The Madras High Court recently ruled that private entities discharging public functions would also be subject to the Court’s writ jurisdiction under Article 226..To this end, a judgment passed earlier this month by Justice S Pushpa Sathyanarayana states,.“If any private body has a public duty imposed on it, the Court has jurisdiction to entertain the writ petition.”.The Court has explained that such intervention is required given that several private entities have been vested with the performance of activities that are in the nature of State obligations. The judge notes,.“Today, in the modern world, there are numerous socio- economic activities to be performed by the State. This resulted in sharing some of the obligations to the other bodies, while retaining certain level of control over them. This gave an impetus to the public and private bodies to acquire major concerns and started exercising monopoly power over its activities, which are close to State functions. By allowing these governmental functions to the private bodies, the fundamental rights of the citizens are being strained. .Therefore, to protect the rights from the clutches of the Legislature, Executive, public and private agencies, the Courts have to extend their power under Article 226 of the Constitution of India…”.The Court was approached by a woman who was denied the benefit of an insurance policy opted by her deceased husband with the HDFC ERGO General Insurance Company Limited..Her husband had passed away due to a heart attack while they were in Abu Dhabi. She filed for insurance given that her husband had passed away owing to a major medical illness purportedly covered by the insurance policy..A medical certificate issued by the Abu Dhabi hospital on request stated that he had passed away due to “acute coronary artery syndrome”. The HDFC, however, denied the claim stating that the policy only covered the medical event of “myocardial infarction.”.A challenge made by the woman to the HDFC’s repudiation of the claim was dismissed by an Insurance Ombudsman in May 2016. Aggrieved by the Ombudsman’s order, the woman filed a writ petition before the High Court..Inter alia, the HDFC had argued that it was not a “State” under Article 12 of the Constitution. It was submitted that only contractual obligations existed between the insurance company and the claimant. Therefore, it was not amenable to the writ jurisdiction of the High Court under Article 226..Justice Pushpa Sathyanarayana, however, disagreed. She noted,.“A reading of Article 226 makes it clear that it can be invoked not only for infringement of fundamental rights, but also for any other purpose … As happened in this case, lack of effective control has made the private bodies acquire more power similar to public authorities. The public monopoly power is replaced by private monopoly power. Hence, it becomes necessary that the private bodies should be made accountable to judiciary within the judicial review. “.On facts, the Court eventually found that HDFC was liable to pay up on the insurance claim. The judge observed,.“The heart attack suffered by the petitioner’s husband by no stretch of imagination could be stated as NOT a major medical illness. The repudiation of the same by the first and second respondents would result in losing public faith in the private insurance companies.”.On the request of the Court, a medical expert also informed that acute coronary artery syndrome includes myocardial infarction. The Court, therefore, ruled in favour of the petitioner..Insurance contracts need to be made more transparent.Before parting with the judgment, the Court also expressed concern over the apparent power disparity between insurance companies and the claimant public. It observed,.“Even though law seems to be clear in constituting a balance between the insuring party and insured, in reality, there is no equality between the two as insurer is the richest corporation and the individual is an ordinary individual. In fact, in many cases, the individual has no legal knowledge about the ambiguous language used in the company’s policy with an intention to waive them from the liability to pay the injured on happening of an agreed event. Many a times the companies willfully neglect reimbursing the insured, who instead of getting their amount from the company have to pay the Courts for getting their rights enforced. The case on hand is the classic example of the same.“.It opined that there is a need to bring about more transparency and accuracy of the facts before and insurance contract comes into force. The judge observed that such measures are required to guard against malpractices and arbitrary use of power by insurance companies in denying claims citing vague contractual provisions. As noted in the judgment,.“The insurance companies cannot wash their hands by merely contending that every minute information has been given in the offer documents and the insured accepted those conditions by affixing their signature in the documents, as those information were never noticed by the insured. The companies should concentrate on factors like right mix of flexibility, risk and return, which will suit the customer.”.As for the main case, the Court directed HDFC to honour the petitioner’s insurance claim within eight weeks without insisting on any further documentation..[Read Judgement].Bar & Bench is available on WhatsApp. For real-time updates on stories, click here to subscribe to our WhatsApp.