Star Health and Allied Insurance Co. Ltd. v. Office of Insurance Ombudsman Mumbai & Goa

1. This Petition is filed under the provisions of Articles 226 and 227 of the Constitution of India by a private Insurance Company and this decision is of significance in the interest of a large number of people who purchase health Insurance Policies 1 of 12 with the hope of covering and securing medical / health emergencies in their lives. The Award dated 30.03.2020 passed by Respondent No.1 - Insurance Ombudsman under the Insurance Ombudsman Rules, 2017 is challenged by Petitioner - Insurance Company before me.

2. Briefly stated such of the relevant facts necessary for adjudication of the case are as under:-

2.1. Respondent No.2 is the husband of Respondent No.3. He availed Insurance Policy from Petitioner – Insurance Company being Policy No.P/171131/01/2018/010459 known as Star Comprehensive Insurance Policy during the period from 31.03.2018 to 30.03.2019. This was a Family Floater Policy which also covered the Respondent No.3 under its umbrella alongwith their son.

2.2. Respondent No.3 aged approximately 30 years met with a road accident sometime in December 2018 and injured her back. Thereafter she approached her family Doctor as she was encountering difficulty in walking. After investigation, she was advised to do Magnetic Resonance Imaging (for short “MRI”) of her back i.e. affected portion and consult a Spine Surgeon. After the MRI, she consulted Dr. Abhay Nene, a Spine Surgeon and on his advice was admitted to Aastha Hospital, Kandivali (West), Mumbai 2 of 12 for further treatment. The Spine Surgeon Dr. Abhay Nene and the Doctor from Aastha Hospital both opined that Respondent No.3 required immediate surgery for treatment of a prolapse of intervertebral disc L[3] – L[5]. She was admitted to Aastha Hospital on 17.01.2019 and after a successful surgery was discharged on 22.01.2019. After her discharge, Respondent No.2 on behalf of Respondent No.3 lodged a Claim Application seeking reimbursement of the hospitalisation and medical expenses from Petitioner – Insurance Company to the extent of Rs.3,35,000/under the Insurance Policy.

2.3. After receiving the Claim Application within 8 days by repudiation of claim letter dated 20.02.2019, claim of Respondent Nos.[2] and 3 was rejected on the ground that Respondent No.3 had undergone surgery for prolapse disc which would not stand covered within the first 2 years of the policy. It was the case of Petitioner – Insurance Company that though Respondent No.3 had stated that she had met with a road accident, there was no proof of the accident having taken place as no First Information Report (for short “FIR”) was lodged and the theory of the accident was a mere camouflage to avail the insurance claim under the Policy. 3 of 12

2.4. Respondent No.2 addressed a representation dated 29.03.2019 for reconsideration of his claim but by a second repudiation letter dated 20.04.2019, Petitioner – Insurance Company rejected his claim, this time stating that diagnosis of Respondent No.3 pertaining to disc prolapse was not trauma related due to the road accident, but was due to an existing chronic condition and therefore was excluded under clause 3(a) of the Insurance Policy.

2.5. Being aggrieved by the same, Respondent No.2 filed a complaint dated 11.08.2019 with Respondent No.1. Complaint was registered under Rule 13(b) of the Insurance Ombudsman Rules, 2017 and parties were heard by Respondent No.1 and Award dated 31.03.2020 came to be passed directing Petitioner – Insurance Company to pay an amount of Rs.3,13,301/- after deduction of non-medicals as per the terms and conditions of the Insurance Policy to Respondent No.2.

2.6. Hence, the present Writ Petition.

3. Mr. Karnik, learned Advocate appearing for the Petitioner - Insurance Company would submit that under clause 3(a) of the Insurance Policy there was a clear exclusion during the first 2 years of continuous operation of the insurance cover for 4 of 12 expenses of treatment of prolapse of intervertebral disc (other than caused by accident). He would submit that in the present case, injury / medical condition occurred in the first year itself and there was no evidence of any road accident. Therefore according to Petitioner – Insurance Company once no material supporting the theory of accident was placed on record, Respondent No.1’s conclusion in returning an affirmative Award in favour of Respondent No.2 is contrary to the contractual terms of the Insurance Policy. Therefore according to Petitioner – Insurance Company, Award dated 30.03.2020 deserved to be set aside. These are the two specific grounds for challenging the impugned Award by the Petitioner - Insurance Company.

4. PER CONTRA, Mr. Mhatre, learned Advocate appearing for the answering Respondents would submit that despite taking a valid Insurance Policy and paying the premium thereof, they have not received the coverage amount due to objections raised by Petitioner – Insurance Company which have been dealt with by Respondent No.1 in his Award and comprehensively rejected. He would state that in support of Respondent No.3’s case, a certificate dated 15.12.2018 of their family Doctor was produced on record which certified that Respondent No.3 had fallen on the road and 5 of 12 the family Doctor had treated her with pain killers. However, when she did not show signs of immediate recovery, the family Doctor on the basis of MRI Report referred her to consult a Spine Surgeon for further treatment and thereafter on his advice she was admitted to Aastha Hospital for surgery. He would submit that the certificate issued by the family Doctor was a material piece of evidence to prove that the injury caused to Respondent No.3 was due to the road fall / accident (trauma). He would submit that there was no chronic condition or prior ailment suffered by Respondent No.3 as alleged and therefore in that view of the matter the condition of exclusion from the policy during the first 2 years would not apply in the facts and circumstances of the present case. In support of the Award passed by Respondent No.1, he would submit that the Award is a reasoned and speaking Award which analyses and scrutinises the material available on record and no fault can be found in the same. He has therefore urged to uphold the Award dated 30.03.2020 passed by Respondent No.1 in the facts and circumstances of the case.

5. I have heard Mr. Karnik and Mr. Mhatre appearing for the respective parties and with their able assistance perused the 6 of 12 pleadings and record of the case. Submissions made by Advocates have received due consideration of the Court.

6. At the outset, there is no dispute about the fact that Star Comprehensive Insurance Policy in the present case covered the Respondent Nos.[2] and 3 alongwith their son as can be seen from the Policy at page No.25 of the Petition. The basic sum insured under the Policy is Rs.5,00,000/-. In the Claim Application filed by Respondent No.2 on behalf of Respondent No.3’s hospitalisation and medical treatment, it is seen that the date of detection for the first time of the disease / problem is 20.12.2018. It is seen that Respondent No.3 was treated for the problem between 20.12.2018 and 22.01.2019 out of which she was admitted to Aastha Hospital between 17.01.2019 to 22.01.2019 for undergoing the surgery. The exhibits annexed to the Petition show that on the representation sheet, the stand adopted by the Petitioner – Insurance Company is that as per the zonal decision, the Petitioner – Insurance Company would stand by rejection of the claim on the ground of 2 years exclusion for disc diseases. In the present case, it is pertinent to note that in the rejection of Claim letter dated 20.04.2019 it is stated that the surgery performed on Respondent No.3 was due to a chronic condition and it was not 7 of 12 trauma related. This cannot be the basis for the Petitioner – Insurance Company to deny the claim of Respondent Nos.[2] and 3. In the present case, it is seen that Respondent No.1 - Insurance Ombudsman has considered the following documents for declaring the Award viz. the proposal form, policy schedule with conditions, claims form, repudiation letters, internal claim notes, investigation report, and after analysing the same returned a categorical finding that Respondent No.2 submitted his family Doctor’s certificate confirming Respondent No.3’s accidental fall and the initial treatment given to her by the said family Doctor and further refering her to the Spine Surgeon for consultancy. After analysing the Hospital Discharge Summary, the Respondent No.1 has concluded that there is nothing to show that Respondent No.3’s condition was chronic in nature in so far as her spinal injury is concerned and therefore rightly allowed the claim of the Respondent Nos.[2] and 3 by dismissing the case of Petitioner – Insurance Company.

7. It is seen that the Health Insurance Policy, though subject to various exclusions is subject to the condition of the free look period. Though Mr. Karnik would argue that the condition of Respondent No.3 was determined by the team of Petitioner – 8 of 12 Insurance Company and as per the reply dated 20.04.2019 would not entitle Respondent Nos.[2] and 3 to claim any entitlement. However, record clearly shows that there is no dispute about the aforementioned facts which have been stated by me. It is not the case of the Insurance Company that Respondent No.3 was suffering with any chronic condition prior to the issuance of the Policy. Record clearly reveals that the road accident occurred in the month of December, 2018 involving Respondent No.3 and she fell down on the road and though there was no external injury, the initial treatment was given by her family doctor and thereafter the Spine Surgeon and the surgery carried out in Aastha Hospital. The only reason for dismissing the claim was with respect to non-inclusion / exclusion under clause No.3(a). It was contended by Petitioner – Insurance Company before Respondent No.1 – Insurance Ombudsman that though there was no dispute on the aforesaid facts, only on the basis of scrutiny of documents they had opined that hospitalisation of Respondent No.3 was due to a chronic condition and not due to trauma.

8. However, both the parties have fairly not disputed the fact that major surgery which had taken place on Respondent No.3, inter alia, pertaining to disc prolapse of L3-L[5] is supported by the 9 of 12 documents produced on record as also the deposition of both parties in the proceedings held before the Respondent No.1 Insurance Ombudsman. The entire details of the initial treatment relied upon by Respondent No.3 and thereafter by consulting the Spine Surgeon and thereafter her entire Discharge Summary from Aastha Hospital clearly show that Respondent No.3 was never suffering from any chronic condition. Documents reveal the age of Respondent No.3 as 33 years and therefore it is one more reason to disbelieve the objection raised by Petitioner – Insurance Company. I have perused the Discharge Certificate that gives the entire medical history which is appended at Exhibit-E, page No.35 to the Petition and find that all such necessary details have been stated therein which do not prove or show that Respondent No.3 was suffering from any chronic condition earlier. It is not denied that there was no trauma when the case was argued before the Respondent No.1learned Insurance Ombudsman. Learned Insurance Ombudsman has returned a cogent finding under the title Forum’s Observations / Conclusion on internal page No.3 of the Award which is reproduced below:- “On perusal of the documents produced on record and from the deposition made by both the parties in the hearing, it is observed that Complainant has submitted his family doctor’s certificate confirming patient’s accidental fall and initial treatment given to her by family doctor for the same. Their family doctor advised for 10 of 12 an MRI and thereafter a spine surgeon was consulted and surgery was done. Further in the Hospital Discharge summary nothing appears about the patient’s chronic condition. Therefore Respondent’s contention about patient’s hospitalisation for chronic conditions attracting waiting periods is not justifiable. The decision of the Respondent to repudiate the subject claim is set aside by the following Order:- …………………………..”

9. The findings returned by the learned Insurance Ombudsman are adequately supported by the documents submitted by the Petitioner - Insurance Company itself. The certificate given by the family Doctor who treated Respondent No.3 is a material piece of evidence which justifies the accidental fall on the road. Insistence of lodging an FIR for the same is uncalled for. Since this was a clear case of an accident, the exclusion clause 3(a) cannot apply as such a situation stands exempted by the clause itself. Petitioner – Insurance Company has failed to bring on record any cogent material to allege chronic condition and hence there is no reason as to why interference is therefore called in the impugned Award. It is a well reasoned speaking Award considering the evidence and facts and circumstances before the learned Insurance Ombudsman. Therefore the Award dated 30.03.2020 is sustained.