Royal Sundaram Held Liable For Deficiency in Service

The Consumer Disputes Redressal Forum, Ahmedabad, partly allowed a complaint filed by Consumer Education and Research Society (CERS) and Asha Kanayalal Multani against Royal Sundaram Alliance Insurance Company Limited of Chennai and Ahmedabad, and Citi Bank, Ahmedabad.

The forum held both offices of Royal Sundaram jointly and severally guilty of deficiency in service and directed the company to pay Asha Rs. 80,468 with 6 per cent interest from 19 February 2004 until realisation and Rs. 5,000 as compensation towards mental agony. It also ordered the payment of Rs. 5,000 each to Asha and CERS towards cost and execution of the orders within 30 days. Citi Bank had no liability in this case; the forum observed and directed it to bear its own cost.

Asha K. Multani was insured under a Royal Sundaram Health Shield Policy through Citi Bank Good Health Policy system, both having accounts with Citi Bank. On 1 September 2003 , Asha was admitted to hospital with an acute stomach ache. She underwent a surgery of the gall bladder and was discharged on the fourth day. Asha submitted her hospital bill for Rs. 80,468 to Royal Sundaram. The insurance company repudiated the claim on the grounds of pre-existing disease and stated that the sonogram report showed that the gallstone would have been in existence at the time of taking the policy. The company also denied continuation of the insurance policy. Asha approached CERS.

CERS legally challenged the insurance company and proved that Asha had the mediclaim policy from 30 November 2000 with New India Assurance Co. Ltd. and that she had later transferred this policy to Royal Sundaram. Therefore, it was not a fresh policy but a mere continuation of the existing one. The Forum observed that the insurer had failed to prove the pre-existence of the disease. The onus of proving what Royal Sundaram was saying was upon the insurance company, it said adding, a mere statement was not enough to repudiate a bona fide claim. Besides, the policy provided for a continuous cover and Royal Sundaram could not take shelter under the false pretext of pre-existing disease.

Pritee Shah