Friday, June 18, 2010

TC: Mediclaim not refused since Insured lied


Present Hon'ble Thiru Justice N. KANNADASAN, PRESIDENT



(Against order in O.P.No.92/2003 on the file of the DCDRF, Chennai (South)


The Senior Divisional Manager

M/s. New India Assurance Co. Ltd.,

Citi Bank Divisional Office, 712500

Allied’s Mount Casa Blanca Building M/s. K.S.Narasimhan

II Floor, New No.260 (Old No.701-702) Counsel for

Anna Salai, Chennai – 600 006 Appellant / 1st Opposite party


1. Suresh Bazantrai Melvani

C/o. Sona Hotels

Rue De Quorem Mr. D. Saravanan

Near Pato Bridge Counsel for

Panaji, Goa – 403 001 1st Respondent /Complainant

2. The Director

Citi Bank Mr. R. Balaji

164, Anna Salai Counsel for

Chennai – 600 002 2nd Respondent / 2nd opposite party



1. The appellant is the 1st opposite party and the 1st respondent is the complainant. The 2nd respondent is the 2nd opposite party.

2. The complaint is filed under the following circumstances:

The complainant got himself insured with the 1st opposite party through the 2nd opposite party under Group Mediclaim Policy for the period from 1.10.1993 to 30.9.1994. Thereafter, the complainant has renewed the said policy every year alongwith other members of his family from the year 1994 onwards. On 23.9.01, the complainant has suffered severe breathlessness and was admitted in Goa Medical College Hospitalimmediately for treatment. After initial treatment, he was discharged from the said hospital and he continued his treatment in Breach Candy Hospital, Mumbai, with effect from 26.9.01, during which date he was admitted. He was under the treatment of Dr.Z.F. Udwadia, Consultant Chest Physician, who has diagnosed him to be suffering from Obstructive Sleep Apnea (herein after called as OSA in short). Subsequently, he was incidentally detected to be having Nephrotic Syndrome, which was linked to his diabetes. He was recommended to use Respironics Auto-CPAP machine, every night as a life saving measure. The complainant has made a preliminary claim for Rs.65,084/-, . Subsequently, he has also raised an additional claim for the purchase of CPAP machinery, which is worth about Rs.88000/-. According to the complainant, the 1st opposite party has arbitrarily repudiated the claim on the ground that the opposite party’s panel doctor has given an opinion that nature of ailment for which he was hospitalized emerged from the pre-existing disease and there is an exclusion clause in the policy. Subsequently, the complainant has sought an opinion from the doctor doctor who gave treatment, who has immediately clarified to the effect that the decease is a new onset.

Inspite of the said clarification, the 1st opposite party through the letter dt.27.1.01 expressed their inability to settle the claim and hence the complaint was preferred.

3. The 1st opposite party/ appellant herein resisted the complaint on the ground that this is the claim to the effect that the claim of the complainant on two grounds viz. claim for Rs.65084/- towards expenses incurred in the treatment and a further claim of Rs.88000/- being the cost of the machine, is liable to be rejected. According to them, the claim was rejected due to the pre-existing disease, which falls under exclusion clause as set out hereunder.

1. In respect of domiciliary hospitalization the company shall not cover (i) expenses for the pre and post hospital treatment and (ii) expenses incurred for any of the following diseases (a) asthma; (b) Bronchitis (c) chronic nephritis and Nephritic Syndrome……………………………………………

2. Besides the company shall not be liable for payment of claims arising out of (a) disease/injuries which are pre-existing when the cover incepted for the first time ………………………….

It is further contended that in the light of the above exclusion clause and in view of the fact that the machine was purchased by the complainant for domiciliary treatment of Nephrotic Syndrome linked to his diabetes, the rejection of the complaint is justified and as such there is no deficiency in service.

4. The 2nd opposite party has contended that there is no privity of contract between them and they cannot be held responsible.

5. The District Forum by considering the entire materials available on record, has allowed the complaint by accepting the contentions raised by the complainant and granted relief by directing the opposite party / appellant to pay a sum of Rs.1,53,084/- being the claim amount with interest @9% p.a., from 16.11.01 till date of realization and a sum of Rs.10000/- towards deficiency in service and mental agony and Rs.1000/- towards cost. Against the said order, the present appeal is filed by the 1st opposite party.

6. The learned counsel for appellant submits that the District Forum has erroneously allowed the complaint without considering the exclusion clause, as extracted above.

It is further contended that there is no provision in the policy for allowing the purchase of machinery for domiciliary treatment and for reimbursement of the cost of the said machine. The learned counsel would further contend that in as much as the discharge summary given by the Goa Medical College Hospital and Breach Candy Hospital, Mumbai, discloses that the complainant has a history of DM/HT and the present illness is Nephrotic Syndrome, which is linked to his diabetes, he is not entitled for the claim and the same was rightly repudiated by the appellant.

7. In this connection, a perusal of the materials available on record would disclose that the complainant was suffering from OSA, as evident from Ex.A3 and Ex.A4, which are medical records pertaining to theGoa Medical College Hospital as well as Breach Candy Hospital, Mumbai. The discharge report of Breach Candy Hospital, Mumbai, as seen under Ex.A4, would reveal that various investigations were carried out to ascertain the cause for complainant’s breathlessness. It is an admitted fact that the appellant, who has taken a policy in the year 1993 and periodically renewed the same, never had any history of the existence of the above said disease. In fact, when the complainant has submitted the claim form for Rs.65,084/- on 11.10.01, and additional claim of Rs.88000/- towards the cost of the machine through his letter dt.24.10.01, by enclosing the Sleep Study Test Report dt.29.9.01 and 1.10.01 and the prescription of Dr. Zarir F. Udwadia for the use of Auto CPAP machine dt.22.10.01 and the Invoice and bill of Life Line dt.22.10.01 and 24.10.01, the appellant / 1st opposite party appears to have repudiated the said claim in a mechanical manner by their letter dt.16.11.01, Ex.A11, on the basis of the opinion of their panel doctor. Immediately, thereafter the complainant has sought necessary clarification from Dr. Zarir F. Udwadia, who has chosen to clarify about the nature of the disease and the hospitalization through his letter dt.26.11.01, Ex.A13, which reads as follows:

“Mr. Melvani was hospitalized for evaluation of breathlessness. The cause of this was determined to be secondary to OSA. This disease was of new on set with symptoms dating back only for a few months and was not related to his past medical problems.

He was incidentally detected to have nephritic syndrome which was linked to his diabetes but these conditions were not related to his OSA”.

The above documents makes it clear that the disease was of new on set with symptoms dating back only for a few months and was not related to his past medical problems”. The complainant has chosen to forward the said clarification to the 1st opposite party/appellant. Even thereafter in a casual manner, the 1st opposite party/ appellant has repudiated the claim through their letter dt.27.12.01, Ex.A15 (wrongly indicated as Ex.A14 in the order). A perusal of the opinion of the panel doctor as seen under Ex.B1, discloses that the panel doctor had in a casual manner gave an opinion that the claim may be repudiated as a case of PED, and its complication. In the very same report, which is in the form of prescribed format, for clause 4, 5 and 6, the doctor has given an opinion that the hospitalization was necessary, period of hospitalization was reasonable and that prescription/ treatment was in line with the illness/ disease.

8. When the complainant has chosen to correspond with the 1st opposite party by forwarding the discharge summaries of Goa and Mumbai hospitals, and clarification letter of the doctor (Ex.A13), who gave treatment, and who is the Consultant Chest Physician, the panel doctor, without looking into those materials and without even examining the complainant, has suggested casually that the claim could be repudiated. In fact no other contra materials were available for perusal of thepanel doctor to come forward with such conclusion.

In the very same report, as against clause 3 (b), the panel doctor gave an opinion that the patient would be suffering DM/HT, for the past 20 years. It is not known where from such an opinion of “for the past 20 years was formed by the panel doctor, without even examining the complainant or verification of previous medical records, other than the discharge summaries, which were enclosed alongwith the claim forms.

9. A perusal of the information supplied on OSA in the journal published by UPHS Health Care PENN Today, in Vol.6, Number 1, Spring 1995 discloses as follows:

“Apnea “ meant lack of breathing. Obstructive sleep apnea is a particular type of snoring – loud and punctuated by choking silences when breathing actually stops. It wreaks havoc with sleep quality, causing daytime drowsiness and often cognitive impairment.

“Obstructive sleep apnea typically begins as ordinary snoring. Snoring occurs when a partial obstruction in the back of the throat restricts airflow during inhalation. Causes include allergies and colds, which swell throat tissue, obesity, which adds excess tissue to the throat, alcohol, tranquilizers and sedatives which relax the throat muscles, and anatomical abnormalities, unusually large soft palates or nasal malformations that restrict airflow”

During ordinary snoring, people never stop breathing. But in obstructive sleep apnea, they do. As the lungs struggle to inhale enough air through the narrowed airway, they such the passage closed, and the person stops breathing, unusually for a few seconds, though apnic episodes may last upto a minute. A sudden choking silence replaces the soring. When the airway closes, the lack of oxygen sets off an internal alarm, and the brain rouses the apnic sleeper, which restores breathing. But with every episode of sleep apnea, and those with the condition may suffer 100 a night- the bloods oxygen level plummets, but the body’s oxygen requirement remains unchanged. To compensate for the lack of oxygen, the heart pumps extra hard to circulate more blood. The result is enormous spikes in blood pressure, residual high blood pressure during the day and over time, substantially increased risk of heart attach and stroke”.

“In addition, obstructive apnea destroys sleep, which in turn impairs daytime cognitive function”

“ Ironically, obstructive sleep apnea is remarkably easy to treat. All it takes is a $1200 device that delivers “continuous positive airway pressure,” (C-PAP). A C-PAP device includes a mask that fits over the nose attached to a small pump that gently pushes extra oxygen into the lungs with each breath. C-PAPs prevent airway collapse and maintain a healthy blood oxygen supply”.

10. A further observation is made in the said journal about OSA, which reads as follows:

Unfortunately, sleep apnea often goes undiagnosed. According to a recent report from the National Sleep Commission, “physicians tend not to ask their patients about sleep, “Schwab said. A study at theUniversity of Wisconsin found that 4% of men and 2% of women, aged 30 – 60, have undiagnosed sleep apnea, which can lead to serious consequences.

11. In the light of the above, we are unable to appreciate the stand taken by the appellant / 1st opposite party, in repudiating the claim, in a casual manner, by trying to link the present disease with that of thesomeother disease, eventhough there is no direct link of both diseases.

12. That apart as referred supra, the OSA, often go undiagnosed even as per the leading medical journals and as such the complainant cannot be found fault. The Hon’ble Supreme Court in its decision reported in AIR 1991 Supreme Court 392 it has been observed as “ The burden of proving that the insured had made false representations and suppressed material facts is undoubtedly on the corporation.”

13. In the light of the principles laid down by the Apex Court as referred supra, the appellant/ 1st opposite party has not discharged their burden of proving the fact that the complainant has made a false representation, while taking policy, more particularly with regard to the nature of the disease.

14. As regards the claim with regard to the cost of the machinery is concerned, the records reveal that it cannot be construed as a domiciliary treatment and on the other hand the machinery has to be purchased only as per the opinion of the doctor, who gave the treatment to the complainant and after hospitalization. The cost of the machineries is not controverted. Hence the contentions urged by the learned counsel for appellant in this regard, does not stand to reason. As regards the 2nd opposite party is concerned, the District Forum has rightly rejected the claim made as against them.

15. We expect that the public bodies like the appellant / 1st opposite party, while considering the claims of the public, to act in a judicious manner, in view of the fact that every other day hundreds of claims are made by the general public before the insurance companies.

17. For the reasons stated above, we do not see any reasons to interfere with the order of the District Forum and accordingly the appeal is dismissed with cost of Rs.2000/-.






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