1. Health insurance claim for post-chemotherapy injections denied by insurer as outpatient treatment not covered under policy. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 )
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2026 Supreme(Kar) 352
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
SURAJ GOVINDARAJ, J.
M/s National Insurance Co Ltd - Petitioner
Versus
Mr. Padmanabha Shetty G., S/o. Pakeerappa Shetty - Respondent
Writ Petition No. 14682 of 2024 (GM-RES)
Decided On : 01-09-2026
Advocates Appeared:
For the Petitioner: Sri. Devaiah I.S.
For the Respondent: Sri. Ranjay Shetty, Sri. Kashyap N. Naik, Sri. Vignesh Shetty.
For the Petitioner: Sri. Devaiah I.S.
For the Respondent: Sri. Ranjay Shetty, Sri. Kashyap N. Naik, Sri. Vignesh Shetty.
Health insurance coverage for necessary treatment of a covered disease cannot be denied solely because medical advancements allow it to be administered as an outpatient. Additionally, statutory conciliation is not required to be repeated if there is no realistic possibility of a consensual settlement.
Headnote:(A) Legal Services Authorities Act, 1987 - Section 22-C - Cognizance of cases by Permanent Lok Adalat - Conciliation procedure - Whether remanding a matter for conciliation is necessary when one party has categorically refused to make any settlement offer - Conciliation is a consensual dispute-resolution mechanism requiring mutual agreement; the statutory obligation to cooperate in good faith does not empower the forum to compel a settlement against a party's will - Where a party maintains an unequivocal position of no liability and declines any settlement proposal, remitting the matter for conciliation would serve no meaningful purpose and result only in further delay. (Paras 19.1 to 19.14)
(B) Insurance Law - Health Insurance Policy - Interpretation of "Hospitalisation" and "Day Care Treatment" - Reimbursement of medical expenses - Whether treatment administered as an out-patient, necessitated by a covered serious ailment and made possible by medical advancements, can be denied solely on the ground of lack of hospitalisation - Hospitalisation is a mode of administration and not an end in itself - Where advances in medical science enable a treatment to be administered safely without hospitalisation, such absence cannot be determinative of whether the treatment is connected with the insured disease - An interpretation that denies coverage because modern medical practice eliminates the need for hospitalisation for a specific treatment related to an insured disease is unduly restrictive and hyper-technical. (Paras 20.1 to 20.21)
Facts of the case:
An insured individual suffering from Stage IV prostate carcinoma received chemotherapy and subsequent injections as part of the continuing management of the disease. While chemotherapy expenses were reimbursed, the insurer denied reimbursement for the injections on the ground that they were administered as outpatient treatment and did not satisfy the policy's definitions of "hospitalisation" or "day care treatment." The Permanent Lok Adalat directed the insurer to reimburse the expenses and pay compensation.
Findings of Court:
The court found that the injections were prescribed as part of the continuing treatment for the insured disease. The lack of hospitalisation was a result of medical advancements and the nature of the injections, not a voluntary choice by the insured. The insurer's reliance on isolated definitions to deny coverage for necessary treatment of a covered disease was deemed unreasonable.
Issues: 1. Whether the matter should be remanded to the Permanent Lok Adalat to pursue the conciliation process prescribed under Section 22-C of the Legal Services Authorities Act, 1987. 2. Whether the award passed by the Permanent Lok Adalat directing reimbursement for outpatient injections suffered from any legal infirmity based on the contractual definitions of hospitalisation.
Ratio Decidendi: A statutory requirement for conciliation does not justify a remand if there is no realistic possibility of a consensual resolution. In health insurance, the therapeutic purpose and connection to the insured disease take precedence over the technical mode of administration; medical advancements that remove the need for hospitalisation should not result in a loss of coverage for necessary treatment.
Result: Writ petition dismissed; petitioners directed to pay the award amount with up-to-date interest and nominal costs of Rs. 50,000.
Legal Category Hierarchy
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insurance law
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health insurance
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coverage
- day care treatment
- hospitalisation
- outpatient treatment exclusion (Para 7)
- claim repudiation
- reimbursement
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coverage
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policy interpretation
- exclusionary clauses
- restrictive interpretation
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health insurance
- practice and procedure
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legal services authorities act, 1987
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section 22-c
- cognizance of cases
- conciliation proceedings
- duty to cooperate
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section 22-c
- medical jurisprudence
Table of Contents
2. Insurer argued injections were outpatient treatment excluded from coverage; insured argued they were part of cancer treatment. (Para 12 , 13 )
3. Hospitalisation is not determinative; treatment connected to insured disease is covered despite being outpatient due to medical advancement. (Para 20 )
4. Writ petition dismissed with costs; insurer directed to pay awarded amount with interest within 30 days. (Para 21 )
ORDER :
1. The Petitioners-Insurance Company are before this Court seeking for the following reliefs:
i. Issue a writ, order or direction in the nature of a writ of certiorari or any other appropriate writ/order/direction quashing the impugned order dated 20.09.2023 and modified/rectified order dated 10.01.2024 passed by the learned Permanent Lok Adalat, at Mangaluru, Dakshina Kannada in PLD No. 761/2022 (Annexure-A & B) and
ii. Pass any other orders/grant such other relief as this Hon’ble Court deems fit, under the circumstances of the case, in the interest of justice and equity.
2. Respondent No.1 was an employee of Vijaya Bank, which, pursuant to its merger, became part of respondent No.3–Bank of Baroda.
3. The Indian Banks’ Association had formulated a health insurance scheme for retired employees of member banks. Vijaya Bank was a member of the said scheme and, following its merger with Bank of Baroda, the latter also became a member. Vijaya Bank had extended the insurance scheme to its eligible retired officers and employees. Respondent No.1, being an eligible retired officer, paid the requisite premium and was covered under the scheme for the period from 01.11.2021 to 31.10.2022, with an annual coverage of Rs.9,00,000/.
4. Respondent No.1 was suffering from Stage IV carcinoma of the prostate and had undergone treatment at HCG Hospital, Bengaluru, including chemotherapy. During the course of such treatment, he was advised to continue two post-chemotherapy injections, namely, Zoladex and Xgeva, once every three months.
5. Respondent No.1 was admitted to Indira Hospital, Mangaluru, on 03.11.2021 and discharged on 04.11.2021, incurring expenditure of Rs.71,252/-. He was again admitted on 09.02.2022 and discharged on 10.02.2022, incurring expenditure of Rs.71,382/-. He was thereafter admitted on 25.05.2022 and discharged on 26.05.2022, and was once again admitted on 29.08.2022 and discharged on 30.08.2022, incurring expenditure of Rs.71,428/- on the latter occasion.
6. While several components of his medical expenditure were reimbursed, the amounts incurred towards the injections Zoladex and Xgeva were not reimbursed. Claiming a total sum of Rs.2,85,470/- towards the unpaid medical expenses, respondent No.1 invoked Section 22-C(1) to (8) of the Legal Services Authorities Act, 1987, by instituting proceedings before the Permanent Lok Adalat at Mangaluru, which was registered as Dispute No.761/2022.
7. The petitioners entered appearance through counsel and filed their counter statement. Their principal contention was that administration of the injections Zoladex and Xgeva did not require hospitalisation and, therefore, the treatment constituted out-patient treatment. According to the petitioners, the insurance policy extended coverage only to treatment involving hospitalisation and did not cover treatment undertaken otherwise than by way of hospitalisation.
8. The matter was initially taken up by the Permanent Lok Adalat for conciliation. Since the parties did not arrive at an amicable settlement, the Permanent Lok Adalat recorded the failure of conciliation and proceeded to the stage of adjudication by recording evidence.
9. Upon completion of the evidence, the Permanent Lok Adalat passed an order dated 20.09.2023, directing the petitioners and the other respondents therein to pay Rs.2,85,470/-, together with interest at 6% per annum from the date of the petition until realisation. The Permanent Lok Adalat further directed payment of Rs.25,000/- as compensation to respondent No.1 towards the inconvenience allegedly caused to him.
10. Thereafter, Bank of Baroda filed an application under Section 152 of the Code of Civil Procedure, seeking correction/modification of the operative portion of the order on the ground that the liability to satisfy the medical claim was that of the petitioners, being the insurers. The Permanent Lok Adalat allowed the said application and modified the operative portion, directing the petitioners to make payment
