The Delhi High Court addressed the question related to the interpretation of the insurance policy clauses, specifically whether the cancellation of the petitioners' trip, prompted by the Government of India's advisory against non-essential travel to Italy due to the Covid-19 pandemic, fell under the policy's exclusion clause concerning cancellations due to Government Regulation or Prohibition.
Brief Facts of the Case:
The petitioners had challenged an award by Insurance Ombudsman affirming the company's denial of their claim. The petitioners had a travel insurance policy for a trip to Italy which got cancelled due to the Government of India's advisory on non-essential travel, following which, the WHO declared Covid-19 a global pandemic.
The Insurance Company rejected the petitioners' claim, citing that Covid-19 was not covered in their policy. The petitioners argued that the policy did not specify such exclusions. The respondents upheld the denial, prompting the petitioners to file a writ petition before the court.
Contentions of the Petitioners:
The petitioners asserted that their claim was rejected based on an illegal and improper understanding and alleged misinterpretation of Clause 7 of the insurance policy. They contended that the travel plan was not cancelled due to any government regulation or prohibition, challenging the basis of the rejection.
Contentions of the Respondents:
The respondents argued that the writ petition was not maintainable against a private insurance company under Article 226 of the Constitution. It is asserted that the court cannot adjudicate on the terms of the policy, and the petitioners have an alternative remedy under the Consumer Protection Act, 2019.
Additionally, they highlighted the admission by the petitioners in an email dated 12.04.2020, stating that the trip was cancelled due to the government advisory only. The Insurance Company maintained that their rejection aligned with their policy conditions.
Observations by the Court:
The High Court considered the rejection of the petitioners' insurance claim under the 'Reliance Travel Care Policy-Corporate Short Term'. The key issue was the cancellation of the trip by the petitioners and whether it fell under the exclusion clause of the insurance policy, specifically Clause 7, which stated that the insured would not be entitled to a claim if the trip was cancelled due to any government regulation or prohibition.
The Court, in analyzing the impugned award, determined that the key reason for the claim rejection was the cancellation of the trip based on Government Regulation/Prohibition, as stipulated in the insurance policy. Upon reviewing the relevant advisory from the Government of India cautioning against non-essential travel to certain countries, including Italy, the Court interpreted "Advisory" in its ordinary sense, denoting advice rather than prohibition. The Court concluded that the advisory did not restrict Indian citizens from travelling to Italy but served as a precautionary measure amid the evolving COVID-19 situation.
The court referred to its earlier decision in the case of Pavan Sachdeva vs. Office of the Insurance Ombudsman and Anr.[1], emphasizing that if an insurer had illegally repudiated a claim contrary to the policy terms, a writ petition could be maintainable. It highlighted that in cases where there were no disputed questions of fact and the insurer had unjustly repudiated the claim, the writ petition could be entertained.
Decision of the Court:
The High Court found that the respondents had misunderstood the relevant clauses of the insurance policy, specifically Clause 7. The Court set aside the impugned orders and directed the insurance company to honour the petitioners' claim within four weeks, along with interest at the rate of 6% from the date the claim became due. The Court concluded that there was no need to remit the matter back for fresh consideration, as the rejection was solely based on an incorrect interpretation of the insurance policy.
Case Title: Mohit Kumar and Anr. vs. Office of the Insurance Ombudsman and Ors.
Coram: Hon'ble Mr. Justice Purushaindra Kumar Kaurav
Case no.: W.P.(C) 8916/2020
Advocate for the Petitioners: Mr. Prateek Kumar
Advocates for the Respondents: Ms. Prerna Mehta and Mr. Rajeev M. Roy, Advocates for respondent No.2; Mr. Abhishek Nanda and Ms. Parul Tomer, Advocates for respondent No.3
Read Judgment @LatestLaws.com
[1] W.P.(C) 6304/2019
Picture Source :
