New India Assurance takes Orissa govt to High Court

BHUBANESWAR: The New India Assurance Co Ltd [NIACL] has moved the Orissa High Court challenging the state government's order unilateral cancelling a work order awarded to it to implement of health insurance scheme under the Rashtriya Swasthya Bima Yojana [RSBY] for BPL families in the districts of Khurda, Cuttack, Sambalpur, Sundargarh, Ganjam and Rayagada stating that it was arbitrary and illegal. Last month the Court issued a stay order on the opening of the financial bids and ordered the government to submit its reply this month.

The state government had initially floated tender for twelve districts in two phases for the financial year but six out of twelve districts were re-tendered to include maternity benefits. Incidentally, NIACL on both the occasions was the lowest bidder.

However, the state government on August 26, 2009 informed the insurance company the union government of India have approved the tenders of NIACL for Rashtriya Swasthya Bima Yojana (R.S.B.Y) for six districts. Accordingly, the NIACL conducted district level workshops, appointed Third Party Administrator (T.P.A) and also empanelled hospitals for carrying out the Scheme by spending huge amount. As there were mismatch of B.P.L data provided by the state Government to R.S.B.Y site, some of the District Collectors and the then Nodal Agency advised it to stop further enrollment. After the intervention of the union government, the work again started, but the work was again stopped from March 4, 2010 till finalization of a corrected BPL list to be uploaded to R.S.B.Y website.

The insurance company waited for about nine months but the corrected BPL lists was never uploaded to the R.S.B.Y website and due to non-availability of the required data on BPL families, the NIACL could not carry out its job. Then suddenly, the state government on October 16, 2010 without any rhyme or reason intimated the insurance company of cancellation of the work order. The insurance company in its writ petition, has alleged that the state government and other agencies have not acted transparently and the very cancellation of the work order without specifying any reason is arbitrary, discriminatory, malafide and hence liable to be quashed.

In the rejoinder to the reply of the state government, the NIACL said even as its representation before the authorities in October last was pending for disposal, the state government again floated tender for six districts where the former was working. It also made it clear that it had successfully implemented the scheme in some other districts like Nayagarh, Jharsuguda, Deogarh, Kalahandi, Nuapada and Puri and the percentage of enrolment in respect of those districts were more than the national average. The state government in its reply had taken stand that NIACL's performance in implementing the scheme was not satisfactory and hence the work order was cancelled.

NIACL countered the state government's stand saying that the latter had not filed a single document to show that communications was ever made with the former regarding its non-performance.