Om Prakash Ahuja (Appellant) Vs. Reliance General Insurance Co. Ltd. etc. (Respondent)

CIVIL APPEAL NOS. 2769-2770 OF 2023

(2JB, Abhay S. Oka and Rajesh Bindal JJ., delivered by Rajesh Bindal J.)

Facts: The present appeal if filed against the Common order passed by the National Consumer Disputes Redressal Commission in Revision Petition Nos. 923 of 2011 and 1417 of 2014 wherein the National Commission upheld the directions of the State Commission to the extent of reimbursement of expenses incurred on the treatment of the deceased wife of the appellant, however, the direction for renewal of the health insurance policy was set aside.

Issue: Was the appellant’s claim rightly rejected by the insurance company?

Arguments on behalf of counsel for appellant:

Learned counsel for the appellant submitted that it is a case in which the appellant had got the health insurance policy for the family. Once expenses had been incurred on the treatment of his wife, the same were required to be reimbursed by the insurance company. However, for the period subsequent to 6.7.2009, the claim was not accepted by the insurance company. On a complaint filed by the appellant, a direction was issued by the District Forum to the insurance company to reimburse the expenses incurred on the treatment. The order was upheld by the State Commission. However, the National Commission has erroneously set aside that order holding that the renewal of policy was not proper, and nonrenewal of a policy by the insurance company has certainly deprived the appellant from taking the policy from any other company. At this stage, it would be unreasonable to deprive the appellant of the fruits of the policy in the form of claim, despite the fact that more than the normal premium was charged by the insurance company at the time of renewal as extra risk was covered.

Arguments on behalf of counsel for respondent:

On the other hand, learned counsel for the insurance company submitted that no benefit could accrue to the appellant in terms of an order passed by the Commission, which was ultimately set aside. Initially the appellant had got the policy from 7.7.2007 to 6.7.2008, which was renewed up to 6.7.2009. There was some issue with reference to the claim for expenses incurred by the appellant for treatment of his wife as the disease from which she was suffering at the time of purchasing the policy, was not disclosed. Still in a complaint filed by the appellant, direction was issued for reimbursement of the expenses incurred by the appellant. As the direction was upheld up to the National Commission, the insurance company has not challenged the same. Even though there may be dispute regarding the quantum of expenses incurred. There is no error in the order passed by the National Commission whereby it has held that renewal of policy from 7.7.2009 onwards is not proper. It is a case in which at the time of purchasing the first policy, the appellant had concealed the factum of illness being suffered by his wife as a result of which the claim for treatment was made. Though that amount is not being disputed by the appellant, however, the claim made for the period during which the policy was renewed in terms of interim order passed by the National Commission will not be admissible to the appellant.

Held:  The court allowed the present appeal and set aside the impugned order, while restoring the orders passed by the District Forum and State Forum regarding direction to the Insurance Company to renew the policies, and held that “once there is a valid insurance policy available in favour of the appellant, the claim made by him for reimbursement of the expenses incurred is justifiable and deserves to be paid to him.”