M/S NATIONAL INSURANCE CO LTD vs MR PADMANABHA SHETTY G
- Court
- Karnataka High Court
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®
CNR: KAHC010254402024
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
ST
DATED THIS THE 1 DAY OF SEPTEMBER, 2026
BEFORE
THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ
WRIT PETITION NO. 14682 OF 2024 (GM-RES)
BETWEEN
1. M/S NATIONAL INSURANCE CO LTD
MUMBAI CORPORATE REGIONAL
OFFICE,
PUBLIC LIMITED COMPANY
NATIONAL INSURANCE BUILDING
ND
2 FLOOR, 14 JAMSHEDJI TATA ROAD,
CHURCH GATE, MUMBAI 400020,
REP BY ITS MANAGER
AUTHORIZED SIGNATORY
MRS SUJATHA.
2. M/S NATIONAL INSURANCE CO. LTD.,
A PUBLIC LIMITED COMPANY
BHARATH BUILDING P M RAO ROAD,
MAGNALORE 575001
REP BY ITS MANAGER
AUTHORIZED SIGNATORY
MRS SUJATHA.
...PETITIONERS
(BY SRI. DEVAIAH I S., ADVOCATE)
AND
1. MR PADMANABHA SHETTY G
S/O PAKEERAPPA SHETTY,
AGED ABOUT 66 YEARS,
RESIDING AT NO.1304,
B BLOCK MAURIKSHA PARK
PVS CIRCLE, KODIALBAIL,
MANGALORE 575003
Digitally signed
by SHWETHA
RAGHAVENDRA
Location: HIGH
COURT OF
KARNATAKA
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2. MEDI ASSIST INSURANCE TPA PVT LTD.,
TH
NO.4/1 TOWER D, 4 FLOOR
IBC KNOWLEDGE PARK
BANNERGHATTA ROAD,
BENGALURU, KARNATAKA 560029
REPRESENTED BY ITS CEO
3. M/S BANK OF BARODA
BARODA BHAVAN,
TH
7 FLOOR, R.C. DUTT ROAD,
VADODARA 390007,
REP BY THE MANAGING DIRECTOR AND CEO.
4. M/S BANK OF BARODA
ZONAL OFFICE II FLOOR,
VIJAYA TOWERS,
LHH ROAD, MANGALORE 575003,
REP BY THE GENERAL MANAGER.
…RESPONDENTS
(BY SRI. RANJAY SHETTY., ADVOCATE FOR R1;
SRI. KASHYAP N. NAIK., ADVOCATE FOR R2;
SRI. VIGNESH SHETTY., ADVOCATE FOR R3 & R4)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF
THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT, ORDER OR
DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI OR ANY OTHER
APPROPRIATE WRIT/ORDER/DIRECTION QUASHING THE IMPUGNED ORDER
DATED 20.09.2023 AND MODIFIED/RECTIFIED ORDER DATED 10.01.2024
PASSED BY THE LEARNED PERMANENT LOK ADALAT, AT MANGALURU,
DAKSHINA KANNADA IN PLD NO.761/2022 (ANNEXURE-A & B) AND ETC.,
THIS WRIT PETITION COMING ON FOR ORDERS AND HAVING BEEN
RESERVED FOR ORDERS ON 28.07.2026, THIS DAY, THE COURT
PRONOUNCED THE FOLLOWING:
CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ
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CAV ORDER
1. The Petitioners-Insurance Company are before this
Court seeking for the following reliefs:
i. Issue a writ, order or direction in the nature of a
writ of certiorari or any other appropriate
writ/order/direction quashing the impugned order
dated 20.09.2023 and modified/rectified order
dated 10.01.2024 passed by the learned
Permanent Lok Adalat, at Mangaluru, Dakshina
Kannada in PLD No. 761/2022 (Annexure-A & B)
and
ii. Pass any other orders/grant such other relief as
this Hon’ble Court deems fit, under the
circumstances of the case, in the interest of justice
and equity.
2. Respondent No.1 was an employee of Vijaya Bank,
which, pursuant to its merger, became part of
respondent No.3–Bank of Baroda.
3. The Indian Banks’ Association had formulated a
health insurance scheme for retired employees of
member banks. Vijaya Bank was a member of the
said scheme and, following its merger with Bank of
Baroda, the latter also became a member. Vijaya
Bank had extended the insurance scheme to its
eligible retired officers and employees. Respondent
No.1, being an eligible retired officer, paid the
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requisite premium and was covered under the
scheme for the period from 01.11.2021 to
31.10.2022, with an annual coverage of
Rs.9,00,000/.
4. Respondent No.1 was suffering from Stage IV
carcinoma of the prostate and had undergone
treatment at HCG Hospital, Bengaluru, including
chemotherapy. During the course of such treatment,
he was advised to continue two post-chemotherapy
injections, namely, Zoladex and Xgeva, once every
three months.
5. Respondent No.1 was admitted to Indira Hospital,
Mangaluru, on 03.11.2021 and discharged on
04.11.2021, incurring expenditure of Rs.71,252/-. He
was again admitted on 09.02.2022 and discharged
on 10.02.2022, incurring expenditure of Rs.71,382/-.
He was thereafter admitted on 25.05.2022 and
discharged on 26.05.2022, and was once again
admitted on 29.08.2022 and discharged on
30.08.2022, incurring expenditure of Rs.71,428/- on
the latter occasion.
6. While several components of his medical expenditure
were reimbursed, the amounts incurred towards the
injections Zoladex and Xgeva were not reimbursed.
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Claiming a total sum of Rs.2,85,470/- towards the
unpaid medical expenses, respondent No.1 invoked
Section 22-C(1) to (8) of the Legal Services
Authorities Act, 1987, by instituting proceedings
before the Permanent Lok Adalat at Mangaluru,
which was registered as Dispute No.761/2022.
7. The petitioners entered appearance through counsel
and filed their counter statement. Their principal
contention was that administration of the injections
Zoladex and Xgeva did not require hospitalisation
and, therefore, the treatment constituted out-patient
treatment. According to the petitioners, the
insurance policy extended coverage only to
treatment involving hospitalisation and did not cover
treatment undertaken otherwise than by way of
hospitalisation.
8. The matter was initially taken up by the Permanent
Lok Adalat for conciliation. Since the parties did not
arrive at an amicable settlement, the Permanent Lok
Adalat recorded the failure of conciliation and
proceeded to the stage of adjudication by recording
evidence.
9. Upon completion of the evidence, the Permanent Lok
Adalat passed an order dated 20.09.2023, directing
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the petitioners and the other respondents therein to
pay Rs.2,85,470/-, together with interest at 6% per
annum from the date of the petition until realisation.
The Permanent Lok Adalat further directed payment
of Rs.25,000/- as compensation to respondent No.1
towards the inconvenience allegedly caused to him.
10. Thereafter, Bank of Baroda filed an application under
Section 152 of the Code of Civil Procedure, seeking
correction/modification of the operative portion of
the order on the ground that the liability to satisfy
the medical claim was that of the petitioners, being
the insurers. The Permanent Lok Adalat allowed the
said application and modified the operative portion,
directing the petitioners to make payment of the
medical claim and costs.
11. Aggrieved by the order dated 20.09.2023 as well as
the subsequent order passed on the application
under Section 152 of CPC, the petitioners–insurers
have approached this Court.
12. Sri Devaiah I.S., learned counsel for the petitioners
submits that:
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12.1. He relies on Section 22-C of the Legal Services
Authority Act, 1987, which is reproduced
hereunder for easy reference:
“22-C Cognizance of cases by Permanent Lok
Adalat.—
(1)Any party to a dispute may, before the dispute is
brought before any court, make an application to the
Permanent Lok Adalat for the settlement of dispute:
Provided that the Permanent Lok Adalat shall not have
jurisdiction in respect of any matter relating to an
offence not compoundable under any law:
Provided further that the Permanent Lok Adalat shall
also not have jurisdiction in the matter where the value
of the property in dispute exceeds ten lakh rupees:
Provided also that the Central Government, may, by
notification, increase the limit of ten lakh rupees
specified in the second proviso in consultation with the
Central Authority.
(2)After an application is made under sub-section (1) to
the Permanent Lok Adalat, no party to that application
shall invoke jurisdiction of any court in the same dispute.
(3)Where an application is made to a Permanent Lok
Adalat under sub-section (1), it—
(a)shall direct each party to the application to file before
it a written statement, stating therein the facts and
nature of dispute under the application points or issues
in such dispute and grounds relied in support of, or in
opposition to, such points or issues, as the case may be,
and such party may supplement such statement with
any document and other evidence which such party
deems appropriate in proof of such facts and grounds
and shall send a copy of such statement together with a
copy of such document and other evidence, if any, to
each of the parties to the application;
(b)may require any party to the application to file
additional statement before it at any stage of the
conciliation proceedings;
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(c)shall communicate any document or statement
received by it from any party to the application to the
other party, to enable such other party to present reply
thereto.
(4)When statement, additional statement and reply, if
any, have been filed under sub-section (3), to the
satisfaction of the Permanent Lok Adalat, it shall conduct
conciliation proceedings between the parties to the
application in such manner as it thinks appropriate
taking into account the circumstances of the dispute.
(5)The Permanent Lok Adalat shall, during conduct of
conciliation proceedings under sub-section (4), assist the
parties in their attempt to reach an amicable settlement
of the dispute in an independent and impartial manner.
(6)It shall be the duty of every party to the application
to cooperate in good faith with the Permanent Lok Adalat
in conciliation of the dispute relating to the application
and to comply with the direction of the Permanent Lok
Adalat to produce evidence and other related documents
before it.
(7)When a Permanent Lok Adalat, in the aforesaid
conciliation proceedings, is of opinion that there exist
elements of settlement in such proceedings which may
be acceptable to the parties, it may formulate the terms
of a possible settlement of the dispute and give to the
parties concerned for their observations and in case the
parties reach at an agreement on the settlement of the
dispute, they shall sign the settlement agreement and
the Permanent Lok Adalat shall pass an award in terms
thereof and furnish a copy of the same to each of the
parties concerned.
(8)Where the parties fail to reach at an agreement under
sub-section (7), the Permanent Lok Adalat shall, if the
dispute does not relate to any offence, decide the
dispute.”
12.2. It is contended that the scheme of Section 22-C
of the Legal Services Authorities Act, 1987
makes conciliation an essential and mandatory
stage in the proceedings before a Permanent
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Lok Adalat. Sub-sections (4) and (5) require
the Permanent Lok Adalat to conduct
conciliation proceedings and assist the parties,
in an independent and impartial manner, in
their attempt to arrive at an amicable
settlement. Correspondingly, sub-section (6)
casts a duty upon the parties to cooperate in
good faith with the Permanent Lok Adalat in
such conciliation proceedings.
12.3. According to learned counsel, in the present
case, instead of making any meaningful
attempt to facilitate conciliation, the Permanent
Lok Adalat, noticing that the parties had not
appeared for conciliation, treated the
conciliation process as having failed and
proceeded to the stage of recording evidence.
In doing so, according to him, the Permanent
Lok Adalat effectively dispensed with the
statutory conciliation mechanism, thereby
defeating the legislative scheme underlying
Section 22-C.
12.4. Learned counsel submits that, having regard to
the statutory scheme, the Permanent Lok
Adalat was required to make a genuine and
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meaningful effort to facilitate settlement before
proceeding to adjudication. The mere absence
of an amicable settlement at the initial stage,
according to him, could not by itself justify
treating the statutory conciliation process as
exhausted.
12.5. On this premise, learned counsel submits that
the matter ought to be remanded to the
Permanent Lok Adalat, so as to enable the
parties to participate in conciliation and explore
the possibility of an amicable settlement.
12.6. During the course of hearing, this Court
enquired whether, having regard to the passage
of time, the petitioners were willing to make
any offer which could form the basis for a
possible settlement.
12.7. On instructions, learned counsel categorically
submitted that the petitioners were not willing
to make any offer, as according to them there
was no liability whatsoever to reimburse the
expenditure incurred by respondent No.1
towards the Zoladex and Xgeva injections.
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12.8. Learned counsel, however, submits that the
impugned award is unsustainable on merits, as
the Permanent Lok Adalat has failed to properly
consider the specific terms and conditions of
the insurance policy and the grounds on which
the claim was repudiated.
12.9. It is submitted that the petitioners had issued
repudiation letters dated 05.02.2022,
29.03.2022, 14.09.2022 and 17.09.2022,
consistently taking the stand that the expenses
incurred by respondent No.1 towards Zoladex
and Xgeva injections were not covered under
the policy.
12.10. Learned counsel places particular reliance upon
Clauses 2.10 and 2.19 of the insurance policy,
which define “Day Care Treatment” and
“Hospitalisation”, respectively which are
reproduced hereunder for easy reference:
“Clause 2.10: DAY CARE TREATMENT -
Day care treatment means the medical treatment and/or
surgical procedure which is-i. Undertaken under general
or local anaesthesia in a hospital/day care centre in less
than 24 hours because of technological advancement
and
ii. Which would have otherwise required a hospitalisation
of more than 24 hours. Treatment normally taken on an
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outpatient basis is not included in the scope of this
definition.
Clause 2.19: HOSPITALISATION
Means admission in a Hospital/Nursing Home for a
minimum period of 24 in-patient care consecutive hours
except for the specified day care procedures/treatment,
were such admission could be for a period of less than
24 consecutive hours.”
12.11. He submits that Clause 2.10 defines “Day Care
Treatment” as medical treatment and/or a
surgical procedure undertaken under general or
local anaesthesia in a hospital/day care centre
for a period of less than 24 hours owing to
technological advancement, where such
treatment would otherwise have required
hospitalisation for more than 24 hours. The
definition expressly excludes treatment
normally taken on an outpatient basis.
12.12. Learned counsel submits that the
administration of Zoladex and Xgeva injections
does not satisfy the requirements of the
aforesaid definition. Respondent No.1 was not
subjected to general or local anaesthesia, nor
did the administration of the injections
constitute a medical treatment or surgical
procedure which, but for technological
advancement, would have required
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hospitalisation for more than 24 hours.
According to the petitioners, the injections were
ordinarily administered on an outpatient basis.
12.13. It is, therefore, contended that the expenditure
incurred towards the said injections cannot be
brought within the expression “Day Care
Treatment” under Clause 2.10. The exclusion of
treatment normally undertaken on an
outpatient basis, according to learned counsel,
further fortifies the petitioners' contention.
12.14. Learned counsel next relies upon Clause 2.19,
which defines “Hospitalisation” as admission to
a hospital/nursing home for a minimum period
of 24 consecutive hours of inpatient care,
except in respect of specified day-care
procedures/treatments where admission may
be for a shorter period.
12.15. It is submitted that there is no dispute that the
expenses incurred by respondent No.1 in
respect of the treatment actually undertaken
during his hospitalisation were duly reimbursed
by the insurer. The dispute is confined to the
expenditure incurred subsequently towards
administration of Zoladex and Xgeva injections.
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12.16. According to learned counsel, the said
injections were not administered during a
period of hospitalisation, nor did their
administration constitute a specified day-care
procedure within the meaning of Clause 2.10.
Consequently, the expenditure does not fall
within the coverage contemplated under Clause
2.19.
12.17. The submission, therefore, is that the
petitioners had rightly repudiated the claim in
accordance with the express terms of the
insurance policy. The Permanent Lok Adalat,
according to learned counsel, has failed to
examine the contractual terms governing the
insurance coverage and has not properly
considered the specific grounds contained in the
repudiation letters.
12.18. Learned counsel accordingly submits that,
without determining whether the treatment in
question fell within the contractual definitions of
“hospitalisation” or “day care treatment”, the
Permanent Lok Adalat could not have directed
the petitioners to reimburse the expenditure of
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Rs.2,85,470/-, together with interest and
compensation.
12.19. It is thus contended that the impugned award
suffers from a failure to consider the material
terms of the insurance policy and the specific
defence of the petitioners, and is consequently
liable to be interfered with in exercise of the
writ jurisdiction of this Court.
13. Sri Ranjan Shetty, learned counsel for respondent
No.1, submits that:
13.1. There is no dispute that respondent No.1 was
suffering from Stage IV carcinoma of the
prostate and was undergoing treatment for the
said serious and advanced malignancy. The
expenses incurred towards chemotherapy were
admittedly reimbursed by the insurer. The
dispute is confined to the expenses incurred
towards Zoladex and Xgeva injections, which
were prescribed by the treating doctors as part
of the continuing treatment following the
chemotherapy cycles.
13.2. Learned counsel submits that the fact that the
two injections were administered once every
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three months and after completion of the
chemotherapy cycle does not take them outside
the scope of treatment for the underlying
disease. The injections were prescribed as a
continuation and adjunct to the treatment of
prostate cancer and were not medicines
administered for any unrelated ailment.
13.3. Zoladex: Insofar as Zoladex is concerned,
learned counsel submits that it is the trade
name for Goserelin Acetate, which is used as
hormonal therapy in the treatment of prostate
cancer. It functions by suppressing the
production of testosterone and thereby
depriving hormone-sensitive prostate cancer
cells of the androgenic stimulation necessary
for their growth and progression.
13.4. It is submitted that, particularly in advanced
prostate cancer, hormonal therapy is an
established component of treatment and may
be administered along with, or subsequent to,
other forms of systemic cancer treatment.
Thus, merely because Zoladex was
administered after the chemotherapy cycle and
not simultaneously with the chemotherapy, it
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cannot be characterised as treatment unrelated
to the cancer for which respondent No.1 was
insured.
13.5. Learned counsel submits that, in the case of
respondent No.1, Zoladex was prescribed by
the treating doctors as part of the continuing
management of his Stage IV prostate
carcinoma and was therefore directly connected
with the insured medical condition.
13.6. Xgeva: With regard to Xgeva, learned counsel
submits that it is the trade name for
Denosumab, a monoclonal antibody used to
reduce the risk of skeletal-related complications
in patients with certain advanced cancers
involving the bone.
13.7. It is submitted that advanced prostate cancer
may metastasise to the skeletal system,
resulting in serious complications including
bone destruction, pathological fractures and
spinal complications. Xgeva is administered to
inhibit the biological mechanism responsible for
bone resorption and thereby protect against
such skeletal complications.
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13.8. According to learned counsel, Xgeva was
therefore not a medicine being administered for
some independent or incidental condition. It
was prescribed to respondent No.1 in
consequence of, and as part of the medical
management of, his advanced prostate cancer.
The expenditure incurred towards the said
injection must consequently be regarded as
expenditure towards treatment of the very
disease for which respondent No.1 was
receiving chemotherapy.
13.9. Absence of hospitalisation cannot defeat the
claim. Learned counsel submits that the
petitioners' principal objection proceeds on the
basis that the injections were administered
without hospitalisation and without general or
local anaesthesia. It is contended that this
approach is unduly technical and contrary to
the substance of the treatment actually
received.
13.10. It is not disputed that the injections were
administered without requiring respondent No.1
to be hospitalised. However, that was precisely
because of the nature of the treatment and
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advancements in modern medical science. The
fact that a treatment can now be safely
administered without hospitalisation cannot, by
itself, convert the treatment into something
other than medical treatment for the underlying
disease.
13.11. Learned counsel submits that the distinction
sought to be drawn by the insurer between
treatment administered during hospitalisation
and treatment administered subsequently on an
outpatient basis is artificial in the facts of the
present case. The injections were prescribed by
the treating doctor as a necessary part of the
continuing treatment of respondent No.1's
advanced cancer.
13.12. It is further submitted that respondent No.1 did
not voluntarily choose to undergo the treatment
or incur the expenditure. He was medically
advised and required to undergo the injections
as part of the treatment prescribed for his
serious medical condition. Having accepted the
premium and provided insurance coverage for
the relevant period, the insurer cannot,
according to learned counsel, deny
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reimbursement by adopting an excessively
technical interpretation of the policy.
13.13. Learned counsel submits that respondent No.1
was admittedly an eligible insured person and
had paid the requisite premium for the relevant
policy period. The underlying treatment for
prostate cancer was within the scope of the
medical condition for which he was receiving
treatment and the insurer had itself reimbursed
other expenses relating to his cancer
treatment.
13.14. It is therefore contended that the insurer's
attempt to deny reimbursement solely because
the particular injections were administered
without hospitalisation and did not involve
general or local anaesthesia amounts to a
hyper-technical interpretation of the policy.
13.15. Learned counsel submits that the policy terms
must be construed having regard to the object
and purpose of health insurance, particularly
where the treatment is prescribed by a medical
practitioner and is directly connected with the
insured disease. The expression relating to day-
care treatment, according to him, cannot be
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applied in a manner which effectively excludes
medically necessary treatment merely because
advances in medical technology have eliminated
the need for prolonged hospitalisation.
13.16. It is further submitted that the Permanent Lok
Adalat, having considered the material placed
before it, has rightly rejected the insurer's
technical objection and directed reimbursement
of the expenditure incurred by respondent
No.1.
13.17. Learned counsel accordingly submits that the
Permanent Lok Adalat's award does not suffer
from any jurisdictional or legal infirmity
warranting interference under Article 226/227
of the Constitution of India. Respondent No.1
was duly insured; the injections were
prescribed as part of the treatment of his Stage
IV prostate cancer; the expenditure was
incurred pursuant to such medical advice; and
the mere fact that the injections could be
administered without hospitalisation cannot
disentitle him from reimbursement.
13.18. He therefore submits that the writ petition is
devoid of merit and is liable to be dismissed,
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leaving intact the award passed by the
Permanent Lok Adalat.
14. Sri Kashyap N. Naik, learned counsel appearing for
respondent No.2 submits that the insurance scheme
having been taken over by the petitioners, it is the
petitioners who are liable under the said scheme.
15. Sri.Vignesh Shetty, learned counsel appearing for
respondents No.3 and 4 submits that respondents
No.3 and 4 are not liable to make payment of any
amounts since erstwhile Vijaya Bank which has been
taken over by Bank of Baroda had formulated the
insurance scheme under which respondent No.1 had
made payment of money to respondent No.2 initially
and thereafter to the petitioners and as such, the
contract of insurance is between the petitioners and
respondent No.1.
16. Heard Sri.Devaiah.I.S, learned counsel for the
petitioners and Sri.Ranjan Shetty, learned counsel for
respondent No.1, Sri.Kashyap N. Naik, learned
counsel for respondent No.2 and Sri.Vignesh Shetty,
learned counsel for respondents No.3 and 4. Perused
papers.
17. The points that would arise for consideration are:
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1) Whether there would be any purpose
served by remanding the matter to the
permanent Lok-Adalat directing the
parties to avail of conciliation procedure as
prescribed under Section 22-C of the Legal
Services Authority Act, 1987?
2) Whether the award passed by the
permanent Lok-Adalat suffers from any
legal infirmity requiring this Court to
intercede?
3) What order?
18. This Court answers the above points as follows.
19. Answer to point No.1 : Whether there would be
any purpose served by remanding the matter to
the permanent Lok-Adalat directing the parties
to avail of conciliation procedure as prescribed
under Section 22-C of the Legal Services
Authority Act, 1987?
19.1. Sri Devaiah I.S., learned counsel for the
petitioners, placing reliance upon Section 22-C
of the Legal Services Authorities Act, 1987,
contended that the matter ought to be
remanded to the Permanent Lok Adalat to
enable the parties to avail themselves of the
conciliation process contemplated under the
said provision. The submission proceeds on the
premise that the Permanent Lok Adalat,
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noticing that neither party had appeared for
conciliation, recorded failure of conciliation and
proceeded thereafter to adjudicate the dispute
by recording evidence.
19.2. There can be little doubt that conciliation
constitutes an important and integral
component of the statutory scheme governing
the functioning of a Permanent Lok Adalat.
Section 22-C(4) requires the Permanent Lok
Adalat to conduct conciliation proceedings
between the parties, while sub-section (5) casts
upon it the duty to assist the parties in their
attempt to arrive at an amicable settlement in
an independent and impartial manner. The
object is plainly to provide the parties with an
opportunity to resolve the dispute consensually
before the Permanent Lok Adalat proceeds to
adjudicate the dispute under sub-section (8).
19.3. The submission of learned counsel for the
petitioners, therefore, cannot be said to be
without substance insofar as it emphasises the
importance of the conciliation process.
Ordinarily, the statutory mechanism ought to
be followed in its proper sequence, and a
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Permanent Lok Adalat should make a
meaningful effort to facilitate an amicable
settlement before proceeding to adjudication.
19.4. The question, however, is not merely whether
conciliation ought to have been attempted, but
whether, in the peculiar circumstances of the
present case, any useful purpose would now be
served by remanding the matter for that
purpose.
19.5. During the course of hearing, this Court
specifically enquired of learned counsel for the
petitioners whether, having regard to the lapse
of time and the nature of the dispute, the
petitioners were willing to make any proposal
which could facilitate an amicable settlement.
On instructions, learned counsel made a
categorical submission that the petitioners were
not willing to make any offer whatsoever, since
their consistent stand was that they were under
no obligation to reimburse any amount incurred
towards the Zoladex and Xgeva injections.
19.6. The significance of this submission cannot be
lost sight of. The dispute raised by respondent
No.1 is a claim for reimbursement of medical
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expenses under the insurance policy. The
petitioners' position is not that a lesser amount
is payable, or that the claim can be settled on
commercial or equitable terms. Their position is
that no amount is payable at all.
19.7. Conciliation is a consensual dispute-resolution
mechanism. It requires the parties, with the
assistance of the Permanent Lok Adalat, to
explore the possibility of arriving at a mutually
acceptable resolution. The statutory obligation
upon the parties to cooperate in good faith
under Section 22-C(6) does not, however,
empower the Permanent Lok Adalat to compel
either party to accept a settlement against its
will.
19.8. In the present case, the petitioners, even
before this Court, have maintained an
unequivocal position that there is no liability on
their part under the insurance policy.
Respondent No.1, on the other hand, continues
to assert his entitlement to reimbursement.
Thus, there is no indication of any area of
consensual resolution which could presently be
explored by remanding the matter.
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19.9. It would be incongruous to remit the matter
merely to direct the parties to undertake
conciliation when one party has categorically
stated that it is not willing to make any
payment or consider any settlement proposal.
Conciliation cannot be converted into a process
whereby one party is required to persuade the
other to abandon or withdraw a claim which it
asserts to be legally sustainable. Nor can a
Permanent Lok Adalat compel either party to
agree to terms which it does not accept.
19.10. More importantly, the petitioners themselves
have invited this Court to examine the merits of
their contention that the expenditure incurred
towards Zoladex and Xgeva injections is outside
the scope of the insurance coverage. Having
adopted a categorical position on the
substantive liability and having expressly
declined any settlement proposal, the
petitioners cannot seek a remand merely on the
ground that the conciliation process before the
Permanent Lok Adalat was not pursued to its
logical conclusion.
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19.11. The passage of time is also a relevant
consideration. The proceedings were instituted
before the Permanent Lok Adalat in 2022; the
award came to be passed on 20.09.2023; and
the present writ proceedings have thereafter
remained pending. At this stage, remitting the
matter for a conciliation exercise which, on the
admitted stand of the petitioners, has no
realistic possibility of yielding a settlement
would result only in further delay without
advancing the object of the legislation.
19.12. The purpose of constituting a Permanent Lok
Adalat is undoubtedly to provide an
expeditious, inexpensive and efficacious
mechanism for resolution of disputes through
conciliation and, where conciliation fails,
adjudication. The conciliation mechanism
cannot, however, be viewed in isolation from
the subsequent statutory power of the
Permanent Lok Adalat under Section 22-C(8) to
decide the dispute where the parties fail to
reach an agreement.
19.13. Although the importance of the conciliation
process under Section 22-C is recognised,
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remand at this stage would serve no
meaningful purpose. The petitioners have
expressly stated that they do not propose to
make any payment or settlement offer and
maintain that the claim itself is not
maintainable. There is consequently no
demonstrated possibility of an amicable
settlement which could justify setting aside the
proceedings already undertaken and directing a
fresh exercise in conciliation.
19.14. This Court, therefore, answers Point No.1
holding that, notwithstanding the importance of
the conciliation procedure contemplated under
Section 22-C of the Legal Services Authorities
Act, merely because the Permanent Lok Adalat
did not pursue conciliation further, it would not
be appropriate to remand the matter for a
conciliation exercise which, in view of the
categorical stand of the petitioners, would
serve no useful purpose.
20. Answer to point No.2: Whether the award
passed by the Permanent Lok-Adalat suffers
from any legal infirmity requiring this Court to
intercede?
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20.1. The principal contention urged by Sri Devaiah
I.S., learned counsel for the petitioners, is
founded upon Clauses 2.10 and 2.19 of the
insurance policy. According to the petitioners,
Clause 2.19 covers expenses incurred during
hospitalisation, whereas the Zoladex and Xgeva
injections were administered without
hospitalisation. As regards Clause 2.10, it is
contended that a treatment would qualify as
“Day Care Treatment” only when it is
undertaken under general or local anaesthesia
in a hospital/day-care centre and would
otherwise have required hospitalisation for
more than 24 hours. Since the injections in
question were administered without general or
local anaesthesia and did not require
hospitalisation, it is contended that the
expenditure incurred thereon falls outside the
scope of the policy.
20.2. The contention requires consideration in the
context of the nature of the ailment suffered by
respondent No.1 and the purpose for which the
two injections were prescribed. It is not in
dispute that respondent No.1 was suffering
from Stage IV carcinoma of the prostate and
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that he was undergoing treatment for the said
disease. It is also not in dispute that the insurer
had reimbursed the expenses incurred towards
his hospitalisation and treatment for prostate
cancer.
20.3. The material placed before the Permanent Lok
Adalat indicates that Zoladex and Xgeva were
prescribed as part of the continuing treatment
and management of respondent No.1's prostate
cancer. Zoladex, containing Goserelin Acetate,
is used as hormonal therapy in the
management of prostate cancer by suppressing
testosterone. Xgeva, containing Denosumab, is
used in appropriate cancer patients to reduce
skeletal complications associated with the
disease, particularly where there is involvement
of, or risk to, the skeletal system.
20.4. Thus, these injections cannot be characterised
as medicines administered for an ailment
unconnected with the disease for which
respondent No.1 was undergoing treatment.
They constituted medically prescribed
treatment forming part of the continuing
management of his advanced prostate cancer.
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The fact that the injections were administered
at intervals of three months and after the
chemotherapy cycles does not sever their
connection with the underlying disease or
convert them into treatment unrelated to the
insured condition.
20.5. The question, therefore, is whether the
petitioners can deny reimbursement merely
because, owing to the nature of the treatment,
respondent No.1 did not require hospitalisation
for administration of the injections.
20.6. In the considered opinion of this Court, the
answer has to be in the negative in the facts
and circumstances of the present case.
Hospitalisation is not an end in itself; it is a
mode in which medical treatment may be
administered. Where advances in medical
science enable a treatment which would
otherwise have required a longer hospital stay
to be administered safely and effectively
without hospitalisation, the absence of
hospitalisation cannot, by itself, be treated as
determinative of whether the treatment is
connected with the insured disease.
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20.7. In the present case, respondent No.1 was
already undergoing treatment for advanced
prostate cancer. The injections were
administered pursuant to medical advice as
part of the continuing treatment. There is no
suggestion that respondent No.1 avoided
hospitalisation in order to defeat the terms of
the policy or that he voluntarily chose an
outpatient mode of treatment merely to claim
reimbursement. On the contrary, the very
nature of the injections was such that
hospitalisation was not considered medically
necessary.
20.8. A contrary interpretation would lead to an
anomalous result. If a particular treatment
necessarily required hospitalisation, the
expenditure would be reimbursable; but if, by
reason of medical advancement, the identical
therapeutic objective could be achieved through
a short outpatient procedure without occupying
a hospital bed, the insured would lose
coverage. Such an interpretation would make
the availability of insurance dependent upon
the manner of administration of the treatment
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rather than its therapeutic purpose and its
connection with the insured disease.
20.9. Clause 2.10 itself recognises the relevance of
technological advancement by defining day-
care treatment with reference to treatment
which, but for such advancement, would
otherwise have required hospitalisation of more
than 24 hours. The provision, therefore, cannot
be read in isolation or in a manner which
defeats the very rationale for recognising day-
care treatment in the first place.
20.10. The petitioners' contention that the absence of
general or local anaesthesia, by itself, takes the
treatment outside Clause 2.10 also cannot be
accepted without examining the substance and
purpose of the treatment. The administration of
the injections was not an independent or
elective outpatient activity unrelated to the
insured disease. It was treatment prescribed by
the treating doctor in the course of
management of respondent No.1's advanced
cancer.
20.11. It is also significant that the petitioners have
not disputed the underlying medical condition,
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the prescription of the injections, or the fact
that the expenditure was actually incurred. The
objection is essentially that the treatment was
administered without hospitalisation and,
therefore, falls outside the contractual
definition relied upon by the petitioners.
20.12. The construction suggested by the petitioners
would, in the peculiar circumstances of this
case, result in coverage being denied not
because the treatment was unrelated to the
insured disease, but because modern medical
practice made hospitalisation unnecessary.
Such an interpretation cannot readily be
accepted where the treatment is demonstrably
part of the continuing management of the very
disease for which the insured had obtained
coverage.
20.13. It is true that an insurance contract is ordinarily
required to be construed according to its terms
and that the Court cannot rewrite the contract
between the parties. At the same time,
contractual provisions, particularly exclusionary
provisions in a health insurance policy, have to
be construed in the context of the policy as a
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whole and the purpose for which the coverage
was extended. The insurer cannot rely upon an
isolated expression in a definition clause to
defeat coverage in respect of treatment which,
in substance, forms part of the insured's
treatment for the covered disease, unless the
exclusion is clearly attracted.
20.14. In the present case, the petitioners'
interpretation would effectively require
respondent No.1, a patient suffering from Stage
IV prostate cancer, to undergo hospitalisation
for the limited purpose of satisfying a
contractual condition even though such
hospitalisation was medically unnecessary.
Neither the patient nor the hospital can
reasonably be expected to undertake an
unnecessary hospital admission merely to bring
the treatment within the insurer's preferred
interpretation of the policy.
20.15. The Permanent Lok Adalat, having considered
the nature of the treatment and the
circumstances in which the injections were
administered, has directed reimbursement of
the expenditure incurred by respondent No.1.
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This Court, exercising jurisdiction over the
award, does not find the conclusion reached by
the Permanent Lok Adalat to be so
unreasonable, perverse or contrary to the
terms of the policy as to warrant interference.
20.16. The conduct of the petitioners also requires
consideration while examining the
consequential relief. Respondent No.1 had
obtained coverage under the scheme after
payment of the requisite premium. During the
currency of the policy, he was undergoing
treatment for a serious and advanced disease.
The insurer reimbursed the expenses incurred
during his hospitalisation but declined the
expenditure towards the two injections which
were prescribed as part of the continuing
treatment of the same disease.
20.17. The Court is conscious that the mere fact that
an insured person is suffering from a serious
ailment cannot, by itself, enlarge the
contractual liability of an insurer. Compassion
cannot substitute the terms of a contract.
However, where the claim falls within a
reasonable construction of the policy and the
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treatment is admittedly connected with the
insured disease, the insurer cannot adopt an
unduly restrictive interpretation merely because
the treatment was capable of being
administered without hospitalisation.
20.18. In the present case, the petitioners have
persisted in their objection notwithstanding the
finding of the Permanent Lok Adalat. The filing
of a writ petition, by itself, cannot be
characterised as an abuse of process merely
because the insurer has challenged an adverse
award. A party is entitled to invoke the
jurisdiction of this Court where it genuinely
disputes its legal liability. However, once the
challenge is examined and found to rest on an
unduly restrictive interpretation of the policy,
the Court is entitled to consider whether the
continuation of such litigation warrants any
consequential order as to costs.
20.19. Having regard to the nature of the claim, the
amount involved, the fact that the expenditure
arose from medically prescribed treatment for
the very disease for which respondent No.1 was
insured, and the circumstances in which the
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claim came to be denied, this Court is of the
view that the petitioners' challenge does not
warrant interference with the award.
20.20. Accordingly, this Court holds that the
Permanent Lok Adalat has not committed any
error of law or jurisdiction, nor has it adopted a
view which warrants interference in exercise of
the writ jurisdiction of this Court. The award
directing reimbursement of the medical
expenses incurred by respondent No.1 towards
Zoladex and Xgeva injections is consequently
liable to be sustained.
20.21. In view of the above, Point No.2 is answered in
the negative, holding that the award passed by
the Permanent Lok Adalat does not suffer from
any legal infirmity warranting interference by
this Court.
21. Answer to point No.3: What Order?
21.1. In view of the answers to points No.1 and 2 and
for all the reasons aforestated, this Court
passes the following:
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ORDER
i) The writ petition is dismissed by
imposing nominal cost of Rs.50,000/-
payable by the petitioners-Insurer to
respondent No.1 within a period of 30
days from the date of receipt of a copy of
this order.
ii) The petitioners are also directed to make
payment of the amounts as directed by
the Permanent Lok-Adalat to respondent
No.1 within 30 days from the date of
receipt of this order with up-to-date
interest.
Sd/-
(SURAJ GOVINDARAJ)
JUDGE
KTY
List No.: 2 Sl No.: 1