South Delhi Consumer Commission Awards ₹25,000 Against Insurer for Delay in Repudiation Letter

March 17, 2026 : The South Delhi District Consumer Disputes Redressal Commission has partly allowed a consumer complaint filed by Pankaj Kumar Sharma, holding the insurer liable for deficiency in service while rejecting allegations of medical negligence against Max Smart Super Speciality Hospital.

The bench comprising President Monika A. Srivastava and Member Kiran Kaushal ruled that United India Insurance Company failed to provide a timely repudiation letter explaining the rejection of the mediclaim, thereby amounting to deficiency in service. The Commission directed the insurer to pay ₹25,000 as compensation to the complainant within three months, failing which interest at 6% per annum will apply.

The dispute arose from a group mediclaim policy covering the complainant and his family for the period from 10 June 2017 to 9 June 2018. During the policy period, Sharma’s 14-year-old daughter was admitted to Max Smart Super Speciality Hospital on 21 October 2017 with complaints of prolonged abdominal pain and a prior history of typhoid. She was examined by multiple specialists, including a paediatrician, gastroenterologist, and surgeon, before being referred to the psychiatry department.

After evaluation, the patient was diagnosed with “anxiety and stress with somatic symptoms” and discharged on 30 October 2017. Although an initial amount of ₹15,000 was sanctioned by the insurer, it was later withdrawn, compelling the complainant to pay ₹97,446.46 towards hospital expenses.

The reimbursement claim submitted through the third-party administrator was subsequently rejected. The insurer relied on Exclusion Clause 4.9 of the policy, which excludes coverage for psychiatric and psychosomatic disorders. The Commission, after examining medical records and the discharge summary, upheld the repudiation, finding that the diagnosis fell squarely within the exclusion clause.

On the allegation of medical negligence, the Commission found no evidence to support the claim. It observed that the patient had been appropriately evaluated by multiple specialists and referred to psychiatry only after physical causes were examined. The complainant failed to produce any expert evidence to establish negligence, and the OPD records relied upon were issued nearly a year after discharge, weakening the claim.

However, the Commission took note of the insurer’s failure to communicate the repudiation formally and in a timely manner. It observed that the repudiation letter was produced only during the proceedings and not at the time the claim was rejected. This lapse was held to constitute deficiency in service.

Accordingly, while denying reimbursement of medical expenses and dismissing the allegations against the hospital, the Commission granted limited relief by awarding compensation for procedural deficiency on the part of the insurer.

Case Title: Pankaj Kumar Sharma v. Max Smart Super Speciality Hospital & Ors.
Case No.: Consumer Complaint No. DC/83/CC/299/2018