Insurer Should Indemnify If Insured Suffers Sudden Sickness Or Ailment Which Is Not Expressly Excluded Under The Policy: Supreme Court

The Supreme Court has observed that if the insured suffers a sudden sickness or ailment which is not expressly excluded under the policy, a duty is cast on the insurer to indemnify the insured for the expenses incurred thereunder.The bench of Justices DY Chandrachud and BV Nagarathna in the present matter was considering a civil appeal against the order dated 22nd May, 2015, passed by the National Consumer Disputes Redressal Commission ("Commission") in a Consumer Complaint by which the appellant's complaint was dismissed on the ground of non disclosure of material facts.While allowing the appeal, the bench in Manmohan Nanda V. United India Assurance Co. Ltd. & Anr observed that, "The object of seeking a mediclaim policy is to seek indemnification in respect of a sudden illness or sickness which is not expected or imminent and which may occur overseas. If the insured suffers a sudden sickness or ailment which is not expressly excluded under the policy, a duty is cast on the insurer to indemnify the appellant for the expenses incurred thereunder."Factual Background The appellant had sought an overseas mediclaim policy B ("mediclaim policy") as he intended to travel to the United States of America ("USA") to attend the wedding of his sister in law's daughter. At the instance of the insurance company, the appellant was medically examined prior to the consideration of his request for issuance of a mediclaim policy and on his medical examination, the report categorically noted that the appellant had diabetes type II (diabetes mellitus). No other adverse medical condition was found.Pursuant to the queries, the insurer accepted the proposal form and issued an Overseas Mediclaim Business and Holiday Policy which was valid from 19th May, 2009 to 1st June, 2009, to the appellant. While the appellant exited the customs section at San Francisco airport, he felt weak and started sweating. His wife got him admitted at the SFO Medical Centre and after he received medical treatment, he was shifted to Mills Peninsula Medical Centre where angioplasty was performed on the appellant on 19th May, 2009 and 22nd May and three stents were inserted to remove the blockage from the heart vessels.In order to avail the benefit under the mediclaim policy, appellant's son in law contacted M/s Corris International, a foreign collaborator of the Insurance Company which was to provide emergency assistance and claims administration services to the insured. M/s Corris International sought certain documents regarding details of treatment given by the Medical Centre as well as details of the mediclaim policy for the purpose of considering the same for indemnifying the appellant. The appellant was discharged on 24th May, 2009.Two and a half months thereafter, appellant started receiving bills from the cardiovascular wing of the Medical Centre and SFO Medical Centre towards the treatment he received at their facility. On 19th August, 2009, the appellant sent a letter annexing all bills in original as well as the discharge summary to the Divisional Manager of the insurance company at their Bhopal office and a copy to Heritage Health TPA Pvt Ltd.On 22nd August, 2009, appellant received a letter from Heritage Health TPA Pvt Ltd. stating that his claim had been repudiated as the appellant had a history of hyperlipidaemia and diabetes and the policy did not cover pre existing conditions and complications arising therefrom. Aggrieved, the appellant filed a complaint under Section 21 (9) of the Consumer Protection Act, 1986 ("Act") against the respondents before the Commission. The Commission dismissed the complaint filed by the appellant on the ground of nondisclosure of material facts. Submission Of Counsels Senior Advocate Gopal Sankarnarayanan along with Advocate Zehra Khan appearing for the appellant submitted that the policy in question contained the nature of coverage and excluded pre existing conditions as defined in general condition 10. He further contended that repudiation of the contract on the ground of suppression of pre existing disease by appellant was wholly erroneous. Senior Counsel further submitted that the appellant had no knowledge that he was suffering from hyperlipidaemia at the time of submission of the proposal form and that the obligation to disclose any fact extends only when the said fact is known to the appellant but not otherwise. He further argued that the proposal form was worded in such a manner that there was no specific query which could have led to the appellant disclosing that he was suffering from hyperlipidaemia and that the insurance policy did not define the terms "pre existing disease," "pre existing ailment," "pre existing condition", "disease" or "illness."Senior counsel further submitted that the nature of a disease or illness which would exclude a policy holder or an insured from the benefits of the said policy must be clearly mentioned in the policy itself. He contended that the same could not ...

Insurer Should Indemnify If Insured Suffers Sudden Sickness Or Ailment Which Is Not Expressly Excluded Under The Policy: Supreme Court

Shruti Kakkar

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Insurer Should Indemnify If Insured Suffers Sudden Sickness Or Ailment Which Is Not Expressly Excluded Under The Policy: Supreme Court

Shruti Kakkar

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