Kanwaljit Singh vs National Insurance Company Ltd.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 6255 OF 2019

KANWALJIT SINGH ..….APPELLANT

VERSUS

NATIONAL INSURANCE COMPANY LTD …RESPONDENT

JUDGMENT

VINEET SARAN, J

The question involved in this appeal is with regard to the

extent of the liability of the Insurance Company with regard to

individual claim under “Parivar - Mediclaim for Family Policy” (for Signature Not Verified

short “Family Mediclaim Policy”).

Digitally signed by INDU MARWAH Date: 2019.08.14 17:54:20 IST Reason: 2

2. The admitted facts of this case are that since 2007-2008, the

appellant had been taking individual Mediclaim Policies for his

individual family members. The dispute in the present appeal

pertains to the medical claim for the year 2014-15, with regard to

son of the appellant, namely Master Jasnoor Singh. The individual

Mediclaim Policies of the said Master Jasnoor Singh from

2007-2008 to 2013-2014 was for different sum insured, varying

from Rs.50,000 in 2007-2008 to Rs.2,54,000/- in 2013-2014. In

the year 2014-2015, the appellant took Family Mediclaim Policy for

a sum insured of Rs.5,00,000/- for the period 07.02.2014 to

06.02.2015, 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 undergo treatment in Post Graduate Institute (PGI),

Chandigarh. He was initially hospitalized from 24.05.2014 to

19.07.2014 for which the medical bill was for an amount of

Rs.5,40,741/-. He was again hospitalized from 31.08.2014 to 3

17.10.2014, for which the medical bill was for Rs.3,14,485/-.

The total amount of medical bill thus came to Rs.8,55,226/-.

The appellant lodged a claim for the said amount with the

respondent–National Insurance Company Ltd (for short “Insurance

Company”), which was initially repudiated by the Insurance

Company without assigning any reason. However, later

considering that the said Master Jasnoor Singh had an individual

medical claim policy in the year 2009-2010 for Rs.55,000/-, the

respondent - Insurance Company deposited a sum of Rs.27,550/-

in the account of the appellant towards final payment of the claim.

4. Since the remaining claim was not paid, the appellant filed a

complaint before the District Consumer Disputes Redressal Forum

(for short “District Forum”) claiming an amount of Rs.5,00,000/-,

which was the sum insured under the Family Mediclaim Policy for

the relevant year 2014-2015. Before the District Forum, the

respondent – Insurance Company raised various preliminary

objections but had mainly claimed that since the said Master

Jasnoor Singh was having pre-existing disease, hence the claim was

not payable under the terms of the Policy. The District Forum, 4

however, held that since the sum insured under the individual

Mediclaim Policy of Master Jasnoor Singh for the year 2010-2011

(four years prior to his hospitalisation) was Rs.1,07,500/-, the

amount payable would be 50% of such sum insured for the year

2010-2011, which comes to Rs.53,750/- and not 50% of the sum

insured in the year 2009-2010, according to which Insurance

Company had paid Rs.27,550/-. Thus, District Forum directed

that the balance amount of Rs.26,200/- would be payable to the

appellant, along with Rs.5000/- towards harassment and mental

agony, plus Rs.2000/- on account of litigation expenses, along with

interest @ 9% p.a.

5. Challenging the said order, the appellant herein filed an

appeal before 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/-, minus the amount already paid by the Insurance

Company. Besides this, the Insurance Company was also directed

to pay Rs.30,000/- as compensation for mental agony and

harassment, plus Rs.10,000/- as litigation cost. 5

6. Aggrieved by the said order of the State Commission, the

respondent–Insurance Company filed a Revision Petition No. 2295

of 2017 before the National Consumer Disputes Redressal

Commission (for short “National Commission”). By its order dated

20.07.2017, the National Commission upheld the order of the

District Forum. After holding that the said Master Jasnoor Singh

had pre-existing disease which was symptomatic in the year 2009,

the National Commission held that the appellant herein would be

entitled to 50% of the sum insured under the individual Mediclaim

Policy of Master Jasnoor Singh for the year 2010-2011. Challenging

the said order of the National Commission, this appeal has been

filed by way of Special Leave Petition.

7. The submission of learned counsel for the appellant is that

since the individual Mediclaim Policy of Master Jasnoor Singh was

continuously held since 2007-2008 till the year 2014-2015 and it

not being the case of the Insurance Company that at the time of

taking initial individual Mediclaim Policy in the year 2007, the said

Master Jasnoor Singh had any such disease, hence, the repudiation

or scaling down of the claim of the appellant could not be justified. 6

It was contended that the entire amount, as awarded by the State

Commission, should be restored and this appeal be allowed.

8. Per contra, learned counsel for the respondent – Insurance

Company has justified the order of the National Commission in

awarding the compensation of 50% of the sum insured for the year

2010-2011, as had been awarded by the District Forum and has

prayed that the present appeal be dismissed.

9. We have heard learned counsel for the parties at length and

have perused the record.

10. The fact that Mediclaim Policy of Master Jasnoor Singh was

continuously taken by the appellant for varying sum insured since

2007-2008 till 2014-2015 is admitted by the insurance company.

It is also not disputed that at the time of taking the initial

Mediclaim Policy for the year 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 family members and it was

only in the year 2014-2015, at the time of renewal of the

individual Mediclaim Policies, that the appellant had taken the 7

Family Mediclaim Policy, which was effective from 07.02.2014 to

06.02.2015. It is also admitted that the said Family Mediclaim

Policy was for a total sum insured amount of Rs.5,00,000/-.

Under the terms of the Policy, the total expenses incurred for any

one illness would be limited to 50% of the sum insured for the

family. The relevant Clause under the Policy is re-produced

hereunder:

“Company’s liability would, arise if the treatment of disease or injury contracted/suffered is incepted during the policy period. Total expenses incurred for any one illness is limited to 50% of Sum Insured per family. Company’s liability in respect of all claims admitted during the period of insurance shall not exceed the Sum Insured mentioned in the Schedule”. (emphasis supplied)

11. It is not disputed that the sum insured under the Family

Mediclaim Policy, was Rs.5,00,000/-. From the above, it would be

clear that the total medical claim for all the four members of the

family during the period of commencement of the Insurance Policy

(i.e. 07.02.2014 to 06.02.2015) would be Rs.5,00,000/- and for any

individual claim or illness for any one member of the family, the

limit would be 50% of the sum insured, which in the present case 8

would come to Rs.2,50,000/-. Thus, at best the maximum claim

which could be payable in the present case would be 50% of the

sum insured under the Family Mediclaim Policy for the medical

treatment of one member of the family, which was Master Jasnoor

Singh.

12. It may be noticed that the claim could not have been

repudiated by the Insurance Company as there was no pre-existing

disease when the initial individual Mediclaim Policy of Master

Jasnoor Singh was taken in the year 2007-2008. Since then the

policy was regularly renewed up to the year 2014-2015. Thus in the

facts of the present case, the respondent – Insurance Company

cannot take the plea of any pre-existing disease of Master Jasnoor

Singh. Even otherwise, after having initially repudiated the claim

of the appellant, the Insurance Company had itself allowed the

claim to the extent of Rs.27,550/-, which amount was deposited in

the account of the appellant, meaning thereby that the question of

pre-existing disease in the case of the claimant was not considered

to be material by the Insurance Company.

9

13. As we have already observed herein above, the total

medical expense or claim for any one illness for any individual

member of the family would be limited to 50% of the sum insured

for the family. In the present case, the sum insured for the family

under the Family Mediclaim Policy was Rs.5,00,000/-. Thus, in our

considered view, the amount payable against the medical claim of

Master Jasnoor Singh, under the policy, would be limited to the

extent of Rs.2,50,000/-. Undisputedly, the medical expense

incurred and claimed by the appellant for the treatment of Master

Jasnoor Singh within the effective period of the policy was over

Rs.8,00,000/-. As such the appellant would be entitled to a sum of

Rs.2,50,000/- minus the amount already paid by the Insurance

Company under 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 final settlement of the medical insurance

claim of the appellant. The appellant would also be entitled to an

amount of Rs.50,000/- towards mental agony and harassment, 10

plus Rs.30,000/- towards costs of litigation. The Insurance

Company would also be liable to pay interest @ 7.5% p.a. on the

balance amount payable, from the date of the complaint filed before

the District Forum, till the date of actual payment of the balance

amount.

………………………………..J (UDAY UMESH LALIT)

………………………………J (VINEET SARAN) New Delhi August 14, 2019