Insurers Cannot Reject Health Claims on Delay; 90-Day Mediclaim Clause Held Void Under Contract Act: Bombay HC [Read Judgment]

Mumbai: The Bombay High Court has ruled that an insurance company cannot reject a legitimate health insurance claim merely because it was submitted beyond the internally prescribed deadline in the policy, holding that such time-bar clauses in mediclaim policies are void under Section 28 of the Indian Contract Act, 1872.

A Division Bench comprising Justice Bharati Dangre and Justice Manjusha Deshpande delivered the judgment on April 20, 2026, while allowing a writ petition filed by C.P. Ravindranath Menon, an employee of the Export-Import Bank of India, challenging the rejection of his group health insurance claim by United India Insurance Company Limited.

The petitioner had submitted four claims totalling ₹1,13,487.49 on May 24, 2022, for medical expenses incurred by himself and his spouse during the policy period from April 1, 2021, to March 31, 2022. The insurance company declined to process the claims, asserting that they were filed beyond the time limits stipulated in the policy—namely, 30 days from discharge for hospitalisation claims and 15 days from completion of treatment for post-hospitalisation claims—with an outer cap of 90 days, beyond which no claim would be entertained.

The insurance company, represented by Ms. Varsha Chavan, contended that the policy was a contract freely entered into by the petitioner, who was bound by all its stipulations, including the 90-day deadline. She relied upon the Supreme Court’s decision in United India Insurance Co. Ltd. v. Harchand Rai Chandan Lal, (2004) 8 SCC 644, to argue that the terms of an insurance contract must be strictly construed and that the insured cannot claim beyond what the policy covers.

The petitioner, represented by Mr. Subit Chakrabarti along with Ms. Khushnumah Banerjee of Vidhii Partners, placed reliance on the Supreme Court’s decision in The Oriental Insurance Company Ltd. v. Sanjesh & Anr., 2022 SCC OnLine SC 806, where the imposition of a one-month deadline (extendable by another month) for lodging insurance claims was struck down as contrary to Section 28(b) of the Indian Contract Act.

Examining the Supreme Court’s ruling in Sanjesh, the Court noted that Section 28 of the Indian Contract Act renders void any agreement which extinguishes the rights of any party or discharges a party from liability under a contract on the expiry of a specified period so as to restrict that party from enforcing their rights. The Apex Court in that case had held that such conditions of limitation imposed within an insurance policy fall squarely within Section 28(b) and are therefore void.

Applying this principle to the present case, the Court found that the 90-day time-bar clause in the group mediclaim policy had the precise effect condemned by Section 28. The clause imposed a limitation on the exercise of the insured’s rights under the policy solely on the ground that the prescribed period had elapsed, thereby extinguishing a right which the insured would otherwise have been entitled to enforce.

The Court rejected the insurance company’s attempt to distinguish Sanjesh on the ground that it was decided on its own facts or that the present matter was purely contractual. The Court held that since insurance policies are contracts governed by the Indian Contract Act, the embargo created by Section 28 applies with full force. If Section 28 operates on the facts, its application cannot be excluded merely because the contract was freely entered into.

The Court accordingly declared the 90-day limitation clause in the policy to be void and non est. The writ petition was allowed in terms of the prayers made. The Court directed Respondent No. 1, the insurance company, to reimburse the claim amount under the policy within eight weeks from the date of the judgment, along with interest at the rate of 6% per annum from the date it became due and payable.

Case Title: C.P. Ravindranath Menon v. United India Insurance Company Limited & Anr., Writ Petition No. 2474 of 2023

[Read Judgment]