Nishka Srinivas Veluvali –
Published On: December 10, 2021 at 19:30 IST
The Supreme Court permitted the relief of Mediclaim Policy to two senior citizens and stated that it’s the negligence of the insurance agent who did not disclose the changes in the policy at the time of renewal to the policy-holders.
This will be considered as the “deficiency of the service” under the Consumer Protection Act 1986.
The Bench consisting of Justice S Ravindra Bhat and Justice KM Joseph were hearing the Appeal filed opposing the Order of the National Consumer Disputes Redressal Commission that rejected any reliefs to the Appellants.
The Appeal was filed by two senior citizens who availed a Mediclaim policy from the United India Insurance in 1982 that was renewed yearly basis. In 2008, the second Appellant had undergone an angioplasty surgery.
The Appellants had submitted the total claim of 3.82 lakhs to the insurer with regard the angioplasty surgery. The claim of the insurance at that time totalled to Rs. 8 lakhs.
However, the insurance agency considered the claim of Rs. 2 lakhs only, stating that the agreement upon renewal had a condition which limited the liability with regard to such surgeries to an amount of Rs. 2 lakhs.
The Appellants questioned this before the District Consumer Forum, which had given the Order in the appellants’ favour.
State Commission reversed the District Forum’s Order by giving the Verdict in the favour of the insurance agency. The Appellants did not receive any relief even after filing a revised appeal before National Commissioner. Hence the matter was taken to the Supreme Court.
The insurer argued that it is not legally bound to inform the policy holder regarding the changes in policy because it was not the concept of ‘renewal’ since new agreement was supposed to make on annual basis.
The Judgement was authored by Justice Ravindra Bhat stating, “If the renewed contract is agreed, in all respects, by both the parties, undoubtedly the fresh terms (with restrictions) would be binding. However, that would not be the case when the new term is introduced unilaterally about which the policy holder is in dark. Further, the allusion to continuation of the terms of the Gold Policy with respect to senior citizens (who were not to be compelled to migrate to another policy) but were to be subject to the same terms, upon payment of a different rate of premia, reinforces the conclusion that there was in fact, a renewal of the existing terms.”
The Court also observed that the Insurer did not submit any proof to show that the agent had informed the changes of the policy to the Appellants.
Hence, the Top Court restored the Order of District Forum and permitted the Appellants with relief the insurer had previously promised to give so.