IN THE HIGH COURT OF JUDICATURE AT PATNA Cr.Misc. No.24836 of 2007 RITU RAJ son of Late K. N. Singh Branch Manager National Insurance Company Jeevan Prakash Building Fraser Road P.S. Kotwali District Patna- ( Accused No. 1)…….Petitioner. Versus 1. STATE OF BIHAR 2. Md. Ashraf son of late Md. Rafique resident of 625/2 Haroon Nagar P. S. Phulwarisharif Town and District (Patna) (Complainant)….Opposite parties ----------- For the Petitioner : Mr. Ashok Priyadarshi, Advocate For the Opp. Party no. 2 : Mr. N.A. Shamsi, Advocate with Mr. S. Quaisar Hasan, Advocate ----------- P R E S E N T HON'BLE JUSTICE MIHIR KUMAR JHA Mihir Kr. Jha,J. Heard Mr. Ashok Priyadarshi, counsel for the petitioner and Mr. N. A. Shamasi, counsel for opposite party no. 2. 2. Aggrieved by order dated 23.11.2005 passed in Complaint Case No. 2934(C) of 2005 taking cognizance for offence under Sections 406, 420 and 120 B I.P.C. and issuing summons for trial, the petitioner, Branch Manager of National Insurance Company is before this Court with a plain and simple case that the complainant had a mediclaim policy and was well aware of its terms and conditions and its alleged breach can at best be civil liability and therefore continuance of criminal prosecution for such breach would be out and out abuse process of the court. 2 3. It has been submitted by the learned counsel for the petitioner that if there be any deficiency of service on the part of the Insurance company or the Third Party Administrator (T.P.A.), M/s Genins India Ltd., the petitioner in the capacity of Branch Manager cannot be made liable for criminal prosecution inasmuch as the whole case is out and out a dispute of civil nature. He further relies on a judgment of Division Bench of this Court in the case of Oriental Insuracne Co. Ltd. & Ors. Vs. The State of Bihar & Anr., reported in 2004(2) PLJR 458. 4. Mr. N. A. Shamasi, learned counsel for the complainant opposite party no. 2 on the other hand would submit that there is a clear element of cheating as explained in the complaint petition and as such when the Insurance company and the third party have not made full and final settlement of claim of Rs.89,194/-, the amount spent over the treatment of the complainant till date, the dispute of civil nature would not remain confined to civil dispute but also embrace and attract criminal proceedings. In this context he has also referred to the judgment of the 3 Apex Court in the case of M/s Medchl Chemicals and Pharma P. Ltd. vs. M/s Biological E. Ltd. & Ors., reported in 2000(3) PLJR S.C. 56. 5. In the opinion of this Court two things are very clear from the reading of the complaint petition, namely, the complainant comes from a very well educated family and had the capacity of understanding the scope of medi claim policy and the other that the petitioner in capacity of the Manager of Insurance Company did nothing wrong in any way to influence the complainant opposite party no. 2 to subscribe to the medi-claim policy. Thus there would be no question of any inducement in such voluntary policy being taken up by a well qualified person like the complainant opposite party no. 2. 6. True it is that the complainant had staked a claim of Rs.4 lakh under the policy in which the amount expenses for medical treatment was confined to Rs.89,194/- the rest being a claim for the loss of business in the period the complainant had to be remain hospitalized for his treatment. Thus, the complaint petition by itself is a proof of civil dispute claiming compensation wherein the breakup of the damage 4 and compensation for the treatment undergone loss of business suffered by the complainant has been explained in the following words:- "That as the accused remained mute and accused no. 3 absconded from the scene the complainant then have no option left but on his own managed the money and settled the Hospital bills vide Receipt No. Ad 05-06/5502 dated 15.07.2005 for an amount of Rs. 10,360/- plus 7,234/- for the medicines purchased. Further the discharge summary shows that the complainant suffered heart attack and was diagnosed as having Acute Myocardial Infarction (A.M.I.) and was advised follows-up review for further management in clinic. Furth more due to paucity of fund the complainant could not go through the Angiographic test, causing further detoriation of his health. That thereafter the complainant had undergone the stress Myocardial Perfusion study (commandly known as Thallium Test) at Dev Institute of Nuclear Medicine Pvt. Ltd. at Patna, wherein after detail process of test the complainant was diagnosed to be suffering from "Coronary Artery Disease with predominant involvement of the left interior descending artery and the perfusion defects in the L.V. 5 and was advised revascularization procedure". The whole process costed the complainant a further loss of Rs. 5,850/-. That during all these period the complainant remained in-door and is having survey jobs in hand at the time of Hospitalization for New India Assurance Co. for about Rs. 15,000/- and anticipated job of Rs. 20,000/- and for United India Company for about Rs. 50,000/- and anticipated job of Rs. 80,000/- which were hampered for non-submission of report in time, further fresh assignment from other companies could not be completed/allotted because the Doctor has advised rest due to which the complainant was put into a loss of Rs. 1,80,000/-. That it is also necessary to mentioned here in this connection that the complainant was also engaged by the private business organizations for assessment of transit loss of the consignments on which the parties claim for compensation from the Insurance Company for which the complainant was put to a further loss to a tune of Rs. 1,50,000/- as the aforesaid jobs were the only livelihood of the complainant who has to maintain his family including the studies of his minor children. 6 That it is pertinent to mention that accused no. 3 who was the agent/representative of accused no. 2 suddenly absconded from the scene without honouring his own words given to the complainant that he will get the Hospital bills settled before discharge. Thus it confirms the melicious and mischievous, attitude by wrongly restraining my client in the Hospital on the false statement made by the said accused no. 3 in particular on behalf of T.P.A. accused no. 1. That in the aforesaid facts the complainant had no option but to send a legal notice dated 30.7.05 and when no communication was received then a reminder was again sent to accused nos. 1 and 2 on 25.8.2005, but the authorities are bent upon on their illegal and arbitrary acts as they are neither setting the claim nor replied to the legal notices. That in the aforesaid facts and circumstances it is quite clear that accused nos. 1, 2 and 3 has cheated the complainant and earned illegal gains by playing fraud upon him and not keeping their words and in total violation of the agreement clauses contained in the policy due to which the complainant has suffered huge loss both in terms of money as well as in 7 terms of mental harassment and due to which his practice has also been considerably effected. That due to the aforesaid, financial loss, as contained Under Clause-I of the policy the complainant has been put to loss of Rs. 17,594.00 and under Clause 3.1 of the policy the loss suffered was Rs. 10,000.00 and under Clause 3.2 of the complainant was further put to severe loss of over Rs. 15,000.00 That further due to the aforesaid mental torture, physical harassment, good will and adverse effect on the professional activities for quite a longtime, compensation as well as cost of litigation etc. the complainant has been put to severe loss of over Rs. 4,00,000/- which has to be compensated by the accused nos. 1, 2 and 3 as damages to the complainant. That due to the mischievous, baneful and noxious attitude of the accused 1, 2 and 3 the complainant fears that unless they are directed by a court of law they would not mend their ways and would continue in their own malevolent, maligent and virulent manner." 7. Strictly speaking the complaint petition drafted with legal acumen infact is more 8 appropriate by way of a plaint of money suit, wherein the only circumstance for launching criminal prosecution has been set out in Paragraph no. 22 thereof is confined against the two other accused persons the officials of M/s Genins India Ltd. inasmuch as it has been stated therein :- That the conduct of the accused show that they have wrongly restrained the complainant in the Hospital on the false statement made by the accused no. 2 and 3 and further due to the mischievous, baneful and noxious attitude of the accused have put the complainant in wrongful huge loss and are liable for criminal proceeding initiated against the accused persons for the offence of cheating, fraud criminal breach of truth and misrepresentation etc. committed by them against the complainant. 8. That apart, this court is also satisfied that whatever amount could not be settled against the claim of the complainant has been done so by a third party, M/s Genins India Ltd. which way back on 11.9.2006 had on evaluation of the claim of the opposite party no. 2, the complainant made payment of admissible amount of Rs.28,691/- by a cheque which was received by the advocate for the complainant on 19.9.2006 under protest. It was therefore always and in fact would still be open to the 9 complainant to claim the rest of the amount in accordance with law but for that the recourse to present criminal case cannot be resorted to by way of arm twisting method. 9. Additionally from the reading of the complaint itself, this court is also satisfied that so far the petitioner, Manager of Insurance Company is concerned there is no whisper of any specific allegation against him much less under for offence under Section 406 and 420 I.P.C. In a long and well dratted complaint petition running into 17 pages with its twenty three paragraphs the direct reference and/or allegation as with regard to the petitioner is only in its paragraph no. 3 relevant portion whereof reads as follows:- ".......That the fact of the case is as such, that the Branch Manager of the said company described in detail about the various policies of the company concerning medical and especially highlighted the benefits of Hospitalization and Domiciliary Hospitalization policy and presented the said policy in a very attractive way and suggested to the complainant vehemently to ascribe to the said policy. The Complainant believing the words of 10 the Branch manager to be true submitted the proposal and declaration form in the name of his wife namely Mrs. Danish Yafta alongwith his own name for a sum of Rs. 50,000/- each in the year November 2003, thereafter the complainant got the policy renewed after submitting a fresh proposal and declaration form dated 7.11.2004 and paying the full premium of Rs. 2,093.00 vide Cheque No. 139667 and thereafter the said company assured Mediclaim policy namely Hospitalization and Domiciliary Hospitalization benefit policy bearing no. 17081/48/04/8500691, policy period 00.00 Hrs. on 07.11.2004 to Midnight or 06.11.2005." 10. In rest of the paragraph the narration as explained above is with regard to damage and compensation and the allegation of misappropriation and/or cheating as quoted above is directed only against the other two accused namely Chairman cum Managing Director of the Genins India Ltd. and his representative at Patna namely Sandeep Singh who are said to be responsible in delaying as well as reducing and rejecting the claim of Rs. 4,00,000/- filed 11 by the complainant opposite party to a sum of Rs. 28,691/-. 11. While this Court for the purposes of the present case is not required to adjudicate the correctness or otherwise in the decision of the officials of the M/s Genins India Ltd., the Third Party Assistance (T.P.A.) as with regard to scaling down and reducing the claim of the complainant opposite party no. 2 of a sum of Rs. 4,00,000 to Rs. 28,691/- but this much is clear that at the time when the complainant had subscribed to the mediclaim policy even at the instance and initiative of the petitioner, the Branch Manager of Insurance Company, it was well known to the complainant, himself being a qualified and practicing Surveyor and Loss Assessor of United India Assurance Company Ltd., New India Assurance Company Ltd. and National Insurance Company Ltd. as also other private companies as asserted by him in paragraph no. 2 of the complaint petition that reimbursement and/or payment of the amount under Mediclaim policy was to be made by M/s Genins India Ltd. the T.P.S. as per the terms of agreement, a fact which has also been incorporated at length in paragraph no. 5 of 12 the complaint petition in the following words:- "That it is relevant to mention here that the policy schedule issued under the authorized signature of accused no. 1 clearly mentions the name of the 3rd party Assistant (hereinafter referred to as the T.P.A.) for the sake of brevity) accused no. 1 namely M/s Genins India Ltd. of Noida, Uttar Pradesh. It is further stated that the T.P.A. has issued a laminated Health card confirming that they are licensed as TPA by the Insurance Regulatory and development Authority, India (hereinafter referred to as the IRDA for the sake of brevity) and is engaged for a fee by the insurance company accused no. 1 for assistance and claim administration in the event of claim occuring during the course of the policy. 12. Thus when the complainant himself was all along aware that the payment under the agreement/policy was to be made by T.P.S. there would be little for him to allege anything in this regard against the petitioner, whose role as explained above was confined to issuance of the coverage of Mediclaim policy not only 13 voluntarily taken by the complainant but also renewed periodically by him on his own sweet will and volition as explained in paragraph no. 3 of the complainant petitioner, already quoted above in this judgment. 13. Infact it is this aspect of the matter which was gone into by the division bench of this Court in an exactly similar case of Oriental Insurance Company (supra) where in it was held that :- “25. Soliciting of business is normal phenomenon in commercial world which is also true of insurance business. Every year hundreds and thousands of insurance policies are issued to customers as a routine. Dispute may arise between the parties in future but it does not mean that officials on whose representation/inducement to customers to take policy intended to cause wrongful gain to the company or themselves and wrongful loss to the customers. 26. In the instance case the decision to repudiate the policy was based on the findings of the Surveyor & Investigators based on the meteorological reports. Under Section 64 UM(2) of the Insurances Act no claim in respect 14 of a loss shall (unless otherwise directed by the controller) be admitted for payment or settled by the insurer unless he has obtained a report, on the loss that has occurred from a person who holds a licence issued under that section to act as a surveyor or loss assessor. The decision to reject the claim was in consonance with the report of Surveyor & Loss Assesor/Investigator. It does not appear in the facts and circumstances that there was any criminal intention i.e. mens rea on the part of the concerned officials of the petitioner company to cheat the complainant or misappropriated money so as to make them liable for prosecution. I am satisfied in the circumstances that the petitioners’ prosecution would be an abuse of the process of the Court and it is a fit case in which this Court should exercise inherent powers under Section 482 of the Criminal Procedure code to quash the same.” 14. In the considered opinion of this Court the present case is infact fully covered by the ratio of aforesaid judgment of division bench in the Oriental Insurance Company (supra). 15 15. The reliance placed by the learned counsel for the complainant on the judgment of Apex Court in the case of M/s Medchl Chemicals (supra) is wholly misplaced inasmuch as the Apex Court therein was dealing with a situation where there was a commercial dealing of securing drugs in bulk for sale and use of pharmaceutical drug products and in that context, the promise of continuing the supply of raw-material was made so that there could be no interruption or hindrance in the manufacturing activity of the complainant. The Apex Court in the aforesaid case had also noticed the concluded agreement between the parties as with regard to aforementioned obligation of maintaining the supply of raw material. It was in this factual background and the resultant breach of agreement that the Apex Court had held that it can not be said to be a rule of universal application that if there is a remedy in civil law, criminal action cannot be maintained. However, paragraph 20 of the aforesaid judgment makes it abundantly clear that it was factual aspect of the case in which the Apex Court had held that issue involved in the matter under consideration was not a case 16 in which criminal trial should have been short circuited. 16. This Court has failed to understand as to how the ratio of aforementioned judgment can be made applicable to an insurance policy and against an officer of Insurance Company like the petitioner specially when the Mediclaim policy was pointedly clear as with regard to the liability for payment/reimbursement of claim by T.P.S. and that too where the rights of the parties are well defined and could be well adjudicated either before a Consumer Forum or before the Arbitrator as contemplated in the agreement/policy. 17. That being so, this Court is satisfied that the continuation of the criminal case against the petitioner, an officer of the Insurance Company, would be a gross abuse of the process of the Court. 18. Consequently, this application is allowed and the order taking cognizance as also the resultant criminal proceedings, so far it relates to the petitioner, is hereby set aside. (Mihir Kumar Jha,J.) Patna High Court Dated 21st May 2010 A.F.R./kanchan