Supreme Court Directs Insurance Payout of Over ₹4 Lakh in Medical Expenses Dispute

Supreme Court Directs Insurance Payout of Over ₹4 Lakh in Medical Expenses Dispute

In a recent case concerning an insurance claim dispute, the Supreme Court issued a directive to the insurance company to pay the appellant a sum of ₹4.09 lakh to cover the medical expenses incurred. Additionally, the Court ruled that the payment should include interest and nominal costs. This decision came after the Court set aside an order previously issued by the National Consumer Disputes Redressal Commission (NCDRC).

The Supreme Court noted that the representations put forth by the insurance company during the proceedings at the NCDRC were in conflict with the evidence on record. Consequently, this contradictory stance resulted in the appellant being unjustly deprived not only of the amount spent on medical expenses due to the injuries sustained by a victim in an accident but also compelled them to seek recourse from the highest court.

The Division Bench, consisting of Justices B.V. Nagarathna and Ujjal Bhuyan, pointed out that the District Forum had clearly instructed the respondent-insurer to adhere to the terms and conditions stated in the insurance policy. This included settling the claim and making the legally owed payment to the appellant for indemnification. However, the insurer failed to comply with these directives. The State Forum's observations were similar, emphasising the release of the admissible amount to the insured, which should have been done within 45 days of the expiration period.

In this case, the appellant was the owner of a vehicle insured by the respondent insurance company. Unfortunately, the vehicle met with an accident in Nepal, which resulted in the death of one person and injuries to another. As a consequence of the accident, the appellant had to bear several expenses. These expenses included compensation to the family of the deceased, covering medical costs for the injured person's treatment in India, and making a final settlement payment. The total amount claimed by the appellant for reimbursement from the insurance company was ₹10.36 lakh.

Initially, the insurance company declined to make the payment, leading the appellant to seek redressal from the District Consumer Forum. The forum ruled in favour of the appellant. However, the compensation awarded was only ₹1 lakh. Dissatisfied with this decision, the insurance company filed an appeal against the ruling, but their appeal was dismissed. Consequently, they were directed to release the admissible amount to the appellant as per the ruling.

In response, the insurance company filed a revision petition with the NCDRC, wherein they were awarded ₹6.28 lakh in compensation, excluding the medical expenses of ₹4.09 lakh incurred for the treatment of the injured person.

The Supreme Court granted approval to the appellant's appeal and noted that the evidence of the medical expenses was already present in the records. The insurance company's contention that there was 'no evidence' was deemed incorrect by the court.

The Apex Court, in this context, examined the copies of the mentioned Exhibits, which were filed through an application for submitting additional documents. The fact that evidence in the form of Exhibits C-19 to C-28 existed on record was not disputed by the counsel representing the respondent-insurer. The Court reviewed these Exhibits (Annexure P9 to P28), which were issued by Charak Hospital and Research Centre. According to these documents, the appellant had incurred expenses amounting to Rs. 6,54,000 (Nepalese Rupee), equivalent to ₹4,09,000 (Indian Rupee) for the medical treatment of Ram Prashad Tharu.

The insurance company's counsel did not contest the authenticity of these documents. Instead, their contention before the NCDRC was that "there is no evidence on record" to support the payment claim, a submission the Court deemed incorrect and unfounded.

The Court pointed out that the NCDRC had also acknowledged that the appellant did not challenge the Order of the District Forum, which resulted in the disallowance of the mentioned amount.

The Court disagreed with the presented interpretation, stating that it did not consider it to be a correct reading of the Order of the District Forum. The Court clarified that the District Forum had specifically referred to the medical bills at Exhibits C-19 to C-28 and had directed the insurance company to release the amount found admissible to the complainant-appellant.

“The appellant herein was naturally under the impression that the amounts covered under the medical bills would also be payable. Even, the State Commission had stated to the same effect that the claims as per the terms and conditions incorporated in the insurance policy had to be released if found admissible and to the extent of entitlement of the insured. However, the NCDRC, on the basis of the submission of the learned counsel for the insurer, disallowed the disbursement of the medical bills on the premise that there was no evidence on record and that the appellant herein had not contested the Order of the District Forum before the State Commission. As a consequence, the appellant had to approach this Court for seeking reimbursement of the medical bills paid by the appellant for the treatment of Ram Prasad Tharu,” the Bench said.

The Court observed that the submissions made by the insurance company before the NCDRC contradicted the evidence present in the records. As a consequence of this discrepancy, the appellant had not only been deprived of the mentioned amount spent on medical expenses for the injuries sustained in the accident, for which there was third-party insurance coverage but had also been compelled to approach the Court for resolution. The Court found the insurer's stance, in this case, to be unfair and unjust.

In light of these considerations, the Supreme Court allowed the appeal and overturned a portion of the NCDRC's Order that disallowed indemnification of the amount spent by the appellant-insured towards medical expenses. It directed the respondent-insurance company to pay the sum of ₹4,09,000/- (Indian Rupee) as per Exhibits P-9 to P-28. Additionally, the Bench ordered the payment of interest at the rate of 7 per cent per annum, starting from the date of filing the complaint before the District Forum until the amount is fully realised. Moreover, a nominal cost of ₹30,000 was also imposed, payable to the appellant. The insurance company was directed to disburse the aforementioned amounts to the appellant within one month from the date of the Court's ruling.