The court affirmed the Ombudsman's discretion to grant ex gratia payments in life insurance cases, considering social obligations and compassionate grounds despite policy lapses.

JUDGMENT

Muralee Krishna, J.

The petitioner in W.P.(C) No.16294 of 2015 filed this writ appeal under Section 5(i) of the Kerala High Court Act , 1958, challenging the judgment dated 02.08.2024 passed by the learned Single Judge in that writ petition.

2. The husband of the 1^st respondent, namely, B. Noufal, had obtained a life insurance policy bearing No.785098280 commencing from 04.06.2011 from the appellant Life Insurance Corporation of India. The said Noufal died on 29.01.2013 on account of heart attack, leaving behind the 1^st respondent and three minor children. The claim preferred by the 1^st respondent was rejected by the appellant, stating the reason that the premium due for December, 2012 was not paid by the insured and hence the policy was lapsed. Being aggrieved, the 1^st respondent approached the 2^nd respondent Insurance Ombudsman, with a complaint filed under Rule 12(1)(b) read with Rule 13 of the Redressal of Public Grievance Rules, 1998 (‘RPG Rules’, for short). Before the Ombudsman, the appellant entered appearance and stated that the policy had run for only one year and six months.

The premium payable under the policy has to be paid every March/June/September/December. There was a grace period of 30 days from the due date, during which time the premium could be paid. If the premiums are not paid within the days of the grace period, the policy will lapse. The husband of the 1^st respondent died on 29.01.2013, and the days of the grace period for the unpaid dues were already over, and hence the policy was lapsed before his death.

3. The learned Ombudsman by Ext.P5 award dated

03.12.2014 directed the Insurer to condone the delay in remitting the premium and pay the claim. By invoking the power under Rule 18 of the RPG Rules, the learned Ombudsman further directed that in case the Insurer is having legal hurdle in reviving the lapsed policy, the sum assured may be paid as ex gratia. The learned Ombudsman took note of the fact that the 1^st respondent is only 24 years old and the children are aged 6, 4 and 2, with no one to take care of them, and the Insurance Companies have a social obligation as well, and hence in deserving cases they have to be compassionate.

4. Being aggrieved by Ext.P5 award of the learned Insurance Ombudsman, the appellant filed W.P.(C)No.16294 of 2015 under Article 226 of the Constitution of India seeking a declaration that the 1^st respondent was not entitled to any reliefs under the policy including ex gratia payment as directed by the learned Ombudsman and a writ of certiorari to quash Ext.P5 award. It is contended by the appellant that as far as the appellant and the life assured are concerned, they are bound by a contract and the terms of the contract would govern the payment of any benefit under the policy at all material times. According to the appellant, the learned Ombudsman has gone beyond his jurisdiction and has acted in excess of the powers vested with him. The granting of ex gratia payment is unreasonable and against the principles of natural justice, equity and good conscience.

5. In the writ petition, there was no appearance for the 1^st respondent. The learned Single Judge, after appreciating the materials placed on record and the submissions made by the learned counsel for the appellant, by the impugned judgment dated 02.08.2024, dismissed the writ petition. Though the learned counsel for the appellant relied on the judgment of this Court in Star Health and Allied Insurance Company Ltd. v. Byju. S [2019 (4) KHC 113] , the learned Single Judge found that the ratio decided in that judgment is in favour of the 2^nd respondent, Insurance Ombudsman. Paragraphs 14 to 16 of the impugned judgment of the learned Single Judge read thus:

“14. The learned counsel fo