Hospital and insurance company

Hello, one of my relatives got surgery from a leading hospital in Gurgaon and made a Claim from a nationalised insurance company after discharge from the hospital. The insurance company paid only 50% of the claim citing the following reason: My relative had gone in for a single room whereas his limit for the stay was 1% of sum assured which worked out lower. As per a clause in the policy, all charges like tests, operation theater charges, surgeon fee etc are linked to the type of room availed and since the room entitlement limit was lower, the claim was accordingly reduced by linking all charges to a lower category room. We had a lot of debate on this topic but the insurance company was adamant and ultimately arranged for an email from the hospital confirming that the hospital would have taken lower charges if a lower category room had been availed. My query is (a) is such a clause in the insurance policy acceptable? Is it not restrictive And unfair? (B) is a hospital allowed to have lower charges for a lower room category eg. Surgeon fee or OT charges for same treatment being lower for a double or triple room category when compared to a single room category? Pl help. Thanks