Srinagar: The High Court of J&K & Ladakh while staying proceedings in the contempt petition by the State Health Agency (SHA) against the insurer in the Ayushman Bharat Health scheme has directed the government to utilize the premium amount of Rs 427.73 crores lying with it for reimbursement of medical claims to the empanelled private hospitals.
Justices S Kumar and S Sharma ordered “there shall be stay of the proceedings in the contempt matter”.
It also directed the UT of Jammu and Kashmir “to utilize the premium amount of Rs 427.73 crores lying with it for reimbursement of medical claims which, however, shall be subject to outcome of the present appeal”.
The Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (AB PM-JAY) and SEHAT schemes have run into rough weather as the private hospitals across J&K allege that they have not been paid money despite providing services to the patients under the schemes.
The State Health Agency (SHA) of Jammu and Kashmir has meanwhile initiated contempt proceedings against IFFCO Tokio General Insurance Company Limited for allegedly failing to comply with the directives of the Jammu and Kashmir High Court.
The government claims that the insurance company has allegedly violated its contractual obligations under the scheme.
The dispute has its genesis in a three-year contract awarded to IFFCO Tokio on March 10, 2022. The contract, which commenced on March 15, 2022, and was set to continue until March 14, 2025, required the company to provide health insurance coverage under the scheme.
The scheme has ensured affordable healthcare access for thousands of eligible families in Jammu and Kashmir. However, on November 1, 2023, IFFCO Tokio announced its intention to prematurely terminate the contract by March 2024, raising alarms about the continuation of healthcare services for the residents of the Union Territory.
In response to this sudden decision, the SHA sought judicial intervention, and on August 28, 2024, the J&K High Court ruled that IFFCO Tokio must continue fulfilling its contractual responsibilities until the dispute is resolved through arbitration.
The court underscored the public nature of the contract and the essential healthcare services it provides, deeming the insurance company’s unilateral withdrawal as unjustified and potentially harmful to the public.
The High Court’s judgment clearly stated that the insurer’s refusal to continue its services could not be allowed without valid cause.
The court emphasized that the termination of the contract would result in irreparable damage to the healthcare system and the beneficiaries of the scheme.
The ruling also invoked Clause 41.4 of the contract, which requires both parties to continue performing their duties while any dispute is pending resolution through arbitration.
Despite the High Court’s order, IFFCO Tokio has, according to the government, allegedly failed to comply, refusing to resume services under the health schemes.
The insurance company has allegedly not settled a single claim for the policy period starting from March 15, 2024, until now, further aggravating the situation. As a result, the SHA has initiated contempt proceedings, arguing that the company’s actions constitute a wilful disobedience of the court’s orders.
