Delhi State Commission Orders Insurer to Pay ₹20 Lakh, Rejects Claim Repudiation Based on Unproven Pre-Existing Disease

April 24, 2026 : In a significant ruling reinforcing consumer protection in insurance disputes, the Delhi State Consumer Disputes Redressal Commission has held that an insurance claim cannot be denied merely on allegations of non-disclosure of pre-existing illness without credible medical evidence establishing both the existence of the disease and its causal link to the insured’s death.

The Bench comprising Justice Sangita Dhingra Sehgal (President) and Bimla Kumari (Member) allowed an appeal filed by Ms. Sunita Kain against India First Life Insurance Company Ltd., setting aside the District Commission’s order that had dismissed her complaint.

The case arose from a life insurance policy obtained by the complainant’s husband under the “India First Group Credit Life Plan” with a sum assured of ₹20 lakh, commencing on 20 June 2012. Following his death on 24 February 2014, the insurer repudiated the claim on 10 November 2014, alleging suppression of material facts relating to pre-existing conditions such as diabetes and chronic kidney disease.

On appeal, the State Commission framed the core issue as whether such repudiation was justified and whether it constituted deficiency in service. It underscored that the burden of proof lies squarely on the insurer to establish pre-existing disease through cogent medical evidence, not conjecture or hearsay.

Examining the record, the Commission found that the insurer failed to produce any reliable medical documents, treatment history, or hospital records to substantiate its allegations. The investigation report relied upon by the insurer was found to be internally inconsistent and largely based on unverifiable hearsay statements, with doctors and chemists denying any prior treatment or medication history of the deceased.

The Commission further noted that even assuming the existence of lifestyle conditions such as diabetes, there was no evidence demonstrating a nexus between such conditions and the cause of death. It reiterated that common ailments like diabetes or hypertension, absent hospitalization or serious medical intervention proximate to policy issuance, cannot automatically be treated as “pre-existing diseases” justifying repudiation.

Importantly, the Commission held that exclusion clauses cannot be enforced unless they are properly communicated to the insured. In this case, the insurer failed to prove that policy terms and exclusions were ever supplied to the policyholder.

The Commission also flagged procedural lapses, noting that the insurer took 213 days to repudiate the claim, far exceeding the timelines prescribed under IRDA guidelines. This delay was held to independently constitute deficiency in service.

Additionally, the insurer had issued the policy without conducting any pre-insurance medical examination despite the insured’s age, and therefore could not later rely on alleged non-disclosure to deny liability.

Concluding that the repudiation was arbitrary and unjustified, the Commission directed the insurer to pay ₹20 lakh along with interest at 6% per annum from the date of repudiation. It further awarded ₹1 lakh as compensation for mental agony and ₹50,000 towards litigation costs.

The ruling reiterates key principles governing insurance contracts, particularly the insurer’s evidentiary burden and the necessity of a demonstrable causal connection between alleged non-disclosure and the insured event.

Case Details:
Case Title: Ms. Sunita Kain v. India First Life Insurance Company Ltd.
Case No.: First Appeal No. 237/2023
Decision Date: 24 April 2026