JUDGMENT
Badar Durrez Ahmed, J.
1. The petitioner has been taking ‘Medi-claim Policies’ from the respondent No. 2 (hereinafter referred to as ‘the Insurance Company’) from 1988-89. Earlier, the petitioner took Medi-claim Policies under category-III. However, the same was subsequently converted to a Medi-claim Policy under category-I. The difference between category-III and category-I is that under the former the maximum benefit is restricted to Rs. 49,500 (i.e., Rs. 45,000+10% cumulative bonus) whereas, under the latter, the maximum benefit is an enhanced sum of Rs. 2 lakhs. The policy in question is the Medi-claim Policy issued on 17.04.1998 for the period from 17.04.1998 to 16.04.1999.
2. The petitioner had an heart ailment and was hospitalised from 16.07.1998 to 19.07.1998 and again from 24.07.1998 to 25.07.1998 in the Escorts Heart Institute, New Delhi. There was a blockage in his arteries which was attended to by the said heart institute.
3. There is no dispute as regards the facts of the case. The petitioner paid an amount of Rs. 1,92,193/- to the said Escorts Heart Institute towards the Bill raised for his treatment and hospitalisation. The petitioner thereafter submitted a claim to the Insurance Company and the Insurance Company, after processing the claim of the petitioner, paid a sum of Rs. 49,500/- to the petitioner on 23.11.1998. The Insurance Company did not pay the full amount of the claim. The ground for payment of only Rs. 49,500/- was founded on the fact that the Medi-claim Policy which was taken by the petitioner had a rubber-stamped endorsement on it to the following effect:-
“However, the increased benefits are not applicable for those illnesses/diseases/disabilities contracted/suffered during the previous policy periods. The claim for the said illnesses/diseases/disabilities if admitted shall be processed as per the previous year’s policy limits only.”
4. In fact, the decision in entire petition hinges upon the interpretation of the aforesaid endorsement and in particular upon the expression “as per the previous year’s policy limits only”.
5. The petitioner being aggrieved by the Insurance Company’s stand of not allowing the entire payment of Rs. 1,92,193/- filed a complaint against such short settlement of Medi-claim Policy before the Insurance Ombudsman for Delhi and Rajasthan, Universal Insurance Building, 1st Floor, 2/2A, Asaf Ali Road, New Delhi-110002. It may be relevant to note at this stage that the petitioner had in 1988-89 been paid two claims for treatment of heart disease under the then extant Medi-claim Policies. It is also pertinent to note that the petitioner had a Medi-claim Policy of category-I having a maximum limit of Rs. 2 lakhs for the previous year, i.e., the year previous to the policy w.e.f. 17.04.1998. The limits under the old policies, i.e., of the years 1988-89, as they were category-III policies, were restricted to Rs. 49,500/- as mentioned above. The limits under the new policies, i.e., for the years 1997-98 and 1998-99 were enhanced to Rs. 2 lakhs. There is no dispute with regard to these facts.
6. The Insurance Ombudsman (respondent No. 1) passed his Mediation Order dated 09.03.2001 wherein he concluded that the rubber stamp endorsement clearly indicated that the “disease of heart, for which the complainant had taken two claims when the policy was for lesser sum insured, is not covered for the increased sum insured of Rs. 2 lakhs”. The Insurance Ombudsman, therefore, held that the decision of the Insurance Company in restricting the claim for heart disease to Rs. 49,500/- against the total claim of Rs. 1,92,193/- was fully sustainable as in his view the sum insured of category-III of the old Medi-claim Policy would apply in respect of pre-existing diseases even though the policy had been renewed for an increased sum insured.
7. Learned counsel appearing on behalf of the petitioner submitted that the decision of the Insurance Company as also the Insurance Ombudsman is clearly untenable and is ex-facie wrong. According to him, the decision of the Insurance Ombudsman is absolutely misplaced, wrong and unjustified and the impugned Order dated 09.03.2001 is based upon a wrong interpretation of the said rubber stamp endorsement. It is his contention that the word “year’s” as appearing in the endorsement has been used in the singular and not in the plural sense. As such, according to him, it means that the claim if admitted in respect of a pre-existing disease, has to be processed in terms of the policy for the previous year only and not in terms of the policies for all the previous years. Accordingly, the petitioner has sought the issuance of a writ of certiorari for quashing of the Order dated 09.03.2001 passed by the Insurance Ombudsman (respondent No. 1) and also for the issuance of a writ of mandamus commanding the respondent No. 2 (Insurance Company) to pay the balance of the petitioner amounting to Rs. 1,42,693/- with interest w.e.f. 08.10.1998 till the time of payment of said amount @ 12% per annum.
8. Learned counsel appearing on behalf of the petitioner has further submitted that the respondent Insurance Company itself has admitted the position that the endorsement as it stands means only the previous “year” in the singular and not previous “years” in the plural. He has drawn my attention to paragraph 3 of the additional affidavit filed on behalf of the respondent No. 2 on 09.05.2003 wherein the respondent No. 2 has stated that ” due to bonafide mistake and accidental omission, in place of the word “years’, the word “year’s” has come, in the above referred to endorsements of rubber stamp, which is purely a grammatical mistake which has occurred in preparation of the said rubber stamp”. This statement on the part of the Insurance Company, according to the learned counsel for the petitioner, is sufficient to indicate that the endorsement as it stands means only the previous year and that is how it ought to be interpreted. The explanation that is sought to be given as regards grammatical mistake and, bonafide mistake and/or accidental omission cannot be taken note of as the Insurance Policy has to be construed as it is and the intention thereof has to be gathered from the words and expressions appearing thereon as they are.
9. Learned counsel for the respondent, however, submitted that the endorsement must be construed as a whole and while so construing the endorsement, it becomes clear, according to him, that the words “previous year’s policy” refers to “previous policy periods” appearing in the first sentence of the endorsement. According to him, if it is construed in this light, the word “year’s” actually means “years'”. The learned counsel for the respondent also referred to the relevant portions of the “Exclusions” clause including clause 4.1 which reads as under :-
“4. EXCLUSIONS
4.0 The Company shall not be liable to make any Payment under this policy in respect of any expenses whatsoever incurred by any Insured Person in connection with or in respect of:
4.1 Such diseases which have been in existence at the time of proposing this insurance. Pre-existing condition means any injury which existed prior to the effective date of this insurance. Pre-existing condition also means any sickness or its symptoms which existed prior to the insured person had knowledge that the symptoms were relating to the sickness. Complications arising from pre-existing disease will be considered part of the pre-existing condition.”
10. According to the learned counsel for the respondent since the petitioner had a pre-existing condition, his claim itself was not tenable in view of the aforesaid exclusions clause. This contention of the learned counsel does not carry any weight in as much as the Insurance Company has admitted its liability, albeit to the extent of Rs. 49,500/- only. The respondent Insurance Company, therefore, cannot take recourse to the provisions of clause 4.1 of the said Medi-claim Policy.
11. As stated above, the entire case hinges upon the interpretation of the rubber stamp endorsement on the policy. No other point was urged by counsel for either party. While the learned counsel for the petitioner has urged that the word “year’s” be construed in the singular, the learned counsel for the respondent has contended that the word “year’s” be construed in the plural. As admitted by the Insurance Company, the words as they stand, give the impression that the word “year’s” is to be construed in the singular though they contend that this is a bonafide mistake. Thus, assuming the stand of the respondent to be plausible, at the best it can be stated that both the aforesaid interpretations are reasonably possible.
12. If this be the case, i.e., if there be two interpretations which are reasonably possible, then the one which favors the policy holder is to be accepted as the same advances the purpose for which a policy is taken and would be in consonance with the object to be achieved for getting the petitioner insured against hospitalisation. This is what the Supreme Court held in the case of Shashi Gupta (Smt.) v. Life Insurance Corporation of India and Anr., reported in (1995) Suppl. 1 SCC 754. In paragraph 3 thereof it is observed that:-
“3. As both the aforesaid interpretations are reasonably possible, we would accept the one which favors the policy-holder, as the same advances the purpose for which a policy is taken and would be in consonance with the object to be achieved for getting lives assured…”
This decision was relied upon by the Supreme Court in the case of Life Insurance Corporation of India v. Raj Kumar Rajgarhia, reported in 1999 (3) SCC 465. In the latter case in paragraph 16 thereof, it was observed as under:-
“This view of ours is also supported by a decision of this Court in the case of Shashi Gupta v. LIC of India wherein it is held that “while interpreting the terms of the insurance policies, if two views are possible, Courts will accept the one which favors the policy-holders.”
Accordingly, the view that has been put forward by the learned counsel for the petitioner being that of the policy holder has to be accepted. This would mean that “previous year’s policy limits” appearing in the endorsement would have reference to the limits of the Medi-claim Policy for the year 1997-98. The limit for that year, as indicated above, was Rs. 2 lakhs. Thus, the petitioner’s claim would be subject to a limit of Rs. 2 lakhs and not Rs. 49,500/-. As such, the Order dated 09.03.2001 passed by the respondent No. 1 to the extent that it disallowed the petitioner’s claim for the full amount and upheld the payment of claim by the Insurance Company only to the extent of Rs. 49,500/- is set aside. Hence, respondent No. 2 is directed to pay the balance amount of Rs. 1,42,693/- with interest w.e.f. 8.10.1998 @ 8% per annum till the date of payment. To this extent the writ petition is allowed.
There shall be no orders as to costs.