Wrongful Denial Of Insurance Claim, East Delhi District Commission Holds HDFC ERGO Gen. Insurance Co. Liable

Brief Facts:

Mr Daljeet Kaur (“Complainant”), a Mediclaim policy-holder of HDFC ERGO General Insurance Company Ltd. (“Insurance Company”), availed medical treatment for "left common nerves paresis" at Sir Ganga Ram Hospital, New Delhi (“Hospital”), in September 2017. The Complainant paid a total cost of Rs. 97,566/- for the hospitalisation. After the bill was presented, he filed a claim to the Insurance Company including all relevant medical prescriptions and bills. The Insurance Company repudiated the claim, demanding additional documents such as investigation, treatment, and follow-up records related to diabetes, hypertension, and thyroid since the initial diagnosis. The Insurance Company also demanded a notarized affidavit on a Rs. 100/- stamp paper from the treating doctor. On one hand, the Insurance Company requested additional documents via an email dated 02.07.2018 at 12:26 PM, while simultaneously, in the next 2 minutes at 12:18 PM on the same day, the Insurance Company sent a rejection letter dated 02.07.2018. Feeling aggrieved, the Complainant filed a consumer complaint in the East-Delhi District Consumer Disputes Redressal Commission, Delhi (“District Commission”).

The Complainant contended that the simultaneous rejection mail along with a request for additional documents showed the pre-determined stance of the Insurance Company regarding its decision to reject the claim. Further, it had been sending reminders merely as a formality to create a false basis for rejection. The Complainant argued that this intentional and wilful negligence amounts to a deficiency in service, causing harassment and mental agony.

In response, the Insurance Company contended that there was no cause of action arising in favour of the Complainant to initiate the present complaint. It asserted that despite receiving letters and reminders, the Complainant failed to submit the mandatory documents required for claim processing. Consequently, in accordance with the policy's terms and conditions, her claim was 'closed.'

Observations by the Commission:

The District Commission noted that a certificate issued by the treating doctor on 12.12.2017 certified that the Complainant was not on medication for hypertension, diabetes, and thyroid and that it was wrongly prescribed. However, despite this, the Insurance Company, through letters, persisted in demanding a certificate from the treating doctor on a notarized stamp paper. Additionally, a fresh affidavit by another team doctor was filed by the Complainant, but the Insurance Company did not proceed with the claim.

The District Commission noted that the Complainant suffered an accidental fall resulting in a knee injury, which cannot be considered a pre-existing ailment. It held that the incident was an accident and can occur to anyone, categorically not constituting a pre-existing ailment. Therefore, it held that the diseases had no relation to the treatment sought by the Complainant. The District Commission referred to the decision of the Supreme Court in Manmohan Nanda Vs. United India Assurance Co Ltd (Civil Appeal no. 8386/2015) where it was held that the insured is not obligated to disclose facts unknown to them or that they could not reasonably be expected to know at the material time. The District Commission, therefore, held that lifestyle diseases arising from normal occurrences should not serve as impediments in the consideration of insurance claims.

Consequently, it held that HDFC ERGO General Insurance Company Ltd. failed to establish that the Complainant was suffering from the said ailment at the time of taking the policy. The District Commission additionally held that the demand made by the Insurance Company for a certificate from the treating doctor on a notarized 100/- stamp paper was impractical for a patient to obtain from any Hospital. Despite the issuance of two certificates by the treating doctor and a teammate, respectively, certifying that the patient was not suffering from the mentioned diseases, the Insurance Company disregarded this evidence. The District Commission noted that the rejection of the claim was solely for not providing the doctor's certificate, without taking into account that there is no clause in the policy mandating a treating doctor to provide a notarized stamp paper certificate for insurance claim clearance. The District Commission referred to the Supreme Court decision in New India Assurance Co Ltd versus Paresh Mohan Lal Parmar (CA 10398 /2011) and held that the insurer must demonstrate the insured's awareness of the policy's terms and conditions at the time of issuance. Failure to inform the insured renders any claim rejection invalid.

Therefore, the District Commission ruled in favour of the Complainant and ordered the Insurance Company to release the claim of the Complainant of Rs. 97,566/- along with interest @6% p.a. from the date of filing of the complaint and a compensation of Rs.20,000/- (including the litigation cost) for causing harassment and mental agony to the complainant within 30 days from the date of order.

Case Title: Daljeet Kaur Vs Apollo Munich Health Ins.

Case No.: CC/137/2019

Advocate for the Complainant/Respondent: N.A.

Advocate for the Respondent: N.A.

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