Reliance General Insurance Co. Ltd. vs Permanent Lok Adalat

Ritu Bahri, J.

C.M. N. 5175 of 2014

Application is allowed as prayed for.

Accordingly, P-11 is taken on record.

Main case

The instant petition has been filed under Article 226/227 of the Constitution of India for issuing a writ in the nature of certiorari for quashing the impugned order dated 31.7.2013 (P-1) passed by respondent No. 1 directing the petitioner and respondent No. 3 to pay Rs. 30,529/- towards medical expenses to respondent No. 2 along with interest @ 9% per annum from 01.01.2009 till passing of the award, within a period of two months of the award.

The father of the applicant/respondent No. 2 had obtained policy for him from the petitioner/company for the period from 09.11.2009 to 08.11.2010. He fell ill and was admitted in Saini Children Hospital, Ladwa and received medial treatment from 19.11.2009 to 26.11.2009. Lateron, he was admitted in Ashirwad Children and Maternal Hospital, Jagadhari where he remained admitted from 28.11.2009 to 09.12.2009. The applicant submitted all the documents/receipts relating to the expenses incurred on treatment to the respondents but his claim was not settled despite repeated requests.

Applicant/Respondent No. 2 thereafter filed a petition u/s. 22(c)(I) of the Legal Services Authority Act and made a claim amounting to Rs. 45,000/- along with interest @ 18% per annum. Both applicant and petitioner contested the petition vide joint written statements filed on 30.12.2011. It has been pleaded by the petitioner/company that the claim should have been submitted within 90 days of the discharge from the hospital i.e. from 26.11.2009 but the claim was received on 30.12.2009 and thus there is violation of procedure 3 of the Insurance Policy. As per the exclusion clause 2, claim for medical expenses incurred on the treatment undertaken within 30 days from the date of inception of the policy was not to be entertained. Thus, the claim of the petitioner was repudiated under exclusion clause 2 and procedure 3 of the policy.

Conciliation proceedings in this case were conducted on 24.02.2012 as envisaged u/s 22(4)(c) of the Act, but the dispute could not be settled and at this stage, the Lok Adalat proceeded u/s 22(c)(8) of the Act and decided the case on merits.

The petitioner-company had declined the claim of the petitioner on two grounds:-

Exclusion clause 2 and procedure 3 of the policy.

The applicant was admitted in hospital on 19.11.2009 and thereafter discharged on 09.12.2009. The medical expenses on his treatment was incurred on 09.12.2009 and thereafter, he submitted all the documents relating to the expenses incurred on the treatment to the petitioner/company. As per the policy, he was insured from 09.11.2009 to 08.11.2010, therefore, the expenses incurred on 09.12.2009 were covered as per policy (P-6). As regards to exclusion clause 2, the medical expenses incurred from the treatment undertaken for disease or illness and or for critical illness within 30 days of the inception date of the policy, were not to be entertained by the complaint.

As per insurance policy, the petitioner was insured for his held from 09.11.2009 to 08.11.2010, thus, he was covered by the Insurance Policy. As regards to procedure No. 3 which says that the insured should file claim within 30 days of discharge from the hospital, it is contended that the applicant was admitted on 19.11.2009 and was discharged on 26.11.2009 and the claim was filed on 30.12.2009, after expiry of 30 days from the date of discharge. This contention was rejected by the Lok Adalat as the petitioner was suffering from Broncho Pneumonia and was admitted in Saini Children Hospital, Ladwa from 19.11.2009 to 26.11.2009. Lateron, he was admitted in Ashirwad Children and Maternal Hospital, Jagadhari where he remained admitted from 28.11.2009 to 09.12.2009. Discharge of the petitioner on 26.11.2009 cannot be considered his final discharge from the hospital after treatment. He continued suffering from the same disease and had changed the hospital from Ladwa to Jagadhari, continuing with the same treatment from where he was discharge on 29.12.2009. The claim filed on 30.12.2009 was well within limitation.

The Lok Adalat has rightly passed the award in favour of the applicant and out of Rs. 45,000/-, the award was passed for an amount of Rs. 30529/-.

Recently, Hon''ble the Supreme Court of India in a case of Bar Council of India Vs. Union of India (UOI), had examined the provisions of the State Legal Services Authorities Act in detail and considered the object of Section 22(c) which provides for procedure to raise dispute on a pre-litigation stage. Chapter VI-A has been inserted which provides for pre-litigation conciliation and settlement procedure. The litigation is sought to be nipped in the bud by first affording the parties to such dispute an opportunity to settle their dispute through the endeavours of the Permanent Lok Adalat and if such efforts fails then to have the dispute between the parties adjudicated through the decision of the Permanent Lok Adalat. The provisions of Section 22(c) is followed by Section 22(d) of the Act which inter alia provides that while deciding the dispute in merits, the PLA shall not be bound by the CPC, 1908 and the Evidence Act, 1872. Section 22-e accords finality to the award of PLA under Sub-Section 1 and the provision made in sub Section 4 that every award made by the PLA shall be final and hence shall not be called in question in any original suit, application or execution proceedings form mainly bone of contention. While explaining the object of Chapter VI-A, Hon''ble the Supreme Court has observed in paragraph 22 as under:-

It is necessary to bear in mind that the disputes relating to public utility services have been entrusted to Permanent Lok Adalats only if the process of conciliation and settlement fails. The emphasis is on settlement in respect of disputes concerning public utility services through the medium of Permanent Lok Adalat. It is for this reason that sub-section (1) of Section 22-C states in no unambiguous terms that any party to a dispute may before the dispute is brought before any court make an application to the Permanent Lok Adalat for settlement of dispute. Thus, settlement of dispute between the parties in matters of public utility services is the main theme. However, where despite the endeavours and efforts of the Permanent Lok Adalat the settlement between the parties is not through and the parties are required to have their dispute determined and adjudicated, to avoid delay in adjudication of disputes relating to public utility services, the Parliament has intervened and conferred power of adjudication upon the Permanent Lok Adalat. Can the power conferred on Permanent Lok Adalats to adjudicate the disputes between the parties concerning public utility service upto a specific pecuniary limit, if they do not relate to any offence, as provided u/s 22-C(8), be said to be unconstitutional and irrational? We think not. It is settled law that an authority empowered to adjudicate the disputes between the parties and act as a tribunal may not necessarily have all the trappings of the court. What is essential is that it must be a creature of statute and should adjudicate the dispute between the parties before it after giving reasonable opportunity to them consistent with the principles of fair play and natural justice. It is not a constitutional right of any person to have the dispute adjudicated by means of a court only. Chapter VI-A has been enacted to provide for an institutional mechanism, through the establishment of Permanent Lok Adalats for settlement of disputes concerning public utility service before the matter is brought to the court and in the event of failure to reach any settlement, empowering the Permanent Lok Adalat to adjudicate such dispute if it does not relate to any offence.

In the present case, the claim has been rightly answered in favour of respondent No. 2 and therefore, no ground is made out to interfere in the order dated 31.7.2013 (P-1) passed by respondent No. 1.

The petition is dismissed.