HC asks insurance firm to pay `1.16 crore to bizman’s widow
Dismissing the appeal filed by the insurance company, the Bombay high court (HC) upheld the order awarding a compensation of over Rs1.16 crore to the widow of a city businessman who died in an accident nine years ago. HT reports.mumbai Updated: May 18, 2012 00:43 IST
Dismissing the appeal filed by the insurance company, the Bombay high court (HC) upheld the order awarding a compensation of over Rs1.16 crore to the widow of a city businessman who died in an accident nine years ago.
The income of the legal heir and the money received from other sources cannot be taken into consideration while computing the loss of future income due to the accidental death of an earning family member, the division bench of justice AM Khanwilkar and justice SS Shinde ruled.
The court was hearing an appeal by the United India Insurance Company Ltd challenging the order passed by the Mumbai Motor Accident Claims Tribunal on September 30, 2011. In its order, the tribunal had directed the insurance company to pay the wife of deceased businessman Riyaz Varawalla, Sugra, an aggregate sum of Rs69.18 lakh along with an interest at the rate of 8.5% per annum — bringing the total to Rs1.16 crore.
The insurance company had contended that the widow had received an insurance amount from the Life Insurance Corporation of India and other credit card companies. The tribunal should have deducted these amounts while calculating her future loss because of her husband’s untimely accidental death, they argued.
The high court, however, rejected the contention holding that if the received amount is an outcome of separate contracts and had no direct nexus with the accidental death, it cannot be deducted while computing the future loss of income.
The court maintained that the amounts received from credit card companies were a result of other contracts entered into by Varawalla and had no co-relation with the third party insurance in case of an accident.
The court also rejected the company’s claim that the tribunal should have taken the woman’s income – as she was a partner in some of the businesses of her husband – into account. The court held that the woman’s earnings could not be taken into consideration to reduce the quantum of loss of annual dependency income on account of the accidental death.