Insurance Company Neither Necessary Nor Proper Party In Medical Negligence Cases: Andhra Pradesh High Court

The High Court was hearing a writ petition filed by a doctor challenging the rejection of his plea to implead New India Assurance Company Limited as a respondent in a medical negligence complaint pending before the District Consumer Disputes Redressal Commission.

A Division Bench comprising Justice Ravi Nath Tilhari and Justice Challa Gunaranjan, while dismissing the plea, remarked: “The insurance company, in the present case of medical negligence, is not a necessary party, because the insurance company is not a person in whose absence, any effective order cannot be passed or compensation cannot be awarded against the hospital or the doctors. In our view, the insurance company is also not a proper party as the presence of the insurance company would not to be required to enable the Court to completely, effectively or adequately adjudicate upon the matters in dispute before the Consumer District Forum.”

The petitioner was represented by Advocate K. Sarvabhouma Rao.

Background

The matter arose from a complaint filed before the District Consumer Forum, alleging medical negligence against the petitioner, a doctor and other doctors in a hospital in Hyderabad.

The petitioner moved an application under Order I Rule 10 of the Civil Procedure Code, seeking to implead the Insurance Company Limited as a party, citing that the hospital was covered under a professional indemnity insurance policy.

The District Forum dismissed the application, holding that there was no privity of contract between the complainant and the insurance company and that the complainant was neither a consumer nor a beneficiary of the insurance policy. It held that if liability were eventually fixed on the petitioner, he could seek indemnification separately from the insurer.

The State Consumer Disputes Redressal Commission, Vijayawada, and subsequently, the National Commission, upheld the order. The doctor then approached the High Court under Article 226 of the Constitution, seeking to quash these orders.

Court’s Observation

The Andhra Pradesh High Court examined the scope of Order I Rule 10 CPC and the principles governing the inclusion of parties in civil and quasi-judicial proceedings. Referring to precedents including Sudhamayee Pattanik v. Bibhu Prasad Sahoo (2022) and Mumbai International Airport (P) Ltd. v. Regency Convention Centre & Hotels (P) Ltd. (2010), the Court reiterated that the plaintiff is the dominus litis and cannot be compelled to implead a person who is neither a necessary nor a proper party.

Elaborating further, the Court observed that “the issue before the Forum would be the negligence or no negligence on the part of the doctors or the deficiency of service, and for such adjudication, the presence of the insurance company is not required.”

The Court further distinguished cases under the Motor Vehicles Act, 1988, noting that “so far as the Motor Vehicles Act is concerned, the insurance company in such claim cases, becomes a necessary party to be impleaded”, while clarifying that “any such comparison cannot be made for its impleadment in the cases for compensation before the District Forum due to medical negligence.”

The Bench explained that any contractual liability between the doctor and the insurer was independent of the patient’s claim and could be settled separately under the terms of the insurance policy, without affecting the complainant’s right to compensation.

Conclusion

Concluding that the insurance company was neither a necessary nor a proper party in the medical negligence proceedings, the High Court upheld the orders of the District Forum and the State Commission, dismissing the writ petition as devoid of merit.

Cause Title: Dr Mudunuri Ravi Kiran v. The District Consumer Disputes Redressal Commission, Guntur & Others (Neutral Citation: APHC01035021202)

Appearances

Petitioner: K. Sarvabhouma Rao, Advocate

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