National Commission Comes Down Heavily On Insurance Companies

P.M.Bhat, member, Mysore Grahakara Parishat writes

It has become common for insurance companies to deny health insurance benefits to customers by claiming that the health problem existed before the policy was made and so is not covered under the policy. The insurance companies were earlier denying insurance benefits saying that the customer knew of his health problem but did not disclose it at the time the policy was made. But exclusionary clauses included in newer policies deny policy coverage in case of preexisting health conditions even though the customer might not be aware of them. Such fraudulent clauses give insurance companies sweeping powers to reject almost any health claim. No wonder, such clauses are being challenged more and more, especially before consumer courts, by unhappy policy holders.

In a recent decision (II (2008) CPJ 146 (NC)) which is a godsend to thousands of health insurance policy holders across the country, the National Consumer Commission has come down heavily on this deceitful practice. Relying on an earlier decision, it has said: "The policy which states that it is immaterial whether the insured had knowledge of the disease or not, and even existence of symptoms of the disease prior to effective date of insurance enables the Insurance Company to disown the liability. If this interpretation is upheld, the Insurance Company is not liable to pay any claim whatsoever, because, every person suffers from symptoms of any disease without the knowledge of the same. This policy is not a policy at all, as it is just a contract entered only for purpose of accepting the premium without the bona fide intention of giving any benefit to the insured under the garb of preexisting disease. Most of the people are totally unaware of the symptoms of the disease that they suffer from and hence they can not be made liable to suffer because the Insurance Company relies on the (exclusionary clause) in a mala fide manner to repudiate all claims. No claim is payable under the mediclaim policy as every human being is born to die and diseases are perhaps preexisting in the system totally unknown to him of which he is genuinely unaware."

The Commission observed caustically that if one can foresee disease from some earlier symptom, then every person would do medical studies and not take any insurance policy at all. The Commission also noted that before insuring, the customer is thoroughly checked by the doctors nominated by the insurance company and if at that time he was found hale and hearty, it would be difficult to conclude that he had suppressed a preexisting disease.

So, if an insurance company refuses to meet its obligations under the pretext of preexisting condition, the affected party should file a complaint before a consumer court for relief.

Final order on Chamalapura

Click here for the final order dated 19-05-2008 on Chamalapura Thermal Power Plant by KERC.

Petition to KERC on Chamalapura

Click here for the full text of the original petition filed by MGP on 19-10-2007 regarding Chamalapura coal based thermal power plant

Mysore's Drinking Water Quality Hits A New Low

C V Nagarj, member, Mysore Grahakara Parishat, writes

Mysore Grahakara Parishat has been periodically testing tap water in Mysore and reporting the results to the public. The quality of drinking water in Mysore has been declining steadily and the latest survey shows that it has hit a new low.

Dr. Ajay Memorial Drinking Water Foundation and Mysore Grahakara Parishat conducted a summer camp for a select group of eighteen high school students recently. The programme consisted only of various experiments (concerned with environment) conducted by the students themselves.

One of these experiments was testing of drinking water. Each student collected tap water from his or her home and tested it for bacterial contamination using the Manja test (Hydrogen sulphide paper strip test) which is a very reliable test for bacterial presence. Thirteen out of the eighteen samples (72%) were found contaminated (out of which 11% were extremely contaminated, 56% highly contaminated and 5% moderately contaminated).

This high figure of bacterial contamination is ominous since it is well-known that contamination increases after the monsoon begins. The first rains bring in a heavy load of organic matter to the KRS reservoir. It is very difficult to filter the turbid water containing a high load of organisms. So the water that comes out of the filtration unit in the water treatment plant still has a lot of suspended organic material in it. Chlorination is not 100% effective against pathogenic bacteria if there is a lot of suspended organic matter in water and so the danger of contaminated water which is already high will increase even more in the next month.

The students participating in the summer camp also tested water from bore wells for dissolved salts. Total dissolved salt (TDS) content varied from 600 milligrams per liter to 1,500 milligrams per liter in the eighteen samples tested. According to drinking water specifications (IS 10500:1991) of the Bureau of Indian Standards, 500 milligrams per litre is the desirable level for TDS. Therefore, TDS of all the bore wells tested exceeded this level. Excessive TDS is known to cause cancer and other diseases.

A bacteriological test of bore well water was not conducted. But it is very likely that most of the bore wells are also bacterially contaminated. A survey conducted by Mysore City Corporation in 1999 had showed that 47% of the bore wells were bacterially contaminated. It is estimated that this percentage has now gone up to more than 70%.

MCC authorities are saying that the situation can not be improved until the JNNURM project to overhaul water supply in the city is completed. It is a misleading answer since the JNNURM project will only upgrade the water supply infrastructure. But if MCC does not improve its water treatment, we may get 24x7 water, but it will be unsafe water.

The citizens of Mysore would be well-advised to purify water before drinking it. They can use water purifying kits such as Aquaguard or boil water or immerse a clean (EC grade) copper sheet in the water for 24 hours to kill the harmful bacteria (For more information on these and other methods, call Prof. A. Ramalingam at 6568892).

Door-to-door Garbage Collection, Supreme Court, Suryapet and Namakkal

Prof. S.K. Ananda Thirtha, member, Mysore Grahakara Parishat writes


Garbage is now being collected door-to-door in Mysore city under Nirmala Nagara programme. Garbage collection has been privatized in many areas of the city and the workers appointed by garbage contractors come in three-wheelers every morning and collect the garbage from every household. Street-side garbage bins which were overflowing with unsightly garbage and were the feeding troughs for street animals such as pigs, cattle and dogs, are being phased out. If the garbage management programme succeeds, it will be a big step for Mysore in its effort to regain lost glory.

But most people do not realize that this programme is not the brainwave of any government or any official, but is the direct consequence of the pressure being applied by the Supreme Court on municipal bodies. Dr. Almitra H. Patel and another resident of Bangalore had filed a petition before the Supreme Court (W.P. (Civil) No. 888/1996) in 1996 pleading that municipal bodies in India were not properly performing their statutory duty of garbage collection and garbage management and as a consequence, the citizens were suffering. The petitioners had asked the Supreme Court to issue emergency orders to all municipal bodies and state and central governments to improve garbage collection and management. After hearing their arguments, the Supreme Court issued an order in January, 1998. In this order, it set up an expert committee which included Dr. Almitra Patel and was chaired by Ashim Burman, the then Commissioner of Calcutta City Corporation. This committee was asked to go into all aspects of municipal garbage masnagement and give a comprehensive report in six months. After a few delays, the committee finally gave its report in May, 1999. On the basis of this report, the Supreme Court issued another order in August, 1999 taking to task central and state governments for their lack of effort in managing urban garbage. As a result of this pressure from the Supreme Court, the Ministry of Environment and Forests of the central government brought into force the Municipal Solid Wastes (Management and Handling) Rules, 2000 from 25-09-2001.

But no municipality in the country followed these rules. So Dr. Almitra Patel filed another petition before the Supreme Court (SLP(C) No. 22111/2003). When the Supreme Court took it up for hearing on 4-10-04, it expressed great irritation with local, state and central governments. It dismissed pleas of lack of funds. It pointed out that Suryapet in Andhra Pradesh and Namakkal in Tamil Nadu, despite any funding either from state government or central government had strictly obeyed the Municipal Solid Wastes (Management and Handling) Rules through good management and will power to become zero garbage towns and ordered all other cities to study their example and follow their footsteps.

It is only because the Supreme Court is applying such relentless pressure on municipalities that they are now paying attention to solid waste management and are trying to become zero garbage cities.

What have Suryapet and Namakkal done to merit such appreciation from the Supreme Court?

Suryapet is a town of roughly 1 lakh population, located about 100 km east of Hyderabad. Before 2003, it was like any other town, with garbage strewn all over its streets and hordes of pigs, cattle and dogs wallowing in it. When S.A. Khader Sab came as the Commissioner of Suryapet in January 2003, he immediately set out to make it a garbage-free city. Door-to-door collection of garbage began. About 360 garbage bins which dotted the streets of Suryapet were removed one by one and in fifteen months, there was no streetside garbage bin in town. When Khader Sab was the Commissioner of Mandapet in 1999-2000, he had started a similar programme there. and so he had some experience in the field. Based on that experience, he discussed the programme in detail with municipal councillors, women's groups and the general public. With a lot of encouragement, they all became actively involved in cleaning up Suryapet. In the beginning, garbage was being collected without segragation, but in August, 2003, each household was given two plastic containers, the green one to store wet garbage and the red one to store dry garbage. The cost of these containers was raised from industries, service organizatiosn and other donors. People who littered the streets were fined Rs. 100 and their names announced on loudspeakers. With these steps, street garbage completely disappeared from Suryapet. Now, segregated garbage is processed and sold. The minicipality is earning Rs. 20,000 every month from its processed garbage. It hopes to increase the monthly income to Rs. 450,000 soon.

In a similar manner, Namakkal (population: 50,000), which is 60 km south of Salem in Tamil Nadu has taken to garbage management aggressively since 2003 under the stewardship of its Commissioner, P. Kanthasamy. It can boast of being the first zero garbage town of India.

Suryapet and Namakkal have demonstrated that to make cities clean and beautiful, lots of money is not needed, but only good management and the will to succeed

(Information assistance: Prof. V. Jagannath).

KERC Advises Government to Take a Fresh Decision on Chamalapura

Maj. Gen. (Rtd.) S.G. Vombatkere, President, Mysore Grahakara Parishat writes

The government is proposing to set up coal-based power plants in various places in Karnataka including Chamalapura. Mysore Grahakara Parishat filed an application before Karnataka Electricity Reforms Commission asking it to advise the government against such power stations. Sec. 86 (2) of the Electricity Act, 2003, mandates that KERC should advise the State Government on promotion of efficiency and economy in activities of the electricity industry. In its application, MGP has urged KERC to exercise this power, commission a detailed study by an expert group on the costs and benefits of establishing coal-based power stations relative to alternatives like efficiency improvement, energy conservation, demand side management and deployment of non-conventional energy sources, hold public hearings on the economic, social and environmental impact of establishing coal-based power stations and advise the government against establishment of such stations in the state until the better alternatives mentioned above are fully harnessed.

Karnataka Power Corporation Limited argued that the petition should be rejected as KERC was not the right forum for taking up this matter. But KERC did not allow this objection. Proceeding on MGP's petition, it conducted public hearings and gave its final order on 19-5-08. In its order, KERC has accepted many of MGP's demands. It has noted that

1. The bidding guidelines issued by the Government of India have not been complied with and replies to the Commission by Power Company of Karnataka Limited (PCKL) are misleading. The bidding process initiated by PCKL lacks transparency and the whole process is carried out in a very casual manner.

2. The issues raised by MGP and the public during the proceedings of the Commission should have been considered before the decision for setting up a plant at Chamalapura was taken.

The Commission has advised the government TO TAKE A FRESH DECISION ON CHAMALAPURA taking the above facts into consideration. It has asked the government to direct PCKL to strictly comply with the bidding guidelines issued by the Government of India.

The Commission has also advised the government to look into all the aspects involved in the project such as environment, heritage, land acquisition, fuel linkage, water supply, etc.

Instead of setting up an expert committee itself, KERC has advised the government to set up such a committee to make a detailed study of the desirability or otherwise of establishing coal-based thermal power plants in Karnataka.

KERC's order is of great significance because, this is the first time in India that powers given by Sec. 86 (2) of the Electricity Act have been used to oppose a power plant. This unique initiative by Mysore Grahakara Parishat is bound to have ramifications nationwide as others take similar initiatives.

Property Tax : Follow The Law And Save Money

P.M. Bhat, Member of Mysore Grahakara Parishat writes

The time has come to pay the property tax for the year 2008-2009. Many citizens are worried that the property tax has increased steeply with the rising value of property. But THIS PERCEPTION IS NOT CORRECT. Your tax has increased only marginally.

WHAT DOES THE LAW SAY?

Sec. 109A of the Karnataka Municipal Corporations Act, 1976 says:

109A. Enhancement of property tax.- Notwithstanding anything contained in section 108 and 109 the property tax assessed and levied under either provision shall not be assessed each year thereafter but shall stand enhanced by 15 percent once in every three years commencing from the financial year 2005-2006:

Provided that the Municipal Corporation may enhance such property tax upto 30 percent once in three years and different rates of enhancement may be made to different areas and different classes of buildings and lands:

Provided further that the non assessment of property tax under this section during the block period of three years shall not be applicable to a building in respect of which there is any addition, alteration or variation to it.

Provided also that nothing contained in this section shall be deemed to affect the power of State Government to direct an earlier revision of property tax.

When the draft of the amendment which changed the property tax basis from annual rateable value of the property to the capital value of the property, apprehensions were voiced that if property values increased sharply, the property tax burden would become unbearable to many citizens. To allay these fears, the government was forced to introduce Sec. 109A which fixes the average annual rate of increase in property tax at 5%, irrespective of how steeply property values are increasing.

So the property tax you paid in 2005-06 is the same amount you were required to pay in 2006-07 and 2007-08. It will increase by 15% for 2008-09 and will remain at the same level for 2009-10 and 2010-11. The first proviso of Sec. 109A empowers MCC to enhance the tax for the year 2008-09, but MCC has not exercised this power. The third proviso of Sec. 109A empowers the State to order an earlier revision of the tax, but it has not exercised that power either. So both these provisos are inoperative. Reassessment of the 2005-06 tax in the years 2006-07 and 2008-09 just because property values went up is not allowed by Sec. 109A.

Note that even if you buy a property (at the present astronomical prices), the tax on it will not increase. You continue to pay the amounts described above, unless you alter the building in any way (Proviso 2 of Sec. 109A).

So how much tax do you have to pay in 2008-09? All you have to pay is 1.15 times the property tax you paid for the year 2005-6. You have to add 24% of this amount as cesses (health, anti-beggary and library). You will also have to add Solid Waste Management cess (which varies from Rs. 10 per month to Rs. 50 per month depending on the size of your site).

You have probably paid more as property tax in 2006-07 and 2007-08 compared to 2005-06 and you are entitled to get the excess amounts back. MCC's door-to-door garbage collection did not begin on 1-1-2007 (In Yadavagiri, for instance, it began only in November), but you most probably paid SWM cess for the whole year 2007-08. You should also get back the excess amount paid as SWM cess. To pay what you are legally obligated to pay, and not what MCC wants you to pay, you have to use the printed property tax form. If you fill the form from the MCC website, the MCC software calculates your tax and you will be, in all probability, paying more than you should.

In the first page of the printed form, fill in only the year, and items 1-6 (your name and address, tenant's name, ward number, mohalla, road and site number). You do not have to fill in the other information. Go to page 2 and in the space at the top right hand portion of the page explain why you are paying what you are paying. If the space is not enough attach an extra page. A typical explanation will be as follows:

According to Sec. 109A of the Karnataka Municipal Corporations Act, property tax paid in 2005-06 will continue unchanged in 2006-07 and 2007-08. It will increase by 15% for 2008-09.
In my area, door-to-door garbage collection began in November, 2007.

Property tax paid in 2005-06 1000
Property tax paid in 2007-08 in ignorance of the law 1300

Property tax to be paid in 2008-09 = 1000x1.15= 1150
24% cess = 1150x0.24= 276
SWM cess for 12 months = 12x10= 120
Total = 1546
5% rebate for paying in April = -77
Excess property tax paid in 2007-08 = -300
Excess SWM cess paid in 2007-08 (for 10 months) =10x10 -100
Amount being remitted = 1069

MCC can not refuse to receive the form. If MCC objects to your form, tell them that the tax is "Self Assessed". If MCC does not agree with your assessment, ask it to send you a demand notice with details of its assessment.

So in paying your property tax for 2008-09, follow the law. You will also save money!