Delay In Settling Medical Insurance Claim Can Be Grounds For Seeking Compensation, But Does Not Amount To Criminal Offence: Delhi HC

“… it would be pertinent to record that such incidents of alleged harassment felt by the patients in settling their Final Bills, is not an untold story but is frequently suffered by the patients. Their harassment gets compounded by the fact that they come out of a trauma of an ailment under treatment but even for discharge, there are long drawn procedures for settling the bills with the Insurance Company. This harassment and mental trauma by the patients and their family members who are pushed to follow the matter with the Insurance Company for getting the requisite approvals which is riddled with delays at the end of the Insurance Companies, is well understandable. Much angst has been expressed on this system of getting the approvals from the Insurance Company at many forums and by the Courts, but such situation may be a ground for seeking compensation for mental harassment, but does not tantamount to any criminal offence.” Justice Neena Bansal Krishna observed.

It was further noted, “Though many a times, many Courts have recommended that there may be some Regulatory Policy and even a Charter of Patients Rights, has been proposed by NHRC but unfortunately, no final redressal to this aspect, has been worked out till date. It is a matter which must be taken up at the level of State Government/Central Government in consultation with IRDA and the Medical Council of Delhi and India, to work out some mechanism to smoothen the discharge process and settling of the medical Bills.”

The Court was hearing the petitioner's challenge to the Sessions Court's order, which quashed the Summoning Order against the managers of Max Super Speciality Hospital.

The facts of the case are that the petitioner was diagnosed with Cysticercosis of right hand and got himself operated at the Max Hospital. He was holding a Cashless Insurance Policy from Max Bupa Health Insurance Company Ltd. The charges at the hospital were stated to be around Rs.1.79 lakh. The insurance company gave a pre authorization of Rs. 75,000 and assured that the further amount would be approved subsequently. As there was no approval for the balance amount on the date of admission, the Hospital asked the petitioner to deposit an advance sum of Rs. 1.45 lakh.

After the petitioner's operation, there was some delay in discharge from the Hospital on account of the requisite approvals to come from the Insurance Company. Subsequently, approvals were received and the excess amount deposited by the petitioner was refunded. Further, there was an error in preparing the final bill, wherein the petitioner was not given credit of Rs. 12495. This was however, rectified after he contacted the Customer Care Unit.

The main grievance of the petitioner was that despite the approval from the insurance company of the entire amount, the hospital claimed that they had only received an amount of Rs. 1,04 lakh and the petitioner was forced to pay the balance amount of Rs. 57,332.

The petitioner contended that he was induced to deposit a sum in advance before his surgery was conducted, thereby causing wrongful loss to him and wrongful gain to the hospital. He argued that offence of cheating was made out as the hospital unauthorisedly debited an amount of Rs.57332 from the advance payment made by him.

He further contended that he was wrongfully restrained from leaving the hospital and that he was permitted to leave only later in the night. He argued that there was a larger conspiracy at the Max Hospital to defraud the patients and such a decision had been taken at the highest level of the Management.

He filed a complaint before the Magistrate, who recorded pre-summoning evidence of the petitioner for offences under Section 342 (wrongful confinement), 406 (criminal breach of trust), 420 (cheating) and 120B (criminal conspiracy) of IPC.

Max Hospital and the accused managers challenged the summoning order before the Sessions Court. The Sessions Court set-aside the summoning order, noting that the order suffered from gross illegality and infirmity. The petitioner thus filed the present petition challenging the Sessions Court's order.

The High Court observed that prima facie no offence of cheating was made out. It noted that the hospital did not have any fraudulent intention as it asked the petitioner to deposit an advance amount only because it received only a sum of Rs. 75000 as advance.

It further noted that the advance amount received was adjusted at the time of final bull and thus no offence of misappropriation was made out. It also noted that there was only a delay of a few hours in discharging the petitioner on account of completion of formalities and thus, there was no intentional wrongful restraint.

On deposit of the balance amount, it noted “It may seem to be an onerous condition, but definitely cannot be stated to be extraction of money nor can any dishonesty or fraudulent intention be attached to the Max Hospital, in this regard. The Petitioner had been informed in advance about the payment schedule and the amounts which would be required to be deposited.”

In view of the above, the Court upheld the Sessions Court's order quashing the summoning order.

Case title: Shashank Garg vs. State

Citation: 2025 LiveLaw (Del) 454