New Delhi: Insurer cannot refuse a claim to the insured person once he citing an existing medical condition during the policy has been issued.

A division bench comprising, Justice D.Y. Chandrachud and Justice B.V. Nagarathna observed that once the insured person discloses his ailment in the proposal form, the insurer cannot refuse the claim. The proposer is under a duty to disclose to the insurer all material facts within his knowledge.

"Once the policy has been issued after assessing the medical condition of the insured, the insurer cannot repudiate the claim by citing an existing medical condition, which was disclosed by the insured in the proposal form and which condition has led to a particular risk in respect of which the claim has been made by the insured," the bench observed in its recent judgement.

The proposer is know all the facts and circumstances concerning the proposed insurance, the bench remarked.

While the proposer can only disclose what is known to him, the proposer's duty of disclosure is not confined to his actual knowledge, it also extends to those material facts which, in the ordinary course of business, he ought to know, the court observed.

The Supreme Court was hearing an appeal filed by Manmohan Nanda against an order of the National Consumer Disputes Redressal Commission (NCDRC), rejecting his plea seeking a claim for medical expenses incurred in the United States.

Mr Nanda had bought an Overseas Mediclaim Business and Holiday Policy as he intended to travel to the US. In the US he suffered a heart attack, he was admitted to a hospital, angioplasty was performed, three stents were inserted to remove the blockage from his heart vessels.

Later, Mr. Nanda has claimed the insurance, but Overseas Mediclaim Business and Holiday Policy have rejected his claim stating that the applicant has not disclosed his health history that he was suffering from hyperlipidaemia and diabetes.