KANWALJIT SINGH versus NATIONAL INSURANCE COMPANY LTD on 14 August 2019

230

SUPREME COURT REPORTS

[2019] 10 S.C.R.

A

KANWALJIT SINGH

v.

NATIONAL INSURANCE COMPANY LTD

(Civil Appeal No. 6255 of 2019)

B

AUGUST 14, 2019

[UDAY UMESH LALIT AND VINEET SARAN, JJ.]

Insurance: Extent of liability of Insurance Company withregard to individual claim under “Parivar-Mediclaim for FamilyPolicy” – In the instant case, appellant was taking individualCmediclaim policies since 2007-2008 for his individual family membersand in the year 2014-15, he took family mediclaim policy for Rs.5lacs – During validity of the family mediclaim policy, appellant’sson fell sick and was hospitalized for which medical bill was raised– Appellant filed claim – Insurance company initially repudiatedDthe claim without assigning any reason – However, later consideringthat the appellant’s son had an individual mediclaim policy in theyear 2009-2010 for Rs. 55000, deposited Rs. 27,550/- towards finalpayment of the claim – Complaint before District Forum – Plea ofinsurance company was that since appellant’s son was having pre-existing disease, his claim was not payable under the terms of theEpolicy – District Forum, however, held that since the sum insuredunder the individual Mediclaim Policy of appellant’s son for theyear 2010-2011 (four years prior to his hospitalisation) wasRs.1,07,500/-, the amount payable would be 50% of such sum insuredfor the year 2010–2011, and not 50% of the sum insured in theFyear 2009-2010, according to which Insurance Company had paidRs.27,550/- – On appeal, State Commission allowed the claim ofappellant in toto – Appeal before National Commission – NationalCommission while observing that the appellant’s son had pre-existingdisease which was symptomatic in the year 2009, held that theappellant would be entitled to 50% of the sum insured under theGindividual Mediclaim Policy of appellant’s son for the year 2010-2011 – Challenge against – Held: The claim could not have beenrepudiated by the Insurance Company as there was no pre-existingdisease when the initial individual Mediclaim Policy of appellant’sson was taken in the year 2007-2008 – Since then the policy wasH

regularly renewed upto year 2014-2015 – The total medical expenseor claim for any one illness for any individual member of the familywould be limited to 50% of the sum insured for the family – The suminsured for the family under the Family Mediclaim Policy was Rs.5lacs – Thus, the amount payable against the medical claim ofappellant’s son under the policy, would be limited to the extent ofRs.2,50,000/-.

Allowing the appeal, the Court

HELD : 1. The fact that Mediclaim Policy of son of theappellant was continuously taken by the appellant for varying suminsured since 2007-2008 till 2014-2015 is admitted by theinsurance company. It is also not disputed that at the time oftaking the initial Mediclaim Policy for the year 2007-2008, theson of the appellant did not have any pre–existing disease. Infact, it is admitted that prior to the year 2014-2015, the appellanthad been taking individual Mediclaim Policies for his familymembers and it was only in the year 2014-2015, at the time ofrenewal of the individual Mediclaim Policies, that the appellanthad taken the Family Mediclaim Policy, which was effective from07.02.2014 to 06.02.2015. The sum insured under the FamilyMediclaim Policy, was Rs.5,00,000/–. The total medical claim forall the four members of the family during the period ofcommencement of the Insurance Policy (i.e. 07.02.2014 to06.02.2015) would be Rs.5,00,000/- and for any individual claimor illness for any one member of the family, the limit would be50% of the sum insured, which in the instant case would come toRs.2,50,000/-. Thus, at best the maximum claim which could bepayable in this case would be 50% of the sum insured under theFamily Mediclaim Policy for the medical treatment of one memberof the family, which was appellant’s son. [Paras 10, 11] [235-B-H]

2. The claim could not have been repudiated by theInsurance Company as there was no pre-existing disease whenthe initial individual Mediclaim Policy of appellant’s son was takenin the year 2007-2008. Since then the policy was regularly renewedup to the year 2014-2015. Even otherwise, after having initiallyrepudiated the claim of the appellant, the Insurance Companyhad itself allowed the claim to the extent of Rs.27,550/-, which AB

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Aamount was deposited in the account of the appellant, meaningthereby that the question of pre–existing disease in the case ofthe claimant was not considered to be material by the InsuranceCompany. [Para 12] [236-A-C]

3. The total medical expense or claim for any one illnessBfor any individual member of the family would be limited to 50%of the sum insured for the family. In the instant case, the suminsured for the family under the Family Mediclaim Policy wasRs.5,00,000/-. Thus, the amount payable against the medical claimof appellant’s son under the policy, would be limited to the extentof Rs.2,50,000/-. Undisputedly, the medical expense incurredCand claimed by the appellant for the treatment of his son withinthe effective period of the policy was over Rs.8,00,000/-. As suchthe appellant would be entitled to a sum of Rs.2,50,000/- minusthe amount already paid by the Insurance Company under theorders of the District Forum. The respondent-Insurance CompanyDshall pay to the appellant a sum of Rs.2,50,000/- minus the amountalready paid, towards final settlement of the medical insuranceclaim of the appellant. The appellant would also be entitled to anamount of Rs.50,000/- towards mental agony and harassment, plusRs.30,000/- towards costs of litigation. [Paras 13, 14] [236-D-G]

ECIVIL APPELLATE JURISDICTION : Civil Appeal No. 6255of 2019.

From the Judgment and Order dated 09.07.2018 of the NationalConsumer Disputes Redressal Commission, New Delhi in RevisionPetition No. 2295 of 2017.

FSurender Deswal, Sahil A. Garg, Manish Tanwar, Satish Kumar,Advs. for the Appellant.

Ms. Mridula Ray Bharadwaj, Dr. Sushil Kumar Gupta, MananVerma, Atishay K. Prasad, Advs. for the Respondent.

The Judgment of the Court was delivered byG

VINEET SARAN, J.

1. The question involved in this appeal is with regard to the extentof the liability of the Insurance Company with regard to individual claimunder “Parivar - Mediclaim for Family Policy” (for short “FamilyHMediclaim Policy”).

2. The admitted facts of this case are that since 2007-2008, theappellant had been taking individual Mediclaim Policies for his individualfamily members. The dispute in the present appeal pertains to the medicalclaim for the year 2014-15, with regard to son of the appellant, namelyMaster Jasnoor Singh. The individual Mediclaim Policies of the saidMaster Jasnoor Singh from 2007-2008 to 2013-2014 was for differentsum insured, varying from Rs.50,000 in 2007-2008 to Rs.2,54,000/- in2013-2014. In the year 2014-2015, the appellant took Family MediclaimPolicy for a sum insured of Rs.5,00,000/- for the period 07.02.2014 to06.02.2015, which was for the appellant himself and his family members,namely, his wife, son Master Jasnoor Singh and daughter.

3. It was during the validity of the Family Mediclaim Policy 2014-15, that in the year 2014 Master Jasnoor Singh fell sick and had to undergotreatment in Post Graduate Institute (PGI), Chandigarh. He was initiallyhospitalized from 24.05.2014 to 19.07.2014 for which the medical billwas for an amount of Rs.5,40,741/-. He was again hospitalizedfrom 31.08.2014 to 17.10.2014, for which the medical bill wasfor Rs.3,14,485/-. The total amount of medical bill thus came toRs.8,55,226/-. The appellant lodged a claim for the said amount with therespondent–National Insurance Company Ltd (for short “InsuranceCompany”), which was initially repudiated by the Insurance Companywithout assigning any reason. However, later considering that the saidMaster Jasnoor Singh had an individual medical claim policy in the year2009-2010 for Rs.55,000/-, the respondent - Insurance Company depositeda sum of Rs.27,550/- in the account of the appellant towards final paymentof the claim.

4. Since the remaining claim was not paid, the appellant filed acomplaint before the District Consumer Disputes Redressal Forum (forshort “District Forum”) claiming an amount of Rs.5,00,000/-, which wasthe sum insured under the Family Mediclaim Policy for the relevant year2014-2015. Before the District Forum, the respondent – InsuranceCompany raised various preliminary objections but had mainly claimedthat since the said Master Jasnoor Singh was having pre-existing disease,hence the claim was not payable under the terms of the Policy. TheDistrict Forum, however, held that since the sum insured under theindividual Mediclaim Policy of Master Jasnoor Singh for the year 2010-2011 (four years prior to his hospitalisation) was Rs.1,07,500/-, the amountpayable would be 50% of such sum insured for the year 2010-2011, AB

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Awhich comes to Rs.53,750/- and not 50% of the sum insured inthe year 2009-2010, according to which Insurance Company had paidRs.27,550/-. Thus, District Forum directed that the balance amount ofRs.26,200/- would be payable to the appellant, along with Rs.5000/-towards harassment and mental agony, plus Rs.2000/- on account oflitigation expenses, along with interest @ 9% p.a.B

5. Challenging the said order, the appellant herein filed an appealbefore the State Consumer Disputes Redressal Commission (for short“State Commission”), which allowed the appeal of the claimant in toto,and directed payment of the entire sum insured i.e. Rs.5,00,000/-, minusthe amount already paid by the Insurance Company. Besides this, theCInsurance Company was also directed to pay Rs.30,000/- ascompensation for mental agony and harassment, plus Rs.10,000/- aslitigation cost.

6. Aggrieved by the said order of the State Commission, therespondent–Insurance Company filed a Revision Petition No. 2295 ofD2017 before the National Consumer Disputes Redressal Commission(for short “National Commission”). By its order dated 20.07.2017, theNational Commission upheld the order of the District Forum. Afterholding that the said Master Jasnoor Singh had pre-existing disease whichwas symptomatic in the year 2009, the National Commission held thatEthe appellant herein would be entitled to 50% of the sum insured underthe individual Mediclaim Policy of Master Jasnoor Singh for the year2010-2011. Challenging the said order of the National Commission, thisappeal has been filed by way of Special Leave Petition.

7. The submission of learned counsel for the appellant is that sinceFthe individual Mediclaim Policy of Master Jasnoor Singh was continuouslyheld since 2007-2008 till the year 2014-2015 and it not being the case ofthe Insurance Company that at the time of taking initial individualMediclaim Policy in the year 2007, the said Master Jasnoor Singh hadany such disease, hence, the repudiation or scaling down of the claim ofthe appellant could not be justified. It was contended that the entireGamount, as awarded by the State Commission, should be restored andthis appeal be allowed.

8. Per contra, learned counsel for the respondent – InsuranceCompany has justified the order of the National Commission in awardingthe compensation of 50% of the sum insured for the year 2010-2011, asH

had been awarded by the District Forum and has prayed that the presentappeal be dismissed.

9. We have heard learned counsel for the parties at length andhave perused the record.

10. The fact that Mediclaim Policy of Master Jasnoor Singh wascontinuously taken by the appellant for varying sum insured since 2007-2008 till 2014-2015 is admitted by the insurance company. It is also notdisputed that at the time of taking the initial Mediclaim Policy for theyear 2007-2008, the said Master Jasnoor Singh did not have any pre-existing disease. In fact, it is admitted that prior to the year 2014-2015,the appellant had been taking individual Mediclaim Policies for his familymembers and it was only in the year 2014-2015, at the time of renewalof the individual Mediclaim Policies, that the appellant had taken theFamily Mediclaim Policy, which was effective from 07.02.2014 to06.02.2015. It is also admitted that the said Family Mediclaim Policywas for a total sum insured amount of Rs.5,00,000/-. Under the termsof the Policy, the total expenses incurred for any one illness would belimited to 50% of the sum insured for the family. The relevant Clauseunder the Policy is re-produced hereunder:

“Company’s liability would, arise if the treatment of diseaseor injury contracted/suffered is incepted during the policyperiod. Total expenses incurred for any one illness is limitedto 50% of Sum Insured per family.Company’s liability in respectof all claims admitted during the period of insurance shallnot exceed the Sum Insured mentioned in the Schedule”.

(emphasis supplied)

11. It is not disputed that the sum insured under the FamilyMediclaim Policy, was Rs.5,00,000/-. From the above, it would be clearthat the total medical claim for all the four members of the family duringthe period of commencement of the Insurance Policy (i.e. 07.02.2014 to06.02.2015) would be Rs.5,00,000/- and for any individual claim or illnessfor any one member of the family, the limit would be 50% of the suminsured, which in the present case would come to Rs.2,50,000/-. Thus,at best the maximum claim which could be payable in the present casewould be 50% of the sum insured under the Family Mediclaim Policy forthe medical treatment of one member of the family, which was MasterJasnoor Singh.

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A

A12. It may be noticed that the claim could not have been repudiatedby the Insurance Company as there was no pre-existing disease whenthe initial individual Mediclaim Policy of Master Jasnoor Singh was takenin the year 2007-2008. Since then the policy was regularly renewed upto the year 2014-2015. Thus in the facts of the present case, therespondent – Insurance Company cannot take the plea of any pre-existingBdisease of Master Jasnoor Singh. Even otherwise, after having initiallyrepudiated the claim of the appellant, the Insurance Company had itselfallowed the claim to the extent of Rs.27,550/-, which amount wasdeposited in the account of the appellant, meaning thereby that thequestion of pre-existing disease in the case of the claimant was notCconsidered to be material by the Insurance Company.

13. As we have already observed herein above, the total medicalexpense or claim for any one illness for any individual member of thefamily would be limited to 50% of the sum insured for the family. In thepresent case, the sum insured for the family under the Family MediclaimDPolicy was Rs.5,00,000/-. Thus, in our considered view, the amountpayable against the medical claim of Master Jasnoor Singh, under thepolicy, would be limited to the extent of Rs.2,50,000/-. Undisputedly, themedical expense incurred and claimed by the appellant for the treatmentof Master Jasnoor Singh within the effective period of the policy wasover Rs.8,00,000/-. As such the appellant would be entitled to a sum ofERs.2,50,000/- minus the amount already paid by the Insurance Companyunder the orders of the District Forum.

14. Accordingly, we allow this appeal to the extent that the respondent –Insurance Company shall pay to the appellant a sum of Rs.2,50,000/-(two lakh fifty thousand) minus the amount already paid, towards finalFsettlement of the medical insurance claim of the appellant. The appellantwould also be entitled to an amount of Rs.50,000/- towards mental agonyand harassment, plus Rs.30,000/- towards costs of litigation. TheInsurance Company would also be liable to pay interest @ 7.5% p.a. onthe balance amount payable, from the date of the complaint filed beforeGthe District Forum, till the date of actual payment of the balance amount.

Devika Gujral

Appeal allowed.

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