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2024 Supreme(Online)(KER) 45183
HIGH COURT OF KERALA
A.MUHAMED MUSTAQUE, CJ, S.MANU, J
HDFC STANDARD LIFE INSURANCE COMPANY LTD – Appellant
Versus
JYOTHI MADHAVAN U – Respondent
WA NO. 2121 OF 2023 | WP(C) NO.29499 OF 2021
For the Appellants/Petitioners: JITHIN SAJI ISAAC, K.J.SAJI ISAAC, ELIZABETH VARKEY
For the Respondents: K.P.SREEKUMAR, P.M.SATHEESH(K/1066/2001), K.K.CHANDRAN PILLAI (SR.)(C-41), AMBILY S
The Insurance Ombudsman has jurisdiction to review claims exceeding monetary limits for compensation, with such limits applicable only to awards given.
Headnote:(A) Insurance Ombudsman Rules, 2017 - Rule 17 - Jurisdiction and authority of the Ombudsman - Complaint regarding non-settlement of death claim - Ombudsman found merit but rejected due to claim exceeding Rs.30,00,000/- - Single Judge overturned this, clarifying that limits apply only to compensation, not claim eligibility - Direction for reconsideration issued. (Paras 1-12)
(B) Jurisdiction limits - It was ruled that the Insurance Ombudsman can address claims exceeding prescribed compensation limits, reinforcing the remedial purpose of the Ombudsman’s role. (Paras 11-22)
Facts of the case:
The case arose from a dispute regarding the non-settlement of a death claim by the insurer, which was contested after the claimant’s husband’s death following a housing loan agreement. The insurer rejected the claim based on financial limits outlined in Ombudsman Rules.
Findings of Court:
The court upheld the Single Judge’s decision directing fresh consideration of the claim, reiterating the Ombudsman’s role in resolving inter-party disputes without limiting to claim amount.
Issues: Central questions were whether the Insurance Ombudsman was right in rejecting the claim based on procedural limits and the appropriateness of interpreting such limits under existing rules.
Ratio Decidendi: Court reasoned that limits on compensation by the Ombudsman pertain only to awards and not to claim validity; a wider interpretation aligns with the legislative intent behind the Ombudsman’s founding principles.
Result: Writ appeal disposed.
| Table of Content |
|---|
| 1. overview of the dispute surrounding death claim settlement. (Para 1 , 2 , 3) |
| 2. arguments regarding interpretation of ombudsman rules. (Para 5 , 6) |
| 3. clarification of jurisdiction limits placed on the ombudsman. (Para 12 , 21) |
| 4. judicial direction for reconsideration of the claim. (Para 22) |
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 interpretati
