Insurance company must reimburse compensation for negligence by doctors as per policy liability: Supreme Court

New Delhi: In a recent judgment, the Supreme Court bench has held that the Insurance Company covering the doctors, will have to reimburse the compensation awarded to the complainant for any negligence to the extent of its liability covered under the Insurance Policy, as applicable to the concerned doctor.

Such a direction has been given by the top court bench of Justice A.S. Bopanna and Justice Dipankar Datta while considering an appeal challenging the order by the National Consumer Disputes Redressal Commission (NCDRC) directing compensation to a complainant in a medical negligence case. The bench rejected the hospital's appeal and held that insurers must reimburse compensation to the Complainant to the extent of its liability under the policy.

The matter concerns the NCDRC order dated 06.02.2013, by which the top consumer court had held the Appellant Hospital and its doctors liable for medical negligence resulting in the death of the patient. Holding them guilty, the NCDRC bench directed them to pay compensation to the complainant in the main case.

However, challenging the NCDRC order, the hospital approached the Supreme Court bench. After perusing the judgment, the Apex Court observed that NCDRC had arrived at the conclusion after referring to the available evidence and analyzing it after considering the report received from AIIMS Hospital.

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Taking note of this, the Supreme Court bench observed,

"We see no other contrary material available on record to arrive at a different conclusion. Insofar as the conclusion reached by the NCDRC with regard to the negligence, it is un-exceptionable and as such does not call for interference."

Arriving at such a conclusion, the bench opined that one aspect of the matter which required clarification was regarding the liability of the insurer i.e. New India Assurance Co. Ltd. 

The court observed that the Insurance Company issued the policy in favour of the doctors under the appellant hospital named Nagarmal Modi Sewa Sadan and the concerned doctors had been held to be negligent by the NCDRC bench.

"In such circumstance, it is the Insurance Company which would have to reimburse the compensation to the extent of the liability under the Policy as against the said respondents," the Supreme Court bench observed at this outset.

Relying upon the top court judgment in the case of Sheth M.L. Vaduwala Eye Hospital Vs. Oriental Insurance Co. Ltd., the counsel for the Insurance Company contended that when the Policy is issued in the name of the Doctors and the benefit is claimed by the Hospital, it is not payable by the Insurance Company.

However, the bench distinguished the facts from the concerned judgment from the present case. It noted that, in this case, apart from the Appellant Hospital, the doctors had also been made parties as respondents before the NCDRC bench.

"Having perused the same, we note in the said case the Hospital itself was seeking to take advantage of the policy. In the instant facts, as noted, in addition to the appellant-Hospital, the Doctors in whose name the Policy had been issued were also arrayed as respondents in the NCDRC and the NCDRC having adverted to all the contentions had arrived at its conclusion that the said Doctors were negligent and such conclusion has attained finality in view of our above conclusion," noted the Supreme Court.

Holding the Insurance Company liable to reimburse compensation, the bench ordered,

"It is in that circumstance, in the instant case the Insurance Company is liable to reimburse to the extent they had agreed under the Policy. Hence to that extent, we modify the order holding the Insurance Company(Respondent No.6) to be liable to the said extent and in all other respects, the appellant shall reimburse the compensation jointly and severally."

To read the order, click on the link below:

https://medicaldialogues.in/pdf_upload/supreme-court-compensation-208250.pdf

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