LI Network
Published on: November 27, 2023 at 16:43 IST
In a recent ruling, the Delhi High Court, presided over by Justice Purushaindra Kumar Kaurav, granted relief to a couple whose insurance claim related to canceled travel bookings due to the onset of Covid-19 was disallowed by the insurer.
The court held that a writ petition would be maintainable if it finds that the insurer has wrongfully repudiated the claim outside the specific terms of the policy.
Justice Kaurav emphasized that the court, under Article 226 of the Constitution, could intervene to enforce a life insurance claim.
He stated, “The determination of the question depends on consideration of several factors, i.e., whether a writ petitioner is merely attempting to enforce his/her contractual rights or the case raises important questions of law and constitutional issues, the nature of the dispute raised, the nature of inquiry necessary for determination of the dispute, etc.”
The petitioners, a married couple, had procured the Reliance Travel Care Policy-Corporate Short Term for their travel from Delhi to Italy. Due to the increasing cases of Covid-19 and the advisory from the Government of India dated February 26, 2020, recommending refraining from non-essential travel to Italy, they canceled their flight bookings.
Upon filing an insurance claim, the Insurance Company rejected it, arguing that Covid-19 was not covered under the policy. Unsatisfied, the petitioners approached the Insurance Ombudsman, whose decision was also unfavorable. The petitioners contended before the court that both decisions were based on a misreading of Clause 7 of the insurance policy, asserting that the travel plan was not canceled due to any Government Regulation or Prohibition.
The Insurance Company’s counsel challenged the maintainability of the petition, arguing that the High Court could not adjudicate on policy terms under Article 226. She further claimed that no interference was warranted, given the petitioners’ admission that they had canceled their trip due to Government Advisory/Instructions.
IRDAI’s counsel argued that the Ombudsman’s award was binding on the insurer or insurance broker but not on the petitioners, suggesting that they could avail an alternate remedy under the Consumer Protection Act, 2019.
The court observed that, aside from the advisory, there was no other Government Regulation or Prohibition issued by the Government of India at the time. Interpreting the advisory, it clarified that the directions were advisory in nature, and the petitioners’ decision not to travel did not imply a Government prohibition.
Justice Kaurav strictly interpreted the terms ‘Regulation’ or ‘Prohibition’ and concluded that the advisory did not constitute a prohibition for Indian citizens to travel to Italy.
On the issue of maintainability, the court noted that no disputed questions of facts were involved, and the focus was on interpreting the policy’s relevant clauses.
Finding that both the Insurance Ombudsman and the Insurance Company had misinterpreted the policy’s terms, committing a grave error of law, the court set aside their orders and directed the honoring of the petitioners’ claims, along with 6 percent interest from the date the claim became due.
Case Title: Mohit Kumar and Anr. v. Office of the Insurance Ombudsman and Ors., W.P.(C) 8916/2020