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BFSI Chronicle, 11 Edition September 2022
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Birla Sun Life Insurance Co. Ltd vs the Insurance Article 227 of the Constitution is available
Ombudsman and Anr. to the Insurance company or whether such
writ petition would not be maintainable? [2]
A. The facts of the Case are that the Insured was Whether non-disclosure of any information on
granted an insurance cover of `75 lakhs on existing ailments by an insured in the proposal
19.01.2018 and the Insured did not reveal any form would disentitle the claimant under the
adverse medical conditions in the proposal policy, to the benefits under such insurance
for insurance. The Insured expired on 10th policy?
October, 2019. The Insurance Company
repudiated the claim for suppression of past While answering the question of maintainability of
illness, viz., Hypertension, Psychiatric illness a writ petition under Article 227, The Hon’ble Judge
[schizophrenia] etc. of the High Court of Judicature at Mumbai, inter
alia, observed:
B. The Claimant filed a complaint against the
Insurance Company before the Insurance a. While exercising his duties and functions, an
Ombudsman contending, inter alia, that the Insurance Ombudsman is in fact adjudicating
Insured did not suffer from schizophrenia a dispute.
and hypertension at the time of availing the
policy and that the Insurer did not carry out b. The adjudication being undertaken by the
any medical examination and that there is Insurance Ombudsman has all the trappings
no correlation between the cause of death of an adjudication by a tribunal when the
[septicaemia and multiple organ failure] and Insurance Ombudsman adjudicates a complaint.
the illnesses schizophrenia and hypertension.
c. It is well established that the word “tribunal”
C. The Insurer replied to the complaint, inter as used under Article 227 of the Constitution
alia, stating that the claimant made a claim of is required to be given a liberal interpretation
`75 lakhs which was beyond the pecuniary to include all statutory authorities who are
jurisdiction of the Ombudsman as per the Rule vested with quasi-judicial power even though
17[3] of the Insurance Ombudsman Rules, 2017. they may not have been labelled as tribunals.
Responding to the objection of the Insurer, the
Claimant submitted a letter to the Ombudsman d. The Supreme Court in Manmohan Singh vs.
stating that she will be satisfied with the amount Commissioner Union Territory, Chandigarh &
of `30 lakhs though the claim is for `75 lakhs. Ors [AIR 1985 SC 364] held that the decision of
the Statutory quasi-judicial authorities which
D. The Ombudsman passed an award dated 31 can be appropriately described as tribunal
December 2020, against the Insurer [Aditya would be subject to judicial review, namely,
Birla Sun Life Insurance Company Ltd] to settle a writ of certiorari by the High Court under
death claim for `30 lakhs, if agreed upon by the Article 227 of the Constitution.
complainant.
e. The Supreme Court in Durga Hotel Complex
E. Aggrieved, the Insurance Company, filed a vs. Reserve Bank of India [in a dispute under
writ petition challenging the award of the the Banking Ombudsman Scheme, 1995] has
Ombudsman before the High Court. The writ observed that ‘the Ombudsman’ at the best, is
petition raises two questions viz., [1] Whether an authority or tribunal of limited jurisdiction
a remedy of assailing an award passed by the constituted under the Scheme. Thus, the
Insurance Ombudsman in a Writ Petition under Ombudsman being a statutory Tribunal, the

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