2010 (9) TMI 214 - HC - Companies Law

Reimburse the expenses incurred by the Petitioner towards the treatment of cancer (intravenous chemotherapy) in terms of the mediclaim policy taken by the Petitioner - Power of Ombudsman Held that - The Award dated 18-3-2004 has in fact been acted upon by Respondent No.1 but for some reason only in part. The reasons for not renewing the policy continuously from 30-7-2003 as mandated by the Award dated 18-3-2004 are both unconvincing and unacceptable. The Award is unambiguous that the renewal had to be on the basis that the policy is continued with effect from 30-7-2003. As held in subsequent Award dated 26-4-2005 Respondent No.1 ought to have collected the premium pro rata for the period 30-7-2003 to 14-4-2004 and renewed the mediclaim policy of the deceased Petitioner for this period as well. The communication dated 18-3-2004 from the office of the governing body of the General Insurance Council at Mumbai advising the Insurance Ombudsman not to entertain complaints in respect of non-renewal of mediclaim policies was issued on the same date as the Award of the Insurance Ombudsman i.e. 18-3-2004. Without examining the question of validity of such advice this Court is of the view that the said advice could not govern the Award dated 18-3-2004 which had already been passed on that day in respect of the complaint of the Petitioner which was made prior thereto. Writ petition is allowed with a direction to Respondent No.1 to communicate to the Petitioner s LRs the pro rata premium amount payable for the renewal of the mediclaim policy of the Petitioner for the period 30-7-2003 to 14-4-2004 within a period of two weeks from today. The LRs of the deceased Petitioner will make the payment of the said premium amount within a further period of two weeks thereafter. Within a further period of four weeks thereafter Respondent No.1 will process all the claims made by the Petitioner during the period i.e. 30-7-2003 to 14-4-2004 and reimburse to the LRs of the Petitioners the said claims to the extent they are found admissible.

Issues:
1. Reimbursement of medical expenses under a mediclaim policy.
2. Implementation of awards by the Insurance Ombudsman.
3. Non-renewal of mediclaim policy and rejection of claims.
4. Dispute regarding premium payment and claim processing.

Analysis:

Issue 1: Reimbursement of Medical Expenses
The petitioner sought a mandamus for the reimbursement of cancer treatment expenses under the mediclaim policy. The respondent initially paid previous claims but later refused renewal, citing reasons like excessive claims and alleged non-disclosure of medical conditions. The Insurance Ombudsman found no suppression of facts and directed the renewal of the policy without a break. The court upheld the Ombudsman's decision, emphasizing the obligation of the insurance company to honor valid claims and renew policies as per the award.

Issue 2: Implementation of Awards
The Insurance Ombudsman's awards directing the renewal of the policy were accepted by the respondent, but partial implementation was claimed due to non-collection of premium for a specific period. The court clarified that once an award is accepted, it must be implemented fully without objections. The mechanism of the Ombudsman's adjudication is binding on insurance companies, and attempts to challenge such awards were deemed unacceptable.

Issue 3: Non-Renewal of Policy and Claim Rejection
The respondent's refusal to renew the policy from a specified date led to disputes regarding claim processing for the intervening period. The court held that the insurer's reasons for non-renewal were unconvincing, and the policy should have been continued as per the Ombudsman's directives. Claims made during the disputed period were to be processed and reimbursed accordingly, with interest.

Issue 4: Premium Payment and Claim Processing
The court directed the respondent to communicate the premium amount due for policy renewal promptly. The petitioner's legal representatives were instructed to make the payment within a specified timeframe. All claims from the disputed period were to be processed, and admissible amounts reimbursed with interest. The court also provided instructions on the distribution of the reimbursed amount among the legal representatives of the deceased petitioner.

In conclusion, the court allowed the writ petition, emphasizing the insurer's obligation to honor valid claims, renew policies as directed by the Ombudsman, and ensure timely reimbursement of medical expenses under the mediclaim policy.

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