Key Holdings

• Appellant and his wife obtained a mediclaim policy in 1990; wife treated in 1991, claim of Rs. 8,243/- dishonored, leading to successful litigation up to Supreme Court in 1995 with costs of Rs. 20,000/-, but payment delayed requiring further proceedings. (!) (!)

• Policy fell due for renewal; appellant applied timely on 24.1.1996 with cheque of Rs. 1,796/-, but insurer refused renewal on 7.3.1996 citing "past conduct" (prior litigation); writ petition succeeded in High Court, refusal set aside as unfair/arbitrary, but directed fresh policy as retrospective renewal not possible. (!) (!) [1000059810001]

• Exclusion clauses (2.1, 2.1.14) bar coverage for pre-existing diseases in fresh policy; diseases during non-renewal period would be excluded, disadvantaging insured due to insurer's wrongful refusal. [1000059810001] (!) [1000059810008] (!)

• Nationalized insurers (acquiring companies under General Insurance Business (Nationalisation) Act, 1972 ss. 3(a), 9, 24) hold monopoly, qualify as "State" under Art. 12, must act fairly/reasonably even in contracts; refusal based on insured's litigation for legitimate claim is arbitrary/irrelevant. [1000059810002]

• Renewal extends original policy on same terms from expiration date; must be retrospective from due date to remedy harm from arbitrary refusal, preventing insurer exploiting exclusion clauses for diseases during lapse. [1000059810003][1000059810004]

• Premium cheque returned; no correspondence during litigation, so no obligation to tender further premiums; insurer's argument rejected. [1000059810005]

• High Court erred in directing fresh policy; set aside, insurer directed to renew expired period policy upon application and premium payment; appeal allowed with Rs. 5,000/- costs. [1000059810006][1000059810007] (!) (!)