Partly allowed

Dr. Babulal K. Shah v. the New India Assurance Co. Ltd. and Anr.

Bombay HC11 Dec 2014PIL/71/2008

Case brief

AI extract

What is this about?

This Public Interest Litigation challenged New India Assurance Company Limited for collecting higher premiums on mediclaim policies by using 'running age' instead of 'completed age' for senior citizens, contrary to the Insurance Regulatory and Development Authority's approval which protected existing policyholders.

What did the court decide?

The respondent was directed to refund the excess premium recovered along with 6% per annum interest from 7th October 2007 and to publish the judgment.

Dr. Babulal K. Shah Vs the New India Assurance Co. Ltd… — Consumer Protection | Bombay HC (2014)

pil71 - Copy

ssp

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
 PUBLIC INTEREST LITIGATION NO.71 OF 2008

¶5

Dr.Babulal K. Shah ...Petitioner
vs.

¶6

The New India Assurance
Company Ltd & another ...Respondents

¶7

Mr.Vishal Thaker for the Petitioner
Mr.S.S.Vidyarthi i/b S.M.Vidharthi for the
respondent No.1

¶8

CORAM : A.S.OKA, & G.S.KULKARNI, JJ.
DATE ON WHICH JUDGMENT IS RESERVED: OCTOBER 10,2014
DATE ON WHICH JUDGMENT IS PRONOUNCED:DECEMBER 11,2014

¶9

JUDGMENT: (PER A.S.OKA,J.)

¶10

1The issue involved in this PIL concerns
Hospitalization and Domiciliary Hospitalisation
Benefit Policy (for short the “Mediclaim policy”)
issued by the first respondent-New India Assurance
Company Limited which is a Government of India
Undertaking. The second respondent is the Insurance
Regulatory and Development Authority constituted
under the Insurance Regulatory and Development
Authority Act,1999. While issuing Rule, this Court
by order dated 10th March 2010 has noted the issue
involved in the petition. The order dated 10th March
2010 reads thus:

¶11

“The issue which arises in this petition is
whether the Insurance Company could have
charged premium based on running age and not
completed age. Matter requires consideration.

¶12

pil71 - Copy

¶13

¶14

Hence, Rule.”

¶15

2A brief reference to the facts leading to the
filing of the PIL will be necessary. The petitioner
claims that he is a mediclaim policy holder since
the year 1998. A mediclaim policy was issued to the
petitioner for the period from 7th October 2006 till
6th October 2007 in which the age of the petitioner
was shown as 72 years and the age of his wife was
shown as 75 years. On 23rd September 2007, a
mediclaim policy was issued to the petitioner for
the period from 7th October 2007 till 6th October
2008. In the said policy, the age of the petitioner
was shown as 74 years and the age of his wife was
shown as 77 years. There were two other errors in
the policy. The first was that both of them were
shown as patients of pre-existing disease of
hypertension and Diabetes and the second was that
the date of issue of the first policy was mentioned
as 30th September 2003. As far as the entry
regarding pre-existing disease is concerned, the
same was corrected. A grievance was made by the
petitioner by sending e-mails as regards the age on
7th November 2007 and on 13th November 2007. By a
letter dated 6th December 2007, the Deputy General
Manager and the Chief Public Information Officer of
the first respondent provided information sought by
the petitioner under the Right to Information
Act,2005 (for short `the said Act of 2005').
Information supplied was in the form of a letter
dated 30th November 2007 addressed by the Divisional
Manager of the first respondent to its Regional

¶16

3 pil71 - Copy

¶17

Manager enclosing therewith a circular dated 20th
November 2007. The letter dated 30th November 2007
makes a reference to the paragraph 11 of the said
circular. Paragraph 11 of the said circular reads
thus:

¶18

“11Age of the proposer/family member is
taken as running age of the person and not
completed years of age. The genesis is
calculating the premium on running age of the
person which is correct.”

¶19

3The petitioner made an application dated 16th
December 2007 under the said Act of 2005.
Information was supplied to the petitioner by letter
dated 22nd January 2008. Information supplied was
that running age concept was introduced as a
corporate decision. It was stated that running age
concept was introduced to charge the premium with
effect from 16th August 2007. The petitioner was
informed that the sanction from the Government for
the said change was not required. The petitioner
was informed that the first respondent was governed
by the Rules and Regulations of the Insurance
Regulatory and Development Authority (for short the
`IRDA')-second respondent set up by the Union of
India. In reply to the specific information sought
by the petitioner as to whether a permission from
IRDA to introduce the running age concept was taken,
it was stated by the Chief Manager of the first
respondent that the product is approved by the IRDA.

¶20

4 pil71 - Copy

¶21

4By a further application made by the petitioner
under the said Act of 2005 on 28th March 2008, the
petitioner called upon the Public Information
Officer of the first respondent to provide copies of
the proposal submitted to the IRDA for approval of
the said change and the approval granted by the
IRDA. Information was denied by the Public Relation
Officer of the first respondent by invoking clause
(d) of sub-section (1) of section 8 of the said Act
of 2005. An appeal was preferred by the petitioner
against the said order. The appeal was disposed of
by holding that the information sought falls under
“commercial confidence” and was outside the purview
of the said Act of 2005.

¶22

5The petitioner is relying upon the information
obtained by him from the United India Assurance
Company Limited, the National Insurance Company
Limited and the Oriental Insurance Company Limited
which are Government of India Undertakings. The said
information revealed that completed age is taken by
the said companies for computing the premium
chargeable on mediclaim policies. A reference is
made to the correspondence exchanged between the
petitioner and the second respondent. On the basis
of the various legal contentions raised, following
prayers have been made in this petition:

¶23

(a)that this Hon'ble Court be pleased to
issue a writ of certiorari or in the nature
of certiorari or any other writ, direction or
order under Articles 226 and 227 of the

¶24

pil71 - Copy

¶25

¶26

Constitution of India calling for the records
of the Respondent No.1 relating to the
decision to charge the premium on mediclaim
policy on the basis of running age instead of
completed age and after examining the
legality, validity and reasonable thereof, be
pleased to quash and set aside the same;

¶27

(b)this Hon'ble Court be pleased to direct
the Respondent No.1 to refund to the
petitionerandallothermediclaim
policyholders the excess premium collected by
the Respondent No.1 by reason of the illegal
change of charging the premium on mediclaim
policies on the basis of running age instead
of the completed years of age;

¶28

(c)that this Hon'ble Court be pleased to
direct the Respondent No.1 not to charge 2.5%

¶29

or any other amount extra on the
policyholders attaining the age of 70 years
of age and to give reasonable discount in the
premium to the policyholders attaining the
age of 70 years;

¶30

(d) that this Hon'ble Court may be pleased to
issue necessary directions to the Respondent

¶31

No.2 to regulate the affairs of the
Respondent No.1 in the matter of mediclaim
policies in accordance with the principles of
fairness and justice;

¶32

(e)this Hon'ble Court be pleased to direct
the Respondent No.2 to act for protection of
the interest of the policyholders and to
ensure compliance by the insurance companies

¶33

6 pil71 - Copy

¶34

of the Regulations framed by the Respondent
No.2 for the protection of policyholders;”

¶35

6There are affidavits filed on record by the
first and second respondents for contesting this
petition.

¶36

7The learned counsel for the petitioner in
support of the petition invited our attention to the
documents annexed to the petition and the affidavits
filed on record. He pointed out that the letter
dated 21st January 2008 addressed by the Chief
Manager of the first respondent in response to the
application made by the petitioner under the said
Act of 2005 specifically records that the first
respondent is governed by the Rules and regulations
of the second respondent-IRDA. He pointed out that
in response to the specific query whether the first
respondent had obtained a permission from the second
respondent-IRDA to change from actual age to running
age concept, the said communication dated 21st
January 2008 records that the product has been
approved by the second respondent. He pointed out
that further application was made under the said Act
of 2005 by the petitioner to the Public Information
Officer of the first respondent demanding copies of
the proposal submitted by the first respondent to
the second respondent for granting approval to the
said change and a copy of permission granted by the
second respondent. He urged that the said
information was erroneously denied by invoking
clause (d) of sub-section (1) of section 8. Relying

¶37

7 pil71 - Copy

¶38

upon the communications at Exhibits K-1 to Exhibit
K-3, he pointed out that every other public sector
insurance company has stated that for the purpose of
calculating premium payable on the mediclaim policy,
the completed age as on the date of commencement of
the policy is considered. He pointed out that even
the second respondent did not furnish proper
information under the said Act of 2005. He pointed
out that in response to the application made by the
daughter-in-law of the petitioner under the said Act
of 2005, the Information Officer of the second
respondent by letter dated 26th May 2008 informed the
daughter-in-law of the petitioner that four public
sector insurance companies including the first
respondent had filed their mediclaim policies with
the second respondent and the same have been
cleared. It is stated that the premium charts filed
by the said companies show age and sum assured.

¶39

8He invited our attention to the proposal
submitted by the first respondent to the second
respondent for approval of the second respondent
which is placed on record along with an affidavit.
He also pointed out the communication dated 30th
April 2007 addressed by the Executive Director of
the second respondent to the Chairman and Managing
Director of the first respondent which records that
filing of the products such as revised mediclaim
policy 2006 and rates of premium are being cleared
subject to certain advice. The advice was in the
form of a direction that existing senior citizens
holding policies shall not be compelled to migrate

¶40

8 pil71 - Copy

¶41

to the revised product on renewal if it is to their
disadvantage. He also pointed out the direction
issued by the second respondent on 14th July 2008 in
exercise of power under clause (1) of sub-section
(2) of section 14 of the said Act. It directs the
Insurance Companies to calculate the premium of
Insurance on the completed age of the insured on the
date of commencement of the insurance. He pointed
out the stand taken by the second respondent in the
communication dated 17th July 2009 which relies upon
the approval granted by the second respondent on 30th
April 2007. He submitted that the approval was
granted by the second respondent subject to
condition that the senior citizens who were
existing policy holders should not be compelled to
accept the terms which were prejudicial to them.

¶42

9Dealing with the preliminary objections raised
by the first respondent, he submitted that though
the petitioner may be affected personally by the
gross illegality committed by the first respondent,
by the acts done contrary to the directions of the
second respondent, a large number of senior citizens
who were policyholders of mediclaim policies prior
to the year 2007 will be affected and most of them
are not in a position to approach the Court. He
urged that a statutory regulatory authority in the
form of the second respondent has been created to
regulate the activities of the public sector
insurance companies like the first respondent and
therefore, notwithstanding the fact that the
petitioner may be himself affected by the

¶43

9 pil71 - Copy

¶44

illegality, he can maintain a PIL. As far as the
scope of interference in the writ jurisdiction is
concerned, he placed reliance on the decision of the
Apex Court in the case of LIC of India and another
vs. Consumer Education & Research1. He urged that
the senior citizens in the class of the petitioner
have no bargaining power, as far as the terms and
conditions of the policy of medical insurance are
concerned.

¶45

10The learned counsel for the first respondent
raised several preliminary objections. The first
objection is that the dispute raised is nothing but
a private dispute between the petitioner and the
first respondent. He relied upon various decisions
of the Apex Court on this aspect. He urged that
the contractual dispute between the petitioner
insured and the first respondent-insurer cannot be
resolved by adopting a shortcut method of filing a
PIL. The second contention is that the issue of
interpretation of a policy of insurance can be
decided only by a Civil Court. His third submission
is that the petitioner has bye-passed the other
remedies available and has taken a recourse of
filing this PIL. His submission is that a writ
Court cannot go into the question of rates of the
premium fixed under the policy of the first
respondent. He submitted that fixing the rates of
premium is a matter of fiscal planning. He urged
that in any event, this petition involves several
disputed questions of fact and therefore, this Court

¶46

1 [1995 SCC (5) 482]

¶47

10 pil71 - Copy

¶48

should decline to entertain this petition which is a
petition under Article 226 of the Constitution of
India. He submitted that the second respondent had
approved the product of the first respondent on the
basis of the proposal and an objection was never
raised by the second respondent for calculating the
premium on the basis of the running age of the
insured on the date on which policy is issued. He,
therefore, submitted that no interference is called
for in writ jurisdiction.

¶49

11The learned counsel for the second respondent
relied upon the circular dated 14th July 2008 as well
as the communication dated 30th April 2007. We must
note here that on 26th September 2014, we had granted
time to the learned counsel for the second
respondent to take instructions on the issue as to
whether the decision of the second respondent binds
the first respondent. On the adjourned date, the
learned counsel for the second respondent stated
that the stand of the second respondent is that the
first respondent is bound by the decision of the
second respondent.

¶50

12We have given careful consideration to the
submissions. Before we deal with the preliminary
objection raised by the first respondent, certain
undisputed facts will have to be taken into
consideration. It is not in dispute that the
petitioner was the policy holder of a mediclaim
policy of the first respondent at least from
September 2003. Under the said policy, the

¶51

pil71 - Copy

¶52

¶53

petitioner and his wife have been shown as insured.
In the renewed policy for the period from 7th October
2006 to 6th October 2007, the completed age of the
petitioner and his wife has been shown. It is not
in dispute that the premium paid under the said
policy was calculated on the basis of the completed
age of the petitioner and his wife. In the
subsequent policy issued to the petitioner with
effect from 7th October 2007, the running age of the
petitioner and his wife has been shown and the
premium was calculated on the basis of the running
age. It is also an admitted position that the
concept of calculating the premium on the basis of
the running age was introduced by the first
respondent for the first time on 16th August 2007.
It is not in dispute that in the case of mediclaim
policies issued by way of renewal from 16th August
2007, the running age of the insured was mentioned
and the premium was calculated on the basis of the
running age on the date of issue of the policy.
Prior to the said date, the completed age of the
insured used to be incorporated in the policy and
the premium was calculated on the basis of the
completed age on the date of issue of policy.
13Certain information was supplied to the
petitioner on 22nd January 2008 by the Chief Public
Information Officer of the first respondent. The
information was in the form of a letter dated 21st
August 2008 addressed by the Chief Manager of the
first respondent which is Exh.H to the petition. It
categorically records that the first respondent is
bound by the rules and regulations of the second

¶54

pil71 - Copy

¶55

¶56

respondent-IRDA. In response to the query whether a
permission was taken by the first respondent from
the second respondent to change the policy of taking
the actual age and for adopting the policy of taking
the running age, the reply was that the product was
approved by the second respondent. In response to
the application made by the petitioner under the
said Act of 2005, information was supplied to the
petitioner along with letter dated 6th December 2007.
The information was in the form of a letter dated
30th November 2007 addressed by the Divisional
Manager of the first respondent to the Regional
Manager of the second respondent. A reliance was
placed on the clarification issued by the first
respondent by the circular dated 20th November 2007.
It is stated therein that clause 11 of the circular
provides that age of the proposer/family member is
taken as his or her running age and not the
completed age. Clause 11 of the said circular which
was forwarded to the petitioner records that the
premium is to be calculated on the basis of the
running age. The circular dated 20th November 2007
specifically records that the clarifications have
been issued under the newly introduced health cover.
The letter dated 30th November 2007 specifically
records that the circular was in relation to the
mediclaim policy 2007. It is not disputed by the
first respondent that prior to 16th August 2007, the
completed age on the date of issue of the policy was
taken into consideration for the purpose of
computing the premium. There is no dispute that in
case of the similarly placed insured, who are

¶57

13 pil71 - Copy

¶58

holding mediclaim policies issued by other three
public sector insurance companies issued after 16th
August 2007, the premium is calculated on the basis
of the completed age on the date of policy. Such
premium is less than the premium calculated on the
basis of the running age on the date of issuing the
policy.

¶59

14Going by the affidavit of Shri Inderjeet Singh,
the Regional Manager of the first respondent dated
25th August 2009, an application in prescribed form
was submitted by the first respondent to the second
respondent on 26th February 2007 in relation to the
mediclaim policy (2007 and other policies). The
application specifically provides that same is as
regards the revision in the terms, conditions and
exclusions and premium rates in respect of the
mediclaim policies. It is also not in dispute that
the said proposal/application was approved by the
first respondent by letter dated 30th April 2007.
The material part of the said letter reads thus:

¶60

“We have noted the filing of the products and
rates of premium, which are being cleared by
this letter subject to the following advice:

¶61

(a) due to numerous complaints from the
senior citizens for non availability of the
health cover especially problems they face
for renewal of their health covers and high
increase in the premium, the Authority is
in the process of appointing a committee to
go into the issues relating to availability

¶62

14 pil71 - Copy

¶63

of health insurance to the senior citizens.
In the meantime, you are advised to effect
a modest increase (if it is absolutely
essential) up to 50-75% of the expiry rates
at the time of renewal of existing medi-
claim insurance policies of senior citizens
(age 60 years and above). It is also
clarified that existing Senior Citizens
being the policyholders, shall not be
compelled to migrate to the revised product
on renewal if it is to their disadvantage.

¶64

(b) You may, however, offer the proposed
rates of increased premium to all fresh
cases.

¶65

(c)We will review the position, in
consultation with the insurers, after the
recommendations of the proposed committee
are available on subject of health
insurance cover to senior citizens. Kindly
acknowledge receipt and confirm.”

¶66

 (underlines supplied)

¶67

15The approval sought by the first respondent to
the revised mediclaim policy was granted by the
second respondent by the aforesaid letter dated 30th
April 2007. The letter specifically records that
filing of products and rates of premium are being
cleared subject to advice contained therein. It is
specifically stated that the senior citizens who are
existing policyholders shall not be compelled to

¶68

pil71 - Copy

¶69

¶70

migrate to the revised product on renewal if it is
to their disadvantage. It is further stated that
the proposed rates of increased premium should be
offered to all fresh cases. The filing of the
product by the first respondent to the second
respondent for approval was in terms of the
guidelines issued by the second respondent known as
the “Guidelines on the `File and Use' requirement
for General Insurance Products”. The guidelines
provide that no general insurance products can be
sold to any person unless the requirements of the
guidelines have been complied with.

¶71

16Thus, it is clear that the second respondent
which is the Regulatory Authority did not permit the
first respondent to charge the premium at the
revised rates to senior citizens who were existing
mediclaim policyholders. As stated earlier, the
learned counsel for the second respondent has
reiterated the aforesaid position on the adjourned
date. Section 14 of the Insurance Regulatory and
Development Authority Act, 1999 reads thus:

¶72

“14. Duties, powers and functions of
Authority.—(1) Subject to the provisions of
this Act and any other law for the time
being in force, the Authority shall have
the duty to regulate, promote and ensure
orderly growth of the insurance business
and re-insurance business.

¶73

(2) Without prejudice to the generality of
the provisions contained in sub-section

¶74

pil71 - Copy

¶75

¶76

(1), the powers and functions of the
Authority shall include,—

¶77

( a ) issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel such registration;

¶78

(b) protection of the interests of the
policyholdersinmattersconcerning
assigning of policy, nomination by
policyholders,insurableinterest,
settlement of insurance claim, surrender
value of policy and other terms and
conditions of contracts of insurance;

¶79

( c ) specifying requisite qualifications, code of conduct and practical training for intermediary or insurance intermediaries and agents;

¶80

( d ) specifying the code of conduct for surveyors and loss assessors;

¶81

( e ) promoting efficiency in the conduct of insurance business;

¶82

( f ) promoting and regulating professional organisations connected with the insurance and re-insurance business;

¶83

( g ) levying fees and other charges for carrying out the purposes of this Act;

¶84

( h ) calling for information from, undertaking inspection of, conducting enquiries and investigations including audit of the insurers, intermediaries, insurance intermediaries and other organisations connected with the insurance business;

¶85

(i) control and regulation of the rates,
advantages, terms and conditions that may
be offered by insurers in respect of
generalinsurancebusinessnotso
controlled and regulated by the Tariff
Advisory Committee under Section 64-U of
the Insurance Act, 1938 (4 of 1938);

¶86

( j ) specifying the form and manner in which

¶87

pil71 - Copy

¶88

¶89

books of account shall be maintained and
statement of accounts shall be rendered by
insurersandotherinsurance
intermediaries;

¶90

( k ) regulating investment of funds by insurance companies;

¶91

( l ) regulating maintenance of margin of solvency;

¶92

( m ) adjudication of disputes between insurers and intermediaries or insurance intermediaries;

¶93

( n ) supervising the functioning of the Tariff Advisory Committee;

¶94

( o ) specifying the percentage of premium income of the insurer to finance schemes for promoting and regulating professional organisations referred to in clause ( f );

¶95

( p ) specifying the percentage of life insurance business and general insurance business to be undertaken by the insurer in the rural or social sector; and

¶96

( q ) exercising such other powers as may be prescribed.

¶97

 (emphasis added)

¶98

17The second respondent IRDA is the Authority
under the Insurance Regulatory and Development
Authority Act, 1999. Hence, the directions issued by
the second respondent for the protection of
investors bind the first respondent. As stated
earlier, three other insurance companies which are
the Government of India Undertakings continued to
charge the premium on mediclaim policies on the
basis of the completed age of the insured. In the
new/revised mediclaim policy, the first respondent
proposed to calculate premium on the basis of the
running age of the insured on the date of issue of

¶99

18 pil71 - Copy

¶100

the policy. The second respondent declined to grant
approval to apply revised rates at the time of the
renewal of the existing mediclaim policies held by
the senior citizens. This is crystal clear from the
communication dated 30th April 2007. The first
respondent is bound by what is stated in the
communication dated 30th April 2007. The approval to
the products and rates of premium as proposed by the
first respondent granted by the second respondent
was specifically subject to advice which we have
quoted above. The advice was not to apply revised
rates to the existing senior citizen policyholders.

¶101

18Therefore, the petitioner and similarly placed
senior citizens who were already holding mediclaim
policies of the first respondent as on 16th August
2007 were entitled to renewal thereof by charging
the premium on the basis of the completed age on the
date on which the renewed policy was issued. Hence,
gross illegality had been committed by the first
respondent by charging the premium on the basis of
the running age of the insured on the date of issue
of policy.

¶102

19We may now proceed to decide the preliminary
objections raised by the first respondent. We must
note here that the issue raised in this petition is
not merely a contractual issue. The first
respondent is bound by the directions of the
Regulatory Authority (second respondent) which is
constituted under a statute. The issue is whether
the first respondent could have charged the premium

¶103

¶104

pil71 - Copy

¶105

by applying a method or a rate which is not approved
by the second respondent. At this stage, it will be
necessary to make a reference to the decision of the
Apex Court in the case of LIC of India and another
vs Consumer Education And Research Centre and
others. The Apex Court held that in issuing general
life insurance policy by the LIC of India of any
type, public element is inherent in prescription of
the terms and conditions therein. What is held by
the Apex Court reads thus :

¶106

“We have, therefore, no hesitation to hold
that in issuing a general life insurance
policy of any type, public element is
inherent in prescription of terms and
conditions therein. The appellants or any
person or authority in the field of insurance
owe a public duty to evolve their policies
subject to such reasonable, just and fair
terms and conditions accessible to all the
segments of the society for insuring the
lives of eligible persons...”

¶107

(underline supplied)

¶108

In the same decision, the Apex Court observed thus:

¶109

“It is, therefore, the settled law that if a
contract or a clause in a contract is found
unreasonable or unfair or irrational one must
look to the relative bargaining power of the
contracting parties. In dotted line contracts

¶110

pil71 - Copy

¶111

¶112

there would be no occasion for a weaker party
to bargain or to assume to have equal
bargaining power. He has either to accept or
leave the services or goods in terms of the
dotted line contract. His option would be
either to accept the unreasonable or unfair
terms of forego the service forever. With a
view to have the services of the goods, the
party enters into a contract with
unreasonable or unfair terms contained
therein and he would be left with no option
but to sign the contract.”

¶113

(underline supplied)

¶114

20The learned counsel representing the first
respondent has relied upon several decisions. The
decision in case of National Council vs. Union of
India2 will not apply as it cannot be said that the
present petition has been filed for settling a
purely a private or a contractual dispute. As far
as the decision of the Division Bench of this Court
in case of MTZ Industries and another vs. New India
Assurance Company Limited and others dated 25th April
2006 in Writ Petition No.3050 of 2004 is concerned,
the issue was regarding the repudiation of the
insurance claim of the petitioner by the
respondents-Insurance Companies. As there were
disputed questions of fact, the Court observed that
the remedy of the petitioner is to file a suit.
Similar view is taken by this Court in the decision
dated 7th July 2006 in the case of Girishkumar Sheth
2[2007 (6) SCC 506]

¶115

21 pil71 - Copy

¶116

Vs. New India Assurance Company Limited in Writ
Petition No.1214 of 2006. Reliance placed by the
learned counsel for the first respondent on the
decision of the Apex Court in the case of LIC of
India and others vs. Asha Goel and another3 will not
help the petitioner as this was a case where writ
jurisdiction was invoked by the petitioner for
challenging the repudiation of the claim on the
ground of fraudulent act. The learned counsel for
the first respondent relied upon the decision of the
Apex Court in the case of Kulchinder Singh & Others
vs. Hardayal Singh Brar4 which holds that a remedy
under Article 226 of the Constitution of India is
not available for enforcing a contract. We have
already held that this petition is not filed merely
for enforcing a contract. The decision of the Apex
Court in the case of LIC of India vs. Sindhu5 will
have no application which holds that the Court
cannot rewrite the terms of the contract. Moreover,
there are no disputed questions of fact. There is no
issue regarding interpretation of the terms of a
contract in this petition.

¶117

21As far as the locus of the petitioner is
concerned, it is true that the success of the
petition will result into the petitioner getting a
small amount by way of refund, but the issue raised
is of a public importance. The petition invites
attention of this Court to the illegal action of a

¶118

3 [2001 ACJ 806 (SC)]

¶119

4(AIR 1976 SC 2216)

¶120

5[2006 (5) SCC 258]

¶121

22 pil71 - Copy

¶122

public sector insurance company of acting contrary
to the directions of the statutory Regulatory
Authority. This action frustrates the very object of
the statute of providing a regulatory authority. The
petition discloses the prejudice caused to the
public at large and in particular the senior
citizens. An oblique reason or motive for filing
this PIL cannot be attributed to the petitioner.
The personal gain to the petitioner is incidental
which will be of a very small amount. Therefore, we
overrule the technical objection raised by the first
respondent.

¶123

22In case of senior citizens who were holding
mediclaim policies as of 16th August 2007, the first
respondent could not have charged premium on the
basis of running age while renewing the policy. The
first respondent could have charged premium only on
the completed age of insured on the date of policy.
Resultantly, the premium has been recovered by the
first respondent contrary to the decision/direction
of the Regulatory Authority (second respondent).
Therefore, the first respondent will have to refund
the excess amount of the premium recovered from the
petitioner with interest thereon at the rate of 6%
per annum from 7th October 2007 till the date of
payment. There are senior citizens who are similarly
placed as the petitioner from whom excess premium
has been recovered. On applications being made by
the such persons, the first respondent will have to
issue refund in terms of this order. The petitioner
will be entitled to costs quantified at Rs.10,000/-.

¶124

pil71 - Copy

¶125

¶126

23 Hence, we pass the following order:

¶127

(I) We hold that the senior citizens who were holding mediclaim policies issued by the first respondent as on 16^th August 2007 were not liable to pay premium on the renewed policy calculated on the basis of the running age of the insured on the date of the policy and their liability was to pay the premium calculated on the basis of the completed age of the insured;

¶128

(II)We direct the first respondent to refund
excess premium recovered from the petitioner
together with interest at the rate of 6% per
annum from 7th October 2007 till the date of
payment. The amount shall be paid within a
period of two months from today;

¶129

(III)We direct the first respondent to give
publicity to this Judgment and Order on its
website. If senior citizens who are similarly
placed as the petitioner make applications for
refund of excess premium within a period of six
months from the date of the publication on the
Judgment of this Court on the website of the
first respondent, such citizens shall be
entitled to refund on par with refund ordered
to be paid to the petitioner. The amount of
refund and interest shall be paid to such
applicants within a period of two months from
the date of making application;

¶130

(IV)Rule is made partly absolute on above
terms;

¶131

(V)We direct the first respondent to pay costs

¶132

24 pil71 - Copy

¶133

of this petition quantified at Rs.10,000/- to
the petitioner within a period of two months
from today.

¶134

(G.S.KULKARNI,J.) (A.S.OKA,J.)

Dr. Babulal K. Shah v. the New India Assurance Co. Ltd. and Anr.

Case brief

What is this about?

What did the court decide?

Dr. Babulal K. Shah v. the New India Assurance Co. Ltd. and Anr.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Sanjay Bhaskar Kale Vs the State of Mah and Ors.

Vitthal Mahapurao Bhosale Vs the State of Maharashtra and Others

Devichand Yadavrao Bobade and Another Vs the State of Maharashtra and Others

Basavraj Manmathappa Nagthane Vs the State of Maharshtra and Others

Hrishikesh Rajendra Bhalerao Vs the State of Maharashtra and Others

Vinayak Alias Nandkumar Bapurao Santan Vs the Tahsildar Mahur and Ors.

Shri Pratap R. Yadav Vs Thane Municipal Corporation and Ors.

Anil Mohanlal Kankriya Vs the State of Maharashtra and Others

Shri. Abhay Anant Chougule Vs the State of Maharashtra through Secretary, Dept of Transport and Ors.

Dhaval Son of Kantilal Jain Vs Kantilal Bherulal Jain

Shri. Abhay Anant Chougule Vs the State of Maharashtra through Secretary, Dept of Transport and Ors.

Lawyers Forum for General Utility and Litigating Public, Aurangabad, through President Vs the State of Maharashtra, through Principal Secretary, Law and Judiciary Dept and Ors.

Lawyers Forum for General Utility Litigating Public through Its President Shri. Satish Talekar Vs the State of Maharashtra and Ors.

Lawyers' Forum for General Utility and Litigating Public, a'Bad Vs the State of Maharashtra and Anr.