In the case of Garima Singh v New India Assurance Co Ltd & Ors, the Delhi High Court imposed a ₹50,000 fine on the Central government-owned insurance company for causing distress to a breast cancer patient by wrongfully denying her claim. Justice Subramonium Prasad clarified that the mediclaim policy’s sub-limit of ₹2 lakh for immunotherapy does not apply to Chemo-immunotherapy, a combined treatment method.
Court Intervention
The Court emphasized that even if there was ambiguity, the principle of contra proferentem would favor the petitioner, entitling her to the full claimed amount. Consequently, the Court directed the insurance company to settle Garima Singh’s claim within four weeks. Given the undue harassment suffered by the petitioner, the Court ordered the insurance company to pay her ₹50,000 as costs within the same timeframe.
Singh approached the Court after being denied her insurance claim by New India Assurance Company. Despite having a policy with a cover of ₹44.5 lakhs, her claim for stage-IV breast cancer treatment, including Chemo-immunotherapy, was rejected. The insurer cited a ₹2 lakh sub-limit for immunotherapy treatments. Singh sought ₹11 lakh for her treatment costs.
Ombudsman’s Directive
Upon Singh’s complaint, the Insurance Ombudsman instructed the insurer to honor the claim, emphasizing the critical nature of the treatment. However, Singh alleged non-compliance by the insurer and moved the High Court. The insurance company informed the Court that over ₹37 lakhs had already been disbursed to Singh.
Court’s Ruling
The insurance company argued that the Ombudsman’s award only requires payment according to the policy terms, which limit immunotherapy claims to ₹2 lakh. However, the Court dismissed this argument, emphasizing that the ₹37 lakh already paid to the petitioner was irrelevant to the current claim. The Court ruled that the insurer must honor the claimed amount in compliance with the Ombudsman’s award, both in letter and spirit.
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