Delhi High Court asks Reliance Insurance to pay claim by couple for air tickets cancelled after COVID advisory

The Delhi High Court recently directed Reliance General Insurance to honour the travel insurance claim of a couple who had to cancel their air tickets to Italy in the backdrop of the COVID-19 pandemic and an advisory against international travel issued by the Central government in 2020. [Mohit Kumar v Office of The Insurance Ombudsman].Justice Purushaindra Kumar Kaurav considered the question of whether the couple had cancelled the trip on account of any government regulation or prohibition on February 28, 2020, since the policy barred any claim for cancellations caused due to such reason.The Court noted that the only reason for rejection of the insurance claim by the Insurance Ombudsman was that the couple cancelled the trip on account of the government "regulation or prohibition."Disagreeing with the conclusion, the Court reasoned that there was only a government "advisory" against international travel, and not any regulation or prohibition then..The Court explained that there was only an advisory asking Indian citizens to refrain from non-essential travel to the Republic of Korea, Iran and Italy. It further opined that such an advisory cannot mean prohibition on travel to these countries.“In the instant case, if the petitioners, owing to the advisory and on due application of their mind, decided not to travel to Italy, the same cannot mean that the petitioners were prohibited by the Government of India from travelling to Italy,” the bench observed..By way of background, the couple had availed a travel insurance policy which covered their proposed honeymoon trip to Italy and Spain in February 2020. Two days before the trip, the government issued the advisory due to which the couple decided to cancel their bookings as they felt that the places they intended to visit had become uninhabitable.When they submitted their insurance claim to their insurer, Reliance, their claim was denied on the ground that COVID-19 was not covered under the policy. However, the couple argued that it was nowhere mentioned in the policy that the company would not be liable for the payment of claim if the trip was cancelled for any reason whatsoever.Reliance did not change its stand. Before the High Court, it challenged the maintainability of the petition and argued that the couple themselves had stated that they cancelled their trip due to a government advisory. The Insurance Regulatory and Development Authority of India (IRDAI) also argued that the petitioners should avail the alternative remedy under Consumer Protection Act. .After concluding that the cancellation was not on account of any government prohibition or regulation, the Court also held the petition to be maintainable after it noted that there were no disputed question of facts in the case.The Court further observed that it cannot be laid down as a general proposition of law that the High Court cannot entertain a writ petition under Article 226 of the Constitution to enforce a claim under a life insurance policy.The determination would depend on various factors involved in each case, the Court added.Relying on precedents, the bench said that if the Court finds that the insurer has illegally repudiated the claim outside the specific terms of the policy, a writ petition would be maintainable..In view of the findings, the Court said that an appropriate interference was called for in the matter and that the petition deserves to be allowed.Since there was no other reason for repudiating the claim except the argument on government regulation or prohibition, the Court said the matter was not required to be remitted back to the Insurance Ombudsman or the insurance company for fresh consideration.Accordingly, it directed that the claim of the couple be honoured within a period of four weeks along with interest of six percent from the date when the claim became due..Advocate Prateek Kumar represented the petitioners.Advocates Prerna Mehta and Rajeev M Roy represented Reliance General Insurance.Advocates Abhishek Nanda and Parul Tomer represented the Insurance Regulatory and Development Authority of India.[Read Judgment]