IMPORTANT POINT
The court clarified that the monetary limit in the Insurance Ombudsman Rules applies to compensation, not to the claims themselves, allowing for broader jurisdiction.

JUDGMENT :

S. Manu, J.

Appellants are the 2nd and 3rd respondents in W.P.(C) No.29499 of 2021. First respondent filed the writ petition challenging Ext.P4 award of Insurance Ombudsman. The said award was passed on the basis of a complaint filed under Rule 13(1)(b) read with Rule 14 of the Insurance Ombudsman Rules, 2017. Grievance in the complaint was regarding non-settlement of death claim with respect to the husband of the 1st respondent. Though the Ombudsman found merit in the contentions of the 1st respondent, the complaint was rejected holding that the claim amount was above the limit stipulated under proviso to Rule 17(2) of the Insurance Ombudsman Rules, 2017. Learned Single Judge, after considering the contentions elaborately, held that the Ombudsman was wrong in rejecting the complaint and allowed the writ petition. The learned Judge set aside Ext.P4 award and directed the Ombudsman to reconsider the complaint. Aggrieved by the interference by the learned Single Judge the insurance company has come up in appeal.

Facts

2. Relevant facts are as follows:-

Petitioner's husband availed a housing loan from the 3rd respondent in November, 2018 to the tune of Rs.1,73,00000/-. Immovable properties owned by him were offered as security. As insisted by the 3rd respondent, two insurance policies were also taken as security for the loan. A separate account was opened with the 3rd respondent for payment of premium. Both policies were subscribed on 30.11.2018 and premium was paid. According to the writ petitioner, EMIs were collected by the 3rd respondent till May, 2021. The company did not issue policy with respect to proposal No.20924808, though premium was collected. Unfortunately, the husband of the 1st respondent expired on 11.4.2021. The 1st respondent, on 26.5.2021, approached the office of the 3rd respondent and submitted claim forms with respect to both policies. On 17.06.2021, the insurance company issued a communication to the 1st respondent stating that the application relating to policy proposal No.20924808 was withdrawn for the reason that requirements were not complied within the time limit. It is the case of the 1st respondent that no intimation was provided any time before the death of her husband by the appellants or the 3rd respondent regarding non-fulfillment of any conditions or about the policy not being in force. She therefore submitted before the Ombudsman that the stand of the insurance company is unjust and illegal and prayed that appropriate orders may be passed to provide the benefit of the policy.

3. The insurance company resisted the complaint mainly relying on the proviso to Rule 17(3). Company contended that the Ombudsman is empowered to consider claims upto Rs.30,00,000/- only and claims with respect to any higher amounts cannot be entertained. As the claim involved in the case is much above the said limit, the Ombudsman is not competent to consider the same. On merits also the company refuted the claim. Ombudsman heard the parties and examined the materials. In Ext.P4 award the Ombudsman observed that there were lapses on the part of the insurer and found that the insurer is trying to wriggle out of their obligation under the contract, after retaining the premium for 2½ years. Nevertheless, the Ombudsman rejected the complaint holding that the claim amount being more than Rs.30,00,000/-, the complaint cannot be decided by the Ombudsman.

4. In the writ petition the 1st respondent contended that the rejection of the complaint was improper as the term “compensation” denotes a sum of money payable to a person on account of the loss or damage caused to him by the breach of a contract. Therefore, the interpretation of the proviso to Rule 17(3) of the Insurance Ombudsman Rules by the Ombudsman was incorrect. The 1st respondent contended on merits that the refusal to honour the claim by the company was illegal. The company on the contrary contended that the claim was not sustainable and proceedings before the Ombu