Exclusion clauses in insurance contracts are binding unless proven unconscionable or contrary to public policy, reaffirming the validity of such clauses in commercial contracts.

JUDGMENT

Mr. Vinod S. Bhardwaj, J. (Oral)

Challenge in the present petition is to the award dated 12.04.2017 passed by the Permanent Lok Adalat (Public Utility Services), Gurgaon, whereby the claim of respondent No.2-applicant has been allowed and the petitioner-Insurance Company has been directed to pay a sum of Rs.95,367/- to the respondent-applicant.

2. Briefly summarized the facts of the instant case are that the respondent/applicant had purchased a mediclaim policy from the petitioner-Insurance Company, which was valid for the period from 07.07.2012 to 04.07.2013 and the same was further renewed upto 04.07.2014. On 11.12.2013, however, the respondent-applicant suffered a severe pain for which she was admitted in Aarvy Hospital, Gurgaon. She underwent a surgery for removal of large stone and was discharged from the hospital on 14.12.2013. The hospital raised a bill of Rs. 42,076/-. The respondent-applicant was however re-admitted in the hospital on 30.12.2013 and she remained admitted upto 04.01.2014 causing additional expenses of Rs.53,291/- towards her treatment. A claim in this regard was lodged by the respondent with the petitioner-Insurance Company for reimbursement but the petitioner-Insurance Company repudiated the claim on 30.01.2014 on the ground that the coverage of medical expenses on treatment for stones in the urinary system, during the first two years in the policy, is not payable. Respondent No.2, thus, filed an application under section 22(C) of the Legal Services Authorities Act, 1987 (for short 'the Act') before the Permanent Lok Adalat (Public Utility Services), Gurgaon, alleging that the above terms and conditions of the policy had not been explained to her.

3. The petitioner-Insurance Company entered appearance and filed its reply and defending its decision. It relied upon the exclusion clause to justify the order of repudiation of the claim.

4. On failure of the conciliation efforts to fructify in any amicable resolution of the dispute, adjudication under Section under section 22(C)(8) of the Legal Services Authorities Act, 1987 was undertaken by the Permanent Lok Adalat.

5. Parties led their evidence and on consideration thereof, the Permanent Lok Adalat allowed the application and directed the Insurance Company to pay a sum of Rs.95,367/- to respondent No.2-applicant within a period of 40 days, failing which the Company was held liable to pay interest on the said amount @ 9% per annum from the date of application i.e. 07.08.2014 till the date of actual payment. Aggrieved thereof, the present writ petition has been filed.

6. Learned counsel appearing for the petitioner has placed reliance on the terms and conditions of the policy, as per which the company was exempted from meeting out the liabilities under Clause 2 of cover note specifying exclusion circumstances. The relevant exclusion reads thus:

"We will also not pay for claims arising out of or howsoever connected to the following:

Without derogation from B1) above any Medical Expenses incurred during the first two consecutive annual periods during which you have the benefit of Star Package PolicyCovering Health Guard Section with Us in connection with any types of gastric or duodenal ulcers, cataracts, benign prostatic hypertrophy, hernia of all types, hydrocele, all types of sinuses, fistulae, haemorrhoids, fissure in ano, dysfunctional uterine bleeding, fibromyoma, endometriosis, hysterectomy, stones in the urinary and biliary systems, surgery on ears/tonsils/adenoids/paranasal sinuses, surgery for any skin ailment, Surgery on all internal or external tumours/cysts/nodules/polyps of any kind including breast lumps with exception of Malignant tumor or growth. This exclusion period shall apply for a continuous period of a full 4 years from the date of your first star package Policy Covering Health Guard Section with us, if the above referred illness were present at the time of commencement of the policy and if you had declared such illness at the t