The National Consumer Disputes Redressal Commission has reaffirmed that insurers cannot repudiate claims based on alleged non-disclosure of pre-existing conditions without producing credible, documented evidence. This judgment clarifies the legal threshold for invoking the doctrine of uberrimae fidei in group health insurance disputes, offering critical guidance to both consumers and insurers.
Background & Facts
The Dispute
The dispute arose from the repudiation of a health insurance claim under a group policy issued by Religare Health Insurance Co. Ltd. to the respondent, Jarnail Singh, an employee of a corporate entity. The policy covered a sum assured of Rs. 5,00,000 per individual for the period 12.12.2017 to 11.12.2018, with an annual premium of Rs. 15,391 paid by the employer.
Key Facts
- The respondent was admitted to Fortis Hospital, Mohali on 27.05.2018 for acute cardiac symptoms including sweating, vomiting, and dizziness.
- He underwent PTCA with stent placement in the LAD artery and was discharged on 02.06.2018.
- The insurer denied the claim on 15.07.2018, alleging suppression of a 10-15 year history of hypertension.
- The insurer relied on a cashless hospitalization form filed by Balwinder Kaur, which was unsigned by the respondent and unsupported by any affidavit.
- No prescription slip, OPD card, medical certificate, or treatment record from any physician prior to the policy inception was produced by the insurer.
- The respondent consistently maintained he had never been diagnosed with hypertension, never taken anti-hypertensive medication, and was unaware of any such condition.
- Dr. Arun Kochar and Dr. Amreen Dhindsa, consulted by the State Commission, confirmed no evidence of prior anti-hypertensive treatment.
Procedural History
- 27.05.2018: Respondent admitted to Fortis Hospital, Mohali for cardiac treatment.
- 15.07.2018: Insurance claim repudiated by Religare Health Insurance.
- 12.09.2018: Complaint No. CC/965/2018 filed before District Consumer Disputes Redressal Commission, Punjab.
- 21.06.2021: District Commission allowed the complaint, directing payment of Rs. 5,00,000 with 18% interest from 27.05.2018.
- 19.04.2022: State Consumer Commission dismissed the appeal, upheld the District Commission’s order, but reduced interest rate to 9%.
- 20.07.2022: Revision Petition No. NC/RP/742/2022 filed before NCDRC challenging the State Commission’s order.
- 09.06.2026: NCDRC dismissed the revision petition.
Relief Sought
The insurer sought to set aside the State Commission’s order dated 19.04.2022, arguing that the claim was void due to material non-disclosure. The respondent sought confirmation of the Rs. 5,00,000 reimbursement with 9% interest from 27.05.2018.
The Legal Issue
The central question was whether an insurer can deny a health insurance claim under the doctrine of uberrimae fidei based solely on an unsubstantiated allegation of pre-existing hypertension, without producing authentic medical records or evidence of actual diagnosis and treatment prior to policy inception.
Arguments Presented
For the Appellant
Mr. Pankaj Seth, counsel for Religare, argued that the respondent’s negative response to a query on hypertension in the proposal form constituted a material suppression under Section 45 of the Insurance Act, 1938 and the doctrine of uberrimae fidei. He relied on Reliance Life Insurance Co. Ltd. v. Rekhaben Nareshbhai Rathod (2019) 6 SCC 175 to assert that any non-disclosure, even if innocent, voids the contract and disentitles the claimant. He contended that the policy terms were binding and the insurer’s right to rescind was absolute upon discovery of concealment.
For the Respondent
Mr. Humraz Bir Singh and Mr. Guriqbal Singh Pantalia argued that the insurer failed to discharge its burden of proof. They emphasized that no prescription, OPD record, diagnostic report, or physician certification was produced to establish that the respondent had been diagnosed or treated for hypertension within four years prior to policy commencement. They cited Rubi (Chandra) Dutta v. United India Insurance Co. (2011) 11 SCC 269 and subsequent rulings in Sunil Kumar Maity v. SBI and Rajiv Shukla v. Gold Rush Sales & Services Ltd. to show that mere suspicion or unverified forms cannot substitute for credible evidence.
The Court's Analysis
The NCDRC examined the legal standard for invoking uberrimae fidei in health insurance contracts. It held that while the doctrine imposes a duty of full disclosure, it does not permit insurers to repudiate claims on speculative or uncorroborated assertions. The Court emphasized that the burden of proving non-disclosure lies squarely on the insurer.
"The Insurance Company has not produced any authentic evidence like a prescription slip, OPD Card or a certificate of physician to show any treatment having been undertaken by the complainant for hypertension within a period of four years before the commencement of the policy."
The Court noted that the cashless hospitalization form relied upon was unsigned by the respondent and filed by a third party, rendering it legally inadmissible as proof of prior illness. It further relied on the testimony of two independent physicians who confirmed the absence of prior anti-hypertensive medication.
The Commission distinguished Reliance Life Insurance by observing that in that case, there was documented medical history and treatment records. Here, there was none. The Court reaffirmed that mere non-disclosure without proof of knowledge and materiality cannot justify repudiation.
It also held that the State Commission’s reduction of interest from 18% to 9% was reasonable and within its discretion, and no error of law or fact warranted interference under revisional jurisdiction.
The Verdict
The revision petition was dismissed. The NCDRC upheld the State Commission’s order dated 19.04.2022, confirming the payment of Rs. 5,00,000 to the respondent with 9% interest from 27.05.2018 until actual payment. No costs were awarded. The insurer’s attempt to void the claim on grounds of non-disclosure was rejected for lack of credible evidence.
What This Means For Similar Cases
Burden of Proof Rests Entirely on the Insurer
- Practitioners must insist that insurers produce contemporaneous, authenticated medical records to prove pre-existing conditions.
- Unsigned forms, hearsay affidavits, or internal notes are insufficient to discharge the burden under Section 45 of the Insurance Act.
- Absence of prescription, OPD records, or physician certification renders allegations of suppression legally untenable.
Consumer’s Lack of Medical Knowledge Is a Valid Defense
- A claimant’s assertion of unawareness of a condition, supported by absence of treatment, is legally significant.
- Courts will not infer knowledge from vague questionnaire responses where no diagnosis or treatment exists.
- Insurers cannot impose a duty of omniscience on policyholders.
Precedent Reinforces Consumer-Friendly Interpretation
- Rubi Dutta, Sunil Kumar Maity, and Rajiv Shukla collectively establish that insurers cannot exploit technicalities to deny legitimate claims.
- This judgment strengthens the position of consumers in group health policies where medical underwriting is minimal.
- Legal advisors should advise clients to retain all medical records and demand written justification for claim denials.
