Case Note & Summary
The petitioner, M/s. Toyota Kirloskar Motor Pvt. Ltd., is a company engaged in the manufacture of motor vehicles. It had contracted a 'Group Personal Accident Tailor Made Policy' with respondent No.2, United India Insurance Company Limited, to cover all its employees for bodily injuries, including death, even outside the workplace. The premium was negotiated based on claims made in the previous year. The third respondent, Mr. Chandrashekar K.S., an employee of the petitioner, filed a claim before the Insurance Ombudsman (respondent No.1) seeking compensation under the policy. The Ombudsman passed an award dated 02.01.2019 directing the petitioner to pay compensation to the employee, without issuing any notice or affording a hearing to the petitioner. The petitioner filed a writ petition under Articles 226 and 227 of the Constitution of India seeking a writ of mandamus directing the Ombudsman to issue notice to the petitioner on any future claim, and a writ of certiorari to quash the award. The petitioner contended that the award was passed in gross violation of principles of natural justice as it was not heard. The respondents argued that the Ombudsman had jurisdiction and that the petitioner was not a necessary party. The High Court held that the award was vitiated by violation of natural justice, as the petitioner was directly affected by the award and had a right to be heard. The Court quashed the award and remitted the matter to the Insurance Ombudsman for fresh consideration after giving notice to all parties. The Court also directed the Ombudsman to issue notice to the petitioner in any future claim proceedings.
Headnote
A) Insurance Law - Natural Justice - Audi Alteram Partem - Insurance Ombudsman - Group Personal Accident Policy - The Insurance Ombudsman passed an award directing the employer to pay compensation to an employee without issuing any notice or hearing to the employer. The employer challenged the award by way of writ petition. Held that the award was passed in gross violation of principles of natural justice as the employer was not given an opportunity of being heard. The award was quashed and the matter remitted to the Ombudsman for fresh consideration after hearing all parties. (Paras 1-10) B) Constitutional Law - Writ Jurisdiction - Articles 226 and 227 of the Constitution of India - Certiorari - Mandamus - The High Court exercised its writ jurisdiction to quash an award passed by the Insurance Ombudsman that was vitiated by procedural irregularity. The Court also issued a mandamus directing the Ombudsman to issue notice to the employer in any future claim proceedings. Held that the High Court can interfere with quasi-judicial orders that violate natural justice. (Paras 1-10)
Issue of Consideration
Whether the Insurance Ombudsman can pass an award against an employer without issuing notice to the employer, and whether such award is liable to be quashed for violation of principles of natural justice.
Final Decision
The High Court allowed the writ petition, quashed the award dated 02.01.2019 passed by the Insurance Ombudsman, and remitted the matter to the Ombudsman for fresh consideration after giving notice to all parties. The Court also directed the Ombudsman to issue notice to the petitioner in any future claim proceedings.
Law Points
- Natural justice
- audi alteram partem
- Insurance Ombudsman jurisdiction
- Group Personal Accident Policy
- writ of certiorari
- writ of mandamus
