Enhanced Coverage Not Applicable at Time of Surgery; Karnataka Consumer Commission Dismisses Complaint Against Oriental Insurance
Sangeet Prathap
The Karnataka State Consumer Disputes Redressal Commission (Principal Bench), Bengaluru, comprising President Justice T.G. Shivashankare Gowda and Lady Member Divyashree M., dismissed the complaint filed against Oriental Insurance Company Ltd., holding that the insurer’s partial repudiation of a health insurance claim was justified as the enhanced coverage was not operative on the date of surgery.
Background
The respondent, M.K. Paulose, had initially taken a mediclaim policy with Oriental Insurance for a sum insured of ₹50,000 for the period 23.02.2015 to 22.02.2016, which he later enhanced to ₹1,00,000 from 23.02.2016 onwards, regularly renewing the policy through 2019. On 28.08.2018, he underwent heart surgery at KMC Hospital, Mangaluru. Although the policy offered cashless benefit up to ₹1,00,000, the insurer sanctioned only ₹50,000, repudiating the balance amount. The complainant thereafter approached the Dakshina Kannada District Consumer Disputes Redressal Commission alleging deficiency in service. The District Commission dismissed the complaint with respect to Opposite Parties 1 to 3 but allowed the claim against Oriental Insurance (OP-4), directing payment of the balance ₹50,000 with 5% interest and ₹10,000 towards compensation and litigation costs. Aggrieved, Oriental Insurance filed the present appeal.
Arguments
The complainant contended that since he had enhanced the policy to ₹1,00,000 in 2016 and continuously renewed it, he was entitled to full reimbursement. He alleged that denying the balance ₹50,000 forced him to pay personally and amounted to deficiency in service and unfair trade practice.
Conversely, Oriental Insurance argued that the District Commission overlooked binding policy conditions. Referring to Clause 7.3, it submitted that the increased sum insured becomes operative only after four continuous renewals. It further relied on Clause 4.1, which excludes Coronary Artery Disease for the first four years from the enhancement of the sum insured. Since the surgery took place on 28.08.2018 — before completion of the fourth renewal due on 23.02.2019 — it maintained that the complainant was eligible only for the original sum insured of ₹50,000.
Findings of the Commission
The State Commission examined the policy records and medical claim documents and accepted the insurer’s position. It noted that the enhanced insurance cover had completed only three years and had not reached the fourth renewal as required under Clause 7.3. It further held that Coronary Artery Disease falls under the category of ailments excluded for the first four years under Clause 4.1, making the complainant ineligible to claim the higher coverage for the surgery. The Commission observed that the District Commission committed an error by placing reliance on medical literature and general factors relating to stressful modern lifestyle instead of interpreting the contractual terms governing the insurance. It reiterated that insurance is a contractual arrangement and both parties are governed strictly by policy conditions.
Holding that the repudiation of the enhanced amount was in accordance with policy terms, the Karnataka State Consumer Disputes Redressal Commission allowed the appeal, set aside the District Commission’s order, and dismissed the complaint against all Opposite Parties. It directed that the amount in deposit be returned to the insurer.
Cause Title: Oriental Insurance Company Ltd v. M.K.Paulose
Case No: SC/29/A/2125/2022
Coram: Justice T.G. Shivashankare Gowda (President), Divyashree M (Lady Member)
