Pranav B Prem

The Raipur (Chhattisgarh) District Consumer Disputes Redressal Commission, presided over by Shri Dakeshwar Prasad Sharma (President) along with Smt. Nirupama Pradhan and Shri Anil Kumar Agnihotri (Members), has held Star Health and Allied Insurance Company Ltd. guilty of deficiency in service and unfair trade practice for deducting ₹12,000 from a genuine health insurance claim without justification. The insurer was directed to refund the deducted amount with interest, compensation, and litigation costs.

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Background of the Case

The complainant, Mohit Gandhi, had taken a health insurance policy (valid from 15.12.2022 to 14.12.2023) from Star Health. On 22.12.2022, he was admitted to Raipur Stone Clinic for kidney stone treatment, incurring hospital expenses of ₹74,600. When Gandhi lodged a claim, the insurer reimbursed only ₹62,470, arbitrarily deducting ₹12,000 under the category “professional fees and procedure charges,” stating that these were “Not Reasonable and Necessary.” The company did not explain the basis for this deduction nor cite any relevant clause from the policy. Gandhi first approached the insurer for clarification but did not receive any satisfactory explanation. Left with no remedy, he filed a complaint before the Raipur District Consumer Commission in 2024 (Case No. CC/2024/296).

Proceedings Before the Commission

Despite service of notice, the insurance company failed to appear before the Commission. The matter was therefore decided ex parte based on the documents placed by the complainant. The Commission carefully examined the policy terms, medical records, hospital bill, and the insurer’s assessment sheet. It noted that although deductions were made, the insurer had not produced any document or policy provision to substantiate how the professional charges claimed by the hospital were excessive or unreasonable.

Observations of the Bench

The Bench found the conduct of the insurance company arbitrary and unjustified. It remarked:“In professional treatment, fees of doctors, surgeons, anesthetists, and procedure charges may vary from hospital to hospital depending upon expertise and facilities. Merely branding them as ‘not reasonable and necessary’ without any cogent ground or supporting clause of the insurance policy is not sustainable.” The Commission emphasized that an insurer is legally obliged to clearly communicate the grounds of any deduction to the insured. Failure to do so not only causes financial loss but also mental agony to the policyholder.

The Commission further relied on the principle that consumer fora are meant to protect policyholders from arbitrary practices of insurance companies, and that in health-related claims, the benefit of doubt must lean in favor of the insured unless the insurer establishes specific exclusions.

Final Order

Holding that the insurer’s action amounted to deficiency in service and unfair trade practice, the Commission partly allowed the complaint and ordered Star Health and Allied Insurance Company to:

• Refund the deducted ₹12,000 to the complainant,

• Pay 6% interest on the amount from the date of filing of the complaint (06.08.2024) until realization,

• Pay ₹3,000 as compensation for mental harassment caused to the complainant, and

• Pay ₹2,000 towards litigation costs.

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The decision was pronounced on 21.07.2025, and the complaint was thereby allowed.

Cause Title: Mohit Gandhi vs. Star Health and Allied Insurance Company

Case No: CC/2024/296

Coram: Shri. Thakeshwar Prasad Sharma [President], Smt. Nirupama Pradhan [Member],  Shri. Anil Kumar Agnihotri [Member]