Back
SUPREME COURT OF INDIA
ABHAY S. OKA, RAJESH BINDAL, JJ.
Om Prakash Ahuja – Appellant
Versus
Reliance General Insurance Co. Ltd. etc. – Respondents
Civil Appeal Nos. 2769-2770 of 2023
Decided On : 04-07-2023
Consumer Protection Act, 1986 – Section 23[Consumer Protection Act, 2019 – Section 67] – Insurance – Non-reimbursement of medical expenses – Rejection of claim on the ground that there was concealment of certain material facts by appellant at the time of purchase of policy, was not found to be tenable and insurance company was directed to reimburse expenses – Non-mentioning of disease from which deceased wife of appellant suffered at the time of purchasing policy was not material, as death was caused from a different disease all together – Amount of premium charged by Insurance Company for renewal of policies has not been refunded – Once there is a valid insurance policy available in favour of appellant, claim made by him for reimbursement of expenses incurred is justifiable and deserves to be paid to him – Impugned order passed by National Commission set aside – Orders passed by District Forum and State Forum regarding direction to Insurance Company to renew policies restored. (Paras 26, 27 and 29)
Facts of the case:
Common order dated 26.11.2018 passed by National Consumer Disputes Redressal Commission in Revision Petition Nos. 923 of 2011 and 1417 of 2014 is under challenge before this Court. While entertaining the revision petition filed by the Insurance Company against the order passed by State Commission, National Commission vide interim order dated 13.5.2011 directed that renewal of insurance policy shall be subject to its final decision. Vide order dated 26.11.2018, National Commission upheld directions of State Commission to the extent of reimbursement of expenses incurred on the treatment of deceased wife of the appellant, however, direction for renewal of the health insurance policy was set aside.
Findings of Court:
Non-mentioning of disease from which deceased wife of the appellant suffered at the time of purchasing policy was not material, as the death was caused from a different disease all together. Both had no relation with each other. Now, insurance company cannot be permitted to raise same plea to deny renewal of insurance policy to appellant for the period from 07.07.2009 onwards. Even though direction was given by the District Forum vide order dated 11.09.2009 to renew the policy further but it was not renewed, till such time interim order was passed by National Commission on 13.05.2011.
Result : Appeals allowed.
The Supreme Court considered the provisions related to insurance contracts and the guidelines issued by the Insurance Regulatory and Development Authority while passing this order (!) . Specifically, it took into account the principles governing the renewal of health insurance policies, including the conditions under which renewal can be refused, such as fraud, misrepresentation, or moral hazard, as outlined in the relevant regulations and guidelines. The Court also considered the legal obligation of the insurance company to honor valid insurance policies and the implications of non-renewal or repudiation of claims in the context of these regulations.
JUDGMENT :
Rajesh Bindal, J.
1. Common order dated 26.11.2018 passed by the National Consumer Disputes Redressal Commission (for short, “the National Commission”) in Revision Petition Nos. 923 of 2011 and 1417 of 2014 is under challenge before this Court. We deem it appropriate to notice the facts separately, before we deal with the arguments.
REVISION PETITION NO. 923/2011
2. This petition was filed by the respondent Insurance Company before the National Commission challenging order dated 23.12.2010 passed by Haryana State Consumer Disputes Redressal Commission (for short “the State Commission”) in Appeal No. 1792/09. It was an appeal against an order dated 11.9.2009 passed by the District Consumer Disputes Redressal Forum, Karnal (for short “the District Forum”), in a complaint filed by Om Prakash Ahuja, the appellant. The grievance raised by the appellant in the complaint was that the expenses incurred by him on treatment of his wife for ovarian cancer were not reimbursed by the respondent, Reliance General Insurance Ltd. (hereinafter referred to as “the insurance company”). It was pleaded that the health insurance policy was taken by the appellant for the family, which was valid from 7.7.2007 to 6.7.2008. The coverage was for Rs.2 lakhs against any health problem and Rs.4 lakhs in case of critical illness. The policy was further renewed up to 6.7.2009. The deceased wife of the appellant was diagnosed to be suffering from ovarian cancer. She was treated in various hospitals from 19.1.2008 to 23.8.2008. Claim of Rs.91,496 was lodged for treatment from 19.1.2008 to 11.3.2008 and Rs.4,14,464 for the period from 13.3.2008 to 19.9.2008. The claim was repudiated by the insurance company vide letters dated 1.10.2008 and 8.12.2008, respectively on the ground that the appellant’s wife was suffering from rheumatic heart disease and the same was not disclosed in the proposal form. The complaint was filed before the District Forum. Vide order dated 11.09.2009 the District Forum directed the insurance company to reimburse the expenses incurred by the appellant on treatment of his wife along with interest @ 8% p.a. Further, refusal to renew insurance policy was found to be arbitrary. Direction was issued for renewal of the health insurance policy upon payment of premium.
3. The appeal filed by the insurance company against the order passed by District Forum was dismissed by the State Commission vide order dated 23.12.2010.
4. While entertaining the revision petition filed by the Insurance Company against the order passed by the State Commission, the National Commission vide interim order dated 13.5.2011 directed that the renewal of insurance policy shall be subject to its final decision. Vide order dated 26.11.2018, the National Commission upheld the directions of the State Commission to the extent of reimbursement of expenses incurred on the treatment of the deceased wife of the appellant, however, the direction for renewal of the health insurance policy was set aside.
REVISION PETITION NO. 1417/2014
5. This revision petition was filed by the Insurance Company before the National Commission against the order passed by the State Commission in Appeal No. 689/2013 decided on 2.12.2013, whereby the State Commission upheld the order dated 1.8.2013 passed by the District Forum in a complaint filed by the appellant. It was pleaded in the complaint that the appellant had initially purchased a health insurance policy for the family which was valid from 7.7.2007 to 6.7.2008 and it was subsequently renewed up to 6.7.2009. The said policy was renewed in October 2011 for the period from 7.7.2009 to 6.7.2010 on payment of premium of Rs. 6105 and for the period from 7.7.2010 to 6.7.2011 on payment of Rs. 30,560 and for the period from 7.7.2011 to 6.7.2012 on payment of Rs. 30,560. As the complainant had spent a sum of Rs. 3,23,486.50 during the period from 11.11.2009 to 11.6.2010, Rs. 2,31,307.34 during the period from 2.8.2010 to 6.6.2011, Rs. 1,18,511.50 fo
Once there is a valid insurance policy available in favour of appellant, claim made by him for reimbursement of expenses incurred is justifiable and deserves to be paid to him.
The key legal principle established was that the insurance cover could not commence without the acceptance of the application form by the insurance company, and the insurance company was liable to re....
Insurance Policy – Ambiguity in coverage clauses of disease – Repudiation of claim not justified.
The concurrent findings of fact by lower fora are binding and cannot be interfered with unless proven perverse or lacking jurisdiction.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
