United India Insurance Co. Ltd vs Manubhai Dharmasinhbhai Gajera & Ors

6. We may at the outset, briefly notice the facts involved in one of the matters Facts of Civil Appeal @ SLP (C) 1534/2006

7. Respondents No.1 obtained the mediclaim policy from the appellant in April, 1995 and renewed annually upon payment of the requisite amount of premium. After over three years namely, in July, 1998, Respondent No.1 suffered a coronary disease and was admitted in the Escorts Heart Institute and Research Centre where he underwent 5 `Angioplasty'. A claim made by him was paid by the appellant. In January, 2001 he was once again admitted to the Escorts Heart Institute and Research Centre and once again underwent `Angioplasty'. The amount claimed was duly reimbursed by the appellant to the respondent. In May, 2002 he was hospitalized in Holy Family Hospital for a minor operation and the medical expenses claimed to that effect were reimbursed by the appellant. In April, 2002 he underwent a bye-pass surgery. Respondent No.1 submitted his claim which, however, was not paid.

8. On 3rd April, 2003, the respondent approached the appellant for renewal of the policy and issued a cheque towards payment of the premium for the purpose of renewal of the policy w.e.f. 6th April, 2003, which was refused on the purported ground of `high claim ratio'. After serving notice, the said respondents filed a writ petition which was allowed by the learned Single Judge of the Delhi High Court by his order dated 7th January, 2005 directing the appellant to renew his mediclaim insurance policy.

We would notice the factual matrix involved in other matters at a later stage.

33. We will deal with that aspect of the mater a little later.

(N.B. 1. Company's Liability in respect of all claims admitted during the period of insurance shall not exceed the Sum Insured per person mentioned in the schedule.)

The Company shall not however be bound to give notice that its due for renewal and the Company may at any time cancel this. Policy by sending the Insured 30 days notice by registered letter at the insured last known address and in such event the Company shall refund to the Insured a pro-rata premium - for unexpired Period of Insurance. The Company shall, however, remain liable for any claim which arose prior to the date of cancellation.

The Insured may at any time cancel this Policy and in such event the Company shall allow refund of premium at Company's short period rate only (table given here below) provided no claim has occurred up to the date of cancellation.

However basic sum insured will be maintained and will not be reduced."

These basic principles of law preclude the implication of a term into the policies to the effect that in the event of a declinature or cancellation the defendant must state its reasons therefore."

53. We may also notice that the Universal Declaration of Human Rights states that :

The writ petition, however, had wider ramification. They not only would affect the writ petitions, but also others who would be similarly situated.

Such cases may not be dealt with as individual cases. In appropriate case, such litigation may be regarded as public interest litigation.

Judicial Review of the impugned action on the part of the appellant was, therefore, permissible.

APPLICATION OF LAW

57. Keeping in view the aforementioned legal principles, we may notice the fact of each case.

62. We have noticed the judgment of the Gujarat High Court in each of these cases.

65. Renewal of a medi-claim policy subject to just exceptions should ordinarily be made. But the same does not mean that the renewal is automatic. Keeping in view the terms and conditions of the prospectus and the insurance policy, the parties are not required to go into all the formalities. The very fact that the policy contemplates terms for renewal, subject of course to payment of requisite premium, the same cannot be placed at par with a case of first contract.

67. Appellants before us being subsidiaries to General Insurance Corporation cannot ignore the statutory provisions. They are bound by the directions issued by the Central Government.

68. These appeals are dismissed with costs. Counsel's fee assessed at Rs.25,000/- (Rupees twenty five thousand only) in each case.

May 16, 2008