April 11, 2019

Whether a mosquito bite is a ‘disease’ or an ‘accident’ - Indian Supreme Court examines the position

The Supreme Court of India has held that the illness of encephalitis malaria caused by a mosquito bite is neither unexpected nor an unforeseen eventuality and therefore, it cannot be considered as a peril insured in the policy of accident insurance.

Background

Mr Bhattacharjee owed a housing loan which had an incidental facility of an accidental insurance policy (Policy).

Section II of the Policy insured the borrower of the loan against “[D]eath due to accident”.

Mr Bhattacharjee was employed as a Manager of a tea estate in India. Thereafter, he was transferred to the Republic of Mozambique as a Manager of a Tea Factory located in Zambezia.

Whilst working in Mozambique, Mr Bhattacharjee was diagnosed with encephalitis malaria and later succumbed to death. The death certificate issued by the Republic of Mozambique spelt out the cause of death as “multi organ failure” due to “Encephalitis” and “Pnasituria” malaria.

Mr Bhattacharjee was insured by the National Insurance Company Limited (NIC). His legal heirs filed a claim with NIC contending his death as an “accident” and claimed under the Policy. The claim was rejected by NIC and as a result his legal heirs pursued a consumer complaint against NIC for deficiency in service for not settling the claim under the insurance Policy before the Consumer Forums at the District, State and National level.

Consumer Disputes Redressal Commissions

At the initial stage, the District Consumer Forum allowed the claim of the legal heirs of Mr Bhattacharjee and directed NIC to pay the entire outstanding home loan amount. NIC challenged the order of the District Consumer Forum before the State Consumer Forum. The challenge of NIC was set aside by the State Consumer Forum which held that death due to mosquito bite falls within the four corners of the term of ‘accident’' and “it would be rather silly to say that it was a natural death”.

The decision of the State Consumer Forum was subsequently challenged before the National Consumer Forum by way of revision petition. The National Consumer Forum observed that it would be difficult to accept NIC’s contention that malaria due to mosquito bite is a disease and not an accident. Thus, the National Consumer Forum inter-alia held that the death due to mosquito bite will be an accident and not a disease and therefore, upheld the decision of the State Consumer Forum.

NIC assailed the decision of the National Consumer Forum before the Supreme Court.

Judgment

The Supreme Court unanimously allowed the appeal filed by the NIC and observed:

  • In a policy of insurance which covers death due to accident, the peril insured against is an accident: an untoward happening or occurrence which is unforeseen and unexpected in the normal course of human events.
  • Being bitten by a mosquito is not an unforeseen eventuality in Mozambique considering the fact that according to the World Health Organization’s World Malaria Report 2018, Mozambique - with a population of 29.6 million people - accounts for 5% of cases of malaria globally. Therefore, the death of Mr Bhattacharjee should not be regarded as an accident.
  • Thus, the illness of encephalitis malaria through a mosquito bite cannot be considered as an accident as it was neither unexpected nor unforeseen and therefore, it was not a peril insured against in the Policy of accident insurance.
  • It was further observed that the death of Mr Bhattacharjee did not fall within the purview of Section II of the Policy and therefore, NIC was not liable to indemnify the heirs of Mr Bhattacharjee for the claim of death due to an accident.

What can we learn?

  • This decision will be welcomed by Insurers as it offers clear guidance that accidents and diseases are distinct concepts for the purposes of accident insurance policy.
  • The judgment makes it clear that “the disease which is caused as a result of the insect bite in the natural course of events cannot be regarded as an accident”.
  • It further clarifies that “where a disease is caused or transmitted in the natural course of events, it would not be covered by the definition of an accident”.
  • However, the Court made it clear that in a given case or circumstance, the affliction or bodily condition may be regarded as an accident where its cause or course of transmission is unexpected and unforeseen.
  • This interpretation appears to be consistent with the opinion of Cockburn C.J., in Sinclair v Maritime Passengers Assurance (1861) 3 E&E 478 wherein the Queen’s Bench Division of the UK contrasted the term ‘accident’ with an event that occurs naturally and held that death due to a sunstroke was not an accident.
  • It is also in line with the decision of the English House of Lords in Fenton v Thorley & Co. Ltd (1903) AC 443 wherein Lord Macnaughten speaking for the House of Lords inter-alia held that rupture caused by an act of over-exertion would not fall within the ambit of the term ‘injury by accident.’
  • However, there is a clear distinction between an accident and a disease which is contracted in the natural course of human events in determining whether a policy of accident insurance would cover a disease. There may well be instances where a bodily condition from which an individual suffers may be the direct consequence of an accident. For instance, a motor car accident which may result in bodily injuries, the consequence of which is death or disability may fall within the cover of a policy of accident insurance.

Authors

Sumeet Lall
Partner, CSL Chambers
Sumeet.Lall@cslchambers.com

Ananya Singh
Associate, CSL Chambers

Ananya.Singh@cslchambers.com

CSL Chambers is Clyde & Co's associated firm in New Delhi, India