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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
G.S. Kulkarni, J.
Aditya Birla Sun Life Insurance Co. Ltd. – Petitioner
Versus
The Insurance Ombudsman Goa & Anr. – Respondents
Writ Petition No. 7804 of 2021
Decided On : 18-08-2022
| Table of Content |
|---|
| 1. writ petition filed challenging insurance ombudsman award. (Para 1) |
| 2. challenge to ombudsman’s award for non-disclosure of ailments. (Para 2) |
| 3. key questions raised about maintainability of the writ. (Para 3) |
| 4. factual background provides details of the insured's medical history. (Para 4) |
| 5. insurance company's arguments against claim based on non-disclosure. (Para 5 , 6) |
| 6. respondent's counterarguments regarding the ombudsman’s jurisdiction. (Para 7 , 8 , 9) |
| 7. court's analysis of disclosure and its implications on contract validity. (Para 10) |
| 8. jurisdiction of the ombudsman under the insurance rules is established. (Para 12 , 13 , 14 , 15) |
| 9. analysis of ombudsman’s powers and quasi-judicial nature. (Para 17 , 18) |
| 10. legal standing of the ombudsman’s decisions detailed. (Para 19 , 20 , 21) |
| 11. court examines the value of the medical evidence presented. (Para 22 , 23) |
| 12. court scrutinizes the findings of the ombudsman closely. (Para 24 , 25) |
| 13. insurer claims justified due to non-disclosure of medical history. (Para 28 , 29 , 30 , 31) |
| 14. conclusion on the binding nature of the ombudsman’s award. (Para 32) |
| 15. final decision to quash ombudsman’s award is rendered. (Para 33 , 34) |
JUDGEMENT :
1. Rule made returnable forthwith. Respondent waives service. By consent of parties, heard finally.
2. This petition under Article 227 of the Constitution of India challenges an award dated 31 December 2020 passed by the Insurance Ombudsman, whereby the claim as made by Respondent No.2, who is the wife of the deceased insured has been allowed in terms of the following order :
3. The petition raises the following questions for consideration:-
(ii) Whether non disclosure of any information on existing ailments by an insured in the proposal form submitted to avail of a life insurance policy, would disentitle the claimant under the policy, to the benefits under such insurance policy ?
4. The factual antecedents are required to be noted:
(ii) It is the Petitioner’s case is that the proposal form mandated the insured (late husband of Respondent No.2) to disclose particulars about his medical history and more particularly, question nos.14 II, III(i)(ii), IV (a), (h)(i), which were responded in the negative by the said proposer. The questions are required to be noted, which read thus:
| Question | Response |
| 14 Medical History | |
| II) In the past five years, have you ever undergone any surgical operation at a hospital or clinic or undergone any investigations with other than normal or negative results. | No |
| III) i. Are you on diet or any other medicine of any kind as prescribed by a doctor? | No |
| ii. Are you c | |
Point of Law : Default in refund of premium amount within a reasonable time will come within definition of 'deficiency' as defined in Rule 13 of Insurance Ombudsman Rules, 2017.
The court emphasized the duty of disclosure in insurance contracts, ruling that claims cannot be repudiated without sufficient medical evidence supporting pre-existing conditions.
The court affirmed that insurers must ensure clear communication and understanding of policy terms, especially for illiterate clients, to avoid unjust repudiation of claims.
The Insurance Ombudsman acted within jurisdiction, and the Insurance Company must comply with the award, emphasizing accountability for delays and suppression of documents.
The court clarified that the monetary limit in the Insurance Ombudsman Rules applies to compensation, not to the claims themselves, allowing for broader jurisdiction.
The insurer cannot repudiate a life insurance claim based on non-disclosure of a previous policy if it failed to verify existing records, as this does not constitute material suppression.
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