Court’s Decision
The Kerala High Court allowed the appeal filed by the Life Insurance Corporation of India (LIC) and set aside the judgment of the learned Single Judge that had directed LIC to disburse cancer insurance benefits to the insured claimant.
The Division Bench, comprising Justice Anil K. Narendran and Justice Muralee Krishna S., held that the insured was not entitled to the policy benefits as the diagnosis of cancer occurred within the 180-day waiting period prescribed under Clause 8(G) of Part C of the LIC Cancer Cover Policy.
The Court observed:
“The biopsy report dated 28 September 2021 is only a confirmation of the earlier findings of carcinoma and not the first diagnosis. Therefore, the diagnosis was within the waiting period, and the insurer rightly repudiated the claim.”
Accordingly, the writ appeal was allowed, and the Single Judge’s direction to release policy benefits was set aside, reinstating LIC’s decision to reject the claim.
Facts
The case arose from a Cancer Cover Policy taken by the respondent (insured) from LIC on 16 March 2021 with a sum assured of ₹10 lakhs.
Earlier, she had held a similar policy in 2019, which lapsed while she was abroad. After returning to India, she obtained a new policy by paying the required premium and completing all formalities.
On 25 August 2021, five months after policy commencement, the insured was admitted to Life Line Hospital, Adoor, due to excessive bleeding. Tests revealed low haemoglobin levels, leading to Dilation & Curettage (D&C). The hospital’s ultrasound scan (Ext. R1(b)) reported Endometrial Malignancy.
She was later referred to Lake Shore Hospital, Ernakulam, where she underwent hysterectomy on 9 September 2021. The biopsy report dated 28 September 2021 confirmed Carcinoma Endometrium, Grade II.
LIC rejected her claim on the ground that the first diagnosis of cancer occurred on 25 August 2021, within the 180-day waiting period under Clause 8(G).
Her subsequent appeal before the Insurance Ombudsman was dismissed. She then filed a writ petition before the Kerala High Court, which was allowed by a Single Judge directing LIC to pay policy benefits. LIC appealed against that order.
Issues
- Whether the diagnosis of cancer could be said to have occurred on 25 August 2021 (as contended by LIC) or on 28 September 2021 (as claimed by the insured).
- Whether the waiting-period clause 8(G) of the LIC policy barred the insured’s claim.
- Whether the insured had suppressed material facts about family history of cancer.
Petitioner’s Arguments (LIC)
LIC’s counsel contended that the insured was first diagnosed with endometrial carcinoma on 25 August 2021, only 162 days after policy issuance, well within the waiting period of 180 days.
Relying on the ultrasound, histopathology, and MRI reports (Exts. R1(b)–R1(d)), LIC argued that all clinical findings pointed to carcinoma before the waiting period expired.
It was further submitted that Clause 8(G) explicitly provides that the policy shall terminate if any stage of cancer is diagnosed before 180 days, and that the biopsy report of 28 September 2021 merely confirmed what had already been clinically established earlier.
LIC also alleged suppression of material facts, stating that the insured’s mother had suffered from breast cancer, which the insured failed to disclose in the proposal form—constituting violation of the duty of utmost good faith under insurance law.
Respondent’s Arguments (Insured Claimant)
Counsel for the insured countered that the first diagnosis of cancer occurred only on 28 September 2021, upon receipt of the biopsy report, which alone confirmed the presence of carcinoma by a qualified pathologist.
It was argued that preliminary impressions like “suspected malignancy” or “suggestive of carcinoma” cannot constitute a diagnosis under Clause 13 of Part B, which defines the date of diagnosis as the day when a “medical practitioner certifies” the diagnosis of cancer.
Regarding alleged suppression, the insured maintained that her mother’s cancer occurred over 30 years ago at age 74, well beyond the disclosure threshold. She further argued that LIC never cited non-disclosure as a reason in its rejection letter and was thus estopped from raising it later.
The insured asserted that the Single Judge had correctly found that the confirmation date (28 September 2021) fell after 180 days, entitling her to full policy benefits.
Analysis of the Law
The Division Bench analysed the relevant policy clauses—particularly Clause 13 (Definition of Date of Diagnosis) and Clause 8(G), which mandates a waiting period of 180 days from policy commencement.
Clause 8(G) expressly states that if any stage of cancer occurs or is diagnosed within 180 days, the policy benefit is inapplicable and stands terminated.
The Court clarified that the term diagnosis does not mean confirmation by biopsy alone. Quoting Taber’s Cyclopedic Medical Dictionary, it explained:
“Diagnosis denotes the disease or syndrome a person has or is believed to have, based on scientific or clinical methods establishing the cause and nature of illness.”
Therefore, once a qualified medical practitioner records findings consistent with carcinoma—such as in the ultrasound and MRI reports—the date of such examination constitutes the date of diagnosis under the policy.
Precedent Analysis
- LIC v. Asha Goel (2001 4 SCC 175) — Reiterated that contracts of insurance are governed by their specific terms; courts cannot rewrite them to confer equitable relief. Followed to hold that LIC was bound to apply Clause 8(G) strictly.
- Suraj Mal Ram Niwas Oil Mills v. United India Insurance (2010 10 SCC 567) — Applied for the proposition that insurance contracts are subject to strict interpretation and benefit cannot be extended by sympathy.
- P.C. Chacko v. LIC (2008 1 SCC 321) — Relied on to affirm that suppression of material facts, even if immaterial to the risk, vitiates the contract if shown to be intentional.
- United India Insurance v. Harchand Rai Chandan Lal (2004 8 SCC 644) — Quoted to underscore that courts cannot dilute contractual waiting-period clauses on humanitarian grounds.
These cases collectively guided the Court’s reasoning that strict adherence to policy terms was necessary and that equitable considerations cannot override contractual obligations.
Court’s Reasoning
After reviewing the entire medical record, the Court concluded that the ultrasound, histopathology, and MRI findings of late August 2021 clearly established a diagnosis of carcinoma—the biopsy later only confirmed it.
Hence, the “first diagnosis” under the policy occurred on 25 August 2021, i.e., the 162nd day of the policy term, within the 180-day waiting period.
On the alleged suppression of family history, the Bench upheld the Single Judge’s finding that there was no conclusive evidence regarding the mother’s age or timing of illness, and thus no deliberate non-disclosure.
Nevertheless, since the waiting-period condition was violated, the insured could not claim benefits regardless of this secondary issue.
The Court therefore held:
“The learned Single Judge failed to appreciate that the first diagnosis occurred within the waiting period. The biopsy report was only confirmatory. The respondent was not entitled to coverage under the policy.”
Accordingly, the appeal was allowed, and the writ petition stood dismissed.
Conclusion
The Division Bench set aside the Single Judge’s order and restored LIC’s decision rejecting the cancer claim.
The Court held that the diagnosis date for insurance purposes is when a competent medical practitioner identifies the illness, not when a subsequent pathological confirmation is received.
Consequently, since the insured’s cancer was first identified within the 180-day waiting period, the claim was rightly repudiated under Clause 8(G).
The judgment reaffirms that strict contractual interpretation governs insurance disputes, and equitable sympathy cannot justify deviation from policy terms.
Implications
This decision strengthens the principle that insurance policies must be interpreted strictly according to their terms. It reinforces that courts cannot grant coverage based on compassionate grounds if the conditions precedent—like waiting periods—are not satisfied.
For insurers, it reaffirms their right to rely on express policy clauses. For policyholders, it underscores the need to understand and comply fully with waiting-period and disclosure obligations before making claims.
FAQs
1. What did the Court decide regarding the date of diagnosis?
The Court held that the first diagnosis occurred on 25 August 2021, based on clinical findings, not on 28 September 2021 when the biopsy confirmed it.
2. Why did the insured lose the case despite a valid policy?
Because the cancer was diagnosed within the 180-day waiting period under Clause 8(G), rendering the policy benefits inapplicable.
3. Does confirmation by biopsy change the waiting-period calculation?
No. The Court ruled that the biopsy only confirms an already established diagnosis; the waiting period is reckoned from the first medical identification of the disease.
