Delhi High Court
Sudhakar Tiwari vs New India Assurance Co. Ltd. on 12 May, 2020
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 8th May, 2020
Pronounced on: 12th May, 2020
+ W.P.(C) 2968/2020 & C.M. APPL. 10302/2020
SUDHAKAR TIWARI ..... Petitioner
Through: Mr. Rajiv Dutta, Senior Advocate
with Mr. Piyush Sharma & Mr.Aditya
N. Prasad, Advocates.
Versus
NEW INDIA ASSURANCE CO. LTD. ..... Respondent
Through: Mr. J. P. N. Shahi, Advocate.
%
CORAM:
HON'BLE MR. JUSTICE PRATEEK JALAN
JUDGMENT
1. The dispute between the parties arises out of a medical
insurance policy known as the "New India Mediclaim Policy"
(hereinafter, "the policy"), purchased by the petitioner from the
respondent. The petitioner is aggrieved by a communication dated
05.04.2020 by which the respondent has declined to cover the
petitioner's claims under the policy.
FACTS
2. The petitioner first purchased the policy (bearing no. 311600-
341625-00000498) in the year 2002. It came into effect on
11.09.2002. The sum assured under the policy was then ₹5,00,000/-.
The policy was renewed annually. In the year 2017, the respondent
offered the petitioner an enhancement of the sum assured, which the
petitioner accepted. The sum assured under the policy was thus
enhanced to ₹8,00,000/- with effect from 11.09.2017, and the policy
document to this effect was issued on 04.09.2017.
3. The genesis of the present dispute is that the petitioner was
diagnosed with metastatic squamous cell carcinoma in cervical lymph
nodes in January 2020, and is undergoing treatment at Medanta
Hospital, Gurugram, and Apollo Hospital, Delhi. In accordance with
the procedure under the policy, the petitioner applied for the "cashless
facility". However, the third-party administrator appointed by the
respondent (hereinafter, "the TPA") rejected the petitioner's request.
In a communication dated 30.03.2020 addressed by the TPA to Apollo
Hospital, the reason cited for the rejection was that the maximum
eligible sum insured of ₹5,00,000/- had been exhausted.
4. The petitioner protested to the respondent on the same date and
drew the respondent's attention to the enhancement of the sum insured
in the year 2017. The respondent, by its communications dated
30.03.2020 and 31.03.2020, requested the TPA to confirm the
position. In the second of these communications, the representative of
the respondent stated inter alia that, according to the information
available with the respondent, the sum insured under the policy was
₹8,00,000/- (plus cumulative bonus of ₹90,000/-) and not ₹5,00,000/-.
The respondent indicated that its record did not disclose exhaustion of
the sum insured by the petitioner, and that there must have been "some
misjudgement" at the TPA's end.
5. The TPA responded on 01.04.2020, relying upon the exclusion
contained in the policy in respect of pre-existing conditions. It took the
position that the petitioner was already suffering from the said ailment
when the enhanced coverage was taken, and the enhanced sum assured
would therefore not be available until the petitioner completed four
years of enhanced coverage.
6. The petitioner disputed this and asserted that he had been
treated in 2017-18 for a different ailment. He cited the opinion of the
treating physician that he was free of the earlier ailment (cancer of the
oesophagus) in 2018.
7. Although the respondent on 03.04.2020 requested the petitioner
for further details, the TPA contended, on the same date, that the claim
had been correctly refused, and stated that no further documents were
required.
8. The petitioner's further protest dated 05.04.2020 led to the
impugned communication of the respondent. The relevant parts of the
impugned communication are set out below: -
"Please refer to the mail of Raksha TPA in the trail. As
per the statement you made in your reply, I am afraid, as
per the policy conditions, the enhanced Sum Insured
portion (Rs.3.00 lakhs) opted on the renewal on
11/09/2017 shall not be allowed to you,and will be
blocked till 10/09/2021.
As per doctor prescription date 22-09-2017. You were
having complaints dysphagia to solid since 2 weeks hence
the disease appeared since 07-09-2019. You also
undergone USG endoscopy on 14-09-2017.
As per policy exclusion 5.11.Enhancement clause. {In
respect of any enhancement of Sum Insured, exclusions
4.1, 4.2 and 4.3 would apply to the additional Sum
Insured from such date.}
As per policy Pre-existing clause 4.1.- PRE-EXISTING
CONDITION/DISEASE means any condition, ailment
or injury or related condition(s) for which You had signs
or symptoms, and/or were diagnosed, and/or for which
You received medical advice / treatment within forty eight
months prior to the first policy issued by Us (as
mentioned in the Schedule) and renewed continuously
thereafter.
Further, presence of symptoms before the sum insured
enhancement clearly state that the cost of treatment will
be limited to the previous Sum Insured only.
The TPA is correct in their interpretations."
9. The petitioner has challenged this decision by way of the
present writ petition. Notice was issued on 15.04.2020, parties were
directed to complete pleadings, and the petition was adjourned to
19.05.2020. However, no ad interim relief was granted, which led the
petitioner to approach the Division Bench in LPA No.144/2020. The
Division Bench expedited the filing of pleadings and advanced the
date of hearing to 05.05.2020. The petition was heard on 05.05.2020
and 08.05.2020 by way of video conferencing. Learned counsel for the
parties have also filed their written submissions.
CONDITIONS OF THE POLICY
10. The relevant clauses of the terms and conditions of the
policy are extracted below:
"2.32 PRE-EXISTING CONDITION/DISEASE means
any condition, ailment or injury or related condition(s)
for which You had signs or symptoms, and/or were
diagnosed, and/or for which You received medical
advice/ treatment within forty eight months prior to the
first policy issued by Us (as mentioned in the Schedule)
and renewed continuously thereafter.
xxxx xxxx xxxx
4. WHAT ARE EXCLUDED UNDER THIS
POLICY
No claim will be payable under this Policy for the
following:
4.1 Treatment of any Pre-Existing Condition/Disease,
until forty eight months of Continuous Coverage of such
Insured Person has elapsed from the Date of inception of
his/her first Policy with Us as mentioned in the Schedule.
xxxx xxxx xxxx
5.11 ENHANCEMENT OF SUM INSURED:
You may seek enhancement of Sum Insured in writing
before payment of premium for renewal, which may be
granted at Our discretion. Before granting such request
for enhancement of Sum Insured, We have the right to
have You examined by a Medical Practitioner authorized
by Us or the TPA. Our consent for enhancement of Sum
Insured is dependent on the recommendation of the
Medical Practitioner and subject to limits as stated
below: -
Age <=50 Up to Sum Insured of 15 lakhs
years without Medical Examination
Age 51-60 By two slabs without Medical
Years Examination
Age 61-65 By one slab with Medical
Years Examination
Enhancement of Sum Insured will not be considered for:
1) Any Insured Person over 65 years of age.
2) Any Insured Person who had undergone more
than one Hospitalisation in the preceding two
years.
3) Any Insured Person suffering from one or more
of the following Illnesses/Conditions:
a) Any chronic Illness
b) Any recurring Illness
c) Any Critical Illness
In respect of any enhancement of Sum Insured,
exclusions 4.1, 4.2 and 4.3 would apply to the additional
Sum Insured from such date."
SUBMISSIONS
11. At the outset, Mr. J.P.N. Shahi, learned counsel for the
respondent, raised a preliminary objection that the writ petition is not
maintainable as it concerns a purely contractual dispute. He urged that
the petitioner ought to be relegated to his civil remedies, either before
the dispute redressal forums under Consumer Protection Act, 1986, or
by way of a regular civil suit.
12. On the question of maintainability, Mr. Rajiv Dutta, learned
Senior Counsel for the petitioner, argued that there is no absolute bar
to the jurisdiction of the writ court even in contractual matters arising
between a citizen and an instrumentality of the State, but the exercise
of jurisdiction is a matter for the Court's discretion. He urged that the
discretion ought to be exercised in favour of the petitioner in the
present case, where the underlying facts are undisputed and the action
of the respondent, entirely arbitrary. In this connection, Mr. Dutta
cited the judgment of the Supreme Court in United India Insurance
Company Limited and Ors. vs. Manubhai Dharmasinhbhai Gajera
and Ors., (2008) 10 SCC 404, and three judgments of this Court -
Talvinder Choudhary vs. Union of India & Anr., 2004 (76) DRJ 680;
Mukut Lal Duggal vs. United India Insurance Co. Ltd., 2005 (82) DRJ
70; and Hari Om Agarwal vs. Oriental Insurance Co. Ltd., 2007 (98)
DRJ 246. He also referred me to the judgment of the Bombay High
Court in Smt. Asha Goel vs. Life Insurance Corporation of India &
Ors., AIR 1986 Bom 412.
13. Mr. Dutta further pointed out that the petitioner's ongoing
medical treatment for a life-threatening disease necessitates immediate
relief, which would be extremely difficult to access due to the
prevailing Covid-19 pandemic, and consequent restricted functioning
of all judicial institutions.
14. Turning to the merits of the case, Mr. Dutta accepted that the
enhanced coverage would not be available for a pre-existing condition
upon a combined reading of clauses 5.11 and 4.1 of the policy.
However, he referred to the undisputed medical documents placed on
record by the parties to demonstrate that perianal abcess (from which
the petitioner suffered in June 2017) is unrelated to the petitioner's
cancer diagnosis, and that he had been successfully treated for cancer
of the oesophagus in 2017-18, as certified by his treating physicians.
He argued that the respondent's characterisation of the petitioner's
present ailment (metastatic squamous cell carcinoma in cervical lymph
nodes) as a continuation of the earlier ailment is therefore wholly
arbitrary and liable to be set aside.
15. Mr. Shahi's response on the merits was that the medical
documentation of 2017 and 2018 revealed the existence of cancer, and
the petitioner's present ailment is the same. He submitted that the
petitioner's claim was therefore rightly rejected, applying the
exclusion under clause 4.1. He also relied on clause 5.11(3)(c) to
argue that the petitioner was not entitled to enhancement of the sum
insured, on account of his "critical illness". According to Mr. Shahi,
the petitioner suppressed his medical history when he sought
enhancement of the sum insured under the policy.
ANALYSIS
A. Maintainability of the petition
16. Turning first to the issue of maintainability, Mr.Shahi's
submission that the writ court will normally not entertain contractual
disputes is doubtless correct. However, the question is not one of
jurisdiction of the Court, but of whether the discretionary power under
Article 226 of the Constitution ought to be exercised in a particular
case. The judgments of the Supreme Court and this Court dealing with
this question in the context of insurance contracts are particularly
relevant for the purposes of this case.
17. The question was considered in some detail in Life Insurance
Corporation of India & Ors. vs. Asha Goel & Anr., (2001) 2 SCC 160.
The Bombay High Court had allowed a writ petition against the
appellant. The insurance company contended that the writ court ought
not to have entertained a contractual dispute, and the Supreme Court
held as follows:
"10. Article 226 of the Constitution confers extraordinary
jurisdiction on the High Court to issue high prerogative
writs for enforcement of the fundamental rights or for any
other purpose. It is wide and expansive. The Constitution
does not place any fetter on exercise of the extraordinary
jurisdiction. It is left to the discretion of the High Court.
Therefore, it cannot be laid down as a general
proposition of law that in no case the High Court can
entertain a writ petition under Article 226 of the
Constitution to enforce a claim under a life insurance
policy. It is neither possible nor proper to enumerate
exhaustively the circumstances in which such a claim can
or cannot be enforced by filing a writ petition. The
determination of the question depends on consideration
of several factors like, whether a writ petitioner is
merely attempting to enforce his/her contractual rights
or the case raises important questions of law and
constitutional issues, the nature of the dispute raised;
the nature of inquiry necessary for determination of the
dispute etc. The matter is to be considered in the facts
and circumstances of each case. ... The courts have
consistently taken the view that in a case where for
determination of the dispute raised, it is necessary to
inquire into facts for determination of which it may
become necessary to record oral evidence a proceeding
under Article 226 of the Constitution, is not the
appropriate forum. ...
11. The position that emerges from the discussions in the
decided cases is that ordinarily the High Court should
not entertain a writ petition filed under Article 226 of the
Constitution for mere enforcement of a claim under a
contract of insurance. Where an insurer has repudiated
the claim, in case such a writ petition is filed, the High
Court has to consider the facts and circumstances of the
case, the nature of the dispute raised and the nature of
the inquiry necessary to be made for determination of
the questions raised and other relevant factors before
taking a decision whether it should entertain the writ
petition or reject it as not maintainable. It has also to be
kept in mind that in case an insured or nominee of the
deceased insured is refused relief merely on the ground
that the claim relates to contractual rights and
obligations and he/she is driven to a long-drawn
litigation in the civil court it will cause serious prejudice
to the claimant/other beneficiaries of the policy. The
pros and cons of the matter in the context of the fact-
situation of the case should be carefully weighed and
appropriate decision should be taken. In a case where
claim by an insured or a nominee is repudiated raising a
serious dispute and the Court finds the dispute to be a
bona fide one which requires oral and documentary
evidence for its determination then the appropriate
remedy is a civil suit and not a writ petition under Article
226 of the Constitution. Similarly, where a plea of fraud
is pleaded by the insurer and on examination is found
prima facie to have merit and oral and documentary
evidence may become necessary for determination of
the issue raised, then a writ petition is not an
appropriate remedy."
(Emphasis supplied)
[Although Mr. Dutta relied upon the judgment of the learned Single
Judge of the High Court in the same case, it is unnecessary to consider
the said judgment as the matter was ultimately carried to the Supreme
Court.]
18. In Biman Krishna Bose vs. United India Insurance Co. Ltd.,
(2001) 6 SCC 477, the Supreme Court held that insurance companies,
acquiring the trappings of the "State" as other authorities under Article
12 of the Constitution, ought to act reasonably and fairly while dealing
with customers. This judgment makes it clear that the actions of
insurance companies can be tested in writ proceedings, and set aside if
found to be arbitrary.
19. In ABL International Ltd. & Anr. vs. Export Credit Guarantee
Corporation of India Ltd. & Ors., (2004) 3 SCC 553, the Supreme
Court considered several of its earlier judgments on the question of
maintainability of writ petitions in contractual matters. The Court
summarised its conclusions in the following manner: -
"27. From the above discussion of ours, the following
legal principles emerge as to the maintainability of a writ
petition:
(a) In an appropriate case, a writ petition as against a
State or an instrumentality of a State arising out of a
contractual obligation is maintainable.
(b) Merely because some disputed questions of fact arise
for consideration, same cannot be a ground to refuse to
entertain a writ petition in all cases as a matter of rule.
(c) A writ petition involving a consequential relief of
monetary claim is also maintainable.
28. However, while entertaining an objection as to the
maintainability of a writ petition under Article 226 of the
Constitution of India, the court should bear in mind the
fact that the power to issue prerogative writs under
Article 226 of the Constitution is plenary in nature and is
not limited by any other provisions of the Constitution.
The High Court having regard to the facts of the case,
has a discretion to entertain or not to entertain a writ
petition. The Court has imposed upon itself certain
restrictions in the exercise of this power. (See Whirlpool
Corpn. v. Registrar of Trade Marks [(1998) 8 SCC 1] .)
And this plenary right of the High Court to issue a
prerogative writ will not normally be exercised by the
Court to the exclusion of other available remedies unless
such action of the State or its instrumentality is arbitrary
and unreasonable so as to violate the constitutional
mandate of Article 14 or for other valid and legitimate
reasons, for which the Court thinks it necessary to
exercise the said jurisdiction."
20. Mr. Dutta also cited the judgment in Manubhai (supra), which
arises out of a mediclaim policy. In Manubhai, the Supreme Court
noticed that the insurance company in that case, as in the present case,
is a public sector undertaking, amenable to judicial review and held
that in the absence of serious disputed questions of fact, judicial
review of the impugned decision was permissible.
21. The judgments of this Court are on similar lines. In Talvinder
Choudhary, the Court was concerned with non-renewal of the
petitioner's mediclaim policies. Relying upon Biman Krishna Bose
(supra), and the judgment of this Court in Ashok Kumar Dhingra &
Ors. vs. The Oriental Insurance Co. Ltd. & Ors., 2003 (70) DRJ 470,
it was held that the petition could not be thrown out on the ground of
maintainability. [Although Mr. Dutta also cited the judgment of the
learned Single Judge in Mukut Lal Duggal (supra), which is to the
same effect, it is not necessary to consider the said judgment
separately, as I find that it was carried in appeal to the Division Bench,
and thereafter to the Supreme Court. The Supreme Court heard the
matter alongwith the Manubhai case (supra). The judgments of the
learned Single Judge and the Division Bench in Mukut Lal Duggal
were also affirmed in Manubhai, which has been dealt with above.]
22. The judgment in Hari Om Agarwal (supra) is even closer to the
facts of this case. In that case also, the insurance company had
declined a claim under a mediclaim policy on the ground that it arose
out of a pre-existing medical condition. Following the principles laid
down in Biman Krishna Bose and ABL International, the Court
entertained the writ petition, and granted relief. (During the course of
hearing, I asked learned counsel for the parties to confirm whether this
judgment was carried in appeal. Learned counsel for the petitioner has
indicated that, to the best of his knowledge, the judgment was not
challenged. Mr. Shahi has also not made any submission to the
contrary.)
23. Applying the principles laid down in the above judgments to the
present case, I am of the view that the writ petition cannot be
dismissed on the grounds of maintainability. In the present case also,
the facts of the matter are not in serious dispute. Parties are ad idem as
to the details of the policy as well as its terms and conditions. The
medical record of the petitioner is also undisputed. There is no
allegation in the correspondence between the parties of any fraud or
deceit by the petitioner. Although a case of suppression of material
facts regarding the petitioner's medical history has been taken in the
counter affidavit, it is clear from paragraph 11 of Asha Goel (supra)
that, in order to succeed on this preliminary issue, the respondent
would have to demonstrate the prima facie merit of its contention. In
the absence of such prima facie finding, the case would turn not on the
determination of any factual point requiring evidence to be led, but on
an interpretation of clauses 4.1 and 5.11 of the policy. The petition has
been filed to challenge the decision of a State instrumentality as
arbitrary, and its fate can be determined in accordance with the
principles which govern exercise of jurisdiction under Article 226 of
the Constitution.
24. As far as maintainability is concerned, the only question to be
decided is therefore whether the respondent has made out a prima
facie case of suppression by the petitioner. The basis of this argument
is clause 5.11(3)(c), which contemplates denial of enhancement in the
event of any critical illness. Mr. Shahi relied upon a prescription dated
22.09.2017 of Dr. Durgatosh Pandey of the Department of Surgical
Oncology, Artemis Hospital, Gurugram. He pointed out that in the
said prescription, the doctor has noted the petitioner's history of
drainage of perianal abscess three-four times, lastly in June 2017, and
complaint of "dysphagia to solids" for the previous two weeks.
25. In my view, the respondent's reliance on this prescription is
misconceived. The undisputed medical opinion placed on record is
that the petitioner's complaint of perianal abscess in June 2017 (which
is the date mentioned in the counter affidavit) has no relationship with
cancer. The complaint of dysphagia, even according to the
prescription relied upon by the respondent, was for a period of two
weeks prior to 22.09.2017, i.e. from 08.09.2017. The documents
placed on record by the respondent itself reveal that the enhancement
of the petitioner's policy occurred prior to that date. The petitioner
paid the enhanced premium amount of ₹30,284/- by a cheque dated
01.09.2017, for which the respondent issued a receipt on 04.09.2017.
The policy document is dated 04.09.2017 and came into effect on
11.09.2017. In these circumstances, it is not possible to accept that the
petitioner already knew, when he entered into the enhanced policy,
that he suffered from a critical illness. The respondent has therefore
failed to make out a prima facie case in support of its allegation of
suppression, and no trial on evidence is necessary. In any event,
neither the protracted correspondence between the parties nor the
impugned rejection letter make out this case, which appears to be an
afterthought, taken in the counter affidavit for the first time.
26. I am also conscious of the circumstances at present prevailing in
the country (and indeed, in the rest of the world) on account of the
Covid-19 pandemic. The entire country has been under a national
lockdown since 23.03.2020, and all judicial forums (including this
Court) have been functioning restrictively. Although the insurance
policy in the present case speaks of grievance redressal through an
ombudsman (clause 5.19 of the terms and conditions), Mr. Shahi was
unable to confirm whether the office of the ombudsman is functional
at this time. The petitioner's illness is such that his treatment cannot
be delayed; his right to life is very directly implicated. The existence
of an efficacious alternative remedy, particularly at this juncture, is
extremely doubtful. It appears to me that the petitioner would be
seriously prejudiced if I were to relegate him to other remedies.
27. A consideration of the aforementioned facts and circumstances
of the case, as mandated inter alia by paragraphs 10 and 11 of Asha
Goel (supra), therefore leads to the conclusion that Mr. Shahi's
preliminary objection on maintainability must be rejected.
28. During the course of hearing, Mr. Dutta also suggested that the
petitioner may be relegated to other remedies if the respondent is
willing, in the interregnum, to honour the petitioner's claims in
accordance with the enhanced sum assured. He submitted that the
petitioner would undertake to restitute the respondent in the event the
claim was ultimately found to be invalid. However, Mr. Shahi was not
in a position to accept this suggestion, which would have enabled the
respondent to contest the matter on evidence.
B. Merits of the petitioner's claim
29. Turning now to the merits of the case, Clause 5.11 deals with
enhancement of the sum insured under the policy. It is first to be noted
that the enhancement is granted at the discretion of the insurer. The
insurer has the right to insist upon a medical examination of the
insured prior to enhancement. In the present case, I was informed that
no medical examination was required at the time of enhancement, as
the clause does not mandate it when the insured is less than 50 years
of age, and the sum insured is less than ₹15 lakhs. The enhancement
was accepted by the respondent in its discretion - indeed, the pleading
in paragraph 3(ii) of the petition to the effect that the enhancement
was taken at the suggestion of the respondent, remains untraversed in
the counter-affidavit. Since the enhancement, the respondent has also
accepted higher annual premia computed on that basis.
30. Mr. Shahi also relied upon Clause 5.11(3)(c) to submit that the
petitioner's "critical illness" disentitled him to claim in terms of the
enhanced sum insured. In the absence of a finding in the respondent's
favour with regard to the question of suppression, this contention is
meritless. The three subclauses of clause 5.11 provide for situations in
which enhancement of the sum insured would not be considered -
clause 5.11(3)(c) thus does not afford a ground for withholding the
enhancement when faced with a claim, but for declining the
enhancement at the outset.
31. The petitioner's claim must therefore turn on an interpretation
of the exclusion contained in clause 4.1, which is made applicable to a
situation of enhancement of the sum insured by the very last
stipulation contained in clause 5.11. In the case of a new policy, clause
4.1 makes it clear that pre-existing conditions would not be covered
for the first four years of the policy. Applying this to a case of
enhancement, the clause indicates that in respect of a condition which
exists on the date of enhancement, the enhancement would not be
applicable for a period of four years thereafter. Thus, if the petitioner's
claim is in respect of a condition which existed at the time of
enhancement, the coverage would be only for a sum of ₹5,00,000/-
until September 2021, and for ₹8,00,000/- thereafter. Alternatively, if
the claim is in respect of an ailment which was not a pre-existing
condition, the petitioner's claim would be immediately admissible for
the enhanced amount of ₹8,00,000/-.
32. In interpreting an exclusion clause such as clause 4.1, the
Court's approach is generally restrictive. An exclusion clause must be
read in a manner consistent with the object of the insurance which, in
the case of a medical insurance, is reimbursement of the healthcare
costs of the insured. The approach to be adopted by the Court is clear
from the following observations in Hari Om Agarwal (supra):
"21. The bone of contention, or the point of dispute is the
precise meaning of "complications arising from pre-
existing disease will be considered part of that pre-
existing condition.". This stipulation itself occurs in an
exclusion clause. There is some authority that an
exclusion clause, in the context of a contract of
insurance, which is an assurance whose main purpose
has to be given prominance, should be construed strictly
(Ref. Skandia Insurance Co. Ltd. v. Kokilaben
Chandravadan & Ors., 1987 (2) SCC 654; B.V.
Nagaraju v. Oriental Insurance Co. Ltd., 1996 (4) SCC
647). The primacy given to the main purpose,
notwithstanding that contracting parties agreed to
certain exclusions, is founded on the principle of
interpretation that if contracting parties seek to achieve a
certain purpose by entering into an agreement, the
existence of exclusion clauses should be strictly
interpreted and if it tends to defeat the main purpose,
should be read down by the Court; if that is not possible,
the court should altogether ignore it (Ref Halsbury, LC in
Glynn v. Margeston & Co 1893 AC 351).
22. If the rule indicated in the preceding paragraph were
kept in mind, it would be apparent that the object of the
insurance policy is to cater to medical expenses incurred
by the insured. That is the "main purpose" of the
contract of insurance. The object of the exclusion clause
is to except the liability of the insurer. In a sense this is at
variance with the object of the policy. Nevertheless, it is a
part of the contract; the court should firstly seek to
harmonise the all the clauses, and attempt to give effect
to it. If one proceeds on this premise, the concept of "pre-
existing condition" has to be understood. Clause 4.1
defines it as any injury which existed prior to the effective
date of the insurance; and any sickness or its symptoms
which existed prior to the effective date of the insurance,
whether or not the insured had knowledge that the
symptoms were relating to the sickness. It is apparent
that even if there were known diseases or conditions,
which were disclosed and for which there was a
likelihood of complications arising in the future, the
insurer sought to distance itself from the liability. There
is no dispute here that diabetes was a condition at the
time of submission of proposal; so was hyper tension. In
a sense these were "old ailments" the petitioner was
advised to undergo ECG, which he did. The insurer
accepted the proposal and issued the cover. One may ask,
what then was the cover for. It is not an accident cover
policy, or a life policy. Now, it is universally known that
hypertension and diabetes can lead to a host of ailments,
such as stroke, cardiac disease, renal failure, liver
complications, etc, depending upon varied factors. That
implies that there is probability of such ailments; equally
they can arise in non-dibetics or those without
hypertension. Unless the insurer spelt out with sufficient
clairity, the purport of its clauses, or charged a higher
premia, at the time of accepting the proposal, the insured
would assume and perhaps, reasonably that later,
unforseen ailments would be covered. Thus, it would be
apparent that giving a textual effect to clause 4.1 would
in most such cases render the mediclaim cover
meaningless; the policy would be reduced to a contract
with no content, in the event of the happening of the
contingency. Therefore, I am of the opinion that clause
4.1 cannot be allowed to override the insurer's primary
liability; the "main purpose" rule would have to be
pressed into service. This finding is reinforced in this
case, as the insurer renewed the policy, in 2006, after the
petitioner underwent the CABG procedure."
33. The contention of the respondent in the counter affidavit is that
the petitioner had been symptomatic since June 2017. As mentioned
hereinabove, the prescription dated 22.09.2017, relied upon by the
respondent, noted a complaint of perianal abscess in June 2017, which
is not related to his present condition at all. Further, the petitioner has
disclosed in the petition that he suffered from cancer of the
oesophagus in 2017-18 but, as discussed in paragraphs 24 and 25
hereinabove, considering the documents relied upon by the respondent
itself, I am of the view that the policy for the enhanced sum assured
was issued even before the petitioner developed any symptoms
relatable to oesophagal cancer. The contention of the respondent that
cancer was a pre-existing disease at the time of the enhancement of the
sum assured is therefore unsustainable.
34. In any event, the petitioner has contended that he was
successfully treated by Dr. Pandey for oesophagal cancer in 2017-18.
The doctor's prescriptions from July 2018 to December 2018 show
that the petitioner was treated with chemotherapy, and underwent
oesophagectomy in December 2017. However, the prescription of
24.07.2018 contains the following notation: "Clinically - NED.
Asymptomatic". [Mr. Dutta states that the term "NED" indicates that
as on that date, there was no evidence of the disease. This is not
disputed by Mr. Shahi.] Dr. Pandey's prescriptions of 18.12.2018 and
11.07.2019 carry the same notation.
35. The fact that the petitioner was found to be free of the disease in
the interregnum, in my view, also shows that the petitioner's present
condition cannot be treated as a pre-existing one. The respondent's
representative, in his communication to the petitioner dated
03.04.2020, specifically enquired as to the date on which the petitioner
had first been reported as being free of disease/NED by his treating
doctor. However, later the same day, before receipt of the petitioner's
response, the TPA referred to the aforesaid prescription dated
22.09.2017, and came to the conclusion that the petitioner had
displayed symptoms before the enhancement of the sum insured. The
TPA therefore informed the petitioner that no further documents or
clarification was required, and asserted that the claim had correctly
been rejected.
36. The petitioner nevertheless responded to the respondent's query
on 04.04.2020 and also attached Dr. Pandey's prescription indicating
that there was no evidence of the disease after July 2018. Surprisingly,
none of this is dealt with or explained in the impugned communication
of the respondent dated 05.04.2020. The respondent has instead relied
upon the interpretation of the TPA regarding the petitioner's disease in
2017, and declined the claim on that basis.
37. In my view, the respondent's analysis falls short of the
minimum required standard. The original position taken by the TPA
has simply been reasserted by the respondent without even
considering the information it had sought from the petitioner. In the
counter affidavit filed by the respondent, the petitioner's averments
regarding the nature of the diseases, and the medical records have not
been disputed. It is clear from the record that the petitioner was
afflicted with one form of cancer (oesophagal cancer) in 2017, he was
successfully treated, found to be free of the disease in July 2018, but
the cancer unfortunately recurred in another form (this time in the
lymph nodes) in 2020. Further, the fact that cancer, even if
successfully treated, can recur in another part of the body at a later
date is well known. However, it is not a matter of such certainty or
correlation as to justify treating the present ailment as one for which
the petitioner had symptoms prior to enhancement, particularly when
there was no evidence of the disease in the interregnum. Such an
interpretation is inconsistent with the restrictive construction of
exclusion clauses, and contrary to the very purpose for which medical
insurance is taken or enhanced.
38. For the reasons aforesaid, I am of the view that the impugned
communication of the respondent is contrary to law, unreasonable and
arbitrary, and liable to be set aside.
CONCLUSION
39. The writ petition is therefore allowed, and the impugned
communication dated 05.04.2020 is set aside. The respondent is
directed to honour the petitioner's claims arising out of his ailment of
metastatic squamous cell carcinoma of the cervical lymph nodes for
the enhanced sum of ₹8,00,000/- (and cumulative bonus) as indicated
in the policy document. There will be no order as to costs.
40. Pending application also stands disposed of.
PRATEEK JALAN, J.
MAY 12, 2020/ 'pv'
