Claim cannot be rejected for failure to intimate hospitalization in medical emergency. Consumer forum directs recovery of compensation from erring officials

Background: A mediclaim policy requires the insured to intimate the insurance company or the TPA about a hospitalization. There are times when a medical emergency may arise, where the priority is to get the patient admitted and treated, rather than waste time in digging out the policy to send an intimation about the hospitalization. In such a case, the insurance company attempts to capitalize on the non-intimation by rejecting the claim. This is not permissible as recently held by the South Mumbai District Consumer Forum in the case of Consumer Welfare Association & Anr v/s United India Insurance Co & Anr.

Impact: Maximum number of complaints at the level of the district forum are against insurance companies. Yet, there is no improvement in the attitude of insurance company officials because compensation is paid by the firm for their misdeeds. A change can be expected only if compensation pinches the pockets of erring officials. Hopefully, this judgment should start the beginning of a practice that could bring about a change in the system and compel insurance companies to behave responsibly.

Click Here for the full story by Jehangir Gai – Times of India

Background: Does the imposition of an entry fee amount to imposing unjustified costs on a consumer? Is it an unfair or restrictive trade practice? This interesting issue has been decided by the National Commission in a case filed by the Gujarat government against Big Bazar.

Case Study: Big Bazar, a department store, is a division of Pantaloon Retail. It has branches all over Ahmedabad and other cities. The store periodically frames different schemes to attract consumers and promote its business.

In 2006, the store declared Republic Day as Mega Savings Day. Advertisements were issued stating that store commodities would be sold at lower-than-usual prices, which led to a consumer rush. As the day progressed, it became impossible to regulate customer movement. To restrict entry to legitimate purchasers, the store came up with a scheme of issuing an entry coupon of Rs 50. The value of the coupons could be adjusted against purchases made, and if a coupon was partially utilized, the balance amount was to be refunded. In all, 3,900 coupons worth Rs 50 each were issued between 4pm and 10pm.

The government of Gujarat, through the weights and measures and consumer affairs department, filed a complaint before the district forum alleging that Big Bazar had adopted unfair and restrictive trade practices by collecting Rs 1,95,000 from the sale of the 3,900 coupons. The Forum observed that if the crowd was uncontrollable, the store should have called the police, but had no right to refuse entry or impose an entry fee. Upholding the Government’s contention, it directed Big Bazar to pay Rs1,95,000 along with 9% interest and Rs 10,000 towards mental agony and costs.

The National Commission said that Big Bazar had adjusted the value of the coupons against purchases and allowed the unutilized coupons to be encashed so the entry coupons did not impose any cost on a consumer. It concluded that Big Bazar had not indulged in unfair or restrictive trade practice.

Conclusion: An entry fee does not bring about a manipulation in the price of a product or service, but merely regulates customer crowd. The practice is prevalent worldwide, and is permissible.

Read the full story by Jehangir Gai in The Times of India – Click Here

While the Right To Information Act (RTI) 2005 is well-known, there is another hardly-known tool available in Maharashtra called “Government Servants Regulation of Transfers and Prevention of Delay in Discharge of Official Duties Act, 2006” popularly also known as  Right to Service Act or Transfers and Delays Act (RS Act). In order to bring this Act to light, Moneylife foundation held a seminar “Make the Government Work for you” on 23 May 2014 with Shailesh Gandhi, former Central Information Commissioner (CIC). 
 
Mr Gandhi started the seminar by giving a brief about the foundation of the RS Act as a result of Anna Hazare’s demands, which led to the first ordinance being issued in 2003. The Act was passed in 2006 and the relevant rules came into existence in November 2013.