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2022 Supreme(Online)(NCDRC) 1010
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
Subhash Chandra, Presiding Member
Mukul Sonawala – Appellant
Versus
Oriental Insurance Co. Ltd. – Respondent
Consumer Case No. 85 of 2011
For the Appellants/Petitioners: Mr Ravindra Adsure, Mr Gokul Bista, Mr Yash Sonavane
For the Respondents: Mr Mohan Babu Agarwal, Ms Celeste
The court ruled that insurance claim repudiation without clear medical evidence of a pre-existing condition breaches the principle of utmost good faith owed by insurers.
Headnote:(A) Consumer Protection Act, 1986 - Sections 12 and 14 - Insurance Claim - Complaint filed alleging deficiency in service and unfair trade practice by insurers after a claim was repudiated based on pre-existing illness. Court found that the repudiation was not supported by medical evidence and directed insurers to pay the complainant the claimed amount with interest. (Paras 1-10)
(B) Insurance Law - Principle of Utmost Good Faith - The court held that both parties have a duty to disclose all material facts, and non-disclosure of a pre-existing condition must not be assumed without evidence. (Para 8)
Facts of the case:
The complainant purchased a travel insurance policy before traveling abroad but was denied coverage based on claimed pre-existing illness post hospitalization.
Findings of Court:
The denial of coverage lacked substantial medical proof of a pre-existing condition, leading to a ruling for the complainant.
Issues: The principal issue was the legitimacy of the claim repudiation based on supposed pre-existing conditions.
Ratio Decidendi: The court clarified that presumption without evidence does not suffice for repudiating an insurance claim and emphasized the duty of good faith in insurance contracts.
Result: Complaint allowed in favor of the complainant with compensation directed to the insured.
| Table of Content |
|---|
| 1. allegations of insurance claim repudiation due to pre-existing conditions. (Para 1 , 2 , 3) |
| 2. arguments of the insurer regarding non-disclosure of medical history. (Para 4 , 5) |
| 3. court's examination of evidence and legal principles regarding good faith. (Para 6 , 7 , 8 , 9) |
| 4. conclusion and directive for compliance with the court's order. (Para 11) |
1. This complaint is filed under section 12 read with section 14 of the Consumer Protection Act, 1986 (in short, the ‘Act’) alleging deficiency in service and unfair trade practice on part of the opposite parties in respect of the Overseas Travel Insurance issued by the opposite parties no. 1, 2 and 3, The Oriental Insurance Company Ltd, Mumbai to the complainant who availed of a policy for his overseas travel in May - June 2010.
2. In brief, the facts are that the complainant obtained an Overseas Travel Insurance (No. 121800/48/2010/15534) on payment of a premium from opposite party no.1 through opposite party no. 2, Heritage Health TPA Service Pvt. Ltd, who is the agent of opposite party no.1 for the period 17.05.2010 to 13.06.2010 for a sum of USD 2,50,000. Shortly after arrival in the USA, on 27.05.2010, the complainant fell ill and was admitted to Poudre Valley Hospital, Fort Collins, Colorado, USA. He was diagnosed with fever with malaria and was required to remain admitted in hospital. The expenditure incurred was USD 2,59,000. His claim was repudiated by the opposite party no. 2 on 30.12.2010 on the ground that the cause of hospitalization was a pre-existing illness as per clause 10 (c) of the policy. The complainant contested this ground of repudiation, stating that he would not have travelled overseas if he was unwell and that the report of a medical doctor from the panel of opposite party no.2 prior to issue of the policy had certified him to be medically fit to travel.
3. The complainant has alleged that the act of repudiation is illegal and amounts to deficiency in service and unfair trade practice. It is his averment that he had been examined by an authorised doctor on behalf of opposite party no. 2 and not diagnosed with a pre-existing illness and that the terms and conditions of the policy were not disclosed to him even though he paid the premium. He avers that as per IRDA Regulations Act and various judgements of the Hon’ble Supreme Court and this Commission he is entitled to compensation of the sum assured along with interest and damages. He is before us with the following prayer:
(a) The opposite party be ordered and directed to pay by an award of this Hon’ble Commission a sum of Rs.2,00,000/- being the compensation for the deficiency of service and unfair trade practices as stated hereinabove.
(b) The opposite party be ordered and directed the amount of US $ 2,59,000/- which comes to Rs.1,19,14,000/- along with interest @ 18% per annum from repudiation of claim till payment as per the provisions of law and the judgment, till payment and restrict our claim upto sum insured;
(c ) The opposite party be ordered and directed to pay a sum of Rs.2,00,000/- for mental torture and harassment;
(d ) The opposite party be ordered and directed to pay a sum of Rs.2,00,000/- being the fees to the advocate and Rs.2,00,000/- for cost and expenses;
(e ) Pending the hearing and final disposal an interim award may be granted; and
(f) Such other and further order as this Hon’ble Court deem fit and proper.
4. The opposite party no. 1 has resisted the complaint by way of a written statement. By way of preliminary objections, it is contended that the complainant concealed material facts of a previously existing ailment and disease in procuring the insurance policy and the policy is therefore liable to be dismissed as per G Appukuttan Pillai vs Government of India AIR 1970 Ker 110 (112) (FB) and Asiatic Engineering Co. vs Achhru Ram AIR 1951 ALL. 746 (FB). It is not denied that an Overseas Medi-Claim Policy was issued by M/s Tavel Tag for the period 17.05.2010 to 13.0
