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2026 Supreme(Online)(CONSUMER) 8
CONSUMER
C.T. Sabu, President, Sreeja S., Member, Ram Mohan R, Member
Robin A.K. – Appellant
Versus
Star Health and Allied Insurance Co. Ltd. – Respondent
CC 159/21
For the Appellants/Petitioners: C.S.A. Illah
For the Respondents: Rajith Davis, P.V. Muneera
Insurance policy terms should be interpreted in a commercially sensible manner; a minor shortfall in mandatory hospitalization duration (e.g., 2.5 hours) does not constitute a fundamental breach and cannot be used to arbitrarily repudiate a legitimate claim.
Headnote:(A) Insurance Law - Repudiation of Claim - Hyper-technical interpretation - Rejection of a Covid-19 insurance claim based on a shortfall of 2.5 hours in the stipulated 72-hour minimum hospitalization period is arbitrary and unreasonable. (Para 7)
(B) Interpretation of Policy Terms - Commercially Sensible Approach - Terms and conditions of insurance policies must be interpreted in a manner that advances the purpose of the policy rather than defeating it, especially when substantial compliance is achieved. (Para 7)
(C) Consumer Protection - Deficiency in Service - Repudiating a legitimate claim on frivolous technical grounds constitutes a deficiency in service, entitling the consumer to the sum insured and compensation. (Para 8)
Issues: Whether the repudiation of the claim due to a minor shortfall in the mandatory hospitalization duration is lawful.
By Sri. Ram Mohan R, Member :
1) Complaint in brief, as averred :
The complaint is filed under Section 35(1) of the Consumer Protection Act, 2019. The complainant claims to have availed a ‘Corona Rakshak Policy’ that was launched by an insurance company named ‘Star Health and Allied Insurance Company Ltd”, of which the 1st opposite party is the Managing Director and the 2nd opposite party, the Manager of its Branch at Chalakudy, Thrissur. The impugned policy bore the No.P/181217/01/2021/004089 and customer code No. CB0000083206, the sum assured being Rs.1,00,000/- (Rupees One lakh only). The policy was statedly valid for a period from
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31/07/2020 to 12/05/2021. The policy in question assured a lumpsum benefit of 100% of the insured sum of Rs.1,00,000/-, on positive diagnosis of Covid – 19 and consequent hospitalisation for a minimum continuous period of 72 hours. During the subsistence of the said policy, the complainant was admitted to Kinder Hospital, Kalamassery on 16/10/2020 for treatment relating to Covid – 19 and was discharged on 19/10/2020. Upon discharge, the complainant launched a claim numbered CIR/2021/181217/0410287 with the opposite parties, seeking payment of the sum insured. But the opposite parties allegedly rejected the complainant’s claim on the ground that the complainant was hospitalised only for nearly 70 hours instead of the 72 hours stipulated under the policy. The complainant affirms that the claim was repudiated on a frivolous ground and alleges deficiency in service on the part of the opposite parties. A lawyer notice caused by the complainant statedly elicited no productive result. Hence the complaint. The complainant prays for an order directing the opposite parties to pay him the insured sum of Rs.1 lakh (Rupees One lakh only), apart
from other reliefs of compensation and costs.
2) NOTICE :
The Commission having issued notice, the opposite parties filed their written version and contested the complaint.
3)Version of the opposite parties :
The opposite parties admitted the policy in question. Also, the complainant’s having been contracted Covid – 19 during the period, concerned, is also not disputed by the opposite parties. But they aver that the complainant was hospitalised only for nearly 70 hours, though clauses 3.7 & 3.8 of the policy stipulate that the claim becomes payable only if the insured undergoes hospitalisation for a minimum continuous period of 72 hours. The opposite parties rely on the judgment of the Hon’ble Supreme court in Surajmal Ram
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Niwas Oil Mills (P) Ltd. Vs. United India Insurance Co. Ltd. & Anr. (2010) 10 SCC 567 to justify their repudiation. Hence they deny any deficiency in
service on their part.
4) Evidence :
The complainant produced documental evidence that had been marked Exts. A1 to A5, apart from affidavit and notes of argument. The opposite parties produced documental evidence that had been marked Exts. B1 & B2, apart from
version, affidavit and notes of argument.
5) Deliberation of evidence and facts of the case :
The Commission has very carefully examined the facts and evidence of the case. Ext. A1 is Policy No. P/181217/01/2021/004089 dtd. 31/07/20 issued by the opposite parties in favour of the complainant. Ext. A2 is Discharge Summary issued by M/s Kinder Multispecialty Hospital & Kinder Women’s and Children’s Hospital, in favour of the complainant. Ext. A3 is the opposite parties’ letter dtd. 07/12/2020, addressed to the complainant, regarding repudiation of the claim. Ext. A4 is copy of lawyer notice. Ext. A5 is reply
notice.
Ext. B1 is print-out of customer information sheet issued by the opposite parties. Ext. B2 is letter of authorisation dtd.02/11/2023 issued by the opposite
parties.
6) Points of deliberation :
(i) Whether the opposite parties’ repudiation of the complainant’s claim is lawful ? If in the negative ;
(ii) Whether the complainant is entitled to receive the sum insured, as claimed ? Also whether the complainant is entitled to receive any
compensation from the opp
