2009 (7) TMI 797 - HC - Indian Laws

Insurance Ombudsman jurisdiction extends to companies, not just individuals, court rules

The court held that the Insurance Ombudsman had jurisdiction to entertain a complaint filed by a company, rejecting the Insurance Company's argument that ... Assumption of jurisdiction by the Ombudsman - Held that:- No hesitation in holding that the complaint filed by the complainant-company before the Ombudsman in the matter, was fully maintainable in law, and had been appropriately entertained by the Ombudsman, and, therefore, the order dated 4-12-2000, Annexure P-16, rejecting the preliminary objection of the Insurance Company is fully justified and does not call for any interference. As noticed in the earlier portion of the order also, no arguments have been addressed by learned senior counsel for the parties on merits of the controversy with regard to the validity or otherwise of the award dated 10-4-2001, Annexure P-19. 47. In view of the aforesaid discussion, WP No. 1998 of 2001 filed by the Insurance Company is hereby dismissed Issues Involved:1. Jurisdiction of the Insurance Ombudsman.2. Maintainability of the complaint by a company under the Redressal of Public Grievances Rules, 1998.3. Compliance with the Ombudsman's award.Detailed Analysis:1. Jurisdiction of the Insurance Ombudsman:The primary issue addressed was whether the Insurance Ombudsman had the jurisdiction to entertain a complaint filed by a company. The Insurance Company argued that under the Rules, only an individual could file a complaint, not a company. The Ombudsman, however, rejected this preliminary objection, asserting that the complaint was maintainable and within his jurisdiction.2. Maintainability of the Complaint by a Company:The court examined the definitions and provisions under the Insurance Act, 1938, and the Redressal of Public Grievances Rules, 1998. The Insurance Company contended that the term 'insured person' defined in Rule 4(i) as an individual who has taken an insurance policy on personal lines, and Rule 4(k) defining 'personal lines' as insurance taken in an individual capacity, restricted complaints to individuals only. The court, however, adopted a broader interpretation. It held that Rule 13, which allows 'any person' with a grievance to file a complaint, was not limited to individuals but included juristic persons like companies. The court emphasized that the Rules should be interpreted to advance the object of the Act, which is to provide a grievance redressal mechanism for all policyholders, including companies.The court referenced the General Clauses Act, which defines 'person' to include companies and associations, supporting the broader interpretation. It also cited various Supreme Court judgments emphasizing that subordinate legislation should be interpreted in a manner that supports the statute's provisions and spirit.3. Compliance with the Ombudsman's Award:The court noted that the Ombudsman's award dated 10-4-2001, directing the Insurance Company to pay Rs. 17,92,194 along with interest, had not been complied with. The complainant-company filed WP No. 1743 of 2001 seeking enforcement of this award. The court, having dismissed the Insurance Company's writ petition challenging the Ombudsman's jurisdiction, allowed the complainant-company's writ petition. It directed the Insurance Company to comply with the award within two months, failing which, the complainant-company could initiate execution proceedings before the Insurance Regulatory Authority.Conclusion:The court concluded that the Insurance Ombudsman had the jurisdiction to entertain the complaint filed by the company and that the complaint was maintainable under the Rules. The court dismissed the Insurance Company's writ petition and directed it to comply with the Ombudsman's award. The judgment underscores the importance of interpreting subordinate legislation in a manner that advances the objectives of the primary statute.