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2026 Supreme(Online)(SCDRC) 2364
STATE CONSUMER DISPUTES REDRESSAL COMMISSION CHANDIGARH
Raj Shekhar Attri, President, Preetinder Singh, Member
HDFC ERGO GENERAL INSURANCE COMPANY LIMITED Through its Authorised signatory – Appellant
Versus
RAVI S/o. Sh. Varinder Kumar – Respondent
FIRST APPEAL NO. SC/4/FA/211/2025 | SC/4/IA/265/2025 | SC/4/IA/30/2025
For the Appellants/Petitioners: Sachin Ohri
For the Respondents: Devinder Kumar
In insurance contracts, which are contracts of adhesion, if a covered peril is a proximate cause of death, the presence of a non-covered contributing condition does not absolve the insurer of liability.
Headnote:The case involves a home insurance policy covering major medical illnesses, specifically end-stage renal failure. The complainant, as a nominee, sought the sum insured after the death of the insured, which the insurer repudiated on the grounds that the cause of death was a non-covered illness. The lower commission partly allowed the complaint, directing payment of the sum insured, compensation, and costs. The court addressed whether the presence of a non-covered contributing condition extinguishes liability when a covered peril is an immediate cause of death. The court reasoned that insurance contracts are contracts of adhesion and any ambiguity must be construed in favor of the insured. Applying the proximate cause doctrine, the court held that the effective, dominant cause of death included a covered illness, making the repudiation arbitrary. Consequently, the appeal filed by the appellant is hereby dismissed with no order as to cost.
ORDER
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
U.T., CHANDIGARH
| Appeal No. | 211 of 2025 |
| Date of Institution | 03.07.2025 |
| Date of Decision | 05.03.2026 |
HDFC ERGO General Insurance Company Ltd., Office at 206-212, present Address SCO NO.153-154-155, Madhya Marg, Sector 8-C, Chandigarh through its authorized signatory Lalit Kumar, Manager - Legal Claims, HDFC ERGO General Insurance Company Limited, SCO 124,125, Madhya Marg, Sector 8C, Sector 8, Chandigarh, 160008.
…Appellant/Opposite party no.1
V e r s u s
1. RAVI present address son of Sh. Varinder Kumar, resident of house no. 424/D, Dashmesh Nagar, Nayagaon, Mohali, Punjab, Chandigarh.
2. HDFC Bank limited, Sector 70, SAS NAGAR, Mohali, Punjab through its Branch Manager, Chandigarh.
….Respondents
BEFORE: JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT.
MR.PREETINDER SINGH, MEMBER.
Present:-
Sh.Sachin Ohri, Advocate for the appellant.
Sh.Devinder Kumar, Advocate for the respondent.
JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT
This appeal has been preferred by the Appellant–Insurance Company (opposite party no.1) against the order dated 01.05.2025 passed by the District Consumer Disputes Redressal Commission-I, U.T. Chandigarh (in short the District Commission) in Consumer Complaint No. 376/2024, whereby the said consumer complaint was partly allowed against it (opposite party no.1/Insurance Company) as under:-
“….In the light of the aforesaid discussion, the present consumer complaint succeeds and the same is hereby partly allowed. OP-1 is directed as under:
(i) to pay sum insured of Rs.9,76,796/- to the complainant alongwith interest @ 9% per annum (simple) from the date of repudiation of the claim i.e. 25.10.2021 onwards;
(ii) to pay Rs.20,000/- to the complainant/s as compensation for causing mental agony and harassment;
(iii) to pay Rs.10,000/- to the complainant/s as costs of litigation.
5. This order be complied with by OP-1 within a period of 45 days from the date of receipt of certified copy thereof, failing which the amount(s) mentioned at Sr.No.(i) & (ii) above shall carry penal interest @ 12% per annum (simple) from the date of expiry of said period of 45 days, instead of 9% [mentioned at Sr.No.(i)], till realisation, over and above payment of ligation expenses.
6. It is, however, made clear that the financier (OP No.2) shall have first charge over the aforesaid awarded amount, to the extent the same is due to be paid by the complainant towards the discharge of loan liability, if any….”
The facts of the consumer complaint are that the complainant-Ravi, is the son and nominee of late Smt. Suman (Deceased Life Assured), who had obtained a home loan of Rs.9,00,000/- from HDFC Bank Limited. Under the bank’s arrangement, she purchased a “Home Suraksha Plus” insurance policy from HDFC ERGO General Insurance Company Limited for the loan amount, with coverage under the Major Medical Illness section, including renal failure. The policy was valid from 10.11.2016 to 09.11.2021. During the subsistence of the policy, Smt. Suman was admitted to PGIMER, Chandigarh due to breathing complications and expired on 07.05.2021. As nominee, the complainant lodged a claim along with all requisite documents. However, the insurer repudiated the claim on the ground that the deceased had been treated for COVID-19, which, according to the insurer, was not covered under the policy. Alleging that the immediate cause of death included acute kidney injury, a covered illness, the complainant approached the District Commission seeking settlement of the insured amount along with compensation etc.
The Appellant–Insurance Company admitted issuance of the policy and its validity during the relevant period but contended that the claim was rightly repudiated. According to the insurer, the medical documents revealed that the deceased was diagnosed with pneumonia due to COVID-19, which was not covered under the Major Medical Illness section of the policy. It was asserted that the repudiation dated 25.10.
