S/L 8 22.09.2026 Court. No. 25 Sourav WPA 27584 of 2025 Sri Sayan Kundu Vs. The Insurance Ombudsman & Ors. Mr. Subir Sanyal, Sr. Adv. Mr. Mainak Chandra Mr. Sanju Agarwal … for the petitioners. Mr. Gouranga Kumar Das Mr. Bishal Maity Ms. Tithli Piplai … for the respondent no. 2. Mr. Soumon Nanda … for the respondent no. 3. Mr. Sayak Majumder … for the respondent no. 4. Mr. Rajesh Singh Mr. Arka Maity Mr. Aniruddha Singh … for the respondent no. 7. 1. The petitioner has filed the present writ application challenging the impugned orders wherein the Ombudsman has rejected the claim of the petitioner on the ground that the Ombudsman found that the relief sought by the petitioner is Rs. 57 lakhs and as per the provisions to the Rules 17 of the Ombudsman Rules, 2017 provides that the Ombudsman shall not award compensation exceeding Rs. 50 lakhs. 2. Leanred counsel for the petitioner draws attention of this Court to the Rule 17 of the Insurance Ombudsman Rules, 2017, updated as on 09.11.2023 which reads as follows: “17. Award- (1) Where the complaint is not settled by way of mediation under rule 16, the Ombudsman shall pass an award, based on the pleadings and evidence brought on record. (2) The award passed under the sub-rule (1) shall be in writing, duly signed in person or digitally by the Insurance Ombudsman with reasons for passing such award. 2 (3) Where the award is in favour of the complainant, it shall state the amount of compensation granted to the complainant after deducting the amount already paid, if any, from the award: Provided that the Ombudsman shall,- (i) Not award any compensation in excess of the loss suffered by the complainant as a direct consequences of the cause of action; or (ii) Not award compensation exceeding rupees fifty lakhs (including relevant expenses, if any. (4) The Ombudsman shall finalise its findings and pass an award within a period of three months of the receipt of all requirements from the complainant. (5) A copy of the award shall be sent to the complainant and the insurer or insurance broker, as the case may be. (6) The insurer or insurance broker, as the case may be, shall comply with the award within thirty days of the receipt of the award and intimate compliance of the same to the Ombudsman and upload the details in the complaints management system. (7) The complainant shall be entitled to such interest at a rate per annum as specified in the regulations, framed under the Insurance Regulatory and Development authority of India Act, 1999, from the date the claim ought to have been settled under the regulations, till the date of payment of the amount awarded by the Ombudsman. (8) The award of Insurance Ombudsman shall be binding on the insurers or insurance broker, as the case may be.” 3 3. Learned counsel for the petitioner submits that Clause 3 of Rule 17 of the said Rules provides that the Ombudsman shall (i) not award any compensation in excess of the loss suffered by the complainant as a direct consequence of the cause of action or (ii) not award compensation exceeding rupees fifty lakhs. 4. Learned senior advocate appearing for the petitioner submits that the ombudsman has wrongly interpreted the said clause. He submits that the ombudsman has the power to award an amount more than 50 lakhs but the ombudsman cannot award the compensation more than 50 lakhs or in excess to the amount suffered by complainant. In support of his submission, the learned counsel for the petitioner has relied upon judgment passed by the Division Bench of Kerala High Court in WA No. 2121 of 2023 dated September 5, 2024 in the case of HDFC Standard Life Insurance Company Ltd. & Anr. Vs. Jyothi Madhavan U & Ors. wherein the Division Bench of the Kerala High Court has held as follows: “21. In the light of the above discussion, we are of the view that sub rule (3) of Rule 17 of the Insurance Ombudsman Rules has to be understood as incorporated with the intention to confer authority on the Ombudsman to award appropriate sum of money for loss, suffering, injury or damage sustained on account of deficiencies on the part of insurers as “compensation”, in addition to the main claim/relief sought in the complaint. First part of the proviso to sub rule (3), - “(i) not award any compensation in excess of the loss suffered by the complainant as a direct consequence of 4 the cause of action”, strengthens this conclusion. As a matter of fact, the proviso is restrictive in nature. Restriction imposed by the proviso is two fold. First part of the proviso restrains the Ombudsman from awarding compensation in excess of the loss suffered as a direct consequence of the cause of action. The 2nd part imposes and additional restriction by fixing a cap of Rs. 30,00,000/- in awarding compensation. Thus, the limit fixed in the proviso to sub rule (3) is not to be mistaken as a provision dealing with the pecuniary jurisdiction of the Ombudsman. On the other hand, the said limit ingrained in the proviso restricts the power of the Ombudsman only in the matter of granting compensation.” 5. Learned counsel appearing for the respondent authorities have supported the impugned orders passed by the ombudsman and submits that Ombudsman has correctly passed an award by rejecting the claim of the petitioner as the petitioner has claimed the award of Rs. 50 lakhs for which the Ombudsman has no jurisdiction to pass any award of compensation of more than Rs. 50 lakhs. 6. Heard the learned counsel for the respective parties. Perused the materials on record and the judgment relied by the petitioner. 7. The Ombudsman has passed the impugned order on the pretext that the petitioner has sought for relief of Rs. 57 lakhs but as per the Rule 17(3) of the said Rules, the Ombudsman cannot pass any compensation of more than Rs. 50 lakhs. This Court finds that the Ombudsman has not considered the Rule 17 of the Rules in its true spirit. Rules 17(3) provides that when the award is in 5 favour of the complainant, it shall state the amount of compensation granted to the complainant after deducting the amount already paid, if any, from the award and the Ombudsman shall not award any compensation in excess of the loss suffered by the complainant as a direct consequence of the cause of action or the award compensation exceeding Rs. 50 lakhs. 8. As per section 17, there is no bar upon the Ombudsman to restrict for awarding the amount if the claimant/claimants prove(s) their claim is more than Rs. 50 lakhs but the Ombudsman cannot pass any order of compensation more than 50 lakhs or in excess to the loss suffered by the claimant. 9. Considering the above, the impugned order is set aside and quashed. The matter is remanded back to the Ombudsman with the direction to reconsider the claim of the petitioner and after hearing to all the parties shall pass reasoned and speaking order within a period of eight weeks from the date of receipt of this order. 10. It is made clear that this Court has not gone into the merits of the matter. The Ombudsman shall decide all the points, if any, raised by parties. 11. WPA 27584 of 2025 is disposed of. 12. Urgent photostat certified copies of this order, if applied for, be supplied to the parties upon compliance with all the necessary formalities. (Krishna Rao, J.)