Karnataka High Court Upholds Order Allowing Policyholder To Engage Lawyer Before Insurance Ombudsman

The Karnataka High Court on Wednesday (July 1) dismissed an appeal filed by the Office of the Insurance Ombudsman challenging a single-judge's order that permitted a complainant to engage an advocate during the adjudicatory stage of proceedings before the Ombudsman. [2026 LiveLaw (Kar) 227]

The Division Bench of Chief Justice Vibhu Bakhru and Justice K.S. Hemalekha upheld the single-judge's ruling, which stated that the Ombudsman discharges a quasi-judicial function and cannot deny legal representation once the matter moves beyond mediation.

“…Learned counsel for respondent accepts notice. Petition is finally heard. For the reasons mentioned above appeal is dismissed. Condonation of delay is allowed”, the court noted in the order.

Detailed copy of the Judgment is awaited.

The counsel for the Ombudsman, today, said that strict rules of evidence like chief and cross examination would also be applicable if lawyers were engaged for representation.

However, the Division Bench orally noted: “…the only question required to be answered is who should represent…this is not an internal dispute…the ombudsman is acting as a statutory adjudicatory authority”.

Before the High Court, the complainant's [Respondent] counsel argued in the appeal that the adjudicatory proceedings before the Ombudsman should be on 'pleadings and evidence' brought on record, as per Rule 17(1), which justifies the engaging of an advocate.

The appeal arose from the single judge bench order in a writ petition filed by Sri M.V. Narasimha Prasad, a 54-year-old from Banashankari, Bengaluru, who had approached the High Court after the Insurance Ombudsman rejected his application to engage an advocate in his claim dispute.

Context & Earlier Proceedings

The petitioner had availed a 'Family Health Optima' Insurance Plan in 2019. After undergoing surgery for 'calculous cholecystitis' at a Chikkellur Hospital, he submitted a reimbursement claim, which was denied by the insurer. He then approached the Insurance Ombudsman.

Alleging that the Ombudsman passed an order detrimental to him in violation of natural justice, the petitioner approached the High Court. The single-judge bench had allowed the plea and remanded the matter back to the Ombudsman for fresh adjudication.

In the second round of proceedings before the Ombudsman, the petitioner's application to engage an advocate was denied. Aggrieved, he approached the High Court once again.

Justice Sachin Shankar Magadum, in his order dated March 27, 2026, held that the Insurance Ombudsman cannot deny a complainant the option of engaging an advocate once proceedings move beyond mediation and enter the adjudicatory stage under Rule 17 of the Insurance Ombudsman Rules, 2017.

The court had then clarified that Section 30 of the Advocates Act, 1961, which grants advocates the right to practice before any tribunal or authority empowered to take evidence, would apply to quasi-judicial proceedings before the Ombudsman.

The court observed that refusal to permit legal representation would prejudice the interests of "vulnerable categories of claimants":

The court rejected the Ombudsman's argument that allowing lawyer representation would disturb parity, noting that neither the Ombudsman nor the insurer's representatives are legally trained:

In the appeal, Adv. Sameer Sharma appeared for the respondent-complainant whereas Adv. Virendra D Joshi represented the Insurance Ombudsman.

Case Title: The Office Of Insurance v. M V Naramsimha Prasad

Case No: WA 1534/2026

Citation: 2026 LiveLaw (Kar) 227