Madras High Court

Ramadass vs The Insurance Ombudsman on 8 December, 2023

Author: N.Anand Venkatesh

Bench: N.Anand Venkatesh

                                                                    W.P.(MD)No.8333 of 2020

                          BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

                                             DATED : 08.12.2023

                                                   CORAM

                          THE HONOURABLE MR.JUSTICE N.ANAND VENKATESH

                                         W.P.(MD)No.8333 of 2020
                                                  and
                                        W.M.P.(MD).No.7738 of 2020

                    Ramadass                                              ... Petitioner

                                                      Vs

                    1.The Insurance Ombudsman,
                      The State of Tamil Nadu and Puducherry,
                      Fathima Aktar Court,
                      4th Floor, No.453, Anna Salai,
                      Tenampet, Chennai 18.

                    2.HDFC Standard Life Insurance Company Ltd.,
                      Lodha Excelus,
                     13th Floor, Apollo Mills Compound,
                     N.M.Joshi Marg,
                     Mahalaxmi, Mumbai 400 011.

                    3.Cholamandalam Investment and Finance Company Ltd,
                      Dare House, No.2,
                      NSC Bose Road,
                      Parrys, Chennai 1.                               ... Respondents

                    PRAYER: Writ Petition filed under Article 226 of the Constitution of
                    India for issuance of Writ of certiorarified mandamus, calling for the
                    records relating to the proceedings of the 1st Respondent made in Award


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                                                                        W.P.(MD)No.8333 of 2020

                    No. Impugned Order/CHN/A.L1/0095/2019-2020, dated 26.11.2019 and
                    quash the same and consequently direct the 2nd Respondent to settle the
                    claim towards the Master Policy No.PP000053 dated 26.10.2017.
                                        For Petitioner     : Mr.M.Suresh Kumar

                                        For Respondents : No Appearance

                                                    ORDER

This Writ Petition has been filed challenging the order passed

by the first respondent through impugned proceedings dated 26.11.2019

and for a consequential direction to the second respondent to settle the

claim towards Master Policy No.PP000053, dated 26.10.2017.

2. The case of the petitioner is that his son named

Sathish Kumar obtained a housing loan from the third respondent to the

tune of Rs.10,13,260/- (Rupees Ten Lakhs Thirteen Thousand Two

Hundred and Sixty only) for construction of a house. The property was

also mortgaged as a security for the housing loan. The petitioner stood as a

guarantor for the loan obtained by his son. The third respondent while

granting the loan, insisted that the petitioner's son must get an Insurance

cover from the second respondent. As per this Policy, the loan amount that

was taken by the petitioner's son was covered for a period of ten years from

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26.10.2017. One time premium was also paid. After the loan amount was

released, a residential house was also constructed and it was completed

during February 2018.

3. The petitioner's son suffered heavy fever during December

2018 and as per the advice of the Doctor, he was admitted in the Vellamal

Medical College Hospital at Madurai during the third week of December

2018. He took treatment as an in-patient from 19.02.2018 to 31.12.2018

and he was discharged. Thereafter, once again his health condition

deteriorated and he was admitted on 07.01.2019 and unfortunately, he died

on 09.01.2019. As per the discharge summary that was given by the

Hospital, the petitioner's son was diagnosed to have suffered from Boop,

Viral Pneumonia, Acute Intersitital Pneumonia, Lymphoma.

4. After the above incident took place, the third respondent

advised the petitioner to make the insurance claim from the second

respondent so as to settle the loan amount. Accordingly, the petitioner

made a claim before the second respondent and the second respondent

through letter dated 22.03.2019 rejected the claim made on the ground that

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the petitioner's son was suffering from Diabetes Mellitus and this was

concealed at the time when the Policy was issued and therefore, the

petitioner is not entitled for settlement of the claim.

5. Aggrieved by the rejection of the claim made by the second

respondent, the petitioner filed a complaint before the first respondent.

The first respondent after enquiring all the parties came to the conclusion

that there is no ground to interfere with the decision taken by the second

respondent and the complaint was disposed of through impugned

proceedings in Award No. Impugned Order/CHN/A.L1/0095/2019-2020,

dated 26.11.2019. Aggrieved by the same, the present Writ Petition has

been filed before this Court.

6. Heard the learned counsel appearing for the petitioner. The

respondents have been served with notice and there is no representation

either in person or through counsel.

7. The short issues that arises for consideration in the present

Writ Petition are as follows:

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“(a). Whether this Writ Petition is maintainable as against the

rejection of claim made by a private Insurance Company?

(b). Whether the claim made by the petitioner is liable to be

repudiated on the ground that the petitioner's son had concealed his health

condition at the time of taking policy from the second respondent

Insurance Company?”

8. Insofar as the first issue is concerned, it was dealt with by

the Division Bench of this Court in W.A.(MD).No.157 of 2019 dated

17.10.2019 and it was held as follows:-

“10. In the instant case, the appellant admittedly is not a Government Undertaking Company, but a Private Insurance Company, which has the approval of IRDA. The order impugned in the writ petition was not an order passed by the appellant / Insurance Company, but an order passed by the Insurance Ombudsman, who exercised the powers under the provisions of the Insurance Act and the other related provisions. The Insurance Ombudsman has been created so as to provide remedy to the insured in

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the event of they are aggrieved by any action of the Insurance Company in not settling the claim amount. Furthermore, the Insurance Ombudsman exercises the powers under the Redressal of Public Grievances Rules, 1998. Therefore, the power of the Insurance Ombudsman is a trapping of the Tribunal and accordingly, a full-fledged hearing was granted and the insurer, namely, the appellant was represented by its Manager (Legal) and the complainant, namely, the first respondent appeared in person before the Insurance Ombudsman. Therefore, the bar for entertaining a writ petition cannot be applied to the facts of the present case and to that extent, the decision in the case of G.Ponmani (supra) does not support the case of the appellant Insurance Company.”

9. On a careful reading of the above order, it is seen that the

facts of the present case is almost similar to the facts that was dealt with by

the Division Bench. In that case, the private Insurance Company was

involved and they had repudiated the claim made under the Policy. In

view of the same, a complaint was made before the Insurance Ombudsman.

When the Ombudsman also rejected the complaint, it was put to challenge

in the Writ Petition. In view of the same, it was held that the Insurance

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Ombudsman has the trapping of a tribunal and if they had also conducted a

full-fledged enquiry and passed an order, as against that order, a Writ

Petition is maintainable.

10. The Division Bench specifically took note of the

Judgment in the case of G.Ponmani Vs. The Life Insurance Corporation

of India and another reported in (1993) AIR (Madras) 343 and held that

the said decision will not apply to the facts of the case, since the rejection

of the complaint by the Insurance Ombudsman was the one that was put to

challenge and therefore, the Writ Petition was held maintainable. In view

of the same, this Court holds that the present Writ Petition is maintainable

and the first issue is answered accordingly.

11. Insofar as the second issue is concerned, the second

respondent Insurance Company had rejected the claim mainly on the

ground that the petitioner's son was suffering from Diabetes Mellitus and

this was not informed to the Insurance Company when the Policy was

taken. On going through the materials, it is seen that there was absolutely

no pre-condition that the insured must undergo a medical examination and

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submit a certificate at the time of taking the Policy. The second

respondent has come to the conclusion that the petitioner's son was

suffering from Diabetes Mellitus and they came to know of the same when

they made their private investigation. On this ground, the second

respondent proceeded to reject the claim made by the petitioner.

12. This Court does not want to enter into the dispute as to

whether the petitioner's son was suffering from Diabetes Mellitus or not.

Even assuming that he suffered from such a disease, it must be seen as to

whether the demise of the petitioner's son had any direct nexus with the so-

called ailment that was suffered by the petitioner's son.

13. It is seen from the discharge summary that the petitioner's

son had died due to Boop, Viral Pneumonia, Acute Intersitital Pneumonia,

Lymphoma. This pertains to an infection that was caused to the lung. On

going through the entire discharge summary, it is seen that the petitioner's

son was treated only for this ailment and unfortunately, he died on

09.01.2019 at about 07.55 P.M. Therefore, it is not fair on the part of the

second respondent Insurance Company to reject the claim made by the

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petitioner, just because, the petitioner's son did not inform that he had

Diabetes Mellitus. If Diabetes Mellitus is a ground to reject the claim, then

most of the claims will have to be rejected, since more than half of the

population suffers from Diabetes Mellitus. The second respondent was

only attempting to find a ground to reject the claim and unfortunately, the

first respondent did not appreciate the same and closed the complaint given

by the petitioner.

14. Even on going through the impugned proceedings of the

first respondent, the first respondent has observed that in the repudiation

letter dated 23.03.2019, the insurer has not disclosed the details of the

evidence which they obtained in order to prove the so-called non-

disclosure. Therefore, it is quite clear that there was no evidence available

to substantiate as to whether there was an intentional non-disclosure on the

part of the petitioner's son. After rendering such a finding, the first

respondent proceeds to advice the second respondent that in future they

must properly incorporate those particulars in the repudiation letter in

order to confirm with the provisions of the Insurance Act.

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15. In the Division Bench Judgment that was referred supra, a

similar reason was given for rejecting the claim made and the Division

Bench dealt with the same as follows:

“13. With regard to the pre-ailments, there is nothing on record to show that the appellant Insurance Company directed the insured to undergo a medical examination. It is the case of the appellant Insurance Company that subsequent to the claim petition, when they made investigation, they came to know that the deceased was suffering pre-existing ailments. The cause of death is an accidental fall. A criminal case was registered and after performing autopsy, the body was handed over. Therefore, even assuming that there were certain pre-existing ailments, that would not be a cause for the death of the first respondent's father and hence, the appellant Insurance Company cannot take umbrage of the same.”

16. In the light of the above discussion, this Court has

absolutely no hesitation to interfere with the impugned proceedings of the

first respondent in Award No. Impugned

Order/CHN/A.L1/0095/2019-2020, dated 26.11.2019 and accordingly, the

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same is hereby set aside. There shall be a direction to the second

respondent Insurance Company to immediately settle the claim towards the

Master Policy No.PP000053 dated 26.10.2017.

17. The learned counsel appearing for the petitioner submitted

that the petitioner in order to avoid any default had settled the entire

housing loan to the third respondent.

18. In view of the same, the claim amount shall be settled by