Introduction:
In a significant ruling reinforcing the principles of natural justice and access to legal representation, the Karnataka High Court has held that a complainant cannot be denied the assistance of an advocate once proceedings before the Insurance Ombudsman move beyond mediation and enter the adjudicatory stage. The decision was rendered by a Division Bench comprising Chief Justice Vibhu Bakhru and Justice K.S. Hemalekha in The Office of Insurance Ombudsman v. M.V. Narasimha Prasad, wherein the Court dismissed the appeal filed by the Office of the Insurance Ombudsman and affirmed the earlier judgment of the Single Judge. The Division Bench thereby upheld the finding that the Insurance Ombudsman performs a quasi-judicial function while deciding disputes under the Insurance Ombudsman Rules, 2017, and that parties cannot be deprived of legal representation at that stage.
The litigation arose out of a health insurance dispute involving M.V. Narasimha Prasad, a resident of Banashankari, Bengaluru. The respondent had purchased a “Family Health Optima” Insurance Policy in the year 2019. Subsequently, he underwent surgery for calculous cholecystitis at a hospital in Chikkellur and sought reimbursement of the medical expenses from the insurer. His claim was repudiated, compelling him to invoke the dispute resolution mechanism before the Insurance Ombudsman established under the Insurance Ombudsman Rules, 2017.
During the first round of proceedings before the Ombudsman, the respondent alleged that an adverse order had been passed in violation of the principles of natural justice. He approached the Karnataka High Court by filing a writ petition challenging the Ombudsman’s decision. The Single Judge accepted his grievance, set aside the earlier order and remanded the matter to the Ombudsman for fresh adjudication in accordance with law.
After the matter was remitted, the respondent sought permission to engage an advocate to represent him before the Ombudsman during the adjudicatory proceedings. The Ombudsman rejected the request, maintaining that the Rules did not contemplate legal representation by advocates during the proceedings. Aggrieved by this refusal, the respondent once again approached the High Court.
Justice Sachin Shankar Magadum, by judgment dated 27 March 2026, held that the Insurance Ombudsman could not refuse permission to engage an advocate once the proceedings entered the adjudicatory stage under Rule 17 of the Insurance Ombudsman Rules, 2017. The Court further held that Section 30 of the Advocates Act, 1961, which recognises the statutory right of advocates to practise before courts, tribunals and authorities empowered to record evidence, was applicable to such proceedings. Challenging this judgment, the Office of the Insurance Ombudsman preferred the present intra-court appeal before the Division Bench.
The appeal raised an important question concerning the nature of proceedings before the Insurance Ombudsman and the extent to which parties can insist upon legal representation in quasi-judicial proceedings. The decision has wider implications for consumer rights, procedural fairness, and the functioning of statutory dispute resolution mechanisms under the insurance regulatory framework.
Arguments of the Parties:
The Office of the Insurance Ombudsman, as the appellant, challenged the judgment of the Single Judge primarily on the ground that permitting advocates to appear before the Ombudsman would fundamentally alter the nature of the proceedings envisaged under the Insurance Ombudsman Rules, 2017. It was argued that the Ombudsman mechanism was intended to provide an inexpensive, informal and expeditious forum for resolution of insurance disputes without the technicalities generally associated with ordinary judicial proceedings.
The appellant contended that once legal practitioners were permitted to appear on behalf of parties, proceedings before the Ombudsman would inevitably become adversarial in character. Learned counsel appearing for the Ombudsman submitted before the Division Bench that permitting advocates to represent parties would lead to the application of strict procedural requirements governing recording of evidence, including examination-in-chief and cross-examination, thereby defeating the very object behind creating the Ombudsman system as a simplified dispute resolution forum.
The Ombudsman also sought to distinguish its proceedings from those conducted before regular courts and tribunals, contending that the Insurance Ombudsman was designed to function as an alternative grievance redressal mechanism where technical legal representation was unnecessary. According to the appellant, allowing advocates would unnecessarily complicate proceedings and prolong disposal of insurance claims.
On the other hand, the respondent-complainant supported the judgment delivered by the Single Judge and argued that the Ombudsman’s functions substantially change once the matter progresses beyond mediation and enters the adjudicatory stage contemplated under Rule 17 of the Insurance Ombudsman Rules, 2017. It was submitted that while mediation proceedings may remain informal, adjudicatory proceedings necessarily involve determination of disputed questions based upon pleadings, documentary material and evidence produced by the parties.
The respondent argued that Rule 17(1) specifically envisages adjudication based upon pleadings and evidence brought on record. Consequently, once the Ombudsman assumes the role of an adjudicatory authority, parties must be permitted to obtain professional legal assistance to effectively present their case. Denial of legal representation at such a stage would seriously prejudice litigants, particularly individuals unfamiliar with legal procedures and insurance law.
Reliance was also placed upon Section 30 of the Advocates Act, 1961. The respondent submitted that the provision grants advocates a statutory right to practise before any court, tribunal or authority legally empowered to take evidence. Since the Insurance Ombudsman performs a quasi-judicial function while deciding disputes and evaluates evidence produced by parties, the Ombudsman falls within the scope of authorities before whom advocates are entitled to appear.
The respondent further contended that refusal to permit legal representation disproportionately affects ordinary policyholders, many of whom belong to vulnerable sections of society and may lack the legal knowledge necessary to effectively contest insurance disputes involving complex contractual and medical issues. It was therefore argued that permitting advocates advances rather than obstructs the principles of fairness and natural justice.
Court’s Judgment:
The Division Bench dismissed the appeal filed by the Office of the Insurance Ombudsman and affirmed the judgment delivered by the Single Judge. While the detailed judgment is awaited, the operative order records that the appeal was dismissed after hearing the parties. The Bench also condoned the delay in filing the appeal before proceeding to decide the matter on merits.
During the course of the hearing, the Division Bench made significant oral observations indicating its agreement with the reasoning adopted by the Single Judge. Responding to the appellant’s submission that permitting advocates would result in application of strict evidentiary procedures such as examination-in-chief and cross-examination, the Court clarified that such apprehensions were misplaced. The Bench observed that the principal issue before it was not the procedural format of the proceedings but the entitlement of a party to be represented by an advocate before a statutory adjudicatory authority.
The Court orally remarked:
“…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.”
This observation reflects the Court’s emphasis that once the Insurance Ombudsman exercises statutory adjudicatory powers, questions relating to representation must be examined from the standpoint of fairness rather than administrative convenience.
The Division Bench effectively endorsed the reasoning adopted by Justice Sachin Shankar Magadum in the earlier judgment. The Single Judge had drawn an important distinction between mediation proceedings and adjudicatory proceedings under the Insurance Ombudsman Rules, 2017. While mediation seeks consensual settlement through informal dialogue, adjudication requires the Ombudsman to determine the rights and liabilities of parties by examining pleadings, documents and evidence. It is this adjudicatory function that imparts a quasi-judicial character to the proceedings.
The Single Judge had held that once proceedings reach this adjudicatory stage under Rule 17, the Insurance Ombudsman cannot arbitrarily prohibit parties from engaging legal practitioners. Such prohibition would undermine the principles of natural justice by depriving litigants of professional assistance in proceedings that may involve interpretation of insurance contracts, examination of medical records and appreciation of legal issues.
The earlier judgment had also relied upon Section 30 of the Advocates Act, 1961. The provision recognises the statutory right of advocates enrolled under the Act to practise before every court, tribunal and authority legally authorised to receive evidence. The Single Judge concluded that the Insurance Ombudsman answers this description while discharging adjudicatory functions and therefore cannot exclude advocates merely because the proceedings originate under a special statutory mechanism.
Another important aspect of the earlier judgment, which now stands affirmed, concerned access to justice. The Single Judge had observed that refusal to permit advocates would particularly prejudice vulnerable categories of policyholders who may not possess adequate legal knowledge or the ability to effectively present their claims against insurance companies. Insurance disputes frequently involve interpretation of policy conditions, exclusion clauses, medical documentation and legal precedents. Denial of legal representation in such circumstances may place individual claimants at a significant disadvantage.
The Court had also rejected the Ombudsman’s apprehension that allowing advocates would destroy procedural parity between the parties. It observed that neither the Ombudsman nor the representatives of insurance companies necessarily possess formal legal training merely because advocates are permitted to appear. Accordingly, allowing legal representation does not automatically transform the proceedings into conventional civil trials.
The Division Bench’s dismissal of the appeal reinforces the principle that the presence of legal practitioners does not alter the essential character of statutory proceedings. The authority conducting the proceedings remains free to regulate its own procedure within the framework of the governing Rules. Permitting advocates merely ensures that parties receive appropriate legal assistance while presenting their respective cases.
The judgment also reflects broader constitutional principles governing procedural fairness. Natural justice is not confined to providing an opportunity of hearing but extends to ensuring that parties are afforded a meaningful opportunity to effectively present their case. In proceedings involving adjudication of civil rights and financial entitlements, the ability to engage legal counsel may constitute an important component of such meaningful participation.
Although the detailed judgment of the Division Bench is awaited, the dismissal of the appeal conclusively affirms that the Insurance Ombudsman cannot prohibit legal representation once proceedings have entered the adjudicatory stage contemplated under Rule 17 of the Insurance Ombudsman Rules, 2017. The ruling is likely to have significant implications for insurance dispute resolution across the country by strengthening procedural safeguards available to policyholders while simultaneously clarifying the quasi-judicial nature of adjudicatory proceedings before the Insurance Ombudsman.
The decision also reaffirms the continued relevance of Section 30 of the Advocates Act in proceedings before statutory authorities empowered to determine disputes based upon evidence. More importantly, it recognises that access to competent legal assistance forms an integral part of ensuring fairness, particularly where individuals seek adjudication of claims involving technical questions of law, contractual interpretation and documentary evidence. By upholding the right of parties to engage advocates, the Karnataka High Court has reinforced the principles of natural justice while preserving the integrity of the statutory insurance grievance redressal mechanism.