Insurer not a necessary party in medical negligence cases before consumer forum: HC

The HC ruling came during the hearing of a writ petition filed by a doctor, who challenged the rejection of his plea to implead New India Assurance Company Limited as a respondent in a medical negligence complaint pending before the District Consumer Disputes Redressal Commission.

It was observed by the Court,

"The insurance company, in the present case of medical negligence, is not a necessary party, because the insurance company is not a person in whose absence, any effective order cannot be passed or compensation cannot be awarded against the hospital or the doctors. In our view, the insurance company is also not a proper party as the presence of the insurance company would not to be required to enable the Court to completely, effectively or adequately adjudicate upon the matters in dispute before the Consumer District Forum."

"Reason is that, the issue before the District Forum, inter alia would be the negligence or no negligence on the part of the doctors or the deficiency of service. For such adjudication of such question, the presence of the insurance company is not required. Those can be adjudicated effectively even in the absence of the insurance company based on the evidence filed or to be filed in C.C. In case, the liability is fixed for compensation on the petitioner, the insurance company has to reimburse the petitioner subject to the insurance agreement between them, but the claimant/1st respondent has nothing to do with such agreement. That does not make the insurance company a necessary or a proper party, in the dispute before the District Forum, between the petitioner and the claimant," the bench further observed.

The concerned issue arose after a complaint was filed before the District Consumer Commission, alleging medical negligence against the petitioner, who is a doctor, and other doctors in a Hyderabad-based hospital.

An application under Order I Rule 10 of the Civil Procedure Code was moved by the petitioner seeking to implead the Insurance Company as a party, citing that the hospital was covered under a professional indemnity insurance policy.

However, the District Consumer Commission dismissed the application as it held that there was no privity of contract between the complainant and the insurance company and that the complainant was neither a consumer nor a beneficiary of the insurance policy. It also held that if the petitioner was eventually found liable, he could seek indemnification separately from the insurer.

Even though the District Commission's decision was challenged, later the State Consumer Disputes Redressal Commission, Vijaywada, and the National Commission also upheld the order. Following this, the petitioner-doctor approached the Andhra Pradesh High Court under Article 226 of the Constitution, seeking to quash these orders.

Observations by High Court: 

While considering the petition, the Andhra Pradesh High Court examined the scope of Order I Rule 10 CPC and the Principles governing the inclusion of parties in civil and quasi-judicial proceedings. 

Referring to the legal precedents including in the case of Sudhamayee Pattanik v. Bibhu Prasad Sahoo (2022) and Mumbai International Airport (P) Ltd. v. Regency Convention Centre & Hotels (P) Ltd. (2010), the HC bench reiterated that the plaintiff is the dominus litis and cannot be compelled to implead a person who is neither a necessary nor a proper party.

"It is well settled in law that the plaintiff is dominus litis. He has to choose his opponent. The plaintiffs cannot be compelled to implead a person as party unless such person is a necessary or a proper party. Such right as dominus litis is subject to the orders of the Court to implead a necessary or proper party," observed the HC bench.

"...the issue before the District Forum, inter alia would be the negligence or no negligence on the part of the doctors or the deficiency of service. For such adjudication of such question, the presence of the insurance company is not required," it further explained.

The HC bench also distinguished cases under the Motor Vehicles Act, 1988, and noted that "...so far as the Motor Vehicles Act is concerned, the insurance company in such claim cases, becomes a necessary party to be impleaded. Any such comparison cannot be made for its impleadment in the cases for compensation before the District Forum due to medical negligence."

It was further explained by the court that any contractual liability between the doctor and the insurer was independent of the patient's claim and could be settled separately under the terms of the insurance policy, without affecting the right to compensation of the complainant.

Accordingly, the bench concluded that the District Commission's order did not suffer from any illegality and it held,

"We hold that the insurance company is neither a necessary nor proper party in C.C.No.112 of 2023 claiming compensation for medical negligence against the petitioner. The claimant/1st respondent is dominus litis and cannot be compelled to implead the insurance company."

"The Writ Petition is devoid of merits and is dismissed. There shall be no order as to costs," ordered the HC bench.

To view the order, click on the link below:

https://medicaldialogues.in/pdf_upload/andhra-pradesh-hc-insurance-company-305532.pdf

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