Allowed

Kumud Mahendra Parekh v. the National Insurance Company Ltd.

Kerala HC17 Jul 2024WP(C)/15628/2021

Case brief

AI extract

What is this about?

This writ petition challenged the rejection of a medical insurance claim due to alleged suppression of asthma history. The High Court held that since no treatment or diagnosis was recorded within 48 months per the policy definition, the rejection was invalid.

What did the court decide?

Exhibits P4 and P7 quashed; respondents directed to release Rs. 1,77,894.57 (AED 9007.32 less USD 100) upon document production within one month.

Kumud Mahendra Parekh Vs the National Insurance Company Ltd. — Insurance | Kerala HC (2024)

WPC 15628/21

C.R.

IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR.JUSTICE BASANT BALAJI

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WEDNESDAY, THE 17TH DAY OF JULY 2024 / 26TH ASHADHA, 1946

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WP(C) NO. 15628 OF 2021

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PETITIONER/S:

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KUMUD MAHENDRA PAREKH, AGED 76 YEARS 10/203/204, C-264
D,CEMETERY ROAD, MOTHER THERESA'S JUNCTION,
CHULLIKAL,KOCHI.

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BY ADVS. P.P.JACOB, MARIYAM JACOB

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RESPONDENT/S:

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1 THE NATIONAL INSURANCE COMPANY LTD KOCHI BRANCH, 1ST
FLOOR, SHALIMAR CHAMBERS, P.T.JACOB ROAD, THOPPUMPADY,
KOCHI, ERNAKULAM-682006, REPRESENTED BY REGIONAL MANAGER.
2 THE GRIEVANCE CELL NATIONAL IINSURANCE COMPANY LTD,
REGIONAL OFFICE,OMANA BUILDING, JEW STREET, PADMA
JUNCTION, ERNAKULAM-682035, REPRESENTED BY REGIONAL
MANAGER.
3 TIHE INSURANCE OMBUDSMAN, KERALA, OFFICE OF THE INSURANCE
OMBUDSMAN, 2ND FLOOR, CC 27/2603, PULNAT BUILDING,
OPP.SHIPYARD, M.G.ROAD, ERNAKULAM, KOCHI-682015.

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BY ADVS.GEORGE A.CHERIAN, SC, NATIONAL INSURANCE COMPANY
LIMITED, SOUMYA FRANCIS(K/000605/2020)

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
4.8.2021, THE COURT ON 17.7.2024 DELIVERED THE FOLLOWING:

WPC 15628/21

C.R.

JUDGMENT

(Dated this the 17th day of July 2024)

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The petitioner had availed a medical insurance policy to get insured

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in connection with an overseas journey to the United Kingdom and Dubai. The insurance policy was valid from 25.09.2019 to midnight of 10.11.2019. Ext.P1 is the policy issued, and as per the contract of the policy, an amount of 2,50,000 USD was covered towards accident (medical expenses), 25,000 USD towards personal accident, 1,000 USD towards loss of checked-in baggage, 100 USD for delay of checked-in Baggage, 250 USD towards loss of passport, 2,00,000 USD towards personal liability and 10,000 USD towards illness (medical expenses).

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The petitioner was subjected to a medical examination, and a detailed investigation was conducted by a competent Doctor and Ext.P2 Medical Examination Report was produced before taking the policy. It is specifically noted that, there was no previous history of any operation or existing disability. When the petitioner was abroad, she fell ill due to fever and suffered difficulty to breath. An amount of Rs.1,77,894.57 (9007.32 AED) was spent for the treatment, and after returning, the petitioner has lodged a detailed representation and requested to extend the benefit of the health

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WPC 15628/21

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insurance policy as per Ext.P1. The 1^st respondent company, after due

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verification and investigation, had approved the claim submitted by the petitioner as per Ext.P3 for AED 9007.32 less USD 100. Ext.P3 is an email sent to the petitioner asking to produce certain documents. Thereafter, Ext.P4 letter dated 23.1.2020 was issued rejecting the petitioner's claim on the grounds of pre-existing disease and related complications. The petitioner approached the Grievance Cell of the 1^st respondent and filed a complaint, but the complaint was dismissed, against which the petitioner approached the 3^rd respondent. The 3^rd respondent, also vide Ext.P7, rejected the complaint on the ground that there is a reference regarding the history of bronchial asthma in the discharge summary and that the petitioner has not disclosed the same while taking the policy. The petitioner challenges Exts.P4 and P7 in this Writ Petition.

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A counter affidavit is filed by 1^st and 2^nd respondents, in which it is contended that the petitioner was aged about 74 years and was hospitalised at Mediclinic City Hospital, Dubai, from 23.10.2019 to 25.10.2019, as she felt difficulty in breathing. It was diagnosed as an infective exacerbation of Asthma and Respiratory failure. In the discharge summary, it is specifically noted that the patient had a history of bronchial Asthma. Ext.R1(b) is the copy of the discharge summary dated 25.10.2019. The respondents have

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WPC 15628/21

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also produced Ext.R1(c) proposal form in which, for query nos.2 and 5, the petitioner has stated that she doesn't have any illness or disease up to the date of making the proposal or had an accident in the 12 months preceding the first day of insurance.

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While submitting the proposal and obtaining the policy, the petitioner has suppressed vital facts regarding her existing disease and health conditions. The utmost good faith is required regarding the medical insurance policy, and the insurance contract in the instant case is void. The 1^st respondent has no liability under the contract. The policy was obtained by suppressing existing diseases and ‘pre-existing diseases’ which have been specifically defined in the policy. The policy issued in this case is not a general health policy, and coverage is intended for use by the insured person in the event of a sudden illness or accident arising when the insured person is outside the territory of India. Ext.P2 certificate issued by the Doctor has no application, and the same cannot be considered as a conclusive proof regarding the pre-existing health condition of the insured. The parties are governed by the terms and conditions of the insurance contract, and the

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petitioner cannot wriggle from the terms and conditions.

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A reply affidavit is filed by the petitioner to the counter affidavit

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filed by respondents 1 and 2. It is stated that the petitioner's hospitalisation

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WPC 15628/21

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was due to an adverse climatic changes and is a direct consequence of the

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journey, which is covered under the policy. The petitioner was not suffering from any disease, including asthma, during the period when the policy was applied and taken. A competent Doctor examined the petitioner, and the certificate was issued. It is accepting the said medical certificate, that the policy was issued. The discharge summary will not disable the petitioner to get the policy amount. In paragraph 4, it is stated that the petitioner was not affected by any sort of disease, including asthma, during the period when the policy was taken. Merely the reason that in childhood, the petitioner had suffered difficulty due to asthma, which was cured several years back, does not have any impact in executing the policy and claiming right in terms of the conditions of the policy. The alleged disease was sudden and unexpected, and the petitioner had not suffered any disease of asthma for the last more than 40 to 50 years and, therefore, prayed that the Writ Petition be allowed.

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The counsel for the petitioner argued that in Ext.P1, there is a

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clause which reads as follows:

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“ Notwithstanding anything stated in the policy, it is hereby declared and agreed that all claims occasioned by, happening through or in consequence of any disease which is existing on the date of commencement of risk, whether specifically declared or not, in the proposal form completed by the insured, is excluded from the scope of the policy. “

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WPC 15628/21

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Ext.P2 is a medical examination report which proves the fact that

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the petitioner did not have a history of asthma as on the date of examination or taking of the policy. It is accepting Ext.P2, that the policy was issued and in Ext.P3, the claim was approved and directed the petitioner to produce certain documents for finalising the claim. The respondent company cannot rely on the discharge summary alone for denying claim of the petitioner.

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Ext.R1(b) Discharge Summary is issued by the Doctor, who treated the petitioner and it is, his evaluation that is reflected in it and therefore, the said Discharge summary cannot be used against the petitioner. Moreover, in Ext.R1(c) proposal form, the petitioner has clearly stated that she does not suffer from any illness or disease while making the proposal. Therefore, there was no question of pre-existing disease as far as the petitioner is concerned and therefore, the rejection of the claim is illegal and improper.

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The learned senior counsel appearing for the respondent Insurance

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Company, argued that going by the contract of Insurance, if the insured is having any pre-existing disease as of the date of commencement of the risk and if it is suppressed in the proposal form and subsequently, if it is brought

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to the notice that the insured was having a pre-existing disease, they are justified in denying the claim. As far as the petitioner is concerned, she has suppressed the fact that she was having the illness of asthma at the time of

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WPC 15628/21

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taking the policy by stating ‘No’ in the proposal form in columns 2 and 5,

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Ext.P2 Report cannot be termed as a conclusive proof that the petitioner did

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not have asthma, but Ext.R1(b) discharge summary is drawn by the Doctor,

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who treated the petitioner on the information given by the petitioner herself before the Doctor.

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In the discharge summary it is specifically noted as follows:

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“SIGNIFICANT PHYSICAL FINDINGS AND CO-MORBIDITIES Co-morbidities: History of bronchial asthma.

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HISTORY

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This 75 year old female with past history of bronchial asthma who recently had respiratory tract infection with complaints of fever and cough that started while she was travelling and was started on empiric Augmentin which she completed for 10 days. Xxx xxxx xxx”

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Thus, it can be seen that the petitioner had a history of bronchial asthma

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before taking the policy, and she suppressed the said fact in the proposal form and obtained the policy. Going by the policy conditions, if the insured has any pre-existing disease as on a date of the commencement of the risk,

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the policy cannot be owned.

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The counsel for the respondent relied on the judgment of this

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Court in in Zonal Manager Life Insurance Corporation of India v. Rosamma

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Varkey [2023 (4) KHC 63] , and the learned Single Judge, has held as follows:

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“14. It is true that all facts mentioned in the proposal may not be "material facts". However, details regarding he illness suffered by the proposer/assured, the previous treatment administered to him

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WPC 15628/21

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including hospitalisation etc., which was a specific query in the proposal form, could by no stretch of imagination be understood to be not a "material fact". The Insurance Company would fix premium having due regard to the previous illness and health conditions of the proposer. Thus, it could only be concluded that there has been material suppression and furnishing of false information by the proposer/assured while availing the insurance policy. Hence, the point is answered in the affirmative.”

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The counsel for the petitioner relied on the judgment of this

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Court in Suresh v. Insurance Ombudsman [ 2012 (1) KLT 809] , in which it is

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held as follows:

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“10.xxx xxx xxxx xxxxxx Certainly a contract of insurance is a contract of utmost good faith, but at the same time it must not be lost sight that it is a contract for social insurance and certain rights under the contract, not stated in the contract are protected by the Insurance Act in the interest of social insurance. The legislature wanted to safeguard the beneficiary of the policy from unreasonable repudiation from the insurer and has therefore consciously cast the burden of proving certain facts squarely on the insurer, which statutory provision has to be strictly construed keeping in mind the object with which the legislature has enacted the provision in the statue.”

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The counsel for the petitioner argued that, in view of the dictum in Suresh

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(supra), the respondents cannot rely on the discharge summary and deny

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the petitioner's claim.

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Insurance is a contract between the insurer and the insured. In

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the proposal form, the petitioner stated that she has not been suffering from any illness or disease up to the date of making the proposal. It is also a fact that a medical examination was conducted on the petitioner before accepting the proposal and issuance of the policy, in which the Doctor

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WPC 15628/21

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specifically notes that the petitioner does not have asthma. But when the petitioner was admitted to a hospital in Dubai due to fever and breathlessness, it was noted in the discharge summary that the petitioner had a history of bronchial asthma. It is also not disputed in the reply affidavit filed by the petitioner but instead admitted that the petitioner had suffered difficulty due to asthma during her childhood days, but the same has been cured several years back.

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Pre-existing disease is defined in the Overseas Mediclaim

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Insurance Policy for Business & Holiday Travel produced as Ext.R1(a), which reads as follows:

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“ 2.8 Pre-Existing disease means any condition, ailment or injury or related condition(s) for which you had signs or symptoms, and / or were diagnosed, and / or received medical advice/ treatment within 48 months to prior to the first policy issued by the insurer.”

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A reading of the said definition would make it clear that an ailment, injury, or any symptom diagnosed or received medical advice or treatment within 48 months prior to the first policy issued by the insurer can only be termed a pre-existing disease.

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In this case, the only evidence which is used against the petitioner for rejecting his policy is Ext.R1(b) discharge summary, which shows that the petitioner had a history of bronchial asthma, but nowhere in the discharge summary, it is stated that the petitioner had taken any

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WPC 15628/21

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treatment or had any symptoms or conditions of ailment within 48 months

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prior to the first policy issued by the insurer. Therefore, even if the petitioner had asthma, she had not taken any treatment within a period of 48 months prior to the issuance of the policy. Therefore, the rejection of the petitioner's claim by Ext.P4 that he had a past medical history of asthma

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is against the policy condition and the definition of pre-existing disease.

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The Grievance Cell and the Ombudsman had failed to go into

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this aspect before dismissing the complaint. Therefore, I have no hesitation in holding that the rejection of the petitioner's claim is illegal and improper. Therefore, Exts.P4 and P7 stand quashed, and the respondents are directed to release the amount of AED 9007.32 less USD 100 stated in Ext.P3 on the production of the documents stated in Ext.P3 to the petitioner. The petitioner is directed to produce the records sought in Ext.P3 before the 1^st respondent within one month from today. If such documents are produced,

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the claim shall be processed and paid within two months thereafter.

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The Writ Petition is allowed.

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Sd/-

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BASANT BALAJI JUDGE

Mms/dl

WPC 15628/21

APPENDIX OF WP(C) 15628/2021

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PETITIONER EXHIBITS

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Exhibit P1	TRUE PHOTOCOPY OF THE REGIONAL POLICY ISSUED BY THE FIRST RESPONDENT
	INSURANCE COMPANY DATED 25.9.2019
Exhibit P2	TRUE PHOTOCOPY OF THE MEDICAL EXAMINATION REPORT ISSUED BY
	DR.K.R.JAYACHANDRAN DATED NIL
Exhibit P3	TRUE PHOTOCOPY OF THE LETTER DATED 18.2.2020 ISSUED BY THE INSURANCE
	COMPANY
Exhibit P4	TRUE PHOTOCOPY OF THE LETTER DATED 23.1.2020 ISSUED BY THE INSURANCE
	COMPANY TO THE PETITIONER
Exhibit P5	TRUE PHOTOCOPY OF THE PETITION DATED 9.10.20 FILED BY THE PETITIONER BEFORE
	THE GRIEVANCE CELL OF THE FIRST RESPONDENT
Exhibit P6	TRUE PHOTOCOPY OF THE COMPLAINT DATED 9.12.2020 SUBMITTED BY THE
	PETITIONER BEFORE THE THIRD RESPONDENT
Exhibit P7	TRUE PHOTOCOPY OF THE ORDER PASSED BY THE THIRD RESPONDENT DATED 30.03.2021.

Kumud Mahendra Parekh v. the National Insurance Company Ltd.

Case brief

What is this about?

What did the court decide?

Kumud Mahendra Parekh v. the National Insurance Company Ltd.

Case brief

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