“The amount includes compensation of Rs 10,000 for his mental agony and Rs 2,000 towards the litigation cost,” said the Consumer Education & Research Society (CERS), a co-litigant, in a statement.

Sanghavi, a Crohn’s disease patient, in 2005 was treated at a local hospital, but did not make any claim as the company was not liable to pay any cost for treatment taken during the first six months. He had purchased the policy just a month before his treatment.

In August the following year, Sanghavi renewed the policy and in September, he underwent treatment again. Upon being discharged, he claimed reimbursement of Rs 1,50,299. The insurance company settled only part of the claim, i.e. Rs 44,826, saying the treatment did not require hospitalisation and so the entire cost was not payable.

When Sanghavi, aided by CERS, approached the forum, the insurer apparently “cited the opinion of a doctor from a third party agency (TPA) that since no side effects had been noticed when Sanghavi had been treated for the first time, hospitalisation was not required during the second time”.