Dr. A.M. Muraleedharan v. LIC (2025): denial of a medical-insurance claim as an Article 21 violation

Insurance disputes are, on the orthodox view, contractual disputes. An insured who is refused a claim ordinarily takes the insurer to a consumer forum and litigates the policy as a contract. Dr. A.M. Muraleedharan v. Senior Divisional Manager, Life Insurance Corporation of India unsettles that reflex. Decided on 8 September 2025, the judgment of P.M. Manoj, J., holds that where an insurer denies a medical claim arbitrarily and unreasonably, the denial engages constitutional guarantees — both the right to life under Article 21 and the supervisory writ jurisdiction of the High Court under Article 226 — and need not be left to the contractual machinery alone.

The facts in brief

The petitioner, Dr. A.M. Muraleedharan, held an LIC Health Plus Plan. The policy had taken effect on 31 March 2008 and was valid through 31 March 2024, and it covered the petitioner, his wife and their two children.

His wife was hospitalised from 12 April 2016 to 22 April 2016. The petitioner submitted a claim of Rs 60,093 on 2 May 2016. LIC sanctioned only Rs 5,600, treating the policy benefits as fixed sums rather than as reimbursement of the actual expenses incurred.

A second claim followed. The petitioner's wife underwent a vesicovaginal fistula repair surgery in August 2016, in respect of which a claim of Rs 1,80,000 was made. LIC rejected this claim in its entirety, citing non-disclosure of a pre-existing condition — a hernia surgery the petitioner had undergone in 2006 — even though there was no medical connection between the 2006 hernia and the fistula treatment for which the claim was made. The petitioner approached the High Court by way of two connected writ petitions.

The questions

The case raised three questions, ascending from the procedural to the constitutional.

First, a question of maintainability: can a writ petition under Article 226 lie against an insurer — including the Life Insurance Corporation — for the arbitrary denial of a medical claim, when insurance disputes are ordinarily contractual and consumer fora exist to resolve them?

Second, a question of substance under Article 21: does the arbitrary denial of a claim for medical treatment violate the right to life?

Third, a question of insurance law: can non-disclosure of an unrelated pre-existing condition justify repudiation — and what is the effect of Section 45 of the Insurance Act 1938 and the principle of estoppel on a late, technical repudiation by an insurer that has accepted premiums for years?

What the Court held

On the first question, the Court held that writ jurisdiction was available. While insurance disputes are ordinarily contractual, Article 226 can be invoked in exceptional cases — those involving gross injustice, a violation of fundamental rights, or a breach of the principles of natural justice. Crucially, the Court did not relegate the petitioner to the consumer forum; it entertained the writ and decided it on the merits.

On the second question, the Court reasoned that a medical-insurance claim is not an abstract contractual entitlement but the means by which treatment is paid for. To refuse reimbursement for treatment already taken is, in substance, to deny the treatment itself — and the denial of treatment is a denial of the right to life:

On the third question, the Court held that repudiation on the ground of a pre-existing disease requires a nexus between the pre-existing condition and the disease for which the claim is made. The 2006 hernia bore no medical relationship to the 2016 fistula surgery, so it could not defeat the claim. The Court also invoked Section 45 of the Insurance Act 1938 — which bars repudiation after the policy has run for the prescribed period save in cases of deliberate fraud — and the principle of estoppel: an insurer that accepts premiums year after year cannot later repudiate on an ambiguity it never raised.

The Court accordingly quashed the impugned LIC rejection order(s) and directed LIC to allow the petitioner's claim without further delay.

Analysis

The doctrinal interest of Muraleedharan lies in the bridge it builds between contract and constitution. An insurance policy is a private contract, and the instinctive answer to a wrongful repudiation is that the insured should sue on the contract — typically in the consumer forum, which is designed precisely for this category of dispute. The Court does not deny that this is the ordinary course. What it holds is that the ordinary course is not the only course, and that where the denial is arbitrary, the High Court's writ jurisdiction is not ousted.

That move rests on the character of LIC as a State entity amenable to Article 226, and on the recognition that an arbitrary refusal to pay for medical treatment is not a neutral commercial decision but one that bears directly on the insured's health and life. The reasoning runs parallel to the arbitrariness jurisprudence of Article 14 — that arbitrary State action is, for that reason, vulnerable to constitutional review — but the Court locates the harm specifically in Article 21. The claim, on this view, is the practical condition of access to treatment; to deny it arbitrarily is to deny the treatment, and the right to life is engaged.

The insurance-law holding is the more conventional, but no less important for practitioners. The requirement of a nexus between a pre-existing disease and the claimed condition is a guard against repudiation by technicality: an insurer cannot trawl an insured's medical history for any earlier ailment and use it to defeat an unrelated claim. Coupled with Section 45 and estoppel, the holding sets its face against late, opportunistic repudiation — particularly by an insurer that has banked premiums for years without demur. The combined effect is to read the policy fairly, against the party that drafted it and that holds the informational and bargaining advantage.

It bears noting what the judgment does not do. It does not abolish the contractual forum or hold that every claim dispute belongs in the writ court; the writ remedy is reserved for the exceptional case of arbitrary or unreasonable denial. The discipline of that threshold — arbitrary and unreasonable — is what keeps the principle from collapsing the distinction between constitutional review and ordinary contractual adjudication.

Why it matters

Muraleedharan extends the reach of Articles 21 and 226 into a field — the repudiation of insurance claims — that had been treated as almost wholly contractual. For an insured facing an arbitrary denial of a medical claim, the case opens a constitutional avenue: the High Court need not send the matter to the consumer forum where the denial is arbitrary, and the denial itself can be characterised as a violation of the right to life rather than a mere breach of contract.

For insurers, the lesson is one of substantive fairness. Repudiation on the ground of non-disclosure must be tethered to a genuine nexus between the undisclosed condition and the claim; Section 45 and estoppel will be enforced against late or technical repudiation; and an arbitrary refusal exposes the insurer not only to contractual liability but to the supervisory writ jurisdiction of the High Court. The judgment is a current and concrete reminder that the line between private contract and public-law accountability is not fixed where a State insurer and the right to health are both in play.

Related on Valkya

• Satwant Kaur Sandhu v. New India Assurance
• Reliance Life Insurance v. Rekhaben
• LIC v. Asha Goel
• Shikha Nischal v. National Insurance

Sources

• LiveLaw, "Denial Of Medical Insurance Claim Violation Of Right To Life: Kerala High Court" — https://www.livelaw.in/high-court/kerala-high-court/denial-of-medical-insurance-claim-violation-of-right-to-life-305910
• SCC Online Blog, "Denial of medical insurance claim violates Article 21: Kerala HC; LIC orders quashed" — https://www.scconline.com/blog/post/2025/10/07/denial-of-medical-insurance-claim-violates-article-21-kerala-hc-lic-orders-quashed/
• Verdictum, "Dr. A.M. Muraleedharan v. The Senior Divisional Manager, Life Insurance Corporation of India (2025:KER:66325)" — https://www.verdictum.in/court-updates/high-courts/kerala-high-court/dr-am-muraleedharan-v-the-senior-divisional-manager-life-insurance-corporation-of-india-2025-ker-66325-medical-claims-1593544