Author – Neha Agarwal (Banasthali Vidyapith, Rajasthan)
Madras High Court in case of Jasmine Ebenezer Arthur v. HDFC ERGO General Insurance Company Limited and ors, has observed that writ petition is maintainable against any private body even if it has a public duty imposed on it. The public monopoly power is replaced by private monopoly power. Hence, it becomes important that the private bodies should be made accountable to judiciary within the judicial review.
In the present case, writ petition has been instituted by the petitioner seeking a Writ of Mandamus directing the first respondent herein to honour her claim of Rs.36,45,813/- in respect of Health Insurance Policy availed by her husband on dated 31.12.2013 without insisting for any further documentations or particulars.
It was claimed by the first respondent (insurance company) that they are not a “State” within the meaning of Article 12 of the Constitution and hence, by merely impleading the third respondent as a party, the writ petition seeking Mandamus against the first respondent is not maintainable in law. Since the petitioner and the first respondent only have a contractual relationship, she cannot maintain this writ petition.
The cardiac arrest suffered by the petitioner’s husband is not Myocardial Infarction and thus, not covered under the policy and hence, she cannot stretch the policy to include the uninsured risks or derive any extraordinary benefits and they have not denied any lawful right covered under the policy.
Learned counsel on behalf of petitioner contended that the first respondent is a registered insurance entity with the third respondent and hence, this writ petition is maintainable in law, though the prayer is for the enforcement of the claim covered under the contract of insurance.
After submission from both the sides, the Single Bench headed by Justice Pushpa Sathyanarayana said:
Today, in the modern world, there are numerous socioeconomic activities to be performed by the State. This resulted in sharing some of the obligations to the other bodies, while retaining certain level of control over them. This gave an impetus to the public and private bodies to acquire major concerns and started exercising monopoly power over its activities, which are close to State functions. By allowing these governmental functions to the private bodies, the fundamental rights of the citizens are being strained.
With regards to the question that requires determination is whether the private bodies performing public duties can be brought within the purview of judicial review, the bench said: “A reading of Article 226 makes it clear that it can be invoked not only for infringement of fundamental rights, but also for any other purpose. If a private body is brought within the purview of Article 12, then it will be subject to constitutional limitations. As happened in this case, lack of effective control has made the private bodies acquire more power similar to public authorities. The public monopoly power is replaced by private monopoly power.”
Hence, it becomes necessary that the private bodies should be made accountable to judiciary within the judicial review. If any private body has a public duty imposed on it, the Court has jurisdiction to entertain the writ petition.
The bench also added:
Most of the people give high priority to security of their investments, though the present scenario in the insurance sector offer many high return, but risk involved policies. Therefore, the insurance companies should focus on educating their customers about their financial backing. Such propagation and education should not only be in the form of issuing pamphlets, booklets, etc. to the customers, but also providing them with audio and visual forms, such as informative slides, conversational videos educating about the Frequently Asked Questions (FAQs), etc., which could be given either via CDs or e-mails, in bilingual. The reason being even the educated professionals of the large portion of the population are unaware of various insurance plans and the risk involved in them. The insurance companies cannot wash their hands by merely contending that every minute information has been given in the offer documents and the insured accepted those conditions by affixing their signature in the documents, as those information were never noticed by the insured. The companies should concentrate on factors like right mix of flexibility, risk and return, which will suit the customer.
Accordingly, the writ petition is allowed and the first respondent is directed to honour the claim made by the petitioner in respect of Health Insurance Policy availed by her husband in Policy No.2918200650184900000 dated 31.12.2013 without insisting for any further documentations or particulars in accordance with law. The said exercise shall be completed within a period of eight weeks from the date of receipt of a copy of this order.
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