State Consumer Disputes Redressal Commission
United India Insurance Company Ltd. vs Ajit Saluja, on 28 August, 2008
IN THE STATE COMMISSION:DELHI IN THE STATE COMMISSION: DELHI (Constituted under Section 9 of The Consumer Protection Act, 1986) Date of Decision: 28-08-2008 Appeal No. FA-08/677 (Arising out of Order dated 16-05-2008 passed by the District Forum ( New Delhi), K.G. Marg, New Delhi, in Complaint Case No. CC-1128/95) United India Insurance Company Ltd. Through Its Manager, Delhi Regional Office-I, 8th Floor, Kanchanjunga Building, 18-Barakhamba Road, New Delhi 110001. . . . Appellant Versus Ajit Saluja, C-9/918, Vasant Kunj, New Delhi 110070 . . . Respondent CORAM: JUSTICE J.D. KAPOOR, PRESIDENT MS. RUMNITA MITTAL, MEMBER
1. Whether Reporters of local newspapers be allowed to see the judgment?
2. To be referred to the Reporter or not?
Justice J.D. Kapoor (Oral)
1. Question arising in this appeal preferred against the Order dated 16-05-2008 passed by the District Forum; whereby the appellant has been directed to pay the entire expenses incurred by the respondent towards the mediclaim policy amounting to Rs.24,935/- and Rs. 10,000/- as compensation for the mental agony and harassment and Rs. 3,000/- as cost of litigation, is whether the respondent was admitted in the hospital from 19-04-2004 to 22-04-2004 merely for general health check up or for some illness or other problems that might have necessitated certain check ups and might come within the purview of general check up?
2. The case of the respondent leading to the impugned Order in brief was that the complainant retired as DGM (Projects) from Steel Authority of India (SAIL) on 31-03-1994. He and his wife were members of the Group Medical Scheme of Steel Authority of India and the policy was renewed for the year 2004-05 also.
AS per the practice, the members incur the medical expenses first and then lodge the claim with the insurance company-appellant. The wife of the complainant was admitted to Indian Sine Injury Centre, Vasant Kunj, New Delhi, which is on the panel of SAIL under the SAIL mediclaim on 19-04-2004 and was discharged on 22-04-2004. The complainant had spent a sum of Rs.24, 935/-. However, the appellant insurance company rejected the claim on the ground that the patient was admitted simply for general health checkup
3. In its defence the appellant insurance company has come up with the version that the patient was admitted for general health check up which was not advised by a doctor. It was only a verbal statement of the respondent who had told the doctor that Yesterday night my wife suddenly fell unconscious and still she is not well
4. In this regard three certificates have been produced and referred by the Ld counsel for the appellant to show that the respondent was admitted to hospital only for general check and that is why she was only reimbursed to the limit of Rs. 4000/- and no other expenses. First certificate is dated 23-08-2004. This certificate clearly shows that she was admitted under his care from 19-04-2004 to 22-04-2004 with several ailments namely Hypoglycemic episodes, Stoker Adonis Syncope attack, Arrhythmia uppex, GI Bleed, Hormonal imbalance etc.
5. Another certificate is the discharge summary dated 22-04-2004. There are large number of tests, which have been shown to have been carried out and the treatment given has been mentioned with the investigations conducted which were found to be within normal limits. The treatment /advice given was as under:-
Inj. Novolet 30/70 12Units S/C before breakfast 08 Units S/C before dinner Tab Diabose 50 mg with lunch and with dinner Cap Capril 5 mg BD Tab Gluformin G (1+500) with breakfast and with dinner Tab Metneurobion BD After B/F and after Dinner Isabgol 2 tsf HS (before sleeping) Tab Loprin 75 mg 1 OD after BF Tab Topcid 20 mg BD after BF and after dinner Tab Neurobion 1 OD after lunch Review in OPD with prior appointment with Dr. Lalwani.
6. Other certificates are of Doctors of the panel of the appellant company. One is from Dr. M.S Sagar, dated 4th June, 2004, which is only on the basis of documents of discharge summary produced which is as under:-
Undersigned has gone through the claim documents of the above said claim of Mrs. Kamlesh Saluja (63/F) who was admitted in Indian Spinal Injuries Centre, New Delhi under the care of Dr. R.L. Lalwani on 19-04-2004 as a known case of hypertension & diabetes mellitus admitted for general health checkup with investigations. There was no H/o Tuberculosis or Jaundice. She is having diminished hearing in both ears. She was investigated with complete Hemogram, Serum Bio- Chemistry, ECG, ECHO, USG-Abdomen, Lipid Profile, Hb A1C, Blood Sugar Monitoring, Bone Densitometry, 24 hours urinary creatinine, Alkaline Phosphatase and diagnosed as a case of diabetes mellitus, hypertension for investigations. The investigations were found to be within normal limits with fundus showing minimal diabetic changes and she was discharged on 22-04-2004 with advice to continue insulin, Oral Hypoglycemic agents, antihypertensive, antacids and other supportive treatment.
OPINION This is a case of hospitalization for the management of a known case of Diabetes Mellitus, Hypertension for general health checkup with investigations with all the investigations being essentially Within Normal Limits and discharged with relevant advice.
In the opinion of the undersigned, the claim is not admissible under hospitalization benefit SAIL mediclaim policy as the hospitalization was for diagnostic purpose and all the investigations done were of routine nature which can be done in the out patient without hospitalization. The claim may be considered under OPD benefit subject to the availability of limit.
The report is submitted with prejudice.
SD/-
Dr. M.S. Sagar
7. Another certificate issued by Indian Spinal Injury Centre is dated 17-05-2004 which is as under:-
This is to state that Mrs. Kamlesh Saluja aged 63 years / female was admitted in Indian Spinal Injuries Centre from 19th April 2004 to 22nd April 2004 for general health check with investigations.
SD/-
Dr. R.K. Lalwani Sr. Consultant, Diabetic Indian Spinal Injuries Centre
8. We fail to understand as to why she had gone to the hospital without having any problem. She could not have landed up in the hospital on her own because she suddenly fell unconscious and was still unconscious when admitted to the hospital. No person will go to a hospital in such a condition on his own. General check up is conspicuous from the various investigation a doctor prescribes for diagnosing the disease or the problem with which a person lands up in the hospital like the respondent in the instant case. If in the process large number of tests, which come within the ambit of general check up, are prescribed that does not mean that the patient had gone to the hospital for a general health check up.
However, if it was so then there was no need for admission in the hospital from 19th to 22nd April, 2004. Now a days the doctors have become so conscious that they do not come out with the disease merely on clinical examination or seeing the symptoms of a patient. They refer the patient to undergo number of tests, which is the requirement of advancement in the medical technology and scientific approach. It was the treating doctor who had advised the admission on seeing the patient to judge whether the person had come for a general checkup or with some problem, which necessitates so many investigations some of which may be by way of general check up. In this case the respondent had gone in a serious condition and she was unconscious, may be for any reason, but not for general health check up.
9. We have deprecated the practice of the insurance companies scanning the terms of the contract, which is a beneficial contract, in a hairsplitting manner. We have been reminding them that every beneficial contract has to be provided and receive beneficial construction and interpretation and if there are more than two interpretations or constructions possible the construction which goes in favour of the consumer for the benefit of whom the legislation has been enacted should be acted and relied upon and no other. The mind set of the public officers of these insurance companies need to be changed.
10. We have come across thousands of cases where their approach is always to find out lame excuses on flimsy grounds with the ill design as to how to reject the claim of the consumer. This is not a happy and consumer friendly approach. They give home service while taking the policy and when the consumer suffers a problem and seek indemnification of the loss the insurance companies behave like Shylock. This is how they have become unjustly rich and their officers have developed bloated and rotten ego. We have been warning the insurance companies that if the rejection of claim suffers from the element of whimsicality, capriciousness or arbitrariness the amount of compensation shall be deducted from the salaries of the concerned officers. This is the mandate of the Supreme Court recently given in the case of Ghaziabad Development Authority v. Balbir Singh 2004) 5 SCC 65, followed by the case of Lucknow Development Authority, calling upon the District Forum and the Commissions that if they come to the conclusion that the claim was rejected or action was influenced by capricious, whimsical or arbitrary causes, the compensation should be recovered from the salary of those officers who are responsible for wrongly repudiating the claim.
11. The observations of the Supreme Court are as under and we are quoting this for the future guidance of the insurance companies:-
This Court then went on to hold as follows:
10.
who should pay the amount determined by the Commission for harassment and agony, the statutory authority or should it be realised from those who were responsible for it? Compensation as explained includes both the just equivalent for loss of goods or services and also for sufferance of injustice. For instance in Civil Appeal No.... of 1993 arising out of SLP (Civil) No.659 of 1991 the Commission directed the Bangalore Development Authority to pay Rs.2446.00 to the consumer for the expenses incurred by him in getting the lease-cum-sale agreement registered as it was additional expenditure for alternative site allotted to him. No misfeasance was found. The moment the authority came to know of the mistake committed by it, it took immediate action by allotting alternative site to the respondent. It was compensation for exact loss suffered by the respondent.
It arose in due discharge of duties.
For such acts or omissions the loss suffered has to be made good by the authority itself. But when the sufferance is due to mala fide or oppressive or capricious acts etc. of a public servant, then the nature of liability changes. The Commission under the Act could determine such amount if in its opinion the consumer suffered injury due to what is called misfeasance of the officers by the English Courts. Even in England where award of exemplary or aggravated damages for insult etc. to a person has now been held to be punitive, exception has been carved out if the injury is due to, 'oppressive, arbitrary or unconstitutional action by servants of the Government' (Salmond and Heuston on the Law of Torts).
Misfeasance in public office is explained by Wade in his book on Administrative Law thus:
"Even where there is no ministerial duty as above, and even where no recognised tort such as trespass, nuisance, or negligence is committed, public authorities or officers may be liable in damages for malicious, deliberate or injurious wrong-doing. There is thus a tort which has been called misfeasance in public office, and which includes malicious abuse of power, deliberate maladministration, and perhaps also other unlawful acts causing injury." (p.777).
The jurisdiction and power of the courts to indemnify a citizen for injury suffered due to abuse of power by public authorities is founded as observed by Lord Hailsham in Cassell & Co. Ltd. v. Broome [1972 AC 1027:
(1972) 1 All ER 801] on the principle that, 'an award of exemplary damages can serve a useful purpose in vindicating the strength of law'. An ordinary citizen or a common man is hardly equipped to match the might of the State or its instrumentalities. That is provided by the rule of law. It acts as a check on arbitrary and capricious exercise of power.
In Rookes v. Barnard [1964 AC 1129: (1964) 1 All ER 367, 410] it was observed by Lord Devlin, 'the servants of the government are also the servants of the people and the use of their power must always be subordinate to their duty of service'. A public functionary, if he acts maliciously or oppressively and the exercise of powers results in harassment and agony then it is not an exercise of power but its abuse.
No law provides protection against it.
He who is responsible for it must suffer it. Compensation or damage as explained earlier may arise even when the officer discharges his duty honestly and bona fide. But when it arises due to arbitrary or capricious behaviour then it loses its individual character and assumes social significance. Harassment of a common man by public authorities is socially abhorring and legally impermissible. It may harm him personally but the injury to society is far more grievous. Crime and corruption thrive and prosper in the society due to lack of public resistance.
Nothing is more damaging than the feeling of helplessness. An ordinary citizen instead of complaining and fighting succumbs to the pressure of undesirable functioning in offices instead of standing against it.
Therefore the award of compensation for harassment by public authorities not only compensates the individual, satisfies him personally but helps in curing social evil. It may result in improving the work culture and help in changing the outlook.
Wade in his book -
Administrative Law, has observed that it is to the credit of public authorities that there are simply few reported English decisions on this form of malpractice namely, misfeasance in public offices, which includes malicious use of power, deliberate mal-administration and perhaps also other unlawful acts causing injury. One of the reasons for this appears to be development of law which apart, from other factors succeeded in keeping a salutary check on the functioning in the government or semi-government offices by holding the officers personally responsible for their capricious or even ultra vires action resulting in injury or loss to a citizen by awarding damages against them.
Various decisions rendered from time to time have been referred to by Wade on Misfeasance by Public Authorities.
We shall refer to some of them to demonstrate how necessary it is for our society.
In Ashby v. White (1703) 2 Ld. Raym 938 the House of Lords invoked the principle of ubi jus ibi remedium in favour of an elector who was wrongfully prevented from voting and decreed the claim of damages.
The ratio of this decision has been applied and extended by English Courts in various situations.
In Roncarelli v. Duplessis (1959) 16 DLR 2d 689 the Supreme Court of Canada awarded damages against the Prime Minister of Quebec personally for directing the cancellation of a restaurant-owner's liquor licence solely because the licensee provided bail on many occasions for fellow members of the sect of Jehovah's Witnesses, which was then unpopular with the authorities. It was observed that, 'what could be more malicious than to punish this licensee for having done what he had an absolute right to do in a matter utterly irrelevant to the Alcoholic Liquor Act? Malice in the proper sense is simply acting for a reason and purpose knowingly foreign to the administration, to which was added here the element of intentional punishment by what was virtually vocation outlawry.
In Smith v. East Elloe Rural District Council [1956 AC 736: (1956) 1 All ER 855)] The House of Lords held that an action for damages might proceed against the clerk of a local authority personally on the ground that he had procured the compulsory purchase of the plaintiff's property wrongfully and in bad faith.
In Farrington v. Thompson [1959 UR 286] the Supreme Court of Victoria awarded damages for exercising a power the authorities knew they did not possess.
A licensing inspector and a police officer ordered the plaintiff to close his hotel and cease supplying liquor.
He obeyed and filed a suit for the resultant loss. The Court observed:
"Now I take it to be perfectly clear, that if a public officer abuses his office, either by an act of omission or commission, and the consequence of that is an injury to an individual, an action may be maintained against such public officer."
In Wood v. Blair [The Times, July 3, 4, 5, 1957 (Hallet J and Court of Appeal] a dairy farmer's manageress contracted typhoid fever and the local authority served notices forbidding him to sell milk, except under certain conditions. These notices were void, and the farmer was awarded damages on the ground that the notices were invalid and that the plaintiff was entitled to damages for misfeasance. This was done even though the finding was that the officers had acted from the best motives.
11. Today the issue thus is not only of award of compensation but who should bear the brunt. The concept of authority and power exercised by public functionaries has many dimensions. It has undergone tremendous change with passage of time and change in socio-economic outlook. The authority empowered to function under a statute while exercising power discharges public duty. It has to act to subserve general welfare and common good. In discharging this duty honestly and bana fide, loss may accrue to any person. And he may claim compensation which may in circumstances be payable. But where the duty is performed capriciously or the exercise of power results in harassment and agony then the responsibility to pay the loss determined should be whose? In a modern society no authority can arrogate to itself the power to act in a manner which is arbitrary. It is unfortunate that matters which require immediate attention linger on and the man in the street is made to run from one end to other with no result. The culture of window clearance appears to be totally dead.
Even in ordinary matters a common man who has neither the political backing nor the financial strength to match the inaction in public oriented departments gets frustrated and it erodes the credibility in the system. Public administration, no doubt involves a vast amount of administrative discretion which shields the action of administrative authority. But where it is found that exercise of discretion was mala fide and the complainant is entitled to compensation for mental and physical harassment then the officer can no more claim to be under protective cover.
When a citizen seeks to recover compensation from a public authority in respect of injuries suffered by him for capricious exercise of power and the National Commission finds it duly proved then it has a statutory obligation to award the same. It was never more necessary than today when even social obligations are regulated by grant of statutory powers. The test of permissive form of grant is over. It is now imperative and implicit in the exercise of power that it should be for the sake of society. When the Court directs payment of damages or compensation against the State the ultimate sufferer is the common man. It is the tax payers' money which is paid for inaction of those who are entrusted under the Act to discharge their duties in accordance with law.
It is, therefore, necessary that the Commission when it is satisfied that a complainant is entitled to compensation for harassment or mental agony or oppression, which finding of course should be recorded carefully on material and convincing circumstances and not lightly, then it should further direct the department concerned to pay the amount to the complainant from the public fund immediately but to recover the same from those who are found responsible for such unpardonable behaviour by dividing it proportionately where there are more than one functionaries."
We are in full agreement with what is observed herein. Thus the law is that the Consumer Protection Act has a wide reach and the Commission has jurisdiction even in cases of service rendered by statutory and public authorities. Such authorities become liable to compensate for misfeasance in public office i.e. an act which is oppressive or capricious or arbitrary or negligent provided loss or injury is suffered by a citizen.
12. Foregoing reasons persuade us to dismiss the appeal being wholly devoid of substance.
13. Appeal stands disposed of in aforesaid terms. Impugned Order shall be complied with within one month from the date of receipt of a copy of this Order.
14. A copy of Order as per statutory requirement be forwarded to the parties and to the concerned District Forum and thereafter the file be consigned to record.
15. FDR/Bank Guarantee, if any, be released under proper receipt.
(JUSTICE J.D. KAPOOR) PRESIDENT (RUMNITA MITTAL) MEMBER HK