The Delhi State Consumer Disputes Redressal Commission ordering the National India Assurance Company Limited (NIACL) to pay the amount within a month, said, "we cannot escape from arriving at the irresistable conclusion that disease referred to in the discharge summary was not such a disease that disentitled respondent of insurance policy." The order came on an appeal filed by the NIACL against the order of a District Consumer Forum which, holding it guilty of wrongfully repudiating the policy of one S K Khosla, had asked it to pay the medical expenses in the tune of Rs 1.74 lakh alongwith interest at the rate of nine percent from the date the same became due.
However, the Commission headed by Justice J D Kapoor and Member Ruminita Mittal, though upheld the Forum's verdict, did away the interest part of the award and asked the company to pay Rs 2.19 lakh as full and final compensation including the litigation cost.
As per Khosla's complaint, he, on November one, 1991, bought a mediclaim insurance policy for a year from the NIACL. Later, he kept on renewing the policy.
In June 1994, Khosala was admitted to Escorts Heart Institute following some cardiac complications and underwent bypass surgery.
The company refused to reimburse his medical expenses stating the disease was pre-existing, which was not divulged at the time of renewal, and the policy was not continuous. The Commission, taking cognizance of the plight of the insured, said "the policy in question was continuation of the earlier policy and not a fresh contract and for the NIACL' act of ommission and commission, interest of insured can not be put in jeopardy." The commission also held such diseases can not be said to be pre-existing hence, the repudiation was not just.