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2013 Supreme(Bom) 1590
HIGH COURT OF JUDICATURE AT BOMBAY
D.Y. CHANDRACHUD & S.C. GUPTE, JJ.
Kalyani Avinash Gokhale & Others
Versus
United India Insurance Company Limited & Others
Writ Petition No. 1219 of 2012 With Writ Petition Nos. 10 & 19 of 2013
Decided On : 19-08-2013
For the Petitioners: Gaurav Joshi, Amicus Curiae, Ms. Varda A. Gokhale, In Person.
For the Respondents:R1, A.S. Vadyarthi, R2, Sachin Joshi, Advocates.
Headnote:Constitution of India, 1950 - Article 226 - Insurance Act, 1938, Section 114(1) - Redressal of Public Grievance R ules, 1998, Rules 15 and 16 - Refusal of insurer to renew policy.
Since decision of insurer, not to renew policy, is subject to scrutiny hence jurisdiction under Article 226 of Constitution cannot be ousted. - Contractual matters are not alien to the exercise of the jurisdiction under Article 226 of the Constitution. Undoubtedly, as a matter of self imposed restraint, the Court would not be inclined to consider complicated issues which turn upon an assessment of evidence and disputed questions of fact. But, where as in the present case, the decision of the insurer is sought to be challenged on the ground that it is based on a wholly extraneous consideration, such a decision cannot be immune from judicial review. The reliance which has been placed by the insurer on a non-binding procedure before the Insurance Ombudsman is thoroughly arbitrary because in the absence of the consent of the insured, the decision of the Ombudsman could not have been enforced in view of the Rules of 1998. The second reason to the effect that there was a suppression of material facts is, for the reasons already indicated, equally perverse. There was indeed no suppression of fact on the part of the petitioners.
INSURANCE ACT, 1938 - Section 114(1) - Redressal of Public Grievances Rules, 1998, Rules 15 and 16 - Refusal to renew policy.
Denial of insurer to renew policy on basis of decision of ombudsman is unjustified and not sustainable. - In the present case, there has been a fundamental fallacy in the approach of the insurer to the recommendation of the award of the Ombudsman. In the absence of an unequivocal letter of acceptance by the first petitioner, who had complained to the Ombudsman, the insurer could not have treated the decision of the Ombudsman as a binding direction that the policy which was issued to the first petitioner should not be renewed after 17th April, 2012. Since the first petitioner had not accepted the decision, there was no occasion to treat the order of the Ombudsman as a binding edict. The decision of the insurer not to renew the policy on the basis of the decision of the Ombudsman is flawed and vitiated.
INSURANCE ACT, 1938 - Section 114(1) - Redressal of Public Grievances Rules, 1998, Rules 15 and 16 - Insurance Regulatory and Development Authority Rules, 2013, Clause 5(f) - Denial to renew policy.
Denial of insurer to renew policy on ground that insured is having multiple policies, improper and unjustified. - The third reason for denying benefit of renewal is that the first petitioner had taken recourse to multiple policies. Now in regard, it is evident from the terms of the agreement dated 18 May, 2006 between the insurer and the bank that the risk coverage under the policy was to be in addition to any other policy held by the account-holder either with the first respondent or any other insurance company; either within the scheme or outside the scheme. However, the claims were liable to be paid only on a rateable basis. Thus, there could be no manner of doubt that there was absolutely no bar to the insured seeking an extended cover with more than one policy either with the same insurer or with more than one insurer.
INSURANCE ACT, 1938 - Section 164(4) - Indian Motor Tariff, IMT- 44 - Applicability of IMT-44 of Tariff. -
IMT-44 of Tariff, providing payment of additional premium by hirer of vehicle, applies to those cases where hirer takes policy.
[ICICI Lombard General Insurance Co. Ltd. v. Smt. Pinky, 2013 (4) All MR (Journal) 59 (All)].
INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY RULES, 2013
Insurance Regulatory and Development Authority Rules, 2013 - Clause 5(f). - See Insurance Act, 1938, Section 114(1).
Dr. D.Y. Chandrachud, J.
1. In this batch of petitions, the decision of the First Respondent to decline a renewal of the Health Insurance Cover has been called into question. The first two writ petitions relate to group insurance policies while the third relates to a top up medicare policy.
2 On 18 May 2006, an agreement was entered into between the Bank of Maharashtra (the Second Respondent) and United India Insurance Company Limited (the First Respondent) under which a group Mediclaim insurance cover was to be provided under a scheme of the bank called “Mahabank Swasthya Yojna”. The scheme was intended to provide medical insurance coverage to persons who hold accounts with the bank through what was described as “a Tailor made Group Mediclaim”. Clause 1(b) of the agreement provided that every account-holder between the ages of five and sixty-five was eligible and that renewals could be granted upto the age of eighty. Clause 2 provided for coverage to the account-holder and to members of his or her family; the expression “family” being defined to mean a prime accountholder, spouse and two dependent children. Clause 2(d) provided as follows :
“(d) The risk coverage under this policy shall be in addition to any other policy held by the Account Holders with this Insurance Company or any other Insurance Company whether within this Scheme or outside the Scheme. However, claims will be paid on its ratable proportion of sum insured of all the policies to total claim amount subject to maximum of actual expenses incurred.”
Hence, the coverage of risk under the policy was to be in addition to any other policy held by the account-holder either with the First Respondent or with any other insurance company whether under the scheme or otherwise. However, if an account-holder was insured under more than one policy, a claim was liable to be paid only in ratable proportion. Annexure-I to the agreement stipulates the terms of the policy, conditions and exclusions. Clause 4.1 provided for the following exclusions:
“4. EXCLUSIONS :
The Company shall not be liable to make any payment under this policy in respect of any expenses whatsoever incurred by any Insured Person in connection with or in respect of :
4.1 All diseases / injuries which are pre-existing when the cover incepts for the first time. For the purpose of applying this condition, the date of inception of the initial Mediclaim Policy taken from any of the Indian Insurance Companies shall be taken, provided the renewals have been continuous and without any break. However, this exclusion will be deleted after 3 consecutive continuous claim free policy years, provided, there was no hospitalization for the pre-existing ailment during these 3 years of insurance.
4.2 Any disease other than those stated in clause 4.3, contracted by the Insured person during the first 30 days from the commencement date of the policy. This condition 4.2 shall not however, apply in case of the Insured person having been covered this Scheme or Group Insurance Scheme with any of the Indian Insurance Companies for a continuous period of preceding 12 months without any break.”
Clause 5.9 provided that the policy may be renewed by mutual consent. Clause 5.9 also stipulated that the insurer may, at any time, cancel the policy with a notice of 30 days but would remain liable for any claim which may arise prior to the date of cancellation. A provision for arbitration in regard to disputes and differences was made in Clause 5.10.
3 The Second Petitioner, Avinash Gokhale, is the spouse of the First Petitioner who is an employee of the Bank of Maharashtra. The Second Petitioner had a policy under the Mahabank Swastha Yojna Scheme on a family floater basis from 27 December 2006 with a sum insured of Rupees five lakhs. That policy has been renewed thereafter from time to time until date. In February 2009, the Second Petitioner was detected to be suffering from cancer of the colon. On 18 April 2009, a proposa
