No Connection Between Drinking And Cancer? High Court Strikes Down Insurance Ombudsman Order

Prakash Mehta, 83, was already battling cancer that includes rounds of chemotherapy and radiation treatments when his health insurer threw another curveball at him.

They denied his medical claim worth Rs 17.77 lakh, citing that he had not disclosed his "habit" of alcohol consumption. And just like that, a long-standing policyholder was told he had broken the unspoken rules.

On Friday, the Bombay High Court called out the injustice in no uncertain terms.

"There is absolutely no evidence on record to indicate that the petitioner's occasional consumption of alcohol has contributed to cancer," said Justice Sandeep Marne, setting aside the order of the Insurance Ombudsman that had earlier upheld the insurer's rejection. The judge made it clear: not only was there no link between alcohol and the cancer Mehta was being treated for, but the insurer had not even bothered to prove any such connection.

This was neither a case of fraud, nor it was about suppression of facts. What it turned into, however, was a textbook example of how health insurers sometimes twist the rules just enough to avoid paying up.

What was the case?

This was a case of long-standing policy facing sudden repudiation when a claim was made.

Mehta had been with Royal Sundaram General Insurance Company since 2003. In 2021, after nearly two decades of continuous health insurance, he ported his policy to Care Health Insurance Ltd. He even opted for a top-up, paying a hefty Rs 13.23 lakh premium for a three-year plan, which included a Rs 50 lakh top-up over a Rs 5 lakh base.

All seemed fine until July 2022, when he was diagnosed with Non-Hodgkin's Lymphoma (a group of blood cancers). His treatment began at Mumbai's Breach Candy Hospital, and so did the bills. He filed seven claims totalling nearly Rs 18 lakh. But what came next was not a reimbursement, it was a rejection letter.

Care Health said he had not disclosed his daily alcohol consumption or a pre-existing condition, hypertension. When Mehta took the matter to the Insurance Ombudsman, the rejection was upheld in June 2024.

It was this order that the Bombay High Court has now torn apart.

What did the High Court say?

The court had a hard-hitting response to this claim repudiation. On the alcohol front, the insurer had claimed Mehta answered "no" in the proposal form when asked about smoking or drinking.

But the court pointed out that he had actually left the column blank, not ideal, but not a lie either.

In fact, the insurer's own documents gave conflicting accounts: one note said "daily" drinking, and another recorded "occasional" consumption. Either way, the court said, it didn't matter.

The insurer had made no effort to prove that his drinking, occasional or otherwise, had any link to his cancer. And legally, that's what matters. Without a nexus between the so-called non-disclosure and the disease in question, the rejection did not hold up.

On hypertension, the court was even more scathing. The court noted that this condition was not discussed before the Ombudsman. It noted that the insurer allowed the porting of the policy for Mehta who was 79 years old at that time, offering a substantial cover for a huge premium of over Rs 13 lakh. The insurer took note of no waiting period on any pre-existing condition.

What is the legal takeaway?

The court found various contradictions in the conduct of the insurer. A fact is "material" only if it would have changed the insurer's decision to offer coverage in the first place.

The court noted that Care Health, fully aware of Mehta's age and health, had actively offered a Rs 55 lakh policy and accepted a substantial premium. That didn't align with their later claims that hypertension or alcohol use would have been dealbreakers.

Moreover, the insurer kept extending him renewal offers. How do you tell someone they have breached your trust while continuing to offer them a contract?

The court directed Mehta's insurer to pay him the Rs 17.77 lakh he spent on cancer treatment, along with 8 per cent interest from July 2023.

Key takeaway for policyholders

For consumers, especially older policyholders, the case serves as a reminder to be meticulous while filling proposal forms. But it also throws a spotlight on the accountability of insurers, especially when they invoke fine print to deny big claims.

And as for the insurers? The court just made it clear: if they are going to reject a claim, they must provide something stronger than an unchecked box and a weak assumption. Because drinking a glass of wine now and then doesn't mean they can forfeit a policyholder's right to fair treatment, or to life-saving care.