Madras High Court
Star Health And Allied Insurance Co.Ltd vs A.Chokkar on 26 February, 2010
Author: Prabha Sridevan
Bench: Prabha Sridevan, B.Rajendran
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 26/02/2010 CORAM THE HONOURABLE Mrs.JUSTICE PRABHA SRIDEVAN and THE HONOURABLE Mr.JUSTICE B.RAJENDRAN Writ Appeal (MD)No.480 of 2009 and W.P.(MD)Nos.1699, 1702, 3164, 7207, 7562, 8705, 8927, 10450, 10589, 11176, 11357, 11383, 11384, 12826 and 14035 of 2009 and M.P.(MD)Nos.1 and 2 of 2009 in W.A.(MD)No.480 of 2009 M.P.(MD)No.1 of 2009 in 1699, 1702, 10450, 10589, 11383, 11384, 11176 and 12826 and M.P.(MD)No.2 of 2009 in 1040 and 11383 of 2009 W.A.(MD)No.480 of 2009: Star Health and Allied Insurance Co.Ltd., rep.by its Project Officer, Tamil Nadu Government Employees New Health Insurance Scheme, Old No.64-A, New No.2-A, Ganga Nagar Road, Opp.to BSNL Office, Kodambakkam, Chennai-600 024. ... Appellant/ Respondent vs 1.A.Chokkar ... Respondent-1/ Petitioners 2.The Special Secretary to Government, finance (Salaries) Department, Government of Tamil Nadu, Chennai. ... Respondent-2 (R-2 impleded as per order dated 18.11.2009 in W.A.480/09 and W.P.(MD)No.10589/2009) Writ appeal under Clause 15 of Letters Patent against the order of the learned Single Judge, dated 20.07.2009, made in W.P.(MD)No.1091 of 2009.) !For Appellant in W.A. ... Mr.AL.Somayaji & 480/2009 ... Mr.Yashod Varadan for Mr.G.R.Swaminathan ^For Respondent-1 in ... Mr.P.Sunderraj for W.A.480/2009 ... for Mr.A.Sivaji For Respondent-2 ... Mr.P.S.Raman, in W.A.480/2009 Advocate General, Assisted by Mr.R.Janakiramulu, Spl.Govt.Pleader. :COMMON JUDGMENT
PRABHA SRIDEVAN,J.
The Government of Tamil Nadu received representations from Government Employees regarding their grievances with regard to the existing Tamil Nadu Government Employees Health Fund Scheme, which was implemented by G.O.Ms.No.18, Finance(Allowances) Department, dated 09.01.1992. Therefore, with a view to address the grievances, the Government decided to implement a new health insurance scheme by G.O.Ms.No.430, Finance (Salaries) Department, dated 10.09.2007. One of the important features of this scheme was that it would be a cashless facility. The scheme enumerated the list of diseases/treatments and surgeries which would be covered and the scheme also notified the hospitals which would be covered by this Scheme. The beneficiaries were employees of the Government of Tamil Nadu, State Public Sector Undertakings, Local Bodies, State Government Universities and Statutory Boards under the control of the Government of Tamil Nadu. Though initially the scheme covered only the employees of the Government Departments, in the 2007 G.O., it is provided that the Scheme will cover the other employees.
2.The issues raised in these writ petitions are the extent to which the insurance company will be bound to indemnify the claims made by the beneficiaries; whether the insurance company and the beneficiaries were bound strictly by the terms of the contract; or whether, notwithstanding the terms of the contract, the insurance company was bound to satisfy all the claims.
3.The respondent in Writ Appeal (MD)No.480/2009 was aggrieved by the rejection of his claim by the insurance company and therefore he filed W.P.(MD)No.,1091/2009. The learned Single Judge was of the view that the reason given by the appellant/insurance company for rejection of the claim was unsustainable and directed the appellant/insurance company to reconsider the application. Aggrieved by this, the insurance company has filed the writ appeal.
4.On admission of the writ appeal, all the connected matters were also listed together. We have heard Mr.R.Yashod Vardhan and Mr.AL.Somayaji, learned senior counsels, appearing for the Insurance Company, learned Advocate General Mr.P.S.Raman, for the Government, and M/s.P.Sundararaj, Mr.Isaac Mohanlal, A.Saravanan, D.Sadiq Raja, B.Brijesh Kishore, S.Visvalingam, T.Lajapathi Roy, C.Suresh Kumar, K.Srinivasan, M.Gnana Gurunathan, N.Sathish Babu, R.Murugesan and S.Ramesh learned counsels appearing for the claimants/petitioners and G.Prabhu Rajadurai and N.Asaithambi, learned counsel appearing for respondents in some of the writ petitions.
5.The claimants/petitioners come under three categories.
Category-A Covers cases where the patients had been treated in non network hospitals;
Category-B Covers cases where the procedure/treatment is not covered by the Scheme;
Category-C Covers cases where the claimants had been treated by a network hospital for a procedure that is covered by the scheme but had made payments and had claimed reimbursements,which were rejected because this is a cashless scheme.
6.Briefly, the case of the insurance company is that when the scheme was introduced, it was understood that there were three conditions, (i) that it was cashless and (ii) that it would apply to the network hospitals; and
(iii) that it would be applied only to the specified procedures. This is only a contract and therefore the insurance company is not bound to settle claims which are not covered by the contract. It was further submitted that the Government employees/ beneficiaries are given Star Medical Insurance Guide which specifies clearly which are the network hospitals and what are the procedures that are covered. It was pointed out by the learned senior counsels that care had been taken to have the maximum number of network hospitals in each District so that the beneficiaries cannot complain that for their ailment they had to travel a long distance and therefore they took treatment in a nearby hospital which was not a network hospital. Further, it was submitted that the insurance company have a re-insurance contract to cover their risks and their claims will be settled under the reinsurance contract, only if they had adhered to the terms of the contract and any claim settled dehors the scheme will not get coverage for the insured and therefore the insurer had to suffer a great loss. Several decisions were cited in support of the contention of the insurance company.
7.Learned Advocate General submitted that undoubtedly the insurance company cannot be mulcted with liabilities which are not strictly within the four corners of the contract. Learned Advocate General further submitted that the scheme itself provides, under paragraph 9, the provisions for redressal of grievance and those beneficiaries, who are aggrieved by the non settlement, may approach the authorities for redressal of grievance and the Committee, which will examine the claim, is headed by the Collector and there is a medical expert and therefore their grievances will be heard with the expert opinion of the medical professional. Learned Advocate General submitted that though the insurance scheme is compulsory and every Government employee is bound to come under the cover of the scheme and Rs.25/- is being deducted from his salary, the Tamil Nadu Medical Attendant Rules have not been deleted and therefore if any employee is entitled to make a claim he may do so invoking the said Rules.
8.On the side of the claimants, it was contended that the Government servants are not given any option. They are bound to come under the coverage of the scheme and there can be situations were the beneficiary is not within the reach of a network hospital or the specialists, who attended the beneficiary, may send him to a non-network hospital in which case again the beneficiary may not have a choice and there are several such situations which necessitate the beneficiary to take treatment in a non-network hospital and purely on that ground the Government servant cannot be denied the benefit when he has paid the premium. It was also submitted that until now whenever the Government servant had taken treatment in a non-network hospital, this Court always directed the Government to reimburse the claim and there cannot be any contrary view now. It was also submitted that in situations of emergency, the person, who admits the patient in the hospital, may be asked by the network hopspitals to make payment and in that critical situation it may not be possible for the beneficiary to stand on technicalities and insist that this is a cashless procedure and therefore he is not bound to make any payment and in those circumstances payment is made and therefore to deny reimbursement of such payment to the beneficiary on the ground that it is cashless facility would make the entire scheme illusory.
9.The new health insurance scheme is a pioneering scheme in the entire country and for this purpose the Government had engaged M/s.Star Health and Allied Insurance Company to implement the scheme. In the previous scheme, the Government servants were entitled to just one lakh rupees towards reimbursement for the entire service period; whereas, now the service is divided into four year block period and the beneficiaries would be entitled to two lakhs rupees for every such four year block period. There is extended coverage for more diseases, more number of new hospitals have been included. It is cashless and there is no necessity to make payment at all and even some approved hospitals outside the State have been brought under the network. The beneficiary should be an employee of the Government of Tamil Nadu, Local Body, Public Section Undertaking, Statutory Board and State Government Universities and he should have sent the filled-in application to join the scheme with the relevant details. The period of coverage is four years from 11.06.2008 to 10.06.2012 or until the date of retirement of the employee which ever is earlier.
10.The list of hospitals/approved ailments/the details of the Star Health Insurance officers are made available on the web-site. There is 24 hours help-line. Each employee/beneficiary is issued with an identity card bearing the emblem of the Government of Tamil and the logo of Star Insurance. The card also bears photographs of the beneficiary members. Each card has a unique number and it has to be quoted in all claims as well as on the help-line.
11.The scheme makes it clear that there are ineligible expenses, which are (a)ailments/treatments not approved under the scheme;
(b)coverage exceeding the limit of Rs.2 lakhs; (c)coverage will not be available for expenses other than eligible expenses. These three items should be borne by the employee himself or herself.
12.The grievance redressal committee consists of District Collector, Joint Director of Medical and Rural Health Services Department and the District Treasury Officer at the District Headquarters. Annexure-I contains List of network hospitals and we find in the paper book that there are 375 hospitals, which includes hospitals in New Delhi, Brngaluru, Tiruvananthapuram and Puducherry, apart from hospitals in the State of Tamil Nadu. Learned Advocate General informed us that more hospitals have now been brought under the network. Annexure-II contains the List of diseases, treatments/surgeries, classified under the broad-based specialities. The broad specialities are:
(i)Cardiology and Cardio Thoracic Surgery
(ii)Orthopaedic Surgery
(iii)Nephrology/Urology
(iv)Oncology
(v)Neurology
(vi)Ophthalmology
(vii)Vascular Surgery
(viii)Gastro Enterology
(ix)Plastic and Facio Maxilliary
(x)E.N.T.
(xi)Gynaecology
(xii)Thoracic
(xiii)General: Other Surgeries.
Annexure-III contains the details of address of the offices and coordinators of the Star Health and Allied Insurance Company Limited.
13.G.O.Ms.No.430, Finance (Salaries) Department, dated 10.09.2007, gives us the history behind the introduction of the fresh ambitious scheme. The Government employees were aggrieved that under the then existing scheme pm;u a sum of Rs.1 lakh was granted for the entire service period. This was not sufficient and they underwent the following difficulties.
(a)treatments for certain major ailments, like cancer or by-pass surgery, are very expensive and one lakh rupees is insufficient;
(b)if a Government employee avails one lakh rupees for one treatment, then he cannot have any further assistance under the scheme for the rest of his service period;
(c)the beneficiaries will have to incur expenses initially and avail the financial assistance later and this causes great difficulty to the beneficiaries;
(d)though hospitals are spread-over various parts of the State, in certain areas employees had to travel along distance to reach the approved institutions; and
(e)the coverage of the ailments, which are approved for assistance, was not sufficient.
The earlier scheme covered only the Government employees and others were not included. Therefore, to address all the above issues, the present scheme was introduced. The monthly subscription is Rs.25/-, which will be recovered from the salaries of the employees by the respective organizations.
14.In 2007, the Government framed the new Health Insurance Scheme Rules, 2007 which define the words "employee", "family", "hospital", "scheme", etc. The hospitals to be covered under the scheme were not only free Government Hospitals but, also the pay wards of Government Hospitals and private hospitals. Strict criteria were laid down and it was only if the private hospitals which satisfy those criteria, extracted below, would be tied up as a network hospital.
(a) It should have at least 15 inpatient beds in respect of 'A' class city (population exceeding 12 lakhs) and 'B' class city (population exceeding 5 lakhs but below 12 lakhs) and 10 inpatient beds in respect of 'C' class city (population below 5 lakhs) as per the classification of cities by the Insurance Regulatory and Development Authority;
(b) It should be equipped and engaged in providing medical and surgical facilities along with diagnostic facilities i.e. Pathological tests,X-ray and other investigations like Electro Cardiograph etc., for the care and treatment of injured or sick persons as in-patients;
(c) It should have a fully-equipped operation theatre of its own wherever surgical operations are carried out;
(d) It should have fully equipped nursing staff under its employment round the clock;
(e) It should have qualified doctor(s) physically in charge round the clock;
(f) It should maintain complete records as required on day to day basis and be able to provide necessary records on the insured patient to the insurer or his representative as and when required;
(g) It should have functioned as an inpatient facility for a minimum period of one year.
15.The scheme provided that atleast three institutions, excluding the Government Hospitals, situated in New Delhi, Bengaluru, Thiruvananthapuram and Puducherry, will also be covered and as far as the hospitals in the State, the insurance company will ensure the availability of a minimum of six network hospitals in each district of the State and the availability of a minimum 50 network hospitals, excluding Government Hospitals, in the areas under each district cluster. The District clusters are Northern cluster, Central Cluster, Western cluster and Southern cluster. The scheme also provided that if any district or cluster do not have the required number of hospitals, then the insurance company may seek specific exemption.
16.The implementation procedure inter alia provided that the insurance company shall prepare Identification cards to all the employees with details about their family members and that the insurance company will ensure that members to the family without making any cash payment.
17.Rule 10 of the above said Rules deals with Redressal of grievances and any complaint about any difficulty in availing treatment, non- availability of facilities, bogus availment of treatment for ineligible individuals will be submitted to the Joint Director of the Medical and Rural Health Services Department of the District Headquarters. They will be placed for decision before the Empowered District Level Committee, headed by the District Collector and having the Joint Director of Medical and Rural health Services Department and the District Treasury Officer as members and appeal provision was made against the decision of the Empowered District Level Committee, which was to the State Level Empowered Committee. The State Level Empowered Committee would be headed by the Director of Treasuries and Accounts and having the Director of Medical and Rural Health Services as member-Secretary and an official representative nominated by the Insurance Company as member. If a dispute was unresolved by the State Level Empowered Committee, then it would be referred to the High Level Committee comprising the Secretary to Government, Finance Department, Secretary to Government, Health and Family Welfare Department and the representative of the insurance company. If even after this, the dispute remains unresolved, the civil court in Chennai will have exclusive jurisdiction.
18.All these details are annexed with the Health Insurance Policy, so that no Government Employee can plead ignorance that he did not know that he had to take treatment only in network hospitals or he did not know that he should not pay to the hospitals or that he did not know that only certain ailments/procedures were covered by the scheme.
19.In the case in Writ Appeal (MD) No.480 of 2009, the wife of the Government Servant had undergone by-pass heart surgery in a hospital, which is not a network hospital. The Government Servant had addressed to the Insurance Company that his wife is being treated at a hospital in Thiruvananthapuram from 15.04.2008 and that he is covered by the scheme and that he needs assistance. On 16.08.2008, he was informed that the said hospital is not an empanelled hospital and that he is advised to avail cashless medical treatment for the heart surgery of his wife in any one of the network hospitals. He was also informed that pre-authorization is subject to terms and conditions, provisions and limitation of the Tamil Nadu Government Employees New Health Scheme. To this, the beneficiary replied that his wife had already been treated on 23.04.1999 at Rajaji Government Hospital, Madurai and there were complications and therefore he went to Thiruvananthapuram on 15.04.2008 and they had fixed the date for the by-pass surgery and that it is not possible for him to change the date. On 11.10.2008, the Government issued letter No.62991, Finance(Salaries) Department, by which all the Heads of Departments, Chief Executive Officers of Public Sector Undertakings, Director of Rural Development, Commissioner of Municipal Administration, Registrars of State Government Universities and the Director of Treasuries and Accounts, were informed that it has been reported that many employees, who are covered under the Scheme, have admitted the beneficiaries into non-network hospitals and paid the amount for surgeries and has sent claims directly to the Star Health Insurance Company for reimbursement and that all the pay Drawing Officers under the Control of the heads of the departments mentioned above must bring to the attention of the employees the following:
(1) A hospital approved under the scheme alone should be approached while availing the benefits of the scheme.
(2) The hospital and the local representative or the Helpline of STAR shall be informed of the treatment to be taken so that pre authorisation is given by the company.
(3) The Identity Card of the employee or the Certificate as in Annexure III to G.O.Ms.No.174, Finance (Salaries) Department, Dated 28.04.2008, shall be produced to the hospitals.
(4) The Scheme is on CASH LESS basis and no payment for approved cost should be made by the beneficiary to the hospital.
(5) The charges which are entitled under the scheme should be ascertained and the hospital should not be allowed to charge any excess amount.
(6) Any claim in violation of the above procedure sent to Star Health & Allied Insurance Company Ltd. for reimbursement is liable to be rejected.
20.On 03.10.2008, the respondent's wife underwent operation and he addressed the insurance company for reimbursement, which was rejected by the insurance company. The learned Single Judge had referred to several decisions. "Based on the nature of the disease and condition of the patient, it is for the Doctors to decide and suggest, which kind of surgery is suitable and the patient cannot choose the mode of surgery." - vide 2003(3) CTC 660 - D.Rajarathinam v. Management of Metro Transport Corporation Ltd., Chennai. The learned Single Judge also referred to (2006) 2 MLJ 747 - C.Nagamuthu v. State of Tamil Nadu; (2008) 5 SCC 328 - State of Karnataka and another v. R.Vivekananda Swamy and State of Rajasthan and others vs. Savitri Upadhyay.
21.In the present case, on facts, the wife of the respondent had taken treatment in Rajaji Hospital, Madurai and had then gone to Thiruvananthapuram in 2008, nine years later. We see from the scheme that in Madurai alone about 24 hospitals have been shown as network hospitals, of which ten or multi speciality hospitals and in Thiruvanandhapuram three hospitals are network hospitals. The judgments relied on by the claimants arose out of claims made before this scheme, where the question was when the Government had implemented the health fund scheme by which an assurance was given to the employees that they would receive assistance as per the scheme, whether they could be denied benefit merely because the treatment was taken in a hospital that was not listed in the schedule. In that situation, the legal position is entirely different and in that context there are several decisions of this Court where the Government's denial to reimburse the amount was set aside on the ground that it was arbitrary and violative of the rights guaranteed by the Constitution.
22.But, in this case, we are faced with a claim that should be decided against the terms and conditions of the contract. The relationship of the insurance company with the claimant is purely contractual. The Insurance Company is not bound to satisfy any claim that is not covered by the scheme. The insurance company is strictly bound to satisfy the claims if they arise out of the procedures/treatments that are listed and if the beneficiaries are treated in network hospitals and not otherwise.
23.In the the judgments relied on, (a) AIR 1999 SC 3252 -
Oriental Insurance Co. Ltd. v. Sony Cheriyam, the Supreme Court held that:
"The insurance policy between the insurer and the insured represents a contract between the parties. Since the insurer undertakes to compensate the loss suffered by the insured on account of risks covered by the insurance policy, the terms of the agreement have to be strictly construed to determine the extent of liability of the insurer. The insured cannot claim anything more than what is covered by the insurance policy. That being so, the insured has also to act strictly in accordance with the statutory limitations or terms of the policy expressly set out therein."
(b)In (2004) 8 SCC 644 - United India Insurance Co. Ltd. vs. Harchand Rai Chandan Lal, in paragraph 9, "9.It is possible that an insurer may sustain loss in technical terms of criminal law, but no relief can be given to him unless his case is covered by the terms of the policy. If it is not open to interpret the expression appearing in the policy in terms of common law; but it has to give meaning to the expression as defined in the policy. The act that causes the loss must fall within the definition in the policy and it cannot take the cover and contents of the definition as laid down in criminal law. Therefore, when the definition of the word "burglary" has been defined in the policy then the cause should fall within that definition. Once a party has agreed to a particular definition, he is bound by it and the definition of criminal law will be of no avail. IN this connection, the decision of the National Consumer Disputes Redressal Commission in the case of National Insurance Co. Ltd. v. Public Type College [(2001) 2 CPJ 26 (NC)] which has taken the colour and content of the definition given in criminal law does not lay down the correct proposition of law. It is settled law that terms of the policy shall govern the contract between the parties, they have to abide by the definition given therein and all those expressions appearing in the policy should be interpreted with reference to the terms of policy and not with reference to the definition given in other laws. It is a matter of contract and in terms of the contract the relation of the parties shall abide and it is presumed that when the parties have entered into a contract of insurance with their eyes wide open, they cannot rely on the definition given in other enactment. thus, the decision of the National Consumer Disputes Redressal Commission in the case of National Insurance Co. Ltd. v. Public type college is not a good law and all the tribunals i.e. National Consumer Disputes Redressal Commission, State Commission and District Forum having applied the ratio of that case, the impugned order cannot be sustained."
(c)In (2009) 4 MLJ 811 (SC) - Vikram Greentech (I) Ltd. v. New India Assurance Co. Ltd., in paragraphs 15 and 16.
"15.An insurance contract, is a species of commercial transactions and must be construed like any other contract to its own terms and by itself. In a contract of insurance, there is requirement of uberimma fides i.e. good faith on the part of the insured. Except that, in other respects, there is no difference between a contract of insurance and any other contract. The four essential of a contract of insurance are, (i)the definition of the risk, (ii)the duration of the risk,(iii)the premium and (iv)the amount of insurance. Since upon issuance of insurance policy, the insurer undertakes to indemnify the loss suffered by the insured on account of risks covered by the insurance policy, its terms have to be strictly construed to determine the extent of liability of the insurer. The endeavour of the Court must always be to interpret the words in which the contract is expressed by the parties. The Court while construing the terms of policy is not expected to venture into extra liberalism that may result in re- writing the contract or substituting the terms which were not intended by the parties. the insured cannot claim anything more than what is covered by the insurance policy. General Assurance Society Ltd. v. Chandumull Jain and Another AIR 1966 SC 1644, Oriental Insurance Co. Ltd. v. Sony Cheriyam AIR 1999 SC 3252 : (1999) 6 SCC 451 : (2000) 1 MLJ 8 and United India Insurance Co.Ltd. v. Harchand Rai Chandan Lal AIR 2004 SC 4794 : (2004) 8 SCC 644.
16.Document like proposal form is a commercial document and being an integral part of policy, reference to proposal form may not only be appropriate but rather essential. However, the surveyors' report cannot be taken aid of nor can it furnish the basis for construction of a policy. Such outside aid for construction of insurance policy is impermissible."
(d)In (1996) 2 SCC 336 - Surjit Singh vs. State of Punjab and others, an employee of the Government of Punjab, while in a foreign country, subjected himself to medical examination and he made a claim for reimbursement. The Supreme Court would observe that self-preservation of one's life is the necessary concomitant of the right to life enshrined in Article 21 of the Constitution and when the State had brought Escorts on the recognised list, it is "fair and just that the respondents pay to the appellant employee the rates admissible as per Escorts." This decision was referred to by the counsel who appeared for the beneficiaries and submitted that there may be situations where the beneficiary going, on necessity, to an alternative hospital and on that ground reimbursement cannot be denied.
(e)In AIR 1997 SC 1225 - State of Punjab v. Mohinder Singh Chawla, the beneficiary had a heart ailment which required replacement of two valves. He had treatment in AIIMS at New Delhi. When he claimed reimbursement, it was rejected. In paragraph 11, "11.... Thus, for open heart surgery or heart disease the Escorts Heart Institute is authorised and recognised institution by the Government of Punjab. Consequently, when the patient was admitted and had taken the treatment in the hospital and had incurred the expenditure towards room charges, inevitably the consequential rent paid for the room during his stay is integral part of his expenditure incurred for the treatment. Consequently the Government is required to reimburse the expenditure incurred for the period during which the patient stayed in the approved hospital for treatment. It is incongruous that while the patient is admitted to undergo treatment and he is refused the reimbursement of the actual expenditure incurred towards room rent and is given the expenditure of the room rent chargeable in another institute whereat he had not actually undergone treatment. Under these circumstances, the contention of the State Government is obviously untenable and incongruous. ...."
(f)AIR 1996 SC 2426 - P.B.Khet Mazdoor Samity v. State of W.B. This was a petition filed under Article 32 of the Constitution of India raising the issue on availability of facilities in Government Hospital for treatment of persons sustaining serious injuries. Several directions were given by the Supreme Court which dealt with the adequate facilities of primary health centres, hospitals at District Level and Sub-Division Level to be upgraded, increase facility of speciality treatment at hospitals at District Level, availability of inpatient facility, arrangement of ambulance and facilities for treating emergency patients, etc. and while dealing with the financial resources, the Supreme Court observed, "16.It is no doubt true that financial resources are needed for providing these facilities. But at the same time, it cannot be ignored that it is the constitutional obligation of the State to provide adequate medical services to the people. Whatever is necessary for this purposes has to be done. In the context of the constitutional obligation to provide free legal aid to a poor accused this Court has held that the State cannot avoid its constitutional obligation in that regard on account of financial constraints. (See Khatri (II) v. State of Bihar, (1981) 1 SCC 627 at p. 631 : (AIR 1981 SC 928 at. p.931). The said observations would apply with equal, if not greater, force in the matter of discharge of constitutional obligation of the State to provide medical aid to preserve human life. In the matter of allocation of funds for medical services the said constitutional obligation of the State has to be kept in view. It is necessary that a time-bound plan for providing these services should be chalked out keeping in view the recommendations of the Committee as well as the requirements for ensuring availability of proper medical services in this regard as indicated by us and steps should be taken to implement the same......."
(g)In AIR 1996 SC 1051 - Chameli Singh v. State of U.P., the Supreme Court observed in paragraph 7, "7..... right to live as a human being is not ensured by meeting only the animal needs of man. It is secured only when he is assured of all facilities to develop himself and is freed from restrictions which inhibit his growth. All human rights are designed to achieve this object. Right to live guaranteed in any civilised society implies the right to food, water, decent environment, education, medical care and shelter...."
(h)In 2008 (5) SCC 328, the Supreme Court had to consider interpretation or application of the Medical Benefit Rules in the State of Karnataka and State of Rajasthan. The Karnataka Rules defined "authorized hospitals" and "medical institutions" to mean those which are specified in Schedule-I. Rule 7 entitles the Government servant to receive free medical services in such hospitals. The supreme Court referred to (1998) 4 SCC 117 - State of Punjab v. Ram Lubhaya Bagga:
"29.No State of any country can have unlimited resource to spend o any of its projects. That is why it only approves its projects to the extent it is feasible. The same holds good for providing medical facilities to its citizens including its employees. Provision of facilities cannot be unlimited. It has to be to the extent finances permit. If no scale or rate is fixed then in case private clinics or hospitals increase their rate to exorbitant scales, the State would be bound to reimburse the same. Hence we come to the conclusion that principle of fixation of rate and scale under this new policy is justified and cannot be held to be violative of Article 21 or Article 47 of the Constitution of India."
and paragraph 24 provides that:
"24.In view of the aforementioned settled principles of law thee cannot be any doubt that the Rules regarding reimbursement of medical claim of an employee when he obtains treatment from a hospital of his choice can be made limited. Such Rules furthermore having been framed under the proviso to Article 309 of the Constitution of India constitute conditions of service in terms whereof on the one hand the employee would be granted the facility of medical aid free of cost from the recognised government hospitals and on the other he, at his option, may get himself treated from other recognised hospitals/institutions subject of course to the condition that the reimbursement by the State therefor would be limited."
Of course, in that case, the Supreme Court had directed the State of Karnataka and Rajasthan to pay the balance amount. But, the law laid down in the case was paragraph 29:
"29.In a case of this nature, we are of the opinion, that having laid down the law for the future that claim for reimbursement must be made only in terms of the Rules and not dehors the same, and more so, when there is no power of relaxation, in exercise of our jurisdiction under Article 142 of the Constitution of India, we direct the State of Karnataka and Rajasthan to pay the balance amounts. However, this order shall not be treated as a precedent. ....."
24.In the present case, what we have to decide is whether the State is bound to reimburse the claim, whether the insurance company is bound to indemnify the beneficiary for the claim made by him. As held in the decisions referred to above, the insurance company is strictly bound to strictly by the terms of contract and cannot be asked to settle a claim which does not fall within the terms of the contract and therefore the claim made by the beneficiaries in respect of treatments that were taken in a non-network hospital or for reimbursement of the claim made the insurance company is not liable. For this reason, the insurance company had made it clear that only if the beneficiary took treatment in a network hospital they would settle the claim and more importantly the facility itself is a cashless facility. The insurance company cannot pay cash and if we issue direction to the insurance company to reimburse the claim, we would be virtually re-writing the contract which we are not entitled to.
25.The Tamil Nadu Medical Attendance Rules ("the Rules" in short) clearly lay down the rules regarding dependents and who is entitled to medical concessions under the Rules. It also defines who is a well to do person. The Rules lay down the manner in which claims can be made. According to the learned Advocate General, these Rules are still in force and therefore when it is a claim not covered by the present Insurance Scheme, the Government Servants have the right to make their claims under the Rules. Therefore, as regards Category-A, where treatment has been taken in a non-network hospital, the insurance company cannot be asked to cover the expenses, since the scheme itself makes the network hospitals as intrinsic. However, the petitioners/claimants were also not no remediless and that is why we will issue directions to the claimants to make an application under the Rules or go before the Redressal Committee.
26.Before taking up the individual cases, we must record that there are certain situations which may arise and in fact which have arisen, for which the Government must issue clear guidelines. This the Government has to do, since it has made the Scheme obligatory for everyone and there is automatic deduction of premium to an extent of Rs.25/- per month. The directions are as follows:
(i)The State shall make it clear that if for some reason, which is satisfactory, the claimant is unable to take treatment in a network hospital but has been advised or had to go to a non-network hospital, then his claim would be considered under the Rules.
(ii)If the claimant has been advised some procedure which is not covered by the Scheme, there again, it must be made clear that he can apply under the Rules.
(iii)To safeguard duplication of payments, the Government can make sure and when they apply under the Rules, that the claimant himself certifies that he has not made claim under the Scheme or vice-versa.
(iv)The State shall inform every network hospital that if it receives complaints from claimants that money was demanded for admission or for treatment, then that hospital will be removed from the network. This warning is necessary, since, at times of crisis, the claimants will not be in a position to argue with the hospital that this is a "cashless" Scheme. We are aware that there is an officer of the Star Health Insurance Company at every network hospital to ensure that hospitals adhere to the terms of the Scheme but, yet, it is better to make this position clear to the hospitals, since one of the questions that has arisen before us is that whether the claimants will be entitled to reimbursement if, by mistake, they pay cash.
27.Now coming to the individual cases, in all the case, whatever may be the category, the petitioners/claimants have paid the amount. The scheme is a 'cashless' one and, therefore, it is only the Government which have to make the payment under the Rules. The Redressal Committee is empowered to decide the following circumstances, namely, any difficulty in availing treatment, non-availability of facilities, bogus availment of treatment for ineligible individuals, etc. It is really not clear what other complaints would be covered under the umbrella "etc.". But, however, since the Paragraph relating to 'Redressal of Grievances' starts with the sentence "The Hospitals shall extend treatment to the beneficiaries under the Scheme on a cashless basis", it is evident that the Committee cannot direct payment of cash.
28.Therefore, if the claimants have made payments whether for a procedure not covered or whether at a non-network hospital or they have paid when they have been treated for a covered procedure in a network hospital, their only remedy is to approach the Government under the Rules. If, however, before they take treatment they are informed that a particular procedure is not covered, then at that stage, they may approach the Redressal Committee where the medical expert can decide whether that procedure is covered or not. The Redressal Committee may also go into the complaints regarding non-availability of facility at a network hospital, which may be available in favour of the claimant when he applies under the Rules. Otherwise, we do not think that the Redressal Committee can do much in any one of these cases, since all the petitioners/claimants before us would have made payments. But, if there is a petitioner who has not settled the claim and has come before us, then, in the event, that it is for a procedure that is not covered, he may approach the Redressal Committee. In view of the fact that there are the above lacunae in the Scheme, the Government shall not deny any claim validly made under the Rules only because the claimant is a member of the Scheme.
29.With the above directions and observations, all the writ petitions are disposed of. W.A.No.480/2009 is allowed and the order of the learned Single Judge is set aside. No order as to costs. Connected M.Ps. are closed.
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