Orissa High Court

Biplab Nayak vs Registrar on 27 April, 2022

             IN THE HIGH COURT OF ORISSA AT CUTTACK

                           W.P.(C) No.1112 Of 2014
                           (Through hybrid mode)

        Biplab Nayak                          ....             Petitioner

                                       Mr. Ramdas Acharya, Advocate
                                   -versus-

        Registrar, Biju Patnaik University    ....      Opposite Parties
        of Technology and others
                                       Smt. Prativa Mishra, Advocate
                                         Mr. B.K. Mohanty, Advocate
                                           Mr. S.J. Mohanty, Advocate


                  CORAM: JUSTICE ARINDAM SINHA
                                  ORDER

Order                            27.04.2022
No.
  18.   1.      Mr. Acharya, learned advocate appears on behalf of petitioner

and had on 15th March, 2022 submitted that his client got admission in

a college under the University (opposite party no.1). His client met

with road accident on 23rd July, 2012. The University had taken a

policy to cover the students. The University, in its counter, paragraph-

8 has clearly admitted that consequence of the accident being

hospitalization and amputation of his client's right hand, was covered

by the policy.

2. Court had directed petitioner as well as the insurance company

(opposite party no.3) to file additional affidavits disclosing relevant

// 2 //

information. The affidavits were filed. Petitioner disclosed, inter alia

Discharge Summary dated 5th September, 2012 from Ashwini Hospital

(Unit of Cuttack Hospitals Pvt. Ltd.) saying, inter alia, as extracted

therefrom and reproduced below.

"SURGERY:

1st surgery done on 07-08-2012 Procedure- Debridement & removal of all necrotic tissue from right hand.

2nd Surgery done on 09.08.2012 Procedure-Debridement of all necrotic mussle. Right forearm amputated at the proximal 1/3rd level. Amputated stump closed with skin flap. PVC drain given, The raw area covered by ssg taken from left thigh. The axilla wound margin freshened and closed with 2 pvc drain in two layers. Dressing done 3rd Surgery done on 28/08/2012 Procedure- Debridement of the right upper limb wound. Skin harvested from left thigh. On 29-08-2012 - SSG done in ward."

(emphasis supplied)

The insurance company had also filed additional affidavit disclosing

Memorandum of Understanding (MOU) dated 31st July, 2012,

containing terms of the policy.

3. Mr. Acharya submits, the accident took place on 23rd July,

2012. His client was hospitalized and thereafter discharged. On query

from Court he submits, his client paid the amount demanded against

// 3 //

premium on the insurance policy, on 14th July, 2012. The accident

occurred subsequent thereto, on 23rd July, 2012. He submits, though

the policy commenced thereafter on and from 1st August, 2012 and

was valid for a year, his client suffered hospitalization and amputation

by the 2nd surgery conducted on 9th August, 2012. His client claimed

the hospitalization charges as covered by the policy. He refers to the

MOU and in particular relies on following therefrom, quoted below.

"Hospitalisation Benefits-Students

The policy covers reimbursement of Hospitalisation expenses incurred by the student as an inpatient due to disease/illness/injury sustained by him/her. In the event of any claim becoming admissible under this policy, the Company will pay to the insured student through the college/institution the amount of such expenses as would fall under different heads mentioned below, and as are reasonably and necessarily incurred thereof by or on behalf of such insured students, but not exceeding the sum insured of Rs.50,000/- (fifty thousand) during the policy period."

4. Mr. Acharya reiterates, the University in its counter, paragraph-

8 has clearly admitted that consequence of the accident being

hospitalization and amputation of his client's right hand, is covered by

the policy. He relies on entry-H in Table-I of the MOU to submit,

// 4 //

there was Buffer Sum Insured, to be kept as reserved for the students,

to meet expenses arising out of extreme medical cases only as per

decision of competent authority of the University. The coverage was

Rs.10,00,000/-. He submits, the decision was taken as reflected from

paragraph-8 of the counter. There be direction for payment out of the

Buffer Sum Insured.

5. Mr. Mohanty, learned advocate appears on behalf of the

University and submits, the intimation of accident was given long after

expiry of coverage period.

6. Ms. Mishra, learned advocate appears on behalf of the

insurance company and had earlier submitted, the writ petition is not

maintainable as it contains money claim. Without prejudice to such

contention, she had on 12th April, 2022 relied on several judgments of

the Supreme Court.

(i) New India Assurance Co. Ltd. v. Ram Dayal, reported in

(1990) 2 SCC 680, whereby the Supreme Court declared that the

policy became effective from commencement date of the policy.

(ii) National Insurance Co. Ltd. v. Jikubhai Nathuji Dabhi,

reported in (1997) 1 SCC 66, whereby it was found that the accident

took place before renewal and, therefore, not covered under the

policy.

// 5 //

(iii) New India Assurance Co. Ltd. v. Sita Bai (Smt.),

reported in (1999) 7 SCC 575, whereby it was found that the motor

vehicle policy commenced after the accident and, therefore, the claim

was not covered.

(iv) New India Assurance Co. Ltd. v. Rakesh Talwar,

reported in (2000) 9 SCC 229. The Supreme Court said the same

thing regarding the insurance company as cannot be made liable for

compensation on accident, when the policy was taken subsequent to

the time of accident.

7. She reiterates, the accident took place before commencement

of the policy. She also draws attention to letter dated 16 th December,

2013 written by Senior Divisional Manager of her client to the

Institute of Technology under the University. Text of the letter is

reproduced below.

"In this connection we would like to inform you that we have received claim intimation of Biplab Nayak about his accidental hospitalization, which is forwarded by you on 09.12.2013. Although the claim is inordinately delayed in intimation i.e. after more than one year from its occurrence, we have processed the file and found that Sri Biplab Nayak was injured due to accident on 23.07.2012 and amputation of his right hand was done at Ashwini

// 6 //

Hospital, sector-1, C.D.A. Bidanasi, Cuttack at a subsequent date i.e. on 25.07.2012. As per student's application forwarded by you it is also observed that, Sri Biplab Nayak is a 1st year B.Tech student and was admitted in Mechanical Branch in your institution on 14.07.2012. But as per the MOU signed with BPUT and also insurance premium received from BPUT on 31.07.2012, our policy started from 01.08.2012 for a period of one year i.e. up to 31.07.2013 for the students of 2012- 2013, new batch admitted during 2012. Under this circumstance, the date of loss does not come in the policy period for which have not been able to accept the liability for the said loss. We are extremely sorry for the inconvenience caused to you."

She submits, petitioner has disclosed private hospital Discharge

Summary. Information with her client is otherwise that the amputation

took place on 25th July, 2012, before commencement of the policy.

Furthermore, petitioner's suffering is a consequence of the accident.

The policy covers consequences of accident. Fact to be determined, for

liability of the insurer to arise on the peril insured, is accident. The

accident took place before commencement of the policy and all

consequences thereby are excluded from the cover. She reiterates, this

is what the Supreme Court found in the several cases relied upon by

// 7 //

her.

8. Position taken by the insurance company is that there is no

liability under the policy since the accident took place prior to its

commencement. This is the reason given in relied upon letter dated

16th December, 2013, disclosed in its counter. It will appear from

extract therefrom that the amputation was said to be done at Ashwini

Hospital. As aforesaid, petitioner has disclosed by additional affidavit,

Discharge Summary dated 5th September, 2012. In the Discharge

Summary inter alia, following was said.

"On 25/07/2012-Debridement of necrotic muscles of the right forearm was done."

The Discharge Summary was issued by Ashwini Hospital. It is clear,

the insurance company took this information to mean there was

amputation on 25th July, 2012. Said Discharge Summary goes on to say

that second surgery was done on 9th August, 2012, whereby right

forearm was amputed and third surgery was also done on 28th August,

2012.

9. Court is convinced that the hospitalization and surgeries were

required by reason of petitioner having met with the accident. The

policy having commenced after the date of the accident, the insurance

company's position, of the claim not being covered thereby. However,

// 8 //

the University has said in its counter (paragraph-8) that the claim is

covered. Petitioner has relied on such statement to make submissions as

recorded above. The statements made by the University in paragraph 8

of its counter are reproduced below.

"8. That as per the terms and conditions contained in the said MOU (Annexure-A/1), the policy will be valid for a period of twelve months with effect from 01.08.2012 to 31.07.2013. The petitioner in his Writ Petition has admitted that he had met with an accident on 23.07.2012 and the petitioner stayed for more than six months in hospital for treatment. The medical records filed by the petitioner reveals that the petitioner had undergone three surgeries, the first one on 7.08.2012 and the second one on 9.08.2012 and the third and the last one on 28.08.2012 at Ashwini Hospital, Cuttack and he was discharged from the Hospital only on 5.09.2012. It is most respectfully submitted here that the period of hospitalization and the surgeries were performed during the insurance coverage period and as such the petitioner is fully covered under the insurance policy."

10. The MOU also states coverage of hospitalization benefits as

reproduced above. Close scrutiny of this coverage reveals cover for

hospitalization expenses incurred by the student as an imposition due to

// 9 //

disease, illness, injury sustained by him/her. This under a separate

heading, which does not mention accident. The omission is simply

because disease and illness may not be attributed to accident. However,

injury sustained may be attributable to accident but under this heading

of coverage, the word 'accident' does not find mention.

11. Facts in this case are that petitioner suffered the accident on 23rd

July, 2012. The Discharge Summary says admission was taken in the

hospital on 2nd August, 2012 and discharge was on 5th September, 2012.

It appears, though petitioner suffered the accident but the injury caused

him to be hospitalized, Mr. Acharya submits, for the second time on 2nd

August, 2012. There is reference in the Discharge Summary that on 25th

July, 2012, a procedure was done on right forearm of petitioner. It is

obvious that after the procedure, petitioner stood discharged. The

insurance company, inspite of having filed counter and additional

affidavit, has not disclosed any other source of information regarding

procedure conducted on petitioner by Ashwini Hospital on 25 th July,

2012. The sequence of events, therefore, show that petitioner was

hospitalized, on 2nd August, 2012 and remained hospitalized till 5th

September, 2012. During this time three further surgeries were done on

him, second of which was on 9th August, 2012, whereby his right

forearm was amputated. Considering that this hospitalization happened

// 10 //

during period of coverage and that petitioner had paid the premium

along with admission fees, prior to date of the accident, petitioner

appears to be covered under the hospitalization benefits heading clause

in the MOU. The limit of coverage is Rs.50,000/- during the policy

period. Entry-H in Table-1 adds Buffer Sum Insured to said limit, on it

to be effected on admissible claims. Petitioner's claim having been held

to be admissible under hospitalization benefits heading clause, the

Buffer Sum Insured has to be applied in meeting petitioner's claim.

12. Ms. Mishra points out, the hospitalization benefits heading

clause and all other heading clauses following the table, are elaboration

of statements in the table and cannot be viewed out of context. She

relies on period of insurance given immediately after the table in the

MOU. It is reproduced below.

"Period of Insurance: The Students' Package Insurance Policy as per Table I shall be valied for a period of twelve months from the commencement of the policy i.e. from 01.08.2012."

This submission of Ms. Mishra cannot be accepted because the

clauses that follow Table-I are substantial clauses. For example,

'Personal Accident Insurance-Students' is a heading of substantial

cover clause following the table. Clause-1 under the heading is

reproduced below.

// 11 //

"If such injury shall, within twelve calendar months of its occurrence be the sole and direct cause of the death of permanent disablement of the insured student, the capital sum insured of Rs.2,00,000/- (two lakhs only)."

Above clause clearly means that in event there is an accident within

the period of coverage but the death or permanent disability thereby

occurs twelve months thereafter, which may be beyond expiry of the

cover period, the capital sum insured of two lakhs would be the

insurance benefit. Court is convinced that the headings of cover

following the table are substantial coverage terms, in addition to

Table I.

13. Court finds that there are no disputed questions of fact

involved in this writ petition, where petitioner has come to Court

seeking relief under an insurance policy. The policy was taken by the

University under direction, being subject to Odisha Joint Entrance

Examination held in year 2012, as submitted by Mr. Mohanty. In the