Facts

The complainant, Madhu Sawhney, purchased two health insurance policies under the Platinum variant from Niva Bupa in June 2023, with sums insured of ₹10 lakh and ₹25 lakh, respectively. She submitted that she had disclosed her existing medical conditions, including diabetes mellitus, lipid disorders and hypertension, while obtaining the policies. The insurer had also conducted a pre-policy medical examination.

On December 23, 2023, Sawhney was admitted to the Emergency Department of Max Super Speciality Hospital, Shalimar Bagh, Delhi. The initial emergency assessment inadvertently recorded chronic kidney disease (CKD). The entry was corrected through an addendum dated December 30, 2023, during the same hospital admission and before her discharge.

The insurer declined cashless authorisation, citing insufficient documentation. Sawhney paid the hospital bill of ₹3,87,391 herself and subsequently sought reimbursement.

Between January and April 2024, Niva Bupa repeatedly sought additional documents and medical clarifications. On March 30, 2024, it demanded an affidavit from the treating doctor concerning the CKD entry. The complainant maintained that the hospital had already corrected the error and furnished a clarification explaining the circumstances.

On April 25, 2024, the insurer rejected the reimbursement claim for non-submission of mandatory documents. Sawhney then approached the Consumer Commission, alleging deficiency in service and seeking reimbursement, interest, compensation and litigation expenses.

Niva Bupa failed to file its written version within the statutory period. By an order dated May 29, 2025, its right to file the written version and evidence was closed. The Commission considered its subsequent written arguments only to the limited extent that they raised questions of law without introducing disputed factual material.

Commission's Observations

The Commission observed that the erroneous CKD entry had been corrected during the hospitalisation itself, and the treating doctor had clarified that the complainant had no history of renal dysfunction and her kidney function tests were normal. Despite receiving these clarifications, Niva Bupa continued to seek a further affidavit regarding the same discrepancy.

It held that while insurers can seek relevant documents, they cannot repeatedly demand documents already supplied or those that are not reasonably obtainable, thereby keeping claims pending indefinitely.

Relying on the Supreme Court's decision in Manmohan Nanda v. United India Assurance Co. Ltd., the Commission observed that an insurer must assess medical risks based on information available before issuing a policy. It noted that Niva Bupa had failed to establish what essential documents remained unavailable or demonstrate any valid ground for rejecting the claim.

The Commission concluded that the insurer's handling and rejection of the claim amounted to deficiency in service, forcing the complainant to bear the hospital expenses herself. It found it unnecessary to examine product liability under Sections 83–85 of the Consumer Protection Act, 2019, as the complaint could be decided on the ground of deficiency in service.

Decision

Partly allowing the complaint, the Commission directed Niva Bupa to reimburse ₹3,87,391 towards hospital expenses, with interest at 6% per annum from April 25, 2024, until actual realisation.

The insurer was also directed to pay ₹50,000 as compensation for mental agony, harassment and inconvenience, along with ₹35,000 towards litigation expenses.

The Commission directed the insurer to comply with the monetary directions within 45 days of receiving a copy of the order. In case of default, the reimbursement amount would carry interest at 9% per annum, instead of 6%, from April 25, 2024, until actual realisation.