Supreme Court Orders Insurance Company to Reimburse Medical Expenses Incurred in Accident, Calls Insurance Company’s Conduct “Unfair and Unjust”

In a significant judgment, the Supreme Court of India ruled in favor of the insured, Hem Raj, ordering The New India Assurance Co. Ltd. To indemnify the total amount of INR 10,36,500/- for an accident that occurred in Nepal. The Court found the insurance company’s conduct “unfair and unjust” for denying reimbursement of medical expenses incurred by the insured towards the treatment of an injured third-party involved in the accident.

The case involved an accident on 11^th September 2014, in Nepal, where the insured’s vehicle was driven by someone else and resulted in the death of Smt. Santliya Tharu and injuries to Ram Parshad Tharu. The insurance policy covered the territory of India and Nepal, and the insured sought reimbursement for various expenses incurred.

The National Consumer Disputes Redressal Commission (NCDRC) initially disallowed the indemnification of medical expenses, citing “no evidence on record.” However, on appeal, the Supreme Court found medical bills (Exhibits P-9 to P-28) on record supporting the medical expenses incurred by the insured. The Court criticized the insurance company’s incorrect submissions before the NCDRC, which led to the denial of reimbursement, and termed the insurer’s conduct as “not fair and just.”

Hon’ble Justice B.V. Nagarathna, who delivered the judgment, stated, “The submissions made on behalf of the insurance company before the NCDRC are contrary to the evidence on record as a result of which the appellant herein has been not only deprived of the aforesaid amount spent by him towards medical expenses but also has been constrained to approach this Court. We find that the stand of the insurer in this case is not fair and just.”

The Supreme Court allowed the appeal and directed The New India Assurance Co. Ltd. To pay the insured the amount of INR 4,09,000/- for medical expenses, along with 7% interest per annum from the date of filing the complaint before the District Forum. Additionally, a nominal cost of INR 30,000/- was imposed on the insurance company.

 Date of Decision: 25th July, 2023

HEM RAJ vs THE NEW INDIA ASSURANCE CO. LTD.

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