Found an issue with permissions on warehouse.
The Warehouse /user/hive/warehouse was set to owner hive:hive with 771 permissions recursively. User was granted write privilege on table (tbl-1) on database (db-1).
Initially all grants were done with beeline.
Next the user switched to impala-shell and inserted some data into tbl-1. The permissions on the new hdfs file was the following:
ownership : impala:hive
permissions: 751 i.e. read and execute on group.
The user cannot use insert overwrite via beeline sine the group hive has read only permissions.
The documentation: http://www.cloudera.com/documentation/enterprise/latest/topics/impala_insert.html has the following:
Related startup options:
By default, if an INSERT statement creates any new subdirectories underneath a partitioned table, those subdirectories are assigned default HDFS permissions for the impala user. To make each subdirectory have the same permissions as its parent directory in HDFS, specify the --insert_inherit_permissions startup option for the impalad daemon.