A Delhi consumer commission has directed Aditya Birla Health Insurance Company Ltd. to reimburse a policyholder's hospital expenses after finding the insurer guilty of deficiency in service and unfair trade practice for first approving a cashless claim and then withdrawing it during treatment.The District Consumer Disputes Redressal Commission-III (West), Janakpuri, ordered the insurer to pay Rs 44,354 towards the hospital bill, Rs 20,000 as compensation, and Rs 10,000 towards litigation expenses to the complainant.The order was passed on July 3, 2026, in a complaint filed by Delhi resident Janardan Chauhan against Aditya Birla Health Insurance Company Ltd.Why did the policyholder approach the consumer court?According to the complaint, Janardan Chauhan had purchased a Group Activ Health insurance policy from Aditya Birla Health Insurance through Bajaj Finance Ltd.The policy, issued on February 18, 2023, covered both Chauhan and his wife for a sum insured of Rs 5 lakh after payment of a premium of Rs 15,107.54.Several months later, in August 2023, Chauhan's wife developed multiple health problems, including pain in both lower limbs, fever, loose stools, dehydration and high blood pressure.She was taken to Pushpanjali Hospital and Trauma Centre, Peera Garhi, Delhi, on August 25, 2023, where, after examination in the outpatient department, the treating doctor advised immediate hospital admission because of her medical condition.Cashless claim was initially approvedFollowing her admission, Chauhan applied for a cashless claim under the health insurance policy.According to the complaint, Aditya Birla Health Insurance initially approved the hospitalisation request.On August 25, 2023, the insurer issued a pre-authorisation approval for Rs 36,450, after receiving and examining the medical information sought from the hospital.With the approval in place, Chauhan expected the treatment to continue under the cashless facility.What happened at the time of discharge?According to the complaint, the situation changed unexpectedly on August 29, 2023, the day Chauhan's wife was discharged from the hospital.While completing the discharge formalities, Chauhan learnt from the hospital's accounts department that the insurer had revoked the earlier cashless approval.As a result, he had to arrange the entire hospital bill himself and paid Rs 44,354 from his own pocket before his wife could be discharged.Why did Aditya Birla Health Insurance reject the claim?After discharge, Chauhan submitted a reimbursement claim along with the original treatment records and hospital documents.However, on September 25, 2023, the insurer rejected the claim.According to the repudiation letter placed before the commission, Aditya Birla Health Insurance took the view that: "Patient could have been managed on outpatient basis, here hospitalization is not justified."The insurer also returned the treatment documents after stamping them with the words "Claim Repudiated."Legal notice also failed to resolve the disputeFollowing the rejection, Chauhan served a legal notice on the insurer on December 20, 2023, demanding reimbursement of the hospital expenses.However, in its reply dated January 19, 2024, the insurance company maintained its earlier stand and reiterated that hospital admission had not been medically necessary because, according to it, the patient could have been treated as an outpatient.With the dispute unresolved, Chauhan approached the District Consumer Commission seeking reimbursement of the medical expenses along with compensation for the hardship caused.What did the consumer commission observe?The commission noted that despite receiving notice, Aditya Birla Health Insurance chose not to appear before the commission or contest the complaint.Consequently, the insurer was proceeded against ex parte.After examining the documents filed by the complainant, the commission observed that the allegations made by Chauhan had remained unrebutted and uncontroverted.The order stated that since the insurer failed to contest the proceedings or challenge the evidence placed on record, the complainant's version stood admitted.The commission therefore held Aditya Birla Health Insurance guilty of deficiency in service as well as unfair trade practice.What relief did the consumer court grant?Allowing the complaint, the District Consumer Disputes Redressal Commission directed Aditya Birla Health Insurance to:Refund Rs 44,354 towards the hospital expenses incurred by the complainant.Pay Rs 20,000 as compensation.Pay Rs 10,000 towards litigation costs.The commission directed the insurer to comply with the order within 30 days of receiving a copy of the judgment.Check the case judgement here: