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Judgment
K. Chandru, J.—This matter came to be posted on being specially ordered by the Hon''ble Chief Justice vide order dated 9.8.2011.
The Petitioner took an Insurance Policy with the 3rd Respondent Insurance Company. The said policy is a Health Policy. The Petitioner''s wife
had problem of respiratory infection and breathlessness. She was admitted to Sri Ramachandra Hospital and she was diagnosed to have congenital
Heart disease and her case was referred for surgery. She underwent surgery after admitted to the hospital on 29.5.206 and surgery was performed
on 2.6.2006. Subsequently, when the Petitioner claimed for reimbursement in terms of the Insurance Policy, the 3rd Respondent Insurance
Company repudiated his claim on certain grounds. The Petitioner, instead of challenging the same before the court of law by availing the remedy
provided u/s 114 of the Insurance Act, 1938, wherein the Central Government has constituted a Ombudsman in respect of the claims repudiated
by the Insurance Company under the Rules framed known as ''The Redressal of Public Grievance Rules, 1998'', filed a complaint before the
Insurance Ombudsman at Chennai. The complaint was taken on file and after notice to the 3rd Respondent, the Ombudsman by an order dated
16.6.2008 found that since she had pre-existing disease and also found to be a congenital defect, the claim arising out of the policy cannot be
considered and hence the Policy conditions cannot be found fault with. The Ombudsman did not find fault with the repudiation made by the 3rd
Respondent. The Petitioner challenging the Award of the Ombudsman has filed the present Writ Petition.
The Writ Petition was admitted and Notice was issued to the Respondents. When the notice went to the 1st Respondent, the 1st Respondent
by communication dated 1.12.2009 directly addressed to the Assistant Registrar of this Court and also sent the supporting files. It was stated by
them that they need not be a party in this Writ Petition.
On behalf of the 2nd Respondent, Mr. N.Vijayaraghavan, learned Counsel appears. It is stated by the learned Counsel that the Central
Government had framed Rules known as ''Redressal of Public Grievances (RPG) Rules, 1998 only to have an internal procedure to settle the
claims of the aggrieved persons to find a solution within the Department and the Ombudsman constituted under Rule 6 has power to pass an
Award, which is binding on the insurer. But, at the same time, it is not binding on the insured. Therefore, as far as the insured persons are
concerned, having a remedy before any forum including the forum provided by the Consumer Protection Act, 1988, since the Petitioner has not
satisfied with the Award of the Ombudsman, nothing prevented the Petitioner from availing the remedy by way of complaint before the Consumer
Court.
The question as to whether the Award of the Ombudsman is binding on the claimant/insured came to be considered by the National Consumer
Disputes Redressal Commission, New Delhi reported in 2005 Vol.1 CPJ 107 (NC). After analysing the Redressal of Public Grievance Rules, the
National Consumer Forum in paragraph Nos. 10 to 13, it was observed as follows:
In case, if the award is not accepted by the complainant, then the Insurance Company may not implement the said award.
The Rules quoted above are clear and do not require any further consideration.
In view of the above discussion, it is held that the decision of the Ombudsman is not binding on the complainant and the decision of the
Insurance Company to repudiate the claim is subject to adjudication by the Fora constituted under the Consumer Protection Act.
In the result, revision application filed by the complainant is allowed. The impugned order passed by the State Commission is set aside. The
order passed by the District Forum is restored. The District Forum is directed to proceed in accordance with law. There shall be No. order as to
costs.
Since it is the matter arising out of the insurance claim and also the terms of the Insurance are in the nature of contract, merely because the
award went against the Petitioner passed by the 2nd Respondent, the Petitioner cannot institute a Writ Petition against the repudiation of the claim
made by the Petitioner and having availed the Insurance Procedure established by the Central Government, the remedy open to the Petitioner is to
file a suit against the 3rd Respondent or in the alternative file an appropriate complaint before the Consumer Forum created under the Consumer
Protection Act. Hence, the writ petition stands dismissed. No. costs.