THE NATIONAL INSURANCE COMPANY LTD.,versusPANKAJ MUNNI,

 VINA
 ARVIND                                                                      8.as.wp.5102.2011 @1.doc
 KHADPE
Digitally signed by
VINA ARVIND
KHADPE
Date: 2026.09.21
19:30:09 +0530                   IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                         CIVIL APPELLATE JURISDICTION
                                               WRIT PETITION NO.5102 OF 2011

                      The National Insurance Company Ltd.                    … Petitioner
                           Versus
                      Pankaj Munni                                           … Respondent

                                                        ***
                      Mr. Shasvat Vidyarthi i/b. Mr. Asim Vidyarthi for the Petitioner.
                      None for the Respondent.
                                                        ***
                                                          CORAM : M.M. SATHAYE, J.
                                                              DATE   : 21st SEPTEMBER, 2026
                      P.C. :

                      1.       Heard the learned Counsel for the Petitioner. Office note
                      indicates that as per the Court’s recent Order dated 06.07.2026, the
                      notice issued to the sole Respondent has been duly served. None
                      appeared for the Respondent, despite due service.

                      2.       Invoking Article 226 of the Constitution of India, the Petitioner
                      - Insurance Company is challenging the Order dated 04.08.2010
                      passed        by   the    Insurance   Ombudsman   in   Complaint         No.GI-
                      1136/2009-2010.            By the said impugned Order, the Petitioner -
                      Insurance Company is directed to settle the claim lodged in respect of
                      hospitalization of deceased Mr. Manish Muni at Hinduja Hospital
                      from 24.10.2008 to 14.12.2008 for the treatment of Leukemia for
                      50% of the admissible expenses against the balance claim amount of
                      Rs.7,23,574/-, on ex-gratia basis.




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                              BACKGROUND

3.     The Complainant is the brother of the deceased Manish Muni.

4.     The deceased was covered under Individual Mediclaim
Insurance Policy. In the present case, admittedly, two such policies
were issued. The first policy issued by the Petitioner covered the
deceased for a period from 14.11.2007 to 13.11.2008 for sum
insured of Rs. 5,00,000/- plus cumulative bonus (‘C.B.’ for short) of
Rs.1,50,000/-. The second policy issued by the Petitioner covered the
deceased for a period from 14.11.2008 to 13.11.2009 for sum
insured of Rs.5,00,000/- plus C.B.

5.     The deceased was admitted for treatment of Leukemia from
24.10.2008 (which admittedly falls during the period of the first
policy) to 14.12.2008 (which admittedly falls during the period of
the second policy). Admittedly, the deceased passed away on
14.12.2008.

6.     Therefore, in the peculiar facts of this case, the insured was
admitted when the first policy was in force, but died in the hospital
during his treatment when the second policy was in force.

7.     The claim was lodged for reimbursement of the hospitalization
expenses to the tune of Rs.13,73,574/- under the insurance policy.
The amount of Rs.5,42,000/- was settled. Further claim of the
balance amount, though lodged, it was neither paid nor any
communication was sent.



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8.     In these circumstances, the brother of the deceased approached
the Insurance Ombudsman.

                                  SUBMISSIONS

9.     Learned   Counsel    for    the   Petitioner-Insurance      Company
submitted as under :

9.1.   That the claim is lodged on the basis of the hospitalization that
started during the period of the first policy under which the amount
of Rs.5,42,000/- has already been paid. However, the second claim
for the balance amount cannot be entertained as per Policy Condition
No.3.13.

9.2.   That under Condition No.3.13, there is limit of indemnity
making reference to the ‘hospitalization taking place during currency
of the policy’ which in the present case is during the first policy.
Therefore, the indemnity is limited and therefore the claim of balance
amount cannot be granted. That the Ombudsman found favour with
this argument, but still awarded payment.

9.3.   That the Ombudsman has not given any reason for arriving at
the ex-gratia amount which is in the nature of voluntary payment.
That ex-gratia amount could only be on its own volition of the
Insurance Company.

9.4.   That ex-gratia amount can be ordered as token / lump-sum
amount but and can not be based on calculations and therefore the
learned Ombudsman should not have taken any basis (such as 50%


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of the balance claim) for ordering the ex-gratia payment.

9.5.    Apart from Condition No.3.13, learned Counsel for the
Petitioner has also relied upon Rule 16(2) of the Redressal of Public
Grievances Rules, 1998 (‘the said Rules’ for short) and its proviso to
contend that there was no insured peril for passing award.

10.     None appeared for the Respondent.

                          REASONS AND CONCLUSION

11.     I have considered the submissions and perused the record.

12.     For the sake of the clarity, Condition No.3.13 of the policy
document as well as proviso to Rule 16(2) are reproduced below :-

       “3.13 Limit of Indemnity : means the amount stated in the
             schedule against the name of each insured person
             which represents maximum liability for any and all
             claims made during the policy period in respect of
             that insured person with regard to hospitalization
             taking place during currency of the policy. “

       “R. 16. Award -

              (1) Where the complaint is not settled by agreement
                under rule 15, the Ombudsman shall pass an award
                which he thinks fair in the facts and circumstances
                of a claim.

          (2) An award shall be in writing and shall state the
          amount awarded to the complainant:

             Provided that Ombudsman shall not award any
          compensation in excess of which is necessary to cover


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          the loss suffered by the complainant as a direct
          consequence of the insured peril, or for an amount not
          exceeding rupees twenty lakhs (including ex gratia and
          other expenses), whichever is lower.”

                                            (emphasis supplied)

13.    The argument of the learned Counsel for the Petitioner –
Insurance Company about the hospitalization taking place during
currency of the policy is based on Condition No.3.13. Bare reading of
Condition No.3.13 clarifies that the indemnity is limited to the claims
made during the policy period with regard to hospitalization taking
place during currency of the given policy. It is nobody’s case that such
condition     was   not   there   in   the    second   policy.     The     word
‘hospitalization’ in Condition No.3.13 is not qualified by any specific
period and will therefore have to be interpreted as a general term. In
the present case, admittedly, the deceased was hospitalized from
24.10.2008 to 14.12.2008. First part of hospitalization is from
24.10.2008 till 13.11.2008 which falls under first policy. And second
part of hospitalization from 14.11.2008 to 14.12.2008, which falls
under second policy. Therefore even under second policy there was
hospitalization.

14.    When a patient is admitted in the hospital taking medical
treatment, every day he is subjected to charges such as room charges,
doctor’s charges and other charges. It is inconceivable that the patient
who is admitted in the hospital (especially for disease such as
Leukemia) will not be charged per day. It is matter of common
knowledge that the room charges, doctor’s charges as well as other
charges are recurring events during the hospitalization of the patient,

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happening each day. Therefore, for the aforesaid period of
hospitalization falling under the second policy, the deceased was
certainly charged by the hospital under various heads. Therefore I see
no reason why for such hospitalization during the second policy
period should not be covered by term ‘hospitalization’ under
Condition 3.13 of the second policy. The deceased clearly had
‘insured peril’ during the second policy also.

15.    In that view of the matter, though the Ombudsman found that
the stand of the Petitioner-Insurance Company is “technically in order
and cannot be faulted with.” (in the words of the Ombudsman) , in
my considered view, the said argument of Petitioner has no merit and
ought to have been rejected.

16.    Therefore it cannot be said that under proviso to Rule 16(2) of
the said Rules, the learned Ombudsman cannot award any
compensation.

17.    Viewed in the light of what is observed above, the deceased
clearly had insured peril during the second policy also. Therefore,
Rule 16 permits the Ombudsman to pass an Award which he thinks
fair in the facts and circumstances of the claim. Proviso to Rule 16(2)
of the said Rules, permits the learned Ombudsman to grant
compensation including ex-gratia and other expenses. Hence, no fault
can be found with the decision taken by the Ombudsman to award
compensation.

18.    So far as the argument that ‘for granting ex-gratia payment,
the Ombudsman could not have taken the balance amount as basis

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and could not have directed 50% thereof’, it is important to note that
the Petitioner – Insurance Company has not volunteered any ex-gratia
payment and has not paid anything out of its own volition for balance
claim. Since the complaint was not settled by agreement under Rule
16(1), the Ombudsman was called upon to pass an Award. In such
circumstances, the ex-gratia amount directed under the impugned
order need not be limited to the volition of the Petitioner – Insurance
Company. It can most certainly be a direction by the Ombudsman
under the head of ‘ex-gratia’ specifically mentioned under the
proviso.

19.    It is settled position of law that to arrive at any figure of
monetary liability, the deciding authority has to have a basis. The
Ombudsman has chosen to take the balance amount as basis and has
permitted only 50% of the admissible expenses. The Ombudsman has
not directed the full amount claimed by the Respondent –
complainant. Ex-facie, proviso to Rule 16(2) provides for a
spectrum / band / limit upon the power to grant compensation. It
can not be in excess of which is necessary to cover the loss suffered or
can not exceed Rs.20 Lakhs whichever is lower. Considering that the
balance claimed has not been fully granted and is limited to only
50%, the Ombudsman was well within his limit as provided under
Rule 16 of the said Rules.

20.    In the aforesaid facts and circumstances and for the reasons
indicated above, there is no reason to interfere in the impugned
order. No perversity is found in the impugned order.



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21.    Writ Petition is accordingly dismissed. Rule is discharged. No
order as to costs.

22.    All concerned to act on duly authenticated or digitally signed
QR verifiable copy of this order.



                                            (M.M. SATHAYE, J.)




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