Ernakulam Consumer Commission Holds Aditya Birla Health Insurance Liable For Arbitrarily Denying Accident Claim On Grounds Of Unrelated Pre-Existing Ailments
Pranav B Prem
The District Consumer Disputes Redressal Commission, Ernakulam, comprising D.B. Binu (President), V. Ramachandran (Member), and Sreevidhia T.N. (Member), has held Aditya Birla Health Insurance Company Ltd. liable for deficiency in service and unfair trade practice for wrongfully repudiating a genuine accident claim on the grounds of unrelated pre-existing ailments. The Commission directed the insurer to reimburse ₹81,042 towards medical expenses, pay ₹10,000 as compensation for mental agony and distress, and ₹5,000 as litigation costs, with 9% annual interest in case of default.
Background
The complainant, Joy Paulose, had obtained a health insurance policy from Aditya Birla Health Insurance Company Ltd., effective from January 17, 2024. On February 1, 2024, he suffered a fall from a height of about 10 feet at his residence, resulting in blunt chest trauma, rib fractures, pneumothorax, and a fracture of the left fifth metacarpal.
He was admitted to MOSCMM Hospital, Kolenchery, and incurred medical expenses amounting to ₹81,042. However, when he sought a cashless claim, it was denied by the insurer on the ground of alleged non-disclosure of pre-existing diseases, namely varicose veins and dyslipidemia. A subsequent reimbursement claim was also repudiated for the same reason. Aggrieved, the complainant approached the Commission under Section 35 of the Consumer Protection Act, 2019, alleging that the insurer’s actions were arbitrary and amounted to deficiency in service and unfair trade practice.
Contentions
The complainant contended that the hospitalization was entirely due to the accidental injury and bore no connection with any pre-existing conditions. He emphasized that the discharge summary clearly attributed the injury to the fall, and that the diseases cited by the insurer — varicose veins and dyslipidemia — were minor and unrelated to his treatment.
He submitted that the insurer’s refusal to honour his claim despite the accident-based coverage and valid documents caused mental agony, financial hardship, and emotional distress.
Although duly served, Aditya Birla Health Insurance neither filed its reply within the prescribed time nor appeared for the hearing. Consequently, the matter proceeded ex parte.
Observations of the Commission
The Commission examined the policy certificate, discharge summary, medical bills, and claim rejection letters, which conclusively established that the complainant’s hospitalization arose solely from the accidental fall. It observed that the insurer’s repudiation based on unrelated pre-existing ailments was arbitrary, unreasonable, and contrary to the terms of the policy. The bench noted that the discharge summary did not mention any chronic illness as the cause of hospitalization, and the treatment was clearly accident-related.
The Commission remarked: “Repudiation of an accidental injury claim solely on the grounds of pre-existing diseases that have no nexus with the cause of hospitalization is unjust and amounts to deficiency in service and unfair trade practice.” The bench also referred to previous consumer rulings where insurers were cautioned against rejecting claims without rational basis, especially when the medical evidence clearly indicates an accidental cause.
Order
Holding Aditya Birla Health Insurance Company Ltd. guilty of deficiency in service, the Commission directed the insurer to:
- Reimburse ₹81,042 towards medical expenses incurred for treatment.
- Pay ₹10,000 as compensation for mental agony and distress.
- Pay ₹5,000 as costs of litigation.
The Commission further directed that the insurer must comply within 45 days, failing which the awarded amount shall carry 9% annual interest from March 16, 2024, until full realization.
Cause Title: Joy Paulose vs. M/s Aditya Birla Health Insurance Company Ltd.
Case No: CC.No. 300 of 2024
Coram: Shri D.B. Binu, President, Shri V. Ramachandran, Member, Smt. Sreevidhia T.N, Member
