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2025 Supreme(Online)(SCDRC) 2391
STATE CONSUMER DISPUTES REDRESSAL COMMISSION
HON’BLE JUSTICE SANGITA DHINGRA SEHGAL, CJ, HON’BLE MS. PINKI, J
MR. AMIT SINGHAL – Appellant
Versus
CARE HEALTH INSURANCE LIMITED – Respondent
FIRST APPEAL NO.- 602/2023 | CC No. 940/17
For the Appellants/Petitioners: Mr. Paritosh Sharma, Mr. Vardan Gupta
For the Respondents: Mr. Yuvraj Sharma
Insurance companies must ensure adequate pre-issuance assessments and cannot repudiate claims based on undisclosed conditions unless evidence establishes a material misrepresentation.
Headnote:(A) Consumer Protection Act, 2019 - Section 2(11) - Insurance Policy - Claim rejection - Appellant's claim for critical illness coverage was repudiated for non-disclosure of cancer and existence of a smoking habit - The Respondent was mandated to evaluate claims based on disclosed health status, and non-disclosure or misrepresentation constitutes deficiency - The appellate court reinstated Appellant's claim observing that the insurer failed to conduct necessary pre-issuance medical checks and that no evidence was submitted to confirm the alleged non-disclosure, thereby ruling in favor of the Appellant. (Paras 21-24)
(B) Duty of disclosure - An insured individual must disclose all material facts regarding health condition - The principle of utmost good faith in insurance contracts underscores the insurer's obligation to properly assess risk warnings without undue burden on the insured to provide historical medical records. (Paras 12-20)
(C) Appeal allowed - Procedural lapses by the Respondent in processing the claim warrant compensation to the Appellant for mental distress and litigation costs.
| Table of Content |
|---|
| 1. factual background of the case and claims. (Para 1 , 2) |
| 2. arguments from the respondent about claim denial and evidence presented. (Para 3 , 4 , 5 , 6 , 11) |
| 3. court's analysis of credibility of medical opinions and evidence. (Para 10 , 12 , 13) |
| 4. legal principles on insurance policy and duty of disclosure. (Para 18 , 19) |
| 5. final judgment and directives to the respondent. (Para 21 , 22 , 24) |
JUDGMENT
1. The facts of the case as per the District Commission record are:
“1. The case of the Complainant as revealed from the record is that the Complainant has earlier filed a complaint vide CC No. 940 of 2017 in the Hon'ble State Commission and the same was disposed of by the Hon’ble Commission in which the Hon'ble Commission gave direction to the Opposite Party to decide the claim of the Complainant within 3 months vide order dated 24.07.2019, and also gave permission to Complainant to file a fresh complaint against the Opposite Party in case Opposite Party repudiate the claim. It is his case that Opposite Party had not complied with the above mentioned order and after the expiry of 3 months period i.e. 23.10.2019, a legal notice dated 23.10.2019 was sent to the Opposite Party. It is his case that the Opposite Party rejected the claim and the reason given in the letter dated 04.12.2019 was "Non-disclosure of cancer at the time of policy Inception" "Permanent Exclusion- Act of self-destruction or self- inflicted injury, attempted suicide while sane or insane or any illness or injury attributable to consumption, use misuse or se of tobacco intoxicating drugs and alcohol or hallucinogens of smoking addiction". Complainant took an insurance policy from the Opposite Party vide policy no. 10121133 for a sum of Rs. 50 lacs. The period of the said policy was from 01.07.2014 to 30.06.2017. Complainant continuously paid a premium of Rs. 1,46,711/-. On 26, June 2015, during the validity of Insurance Policy, the Complainant had undergone a surgical procedure at Pushpanjali Crosslay Hospital, Vaishali, Ghaziabad, U.P and the same is covered according to the terms and condition of the policy. Complainant informed the Opposite Party about the surgery and Opposite Party deputed Mr. Suresh Kumar to look after all the medical procedure and for collecting all the relevant documents and angioplasty CD from the hospital. It is his case that after discharge from the hospital, the Complainant filed the claim application of Rs. 50,00,000/-along with all the relevant documents. The executive of the Opposite Party assured the Complainant that within 15 days they would settle the claim. After that the Complainant approached the Opposite Party numerous times through phone, e-mail and even personally visited the office of Opposite Party but all in vain. On 14.04.2016, Complainant also sent a legal notice to the Opposite Party. On 27.05.2016 Opposite Party sent a reply in which Opposite Party was ready to pass the claim of Rs. 50 lacs but claimed some OPD prescriptions and angioplasty CD to the Complainant and the angioplasty CD was provided by the Complainant to the Opposite Party. After that on 18.06.2016, Complainant sent a reply mentioning that such old documents demanded by the Opposite Party were nowhere required for the claim process. Moreover, the Complainant had "Sudden Onset Chest pain associated with suffocation and choking and sensation and there was no past history of Hypertension, Diabetes Mellitus or same ailment". It is his case that Opposite Party demanded 05 years old OPD prescriptions. The Complainant had no such records available with him so Complainant had shown his inability to provide such documents. Therefore, Opposite Party did not pass the claim. Hence, this shows the deficiency of service on the part of Opposite Party. Complainant has prayed for Rs. 50,00,000/- along with interest @ 18% p.a., Rs. 25,00,000/- mental harassment and Rs. 5,00,000/- on account of litigation expenses.
2. The Opposite Party contested the case
