[Cites 2, Cited by 0]
Kerala High Court
Life Insurance Corporation Of India vs Smt.Surumi on 31 January, 2026
Author: Anil K.Narendran
Bench: Anil K.Narendran
1
WA No.1690 of 2025 2026:KER:7564
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN
&
THE HONOURABLE MR.JUSTICE MURALEE KRISHNA S.
SATURDAY, THE 31ST DAY OF JANUARY 2026 / 11TH MAGHA, 1947
WA NO. 1690 OF 2024
AGAINST THE JUDGMENT DATED 02.08.2024 IN WP(C) NO.16294 OF
2015 OF HIGH COURT OF KERALA
APPELLANT/PETITIONER:
LIFE INSURANCE CORPORATION OF INDIA
JEEVAN PRAKASH,PATTOM POST, TRIVANDRUM-695
004,REPRESENTED BY THE MANAGER(LEGAL & HPF),LIC OF
INDIA,DIVISIONAL OFFICE,ERNAKULAM, PIN - 682011
BY ADV SHRI.R.S.KALKURA
RESPONDENTS/RESPONDENTS:
1 SMT.SURUMI
THEJUS NAGAR 69, THOTTAMALA P.O.,KOLLAM DISTRICT, PIN
- 691020
2 THE INSURANCE OMBUDSMAN KOCHI
REPRESENTED BY ITS SECRETARY,2ND FLOOR,PULINAT
BUILDING, OPP.COCHIN
SHIPYARD,M.G.ROAD,ERNAKULAM,KOCHI, PIN - 682015
THIS WRIT APPEAL WAS FINALLY HEARD ON 19.01.2026, THE COURT
ON 31.01.2026 PASSED THE FOLLOWING:
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WA No.1690 of 2025 2026:KER:7564
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 1st 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 1st respondent and
three minor children. The claim preferred by the 1st 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 1st respondent
approached the 2nd 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.
WA No.1690 of 2025 2026:KER:7564
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 1st 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 1st 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.
WA No.1690 of 2025 2026:KER:7564
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 1st 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
WA No.1690 of 2025 2026:KER:7564
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 2nd respondent,
Insurance Ombudsman. Paragraphs 14 to 16 of the impugned
judgment of the learned Single Judge read thus:
"14. The learned counsel for the petitioner vehemently
argued the matter and has produced a reported judgment
in Star Health and Allied Insurance Company Ltd. v. Baiju S.
and another reported in [2019 (4) KHC 113], wherein it is
stated:
"If only reasons are assigned by the authority, an
appellate or judicial forum will be in a position to
evaluate the manner in which the power was
exercised in order to arrive at a just conclusion.
However, in the case on hand, Ombudsman basically
found that, the contract of policy issued is ab initio
void, consequent to the illegal conduct on the part of
the 1st respondent not disclosing the true and material
facts, which forms the foundation of issuance of a
policy. Above all on a reading of Rule 18, it is explicit
that only if it deems fit, the ex-gratia may be awarded,
which thus means, the authority was duty bound to
explain the circumstances leading to the fitness of
things enabling him to do so. Having not done so, the
substratum with respect to the exercise of the
discretionary power vanishes. ...........".
WA No.1690 of 2025 2026:KER:7564
15. On perusing the above judgment, it appears that in fact
this ratio is decided in favour of the 2nd respondent. Since
in the case on hand, while exercising jurisdiction under Rule
18, specific reason is assigned by the Ombudsman while
exercising discretion provided under Rule 18. He has
considered the pathetic situation, in which the 1st
respondent is in. It is also considered that the
circumstances in which she approached the Ombudsman for
awarding the assured sum.
16. The factual situation discernible from the records is that
at the time of the death of her husband, admittedly the
premium was in default. In fact, there was a grace period
from 04.12.2012 to 04.01.2013. Due to the financial
paucity in connection with the 3rd delivery of the 1st
respondent, the insured could not remit the amount, which
comes to Rs.1912/-. That itself shows the financial situation
of the 1st respondent. While this being the situation, her
husband expired on 29.01.2013 due to heart attack. She
was not in a position to continue any further payment
towards the policy as she is jobless, studied only up to 10th
standard and aged only 24 years. At that point of time, she
was surviving with the aged mother of the deceased along
with three minor children aged 6, 4 and 2. This situation is
specifically explained by the Ombudsman while exercising
his discretionary jurisdiction under Rule 18. I am satisfied
that the ombudsman is justified in granting the ex-gratia by
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exercising his discretion under Rule 18 of the Rules 1998".
6. Heard the learned counsel for the appellant. Despite
service of notice, none appeared for the 1st respondent.
7. The learned counsel for the appellant vehemently
submitted that the life insurance policy availed by the husband of
the 1st respondent was lapsed due to non-payment of premium,
which ought to have been paid by December, 2012. The lapsed
policy cannot be revived if the premium is not paid, even in the
grace period of thirty days. It is without noting these aspects, the
learned Ombudsman exercised the discretion under Rule 18 of the
RPG Rules. Similarly, the learned Single Judge also erred by
upholding Ext.P5 award of the learned Ombudsman. At least the
payment ought to have been limited by the learned Ombudsman
to the extent of repayment of the premium paid by the late
husband of the 1st respondent, with interest.
8. The husband of the 1st respondent availed a life
insurance policy from the appellant, which commenced on
04.06.2011. The premium was paid only for one year and six
months by him. The premium due for the quarter December 2012
was not paid by the husband of the 1st respondent, even within
WA No.1690 of 2025 2026:KER:7564
the grace period of thirty days from the due date, and hence the
policy lapsed. In such circumstances, we find force in the
submission of the learned counsel for the appellant that a lapsed
policy cannot be revived by condoning the delay in remitting the
premium. Moreover, the 1st respondent has no claim that the 1st
respondent was ready to pay the last premium to revive the policy.
9. At the same time, we notice that the learned Ombudsman
exercised his discretionary power under Rule 18 of the RPG Rules
to direct the appellant to pay the sum assured as ex gratia. The
learned Ombudsman as well as the learned Single Judge took into
consideration the fact that the 1st respondent is a widow of young
age having three minor children of the ages of 6, 4 and 2 at the
time of the death of her husband, the insured. The RPG Rules do
not provide how the power to make ex gratia payment has to be
exercised by the Insurance Ombudsman in cases wherein the
learned Ombudsman find it fit to order such payments. In Byju.S
[2019 (4) KHC 113], a learned Single Judge of this Court set
aside the award of the learned Ombudsman directing the ex gratia
payment of Rs.1/- lakh to the 1st respondent therein and instead
directed the Insurance Company to return the premium paid by
WA No.1690 of 2025 2026:KER:7564
the 1st respondent therein. The suppression of material facts in
the proposal form by the insured was taken into consideration by
the learned Single Judge in that judgment. But in the present
case, as stated above, the insured is no more, and the factors
taken into consideration by the learned Ombudsman are also
different. The social obligation of the insurer was taken note of by
the learned Ombudsman, which was upheld by the learned Single
Judge. Therefore Ext.P5 award passed by the learned Ombudsman
cannot be said to be outside the purview of the power vested in
him under Rule 18 of the RPG Rules. So also, we find no illegality
or impropriety in the impugned judgment of the learned Single
Judge.
Having considered the pleadings and materials on record and
the submissions made at the Bar, we find no ground to interfere
with the impugned judgment of the learned Single Judge.
In the result, the writ appeal stands dismissed.
Sd/-
ANIL K.NARENDRAN, JUDGE
Sd/-
sks MURALEE KRISHNA S., JUDGE
