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2022 Supreme(Online)(Del) 7292
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
V. K. Jain, J
Manipal Health System – Appellant
Versus
National Insurance Company Limited – Respondent
Consumer Complaint No. 1234/2010
Consumer Protection Act protects beneficiaries hiring services, and unilateral premium loading by insurers is unjustifiable without consent, leading to claims' non-payment being deemed deficiency of service.
Headnote:(A) Consumer Protection Act, 1986 - Section 21 - Insurance Policy - Claim of Rs. 1,36,49,435 for unpaid claims under General Group Mediclaim Insurance Policy - Insurance Company disputing claims citing high incurred claim ratio - Court finds unilateral premium loading unwarranted and orders payment of balance claims. (Paras 25, 30)
(B) Definition of consumer under Consumer Protection Act - Includes beneficiary for whose benefit services are hired - Complainant avails Policy for employees, thus classified as a consumer. (Paras 8, 24)
Facts of the case:
The Complainant filed a complaint against the Respondent for outstanding insurance claims under a Group Mediclaim Policy. Despite repeated requests, the Opposite Party failed to release the due amounts of Rs. 1,36,49,435.
Findings of Court:
The court holds that the insurer’s demand for additional premium was not agreed upon and therefore, withholding the claim is a deficiency of service.
Issues: Whether the Complainant is a consumer as defined under the Act and the justifiability of insurer's denial of claims based on premium adjustments.
Ratio Decidendi: The Court ruled the Opposite Party acted unreasonably in not settling claims during the policy's currency while imposing additional premium requirements without consent. The unilateral decision to withhold payments constituted deficiency of service.
Result: Complaint allowed, order for payment of Rs. 1,20,49,435 along with delay compensation.
| Table of Content |
|---|
| 1. complaint regarding unpaid insurance claims. (Para 1 , 2 , 4 , 10) |
| 2. definition of consumer under the act. (Para 8 , 24) |
| 3. insurance company disputes based on terms of the mou. (Para 12 , 14 , 20) |
| 4. court's findings on premium loading and settlement of claims. (Para 25 , 30) |
1. The present Consumer Complaint has been filed by the M/s. Manipal Health System (hereinafter referred to as the Complainant) under S.21 of the Consumer Protection Act, 1986 (for short the Act) against National Insurance Company Limited & Another (hereinafter referred to as the Opposite Parties) regarding the unpaid claim of Rs. 1,36,49,435 (Rupees One Crore Thirty Six Lakhs Forty Nine Thousand Four Hundred and Thirty Five Only) and Rs. 1,00,00,000 (Rupees One Crore Only) towards damages arising out of business losses and harassment on account of non - release of the unpaid amounts under the ˜General Group Mediclaim Insurance Policy. For the sake of convenience we will treat National Insurance Company Limited as Opposite Party / Insurance Company.
2. Brief facts of the case are that the Opposite Party / Insurance Company vide proposal dated 30.9.2008 issued a ˜General Group Mediclaim Insurance Policy with Policy Number 602311/46/08/850000053 in favour of the Complainant through Opposite Party - 4 (Mr. Manjunath J. Mysore, Divisional Manager, National Insurance Company Limited). A schedule bearing No. 167211 attached to the Policy was issued by the Insurance Company in favour of the Complainant on 5.11.2008 wherein it was mentioned that the Policy was effective from midnight of 1.10.2008 for a term ending on midnight of 30.9.2009 thereby insuring a total sum of Rs. 40 Crores in relation to the risks covered as mentioned in the Policy and applicable to various locations as mentioned therein having a ˜Special Peril and a ˜Special Exclusion clause as per the Policy and the Memorandum of Understanding (MoU). The Schedule recorded the payment of Rs. 37,84,452 towards the premium paid under the policy.
3. The MoU was executed by the Complainant and the Opposite party / Insurance Company on 27.11.2008. Clause 5.8 of the MoU provided that the Policy may be renewed by mutual consent. The relevant portion reads as under:
The Policy may be renewed by mutual consent. The Company shall not however be bound to give notice that it is due for renewal and the Company may at any time cancel this policy by sending the Insured 30 (thirty) days notice by Registered Letter at Insureds last known address and in such event the Company shall refund to the Insured a pro - rata premium for unexpired period of Insurance.
Clause 5.12 of the MoU stated that at the time of renewal of the Policy, the premium payable will be loaded suitably depending upon the incurred claims ratio for the entire group insured under the Policy. The relevant portion of the Clause 5.12 reads as under:
High Claim Ratio Loading Malus: The total premium payable at renewal of the Group Mediclaim Policy will be loaded suitably depending upon the Incurred claim ratio for the entire group insured under the Group Mediclaim Policy.
The MoU was to remain in force for a period of 3 years from the date of its execution.
4. The Complainant stated that during the tenure of the Policy it continued to submit its claims to the Opposite Parties. The Opposite Party / Insurance Company, in its letter dated 4.9.2009, acknowledged that the sum of Rs. 66 Lakh is payable and that it is ready for making the said payment. The Complainant averred that the Opposite Parties deliberately did not clear the Claims. Thus, the Complainant decided not to renew the Policy and the same was communicated to the Opposite Party vide e - mail dated 5.10.2009. In the e - mail, the Complainant requested the Opposite Party to clear the outstanding payment of Rs. 66 Lakh so that the issue between the parties can come to a rest. The Complainant once again vide its e - mails dated 7.10.2009 and 14.10.2009 informed the Opposite Parties that
