Badar Durrez Ahmed, J.
1. In this writ petition the petitioners have sought issuance of directions to the Respondent No.1 (i) to disburse the payments in respect of claims made by the petitioners under their Mediclaim Policies along with interest thereon and, (ii) to renew the Mediclaim Policy of the petitioners on the original terms and conditions including the premium payable as per the previous year's policy.
2. The facts, which are not in dispute, are that the petitioner No.1 (Shri Ashok Kumar Dhingra) had taken the following Mediclaim Policies as indicated in the table below:-
S.No. Policy No. From To1 48/96/0024 13/05/95 12/05/962 48/98/418 12/01/98 11/01/993 48/99/612 12/01/99 11/01/004 48/2000/577 12/01/00 11/01/015 48/2001/405 12/01/01 11/01/02
3. All the other petitioners being the family members of Petitioner No.1 were also covered under the above Mediclaim Policies which were provided by the Respondent No.1. It is clear that after the first policy there was a break of about two years before the next policy (shown at S.No.2) was taken by the petitioners. There is no dispute that subsequently, i.e. from policy shown at S.No.3 onwards, the policies had been renewed from year to year by the Respondent No.1. The last renewed policy being the Mediclaim policy shown at S.No.5 which covered the period 12.1.2001 to 11.1.2002.
4. The petitioners have been submitting claims particularly with respect to the illness of the petitioner No.4 (i.e., petitioner No.1's son) who has been suffering from Pancreatic is for approximately three years prior to the filing of the present writ petition. Most of these claims have been paid by the respondent No.1. At the time of the filing of the writ petition only two claims, being Claim Nos. 49/01 and 50/01 in respect of the Mediclaim Policy No. 48/2001/405 for a total amount of Rs. 45,285/-, were stated to be pending. The question of settlement of these claims was the subject matter of a complaint made by the petitioners to the Insurance Ombudsman. This aspect will be considered in greater detail hereinbelow. At this stage, it is sufficient to note that these pending claims have also been cleared by the Respondent No.1 to the following extent:-
(1) Rs. 10,555/- in respect of claim No. 49/2001.
(2) Rs. 10,297/- in respect of Claim No. 51/2001.
These payments were made on or about 26.2.2002 as indicated in paragraph 9 of the additional affidavit filed on behalf of the Respondent No.1. Thus, according to Respondent No.1, all claims have been settled and nothing is owing or due from it to the petitioners under the said Mediclaim Policies. On the other hand, the petitioners contend that the claims submitted by them, particularly the afore-mentioned two claims, have not been paid in full and, accordingly, they are entitled to the balance amount along with interest on the delayed payments.
5. In this connection, it may be pointed out that the petitioners had filed a complaint/petition before the Insurance Ombudsman (Respondent No.6) in respect of, inter alia, the aforesaid two claims vide its petition dated 24.7.2001 which was received by the respondent No.6 by registered post on 2.8.2001 as indicated in the counter affidavit filed on behalf of respondent No.6. The Insurance Ombudsman responded to the said complaint dated 24.7.2001 by sending a letter to the petitioners dated 9.8.2001 informing the petitioner No.1 that his complaint has been received on 2.8.2001 and the same has been registered as Complaint No. GI/0139/OIC/01 and that inquiries were being made from the insured (respondent No.1) about the facts of the complaint. The insurance Ombudsman (respondent No.6) also requested the petitioner No.1 to give, inter alia, detailed particulars of his complaint in the enclosed proforma, Xerox copies (photocopies) of documents in support of the claim, and the petitioner No.1's consent and letter of agreement in case the the petitioner No.1 was agreeable for the Insurance Ombudsman to act as a conciliator/arbitrator and authorising him to give his recommendations/award for the resolution of the complaint. Although, the petitioners have stated in the writ petition that this letter issued by the respondent No.6 on 9.8.2001 was received by the petitioners on 9.9.2001, this statement of the petitioners is belied by the very document filed by the petitioners as Annexure 'D' collectively. Pages 48 to 49 is the Complaint Form (under Redressal of Public Grievance Rules, 1998) filled in by the petitioner No.1 and verified and signed by him on 5.9.2001. At page 50 is the Letter of Agreement executed on 5.9.2001 by the petitioner No.1, agreeing thereby to refer the dispute with regard to the non-disbursement of pending Mediclaims of the petitioners to the Insurance Ombudsman for final settlement by him. It is also indicated in the letter of agreement that the provisions of the Indian Arbitration and Conciliation Act, 1996 shall apply. At page 51 is the document dated 5.9.2001 whereby the petitioner No.1 requested the Insurance Ombudsman and gave his unconditional and irrevocable consent to the Insurance Ombudsman to act as a conciliator/arbitrator between the Insurance Company and the petitioner No.1 and to give his recommendations/award for the resolution of the complaint. By this letter the petitioner No.1 also undertook to abide by the recommendations/award of the Respondent No. 6 in respect of the said dispute with regard to the Mediclaims. All these documents are dated 5.9.2001. As mentioned above, the proforma of these documents was forwarded by the respondent No.6 to the petitioner No.1 along with the former's letter dated 9.8.2001. When these documents are admittedly dated 5.9.2001, it does not lie in the mouths of the petitioners to state that they had received the letter dated 9.8.2001 only on 9.9.2001.
6. Any how, by a letter dated 16.9.2001 the petitioner No.1 regretted the delay in responding to the respondent No.6's letter dated 9.8.2001 as the petitioner No.1's daughter was not well and was hospitalised. Along with this letter dated 16.9.2001 the petitioner No.1 submitted the complaint in the prescribed proforma as well as the agreement and consent letter for necessary action and requested that the respondent No.6 take up the matter for resolution of the pending claims at an early date. Although, it is alleged in paragraph 16 of the petition that the respondent No.6 had not responded to the complaint filed by petitioner No.1 in any manner whatsoever till the filing of the petition despite the requirement of the respondent No.6 deciding the matter within the strict time frame of three months, the affidavit filed on behalf of the Respondent No.6 reveals that the respondent No.6 also received a letter dated 10.12.2001 from the petitioner No.1 requesting that the complaint be taken up at an early date and in the said affidavit in paragraph 16 thereof, it is stated that without waiting for a response from the respondent No.6 the petitioner No.1 approached his advocate and got the present petition prepared on 11.12.2001 which would be clear from the date appearing on page 16 of the petition itself. Accordingly, it is the respondent No.6's contention that the petitioner No.1 from the very beginning had no intention of availing of the benefit of the proceedings to be conducted by respondent No.6 and, in fact, the petitioner No.1 intended to approach this Court even though his complaint was under consideration of the respondent No.6 and even when the stipulated period of three months from the date of receiving full details of complaint (i.e., w.e.f. 20.9.2001) was not yet over. It is further submitted in the said affidavit on behalf of respondent No.6 that the writ petition had been prepared on 11.12.2001 itself when the three months' period was yet to expire on 19.12.2001. Thus, according to the respondent No.6, the petitioners have rushed to this Court prematurely, without waiting for a decision of the respondent No.6.
7. The institution of the Insurance Ombudsman is an independent and quasi-judicial forum for redressal of grievances of any person against an insurer. The appointment, powers and procedure to be followed by the Ombudsman is prescribed under the Redressal of Public Grievance Rules, 1998 which have been framed by the Central Government in exercise of the powers conferred by Section 114(1) of the Insurance Act, 1938. The Insurance Ombudsman is empowered to receive and consider inter alias complaints regarding delay/disputes qua settlement of claims. The Insurance Ombudsman by virtue of Rule 14 of the said Rules may adopt a procedure other than that mentioned in Rule 13 for dealing with the claim. The Insurance Ombudsman may ask parties for necessary details and where he considers necessary he may collect factual information available with the Insurance company. Rule 14(2) requires the Ombudsman to dispose of a complaint 'fairly and equitably'. A complaint filed before the Ombudsman may be settled by agreement through mediation of the Ombudsman. In such eventuality, the Ombudsman, as prescribed under Rule 15 makes recommendations which, if accepted by the Complainant, would dispose of the complaint fully and finally and the insurer would thereupon be required to comply with the recommendations. However, if the complaint is not settled by agreement under Rule 15, the Ombudsman is required to pass an award which, according to him, would be fair in the facts and circumstances of the claim. This award is required to be passed, in terms of Rule 16(8), within a period of three months from the receipt of the complaint.
8. In the present case the complaint in prescribed proforma was admittedly received by respondent No.6 on 20.9.2001. Thus, the respondent No.6, in terms of the said Rules, ought to have passed an award within three months thereof i.e., by 20.12.2001. It is the respondent's contention that before he could do so the present petition was already drafted and prepared as would be clear from the date appearing at page 16 of the petition and, thereforee, there was nothing left for respondent No.6 to do. This is not a proper stand to take. The petition was, in point of fact, filed on 1.2.2002. Even if it is assumed that the petition was prepared on 11.12.2001, this still does not enable us to detract from the fact that the affidavit in support of the petition was sworn on 31.1.2002 and the petition itself was filed on 1.2.2002. The mere fact that the petition was dated 11.12.2001 does not entitle the respondent No.6 to take refuge behind it for his lapse in not passing the award within three months. There was nothing which prevented the respondent No.6 from passing the award within three months of the date of the receipt of the complaint. The mere fact that the date on the petition filed in this Court only on 1.2.2002 is shown as 11.12.2001 cannot be a ground for the respondent No.6 to explain away the delay on his part to pass the award. To this extent, the grievance of the petitioners has to be upheld. The institution of the Insurance Ombudsman is for the very purpose of speedy settlement of disputes and claims. The Rules framed also require the disputes to be resolved/adjudicated upon within a strict time frame. The awards have to be passed within three months of the receipt of the complaint. Adequate Explanationn has not been furnished by the Respondents to explain the delay in disposing of the complaint filed by the petitioner No.1. To this extent, the petitioners are entitled to the issuance of directions requiring the respondent No.6 who is a quasi-judicial functionary to promptly take up the complaint of the petitioners with respect to the pending claims and to dispose of the same as expeditiously as possible and not later than three months of this judgment. I have not embarked upon the exercise of deciding the disputed claims mainly for two reasons. First of all, the institution of the Insurance Ombudsman is the forum where the petitioners chose to go for redressal of their grievances in the first instance. That remedy is adequate and efficacious. It is also akin to an arbitration and is governed by the Arbitration & Conciliation Act, 1996 under which a full-fledged machinery is provided and courts are not to interfere except where expressly provided by the Act. Secondly, the settlement of the claims involves examination of disputed questions of fact which may require oral and/or documentary evidence. Thus, it would not be proper for me to adjudicate the same in exercise of jurisdiction under article 226 of the Constitution of India. These questions are best left to be determined by the Insurance Ombudsman as indicated above. It is made clear that insofar as the so-called pending claims of the petitioners are concerned, this Court has not expressed any opinion on the merits thereof. The respondent No.6 shall take an independent decision on the same.
9. This leaves me to discuss the issue of renewal of the mediclaim policy. In fact, this was the main thrust of this petition. It was urged on behalf of the petitioners that when the last Mediclaim Insurance Policy (being Policy No. 48/2001/405) for the period 12.1.2001 to 11.1.2002 expired, the same ought to have been renewed for the subsequent periods on the same terms and conditions at the same rate of premium. In this connection, it is pertinent to note that while the aforesaid claims in respect of the Mediclaim Policy No. 48/2001/405 were pending before the respondent No.6, the petitioner No.1 by a letter dated 8.1.2002 requested the respondent No.1 to renew the existing Mediclaim Policy for another year so that there was no break in the policy. Along with the said letter the petitioner No.1 enclosed the completed proposal form duly certified by the doctor and also enclosed therewith a blank cheque dated 7.1.2002 bearing No. 131605 drawn on Bank of Baroda. The petitioner No.1 clearly stated in the said letter that he had not filled in the amount in the cheque as 'the revised premium' was not known to him. In reply, the respondent No.1, while returning the proposal form as well as the cheque, by letter dated 11.1.2002 stated as under:
'We are in receipt of your letter dated 08-01-2002 Along with the proposals forms in connection with the above. The matter was referred to our Divisional office Along with the past claims history and they have advised us that in view of the adverse claims ratio during the past the renewal of the said policy will be considered subject to loading of premium @ 200% and also subject to an Excess of Rs.20,000/- on each and every claim. Further, on your telephonic request to Mr. Mahajan, Mr. Bedi on 11.01.2001, the matter was again discussed with the Divisional office and they have again confirmed the earlier stand taken in this case. This was conveyed to you by Mr. Bedi over telephone and you expressed your inability to renew the policy on these terms and necessitated us to return the proposals and cheque through Regd. A/D post.
Accordingly, we are returning herewith your proposals forms Along with the cheque.'
10. According to the petitioners, the respondent No.1 could not refuse to renew the Mediclaim Policy and further submitted that the renewal has to be done on the same terms and conditions of the previous policy. In the written synopsis filed on behalf of the petitioners, it is indicated that the following questions of law need to be decided in the present case:-
'A. Whether the Insurance Company can refuse to renew the policy on original terms and conditions?
B. Whether the Insurance Company in the Mediclaim case can ask for a loading of premium at the time of renewal?
C. Whether the Insurance company can subject the claims to an excess of Rs.20,000/- or any other amount on each and every claim?
D. Whether the Insurance Ombudsman can take more than three months to resolve/adjudicate the matter?'
11. Insofar as question 'D' is concerned, I have already dealt with the same hereinabove and decided in favor of the petitioners. According to the learned counsel appearing on behalf of the petitioners questions ' A', 'B' and 'C' are no longer rest integra and stand answered by the decision of the Supreme Court in the case of Biman Krishna Bose v. United Insurance Co. Limited and Another: : (2001)6SCC477 . On the other hand the learned counsel appearing on behalf of the Respondent No.1 has urged that the Writ Petition itself is not maintainable inasmuch as the relief of renewal of the policy would amount to the granting of the relief of specific performance of a contract which would not be permissible under Article 226 of the Constitution. In support the learned counsel for the respondent relied upon three decisions of the Supreme Court in (a) Kulchhinder Singh & Anr v. Hardayal Singh Brar & Ors : : (1976)IILLJ204SC , (b) Divisional Forest Officer v. Bishwanath T. Company Ltd. : : [1981]3SCR662 , and (c) Bareilly Development Authority & Anr v. Ajai Pal Singh & Ors : : [1989]1SCR743 . The learned counsel appearing on behalf of the respondents also urged that the Insurance Mediclaim Policy was a contract and Clause 3.11 thereof clearly provided that 'the policy may be renewed by mutual consent.' According to the learned counsel for the respondent the requirement of mutuality of consent for renewal by itself implied that there was no compulsion on either the insured or the insurer to renew the policy. He further contended that the decision of the Supreme Court relied upon by the petitioner would not apply to the facts and circumstances of the present case. In fact, he submitted that the respondent No.1 had not refused renewal but had only required a higher premium and the clause of first loss up to Rs.20,000/- in view of the past claims history of the petitioners and the consequent adverse claims ratio. He further submitted that while renewing a Mediclaim Policy, which was distinct and different from a Life Insurance Policy, the insurer was entitled to ask for a higher premium as also to impose a first loss clause based upon the past claims history of the insured.
12. The learned counsel for the respondents stated that in respect of Policy No. 48/98/418 the premium paid was Rs.6672/- and the claims paid to the petitioners there under amounted to Rs.46,320/-. Accordingly, the loss ratio in respect of that policy which was for the period 12.1.1998 and 11.1.1999 came to 694%. Similarly, in respect of the Policy No. 48/99/612 the petitioners were paid a claim amount of Rs.61,956/- and accordingly in respect of this policy which was for the period 12.1.99 to 11.1.2000, the loss ratio came to approximately 928%. Again, for the next year's policy, i.e. 12.1.2000 to 11.1.2001 a claim of Rs.60,956/- was paid and the loss ratio worked out to 913%. Learned counsel for the respondents submitted that it is in view of this past claims history that the respondent No.1 decided to load the premium by 200% besides the clause of first loss of Rs.20,000/- in respect of each claim1. The learned counsel further submitted that this was not done selectively or arbitrarily against the petitioners alone, but that even in the case of their own employees the premia have been loaded due to the high claim ratios. The learned counsel referred to 'MacGillivray on Insurance Law' to demonstrate that loading of insurance premium as well as imposing a first loss clause by the insurance company in respect of a renewal of a general insurance policy was not unusual and, in fact, was in the course of ordinary business of insurance. Learned counsel appearing on behalf of the respondents also referred to various provisions of the Insurance Act, 1938 and in particular Section 64U, 64UC and 64VA to show that the premium payable in respect of an insurance policy was not an arbitrarily arrived at figure and secondly, that the insurer had to maintain a certain 'solvency margin' otherwise under the statutory provisions it could be declared insolvent and be ordered to be wound up.
13. I, now consider the question of maintainability of the writ petition qua the question of renewal of the Mediclaim Policy. As stated above, the learned counsel on behalf of the respondent relied upon three decisions of the Supreme Court to show that the remedy of Article 226 is not available for the enforcement of a contract qua contract. These decisions hold that the High Court in its extraordinary jurisdiction should not entertain a petition whether for specific performance of contract or for recovery of damages and the right to release from a contract has to be claimed in a civil Court and that even where a contract is entered into with the state a writ petition under Article 226 of the Constitution of India would not lie for compelling the State or the authorities to remedy an alleged breach of contract pure and simple. There are other decisions of the Supreme Court in the same light. Normally, I would have tended to agree with this contention of the learned counsel for the respondents that the present writ petition insofar as it seeks renewal of the Mediclaim Policy is purely in the realm of contract and interference of this Court under Article 226 is not warranted. However, in view of the fact that the Supreme Court in the case of Biman Krishna Bose (supra) did not disapprove of the High Court dealing with the question of refusal to renew a Mediclaim Policy in its writ jurisdiction under Article 226 and in deference thereto I feel that the present petition ought not to be thrown out on the ground of maintainability.
14. I now deal with the question as to whether the present case is covered by the decision of the Supreme Court in Biman Krishna Bose (supra). In that case there were certain disputes with regard to the claim under a Mediclaim Policy. In the words of the Supreme Court itself, the relevant facts therein, were as under:-
'While the said litigation was going on, the appellant's policy fell due for renewal. Under such circumstances, the appellant on 24-1-1996, sent a letter along with a cheque of Rs.1796 to the respondent Insurance Company requesting for renewal of his existing mediclaim policy. On 7-3-1996, the Insurance Company declined to renew the mediclaim policy as per the advice of the competent authority of the Company. Under the aforesaid circumstances, the appellant filed a writ petition under Article 226 of the Constitution before the Calcutta High Court challenging the order passed by the respondent Insurance Company refusing to renew the mediclaim policy. The said writ petition was allowed and the order refusing to renew the policy was set aside and a direction was issued to the Insurance Company to renew the mediclaim policy earlier taken out by the appellant. Aggrieved, the respondent Insurance Company filed an appeal against the judgment of learned Single Judge. The Division Bench of the Calcutta High Court while agreeing with the view taken by the learned Single Judge substantially, dismissed the appeal. Yet, the High Court directed the appellant to take a fresh mediclaim policy, as the renewal of mediclaim policy cannot be granted with retrospective effect, as the period for which renewal was required has already expired. It is against the said part of the order the appellant has preferred this appeal.'
(underlining added)
Clearly, in the decision in Biman Krishna Bose (supra), two questions arose. First, was the question with regard to the refusal to renew the Mediclaim Policy. The second was with regard to the date from which the renewal was to take effect. It is clear that the second question of the effective date of renewal would only arise if the Court came to the conclusion that the petitioner or the insured was entitled, as of right, to a renewal on the terms claimed by him. If the Court found that the refusal to renew was neither arbitrary nor unfair and was justifiable in law then the second question would not at all arise.
15. In the case of Biman Krishna Bose (supra), while considering the first question, the Supreme Court held as under:-
'Even in an area of contractual relations, the State and its instrumentalities are enjoined with the obligation to act with fairness and in doing so, can take into consideration only the relevant materials. They must not take any irrelevant and extraneous consideration while arriving at a decision. Arbitrariness should not appear in their actions or decisions. In the present case, what we find is that arbitrariness is writ large in the actions of the respondent Company when it refused to renew the mediclaim policy of the insured on the ground of his past conduct i.e. having gone into litigation for payment of his claim against the respondent Company. We are, thereforee, in agreement with the view taken by the High Court that the order of the respondent Company refusing to renew the mediclaim policy of the appellant was unfair and arbitrary.'
In that case the insurance company had refused to renew the Mediclaim Policy of the insured on the ground of his having gone into litigation for payment of his claim against the said insurance company. This, the Supreme Court found to be highly arbitrary and unfair. It was an entirely extraneous consideration and had nothing to do with matters relevant for or having a reasonable nexus with renewal. It is in this context that the Supreme Court upheld the view of the High Court that the order of the insurance company therein refusing to renew the Mediclaim policy of the appellant therein was unfair and arbitrary.
16. Coming to the facts of this case, I find that, first of all, the respondent No.1 has not refused to renew the petitioners' mediclaim policy. It was, in fact, ready to renew the mediclaim policy subject to the premium being loaded by 200% and the imposition of the first loss clause to the extent of Rs.20,000/-. Secondly, the imposition of these conditions is based on the past claims history and the adverse loss ratio which the respondent No.1 has been facing in respect of the petitioners in the past few years. As indicated above, the insurance company is also required to maintain a solvency margin inter alias based on the concept of net incurred claims which, in view of the provisions of Section 64VA(1A)(ii) Explanationn (ii), refers to the average of the net incurred claims during the specified period not exceeding three preceding financial years. It is imperative for the insurer to see that it does not run the risk of not meeting the solvency margin prescribed under the Act. It is, thereforee, clear that in this context the decision of the Respondent No.1 in imposing the condition of loading the premium by 200% and introducing the first loss clause to the extent of Rs.20,000/- was neither unreasonable nor arbitrary looking to the extremely adverse loss ratio in respect of the mediclaim policies qua the petitioners as indicated above.
17. Insofar as renewals of policies which are on the basis of mutual consent are concerned, the position under general law is stated in paragraph 492 of Halsbury's Laws of England, Fourth Edition, Volume 25 which is as under:-
'492. Conditions in policy as to renewal.
Most non-continuing policies of insurance contain conditions providing for the renewal of the insurance, but these are normally framed on the basis of mutual consent being required. A condition to this effect does not mean that the insurers are bound to accede to an application by the assured for renewal or to accept a premium tendered by the assured for renewal. An offer of renewal may come from the insurers, such as where they send out a renewal notice, and then payment of the appropriate premium amounts to acceptance of their offer so as to create a binding contract and there is no room for refusing to take the premium. If the renewal notice stipulates a higher rate of premium and the assured refuses to pay it, the offer has lapsed and cannot be revived later by the assured tendering the increased premium. In any case there is no obligation on the insurers to send out a renewal notice.'
The same principles are set out in General Principle of Insurance Law by E.R. Hardy Ivamy (Third Edition), as indicated hereinbelow:-
'1 Where the Policy is Renewable by Mutual Consent
The assured, by tendering the renewal premium, in the first instance makes an offer to renew the policy, which the insurers may accept or decline at pleasure; they cannot, thereforee, be compelled to accept the renewal premium when tendered.
If, on the other hand, the insurers invite the assured to renew the policy by sending him a renewal notice, the offer to renew the policy proceeds from them, and his acceptance is signified by payment of the renewal premium. In this case they are bound to accept the renewal premium when tendered. But if the insurers offer to renew the policy at an increased premium, which the assured refuses to pay, a subsequent tender of the increased premium is inoperative, even though made during the days of grace.'
As regards the general right of renewal, MacGillivray on Insurance Laws, Ninth Edition, (Sweet and Maxwell, 1977) in paragraph 7-36 has this to say:-
'7-36 Right of renewal. A policy may be issued to cover a certain risk for a definite period at a definite premium without any provision for renewal; but more usually the policy is expressed to cover first a definite period, say a year, for which the premium is acknowledged to have been received, and second, an indefinite period thereafter, so long as an annual or other periodical payment shall be paid in accordance with the conditions of the policy. In the case of risks other than life, the assured is not given an absolute right of renewal, the continuance of the policy being conditional not only upon the payment of the premium by the assured but also upon the acceptance of it by the insurers. In any such case the insurers may terminate the risk at each renewal period by refusing to accept the premium tendered.'
18. thereforee, in the case of an insurance policy (other than a policy of life insurance) where there is a clause of renewal by mutual consent, renewal of the policy can be refused by either the insured or the insurer. Mere payment of premium, ipso facto, would not result in a renewal of the policy2. In fact, this is exactly what the Supreme Court held in the case of Pradeep Kumar Jain v. Citi Bank and another : : AIR1999SC3119 as under:-
'6. In the case of life insurance policy a certain sum is agreed to be paid by the insurance company in the event of the death of the insured or a contingency arising as indicated in the policy. The obligation is then on the insured to pay the premiums periodically. There is no other obligation upon him. In the case of a motor vehicle, the risk to be covered is not only in respect of a vehicle but also towards the injury to others or damage caused to property arising out of an accident. In such an event, when the policy is renewed or a fresh policy is applied for, an application has to be given and it is to be indicated whether any claim had been made in the previous year or not and to furnish appropriate material as regards the valuation of the vehicle. It can also be made clear as to the nature and extent of the risk covered whether it is only third party or comprehensive or otherwise. The obligation under the Act is only at least to cover third party risk. Thus mere payment of premium could not result in an automatic renewal of the policy. In the circumstances, we find that the appellant also had certain duties to discharge in the matter of obtaining insurance policy and cannot merely put the blame on the first respondent.'
(underlining added)
19. This being the position, it is clear that the respondent No.1 was well within its rights to impose the condition of loading of premium by 200% and imposing the first loss clause to the extent of Rs.20,000/- as a pre-condition for the renewal of the mediclaim policy. Mere offer of the petitioner no.1 to pay the premium at the rate of the previous year's policy could not result in an automatic renewal of the policy. Nor could the petitioners insist upon renewal on the same rate of premium.
20. In view of this conclusion the question as regards the date on which the renewal would take effect does not at all come into play and the observations3 of the Supreme Court contained in paragraph 5 of its decision in Biman Krishna Bose (supra) which relate, inter alia, to the issue of the effective date of renewal have no applicability to the facts and circumstances of the present case. The petitioners might have derived benefit from the observations contained in paragraph 5 had I held that they were entitled to a renewal of the policy as claimed by them. This is not the case. As aforesaid, there was no refusal to renew by the insurance company (respondent no.1). On the other hand, there was an offer to renew though subject to loading of premium and the first loss clause. This conditional offer to renew was neither arbitrary nor unfair nor unreasonable. As such, the petitioners' prayer qua renewal of the policy on the terms claimed by them cannot be acceded to.
21. Accordingly, the petitioners' prayer seeking issuance of a direction to the respondent No.1 to renew the policy of the petitioners on the original terms and conditions cannot be granted and is rejected. Insofar as the prayer with regard to issuance of directions for disbursement of the claims of the petitioners are concerned, the only relief that the petitioner is entitled to is (as indicated above) that respondent No. 6 be directed to dispose of the petitioner No.1's complaint as expeditiously as possible and not later than 3 months from the date of this judgment. It is so directed. In these terms the writ petition is partly allowed and is disposed of as such.
22. Parties are left to bear their own costs.