Psychiatric Treatment Requiring Hospitalization Can Be Covered Under Mediclaim If Policy Terms Do Not Explicitly Bar Such Cases: J&K High Court
The Jammu and Kashmir High Court held that if hospitalization is deemed necessary by medical experts, insurance companies cannot deny claims solely on the basis of exclusion clauses without proper justification.The petitioner had rejected the claim on the ground that the respondent claimant could have been treated as an outpatient, which would exclude him from making the claim, and also...
The Jammu and Kashmir High Court held that if hospitalization is deemed necessary by medical experts, insurance companies cannot deny claims solely on the basis of exclusion clauses without proper justification.
The petitioner had rejected the claim on the ground that the respondent claimant could have been treated as an outpatient, which would exclude him from making the claim, and also argued that psychiatric treatments were excluded under the policy.
A bench of Justices Sanjeev Kumar and Moksha Khajuria Kazmi held that the claimant was fully eligible to claim insurance on account of his hospitalization due to major depressive disorder and that the petitioner had failed to demonstrate the respondent's non-eligibility to claim the said amount.
The court said that the insurer failed to provide substantive evidence to prove that the treatment could have been managed as an outpatient case. The court added that the medical expert's report contradicted the insurer's stance, emphasizing that the respondent's condition required inpatient care.
The court also stated that the petitioners had failed to convince the court that the respondent was brought in for treatment due to drug addiction and for psychiatric treatment, which would have excluded him from the policy claim.
The High Court upheld the Commission's decision to award reimbursement of ₹2,26,322 with 8% interest. However, the court relieved the petitioner from paying the damages imposed by the consumer forum.
The court directed the Registry to release the amount of ₹3,45,216 deposited by the petitioner before the court in favor of respondent No.2, excluding the ₹30,000 awarded as damages.
BACKGROUND:
The respondent filed a consumer complaint against National Insurance Co. Ltd., claiming reimbursement under a Mediclaim Insurance Policy for treatment expenses related to major depressive disorder and schizophrenia. The policy was valid from February 24, 2005, to February 23, 2006. During this period, the respondent was hospitalized multiple times and incurred medical expenses amounting to ₹2,26,322. The insurance claim was rejected by National Insurance Co. Ltd., stating that psychiatric and psychosomatic disorders were excluded under Clause 4.8 of the policy and that outpatient treatment was not covered.
The Divisional Consumer Forum, Jammu, upheld the insurance company's decision and dismissed the respondent's complaint. On appeal, the Jammu & Kashmir State Consumer Disputes Redressal Commission overturned the forum's decision and directed the insurer to reimburse the medical expenses along with 8% interest and additional damages of ₹30,000. National Insurance Co. Ltd. challenged this order before the High Court under Article 226 of the Constitution.
APPEARANCE:
Suneel Malhotra, Advocate FOR PETITIONERS
Mohit Vaid, Advocate. FOR RESPONDENTS
Case-Title: National Insurance Co. Ltd. Vs Jammu and Kashmir State Consumer Disputes Redressal Commission & ORS, 2025
