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Umesh Narain Sharma v. The New India Assurance Co. Ltd. & Ors. - WRIT - C No. 61244 of 2005  RD-AH 20081 (27 November 2006)
Civil Misc. Writ Petition No.61244 of 2005
Umesh Narain Sharma v. The New India
Assurance Co. Ltd. and others
Hon'ble R.K.Agrawal, J.
Hon'ble Vikram Nath, J.
(Delivered by R.K.Agrawal, J.)
By means of the present writ petition filed under Article 226 of the Constitution of India, the petitioner, Sri Umesh Narain Sharma, seeks the following reliefs:-
"(i) issue a writ, order or direction in the nature of certiorari quashing the order dated 13.6.2005 issued by the respondent no.2 (Annexure ''1'to the writ petition);
(ii) issue a writ, order or direction in the nature of mandamus commanding upon the respondents to pay the claim of Rs.3.31 lacs to the petitioner in respect of the expenses incurred in the treatment of the petitioner;
(iii) issue any other suitable writ, order or direction which this Hon'ble Court may deem fit and proper and to which the petitioner may be found entitled to in the facts and circumstances of the case;
(iv) award costs of this petition to the petitioner."
Briefly stated, the facts giving rise to the present petition are as follow:-
The petitioner is a Senior Advocate of this Court. He had taken a mediclaim insurance policy from the New India Assurance Company Limited, Allahabad, respondent no.3, which is a subsidiary of the General Insurance Corporation of India. It is a Government Company wholly managed and controlled by the Government of India. According to the petitioner, he was insured by the respondent no.1 for the first time on 24.11.1998. It was renewed from time to time and except for some break in renewal during the year 1999 and 2000, the mediclaim insurance policy had been in force continuously for the last 5 years since 30.1.2001. The particulars of the policy, period of insurance and also the claim, if any, preferred by the petitioner is given below:-
Policy no. Period of Insurance Claim made
4208014807021 24.11.1998 to 23.11.1999 NIL
4208014807955 17.01.2000 to 16.01.2001 NIL
4208014808652 30.01.2001 to 29.01.2002 NIL
4208014809832 30.01.2002 to 29.01.2003 NIL
4208014800509 30.01.2003 to 29.01.2004 NIL
4208014800915 30.01.2004 to 29.01.2005 NIL
4208014875129 30.01.2005 to 29.01.2006 Claim in question
The mediclaim insurance policy taken by the petitioner was for a sum of Rs.2/- lacs. According to the petitioner, while getting himself insured, he had disclosed all material facts as required by the Insurance Company, including the details of his health condition and at the time of taking the mediclaim insurance policy on 24.11.1998, he did not suffer from any ailments or heart disease nor did he had any symptom of any cardiac problem. In the first week of March, 2005, the petitioner had some complaint regarding his health and on medical advice, he got himself checked up and was admitted on 18.3.2005 at Kailash Heart Institute, H-33, Sector-27, NOIDA for treatment of heart disease under Dr. D.S.Gambhir, M.D., D.H., F.A.M.S. The petitioner underwent angiography in which it was found that there was blockade in the arteries. The petitioner was advised for angioplasty which he underwent and was discharged from the hospital on 22.3.2005. The petitioner made a claim for reimbursement of the medical expenses for a sum of Rs.3.31 lacs which he had incurred on account of treatment of his disease and hospitalisation, by submitting the claim form dated 23.3.2005. The respondent no.1 verified the claim and vide letter dated 13.6.2005 rejected the claim on the following grounds:-
"It is noted from the insurance certificate that there was a break in policy while renewal in 2001. The patient is a known case of CAD since 2005 (5 years). Hence the disease is preexisting and the claim is not payable."
The rejection of the claim is under challenge in the present writ petition on the ground that the stand taken by the Insurance Company is arbitrary; that the petitioner had been insured with the respondent no.1 with effect from 24.11.1998 and since then the mediclaim insurance policy is continuing; the break in the continuity of the policy for 13 days, i.e., from 17.1.2001 to 29.1.2001 would have no material bearing and as the Insurance Company had continued to renew the policy on year to year basis on the same terms and conditions for the last more than 5 years; it is not open for it to refuse to honour the claim on the ground that the disease was preexisting or that there was break in the renewal of the policy; in any event, the petitioner did not have any cardiac problem in the year 2000 and the rejection of the claim is based on wholly irrelevant material and consideration and the invocation of clause 4.1 of the mediclaim insurance policy is wholly arbitrary.
In the counter affidavit affirmed by Shailendra Shukla, Deputy Manager, Legal, on behalf of the Insurance Company, it has been stated that the petitioner has not revealed his health condition on 30.4.2001 (the date appears to have been wrongly mentioned as 30.4.2001 whereas it is 30.1.2001 when the fresh policy was issued) when the policy had expired on 16.1.2001 and a fresh policy was issued on 30.1.2001. The policy issued on 30.1.2001 is actually a fresh policy with fresh proposal form and the petitioner had declared that there was no preexisting complaint regarding his health. The condition of clause 4.1 of the policy has rightly been invoked.
In the rejoinder affidavit filed by the petitioner it has been stated that the break in the policy has no bearing on the merits of the case as he had made the claim against the policy for the period 31.1.2005 to 29.1.2006 and 14 days break between the policy of 2000-2001 has no bearing. It has been reiterated that the petitioner was not a known patient of CAD. According to the petitioner, clause 4.1 of the policy cannot be enlarged and interpreted in such a wide manner so as to preclude the policy holder from the claim and from a conjoint reading of clauses 3 and 4.1, it would be abundantly clear that any disease or illness that relapses within 45 days from the last consultation/treatment would be treated to be the same illness. However, if it relapses after lapse of 45 days, it would be considered to be a fresh illness. The claim made by the petitioner is for the policy of 2005-06 whereas the petitioner is having the policy since 1998-99 and during the said period, there is no instance of any disease or illness that relapsed after 45 days for which the petitioner was treated in the year 2005-06. On the contrary, the disease was not preexisting. The interpretation being adopted by the Insurance Company is totally against the public policy and is violative of Section 23 of the Contract Act as the standard form of the agreement has been imposed by the Insurance Company and the petitioner had to sign on the dotted lines and was not permitted to bargain the terms and conditions. If such an interpretation as made by the Insurance Company is accepted, it would result in payment of no claim in any condition.
We have heard Sri Sumit Kumar, learned counsel for the petitioner, and Sri A.B.Saran, learned senior counsel, assisted by Sri Parmatma Rai, Advocate, appearing for the respondents.
Sri Sumit Kumar, learned counsel for the petitioner, submitted that the petitioner had no preexisting cardiac problem during the year 2001 or before and, therefore, the insurance claim made by the petitioner was fully justified. According to him, clause 4.1 of the terms and conditions of the mediclaim insurance policy cannot be invoked in the present case and the Insurance Company ought to have reimbursed the expenses incurred by the petitioner in treatment of his cardiac disease and hospitalisation.
Sri A.B.Saran, learned senior counsel, on the other hand, submitted that as the mediclaim insurance policy taken by the petitioner on 17.1.2000had lapsed on 17.1.2001 and was not renewed before its expiry or on its expiry on 16.1.2001 and instead a fresh insurance policy was taken on 30.1.2001, the Insurance Company was perfectly justified in rejecting the claim on the ground that the petitioner is a known case of CAD since 2000 (5 years). Clause 4.1 of the terms and conditions of the mediclaim insurance policy had rightly been invoked.
We have given our anxious consideration to the various pleas raised by the learned counsel for the parties. The fact except as to whether the petitioner was a known case of CAD since 2000 (5 years) are not in dispute. The petitioner had continuously taken the mediclaim insurance policy since 24.11.1998 with a short break from 24.11.1999 to 16.1.2000 and 17.1.2001 to 29.1.2001. He was hospitalised in Kailash Heart Institute, NOIDA on 18.3.2005 and had undergone angioplasty. The insurance claim has been rejected by the respondent no.1 on the ground that there was a break in the policy in renewal in 2001 and the patient is a known case of CAD (5 years) hence the disease was preexisting and the claim was not payable.
In the case of Life Insurance Corporation of India and others v. Asha Goel (Smt.) and another, (2001) 2 SCC 160, the Apex Court has held as follows:-
"10. Article 226 of the Constitution confers extraordinary jurisdiction on the High Court to issue high prerogative writs for enforcement of the fundamental rights or for any other purpose. It is wide and expansive. The Constitution does not place any fetter on exercise of the extraordinary jurisdiction. It is left to the discretion of the High Court. Therefore, it cannot be laid down as a general proposition of law that in no case the High Court can entertain a writ petition under Article 226 of the Constitution to enforce a claim under a life insurance policy. It is neither possible nor proper to enumerate exhaustively the circumstances in which such a claim can or cannot be enforced by filing a writ petition. The determination of the question depends on consideration of several factors, like, whether a writ petitioner is merely attempting to enforce his/her contractual rights or the case raises important questions of law and constitutional issues; the nature of the dispute raised; the nature of inquiry necessary for determination of the dispute etc. The matter is to be considered in the facts and circumstances of each case. While the jurisdiction of the High Court to entertain a writ petition under Article 226 of the Constitution cannot be denied altogether, Court must bear in mind the self-imposed restriction consistently followed by High Courts all these years after the constitutional power came into existence in not entertaining writ petitions filed for enforcement of purely contractual rights and obligations which involve disputed questions of facts. The Courts have consistently taken the view that in a case where for determination of the dispute raised it is necessary to inquire into facts for determination of which it may become necessary to record oral evidence a proceeding under Article 226 of the Constitution is not appropriate forum. The position is also well settled that if the contract entered between the parties provide an alternate forum for resolution of disputes arising from the contract, then the parties should approach the forum agreed by them and the High Court in writ jurisdiction should not permit them to by-pass the agreed forum of dispute resolution. At the cost of repetition it may be stated that in the above discussions we have only indicated some of the circumstances in which the High Court have declined to entertain petitions filed under Article 226 of the Constitution for enforcement of contractual rights and obligation; the discussions are not intended to be exhaustive. This Court from time to time disapproved of a High Court entertaining a petition under Article 226 of the Constitution in matter of enforcement of contractual rights and obligation particularly where the claim by one party is contested by the other and adjudication of the dispute requires inquiry into facts. We may notice a few such cases; Mohammed Hanif v. State of Assam, (1969) 2 SCC 782; Banchhanidhi Rath v. State of Orissa, (1972) 4 SCC 781 : (AIR 1972 SC 843 : 1972 Lab IC 431); Smt. Rukmanibai Gupta v. Collector, Jabalpur, (1980) 4 SCC 556 : (AIR 1981 SC 479), Food Corporation of India v. Jagannath Dutta, 1993 Supp (3) SCC 635 : (1993 AIR SCW 1425 : AIR 1993 SC 1494) and State of H. P. v. Raja Mahendra Pal, (1999) 4 SCC 43 : (1999 AIR SCW 1376 : AIR 1999 SC 1786).
11. The position that emerges from the discussions in the decided cases is that ordinarily the High Court should not entertain a writ petition filed under Article 226 of the Constitution for mere enforcement of a claim under a contract of insurance. Where an insurer has repudiated the claim, in case such a writ petition is filed the High Court has to consider the facts and circumstances of the case, the nature of the dispute raised and the nature of the inquiry necessary to be made for determination of the questions raised and other relevant factors before taking a decision whether it should entertain the writ petition or reject it as not maintainable. It has also to be kept in mind that in case an insured or nominee of the deceased insured is refused relief merely on the ground that the claim relates to contractual rights and obligations and he/she is driven to a long drawn litigation in the civil Court it will cause serious prejudice to the claimant/other beneficiaries of the policy. The pros and cons of the matter in the context of the fact situation of the case should be carefully weighed and appropriate decision should be taken. In a case where claim by an insured or a nominee is repudiated raising a serious dispute and the Court finds the dispute to be a bona fide one which requires oral and documentary evidence for its determination then the appropriate remedy is a civil suit and not a writ petition under Article 226 of the Constitution. Similarly, where a plea of fraud is pleaded by the insurer and on examination is found prima facie to have merit and oral and documentary evidence may become necessary for determination of the issue raised then a writ petition is not an appropriate remedy."
In the case of Biman Krishna Bose v. United India Insurance Co. Ltd. and another, (2001) 6 SCC 477, the Apex Court has held as follows:-
"Where an insurance company under the provisions of the Act having assumed monopoly in the business of general insurance in the country and thus acquired the trappings of the State being other authorities under Article 12 of the Constitution, it requires to satisfy the requirement of reasonableness and fairness while dealing with the customers. Even, in an area of contractual relations, the State and its instrumentalities are enjoined with the obligations to act with fairness and in doing so, can take into consideration only the relevant materials. They must not take any irrelevant and extraneous consideration while arriving to a decision. Arbitrariness should not appear in their actions or decisions."
It has further held as follows:-
"A renewal of an insurance policy means repetition of the original policy. When renewed, the policy is extended and the renewed policy in the identical terms from a different date of its expiration comes into force. In common parlance, by renewal, the old policy is revived and it is sort of a substitution of obligations under the old policy unless such policy provides otherwise. It may be that on renewal, a new contract comes into being, but the said contract is on the same terms and conditions as that of the original policy."
In the case of United India Insurance Co. Ltd. v. Pushpalaya Printers, (2004) 3 SCC 694, has held as follows:-
"It is also settled position in law that if there is any ambiguity or a term is capable of two possible interpretations one beneficial to the insured should be accepted consistent with the purpose for which the policy is taken, namely, to cover the risk on the happening of certain event. Although there is no ambiguity in the expression "impact", even otherwise applying the rule of contra proferentem, the use of the word "impact" in Clause 5 in the instant policy must be construed against the appellant. Where the words of a document are ambiguous, they shall be construed against the party who prepared the document. This rule applies to contracts of insurance and Clause 5 of the insurance policy even after reading the entire policy in the present case should be construed against the insurer. A Constitution Bench of this Court in General Assurance Society Ltd. v. Chandmull Jain and another, AIR 1966 SC 1644 has expressed that ( AIR p.1649, para 11)
"in a contract of insurance, there is requirement of uberrima fides, i.e. good faith on the part of the assured and the contract is likely to be construed contra proferentem i.e. against the company in case of ambiguity or doubt."
Applying the principles laid down in the aforesaid cases to the facts of the present case, we find that the present is not a case simpliciter for enforcing the contractual right but challenges the arbitrary action of the Insurance Company which is covered under Article 12 of the Constitution of India, in rejecting the claim of the petitioner on wholly untenable grounds and, therefore, this Court can examine the correctness of the order dated 13.6.2005 passed by the Insurance Company.
Clause 4.1 of the terms and conditions of the insurance policy reads as under:-
4.1 Such diseases which have been in existence at the time of proposing this insurance pre-existing condition means any injury which existed prior to the effective date of this insurance. Pre-existing conditions also means any sickness or its symptoms which existed prior to the insured person had knowledge that the symptoms were relating to the sickness. Complications arising from pre-existing disease will be considered part of that pre-existing condition."
From a reading of the aforesaid clause, we find that it will apply to such diseases which were in existence at the time of proposing the insurance policy, i.e., prior to the effective date of the insurance. It is the own case of the respondents that when the fresh policy was issued on 30.1.2001, being Policy No.48/8652 in the proposal form the petitioner had declared that there was no preexisting complaint regarding his health vide paragraph 7 of the counter affidavit filed by Shailendra Shukla, Deputy Manager, Legal. It is presumed that the respondents had checked and verified all the informations given in the proposal form by the petitioner before issuing the mediclaim insurance policy. Thus, it is not right to say that the petitioner is a known case of CAD since 2000. In the counter affidavit except for a bald statement that the petitioner is a known case of CAD since 2000, neither any document nor any material has been brought on record to establish the said averments. In view of the specific averments made in paragraph 7 of the counter affidavit filed by Shailendra Shukla on behalf of the respondents, the stand taken by the respondents for rejecting the claim cannot be sustained.
In view of the foregoing discussions, the writ petition succeeds and is allowed with costs which we assess at Rs.5,000/-. The order dated 13.6.2005 is quashed. The respondent no.3 is directed to process the claim of insurance and make payment of the amount which is ultimately found due and payable, to the petitioner within one month from the date a certified copy of this order is filed before the respondent no.3
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