Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(SCDRC) 3709

STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Sangita Dhingra Sehgal, President, Bimla Kumari, Member
S.B.I. General Insurance Co. Ltd. – Appellant
Versus
Surojit Pachal – Respondent
FIRST APPEAL NO. 579/2023 | FA/579/2023

Advocates:
For the Appellants/Petitioners: N.K. Chauhan
For the Respondents: R.C. Anand

An insurer cannot repudiate a claim based on pre-existing conditions if the policy was issued following a medical examination. Furthermore, an insurer is precluded from relying on policy exclusion clauses if they fail to prove that the terms and conditions were duly provided to the insured.

Headnote:(A) Consumer Protection Act - Insurance Claim - Deficiency in service - Repudiation of claim on grounds of pre-existing disease - Insurer issued policy after medical examination of the insured - Once policy is issued pursuant to medical assessment, insurer cannot retrospectively claim non-disclosure of health condition - Obligation of insurer to supply policy terms and conditions to the insured. (Paras 11, 16)

(B) Insurance Law - Contract of Insurance - Principle of Utmost Good Faith - Reciprocal duties - Insurer has a duty to inform the insured about exclusions - In the absence of proof that terms were provided to the insured, exclusion clauses cannot be invoked to repudiate claims. (Paras 16, 17)

Facts of the case:
The complainant filed a claim for reimbursement of medical expenses following the hospitalization and eventual death of the insured. The insurer repudiated the claim, alleging the suppression of material facts regarding pre-existing illnesses like hypertension and diabetes, and cited exclusion clauses regarding waiting periods for specific ailments. The insurer failed to produce evidence that the policy terms and conditions, including exclusion clauses, were supplied to the insured at the time of policy issuance.

Findings of Court:
The court found that the insurer conducted a medical examination prior to issuing the policy and did not raise objections to the insured's health status at that time. Consequently, the insurer cannot rely on the plea of pre-existing disease after having accepted the risk upon assessment. Furthermore, the claim that the insurer had not provided the terms and conditions of the policy was upheld, rendering the reliance on exclusion clauses impermissible.

Issues: Whether the insurer was justified in repudiating the claim on the grounds of non-disclosure of pre-existing diseases and whether the insurer could rely on exclusion clauses when they had not been appropriately communicated to the insured.

Ratio Decidendi: A contract of insurance is based on the principle of utmost good faith which creates reciprocal duties; therefore, an insurer cannot approve a policy after its own medical assessment and later deny coverage by alleging prior non-disclosure. Additionally, an insurer is prohibited from enforcing exclusionary clauses if it fails to prove that the policy terms were duly supplied to the insured.

Result: Appeal dismissed.

Table of Content
1. factual history regarding insurance claims, medical history, and repudiation grounds. (Para 1 , 2 , 3)
2. arguments regarding policy disclosure, portability, and proof of pre-existing conditions. (Para 4 , 5 , 6 , 7)
3. insurer's duty to conduct medical examination prior to policy issuance to establish pre-existing conditions. (Para 9 , 10 , 11 , 12 , 13 , 14)
4. failure to provide policy terms renders exclusion clauses unenforceable against the insured. (Para 15 , 16 , 17 , 18)

PER: HON’BLE JUSTICE SANGITA DHINGRA SEHGAL, PRESIDENT

JUDGMENT

1. The facts of the case as per the District Commission record are as under:

“1.1. (Introduction to case of parties) - The complaint is filed by insured/complainant against insurer/OP1 and its TPA/OP2 alleging deficiency of services for want of extending cashless facility and later-on declining reimbursement of medical bills claims under the medi claim policy no.0000000007101472 (being subject matter of this complaint) in respect of hospitalisation and treatment of his wife Smt. Monimala Pachal. In the complaint, the complainant seeks reimbursement of medical bills of Rs.5,66,005/- along with interest of 18% pa, apart from litigation costs of Rs.25,000/-, compensation of Rs. 3,00,000/- and other appropriate relief under the circumstances.

It is relevant to mention that the details of bills is not mentioned in chronologically way in the body of complaint but otherwise, however, an attempt is being made in this Final order to put them in chronology that too at one place as matrix of case of complainant so as to keep brevity and clarity. Further, on the same set of facts and figures, the calculation of balance amount of bills comes to Rs. 4,66,005/- and not Rs. 5,66,005/- as mentioned in the complaint. Thirdly, there is another policy taken in joint names of Mrs. Monimala Pachal (wife of complainant) and Akshay Dave son in law) from Oriental Insurance Co., its TPA is Vipul Medicorp Insurance TPA Private Ltd. The complainant has filed record pertaining to it but complainant does not decipher complete details except that it has also extended partly pre-authorisation and sanction for hospitalization expenses of Ms. Monimala Pachal.

The subject matter of adjudication will be in respect of subject medi-claim policy no.0000000007101472 between the complainant and OP1, for that OP2 is TPA of OP 1.

1.2. The OP1 opposes the complainant by denying allegations of deficiency of services, since parties are governed and bound by terms and conditions of subject policy. The complainant has concealed pre-existing disease of his wife from the proposal form, which is against the basic principles of utmost good faith under the insurance policy contract. The pre authorisation/cash-less facility and repudiation of claim was under the terms and condition of policy, it cannot be construed deficiency of services and complainant is not entitled for any claim/relief.

It is material to mention, that reply is not strictly as per rules of pleading as each paragraph is not replied specifically but all paragraphs of complainant are replied in one paragraph by grouping as reply to paragraphs 1-15 together. At some places there is use of ‘second person’ "You' for complainant)", which may be because of cut and paste. But for own convenience, the OP I devised the way to narrate its case, then preliminary objection, preliminary submission and then consolidated reply on merits in one paragraph. The reply also mentions that documents are enclosed as Annexure but no document was not annexed.

1.3. OP 2 was served with notice on complaint, however, it abstained from the proceedings, thus it was proceeded ex-parte on 03.01.2019.

2.1. (Case of complainant) - The complainant/Insured took a Medi-claim Policy No.0000000007101472 on 12.07.2017 for four years from OP1/S.B.I. General Insurance Co. Ltd. Delhi Branch, in his name and in name of his wife Smt. Monimala Pachal. It is top policy of Rs. 10,00,000/- and general policy

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2026 Supreme(Online)(SCDRC) 3709

STATE CONSUMER DISPUTES REDRESSAL COMMISSIONSangita Dhingra Sehgal, President, Bimla Kumari, MemberS.B.I. General Insurance Co. Ltd. – AppellantVersusSurojit Pachal – RespondentFIRST APPEAL NO. 579/2023 | FA/579/2023

An insurer cannot repudiate a claim based on pre-existing conditions if the policy was issued following a medical examination. Furthermore, an insurer is precluded from relying on policy exclusion clauses if they fail to prove that the terms and conditions were duly provided to the insured.

Cases Referred (3)

STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Sangita Dhingra Sehgal, President, Bimla Kumari, Member
S.B.I. General Insurance Co. Ltd. – Appellant
Versus
Surojit Pachal – Respondent
FIRST APPEAL NO. 579/2023 | FA/579/2023