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TMI Blog2001 (8) TMI 1233X X X X Extracts X X X X X X X X Extracts X X X X ..... the High Court to the extent it directed the appellant to take a fresh mediclaim policy & further direct that if the appellant applies for renewal of his mediclaim policy for the expired period and pays the premium, the respondent-company shall renew the said mediclaim policy forthwith. - CIVIL APPEAL NO. 2296 OF 2000 - - - Dated:- 2-8-2001 - V.N. KHARE AND SHIVARAJ V. PATIL, JJ. K. L. Nandwani, Kamal Baid and Debasis Misra for the Respondent. JUDGMENT V.N. Khare, J. - The appellant herein and his wife Smt. Alka Bose, took out a mediclaim insurance policy from the respondent, United India Insurance Company ( insurance company ) on 14-12-1990. In July 1991, Smt. Alka Bose fell ill and as per advice of the doctor, she ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petition under article 226 of the Constitution of India before the Calcutta High Court challenging the order passed by the respondent insurance company refusing to renew the mediclaim policy. The said writ petition was allowed and the order refusing to renew the mediclaim policy earlier taken out by the appellant. Aggrieved, the respondent insurance company filed an appeal against the judgment of learned Single Judge. The Division Bench of the Calcutta High Court while agreeing with the view taken by the learned Single Judge, substantially dismissed the appeal. Yet, the High Court directed the appellant to take fresh mediclaim policy, as the renewal of mediclaim policy cannot be granted with retrospective effect, as the period for which re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Nationalisation) Act, 1972 ( the Act ), General Insurance Corporation of India (GIC) was set up as a Government company for the purpose of superintendence, control and carrying out the business of general insurance in the country. Under section 24 of the Act, the acquiring companies were given the exclusive privilege to carry on general insurance business in India. Under section 3(1) of the Act, an acquiring company has been defined to mean any Indian insurance company in which any other company has been merged in pursuance of the amalgamation scheme formulated under the Act. The respondent insurance company is one of such acquiring company. A perusal of the provisions of the Act makes it evident that it is only the acquiring companies w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State being other authorities under article 12, it requires to satisfy the requirement of reasonableness and fairness while dealing with the customers. Even in an area of contractual relations, the State and its instrumentalities are enjoined with the obligations to act with fairness and in doing so, can take into consideration only the relevant materials. They must not take any irrelevant and extraneous consideration, while arriving at a decision. Arbitrariness should not appear in their actions or decisions. In the present case, what we find is that arbitrariness is writ large in the actions of the respondent-company when it refused to renew the mediclaim policy of the insured on the ground of his past conduct, i.e., having gone into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otherwise. It may be that, on renewal, a new contract comes into being, but the said contract is on the same terms and conditions as that of the original policy. Where an insurance company which has exclusive privilege to carry on insurance business has refused to renew the mediclaim policy of an insured on extraneous and irrelevant consideration, any disease which an insured had contacted during the period when the policy was not renewed, such disease cannot be covered under a fresh insurance policy in view of the exclusion clause. The exclusion clause provides that the pre-existing diseases would not be covered under the fresh insurance policy. If we take the view that the mediclaim policy cannot be renewed with retrospective effect, it w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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