E Vs. NATIONAL INSURANCE CO. LTD. & ANOTHER

JUDGEMENT

(1.) The subject matter of challenge in the present writ petition is a notice for suspension of services dated 27th February, 2018 issued by the General Manager, National Insurance Company Limited (in short, NIC) to the Chairman, E-Meditek Insurance (TPA) Limited.

(2.) Shorn of unnecessary details the facts are that the E-Meditek Insurance (TPA) Limited, being the petitioner herein, is a licensed Third Party Administrator (in short, TPA) under the Insurance Regulatory and Development Authority (TPA-Health Services) Regulations, 2016 (in short, the said Regulations). NIC, being the respondent no.1 herein, entered into a health Service Level Agreement (in short, SLA) with the petitioner from time to time since the year 2002. The tenure of the present SLA, which was entered into on 11th August, 2016, is for a period of two years. By an e-mail dated 26th October, 2016 NIC reported that SAIL Group Mediclaim policies for the period from 1st January, 2014 to 31st December, 2014 and for the period from 1st January, 2015 to 31st December, 2015 were serviced by the petitioner and that upon conducting a special audit followed by an audit by the Vigilance department several irregularities and overpayments were noticed and by the said letter the petitioner was asked to deposit an amount of Rs. 1,45,43,599/- and to explain as to why its services shall not be discontinued. In reply thereto, the petitioner by an e-mail dated 18th November, 2016 stated inter alia that an amount of Rs. 47.61 lakhs has already been paid to NIC and assured that it would comply with all its contractual obligations. Subsequent thereto, a further letter was issued by NIC on 5th April, 2017 stating inter alia that it had suffered loss due to unprofessional handling and payment of fraudulent claims. Subsequent thereto, the petitioner issued a letter dated 20th April, 2017 undertaking to indemnify NIC for the demand of Rs. 79,30,850/- subject to production of details and proof and as regards the remaining claim the petitioner requested for mediation or for appointment of an arbitrator. By a further letter dated 1st May, 2017 the petitioner intimated NIC that it is committed to honour all its obligations under the SLA and that in the event the dispute cannot be resolved the matter may be referred for mediation under the Clause 27 of SLA 2014-16 and Clause 22 of SLA 2016-18. By a subsequent letter dated 2nd August, 2017 the petitioner intimated NIC that a few of its employees have colluded to perform some illegal acts which include manipulating claims and that some of the said employees have been identified and that a police complaint had been lodged against eight employees. NIC thereafter issued a notice of suspension for services on 27th February, 2018. Soon thereafter the petitioner had a discussion with the management of NIC and submitted a further representation on 6th March, 2018. In the midst thereof, the IRDAI issued an order of suspension of certificate of registration on 20th March, 2018. The said order was challenged by the petitioner and by an order dated 23rd March, 2018 the learned Security Appellate Tribunal stayed the impugned order.

(3.) Mr. Kar, learned senior counsel appearing for the petitioner submits that the amount as claimed by the letter dated 26th October, 2016 is based upon a random sampling of claims and the impugned notice dated 27th February, 2018 was issued without taking into consideration the reply submitted by the petitioner on 18th November, 2016 wherein it was categorically indicated that the petitioner had already paid an amount of Rs. 47,61,892/-. The factum of payment of such amount also stands admitted in the subsequent letter issued by NIC on 5th April, 2017.