Kerala High Court
Abraham Ittoop vs Insurance Ombudsman on 9 April, 2021
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
FRIDAY, THE 09TH DAY OF APRIL 2021 / 19TH CHAITHRA, 1943
WP(C).No.2416 OF 2021(B)
PETITIONER:
ABRAHAM ITTOOP,
AGED 73 YEARS,
PROPRIETOR,
NATIONAL ENTERPRISES,
OZHATHIL BUILDINGS, OZHATHIL ROAD,
NEAR RAILWAY GOODS SHED,
KOTTAYAM - 686001.
BY ADVS.
SRI.P.K.SURESH KUMAR (SR.)
SRI.K.P.SUDHEER
SMT.ANJALI MENON
RESPONDENTS:
1 INSURANCE OMBUDSMAN,
OFFICE OF THE INSURANCE OMBUDSMAN,
2ND FLOOR, PULINAT BUILDING,
OPP. COCHIN SHIPYARD,
M.G.ROAD, ERNAKULAM,
KOCHI-682015.
2 UNITED INDIA INSURANCE CO. LTD.,
REPRESENTED BY ITS DEPUTY GENERAL MANAGER,
REGIONAL OFFICE,
'SHARANYA' HOSPITAL ROAD,
ERNAKULAM - 682011.
3 BRANCH MANAGER,
UNITED INDIA INSURANCE COMPANY,
HILLSON HEIGHTS, PULIMOODU JUNCTION,
KOTTAYAM - 686 001.
R2-3 BY ADV. SRI.P.K.MANOJKUMAR, SC
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 09-04-2021, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
WP(C) No.2416/2021
:2 :
JUDGMENT
~~~~~~~~~
Dated this the 9th day of April, 2021
The petitioner, who is running a small time
proprietary unit which is engaged in the business of Clearing,
Forwarding and Transporting of Fertilisers, is aggrieved by
Ext.P3 Award of the Insurance Ombudsman.
2. The petitioner states that he owns three godowns at
different parts of Kottayam and all those godowns and goods
stored therein are insured by the 2 nd respondent. The policies
taken by the petitioner are Standard Fire and Special Perils
Policy. The petitioner has been paying a total premium of
about `3.5 lakhs every year.
3. On 09.08.2019, torrential rains hit the area. The
materials stored in the godowns were totally damaged. The
incident was intimated to the insurer. A Surveyor came and
assessed the total value of the stock in the godown at
WP(C) No.2416/2021
`30,72,808/-. Since the insurer did not consider the claim of
the petitioner, he preferred a complaint before the Insurance
Ombudsman invoking Rule 13 read with Rule 14 of the
Insurance Ombudsman Rules, 2017.
4. Though the Insurance Surveyor had assessed the
total value of the stock at `30,72,808/-, the petitioner, after
adjusting the salvage value, made a claim of `25,05,611/-
only, before the Insurance Ombudsman. The Insurance
Ombudsman, however, dismissed the claim holding that the
claimed amount exceeded the Ombudsman's limit of `30
lakhs. The said Ext.P3 Award is challenged in this writ
petition.
5. The counsel for the petitioner contended that
Ext.P3 order/Award has been passed on a wrong
interpretation of Rule 17(3) of the Insurance Ombudsman
Rules. Ceiling limit of `30 lakhs has to be tested against the
loss claimed by the complainant and not against the total
value of the stocks. The Ombudsman has failed to exercise
the jurisdiction vested in him as per the Rules.
WP(C) No.2416/2021
6. Heard.
7. It is discernible from Ext.P1 complaint filed by the
petitioner before the Insurance Ombudsman that the petitioner
had claimed quantum of relief of `25,05,611/- along with
interest at 8% per annum till the date of disbursement. The
petitioner made that claim after adjusting the salvage value of
the goods.
8. Rule 17 of the Insurance Ombudsman Rules, 2017
framed under Section 24 of the Insurance Regulatory and
Development Authority Act, 1999, reads as follows:-
"17. Award -
(1) Where the complaint is not settled by way of
mediation under rule 16, the Ombudsman shall pass
an award, based on the pleadings and evidence
brought on record.
(2) The award shall be in writing and shall state
the reasons upon which the award is based.
(3) Where the award is in favour of the
complainant, it shall state the amount of compensation
granted to the complainant after deducting the amount
already paid, if any, from the award:
Provided that the Ombudsman shall - (i) not
award any compensation in excess of the loss suffered
by the complainant as a direct consequence of the
cause of action; or (ii) not award compensation
exceeding rupees thirty lakhs (including relevant
expenses, if any).
WP(C) No.2416/2021
(4) The Ombudsman shall finalise its findings
and pass an award within a period of three months of
the receipt of all requirements from the complainant.
(5) A copy of the award shall be sent to the
complainant and the insurer named in the complaint.
(6) The insurer shall comply with the award
within thirty days of the receipt of the award and
intimate compliance of the same to the Ombudsman.
(7) The complainant shall be entitled to such
interest at a rate per annum as specified in the
regulations, framed under the Insurance Regulatory
and Development Authority of India Act, 1999, from
the date the claim ought to have been settled under
the regulations, till the date of payment of the amount
awarded by the Ombudsman.
(8) The award of Insurance Ombudsman shall
be binding on the insurers."
The proviso to sub-rule (3) lays down that the Insurance
Ombudsman shall not award any compensation in excess of
the loss suffered by the complainant as a direct consequence
of the cause of action.
9. Ext.P3 Award passed by the Ombudsman would
show that the learned Ombudsman has taken the actual value
of the stock of `33,18,735.84 and finding that the said amount
exceeded the limit of ₹30 lakhs, the Ombudsman has
dismissed the complaint. The petitioner had adjusted the
salvage value of the goods and had claimed only the actual
loss which is assessed by the petitioner at `25,05,611/-.
WP(C) No.2416/2021
10. When Rule 17 of the Insurance Ombudsman Rules
prohibits only award of compensation exceeding `30 lakhs,
the learned Ombudsman committed an error in rejecting the
claim of the petitioner on the ground that the claim amount
lodged for the stock of fertilisers as per Surveyor's
assessment and the actual value of the stock, exceed `30
lakhs. When the petitioner had limited his claim to
`25,05,611/-, the learned Insurance Ombudsman obviously
committed an error in rejecting the claim on the basis of the
claim amount lodged and the actual value of the stock.
In the circumstances, the writ petition is allowed.
Ext.P3 Award is set aside. Ext.P1 application of the petitioner
is remitted back to the Insurance Ombudsman, to consider the
claim of the petitioner on merits. The petitioner should be
granted further opportunity to produce additional documents
and evidence, if any, in the matter.
Sd/-
N. NAGARESH, JUDGE
aks/07.04.2021
WP(C) No.2416/2021
APPENDIX
PETITIONER'S EXHIBITS:
EXHIBIT P1 TRUE COPY OF COMPLIANT NO.KOC-G-
051/2021-0163 OF 2020 SUBMITTED BY THE
PETITIONER BEFORE THE 1ST RESPONDENT
UNDER RULE 13 R/W R.14 OF THE
INSURANCE OMBUDSMAN RULES, 2017.
EXHIBIT P2 TRUE COPY OF INSURANCE OMBUDSMAN
RULES, 2017 PUBLISHED IN THE GAZETTE
OF INDIA.
EXHIBIT P3 TRUE COPY OF AWARD
NO.IO/KOC/A/GI/0096/2020-2021 DATED
21.12.2020 PASSED BY THE 1ST
RESPONDENT.
EXHIBIT P4 TRUE COPY OF ORDER NO.100505/FIRE
CLAIM/2020/01 DATED 19.02.2020 ISSUED
BY THE 3RD RESPONDENT.
EXHIBIT P5 TRUE COPY OF SURVEY REPORT DATED
16.12.2019 WHICH FORMS THE BASIS OF
EXHIBIT P4.
EXHIBIT P6 TRUE COPY OF STANDARD FIRE AND SPECIAL
PERILS POLICY NO.1005051118P116186515
ISSUED BY THE 2ND RESPONDENT INSURANCE
COMPANY IN FAVOUR OF THE PETITIONER.
EXHIBIT P7 TRUE COPY OF CERTIFICATE OF THE
MUNICIPAL COUNCILOR DATED 28.02.2020.
EXHIBIT P8 TRUE COPY OF CERTIFICATE OF THE
VILLAGE OFFICER DATED 29.02.2020.
SR
