Bombay High Court
Reliance General Insurance Company Ltd vs Office Of Insurance Ombudsman And Anr on 2 September, 2025
2025:BHC-AS:37091
Ajit Pathrikar 14-WP-8448-2021-fc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 8448 OF 2021
Reliance General Insurance Company Ltd. ....Petitioner
: Versus :
Office of Insurance Ombudsman and Anr. ....Respondents
Ms. Kalpana Trivedi with Ms. Yashika Jain & Mr. Kushal H., for the
Petitioner.
CORAM : SANDEEP V. MARNE, J.
DATED : 2 SEPTEMBER 2025.
JUDGMENT :
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1) The petition is filed by the Petitioner-Insurance
Company challenging the order dated 8 February 2021 passed by
the Insurance Ombudsman, directing the Petitioner to pay to
Respondent No.2 an amount of Rs. 23,35,796/- against the claim in
respect of travel insurance policy.
2) Respondent No.2 approached the Petitioner for a travel
insurance policy to cover his overseas travel visit to the United
States of America (USA), the United Kingdom (UK) and Canada
during 18 January 2018 to 1 July 2018. Petitioner issued 'Reliance
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Travel Care Insurance Policy-For Individual (61-70)' bearing No.
130521828190000065, valid for the period from 18 January 2018 to
1 July 2018 or till the date of return of the insured, whichever was
earlier. The policy, inter alia, covered Medical Expenses including
transportation, evacuation and repatriation of mortal remains for
USD 50000. According to Petitioner, Respondent No.2 was insured
to the extent of USD 50000, subject to a maximum coverage of USD
12000 for any one illness, as specified in the policy schedule.
According to Petitioner, insurance policy was approved by
Insurance Regulatory and Development Authority of India
("IRDAI").
3) During his visit to USA, Respondent No.2 fell ill and
was required to perform a surgical operation for removal of his
gallbladder at Chandler Regional Medical Centre, Chandler, AZ,
USA where he was hospitalized from 4 May 2018 to 7 May 2018.
Respondent No.2 registered a claim with the Petitioner in respect
of expenditure incurred by him for medical treatment, which was
to the tune of USD 85590. Petitioner settled the claim at USD 12000
on the ground that the claim was in respect of single illness.
Respondent No.2 got aggrieved by the action of the Petitioner in
settling the claim at USD 12000 and filed a complaint before the
office of Insurance Ombudsman for payment of balance amount
under the insurance policy. By award dated 8 February 2021, the
Insurance Ombudsman has directed the Petitioner to pay to
Respondent No.2 amount of Rs.23,35,796/- less non payable
amount, if any, towards full and final settlement of the complaint.
Petitioner filed representation dated 23 February 2021 before the
Insurance Ombudsman. By email dated 9 March 2021, the
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Insurance Ombudsman informed the Petitioner that though the
insurance policy was approved by IRDAI, the clauses did not
establish any link between the two covers i.e. 'medical expenses'
and 'any one illness'. Aggrieved by the award dated
8 February 2021 passed by the Insurance Ombudsman, the
Petitioner has filed the present petition.
4) Ms. Trivedi, the learned counsel appearing for the
Petitioner would submit that the Insurance Ombudsman has
grossly erred in directing payment of amount exceeding USD
12000 towards settlement of the claim of Respondent No.2. That
the insurance policy contained a clear stipulation that the policy
was subject to maximum coverage of USD 12000 for any one
illness. That since Respondent No.2 suffered from only single
illness related to gall bladder, the Petitioner rightly sanctioned
claim for USD 12000. Inviting my attention to the terms and
conditions of the policy, she would submit that USD 50000 is
payable under the policy only in respect of the immediate
emergency medical assistance where the insured was required to
be transported or evacuated to India. That in any case, the terms
and conditions of the policy are clear and unambiguous and that
therefore, Respondent No.2 could not have claimed amount
exceeding USD 12000 in respect of his claim for medical treatment
for illness relating to Gall Bladder. That the insurance policy is
approved by the IRDAI, which aspect is ignored by the
Ombudsman while erroneously settling the claim contrary to the
terms and conditions of the insurance policy. That the Insurance
Ombudsman erred in holding that there is no connection/link
between 'medical expenses' and 'any one illness'. That the
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Insurance Ombudsman failed to appreciate that though the
maximum coverage for medical treatment was for USD 50000,
what was payable in respect of each illness was only USD 12000.
She would accordingly pray for setting aside the order passed by
the Insurance Ombudsman.
5) I have considered the submissions canvassed on behalf
of the Petitioner. I have also gone through the findings recorded in
the order passed by the Insurance Ombudsman and perused the
records of the case filed alongwith the petition.
6) Petitioner issued 'Reliance Travel Care Policy-For
Individual (61-70)' to cover travel visit of Respondent No. 2 to
USA, UK and Canada during 18 January 2018 to 1 July 2018. The
insurance policy was apparently approved by IRDAI vide letter
dated 20 February 2006, which approval was continued from time
to time. During his visit, Respondent No.2 suffered from infection
in the gall bladder leading to perforation of gall bladder and
spreading of the infection to liver. He was hospitalized from
4 May 2018 to 7 May 2018 and underwent the procedure of gall
bladder drainage (Choelecystostomy) at Dignity Health Chandler
Regional Medical Centre, Chandler, Arizona, USA. He incurred
hospital expenditure of USD 85590. Respondent No.2 filed a claim
with the Petitioner in respect of hospital bill of USD 85590.
However, the claim of Respondent No.2 has been sanctioned by
the Petitioner only to the extent of USD 12000.
7) Petitioner claims that though the insurance coverage
for medical expenses under the policy was for USD 50000, the
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same was subject to the condition of maximum of USD 12000 for
'any one illness'. Since Respondent No.2 suffered from only one
illness relating to gall bladder, the claim has been settled for USD
12000 by the Petitioner. In his order dated 8 February 2021, the
Insurance Ombudsman has held that the term 'any one illness' has
not been defined in the terms and conditions specified in the
policy and therefore there was no clarity about the exact
application of the said condition. The Insurance Ombudsman has
observed that even the representative of the Petitioner could not
satisfactorily clarify the query. The Insurance Ombudsman,
therefore, held that the policy does not restrict any illness under
the sub-limits as 'any one illness'. The Insurance Ombudsman
further held that no weightage could be granted to the clause
which is not approved by the IRDAI. This is how the Insurance
Ombudsman has proceeded to award USD 50000 to the Insured.
8) Since it is the contention of the Petitioner that the claim
awarded by the Ombudsman is contrary to the terms and
conditions of the Policy, it would be necessary to refer to the
relevant terms and conditions of the Policy. Under the policy,
Petitioner undertook to pay or reimburse to the Insured expenses
incurred for availing immediate emergency medical assistance
required on account of illness, injury sustained or contracted
whilst on a trip, but not exceeding the sum insured as specified in
the Schedule. Under the Schedule to the policy, the coverage was
as under :-
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Coverage Sum Insured Deductible (in
(USD) USD)
Transportation, Evacuation
and Repatriations of Mortal
Remains
Delay of checked in baggage 100 12hours
Personal Accident 15000 NA
Accidental death Common 2500 NA
carrier
Personal Liability 50000 NA
Compassionate visit Return fare for any
one accompanying
person-spouse/chil
d/family doctor
Any one illness 12000 NA
Any one Accident 20000 NA
9) Thus, the insurance policy covered medical expenses
including transportation, evacuation and repatriation of mortal
remains to the extent of USD 50000, after deducting USD 50 from
the claim amount. The relevant clause under the heading 'Benefit
1' reads thus :-
"Benefit 1- Medical Expenses Including Transportation, Evacuation
And Repatriation Of Mortal Remains
The Company shall pay or reimburse to the Insured/ Insured Person
expenses incurred for availing immediate emergency medical
assistance required on account of any illness/injury sustained or
contracted whilst on a trip but not exceeding the Sum Insured as
specified in the Schedule. The deductible in respect of this benefit will
be applicable for each separate claim, and shall be of an amount as
specified in the Schedule.
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What it covers
In the event, the Insured/Insured Person shall contract any illness
or injury during the period of insurance and if such illness or
injury shall upon the written medical advice of a Medical
Practitioner/Physician require any such Insured / Insured Person, to
incur hospitalisation within the period of insurance at any
Hospital, for the medically necessary treatment of the Insured /
Insured Person, then the Company will indemnify the Insured /
Insured Person, for the amount of such medical expenses, which
should be reasonable & customary charges, and are incurred by or
on behalf of such Insured / Insured Person for in manner, for the
period and to the extent of the Sum Insured as specified in this
Policy. The company's total liability in aggregate for all claims paid
under the policy shall not exceed the Sum Insured.
1. Out-patient treatment, provided, the same is critical and cannot
be deferred till the Insured/Insured Person's return to the Republic of
India.
2. In-patient treatment in a local hospital at the place the
Insured/Insured Person is staying at the time of occurrence of an
insurable event or at the nearest Hospital.
3. Medical aid that is prescribed by a Physician as necessary part of
the treatment for broken limbs or injuries (e.g. plaster casts, bandages
and walking aids).
4. Radiotherapy, heat therapy or photo therapy and other such
treatment prescribed by a Physician.
5. X-Ray, diagnostic tests and all reasonable costs towards
diagnostic methods and treatment of all illness/injury provided these
pertain to the diagnosed illness / injury due to which hospitalisation
was deemed necessary.
6. Cost of transportation, including necessary medical care en-
route, by recognized medical service provides for medical attention at
the nearest Hospital or by the nearest Physician.
7. Cost of being transferred to a special clinic if this is medically
necessary and prescribed by a Physician.
8. Life saving unforeseen emergency measures provided to the
Insured/Insured Person by the Physician for hospitalization arising
out of a pre-existing disease. The treatment for these emergency
measures would be paid till the Insured / Insured Person becomes
medically stable. All further medical cost to maintain medically stable
or to prevent the onset of acute pain would have borne by the
Insured/ Insured Person.
9. Transportation
----
-----"
(emphasis added)
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10) Thus, the policy included total 11 benefits viz. (i)
medical expenses, (ii) dental treatment, (iii) loss of passport, (iv)
loss of checked baggage, (v) delay of checked in baggage, (vi)
personal accident, (vii) accidental death common carrier, (viii)
personal liability, (ix) compassionate visit, (x) any one illness, and
(xi) any one accident. Though the insurance policy sought to cover
medical expenses to the extent of USD 50000, specification of
separate coverage for 'any one illness' at USD 12000 and 'any one
accident' USD 20000 has created a confusion and this confusion
has enabled the Petitioner to restrict the claim at USD 12000.
11) It is sought to be contended by Ms. Trivedi that
maximum coverage of USD 50000 was payable only in a case
involving immediate emergency medical assistance requiring
transportation of the patient to India. The contention deserves to
be rejected as the policy itself was for coverage of 'emergency'
medical assistance by a person traveling abroad. In fact, Condition
No. 10 (3) of the Insurance Policy reads as under :-
"What Benefit 1 does not cover
The Company shall not be liable to make any payment under this
benefit in connection with or in respect of any expenses whatsoever
incurred by the Insured/Insured Person for:
3. Treatment which could reasonably be delayed until the
Insured/Insured Person's return to the Republic of India. The
question of what can or what cannot be reasonably delayed will be
decided jointly by the treating Physician and the Emergency
Assistance Service Provider."
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12) Thus, the expenses incurred for treatment, which could
be availed in India are not even covered by the policy. The word
'Transportation' used in the expression 'Medical expenses including
Transportation, Evacuation and Repatriations of Mortal Remains' does
not mean that the said coverage is applicable only in the case
involving 'transportation' of the Insured to India. The word used is
'including' which means that expenses incurred towards
transportation of Insured to India are also covered by the policy in
addition to the medical expenses. This implies that if the insured
takes part medical treatment abroad and is required to be brought
back to India for some reason, costs of both medical expenses as
well as transporting to India would be covered subject to cap of
USD 50000. Also if death of insured is caused abroad while taking
medical treatment, the coverage would include medical expenses
and costs of bringing back the mortal remains to India, subject to
the cap of USD 50000. Therefore, mere inclusion of coverage for
transportation, evacuation and repatriation of mortal remains in
the policy does not mean that the medical expenses are capped at
USD 12000. If such capping was intended it ought to have been
specifically provided in the policy that the total coverage of USD
50000 is further subdivided into USD 12000 for medical expenses
and USD 38000 for transportation, evacuation and repatriation of
mortal remains. The contention that the maximum coverage of
USD 50000 was payable only in case involving emergency
evacuation or transportation of the patient to India is therefore
rejected.
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13) The next contention raised on behalf of Petitioner is
that though the total coverage under the policy may be USD 50000,
the same could not exceed USD 12000 for 'any one illness'. In my
view, such an interpretation is clearly against the terms and
conditions of the policy which covered various expenditure
incurred by the Insured under the first head in the Schedule of
'medical expenses' such as treatment, medical aid, radiotherapy,
diagnostics, transportation, reference to special clinic, etc. The
condition that 'The company's total liability in aggregate for all claims
paid under the policy shall not exceed the Sum Insured' means that even
if the total expenditure incurred for various medical treatments
may exceed USD 50000, the claim under the policy would not be
sanctioned beyond USD 50000.
14) If the intention was to restrict the coverage for hospital
expenses for any one illness at USD 12000, a specific condition to
that effect ought to have been included. Petitioner's reading of the
clauses of the Policy may lead to two interpretations, and both
sound to my mind as absurd. The first interpretation would mean
that USD 12000 is payable 'per' illness. This would mean that the
insured must suffer from multiple illnesses during his trip and the
Petitioner would pay USD 12000 per illness. Also, if the insured is
hospitalized on multiple occasions for same illness or is
hospitalized for prolonged period involving huge expenditure, the
Petitioner would cap the coverage to only USD 12000 since illness
is only 'one'. However, if the insured takes treatments for more
than one illness, Petitioner would pay USD 12000 per illness. Also,
an Insured incurring expenses under multiple heads such as
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hospital bill, diagnosis reports, ambulance, etc will still be paid
only USD 12000 under the pretext that he suffered from only one
illness. The second interpretation of the head of 'any one illness :
USD 12000' in the Schedule can also be interpreted to mean that
regardless of number of illnesses suffered by the insured,
Petitioner would pay only USD 12000 for 'one' out of such
multiple illnesses on account of use of the word 'any one'. This
interpretation would mean that the medical expenses coverage
would be capped at USD 12000, which would render otiose the
coverage in the first head of the Schedule for medical expenses of
USD 50000. It would then mean that the medical expenses
coverage would be only upto USD 12000 and rest of the coverage of
USD 38000 is for 'transportation, evacuation and repatriations of mortal
remains'. Since usual transportation of insured to the hospital is
covered in the definition of the term 'medical expenses', use of
separate word 'transportation' in Coverage No. 1 of the Schedule
would mean air transport for bringing back the insured to India.
This is exactly what Ms. Trivedi has canvassed before the Court. It
would thus sound absurd that an insurance policy availed by the
insured for USD 50000 contains coverage for medical expenditure
only to the extent of USD 12000 while the rest of the coverage of
USD 38000 is applicable only in case involving transportation,
evacuation and repatriation of mortal remains. While this
otherwise absurd sounding situation could have been
countenanced through a specific covenant to that effect in the
policy, I am unable to accept the same on account of absence of a
condition in the policy splitting of the coverage into USD 12000 for
medical expenses and USD 38000 for transportation, evacuation
and repatriation of mortal remains.
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15) Thus both the interpretations discussed above not only
raise ambiguity in the terms and conditions of the insurance
contract but also lead to absurdity.
16) The fact that the policy of the Petitioner is approved by
IRDAI does not mean that the Petitioner can read into policy
something which is not specifically provided for. If the contract of
insurance contemplated payment of USD 12000 for medical
expenses incurred for the illness and balance USD 38000 for
transportation, evacuation and repatriation of mortal remains, a
specific covenant to that effect ought to have been included in the
insurance policy. The fact that such a covenant is absent in the
policy makes it abundantly clear that the insurance policy does not
provide for payment of only USD 12000 for medical expenses
incurred for an illness. On the contrary, the policy envisages
coverage of USD 50000 for 'medical expenses' which can also
include for transportation, evacuation and repatriation of mortal
remains. In a case not involving expenditure towards
transportation, evacuation and repatriation of mortal remains, full
amount of USD 50000 can be awarded for medical expenditure.
17) The policy is sold to the Insured under the
representation that medial expenditure to the tune of USD 50000
during the trip would be covered. The Insured is not informed
specifically through an unambiguous stipulation in the Policy that
the total coverage of USD 50000 would be available only if he
suffers from multiple illnesses or that the said coverage was split
into USD 12000 for medical expenses and USD 38000 for
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transportation, etc. This Court is unable to read inclusion of head
of 'any one illness USD 12000' in the Schedule to the Policy as a
specific stipulation restricting the coverage per illness at USD
12000 or splitting of coverage into medical expenses of USD 12000
and transportation of USD 38000.
18) There is thus lack of clarity in the terms and conditions
of the Insurance Policy. While the policy seeks to cover medical
expenses to the extent of USD 50000, inclusion of head of 'any one
illness USD 12000' in the Schedule had created an ambiguity. Here
the principle of contra proferentum would be applicable and in case
of ambiguity, the ambiguous terms would receive an interpretation
favourable to the insured. In Haris Marine Products Versus.
Export Credit Guarantee Corpn. (ECGC) Ltd.1, the Apex Court has
dicussed the principle of contra proferentum in relation to
interpretation of insurance policy and had held as under :-
B. Rule of contra proferentem
19. It is entrenched in our jurisprudence that an ambiguous term in an
insurance contract is to be construed harmoniously by reading the
contract in its entirety. If after that, no clarity emerges, then the term
must be interpreted in favour of the insured i.e. against the drafter of
the policy. In deciding the applicability of a cover note on houses swept
away by floods, a Constitution Bench of this Court in General
Assurance Society Ltd. v. Chandumull Jain [General Assurance Society
Ltd. v. Chandumull Jain, 1966 SCC OnLine SC 208 : (1966) 3 SCR 500,
para 11 : AIR 1966 SC 1644] held as follows : (SCC OnLine SC para 11)
"11. ... In other respects there is no difference between a contract
of insurance and any other contract except that in a contract of
insurance there is a requirement of uberrima fides i.e. good faith
on the part of the assured and the contract is likely to be
construed contra proferentem that is against the company in
case of ambiguity or doubt. ... (I)n interpreting documents
relating to a contract of insurance, the duty of the court is to
interpret the words in which the contract is expressed by the
1 (2022) 20 SCC 776
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parties, because it is not for the court to make a new contract,
however reasonable, if the parties have not made it themselves."
While the Court ultimately denied insurer's liability, it laid down the
manner in which ambiguities were to be interpreted. Since then, a
catena of judgments has upheld this approach.
22. The rule of contra proferentem thus protects the insured from the
vagaries of an unfavourable interpretation of an ambiguous term to
which it did not agree. The rule assumes special significance in
standard form insurance policies, called contract d' adhesion or
boilerplate contracts, in which the insured has little to no
countervailing bargaining power. [Jacob Punnen v. United India
Insurance Co. Ltd., (2022) 3 SCC 655, paras 34-37 : (2022) 2 SCC (Civ)
456] This consideration is highlighted in the facts of this case, since the
risks that ECGC is mandated to cover is its business, and other insurers
rarely foray into the field.
Therefore applying the principle of contra proferrentum to the
present case, the ambiguous terms of the insurance policy are
required to be interpreted to the benefit of the Insured.
19) In my view, therefore, the Insurance Ombudsman has
rightly interpreted the insurance contract to mean that the insured
is entitled to full coverage up to USD 50000 for medical expenses
incurred for treatment for single illness. I, therefore, do not find
any valid reason to interfere in the impugned award of the
Insurance Ombudsman. The petition fails and is accordingly
dismissed, without any order as to costs.
Digitally
signed by
NEETA
NEETA SHAILESH [SANDEEP V. MARNE, J.]
SHAILESH SAWANT
SAWANT Date:
2025.09.04
17:06:10
+0530
2 September 2025
