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2020 Supreme(Del) 1357
IN THE HIGH COURT OF DELHI AT NEW DELHI
Prateek Jalan, J.
Sudhakar Tiwari - Appellant
Versus
New India Assurance Co. Ltd. - Respondent
Writ Petition (Civil) No. 2968 of 2020; Civil Miscellaneous Application No. 10302 of 2020
Decided On : 12-05-2020
Rajiv Dutta, Advocate, Piyush Sharma, Advocate, Aditya N Prasad, Advocate, J.P.N. Shahi, Advocate
The main legal point established in the judgment is that the interpretation of insurance policy clauses should be consistent with the purpose of the policy, and exclusion clauses should be construed restrictively to ensure the fulfillment of the policy's main objective, which is the reimbursement of healthcare costs.
Headnote:
Insurance Policy - Medical Insurance - New India Mediclaim Policy - Conditions of the Policy - [2.32, 4, 5.11] - The court analyzed the terms and conditions of the New India Mediclaim Policy, specifically focusing on the pre-existing condition/disease clause (2.32), the exclusion clause (4), and the enhancement of sum insured clause (5.11). The court interpreted these clauses to determine the admissibility of the petitioner's claim and the respondent's decision to decline coverage.
Fact of the Case:
The petitioner purchased a medical insurance policy in 2002, which was subsequently enhanced in 2017. When the petitioner sought coverage for a medical condition in 2020, the respondent declined the claim, citing pre-existing condition and enhancement clauses. The petitioner challenged this decision through a writ petition.
Finding of the Court:
The court found that the writ petition was maintainable despite being a contractual dispute, as the facts were undisputed and the respondent's action was arbitrary. The court also found that the respondent's reliance on the pre-existing condition and enhancement clauses to deny coverage was unsustainable, as the petitioner's present condition did not qualify as a pre-existing ailment at the time of enhancement.
Issues: The main issue was the admissibility of the petitioner's claim under the medical insurance policy, considering the pre-existing condition and enhancement clauses. The court also addressed the maintainability of the writ petition in a contractual dispute.
Ratio Decidendi: The court held that the respondent's decision to decline coverage based on the pre-existing condition and enhancement clauses was arbitrary and contrary to the purpose of medical insurance. The court interpreted the clauses restrictively and found that the petitioner's present condition did not qualify as a pre-existing ailment at the time of enhancement, thus directing the respondent to honor the petitioner's claims.
Final Decision: The writ petition was allowed, and the impugned communication of the respondent was set aside. The respondent was directed to honor the petitioner's claims for the enhanced sum insured. No costs were awarded.
JUDGMENT
Prateek Jalan, J. - The dispute between the parties arises out of a medical insurance policy known as the "New India Mediclaim Policy" (hereinafter, "the policy"), purchased by the petitioner from the respondent. The petitioner is aggrieved by a communication dated 05.04.2020 by which the respondent has declined to cover the petitioner''s claims under the policy.
FACTS
2. The petitioner first purchased the policy (bearing no. 311600- 341625-00000498) in the year 2002. It came into effect on 11.09.2002. The sum assured under the policy was then Rs. 5,00,000/-. The policy was renewed annually. In the year 2017, the respondent offered the petitioner an enhancement of the sum assured, which the petitioner accepted. The sum assured under the policy was thus enhanced to Rs. 8,00,000/- with effect from 11.09.2017, and the policy document to this effect was issued on 04.09.2017.
3. The genesis of the present dispute is that the petitioner was diagnosed with metastatic squamous cell carcinoma in cervical lymph nodes in January 2020, and is undergoing treatment at Medanta Hospital, Gurugram, and Apollo Hospital, Delhi. In accordance with the procedure under the policy, the petitioner applied for the "cashless facility". However, the third-party administrator appointed by the respondent (hereinafter, "the TPA") rejected the petitioner''s request. In a communication dated 30.03.2020 addressed by the TPA to Apollo Hospital, the reason cited for the rejection was that the maximum eligible sum insured of Rs. 5,00,000/- had been exhausted.
4. The petitioner protested to the respondent on the same date and drew the respondent''s attention to the enhancement of the sum insured in the year 2017. The respondent, by its communications dated 30.03.2020 and 31.03.2020, requested the TPA to confirm the position. In the second of these communications, the representative of the respondent stated inter alia that, according to the information available with the respondent, the sum insured under the policy was Rs. 8,00,000/- (plus cumulative bonus of Rs. 90,000/-) and not Rs. 5,00,000/-. The respondent indicated that its record did not disclose exhaustion of the sum insured by the petitioner, and that there must have been "some misjudgement" at the TPA''s end.
5. The TPA responded on 01.04.2020, relying upon the exclusion contained in the policy in respect of pre-existing conditions. It took the position that the petitioner was already suffering from the said ailment when the enhanced coverage was taken, and the enhanced sum assured would therefore not be available until the petitioner completed four years of enhanced coverage.
6. The petitioner disputed this and asserted that he had been treated in 2017-18 for a different ailment. He cited the opinion of the treating physician that he was free of the earlier ailment (cancer of the oesophagus) in 2018.
7. Although the respondent on 03.04.2020 requested the petitioner for further details, the TPA contended, on the same date, that the claim had been correctly refused, and stated that no further documents were required.
8. The petitioner''s further protest dated 05.04.2020 led to the impugned communication of the respondent. The relevant parts of the impugned communication are set out below: -
"Please refer to the mail of Raksha TPA in the trail. As per the statement you made in your reply, I am afraid, as per the policy conditions, the enhanced Sum Insured portion (Rs.3.00 lakhs) opted on the renewal on 11/09/2017 shall not be allowed to you,and will be blocked till 10/09/2021.
As per doctor prescription date 22-09-2017. You were having complaints dysphagia to solid since 2 weeks hence the disease appeared since 07-09-2019. You also undergone USG endoscopy on 14-09-2017.
As per policy exclusion 5.11.Enhancement clause. {In respect of any enhancement of Sum Insured, exclusions 4.1, 4.2 and 4.3 would apply to the additional Sum Insured from such date.}
As per policy Pre-existing clause 4.1.- PRE-EXIST
