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BFSI Chronicle, 11 Edition September2022
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present petition would be maintainable under d. If the insured had not himself filled up the
Article 227 of the Constitution. proposal form, the complainant herself could
not make any claim as the contract itself was
f. As the adjudication of a complaint before the fundamentally not enforceable as being not
Insurance Ombudsman possesses all essentials made by the insured in the manner as required
of a judicial/quasi-judicial adjudication akin by law.
to an adjudication by a Tribunal. Thus, it is
not an acceptable proposition that merely The Hon’ble Judge dealt with other aspects where
because Rule [17][8] provides that an award the Ombudsman has erred and relying on various
shall be binding on the insurer, the insurer judgments of the Apex Court, held that the insurance
would be precluded from assailing the award contract itself stood vitiated [due non-disclosure of
by invoking the jurisdiction of the High Court material facts] and was rightly repudiated by the
under Article 227 of the Constitution. Insurance Company.

The Judge thus held that a writ petition under Article Finally, while discussing the issue of pecuniary
227 is maintainable against the award of an Insurance jurisdiction, the Hon’ble Judge observed that the
Ombudsman. [Article 227 deals with the Power of Ombudsman ought to have rejected the complaint
superintendence over all courts by the High Court as the claim made by the Complainant [Respondent
and the Article 227 [1] reads: Every High Court shall no.2] was beyond the pecuniary jurisdiction of the
have superintendence over all courts and tribunals Insurance Ombudsman.
throughout the territories interrelation to which it
exercises jurisdiction]. Thus, in essence, the Hon’ble Judge held that:

While dealing with the merits of the case, the Hon’ble 1. An Insurance Company can challenge an award
Judge, inter alia, observed: of an Insurance Ombudsman before the High
Court under Article 227 of the Constitution of
a. The Insurance Ombudsman has completely India.
overlooked the requirements of the insurance
contract, namely, that there has to be disclosure 2. A contract of insurance is vitiated by suppression
in good faith which is sine-qua-non for an of material facts.
insurance contract to be enforceable when a
claim under such contract is made. 3. An Insurance Ombudsman cannot entertain a
complaint beyond his pecuniary jurisdiction.
b. The Ombudsman proceeded on surmises when
he observes that the Life Assured had good Note: Any views are opinions represented in this article
relations with the Petitioner’s agent and thus are in the author’s personal capacity and do not represent
there was a possibility of awareness of the those of people, institutions or Organisations that the
medical history of the deceased insured. author is associated with.

c. For the Complainant [Respondent no.2] to
say that the deceased insured was not aware
of the proposal form and that the agent of the
Petitioner [Insurance company] had filled up
the online form is untenable and accepting
such a statement of the Complainant by the
Insurance Ombudsman is perverse.

The Institute Of Cost Accountants Of India

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