Case Note & Summary
The petitioner, an employee of Export Import Bank of India, held a Group Health Insurance policy from United India Insurance Co. Ltd. for the period 01/04/2021 to 31/03/2022. The policy was on a family floater basis. The petitioner submitted four claims totaling Rs.1,13,487.49 on 24/05/2022, within the policy period, for medical expenses incurred by himself and his spouse. The Insurance Company rejected the claims citing Clause 7.2 of the policy, which required claims to be submitted within 30 days of discharge. The petitioner challenged this rejection before the Bombay High Court. The court held that the time limit in Clause 7.2 is directory, not mandatory, and that the substantive right to claim cannot be defeated by a procedural time bar, especially when the claim was submitted within the policy period. The court quashed the rejection and directed the Insurance Company to process the claim on merits within four weeks.
Headnote
A) Insurance Law - Group Health Insurance - Time Bar Clause - Clause 7.2 of Group Health Insurance Policy requiring claim submission within 30 days of discharge is directory and not mandatory - Rejection of claim solely on ground of delay beyond 30 days is unsustainable - The substantive right to claim cannot be defeated by a procedural time limit, especially when the claim was submitted within the policy period - Held that the Insurance Company's repudiation was arbitrary and liable to be set aside (Paras 1-7).
Issue of Consideration
Whether the rejection of a health insurance claim on the ground that it was submitted beyond the time limit stipulated in Clause 7.2 of the Group Health Insurance Policy is legally sustainable.
Final Decision
The court allowed the writ petition, quashed the decision of the Insurance Company rejecting the claim, and directed the Insurance Company to process the claim on merits within four weeks.
Law Points
- Insurance claim limitation clause directory
- not mandatory
- substantive right not defeated by procedural time bar
- Group Health Insurance
- Clause 7.2
- time-barred claim
- repudiation
- consumer protection
Case Details
2026 LawText (BOM) (04) 59
Writ Petition No. 2474 of 2023
Bharati Dangre, Manjusha Deshpande
Mr. Subit Chakrabarti with Ms. Khushnumah Banerjee i/b Vidhii Partners for the Petitioner, Ms. Varsha Chavan for the Respondent No.1
United India Insurance Company Limited & Anr.
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Nature of Litigation
Writ petition challenging rejection of health insurance claim on ground of limitation.
Remedy Sought
Quashing of the Insurance Company's decision rejecting the claim as time-barred and direction to process the claim on merits.
Filing Reason
The Insurance Company rejected the petitioner's claim under a Group Health Insurance policy citing Clause 7.2 which required claim submission within 30 days of discharge.
Issues
Whether the time limit in Clause 7.2 of the Group Health Insurance Policy is mandatory or directory.
Whether the rejection of claim solely on ground of delay beyond 30 days is legally sustainable.
Submissions/Arguments
Petitioner argued that the claim was submitted within the policy period and the time bar clause is directory.
Respondent Insurance Company defended the rejection based on the strict compliance of Clause 7.2.
Ratio Decidendi
The time limit stipulated in Clause 7.2 of the Group Health Insurance Policy for submission of claim within 30 days of discharge is directory and not mandatory. The substantive right to claim cannot be defeated by a procedural time bar, especially when the claim was submitted within the policy period.
Judgment Excerpts
In availing the benefit of Group Health Insurance, the Petitioner placed his claim before his employer i.e. Export Import Bank of India through his communication dated 24/05/2022.
Since this claim is turned down by United India Insurance Co. Ltd., by relying upon the time-lines set out in the insurance policy, the Petitioner is before us, seeking the relief of quashing and setting aside of the decision of the Insurance Company, rejecting the claim of the Petitioner on the ground that it is time barred.
Procedural History
The petitioner submitted a claim on 24/05/2022 under a Group Health Insurance policy. The Insurance Company rejected the claim citing Clause 7.2. The petitioner then filed Writ Petition No. 2474 of 2023 before the Bombay High Court challenging the rejection.
