Case Note & Summary
The dispute arose from a health insurance claim under a Star Comprehensive Insurance Policy issued by Star Health and Allied Insurance Co. Ltd. to Respondent No.2, which covered his wife Respondent No.3 and their son as a family floater policy for the period 31.03.2018 to 30.03.2019. Respondent No.3, aged around 30 years, allegedly met with a road accident in December 2018 and injured her back. She initially consulted a family doctor, then underwent MRI, and on advice of Spine Surgeon Dr. Abhay Nene was admitted to Aastha Hospital, Kandivali, Mumbai on 17.01.2019. She was diagnosed with prolapse of intervertebral disc L3-L5 and underwent surgery, being discharged on 22.01.2019. Respondent No.2 filed a claim for reimbursement of Rs.3,35,000. The insurer repudiated the claim on 20.02.2019 stating that the surgery for prolapse disc was not covered within the first two years of the policy, and that there was no FIR or proof of accident, calling the accident theory a camouflage. After reconsideration, the insurer again repudiated on 20.04.2019, this time claiming the disc prolapse was due to an existing chronic condition and not trauma, thus excluded under clause 3(a) of the policy. Respondent No.2 filed a complaint before the Insurance Ombudsman on 11.08.2019 under Rule 13(b) of the Insurance Ombudsman Rules, 2017. The Ombudsman passed an award on 30.03.2020 directing the insurer to pay Rs.3,13,301 after deduction of non-medicals as per policy terms. The insurer challenged this award before the Bombay High Court under Articles 226 and 227 of the Constitution. The insurer argued that clause 3(a) clearly excluded disc prolapse treatment within first two years unless caused by accident, and that no accident evidence existed. The respondents argued that a family doctor certificate dated 15.12.2018 proved the road fall, there was no chronic condition, and the exclusion did not apply. The High Court noted the policy covered the respondents, with basic sum insured Rs.5,00,000. It observed that the insurer's second repudiation letter stated the surgery was due to a chronic condition and not trauma related, which could not be the basis to deny the claim. The court found that the insurer's stand on the representation sheet was to reject on ground of two years exclusion for disc diseases. The available judgment text ends mid-sentence while describing the Ombudsman's consideration, without recording the final operative order, ratio decidendi, or final direction. Therefore the final decision and ratio are not mentioned in the provided text.
Headnote
A) Judicial Review - Writ Jurisdiction - Scope of Articles 226 and 227 - Constitution of India, 1950, Articles 226, 227 - Petition filed by private insurance company challenging award of Insurance Ombudsman under Insurance Ombudsman Rules, 2017; Court considered whether award was contrary to contractual terms and perverse; Held that writ jurisdiction is available to examine legality of Ombudsman award (Paras 1, 5-6). B) Insurance - Health Insurance Claim - Exclusion Clause for Disc Prolapse - Insurance Policy Clause 3(a) - Policy excluded expenses for treatment of prolapse of intervertebral disc (other than caused by accident) during first two years of continuous operation; Court observed that insurer's second repudiation stated surgery was due to chronic condition and not trauma related, which cannot be the basis to deny claim without supporting evidence; Held that insurer cannot deny claim solely on assumption of chronic condition (Paras 2.3, 2.4, 4, 6). C) Insurance - Claim Settlement - Standard of Proof for Road Accident - Family doctor certificate and absence of FIR - Court noted respondents produced certificate dated 15.12.2018 from family doctor certifying road fall and treatment with pain killers; absence of FIR did not negate accident when medical evidence supported trauma; Held that insurer's reliance on lack of FIR as camouflage was not sufficient to reject claim if medical evidence supported trauma (Paras 2.3, 4, 6).
Issue of Consideration
Whether the Insurance Ombudsman award accepting policyholder's claim was contrary to exclusion clause 3(a) of the insurance policy; whether absence of FIR and alleged lack of accident evidence justified repudiation; whether insurer established that respondent No.3's disc prolapse was due to chronic condition and not trauma.
Final Decision
Not mentioned (judgment excerpt ends before final decision).
Law Points
- Articles 226 and 227 of Constitution of India provide supervisory writ jurisdiction
- Insurance Ombudsman Rules 2017 Rule 13(b) governs complaint adjudication
- Insurance policy clause 3(a) excludes prolapse of intervertebral disc treatment within first two years unless caused by accident
- Insurer must substantiate chronic condition denial with material evidence
- Family doctor certificate can prove trauma despite absence of FIR
