Delhi High Court: Alleged Harassment By Insurance Companies Over Final Bills May Be Grounds For Mental Harassment Compensation, But Not A Criminal Offence

The Court upheld the Order that discharged Max Super Speciality Hospital and its staff in a case involving allegations of cheating and wrongful restraint by a patient (Petitioner).

A Single Bench of Justice Neena Bansal Krishna held, “This harassment and mental trauma by the patients and their family members who are pushed to follow the matter with the Insurance Company for getting the requisite approvals which is riddled with delays at the end of the Insurance Companies, is well understandable. Much angst has been expressed on this system of getting the approvals from the Insurance Company at many forums and by the Courts, but such situation may be a ground for seeking compensation for mental harassment, but does not tantamount to any criminal offence.”

Advocate Nitin Mehta appeared for the Petitioner, while APP Shoaib Haider represented the Respondents.

Brief Facts

The Petitioner, an advocate, alleged that the Hospital had wrongfully extracted money from him during his treatment for Cysticercosis. He claimed that his insurance policy envisaged cashless settlement of claims with network hospitals, including Max Hospital.

The Petitioner alleged that despite having a cashless policy, he was forced to deposit an advance sum before his surgery and was later not allowed to be discharged until the insurance company received the entire payment. He further alleged that the hospital debited an amount from his advance payment and did not refund the entire sum, even though the insurance company had approved full coverage.

Court’s Reasoning

The High Court noted, “The Petitioner himself has submitted that the Pre authorisation from the Insurance company, was received for Rs.75,000/- while they assured that the further amount would be approved subsequently. Consequently, the Max Hospital made the Petitioner deposit the remaining balance of Rs.1,45,000/- since on the date of admission there was no approval for the balance amount of Rs.1,45,000/-. It may seem to be an onerous condition, but definitely cannot be stated to be extraction of money nor can any dishonesty or fraudulent intention be attached to the Max Hospital, in this regard.”

The Bench held that “it is evident that there was neither any fraudulent or dishonest intention on the part of the Max Hospital in making the Petitioner deposit the entire charges of the surgery in advance since under the Insurance Policy an advance approval of only Rs.75,000/- was received. There is no offence of cheating made out from the aforesaid facts…For the same reasons, it cannot be said that there was any entrustment with the Max Hospital or that there was any breach thereof…There is no misappropriation of funds by the Max Hospital and no offence under Section 406 IPC, is made out.”

“Such incidents of alleged harassment felt by the patients in settling their Final Bills, is not an untold story but is frequently suffered by the patients. Their harassment gets compounded by the fact that they come out of a trauma of an ailment under treatment but even for discharge, there are long drawn procedures for settling the bills with the Insurance Company,” the Bench remarked.

Consequently, the Court ordered, “With these observations, it is held that there is no merit in the Petition and the learned ASJ in his well detailed Order, has rightly observed that no criminal offence under Section 342/420/406//34/120B IPC, is made out.”

Accordingly, the High Court dismissed the Petition.

Cause Title: Shashank Garg v. State & Ors. (Neutral Citation: 2025:DHC:2699)

Appearance:

Petitioner: Advocates Nitin Mehta and Bhanu Sanoriya

Respondents: APP Shoaib Haider; Advocate Anil Bhasin

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