Authority: High Court of Judicature at Bombay
Order Date: 21 September 2026
Case Overview
- Petition No.: Writ Petition No.5102 of 2011 filed by National Insurance Company Ltd. (Petitioner) against Mr. Pankaj Munni (Respondent).
- The petitioner invoked Article 226 to challenge the Insurance Ombudsman’s order dated 04.08.2010 in Complaint No. GI‑1136/2009‑2010, which directed the insurer to settle a claim on an ex‑gratia basis.
- Background facts: The deceased, Mr. Manish Muni, was covered under two individual Mediclaim policies issued by the petitioner. Policy 1 (14.11.2007‑13.11.2008) insured Rs.5,00,000 plus cumulative bonus Rs.1,50,000; Policy 2 (14.11.2008‑13.11.2009) insured Rs.5,00,000 plus cumulative bonus.
- Hospitalisation for leukemia spanned 24.10.2008 to 14.12.2008, overlapping both policies. The deceased died on 14.12.2008.
- Claim lodged for Rs.13,73,574. The insurer paid Rs.5,42,000 (under the first policy). The balance claim remained unpaid, prompting the brother (complainant) to approach the Insurance Ombudsman.
- Ombudsman’s award: payment of 50% of the balance claim amount Rs.7,23,574 on an ex‑gratia basis.
- Petitioner’s submissions: (i) claim should be limited to the first policy per Condition 3.13; (ii) ex‑gratia cannot be calculated as 50% of balance; (iii) no insured peril for the second policy; (iv) reliance on Rule 16(2) of the Redressal of Public Grievances Rules, 1998.
- No respondent appeared before the court.
Legal Reasoning
- Condition 3.13 of the policy defines “Limit of Indemnity” as the maximum liability for claims made during the policy period with respect to hospitalization taking place during the currency of the policy.
- The court interpreted “hospitalization” in Condition 3.13 as a general term, not limited to a specific period, thus covering the entire hospital stay, including the portion falling under the second policy.
- Daily hospital charges (room, doctor, etc.) are recurring and were incurred during the second policy period, establishing an insured peril under that policy.
- The court rejected the petitioner’s argument that the second policy could not cover the claim, stating the argument had no merit.
- Rule 16(2) of the Redressal of Public Grievances Rules, 1998 allows the Ombudsman to pass an award “fair in the facts and circumstances” and not exceeding Rs.20 lakhs (including ex‑gratia), whichever is lower.
- The Ombudsman’s ex‑gratia award of 50% of the balance claim is within the Rs.20 lakhs ceiling and therefore permissible.
- The court held that the Ombudsman is not bound by the insurer’s volition for ex‑gratia payments; the award can be directed by the Ombudsman under the proviso to Rule 16(2).
- No perversity or error was found in the Ombudsman’s order; thus, interference was unwarranted.
Final Outcome
- The writ petition is dismissed; the order of the Insurance Ombudsman dated 04.08.2010 stands.
- No costs are awarded.
- All concerned parties are directed to act on the digitally signed, QR‑verifiable copy of this order.
Topics: Insurance, Legal