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2021 Supreme(Online)(NCDRC) 659
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
DINESH SINGH, JUSTICE KARUNA NAND BAJPAYEE, JJ
LIC OF INDIA – Appellant
Versus
NARESH KUMAR KAMBOJ – Respondent
Revision Petition No. 3471 of 2011
For the Appellants/Petitioners: Mr. Dhananjay Bhaskar Ray
For the Respondents: Mr. Shish Pal Laler
Insurance claims must align with policy terms; misinterpretation leads to wrongful approval.
Headnote:(A) Consumer Protection Act, 1986 - Section 21(b) - Insurance Claim - The matter relates to reimbursement of a medical claim under a policy. The State Commission erred in interpreting policy clauses, specifically clauses 11(a) and 11(b), leading to wrongful repudiation of the claim. The complainant underwent treatment after more than eight years of obtaining the policy, but the insurance company wrongly denied the claim by misinterpreting the policy. (Paras 2, 3, 6, 7)
(B) Insurance - Misinterpretation of policy - The terms of policies must be construed together. The exclusion of certain treatments must be clearly established as per clauses of the policy. It was found that the claimant's medical expenses fell under a specifically excluded category of treatment. (Paras 4, 6)
Facts of the case:
The dispute arose from the insurance claim related to medical expenses due to treatment at a hospital. The State Commission ruled in favor of the complainant, which was challenged by the insurance company based on policy interpretation.
Findings of Court:
The court found merit in the insurance company’s argument that the State Commission misinterpreted policy clauses to grant the claim unlawfully.
Issues: Whether the State Commission correctly interpreted the insurance policy relating to the exclusion of certain medical treatments.
Ratio Decidendi: The court concluded that the State Commission misinterpreted policy clauses, leading to incorrect claim approval. Therefore, the appeal was allowed, and the previous order was set aside.
Result: The appeal is allowed, and the complaint is dismissed. However, recovery of the previously paid amount shall not occur on humanitarian grounds.
| Table of Content |
|---|
| 1. petition filed under the consumer protection act. (Para 1 , 2) |
| 2. insurance company argues misinterpretation of policy. (Para 3 , 4 , 5) |
| 3. court identifies misinterpretation by state commission. (Para 6 , 7) |
| 4. humanitarian factors considered, but policy terms prevail. (Para 8 , 10) |
| 5. final decision based on legal scrutiny over humanitarian claims. (Para 11 , 12) |
Taken up through video conferencing.
1. This petition has been filed under section 21(b) of The Consumer Protection Act, 1986 in challenge to the State Commission’s Order dated 18.05.2011 in appeal no. 1004 of 2007 arising out of the Order dated 09.03.2007 of the District Commission in complaint no. 355 of 2006.
2. We have heard the learned counsel for the petitioner (the ‘insurance co.’) and the respondent (the ‘complainant’) and have perused the material on record including the Order dated 09.03.2007 of the District Commission, the impugned Order dated 18.05.2011 of the State Commission and the petition.
3. The dispute relates to reimbursement of a medical claim.
In its impugned Order the State Commission has quoted clause 11(a) and clause 11(b) of the subject policy and has interpreted the said clauses to hold that the insurance company has wrongly repudiated the claim of the complainant. The relevant extract from the State Commission’s Order is reproduced below:
Shri Nitin Sanghi, learned counsel appearing on behalf of the appellants-opposite parties has argued that in view of clause 11(b) of the Insurance Policy, the expenses incurred by the complainant for implantation of stents from Forties Hospital, Mohali were not covered and for that reason the Insurance Corporation cannot be held liable to compensate the complainant for the expenses incurred by the complainant.
We do not find force in the argument raised on behalf of the appellants-opposite parties. In order to deprive the complainant to get the expenses incurred by him on his treatment for implantation of stents, the opposite parties is only referring to Clause 11(b) of the policy, which in itself is not complete without reading Clause 11(a) with the same. For ready reference, Clause 11(a) and 11(b) of the Insurance Policy is reproduced as under:
“11(a) Benefit (B) of the Policy Schedule is not applicable, if any of the contingencies mentioned in Paragraph 11(b) occurs (i) at any time on or after the date on which risk under this policy is commenced but before the expiry of one year reckoned from the date of this policy or (ii) one year from the date of revival.
11(b) Benefit (B) of the Policy Schedule is applicable on the occurrence of any of the following contingencies: the Life Assured undergoes Open Heart By-Pass surgery performed on significantly narrowed/occluded coronary arteries to restore adequate blood supply to heart and the surgery must have been proven to be necessary by means of coronary angiography. All other operations (i.e. angioplasty and thrombolysis by Coronary Artery Catheterization) are specifically excluded or the Life Assured undergoes Renal Dialysis or Renal Transplantation as a result of an end stage Renal Failure presented as chronic irreversible failure of both kidneys to function.”
Admittedly, the complainant had obtained the Insurance Policy on 28.5.1997 and he suffered from heart problem on 23.6.2005 i.e. after more than eight years. The complainant could have been denied the claim if he would have suffered from the diseases mentioned in Clause 11(b) within one year from the date of obtaining the policy. Thus, the opposite parties have wrongly repudiated the claim of the complainant.
In view of the above, we do not find any merit in this appeal. Hence this appeal is dismissed being devoid of any merit.
4. The learned counsel for the insurance co. submits that a mere reading of clause 11(a) conjoined with clause 11(b) makes it abundantly clear that even if Benefit (B) of the Policy Schedule is applicable in a particular case, “angioplasty and thrombolysis by Corona
