In a poignant case that exposed the harsh realities of insurance disputes, the Bombay High Court has upheld an Ombudsman's award directing Tata AIG General Insurance to release ₹27 lakh to a widow who lost her husband to a sudden cardiac arrest. The Court, while dismissing the insurer's writ petition, observed that denying the claim would defeat the very purpose of tying insurance with housing loans.
Background
The dispute arose after the late Vishal Raut, a schoolteacher, passed away in April 2021 following a sudden chest pain and collapse. His wife, Gauri Raut, who had jointly availed a home loan, lodged a claim under the group insurance policy that had been compulsorily bundled with the loan. The policy promised coverage of ₹27 lakh for critical illness and accidental death.
But Tata AIG rejected her claim, arguing that no medical evidence proved the insured had suffered a heart attack of the severity listed in the policy. The widow then approached the Insurance Ombudsman, who ruled in her favour, noting that the attending doctor had certified death due to cardiac arrest. Tata AIG challenged that decision in the High Court.
Court's Observations
Justice Sandeep V. Marne, who heard the matter, expressed concern over the insurer's conduct.
"This is an unfortunate case where three male members of the family passed away in just six months, leaving behind only women and minor children. Repudiating the claim in such circumstances frustrates the very object of the policy," the bench observed.
The Court stressed that the policy had been made compulsory by the housing finance company. Borrowers had little choice but to accept it, with the assurance that in case of death, their family would not lose the roof over their head.
"If the insured survives a heart attack, the claim is payable. But if he dies suddenly due to the same illness, the nominee gets nothing - such a reading makes the policy absurd," Justice Marne remarked.
On the conflicting medical opinions - one from the treating doctor who confirmed a cardiac arrest and another from the insurer’s panel doctor who attributed death to sepsis - the Court sided with the first-hand account.
"Merely because tests could not be conducted in the few minutes before death, the possibility of cardiac arrest cannot be ruled out," the judge held.
The Decision
Ultimately, the Court refused to interfere with the Ombudsman's award. The writ petition was dismissed, and Tata AIG was directed to pay the widow the full claim amount with interest within four weeks.
In a strong observation, the Judge added that the company had "attempted to wriggle out of its obligation by finding loopholes," thereby forcing the widow into prolonged litigation while her house remained under threat of auction.
The order brings relief to the family, who were battling not just bereavement but also the looming loss of their only home.
Case Title: Tata AIG General Insurance Co. Ltd. v. Vinay Sah, Insurance Ombudsman, Pune & Anr.
Case Number: Writ Petition No. 1244 of 2023 with Interim Application No. 830 of 2023
Date of Judgment: 3 September 2025
