Bombay HC: Medical insurance payouts not deductible from Motor Vehicles Act compensation

ANSWER TO THE QUESTION REFERRED

18. In the light of the foregoing discussion, we are of the considered opinion that the question as framed ought to be answered in the negative. Thus, any amount received by a claimant under a mediclaim policy or under a medical insurance policy is not liable to be deducted from the amount of compensation payable to a claimant under the head “medical expenses” in proceedings under Section 166 of the M.V. Act.

Any Amount Received By Accident Victim from Mediclaim Cannot Be Deducted from Compensation to be paid to the Claimants as same is independent contract. Insurer are liable to pay even if Claimants receive amount from Mediclaim.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

CIVIL APPELLATE JURISDICTION

FIRST APPEAL NO.1344 OF 2014

The New India Assurance Co. Ltd. Vs  Mrs. Dolly Satish Gandhi

CORAM : A.S. CHANDURKAR, MILIND N. JADHAV & GAURI GODSE, JJ

Dated: 28TH MARCH 2025.

JUDGMENT : [ Per A.S. Chandurkar, J. ]

Citation: 2025:BHC-AS:14458-FB

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Whether Insurance Company is bound to give coverage for mental illness along with physical illness?

Can mental illness be treated differently from physical illness for medical insurance purposes, is the question that arises in the present petition.

3. The petition raises an important issue relating to insurance coverage for mental illnesses and the provision of non-discrimination qua such illnesses as enshrined in Sections 21(1)(a) and 21(4) of the Mental Healthcare Act, 2017 (hereinafter, ‘MHA, 2017’).

27. It is clear from a perusal of the provisions of MHA, 2017, as also the provisions of the IRDAI Act, 1999 that immediately upon the MHA, 2017 coming into force, all insurance products ought to have extended the same treatment for mental and physical illnesses and remove any clause that discriminate between the same. The Insurance Ombudsman’s order which holds that the provisions of the MHA are not relevant to the present Petitioner is untenable. The MHA, 2017 has come into effect from May/July, 2018, and thus the exclusion in the Healthcare Policy of NICL with respect to “all psychiatric and psychosomatic disorders/diseases”, under Clause 4.10 as noted above, is contrary to law.

31. The Insurance Ombudsman’s order failed to consider the fact that the MHA, 2017 recognised the rights of the Petitioner and the conclusion of the Insurance Ombudsman that the provisions of the MHA, 2017 are not relevant, is completely contrary to law and is untenable. The MHA, 2017 and the provisions thereof, are absolutely relevant for a person who was suffering from Schizoaffective Disorder. Thus, the Petitioner was entitled for reimbursement of her claim as per the provisions of the MHA, 2017.

33. It is made clear that NICL and all insurance companies are liable to give effect to Section 21(4) of the MHA, 2017 with effect from the date when it has come into force i.e., 29th May, 2018. Mental illnesses ought to be covered without any discrimination. IRDAI would circulate a copy of this order in order to enable compliance by all the insurance companies.

IN THE HIGH COURT OF DELHI AT NEW DELHI

W.P.(C) 3190/2021

SHIKHA NISCHAL Vs NATIONAL INSURANCE COMPANY LIMITED

CORAM:

JUSTICE PRATHIBA M. SINGH

Date of decision: 19th April, 2021

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When insurance company can not avoid payment of Mediclaim?

The contention raised by the learned counsel
for the Insurance Company cannot stretched any
further in view of the clear cut finding by the
Apex Court in a decision in the case of United
India Insurance Company Limited v. Manubhai
Dharmasinhbhai Gajera and others, reported in
(2008) 10 SCC 404, wherein, it has been held that
“as per the terms of the prospectus and the
insurance policy in the present case what was
necessary for non-renewal was a pre-existing

disease when the cover was incepted for the first
time. Hence, only because the insured had
contracted or come to suffer a disease during the
currency of the insurance policy, the same would
not mean that the said disease shall be excluded
or that renewal could be denied on that ground.”
It has been further held that “if the insured had
made some claim in each year, the insurance
company should not refuse to renew insurance
policies only for that reason. In the same
judgment, it has been held that “Insurance
companies cannot either in their prospectus or in
the terms of the policy lay down any condition
which would be derogatory to the terms and
conditions approved by IRDA.”
12. This case can be viewed from other angle. The
disease acquired by the wife of the petitioner
was during the pendency of the Insurance Policy.
The respondents-Insurance Company renewed the
policy with loaded premium and with an assurance
that if the petitioner pays this loaded premium,
the exclusion clause will not be there in the
renewed policy. However, the respondents seem to
have backed out from their promise, as they
charged the loaded premium and kept the exclusion
clause in the renewal policy despite the fact
that the disease was acquired during the pendency
of the policy. We are living in a welfare State.
All these rules and policies are meant for the
welfare of the human beings. The authorities are

not expected to stick to technicalities and adopt
a wooden attitude while dealing with the human
beings. Once the respondent-Insurance Company has
insured a person for mediclaim, they cannot be
allowed to shift the burden on the insurer and
refuse the mediclaim at the time when person
suffers from a disease.
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 4550 of 2006

NM BIJLANI, IAS (RETD)
V
NEW INDIA ASSURANCE CO LTD & 2..
CORAM: MR.JUSTICE MOHINDER PAL
Date : 01/02/2017
Citation: AIR 2017 Guj 57

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Whether mediclaim can be rejected on the ground that pre-existing disease not known to insured was not disclosed?

Dr. Kundnani seems to have changed his mind subsequently and given certificate on 04/01/2010 stating that the insured had been suffering from this problem not since last three years but for the past three months. Let us assume that this letter was issued with an intention to help the insured and that the insured was suffering from this problem for the past three years. Still, we fail to understand as to how mere complaints of persistent non-resolving pain in left leg could make a layman like the Complainant image that he was suffering from some disorder of nervous system, which he should have disclosed in the proposal form. Contention of the Learned Counsel for the Insurance Company, that such a pain observed when the insured was examined at the Bombay Hospital should be sufficient to attribute to the insured the knowledge that he was suffering from the ailment/disease when he submitted the proposal more than two years prior to the examination by the doctor, cannot at all be accepted. Hindsight is good but, hindsight cannot lead to taking the person back in the scale of time. What the patient came to know in the year 2009 could not have been imagined by him in the year 2008 when he filled-up the proposal form. Therefore, inference that insured knew of his disease and he had suppressed it or did not disclose it was thoroughly unwarranted. We may point out that the Insurance Ombudsman to whom the matter was taken up has merely observed that the ailment was possibly pre-existing. He had not come to the conclusion that the ailment was decidedly pre-existing. For repudiating a claim Insurance Company must show that the ailment was pre-existing to the knowledge of the insured and the insured suppressed material information.

State Consumer Disputes Redressal Commission

Mr. Ashok M. Ahuja vs United India Insurance Co. Ltd. ... on 10 December, 2013
Citation;2015(3) ALLMR(Journal)50

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