Supreme Court Rules Death Due to Malaria Not an Accident Under Insurance Policy

Illness contracted through mosquito bite in malaria-prone Mozambique not covered as “accidental death” in home loan insurance; insurer’s liability to pay claim set aside.

In a significant judgment delivered on 26 March 2019, the Supreme Court of India clarified the interpretation of the term “accident” in insurance policies, holding that death caused by malaria due to a mosquito bite in a malaria-endemic region does not amount to death by accident under an insurance policy. The ruling arose from a dispute between the Branch Manager of National Insurance Co. Ltd. and the heirs of the deceased, Mousumi Bhattacharjee, who had claimed insurance benefits following the death of Debashis Bhattacharjee from encephalitis malaria while working in Mozambique.

The deceased had availed a housing loan from Bank of Baroda and took an incidental insurance policy called “National Insurance Home Loan Suraksha Bima,” which covered death due to accident among other perils. After the insured’s death in Mozambique, his family filed a complaint alleging deficiency of service when the insurer denied the claim on the ground that death due to malaria was a disease and not an accident. The consumer forums at District, State, and National levels had ruled in favor of the family, interpreting the mosquito bite as an unforeseen event amounting to an accident.

However, upon appeal, the Supreme Court revisited the definition of “accident” and distinguished between disease and accident. The Court referred to various precedents including Indian and international cases, legal dictionaries, and authoritative texts on insurance law, emphasizing that an accident is an untoward, unexpected, and unnatural event, whereas diseases occurring in the ordinary course of nature are not accidents. The Court highlighted that malaria is endemic in Mozambique, with statistics from the World Health Organization showing that one in three people in Mozambique contracts malaria. The Court reasoned that contracting malaria in such a region cannot be considered unexpected or unforeseen.

The Court therefore held that death due to malaria, a disease contracted in the natural course of events in a malaria-prone area, does not fall under the ambit of “accident” as covered by the insurance policy. It noted that while a mosquito bite itself involves an element of chance, the resulting disease in such a setting is not an accident. Consequently, the Supreme Court set aside the orders of the National Consumer Disputes Redressal Commission that had directed the insurer to pay the entire outstanding Equated Monthly Installments (EMIs) of the housing loan.

Though the insurer had already paid the claim during the pendency of the appeal, the Court’s ruling lays down a binding precedent on the interpretation of accident insurance policies, particularly clarifying that diseases contracted in the normal course of life—even if involving chance elements—do not qualify as accidents.

This decision will have far-reaching implications for insurers and policyholders, especially in clarifying the scope and limitations of personal accident covers attached to loan insurance schemes.

Statutory provisions

Consumer Protection Act, 1986; Article 142 of the Constitution of India

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Note: This news report is based on the Supreme Court judgment in Civil Appeal No. 2614 of 2019, Branch Manager National Insurance Co. Ltd. v. Mousumi Bhattacharjee, dated 26 March 2019.

Branch Manager National Insurance Co. Ltd. v. Mousumi Bhattacharjee (SC) : Law Finder Doc Id # 1405956