Case Note & Summary
The dispute arose from a claim made by the appellant under a Family Mediclaim Policy for his son, Master Jasnoor Singh, who underwent significant medical treatment in 2014. The appellant had taken individual Mediclaim Policies for his family members since 2007, and in 2014, he opted for a Family Mediclaim Policy with a sum insured of Rs.5,00,000. After Master Jasnoor Singh's treatment, which incurred medical bills exceeding Rs.8,00,000, the Insurance Company initially repudiated the claim but later paid a partial amount of Rs.27,550. The appellant sought the full sum insured of Rs.5,00,000 from the District Forum, which awarded him Rs.26,200 plus compensation for harassment. The State Commission later directed the Insurance Company to pay the entire sum insured minus the amount already paid. The Insurance Company challenged this decision before the National Commission, which upheld the District Forum's order, leading to the current appeal. The Supreme Court found that the Insurance Company could not deny liability based on a pre-existing disease since none existed at the time of the initial policy. The court clarified that the maximum claim amount was limited to 50% of the sum insured, amounting to Rs.2,50,000. The appeal was allowed, and the Insurance Company was directed to pay the appellant the remaining amount along with compensation for mental agony and litigation costs, plus interest on the balance amount.
Headnote
A) Insurance Law - Liability under Mediclaim Policy - Extent of Liability - Code of Civil Procedure, 1908 - The court determined that the Insurance Company could not repudiate the claim based on pre-existing disease as there was none at the time of initial policy issuance. The court held that the maximum payable amount under the Family Mediclaim Policy was limited to 50% of the sum insured, which was Rs.2,50,000 for the treatment of Master Jasnoor Singh (Paras 10-14).
Issue of Consideration
Extent of liability of the Insurance Company under the Family Mediclaim Policy
Final Decision
The Supreme Court allowed the appeal, directing the Insurance Company to pay Rs.2,50,000 minus the amount already paid, along with Rs.50,000 for mental agony and Rs.30,000 for litigation costs, plus interest at 7.5% p.a. from the date of the complaint.
Law Points
- Insurance liability
- Mediclaim Policy
- pre-existing disease
- claim repudiation
- compensation for mental agony
