exclusion clause his claim cannot be accepted. It is in the 2nd year of the insurance that the insurer has fallen ill and following the law laid down by the Division Bench in IFFCO TOKIO General Insurance Company Ltd.''s case (supra), the award dated 16.12.2013 (Annexure P3) passed by the Chairman, Permanent Lok Adalat, Gurgaon, does not require any interference.

The writ petition is dismissed.