Mumbai, August 18, 2026: The Central Mumbai District Consumer Dispute Redressal Commission (DCDRC) has held IFFCO-TOKIO General Insurance Co. Ltd guilty of unfair trade practices after it failed to approve the medical insurance cashless claim of Rs 1.05 lakh, thereby directing the insurance company to reimburse the entire claim amount.
“The Complainant is entitled to reimbursement of the claim of 1,05,000 and interest of 7% will be awarded only on the amount of 35,000/- and not on 70,000/- from the date of repudiation of claim, 2023, till realization….. However, considering the hardship caused by repudiation of the insurance claim, compensation of Rs 10,000 towards mental harassment and Rs 5,000 towards litigation costs would meet the ends of justice,” the commission held.
The commission was hearing a complaint filed by Sunderlal D. Kothari, a Dadar resident, who had purchased a Mediclaim policy from IFFCO Tokio. Kothari was admitted to P.D. Hinduja National Hospital on June 19, 2023, in a critical condition and was treated for acute exacerbation of cervical dystonia, viral upper respiratory tract infection and related complications. The hospital had sought cashless authorisation from the insurer, but the request was rejected, compelling Kothari to deposit Rs 1.05 lakh towards his hospital expenses.
After his discharge, Kothari submitted a reimbursement claim along with the required documents. However, the insurer repudiated the claim on August 25, 2023, citing a policy exclusion relating to investigation and evaluation. Kothari subsequently issued a legal notice seeking reimbursement of the amount, but the dispute remained unresolved.
Insurer Cites Policy Exclusion
The insurer argued that the hospitalisation was primarily for conservative management and could have been handled on an outpatient basis. It relied on a clause of the policy, which excluded expenses incurred primarily for diagnostic and evaluation purposes. The insurer also pointed out that it had offered to settle 70 per cent of the claim, amounting to Rs 70,000, but the complainant had not accepted the offer.
Medical Records Support Hospitalisation
The commission, however, found that the medical records established that Kothari’s condition required hospitalisation. The records noted symptoms including fever and chills, generalised weakness, body ache, involuntary spasms of the face and neck, difficulty consuming food or liquids, drowsiness and electrolyte imbalance. The treating hospital had categorically stated that hospitalisation was necessary for intravenous fluids, medication, neurological management, investigations and continuous monitoring.
The commission also relied on the hospital’s written submissions, which described the insurer’s allegation that the hospitalisation was unnecessary as “incorrect and mischievous” and maintained that the admission was medically necessary. It observed that, in the absence of convincing medical evidence to contradict the treating doctors, their opinion deserved greater evidentiary value.
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Claim Repudiation Held Unjustified
Holding that the exclusion clause relied upon by the insurer had no application to the case, the commission concluded that the repudiation of the claim was arbitrary and unjustified. It further held that there was a deficiency in service and unfair trade practice on the part of the insurer. The hospital was, however, absolved of liability, as the commission found no deficiency in service on its part.
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