While upholding orders passed by fora below, the national consumer disputes redressal commission (NCDRC) directed Oriental Insurance Co Ltd to pay Rs2,73,000 with an interest of 9%pa (per annum) as cost for knee replacement treatment. NCDRC categorically stated that Oriental Insurance failed to bring to the notice of the complainant terms and conditions (T&C) of the mediclaim policy.
In an order earlier this month, the NCDRC bench of justice Sudip Ahluwalia (presiding member) said, "Both the fora below had come to concurrent findings in favour of the complainants. They had accepted the contention of the complainant's side that terms and conditions of the policy excluding osteoarthritis from coverage had not been communicated to the complainant or insured."
"It had been contended on behalf of the insurance company that the terms and conditions were contained in the prospectus, which formed a part of the proposal form, a copy of which has also been filed along with the revision petition. But a perusal of page 49 of the paper book goes to show that all the relevant spaces for endorsement, including signatures of the proposer or insured in Clause 13 of the prospectus, are found to have been left blank, which clearly indicates that actually the terms and conditions were not brought to the proposer's knowledge," the bench says.
The case is related to an insurance claim filed by Sangrur, Punjab-based Dr Ram Kumar, for knee replacement treatment of his wife Renu Bala. Dr Kumar bought a health insurance policy titled 'PNB Oriental Royal Mediclaim Policy' for himself and his wife and remitted the premium through Punjab National Bank (PNB).
Ms Bala underwent knee replacement treatment at Raffels Hospital in Panchkula from 21 September 2015 to 28 September 2015, incurring expenses of Rs2,75,000. The insurance policy obligated Oriental Insurance to pay the hospital directly as it was a cashless policy, but this obligation was not fulfilled. Despite multiple e-mails from Dr Kumar requesting approval of the claim, Oriental Insurance did not respond.
The counsel for Dr Kumar sent a legal notice to Oriental Insurance on 20 October 2015 and a reminder on 20 January 2016. But there was no response. On 11 March 2016, Dr Kumar received a response from a third-party administrator (TPA) stating that non-payment of the claim was not a deficiency of service.
Subsequently, on 25 March 2016, Oriental Insurance repudiated the claim on technical grounds. In response, Dr Kumar replied on 4 April 2016, urging the insurer to pay the claim within seven days, but no action was taken. Dr Kumar asserted that he was not provided with the terms and conditions of the medical insurance policy. Dissatisfied with the wrongful repudiation of the claim, he filed a complaint before the Sangrur district consumer disputes redressal commission.
On 7 October 2016, while allowing the complaint, the district commission directed Oriental Insurance to pay Rs2.73 lakh with 9%pa interest, Rs20,000 towards mental agony and Rs11,000 towards litigation costs.
Oriental Insurance filed an appeal before the Punjab state consumer disputes redressal commission, which dismissed the appeal on 18 September 2017, and affirmed the order of the district forum.
Oriental Insurance then approached NCDRC with a revision petition. The counsel for the insurer argued that the wife of Dr Kumar had undergone knee replacement surgery, which is not covered due to the exclusion clause 4.2 (xxii) of the insurance policy, as there is a waiting period of three years from the inception of the first policy taken from Oriental Insurance. "As the policy was only in its second year, the treatment taken by the complainant's wife could not be approved as it squarely came within the purview of this exclusion clause..."
He further contended that the district forum allowed the complaint on the grounds that the terms and conditions of the policy were not provided to Dr Kumar and the state commission dismissed the appeal on the same grounds while admitting that there was such a clause (for exclusion) in the policy.
The counsel for Ms Bala and her son Raj Gaurav, the legal heirs of Dr Kumar, argued that the policy's terms and conditions on which the claim has been repudiated were never supplied to Dr Kumar. "No signatures were affixed at the specific place in the proposal form declaring that the terms and conditions of the policy were understood, and neither were the terms and conditions ever explained to Dr Kumar. Oriental Insurance has not been able to place on record any letter or correspondence to show that the terms and conditions were supplied to Dr Kumar and the argument of the insurer that the complainant is not entitled to any claim on the basis of Clause 4.1 and 4.2 of the policy is wholly baseless and unfounded as no terms and conditions were ever supplied to the complainant."
After hearing both parties and perusing material available on record, NCDRC noted that Oriental Insurance has submitted that the copy of the prospectus on record is only a proforma of the concerned document.
"If that be so, it is difficult to understand why a copy of the actual proposal form accompanied with the prospectus duly signed by the proposer, which is meant to be retained in the custody of the insurance company, was never produced before the lower fora, or even before this Commission. Consequently, no infirmity can be found in the concurrent decisions of both the fora below," justice Ahluwalia said.
"Resultantly, this Commission finds no merits in this Revision Petition, which is accordingly dismissed," NCDRC said while directing Oriental Insurance to pay the insurance claim to the legal heirs of Dr Kumar as per the order issued by the district forum.
(Revision Petition No3825 of 2017 Date: 6 February 2024)
