The
Delhi High Court has held that a circular issued by the Delhi government during
the Covid-19 pandemic to regulate hospital charges cannot be interpreted as
limiting the contractual obligations of insurance companies towards their
policyholders.
Justice
Sachin Datta directed United India Insurance Company Limited to release the
balance amount to petitioner Reena Goel, whose Covid-19 hospitalisation claim
was only partly reimbursed despite being within the insured coverage.
The
non-release of the deficit amount is clearly unjustified and contrary to the
clarification/s issued by Irdai, the court noted.
The court observed that the Delhi government’s June
20, 2020, circular was intended to regulate the fees hospitals charged patients
for Covid-19 treatment, not to reduce the reimbursement payable under insurance
policies.
This position, the court emphasised, had already been
clarified by the Insurance Regulatory and Development Authority of India
(Irdai) through circulars issued in January and April 2021.
Goel
was admitted between December 4 and December 18, 2020, and incurred expenses of
?356,295. She was covered under a ?3 lakh base policy and an additional ?3 lakh
“Super Top Up Medicare Policy”. However, the insurer reimbursed only ?175,340,
citing the Delhi government’s circular.
Finding
the insurer’s reliance on the circular unjustified, the court held that the
deficit payment was contrary to Irdai’s clarifications and inconsistent with
the insurer’s conduct in similar cases. It directed United India Insurance to
settle the balance claim within four weeks.
The petitioner was represented by advocates Rakshita
Goyal, Sanyam Gupta, Aditya Goel, Anju Bhushan Gupta, and Ankita Chaudhary. On
behalf of Irdai (respondent no. 2), appearances were made by Abhishek Nanda,
Hrishika Rawat, and Sourabh Singh.