After accepting the premium and issuing the policy ignoring blank columns in the proposal form, the insurer cannot at a later stage say that there was a suppression or non-disclosure of a material fact and reject the claim, the national consumer disputes redressal commission (NCDRC) reiterated. Upholding the order issued by the state commission, NCDRC directed Bajaj Allianz General Insurance Co Ltd to pay US$43,940 in medical expenses and Rs65,000 as compensation to a traveller-consumer.
In an order last week
, the NCDRC bench of justice Sudip Ahluwalia (presiding member) says, "The relevant columns pertaining to the medical condition of the insured had been left blank where the questions themselves were neither specific nor unambiguous enough to make any person of ordinary prudence to answer the same easily, and once having been left blank, no further steps were taken on behalf of Bajaj Allianz General Insurance to seek specific answers to the same or to put itself on enquiry as would have been required in terms of the observation of the apex court in Manmohan Nanda vs United India Assurance Co Ltd judgment."
"This is of course, an academic observation of this Commission assuming the proposal form as tendered before the state commission was actually found to have been left blank in response to the questions pertaining to the medical condition of the insured and cannot in any way mean to imply that the complainant in this case had actually signed on any such proposal form, which was never produced in original by Bajaj Allianz General Insurance either before the state commission, or even before this Commission in spite of specific directions," the order says.
The case is related to travel insurance bought on 31 May 2011 by Ludhiana-based Surinder Pal Singh from Bajaj Allianz General Insurance by paying Rs2,002 as a premium for his business visit to Canada. Mr Singh was one of the 13 members of the Indian business delegation invited by the Canadian Trade Commission Service for a farm progress show in that country. After collecting premiums, all members of the Indian delegation were supplied with travel insurance policies by the insurer.
During the visit, on 15 June 2011, Mr Singh suffered chest pain and was admitted to General Hospital Regina in the emergency ward. He was then given treatment for emergent cardiac catheterisation and was discharged on 28 June 2011. At the time of discharge, he was not given any bill and was informed that the bills would be recovered from his cashless insurance policy, so he was not required to make any payment.
However, in March 2012, he received a bill of US$43,940 issued by Regina Hospital in Canada with comments that the Hospital was not responsible for sending invoices to insurance companies and it was the responsibility of Mr Singh. He then approached Bajaj Allianz General Insurance to clear the bill and was assured that the bills would be cleared soon, but there was no action on the part of the insurer.
Mr Singh then received letters from OVAG International, vide which demands were raised for immediate payment. He later received a repudiation letter dated 23 September 2013 via email from Bajaj Allianz General Insurance that stated that the claim was repudiated as he had been taking medications for 'hyperlipidaemia' disorder for the past 15 years and that he also had an allergy to aspirin tablet.
It was further stated that Mr Singh was suffering from hypertension as well for the past five years, and this was pre-existing in nature which was not declared at the time of filing the proposal form.
Aggrieved by the acts of Bajaj Allianz General Insurance, Mr Singh filed a complaint before the Punjab state consumer disputes redressal commission.
In its order on 18 October 2016, the state commission allowed the complaint and directed the insurer to pay Mr Singh the amount of medical expenses incurred by him on his ailment in Canada within 45 days. Bajaj Allianz General Insurance will also pay compensation of Rs50,000 for mental harassment and Rs15,000 as litigation costs to Mr Singh, it directed.
Aggrieved by the order of the state commission, Bajaj Allianz General Insurance filed an appeal before NCDRC. It argued that the policy schedule clearly states that the policy coverage is as per policy terms and conditions. "It is clear that Mr Singh had met the agent of the insurer before or at the time of making payment and was informed of the terms and conditions of the policy. It was also the duty of Mr Singh to inquire about the conditions of the insurance policy. The insurance company is protected under the legal maxim 'caveat emptor' against the ignorant contention of Mr Singh that he was unaware of the terms and conditions of the policy," the counsel for the insurer says.
The counsel for Mr Singh contended that the grounds on which Bajaj Allianz General Insurance rejected the insurance claim were baseless, misconceived and arbitrary. He says, "There is no proof that Mr Singh was suffering from hypertension for the past five years or hyperlipidemia or dyslipidemia for the past 15 years. No evidence has been led by the insurer to show that Mr Singh was taking medications for the same."
Pointing out that no proposal form was taken from Mr Singh by Bajaj Allianz General Insurance before handing over the insurance policy, the counsel pointed out that the insurer has not filed any proposal form in the proceedings. Mr Singh also filed affidavits of co-delegates in evidence, who categorically deposed that no proposal form was obtained from any of the delegates while selling the insurance policies.
After hearing both sides, justice Ahluwalia from NCDRC observed that the state commission had drawn adverse inferences against the insurance company on account of its failure or reluctance to produce the actual proposal form in respect of which it was the specific case of Mr Singh that he had never signed up on any such form relied upon by Bajaj Allianz General Insurance.
During the hearing, NCDRC also asked the insurer to submit or provide the proposal form filled by Mr Singh. However, on 18 October 2023, Bajaj Allianz General Insurance informed the bench that the proposal form was unavailable since its authorised representative assisting the insurer at the relevant time was no longer associated with it.
"Ex facie, this submission would appear to be untenable and not worthy of being relied upon since any given proposal form on the basis of which the insurance policy is issued is in the normal course expected to be retained in the custody of the insurance company itself, and not by particular individual temporarily assisting the Company at any given time," justice Ahluwalia noted.
He says, "This Commission finds no impropriety in the view taken by the state commission of having drawn an adverse inference against the insurance company for having failed to produce the proposal form in the face of specific denial of the same having been signed by Mr Singh, and his challenge to have the authenticity of his purported signatures to be examined by a handwriting expert to know the truth."
In its judgement in Canara Bank vs United Insurance Co Ltd, the Supreme Court observed that if any query or column in a proposal form is left blank, the insurance company must ask the insured to fill it up. "If in spite of any column being left blank, the insurance company accepts the premium and issues a policy, it cannot, at a later stage, when a claim is made under the policy, say that there was a suppression or non-disclosure of a material fact, and seek to repudiate the claim."
According to justice Ahluwalia, the apex court's decision is fully applicable to the facts and circumstances of the present case. While dismissing the appeal filed by Bajaj Allianz General Insurance, he says, the commission finds no grounds to interfere with the well-reasoned decision of the state commission.
(First Appeal No360 of 2017 Date: 8 November 2023)