Negligence By Doctor | Insurer Liable To Reimburse Compensation To Complainant To The Extent Of Its Liability Under The Policy: Supreme Court

The Supreme Court has held that in a case of negligence committed by Doctor, the Insurance Company which covered the Doctor would have to reimburse the compensation to the Complainant to the extent of its liability under the Policy, as against the Doctor concerned.

The Bench comprising of Justice A.S. Bopanna and Justice Dipankar Datta, while adjudicating an appeal filed in Nagarmal Modi Sewa Sadan v Prem Prakash Rajagaria & Ors., has declined to interfere with the finding of National Consumer Disputes Redressal Commission (NCDRC) that Doctors working under the Hospital were negligent. It was observed that the finding was arrived at by the NCDRC after perusing evidence and considering the report received from the AIIMS Hospital. Therefore, the conclusion with respect to negligence did not warrant any interference.

BACKGROUND FACTS

New India Assurance Co. Ltd. had issued policy in favour of the Doctors working under the hospital named Nagarmal Modi Sewa Sadan (“Appellant”). The death of a patient was caused in the Appellant hospital while being treated by the Doctors of the Hospital (Respondent No. 2, 3 & 4). The Complainant (Respondent No. 1) filed a complaint before consumer court, seeking compensation on the ground that death was caused by negligence.

On 06.02.2013, the National Consumer Disputes Redressal Commission (“NCDRC”) held the Appellant Hospital as well as the concerned Doctors liable for negligently causing the patient’s death and directed them to pay compensation to Respondent No. 1.

The Appellant Hospital challenged the NCDRC order before the Supreme Court.

SUPREME COURT VERDICT

The Bench declined to interfere with the NCDRC’s finding that Doctors working under the Appellant Hospital were negligent. It was observed that the finding was arrived at by the NCDRC after perusing evidence and considering the report received from the AIIMS Hospital. Therefore, the conclusion with respect to negligence did not warrant any interference.

Insurance Company liable to reimburse to the extent they had agreed under the Policy

On the issue of insurer’s liability in payment of compensation to deceased’s family, it was opined that since the Doctors have been held to be negligent by the NCDRC, it is the Insurance Company which would have to reimburse the compensation to the extent of the liability under the Policy as against the Doctors concerned. It has been observed as under:

“It is not in dispute that the said Insurance Company have issued the policy in favour of the Doctors working under appellant i.e. in favour of Dr. Raman Garodia and Dr. H.P. Shanyar. The said Doctors have been held to be negligent by the NCDRC. 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.”

Further, the Insurance company placed reliance on the judgment in Sheth M.L. Vaduwala Eye Hospital Vs. Oriental Insurance Co. Ltd., (2021) SCC online 3449, and contended that when the Policy issued is in the name of the Doctors and the benefit is sought to be claimed by the Hospital, the same is not payable by the Insurance Company. However, the Bench distinguished the facts of the said judgment from the case at hand. It has been observed that in addition to the Appellant-Hospital, the Doctors in whose name the Policy had been issued, were also arrayed as respondents in the NCDRC. Since the NCDRC has held the Doctors to be liable for negligence, such conclusion has attained finality.

The Bench held that the Insurance Company is liable to reimburse compensation to the Complainant to the extent they had agreed under the Policy. Accordingly, the Insurance Company has been directed to pay the compensation to the extent of its liability under the Policy; and the remaining amount to be paid by the Hospital and the concerned Doctors jointly and severally.

Case Title: Nagarmal Modi Sewa Sadan v Prem Prakash Rajagaria & Ors.

Citation: 2023 LiveLaw (SC) 344

Counsels for Parties: Ms. Ruchira Gupta, Mr. Shishir Deshpande AOR, Ms. Pooja Tripathi, Ms. Harshita Sharma, Mr. Deep Narayan Sarkar, Ms. Astha Tyagi, Mr. Manish Kumar, Mr. Amit Kumar, Mr. Piyush Kaushik, Ms. Aparajita Jha, Mr. Brian Henry Moses, Mr. Madan Lal Sagar, Ms. Divya Roy AOR, Dr. Sushil Kumar, Ms. Sunita Gupta, Ms. Mridula Ray Bharadwaj AOR, Ms. Surbhi Mehta AOR.

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