Gurgaon District Commission Holds Apollo Munich Health Insurance Liable For Wrongfully Repudiating Genuine Medical Claim

Brief Facts:

The Complainant purchased an insurance policy from Apollo Munich Health Insurance (“Insurance Company”). He renewed the policy from March 8, 2018, to March 7, 2020, for a sum insured of Rs. 5,00,000/- and paid a premium of Rs. 30,454.62/-. The policy covered the Complainant's wife, daughter and son.

The Complainant's wife was admitted to Medanta Hospital, Gurugram on May 26, 2018, for pain in her lower abdomen and heavy bleeding. The insurance company was informed about the hospitalization. The wife was discharged from the hospital the next day. The complainant submitted a claim for Rs. 54,257/- incurred on medical treatment but the claim was rejected by the insurance company. The insurance company rejected the claim based on an exclusion clause stating that the admission was for investigation and evaluation of the ailment only.

Feeling aggrieved, the Complainant approached the District Consumer Disputes Redressal Commission, Gurgaon, Haryana (“District Commission”) and filed a consumer complaint against the insurance company. The insurance company contended that the claim was rejected lawfully and justifiably based on the exclusion clauses of the policy.

Observations by the District Commission:

The District Commission referred to the decision of the Punjab & Haryana High Court in IFFCO TOKIO General Insurance Company Ltd. vs Permanent Lok Adalat, Gurgaon and Ors. [(2012) 1 RCR (Civil) 901], where the High Court held that exclusion clauses in insurance policies represent standard contractual provisions. However, in situations where there exists an inequality in bargaining power between the parties, and where consumers lack genuine freedom to negotiate terms, courts retain the authority to nullify unfair and unreasonable clauses. The High Court that when a claim is denied on the grounds of a pre-existing disease, thus invoking an exclusion clause, such denial cannot stand.

The District Commission noted that preceding the administration of treatment for any ailment, requisite investigations must be conducted to ensure adherence to medical standards and protocols. The Complainant incurred medical expenses for investigations pertinent to her ailment, which she duly communicated to the insurance company at the time of her hospital admission. Therefore, it held that the insurance company is estopped from contending that expenses incurred on investigations, antecedent to the treatment, are non-reimbursable due to the exclusion clause within the insurance policy.

The District Commission held that the rejection of the Complainant's claim amounting to Rs. 54,257/- by the insurance company was illegal, arbitrary, and capricious. Consequently, the insurance company was directed to process the Complainant's claim and release the sum of Rs. 54,257/-. Furthermore, the District Commission directed the insurance company to pay a compensation of Rs. 25,000/- and Rs. 11,000/- for litigation expenses.

Case Title: Shri Ramniwas vs Apollo Munich Health Insurance

Case Number: Consumer Complaint No. 80 of 2020

Date of Decision: 27.05.2024