Conduct Far From Bona-Fide: Bombay High Court Upholds Insurance Ombudsman’s Award Directing Insurance Company To Pay ₹27L To Widow
The Bombay High Court dismissed a Writ Petition filed by the insurance company against the award passed by the Insurance Ombudsman.
Justice Sandeep V. Marne, Bombay High Court
The Bombay High Court has upheld an Award of the Insurance Ombudsman directing the insurance company to pay Rs. 27 lakhs to a widow.
The Writ Petition before the Court was related to an unfortunate case where all three male members of the family passed away in a short span of 6 months leaving behind the family in penury.
A Single Bench of Justice Sandeep V. Marne observed, “In the present case as well, this Court finds the conduct of the finance company and the Petitioner to be far from bona-fide. They entered into internal business arrangement where IIFL has virtually acted as an insurance agent of the Petitioner while selling the policy to its borrower. The case does not involve voluntary application by the insured for insurance policy.”
Advocate Maithili Parikh appeared on behalf of the Petitioner while Advocate Avinash Fatangare appeared on behalf of the Respondents.
Brief Facts
The widow’s claim towards insurance availed by her husband as a part of package of housing loan availed for purchase of their home, was repudiated by the Petitioner insurance company. Due to widow’s inability to repay the housing loan, the finance company attached the flat for sale. The Insurance Ombudsman allowed the claim preferred by the widow and directed the Petitioner to pay to her the claim amount of Rs. 27 lakhs vide impugned award in the year 2022. The Petitioner was aggrieved by the said award and hence, filed a Writ Petition before the High Court.
Reasoning
The High Court in view of the above facts, said, “Since insurance policy is bundled with the home loan package, Petitioner insurance company ought to have sanctioned the claim after death of the insured by accepting the opinion of the Doctor who has treated him.”
The Court was of the view that there is no valid reason to interfere in the Order passed by the Insurance Ombudsman.
“In fact, this Court would have been justified in imposing costs on the Petitioners for their conduct in erroneously refusing the claim of Respondent No.2 and in making her litigate for the last four long years. By their conduct Petitioner has pushed the widow to such a position where her home is attached for sale by IIFL”, it added.
The Court, however, noted that the Insurance Ombudsman has already awarded interest at applicable bank rate plus 2% extra from the date of rejecting of claim till the date of payment.
“Therefore, while dismissing the petition, this Court directs that the entire payment due under the Award of the Insurance Ombudsman shall be paid by the Petitioner to Respondent No.2 within a period of 4 weeks”, it directed and concluded.
Accordingly, the High Court dismissed the Writ Petition and upheld the impugned award.
Cause Title- TATA AIG General Insurance Co. Ltd. v. Vinay Sah, Insurance Ombudsman, Pune & Anr. (Neutral Citation: 2025:BHC-AS:37359-DB)
Appearance:
Petitioner: Advocates Maithili Parikh, Nabeel Malik, and Sanjana Sapra.
Respondents: Advocates Avinash Fatangare and Archana Shelar.
