for the Insurance Company cannot stretched any
further in view of the clear cut finding by the
Apex Court in a decision in the case of United
India Insurance Company Limited v. Manubhai
Dharmasinhbhai Gajera and others, reported in
(2008) 10 SCC 404, wherein, it has been held that
“as per the terms of the prospectus and the
insurance policy in the present case what was
necessary for non-renewal was a pre-existing
disease when the cover was incepted for the first
time. Hence, only because the insured had
contracted or come to suffer a disease during the
currency of the insurance policy, the same would
not mean that the said disease shall be excluded
or that renewal could be denied on that ground.”
It has been further held that “if the insured had
made some claim in each year, the insurance
company should not refuse to renew insurance
policies only for that reason. In the same
judgment, it has been held that “Insurance
companies cannot either in their prospectus or in
the terms of the policy lay down any condition
which would be derogatory to the terms and
conditions approved by IRDA.”
12. This case can be viewed from other angle. The
disease acquired by the wife of the petitioner
was during the pendency of the Insurance Policy.
The respondents-Insurance Company renewed the
policy with loaded premium and with an assurance
that if the petitioner pays this loaded premium,
the exclusion clause will not be there in the
renewed policy. However, the respondents seem to
have backed out from their promise, as they
charged the loaded premium and kept the exclusion
clause in the renewal policy despite the fact
that the disease was acquired during the pendency
of the policy. We are living in a welfare State.
All these rules and policies are meant for the
welfare of the human beings. The authorities are
not expected to stick to technicalities and adopt
a wooden attitude while dealing with the human
beings. Once the respondent-Insurance Company has
insured a person for mediclaim, they cannot be
allowed to shift the burden on the insurer and
refuse the mediclaim at the time when person
suffers from a disease.
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 4550 of 2006
NM BIJLANI, IAS (RETD)
V
NEW INDIA ASSURANCE CO LTD & 2..
CORAM: MR.JUSTICE MOHINDER PAL
Date : 01/02/2017
Citation: AIR 2017 Guj 57
1. By way of this petition under Article 226 of
the Constitution of India, the petitioner has
challenged the inaction of respondent no. 2 in
not reimbursing the medical expenses incurred by
the petitioner on the treatment of his wife (also
a policy holder) on the ground that thee was
exclusion clause in the policy at the time of
renewal. and his wife jointly, without exclusion
clause.
2. The petitioner had taken the medi-claim
policy on 20.4.2001 jointly with his wife Smt.
Rani Bijlani for an insured sum of Rs. 3,50,000/-
each, after undergoing prescribed detailed
medical check-up through the approved doctor of
the New India Assurance Co. Ltd. The policy was
subsequently renewed for a period of one year
from 20.4.2003 on the same terms and conditions.
That during the currency of the insurance policy,
the wife of the petitioner was diagnosed for
Ovarian Cancer Stage III (c) in February, 2002
and was admitted in Jashlok Hospital, Mumbai for
treatment. The treatment continued up to August,
2003. During this period, the term of the
mediclaim policy expired on 19.4.2002 and the
policy was renewed by the company on the same
terms and conditions without any exclusion. The
petitioner vide his letters dated 3.7.2002 and
28.8.2002 submitted reimbursement claim to the
respondent no. 2 – Insurance Company.
3. After issuance of the mediclaim policy by the
Insurance Company on 20.4.2001, the policy was
subsequently renewed for four times. The last
renewal was on 20.4.2005. The details of the
policy and each renewal is given at page 34 of
the petition.
4. It is further the case of the petitioner that
in April, 2003, the petitioner was called by Mr.
C.P. Parwani, the then Senior Divisional Manager
of the respondents- Insurance Company asking for
giving undertaking in writing to the effect that
the petitioner agrees to renewal of the Mediclaim
Policy with the “exclusion clause” for Ovarian
Cancer in case of his wife. The petitioner was
further informed that it was the policy of the
company to renew the mediclaim policy with
exclusion clause in the cases where compensation
was claimed and paid by the insurance company,
and in case, the petitioner did not agree with
such undertaking in writing, the mediclaim policy
will not be renewed as the renewal was at the
sole discretion of the Insurance Company. The
petitioner has strongly protested regarding
incorporation of the exclusion clause, however,
he has to give undertaking in view of the
assurance given by the said officer. Ultimately,
on giving undertaking in writing by the
petitioner, the policy was further renewed up to
19.4.2004 with exclusion clause of Ovarian Cancer
in case of wife of the petitioner. The petitioner
has further pleaded that the policy was renewed
from time to time. However, the exclusion clause
was kept in all the renewal.
5. As per the case of the petitioner, he issued
a protest letter/representation to the respondent
– Insurance company on 11.8.2004 after coming of
one judgment of High Court having similar facts.
The relevant portion of such representation is
reproduced as under:
1. Insured has an option and right to get
renewal of Mediclaim insurance by payment of
renewal premium in time.
2. Insurance company is bound to renew the
policy without excluding any disease already
covered under the existing policy which may
have been contracted during the period of the
policy in force.
3. In case the insured seeks to raise the
sum insured at the time of renewal, it has to
be done on the same conditions, but exclusion
can be different so far as the increased sum
insured is concerned.
4. Renewal of Mediclaim insurance policy
cannot be refused, despite timely payment of
renewal premium on the ground that
continuance of the cover would become more
onerous or burdensome for the insurer due to
the insured contracting a covered disease
during the period of existing policy.
5. Renewal can be refused only on the
ground like misrepresentation, fraud or nondisclosure
of material facts that existed at
the inception of the contract.
6. The government insurance companies
continue to be 'State' within the meaning of
Article 12 of the Constitution of India not
withstanding the private companies in the
field of insurance, ending their monopoly by
virtue of insertion of Section 24A in the Act
of 1972, and they cannot arbitrarily cancel
or refuse to renew an existing policy.
6. As per petitioner, during the currency of
this mediclaim policy, the wife of the petitioner
was once again diagnosed Ovarian Cancer in
September, 2004 and she was admitted in Jashlok
Hospital, Mumbai on 11.10.2004 for undergoing
surgery followed by chemotherapy cycles as per
advise of the hospital. On discharge from the
hospital, she was advised 2nd line chemotherapy
treatment consisting of in all six chemotherapy
cycles (each cycle consisting of 3 chemos) at
intervals of approximately one month. After
discharged from the hospital on this occasion,
the petitioner has again written to the Insurance
Company for reimbursement of his mediclaim. The
relevant portion of representation is reproduced
as under:
i) Immediate settlement of my claim for
Rs. 3,24,393/- put up vide my letter
dated 5.11.2004. This claim amount was
spent on treatment of my wife for the
period from 20.9.2004 to 26.10.2004 and
that till date I have spent further
amount of more than Rs. 3.0 lacs on her
subsequent treatment for which claim
under Mediclaim Policy has not been
submitted as total cover under the
policy is limited to Rs. 3.5 lacs only.
ii) Treatment of my wife is still
continuing and in the meantime the
Mediclaim Policy will be due for renewal
for further period of one year from
20.4.2005 and that the same be renewed
without any exclusion clause as per
judgment of the Hon'ble High Court on
payment of loaded premium amount (as may
be intimated to me).
7. It is the grievance of the petitioner that
despite the representation and submission of
bills by the petitioner, the respondent no. 1 –
Insurance Company has failed to reimburse the
mediclaim. The details of which are claimed in
para-4(d) of the reliefs in the writ petition.
8. Learned counsel for the petitioner has
submitted that at the time of getting mediclaim
policy, the wife of the petitioner was not
suffering from any disease and respondents got
conducted medical check-up through their doctor
in this regard. It has been argued that after
initial insurance, the mediclaim policy has been
renewed without any exclusion clause. If the wife
of the petitioner has suffered from a disease
during the pendency of the currency period, the
respondents- Insurance Company cannot add
exclusion clause at the time of renewal of such
policy. It has been submitted that at the time of
second renewal mediclaim policy in April 2003
undertaking was taken from the petitioner under
duress and such writing was given under
misleading information that it was a policy of
the company that such an undertaking was
necessary. Finally, it has been argued that
Divisional Manager in his last letter dated
24.2.2005 has fairly stated that the policy can
be renewed without exclusion clause after the
policy's terms are revised by the competent
authority. It has been submitted that despite
representation and remainders, the policy in
question has not been revised. The petitioner
took up his grievance before the Insurance
Company, however, Insurance Ombudsman expressed
his helplessness in the matter and returned the
same with an observation that his office was not
having jurisdiction to decide such matter. The
learned counsel for the petitioner has relied
upon the decision of the Apex Court passed in the
case of United India Insurance Company vs.
Manubhai Dharasinhbhai Gajera and others,
reported in (2008) 10 SCC 404, in support of his
arguments.
9. The arguments raised by the learned counsel
has been controverted by the learned counsel for
the respondent – Insurance company, merely on the
ground that once the authority has renewed the
policy subject to certain exclusion clause and
agreed upon by the insurer then the exclusion
clause will remain in force for forever and for
any claim repudiated for disease will not be
considered. It has been argued that since the
policy has been renewed with exclusion clause of
ovarian cancer, the wife of the petitioner was
not entitled for mediclaim because of that
disease. It has been argued that the policy for
exclusion clause has expired after 12 months, and
thereafter, the next policy has been renewed with
the same exclusion clause, meaning thereby, the
petitioner has agreed for the exclusion at the
time of renewal of the policy and under these
circumstances he is not entitled to mediclaim .
10. This Court has considered the submissions of
both the sides. The facts of the case are not in
dispute. However, there is dispute regarding
exclusion clause which seems to have been added
at the time of renewal of the policy. The
petitioner, on various occasions has made
representations to the respondents- Insurance
Company, wherein, he has reproduced the finding
of this Court, wherein, in similar circumstances,
despite exclusion clause being there at the time
of renewal, the Insurance Company was directed to
make payment of the medical claim. Learned
counsel for the respondents- Insurance company
has tried to draw a distinction from the judgment
passed by the High Court on the point that
immediately at the time of incorporation of
exclusion clause, the petitioner in that case has
approached the Court by way of Special Civil
Application, however, in the case on hand, the
wife of the petitioner preferred to go for second
renewal being aware of the fact that exclusion
clause was there, and in view of this exclusion
clause, the Insurance Company will not be liable
to pay the medical claim.
11. The contention raised by the learned counsel
for the Insurance Company cannot stretched any
further in view of the clear cut finding by the
Apex Court in a decision in the case of United
India Insurance Company Limited v. Manubhai
Dharmasinhbhai Gajera and others, reported in
(2008) 10 SCC 404, wherein, it has been held that
“as per the terms of the prospectus and the
insurance policy in the present case what was
necessary for non-renewal was a pre-existing
disease when the cover was incepted for the first
time. Hence, only because the insured had
contracted or come to suffer a disease during the
currency of the insurance policy, the same would
not mean that the said disease shall be excluded
or that renewal could be denied on that ground.”
It has been further held that “if the insured had
made some claim in each year, the insurance
company should not refuse to renew insurance
policies only for that reason. In the same
judgment, it has been held that “Insurance
companies cannot either in their prospectus or in
the terms of the policy lay down any condition
which would be derogatory to the terms and
conditions approved by IRDA.”
12. This case can be viewed from other angle. The
disease acquired by the wife of the petitioner
was during the pendency of the Insurance Policy.
The respondents-Insurance Company renewed the
policy with loaded premium and with an assurance
that if the petitioner pays this loaded premium,
the exclusion clause will not be there in the
renewed policy. However, the respondents seem to
have backed out from their promise, as they
charged the loaded premium and kept the exclusion
clause in the renewal policy despite the fact
that the disease was acquired during the pendency
of the policy. We are living in a welfare State.
All these rules and policies are meant for the
welfare of the human beings. The authorities are
not expected to stick to technicalities and adopt
a wooden attitude while dealing with the human
beings. Once the respondent-Insurance Company has
insured a person for mediclaim, they cannot be
allowed to shift the burden on the insurer and
refuse the mediclaim at the time when person
suffers from a disease.
13. In view of the foregoing discussion, this
petition is allowed. The respondents – Insurance
Company will be liable to pay the medical
reimbursement as claimed by the petitioner in
para-4(d). However, while calculating such claim,
cap of medical reimbursement which the petitioner
has agreed at the time of getting policy will be
taken into consideration.
14. Respondent- Insurance Company shall reimburse
the medical claim (without interest) to the
petitioner within a period of one month from
today. However, if such payment is not paid
within one month, the respondent-Insurance
company shall be further liable to pay interest @
12% per annum from the date of submission of
medical claim, till its realisation.
(MOHINDER PAL, J.)
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