Chandigarh Consumer Commission Holds Oriental Insurance & Raksha TPA Liable For Closing Valid Mediclaim As “No Claim”

The District Consumer Disputes Redressal Commission-II, U.T. Chandigarh, comprising President Amrinder Singh Sidhu and Member B.M. Sharma, has held Oriental Insurance Company Ltd. and Raksha Health Insurance TPA Pvt. Ltd. guilty of deficiency in service and unfair trade practice for closing a genuine Mediclaim as “No Claim” despite treatment records being on file.

Brief facts of the Case:

The complainant, Subhash Chander Jindal, maintained a savings bank account with Punjab National Bank (OP-1) and, on the alleged persuasion of its officials, purchased a Mediclaim Health Insurance Policy issued by Oriental Insurance Company Ltd. (OP-2 & OP-3) and administered through Raksha Health Insurance TPA Pvt. Ltd. (OP-4). The policy covered the complainant and his family for a sum insured of ₹5,00,000 and was regularly renewed, including for the period from 25.01.2019 to 24.01.2020.

On 04.09.2019, the complainant suffered from dengue and was admitted to Max Hospital, Mohali, from 08.09.2019 to 13.09.2019. Despite informing the hospital about the insurance coverage, he was denied cashless treatment and had to deposit ₹10,000 at the time of admission and ultimately incurred a total expense of ₹32,137.25.

The complainant lodged a reimbursement claim on 08.09.2019 and sent a reminder on 12.11.2019. However, the insurer/TPA repeatedly sought documents through multiple letters and ultimately closed the claim as “No Claim” on 17.09.2020, citing non-submission of requisite documents. Aggrieved, the complainant approached the Consumer Commission alleging deficiency in service and unfair trade practice.

Contentions of the Opposite Parties

Punjab National Bank (OP No. 1) contended that it had no role in the issuance, administration, settlement, or repudiation of the insurance policy. It submitted that the contractual relationship existed solely between the complainant and the insurer, and that mere payment of premium through the bank did not fasten any liability upon it.

Opposite Parties Nos. 2 to 4 (the insurer and the TPA) admitted the issuance of the mediclaim policy and receipt of the reimbursement claim. However, they asserted that the claim was closed as “No Claim” solely due to the complainant's alleged failure to submit the requisite documents despite repeated reminders, and therefore denied any deficiency in service or unfair trade practice on their part.

Observation and Decision of the Commission:

The Commission observed that the complainant was duly covered under the mediclaim policy issued by Oriental Insurance Company Ltd. and administered through Raksha Health Insurance TPA Pvt. Ltd. during the relevant period, and that his reimbursement claim had been closed as “No Claim” on the alleged ground of non-submission of requisite documents. However, from the insurer's own correspondence, it was evident that the complainant had already submitted the claim papers to the TPA. Since the insurer and the TPA failed to place on record the earlier letters purportedly seeking additional documents, the Commission drew an adverse inference against them.

The Commission further noted that the insurer could have independently obtained the relevant treatment records from the hospital, and when the material documents were already available on record, there was no justification for denying a genuine claim amounting to ₹32,137.25.

Accordingly, the Commission held that the conduct of Oriental Insurance Company Ltd. and Raksha Health Insurance TPA Pvt. Ltd. amounted to deficiency in service and unfair trade practice. They were directed to reimburse ₹32,137.25 along with interest @ 9% per annum from 21.09.2022 (the date of institution of the complaint) till realization, and to pay ₹10,000 as lump-sum compensation towards mental harassment and litigation expenses. The complaint against Punjab National Bank was dismissed, as no deficiency in service was established against it.

Case Title: Subhash Chander Jindal v. Punjab National Bank and others

Case No.: CC/685/2022

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