Kerala High Court
Karuvatta Service Cooperative Bank ... vs The Insurance Ombudsman on 26 May, 2025
Author: N.Nagaresh
Bench: N.Nagaresh
2025:KER:35669
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
MONDAY, THE 26TH DAY OF MAY 2025 / 5TH JYAISHTA, 1947
WP(C) NO. 1572 OF 2024
PETITIONER:
KARUVATTA SERVICE COOPERATIVE BANK LIMITED NO. 2145
KARUVATTA MURI, KARUVATTA VILLAGE,
ALAPPUZHA DISTRICT.
REPRESENTED BY ITS SECRETARY, PIN - 690517
BY ADVS.
ARUN CHANDRAN
HARIMOHAN
ANJALY T.A
ASWATHY S MENON
RESPONDENTS:
1 THE INSURANCE OMBUDSMAN
10TH FLOOR, JEEVAN PRAKASH, LIC BUILDING,
OPP TO MAHARAJA'S COLLEGE, M.G. ROAD,
ERNAKULAM, PIN - 682011
2 THE UNITED INDIA INSURANCE AND CO
REGISTERED OFFICE, 24 UNITED INDIA INSURANCE CO.
LIMITED. 24, WHITES ROAD,
CHENNAI REPRESENTED BY ITS BRANCH MANAGER.,
PIN - 600014
3 THE UNITED INDIA INSURANCE AND CO.
KAYAMKULAM BRANCH, T M BUILDING, FLOOR NO - 1,
BANK ROAD, KAYAMKULAM P.O., ALAPPUZHA, KERALA.
REPRESENTED BY ITS BRANCH MANAGER., PIN - 690502
2025:KER:35669
W.P.(C) No.1572/2024
:2:
4 THE COOPERATIVE INSURANCE SOCIETY LTD. NO. 4428.
OVER BRIDGE JUNCTION, K.S.C BUILDING,
T.C 28/2405, THIRUVANANTHAPURAM REPRESENTED BY
ITS MANAGING DIRECTOR IN CHARGE, PIN - 695001
BY ADVS.
P.R.SHAJI
CHIPPY AMBUDAS(K/004044/2023)
SRI.P.K. MANOJ KUMAR
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 21.05.2025, THE COURT ON 26.05.2025 DELIVERED THE
FOLLOWING:
2025:KER:35669
W.P.(C) No.1572/2024
:3:
N. NAGARESH, J.
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W.P.(C) No.1572 of 2024
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Dated this the 26th day of May, 2025
JUDGMENT
~~~~~~~~~ The petitioner is a Primary Credit Co-
operative Society governed by the Kerala Co-operative Societies Act and the Rules framed thereunder. The petitioner is challenging Ext.P9 Award dated 07.07.2023 of the Insurance Ombudsman.
2. The petitioner-Society had insured itself under Burglary Standard Policy of the 2nd respondent- Insurance Company as per Ext.P1. On the intervening night between 02.09.2020 and 03.09.2020, the accused in CC No.175/2021 broke open the office of the Society, cut open the strong room and committed theft of 4,500 grams of 2025:KER:35669 W.P.(C) No.1572/2024 :4: pawned gold articles and of ₹4,50,000/- cash. The installed CC TV cameras and three Desktop Computers were also stolen by the accused. The petitioner computes the worth of the stolen articles as ₹2.5 Crores.
3. The jurisdictional police registered Crime No.1084/2020 at Haripad Police Station on 03.09.2020. The police arrested the accused and recovered 3690.39 grams of gold articles and ₹3,50,000/- cash. The recovered assets are now thondi materials in CC No.175/2021. The petitioner made an insurance claim for ₹73,07,661/- as per Ext.P2. A Surveyor appointed by the Insurance Company made inspections. The Surveyor issued Ext.P3 loss assessment report dated 19.06.2021 assessing the total loss as ₹59,85,161/-. The Insurance Company, however, did not release the said amount. The petitioner therefore made a complaint on 04.03.2022 to the 4th respondent-Co-operative Insurance Society Limited. The 4th respondent, as per Ext.P4 communication, informed that the claim amount will be 2025:KER:35669 W.P.(C) No.1572/2024 :5: received by the petitioner before the expiry of March, 2022.
4. By Ext.P6 letter dated 28.11.2022 of the 2nd respondent, the petitioner was informed that the Company has approved the claim raised by the petitioner-Society for ₹25,47,145/-. The petitioner requested the Insurer to give adequate compensation. The 1st respondent thereupon issued Ext.P7 notice dated 17.02.2023 stating that ₹25,47,145/- approved by the competent authority is not full and is only partial in nature. Till date, respondents 1 to 3 have not released any payment to the petitioner. The petitioner therefore approached the Insurance Ombudsman in May, 2023 filing Ext.P8 complaint. The Ombudsman rejected the complaint citing that Ext.P8 is not within the scope of Insurance Ombudsman Rules, 2017. Hence, the petitioner is before this Court.
5. The petitioner states that the Insurance Company is duty bound to consider the claim raised by the petitioner in a time bound manner. Even after lapse of nearly 2025:KER:35669 W.P.(C) No.1572/2024 :6: one year since Ext.P7, respondents 2 and 3 have not released any payment to the petitioner. The 1st respondent-Insurance Ombudsman erred in dismissing the complaint of the petitioner. The petitioner is entitled to claim the amount of ₹59,85,161/- as indicated in Ext.P3, urged the petitioner.
6. The 3rd respondent resisted the writ petition. The 3rd respondent stated that the survey report submitted by the Surveyor of the Insurer as indicated that the lost gold is 4 Kg. 862 grams 700 milligrams. The police have recovered 3 Kg. 679 grams 900 milligrams of gold. The net lost gold is 1 Kg. 182 grams 800 milligrams. The cash lost is ₹4,43,743/-. As per the survey report, net assessed loss for burglary of cash and gold is ₹59,85,161/-. ₹3,50,000/- has been recovered by the police.
7. The 3rd respondent further submitted that in the Final Report, the police has stated that the accused named Appunni has purchased a residential building and property in the name of his wife's sister Revathikutty using the 2025:KER:35669 W.P.(C) No.1572/2024 :7: stolen articles. The said Revathikutty had given a statement under Section 164 Cr.P.C. to the effect that she has not given any money for the purchase of property in her name.
8. The 3rd respondent stated that the net loss assessed is ₹56,35,161/-. The cost of the property purchased by Revathikutty is ₹28,05,000/-. Assessed loss amount (final) is 28,30,161/-. The petitioner is entitled to 90% of the assessed loss ₹25,47,145/-. The net loss has been assessed after deducting the recovered cash of ₹3,50,000/- and ₹28,05,000/-, the valuation amount of land and building purchased by the accused in the name of Revathikutty. The 3rd respondent requested the petitioner to submit subrogation letter cum Power of Attorney, bank details and letter of indemnity in order to release the admitted amount of loss. The petitioner has not given the requisite documents/particulars.
9. I have heard the learned counsel for the petitioner, the learned Standing Counsel for respondents 2 2025:KER:35669 W.P.(C) No.1572/2024 :8: and 3 and the learned counsel appearing for the 4th respondent.
10. The petitioner is challenging Ext.P9 order of the Insurance Ombudsman. The Insurance Ombudsman has rejected the complaint submitted by the petitioner-Society holding that the policy is not issued under personal lines of insurance, Group Insurance Policies, policies issued to sole proprietorship or micro enterprises in terms of Rule 4 of the Insurance Ombudsman Rules and hence the complaint cannot be considered by the Ombudsman. Furthermore, as per Rule 17(3)(ii) of the Insurance Ombudsman Rules, the Insurance Ombudsman cannot award compensation exceeding ₹30 lakhs. I find that the complaint of the petitioner stands rejected by the Ombudsman for good and sufficient reasons.
11. The petitioner has a further prayer to direct the insurance company to fix the quantum of claim granted to the petitioner and to pay the same to the petitioner in 2025:KER:35669 W.P.(C) No.1572/2024 :9: accordance with the terms and conditions embodied in Ext.P1 policy. Since there are no questions of facts under serious dispute in this case, I am of the view that the said prayer of the petitioner can be dealt with by this Court.
12. It is not in dispute that the insurance company has assessed the value of cash and gold lost as ₹56,35,161/-. The investigation officers have recovered ₹3,50,000/- cash from the accused which is thondi material in the court now. The petitioner is entitled to claim the same from the jurisdictional court. Therefore, the insurance company is justified in deducting the amount o ₹3,50,000/- from ₹56,35,161/-, the assessed loss.
13. However, the insurance company has reduced the assessed loss amount by an amount of ₹28,05,000/- which is the valuation amount in respect of the land and building purchased by one Revathikutty. The contention is that the said Revathikutty, who is sister-in-law of the accused in the crime, has given Section 164 statement 2025:KER:35669 W.P.(C) No.1572/2024 : 10 : before the Magistrate stating that she has not paid any money for the purchase of the land and building. The insurance company would contend that the land and building was purchased by Revathikutty utilising the amount stolen by her brother-in-law Appunni. Therefore, the petitioner is entitled to recover/receive the said amount/property.
14. Such a stand is not legally tenable. Whether the accused has utilised the stolen money / gold ornaments for the purchase of the land and building in question and whether it is the accused who has paid the money for purchase of the building, etc. are disputed questions of fact. As far as the petitioner is concerned, the petitioner has no contractual or statutory relation with Revathikutty to recover the land and building from her. A Section 164 statement to the effect that she has not spent any money for purchase of the and and building in question, by itself will not confer any right on the petitioner to claim title to the said property. In such circumstances, the stand taken by the insurance 2025:KER:35669 W.P.(C) No.1572/2024 : 11 : company to reduce ₹28,05,000/- to arrive at assessed loss amount, is highly arbitrary and illegal.
15. Respondents 2 and 3 are therefore directed to recompute the assessed loss amount (final), taking note of the afore findings. A decision in this regard shall be taken within a period of one month and should be communicated to the petitioner. The admitted assessed loss amount shall be paid to the 1st respondent within a further period of one month.
Writ petition is disposed of as above.
Sd/-
N. NAGARESH, JUDGE aks/21.05.2025 2025:KER:35669 W.P.(C) No.1572/2024 : 12 : APPENDIX OF WP(C) 1572/2024 PETITIONER'S EXHIBITS Exhibit P1 TRUE COPY OF THE INSURANCE POLICY CERTIFICATE ISSUED BY RESPONDENT INSURANCE COMPANY BEARING POLICY NUMBER:
1015011220P101460142 FOR THE YEAR 2020 - 2021 DATED 18.05.2020 Exhibit 2 TRUE COPY OF THE COMPLAINT ALONG WITH BURGLARY INSURANCE CLAIM FORM AND CLAIM BILL SUBMITTED BY THE PETITIONER ADDRESSED TO THE RESPONDENT INSURANCE COMPANY Exhibit P3 TRUE COPY OF THE LOSS ASSESSMENT REPORT ISSUED THE SURVEYOR TO THE PETITIONER VIA EMAIL DATED 19.06.2021 Exhibit P4 TRUE COPY OF THE COMMUNICATION ISSUED BY RESPONDENT INSURANCE AGENT SOCIETY TO THE PETITIONER DATED 04.03.2022 Exhibit P5 TRUE COPY OF THE NOTICE ISSUED BY THE RESPONDENT INSURANCE COMPANY TO THE PETITIONER DATED 18.08.2022 Exhibit P6 TRUE COPY OF THE NOTICE ISSUED BY THE 1ST RESPONDENT INSURANCE COMPANY TO THE PETITIONER SOCIETY DATED 28.11.2022 Exhibit P7 TRUE COPY OF THE NOTICE ISSUED BY RESPONDENT INSURANCE COMPANY TO PETITIONER DATED 17.02.2023 Exhibit P8 TRUE COPY OF THE COMPLAINT PREFERRED BY THE PETITIONER SOCIETY TO THE RESPONDENT OMBUDSMAN Exhibit P9 TRUE COPY OF THE ORDER ISSUED BY RESPONDENT OMBUDSMAN TO THE PETITIONER DATED 07.07.2023