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2026 Supreme(Online)(SCDRC) 5032
STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Sangita Dhingra Sehgal, President, Bimla Kumari, Member
Star Health & Allied Insurance Co. Ltd. – Appellant
Versus
Rina – Respondent
FIRST APPEAL NO.-22/2025
For the Appellants/Petitioners: Abhishek Nanda, Yashika Singh
For the Respondents: Shripal
The terms of an insurance contract must be construed strictly as written. Repudiation of a claim is legally valid if the insured consumes services at an excluded provider or violates mandatory procedural conditions, such as the stipulation for timely notification of the claim.
Headnote:(A) Consumer Protection Act, 1986 - Section 12, 35 - Insurance - Repudiation of claim - Policyholder admitted for treatment in an excluded provider (hospital).
(B) Insurance Policy - Terms and Conditions - Binding nature - Strict interpretation - Policyholders are bound by the terms and exclusions disclosed by the insurer.
(C) Claim Settlement - Condition of intimation of claim within 24 hours - Mandatory requirement - Failure to provide timely intimation violates policy conditions and disentitles the insured from relief.
Facts of the case:
Respondent obtained a health insurance policy and sought reimbursement for medical expenses incurred at a hospital that was explicitly listed as an 'Excluded Provider' in the policy terms. The appellant rejected the claim citing the hospital's exclusion and also noted a significant delay in the notification of the claim (17 days instead of the mandatory 24 hours). The District Commission initially allowed the complaint and ordered the appellant to pay the claim amount, compensation, and litigation costs, which was subsequently challenged in this appeal.
Findings of Court:
Upon review, the Commission found that the respondent received treatment at an excluded facility in breach of the insurance contract. Furthermore, the respondent failed to comply with the mandatory 24-hour notification clause. The Commission observed a pattern of fraudulent or repetitive claims filed by the same representative.
Issues: Whether the repudiation of the insurance claim by the appellant was valid based on the violation of policy terms (hospital exclusion and notification delay).
Ratio Decidendi: Insurance contracts must be construed strictly according to their written terms. An insurer is entitled to repudiate a claim if the treatment is taken at an excluded provider or if the mandatory conditions of the policy—such as timely claim notification—are not adhered to by the insured.
Result: Appeal allowed; the order of the District Commission is set aside.
| Table of Content |
|---|
| 1. overview of the district commission proceedings and initial dispute. (Para 1 , 2) |
| 2. summary of appellate contentions regarding policy terms and service conduct. (Para 3 , 4 , 5) |
| 3. admissibility of treatment in hospitals specifically excluded by the insurer. (Para 7 , 8 , 9 , 10 , 11 , 12) |
| 4. consequence of failure to comply with the 24-hour claim notification condition. (Para 13 , 14) |
| 5. strict construction of insurance contracts as per judicial precedent. (Para 15 , 16 , 17) |
| 6. evaluation of evidence regarding frequent repetitive claims and potentially fraudulent conduct. (Para 18 , 19 , 20 , 21) |
| 7. final ruling finding the repudiation justified based on breach of conditions. (Para 22 , 23 , 24 , 25) |
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. “The present complaint has been filed under Section 12 and 35 of the Consumer Protection Act, 1986 (in short CP Act) against Opposite. Party (in short OP) alleging, deficiency of services.
2. Briefly stated the facts of the case are that the complainant had taken a on line health insurance policy bearing no. P/161100/01/2024/008522 on dated 30.05.2023 from OP. The said policy was valid from 30.05.2023 to 29.05.2024 for the sum insured of Rs. 5,00,000/- (Rupees Five Lakh Only).
3. It is further alleged that the complainant went to the Government hospital RHTC Hospital Najafgarh, New Delhi in "Emergency" Dept. but did not any relief from medicine of the said hospital. Thus complainant went again in Emergency on 26.02.2024 at 07:00 AM (Morning) to the Mahavir Multispecialty hospital, Mohan Garden, Uttam Nagar, New Delhi, in the OPD and was examined by Dr. R.S. Gupta, (M.D. Physcian) DMC-59340 and was told her that her condition was very critical, as per OPD slip.
4. It is also alleged that the complainant was admitted in Emergency on 26.02.2024 at 07:00 AM (Morning), in Mahavir Multispecilty Hospital, Mohan Garden, Uttam Nagar, New Delhi was examined by Dr. R.S. Gupta, (M.D. Physician) and diagnosed as a case of "UTI with Dehydration on examination "Patient come in hospital with pain abdomen/ multiple episodes of vomiting/ Nausea/ severe/ dehydration/not occur oral intake 3 and 4 days etc. Vital was HR-109/min, BP-90/60mmhg, Spo2-96%, Temp 104'2f, and after treatment discharge on 04.03.2024 at 12:10 PM, as per discharge summery. The said hospital generated the final bills of Rs.2,03,167/- (Rupees Two Lakh Three Thousand One Hundred Sixty Seven) which was paid by Complainant thereafter claimed the aforesaid bill amount from the OP, but OP rejected the claim (no. CIR/2024.161100/1729777) on 16.03.2024 with reasons the insured was admitted and treated in an excluded provider (Hospital).
5. It is further alleged the complainant sent a letter dated 20.03.2024. by hand but no response was received. That the complainant had fever 104'2f at the time of admission at the hospital as per OPD slip and discharge card.
6. It is also stated that when complainant purchased policy, OP did not inform any of "Excluded Policy" in their Mediclaim Policy and excluded provider list or any other information on network or otherwise.
7. Thus the complainant having been left with no option approached this Court. Hence, the present complaint. It is also alleged that the complaint is being filed within the period of limitation.
8. It is prayed that:
1. The Opposite Party be directed to pay a sum of Rs.2,03,167/- (Rupees Two Lakh Three Thousand One Hundred Sixty Seven) to the complainant with pendent elite and future interest @ 18% p.a. from the date of repudiation of claim i.e. 16.03.2024 till realization.
2. OP be directed to verify and produce the medical treatment record and bills of complainant of treatment of complainant from 26.02 2024 to 04.03.2024.
3. Cost of litigation be also awarded.
9. Notice of the complaint was issued to OP, OP was served on 22.04.2024. However OP did not filed written statem
