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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
Subhash Chandra, Presiding Member and AVM J. Rajendra, AVSM VSM (Retd.), Member
Star Health & Allied Insurance
Co. Ltd. and Anr. – Appellants
versus
Atul Kumar and Anr. – Respondents
First Appeal No.150 of 2021
(Against the Order dated 22/01/2021 in Complaint No. 521/2017 of the State Commission Uttar Pradesh)
Decided on 9.10.2023
Consumer Protection Act, 1986 – Section 19 [Consumer Protection Act, 2019 – Section 51] – Appeal – Services - Insurance – Repudiation of Claim- Failure of Insurance Company to Notify – At the stage of proposal form – Knowledge at subsequent stage - Repudiation if Justified - There is no dispute about the existence of policy, medical condition of the child, treatment given to the child, as well as the amount of claim that was preferred by Complainant No. 1 to the Appellant insurer. The only specific contention of the Appellant is that the medical condition of the child was pre-existing at the time of birth and the Respondent No. 1 was aware of the same. However, he did not bring it on record to the notice of the Appellant at this time of making proposal for insurance. The whole controversy thus revolves around the fact weather the medical condition of the child was at the stage of his birth and was it known to the Complainant, who failed to the Appellant while making proposal for insurance - It is a fundamental principle in the insurance contracts that the party claiming the exemption clause needs to establish the same. However, Appellants failed to substantiate that the insured child had such medical condition by birth and that, while being aware, Respondent No. 1 failed to notify the same to the Appellant the stage of making the proposal - It is in common amongst children of tender age to have convulsions during high fever conditions and recover after high temperature recedes. Therefore, mere isolated event of such incident cannot constitute knowledge of an entirely independent medical condition that may be revealed at a subsequent stage. The stated facts and records reveal that, while the Complainant No. 1 clarified the circumstances under which he discovered the medical condition of his child, the Appellant/OPs failed to establish that Master R was suffering from this disease by birth and there was concealment of fact at the time of taking the insurance policy. Therefore, the claim is liable to be allowed - The amount of compensation sought by the complainant is such that the same is within the pecuniary jurisdiction of the learned State Commission – Appeal allowed. [Paras 20 to 28].
Result: Appeal Allowed.
ORDER
AVM J. Rajendra, AVSM, VSM (RETD.), Member—The present First Appeal has been filed under Section 19 of the Consumer Protection Act, 1986 (hereinafter referred to as “the Act”) against the Order dated 22.01.2021 passed by the learned State Consumer Disputes Redressal Commission, Lucknow, U.P. (hereinafter to be referred as “the State Commission”), in Consumer Complaint No. 521 of 2017, wherein the Complaint filed by the Complainant (Respondents herein) was partly allowed.
2. For the sake of Convenience, the parties in the present matter being referred to as mentioned in the Complaint before the State Commission. Mr. Atul Kumar & Anr. are identified as the Complainants. While “M/s. Star Health and Allied Insurance Co. Ltd. & Anr.” are referred to as the Opposite Parties / Insurer (OPs in short) in this matter.
3. This case pertains to repudiation of a medical claim of son of the Complainant No. 1, Anshuman Rai. The rejection as notified by email dated 07.06.2017 was contested by the Complainant as unjust. He was also aggrieved by the premature termination of the health Insurance Policy effective from 27.05.2017 to 27.05.2018.
4. The matter in brief is that Complainant No.1, his wife, and their son, Anshuman Rai, obtained a health insurance policy from the OP vide policy number P/231100/01/2014/001530, valid from 28.02.2014 to 27.02.2015. The total premium paid was Rs.18,719/-. Identity Cards were issued for the Complainant (No.3402889-1), his wife (No.3402889-2), and son Anshuman Rai (No. 02889-3). However, no insurance policy document was issued by the OP. Thereafter, this policy was renewed several times from 28.02.2015 to 27.02.2018, with no pre-existing diseases declared. Anshuman Rai (Complainant No.2) was born on 08.08.2011 with no congenital anomalies. Later, the Complainant No.1 noticed some spots on his son’s back and consulted Medanta Global Health Pvt Ltd on 22.06.2016. Medical examination revealed the presence of café-au-lait spots and a tuft of hair on his back. Thereafter, an EEG and MRI were conducted, and the impression was diagnosed as neurofibromatosis. On 13.07.2016, Complainant No.1 subsequently consulted Primus Super Specialty Hospital, and after confirming the condition of the child, a surgery was advised. The Complainant No.1 requested cashless treatment at the hospital, which was denied by the OPs/Insurer, leading to the spending Rs.14,75,567/- in Primus Super Specialty Hospital and Rs.29,510 in Medanta Global Health Pvt. Ltd.
5. The Complainant alleged that this disease was not a genetic or birth defect, as it was not present in any family member, and he only became aware of it during the consultation at Medanta Global Health Hospital. The insurance policy’s terms and conditions did not exclude pre-existing conditions, and the Complainant No.1 believes the denial of the claim by the OPs/Insurer is unjust. Complainant No.1 contacted the OPs for reimbursement and submitted all required documents. However, the claim was rejected without clear communication. He asserted that the rejection was arbitrary and violated the principles of natural justice. Being aggrieved by the repudiation of Medi-claim and deficiency in service on the part of the OPs/Insurer, the Complainants filed a consumer complaint (No.521 of 2017) before the learned State Commission, prayed to allow the complainant and quash the order dated 07.06.2017 by means of which claim of Complainant No.2 has been rejected and undated termination order of agreement of health policy pertaining to the Complainant No.2 with effect from 27.05.2017. The Complainant also prayed to continue Health Policy/Health Insurance of the Complainant No.2. It was also prayed that the OPs/Insurer be directed to pay ?15,05,077/- spent on the treatment, Rs.34 lakhs towards mental agony and harassment the Complainant.
6. In their response, the OPs/Insurer denied the Complainant’s claim, stating that they issued a Star Comprehensive Insurance Policy covering Mr.Atul Ku
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