Supreme Court Directs Insurance Company to Compensate for Medical Expenses in Accident Claim
The Supreme Court in Hem Raj vs. The New India Assurance Co. Ltd. ruled in favor of an insured vehicle owner, directing the insurance company to reimburse medical expenses incurred for an accident victim. The Court set aside the National Consumer Disputes Redressal Commission’s (NCDRC) order that had denied the medical claim, emphasizing that the insurer’s arguments were contrary to the evidence on record.
Background of the Case
The appellant, Hem Raj, owned a Mahindra Pick-up Vehicle (PB-19H-2461) used for personal purposes. He purchased an insurance policy from The New India Assurance Co. Ltd., covering India and Nepal. The policy was active from March 21, 2014, to March 20, 2015. On September 11, 2014, the vehicle met with an accident in Bardia Belva, Nepal, killing Smt. Santliya Tharu and injuring Ram Parshad Tharu.
The appellant paid medical expenses for the injured and compensation for the deceased’s family, totaling ₹10,36,500. However, when he sought reimbursement from the insurance company, his claim was denied, prompting him to approach the consumer forum.
Claims Made by the Appellant
- ₹3,27,500 for death compensation.
- ₹4,09,000 for hospital expenses.
- ₹3,00,000 as a final settlement for the victim’s family.
The appellant approached the District Consumer Disputes Redressal Forum, which ruled in his favor, directing the insurance company to process the claim as per the policy terms. The insurer challenged the decision before the State Consumer Disputes Redressal Commission, which upheld the District Forum’s ruling. However, the insurance company then filed a Revision Petition before the NCDRC, which partially modified the claim.
NCDRC’s Order
- Allowed ₹6,27,500 out of the total claim.
- Denied ₹4,09,000 for medical expenses, stating that the appellant had not provided evidence.
Supreme Court Appeal
Aggrieved by the NCDRC’s order, the appellant filed an appeal before the Supreme Court, submitting additional documents proving the medical expenses.
Arguments by the Appellant
- The medical bills from Charak Hospital and Research Centre, Lucknow, proving ₹4,09,000 was spent on treatment, were already on record.
- The NCDRC erred in stating that there was “no evidence” while ignoring the documents submitted to the consumer forums.
- The insurance company’s refusal to pay was unjustified and unfair.
Arguments by the Insurance Company
- The claim for ₹4,09,000 should be denied as the appellant had not proved the expenditure before the NCDRC.
- They were only liable to compensate per the policy’s specific terms.
Supreme Court’s Observations
The Supreme Court bench, comprising Justices B.V. Nagarathna and Ujjal Bhuyan, ruled in favor of the appellant.
1. Evidence Was Already on Record
“The claim for ₹4,09,000 was backed by valid medical bills and receipts. The insurance company’s assertion that there was ‘no evidence’ is factually incorrect.”
2. Insurance Company’s Stand Was Unfair
“The insurer’s arguments contradict the evidence submitted before the consumer forums. Such a stand cannot be sustained in law.”
3. NCDRC Misinterpreted the Case
“The appellant had submitted medical bills before the District Forum, which directed the insurer to process the claim as per policy terms. The NCDRC erred in disregarding this aspect.”
4. Compensation for Medical Expenses Is Justified
“The appellant paid for the victim’s treatment in good faith, and denying reimbursement would be unjust. The insurance company must indemnify the appellant.”
Final Judgment
- The Supreme Court set aside the NCDRC’s order denying the medical claim.
- The insurance company was directed to pay ₹4,09,000 with 7% interest per annum from the date of the complaint.
- A nominal cost of ₹30,000 was imposed on the insurance company.
- The amount must be disbursed within one month.
Implications of the Judgment
- Reaffirms that valid medical expenses should be reimbursed by insurers.
- Prevents insurance companies from denying claims based on technicalities.
- Ensures that consumer courts properly assess evidence before ruling.
- Provides relief to accident victims and their dependents in cases of third-party insurance claims.
This ruling safeguards policyholders’ rights, ensuring that insurance companies honor legitimate claims without arbitrary denials.
Petitioner Name: Hem Raj.Respondent Name: The New India Assurance Co. Ltd..Judgment By: Justice B.V. Nagarathna, Justice Ujjal Bhuyan.Place Of Incident: Bardia Belva, Nepal.Judgment Date: 24-07-2023.
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