TMI Blog2009 (7) TMI 797X X X X Extracts X X X X X X X X Extracts X X X X ..... This order shall dispose of two writ petitions, being WP No. 1998 of 2001 and WP No. 1743 of 2001, as both the writ petitions have arisen out of the orders passed by the Insurance Ombudsman. WP No. 1998 of 2001 has been filed by Oriental Insurance Company Ltd. (hereinafter referred as the Insurance Company ), challenging the order dated 4-12-2000, passed by the Ombudsman, whereby the preliminary objection raised by the Insurance Company regarding the assumption of jurisdiction by the Ombudsman has been rejected, and also raising a further challenge to the award dated 10-4-2001, whereby the Ombudsman has directed the payment of Rs. 17,92,194, along with interest, to M/s. Ruchi Worldwide Ltd. (hereinafter referred as the complainant-company ). WP No. 1743 of 2001 has been filed by the complainant-company, requesting for a writ of mandamus and for issuance of directions to the Insurance Regulatory Authority of India, as well as the Insurance Company, to make the payment as per the award dated 10-4-2001 passed by the Ombudsman. For the sake of convenience, the main order is being passed in WP No. 1998 of 2001. 2. The complainant-company M/s. Ruchi Worldwide Ltd. is a company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade by the complainant-company and rendered a final award on 10-4-2001. It was held that the complainant-company was entitled to an amount of Rs. 17,92,194, along with the interest payable at the rate of 9 per cent per annum from the expiry of three months from the date of putting up the claim with the Insurance Company. A copy of the award, dated 10-4-2001, has been appended as Annexure P-19, with WP No. 1998 of 2001. 6. As noticed above, WP No. 1998 of 2001 has been filed by the Insurance Company challenging the order dated 4-12-2000, passed by the Ombudsman, and also challenging the award dated 10-4-2001, Annexure P-19. Similarly, the complainant-company has filed WP No. 1743 of 2001, raising a grievance that the amount awarded by the Ombudsman along with the interest, has not been paid to the complainant-company, and, therefore, directions have been sought against the Insurance Company, as well as the Insurance Regulatory Authority to take up the matter with the Insurance Company, so that the said payment can be released and the award of the Ombudsman can be satisfied. 7. The Insurance Company has challenged the order dated 4-12-2000, Annexure P-16, passed by the Ombuds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, has referred to the Rules, and has drawn the pointed attention of the Court to rules 4( i ) and ( k ) and also rules 12 and 13 of the Rules and has maintained that since rule 4( i ) defines the word "insured person" to mean an individual by whom or on whose behalf an insurance policy has been taken on personal lines, and rule 4( k ) defines "personal lines" to mean an insurance policy taken or given in an individual capacity, therefore, a conjoint reading of the said definition clauses with rules 12 and 13 would indicate that a complaint under rule 13 could only be filed by an individual alone, and not by a juristic person, such as the complainant-company. Shri Mathur has asserted that the phrase "any person" used in rule 13 of the Rules is required to be read in the context of the definition clause contained in rule 4 of the Rules, and, therefore, no broader meaning could be attached to the aforesaid phrase. 14. According to Shri Mathur, the phrase "any person" used in rule 13 of the Rules has to be interpreted in a restricted and exhaustive sense alone, without giving it any enlarged meaning. To support the aforesaid conten-tion, learned senior counsel has also referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also be read in a meaningful manner so as to give effect to the provisions of the statute. In selecting the true meaning of a word regard must be had to the consequences leading thereto. If two constructions are possible to adopt, a meaning which would make the provision workable and in consonance with the statutory scheme should be preferred." (p. 426) [Emphasis supplied] 19. Again in the case of Secretary, Department of Excise Commercial Taxes v. Sun Bright Marketing (P.) Ltd., Chhattisgarh [2004] 3 SCC 185, the Supreme Court has made the following observations : "36. It is a well-settled principle of law that a subordinate legislation, either by way of rules framed in terms of the provisions of the Act, or the General Conditions issued by the Excise Commissioner in exercise of its statutory power or the conditions of sale memo framed, would be subject to the provisions of the Act. For proper interpretation of the statutory provisions, the Act and the Rules are required to be harmoniously read. " (p. 196) [Emphasis supplied] 20. That being the legal position with regard to the interpretation of the rules, it would be pertinent now to extract certain provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in exercise of the powers vested in it, under section 114(1) of the Rules. 23. Certain relevant rules may be extracted as follows : "2. Application. These rules shall apply to all the insurance companies operating in general insurance business and in life insurance business : Provided that the Central Government may exempt an insurance company from the provisions of these rules, if it is satisfied that an insurance company has already a grievance redressal machinery which fulfils the requirements of these rules." 3. Objects. The objects of these rules are to resolve all complaints relating to settlement of claim on the part of insurance companies in cost-effective, efficient and impartial manner." Rule 4 of the Rules contains the definitions. The relevant portion thereof, may be extracted as below : "4. Definitions. In these rules unless the context otherwise requires, ( a )to ( h )****** ( i ) insured person means an individual by whom or on whose behalf an insurance policy has been taken on personal lines; ( j )****** ( k ) personal lines means an insurance policy taken or given in an individual capacity." "12. Power of Ombudsman. (1) The Ombu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub-rules (1) and (2) of rule 13 for dealing with a claim : Provided that the Ombudsman may ask the parties for necessary papers in support of their respective claims and where he considers necessary, he may collect factual information available with the insurance company. (2) The Ombudsman shall dispose of a complaint fairly and equitably. 15. Recommendations made by the Ombudsman. (1) When a complaint is settled, through mediation of the Ombudsman, undertaken by him in pursuance of request made in writing by complainant and insurer through mutual agreement, the Ombudsman shall make a recommendation which he thinks fair in the circumstances of the case. The copies of the recommendation shall be sent to the complainant and the insurance company concerned. Such recommendation shall be made not later than one month from the date of the receipt of the complaint. (2) If a complainant accepts the recommendation of the Ombudsman, he will send a communication in writing within 15 days of the date of receipt of the recommendation. He will confirm his acceptance to Ombudsman and state clearly that the settlement reached is acceptable to him, in totality, in terms of recommendatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the aforesaid definition that the said definition is couched in very broad terms and is not restrictive, in any manner while referring to a policy-holder. Such a policy-holder can be a natural born person, or even a juristic person, such as an incorporated company, who holds an interest in the policy, either originally issued or later on assigned. 26. Apparently, the complainant-company, having taken out an insurance policy from the Insurance Company, is a policy-holder within the meaning of the said clause. Section 2(9) of the Act defines an "insurer". Concededly, the present Insurance Company falls within the definition of the insurer under the said Act. The Redressal of Public Grievances Rules have been framed by the Central Government under section 114 of the Act, to carry out the purposes of the Act. The aforesaid Rules have to be interpreted in a manner, so as to advance the object and intention of the Act, and cannot be assigned any such meaning, which may be in derogation of the said purpose, or may lead to a restrictive operation of any provisions of the Act. 27. Rule 2 of the Rules shows that the said Rules apply to all the Insurance Companies, unless so exemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to act fairly and equitably. Rule 15 requires the Ombudsman, to settle the complaint, in pursuance of request made in writing by complainant and insurer, through mutual agreement and on failure to do so, to render his award in terms of rule 16. 30. Shri A.M. Mathur, learned senior counsel for the Insurance Company, has referred to rule 12(2) to contend that the Ombudsman is to act as a counsellor and mediator in matters, which are within his terms of reference and, if requested to do so in writing by mutual agreement by the "insured person and insurance company". According to the learned senior counsel, the aforesaid user of the term "insured person" in this rule 12(2) clearly indicates that a complaint to the Ombudsman can only be filed by an "insured person" as defined under rule 4( i ) and by nobody else. 31. However, having given my thoughtful consideration to the aforesaid contention of the learned senior counsel for the Insurance Company, I find myself unable to accept the same. 32. A complaint before the Ombudsman may be filed by a complainant, who may be an insured person, as defined under rule 4( i ) of the Rules, or may be any other person, who has a grievan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held in Motipur Zamindari Co. Ltd. v. State of Bihar AIR 1953 SC 320 that whether the word "person" in a statute can be treated as including a corporation, must depend on a consideration of the object of the statute, and of the enactment passed, with a view to carry that object into effect. 36. In Agrawal Trading Corpn. v. Collector of Customs [1972] 1 SCC 553, it has been held by the Supreme Court as follows : "7. The second contention that because the firm is not a legal entity, it cannot be a person within the meaning of section 8 of the Foreign Exchange Regulation Act or of section 167(3), (8) and (37) of the Sea Customs Act, is equally untenable. There is of course, no definition of person in either of these Acts but the definition in section 2(42) of the General Clauses Act, 1897 or section 2(3) of the Act of 1868 would be applicable to the said Acts in both of which person has been defined as including any company or association or body of individuals whether incorporated or not. It is of course contended that this definition does not apply to a firm which is not a natural person and has no legal existence, as such clauses ( 3 ), ( 8 ) and ( 37 ) of sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n any person against whom a decree has been passed or an order capable of execution has been made; Order 1 CPC deals with the parties to suit to be arrayed as plaintiffs or defendants. The relevant observations made by the Apex Court may be extracted with advantage : "22. Any juristic person such as a company or idol can maintain a suit. These persons can be either decree-holders or judgment-debtors and in all these instances, the term "person" is used to describe such company or idol or other juristic person as provided in the General Clauses Act. The definition of the term "person" is given in the General Clauses Act according to which such term shall include any company or association or body of individuals whether incorporated or not. The said definition provides that the word "person" would include both natural and artificial persons. 23. Under Order 33, the petitioner who files an application has to present the application in person. Rule 3 states that the person who is presenting the application shall be in a position to answer all material questions relating to the application and he may also be examined by the Court. 24. The counsel for the appellant argued that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t apply on all fours to the controversy in question also. 40. It would also be relevant to notice certain guidelines laid down by the Supreme Court for Interpretation of Statutes, in Utkal Contractors Joinery (P.) Ltd. v. State of Orissa AIR 1987 SC 1454 : "9. In considering the rival submissions of the learned counsel and in defining and construing the area and the content of the Act and its provisions, it is necessary to make certain general observations regarding the interpretation of statutes. A statute is best understood if we know the reason for it. The reason for a statute is the safest guide to its interpretation. The words of a statute take their colour from the reason for it. How do we discover the reason for a statute? There are external and internal aids. The external aids are statement of objects and reasons when the Bill is presented to Parliament, the reports of Committees which preceded the Bill and the reports of Parliamentary Committees. Occasional excursions into the debates of Parliament are permitted. Internal aids are the preamble, the scheme and the provisions of the Act. Having discovered the reason for the statute and so having set the sail to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... policy taken or given in an individual capacity. Only an insured person as defined in rule 4( i ), read with rule 4( k ) would fall under the term "any person" in rule 13. Rule 13 also uses the expression "may himself or through his legal heirs". Rule 13 state that any person who has a grievance against an insurer, may himself or through his legal heirs make a complaint. The expression "may himself or through his legal heirs" qualifies the expression "any person". Definition clause available under the General Clauses Act, in our view, cannot be imported to explain the meaning of the expression "any person" in the Rules, since Rule itself gives sufficient indication with regard to the expression "any person". Further definition clause in section 3 of the General Clauses Act giving the definition says that the definition clause would apply to the General Clauses Act." It was further observed : "8. Legislature as a rule-making authority makes several rules from the experience gathered from the past and may design to use the words to deal with certain classes of persons. This rule firmly establishes that the intention of the Legislature must be found by reading the statute as a who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave already respectfully indicated my disagreement with the said judgment, still, the said judgment being prospective only, does not come to any rescue of the Insurance Company. 45. Consequently, I have 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. 46. 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. As a natural corollary, WP No. 1743 of 2001 filed by the complainant-company is allowed and the Insurance Company is directed to comply with the award dated 10-4-2001, in letter and spirit, by paying the requisite amount within a period of two mo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
