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2025 Supreme(Online)(SCDRC) 3157
STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Justice Daya Chaudhary, CJ, Simarjot Kaur, J, Vishav Kant Garg, J
Harkanwal Singh – Appellant
Versus
Star Health & Allied Insurance Co. Ltd. – Respondent
Consumer Appeal | C.C.No.314 of 2018
For the Appellants/Petitioners: Sh.Nitish Garg
For the Respondents: Sh.Vishal Sharma, Sh.Punit Jain, Ms.Niharika Goel, Sh.P.M.Goyal
The failure to disclose a pre-existing condition does not justify claim repudiation if the insured provided relevant medical history, emphasizing insurers' duty to perform due diligence.
Headnote:(A) Consumer Protection Act, 2019 - Section 41 - Appeal challenging dismissal of claim for kidney transplant expenses - Appellant failed to disclose pre-existing kidney condition - Court found misinterpretation of non-disclosure; allowed appeal directing payment of claim and damages. (Paras 29-30)
(B) Misrepresentation in Insurance - Obligation to disclose pre-existing conditions - Insurer’s obligation to conduct due diligence in examining claims - Legal precedents cited supporting insured’s position. (Paras 24-28)
Facts of the case:
The Appellant, Harkanwal Singh, purchased a family health insurance policy, which he claimed had been wrongly repudiated by the insurers on the grounds of alleged non-disclosure of a pre-existing kidney condition when he sought coverage for a transplant.
Findings of Court:
The Commission found that the Appellant had disclosed all relevant health history; repudiation was not justified as failure to disclose one detail was not willful concealment.
Issues: Whether the Appellant suppressed material health facts which justified the repudiation of his insurance claim by the insurer?
Ratio Decidendi: The court ruled that the Appellant's alleged non-disclosure of health facts did not justify the claim repudiation; insurers must verify disclosures made during the proposal process adequately.
Result: Appeal allowed; Insurer directed to pay the claim and compensatory damages.
| Table of Content |
|---|
| 1. complainant's purchase and alleged cancellation of insurance policy. (Para 3 , 4 , 5) |
| 2. insurer's argument on non-disclosure of pre-existing diseases. (Para 11 , 12 , 13) |
| 3. detailed analysis of the proposal form and disclosures made. (Para 24 , 25) |
| 4. court's conclusion on evidence of medical condition disclosures. (Para 28 , 29) |
| 5. final judgment direction to pay claims and damages. (Para 30) |
SIMARJOT KAUR, MEMBER :-
The Appellant/Complainant has filed the present Appeal under Section 41 of the Consumer Protection Act, 2019 , (in short the ‘Act’) for setting aside the order dated 08.02.2024 of the District Consumer Disputes Redressal Commission, Bathinda whereby the Complaint filed by the Complainant had been dismissed.
2. It would be apposite to mention that hereinafter the parties will be referred, as were arrayed before the District Commission.
3. Briefly, the facts of the case as made out in the Complaint before the District Commission are that the Complainant had purchased Family Health Insurance Policy No. Policy No.P/211200/01/2017/000007 which was valid w.e.f. 01.04.2016 to 31.03.2017. He had got the said Policy renewed from time to time. The last renewal was w.e.f. 01.04.2018 to 31.03.2019 vide Policy No.P/211217/01/2019/000009. The said policy was for a coverage for an amount of Rs.20,25,000/- (Rs.15,00,000/- (+) Rs.5.25.000/- (Bonus)) for the Complainant and his family. The family members covered under the said policy were Complainant himself Harkanwal Singh, his wife Veerpal Kaur and their children Jashan Jot Kaur & Gurnoor Singh. The OPs No.1&2 had assured the Complainant at the time inception of the policy that this was cashless insurance and in case of any problem total treatment in any hospital in India is free and total medical expenses upto Rs.15,00,000/- would be paid/covered.
4. It was also averred that in the year 2018, suddenly the Complainant had suffered from Kidney disease. Further it was mentioned in the Complaint that prior to this, he was never admitted in any hospital for Kidney disease. He was admitted in Fortis Hospital, Mohali on 21.04.2018 and discharged on 28.04.2018 in emergency for Kidney transplant. In this regard, the claim was duly lodged with OPs No.1&2 under UHID No.001565136 IPD No. IPFHM0031205. The Fortis Hospital, Mohali was network empanelled Hospital for OPs No.1&2 and they were duty bound to provide cashless treatment. But said Hospital in connivance with the OPs No.1&2 did not provide cashless treatment. They had raised a bill for an amount of Rs.3,74,555/- from the Complainant on account of kidney transplant of the Complainant. Under the said Insurance, Policy an amount of Rs.1,00,000/- or 10% of Sum Insured whichever is less was also covered towards Organ Donor expenses. Accordingly, the Complainant, the donor Gurinder Sigh had also lodged a claim of Rs.1,47,590/- with the OPs under IPD No.IPFHM00312304. But the OPs had not paid the said claim also.
5. The Complainant had alleged that the OPs No.1&2 had sent one endorsement schedule to the Complainant in August, 2018 w.e.f. 02.06.2018 vide which the OPs No.1&2 had illegally cancelled the Insurance of the Complainant with the remarks “Non-disclosure of PED”. Thereafter, the OPs No.1&2 had issued new Policy schedule by covering other three members but had deleted his name. The claims of the Complainant and his donor were pending since April, 2018 when the Insurance Policy was in force. Whereas the OPs No.1&2 had cancelled the policy in his name in the month of August, 2018, i.e. after approximately four months. The OPs had rejected the claim of Rs.3,74,555/- on 23.01.2018 towards his treatment and Rs.1,00,000/- on account of organ donor. The OPs No.1&2 had not restored his policy inspite of repeated requests made by him. Due to non-payment of the claim amount, the Complainant had suffered ‘mental agony’ and ‘harassment’. Therefore, the Complaint was filed by the Complainant by seeking directions to be issued to the
