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HC imposes fine of ₹5 lakh on insurance firm for delay in payment of claim
The Lucknow bench of Allahabad high court (HC) also ordered the insurance firm to deposit the entire amount of the compensation of ₹11,94,472 along with 10% interest
The Lucknow bench of Allahabad high court has imposed a fine of ₹5 lakh on an insurance company for keeping a litigation related to payment of compensation to an accident victim’s family alive for almost 20 years.
A single judge bench of Justice Dinesh Kumar Singh on March 14 said: “Since the petitioner –insurance company has kept the litigation alive for almost 20 years before this court, the insurance company (United India Insurance Co Ltd) is saddled with cost of ₹5 lakh to be deposited with the tribunal (Motor Accident Claims Tribunal, Rae Bareli) within a period of 10 days.”
“This exemplary cost has been imposed on the insurance company as they had made the complainant and her five minor children suffer beyond imagination. If the money awarded was paid on time, the victims could have built their lives,” said the court.
The court also ordered the insurance company to deposit the entire amount of the compensation of ₹11,94,472 along with 10% interest as directed by the tribunal.
“In view thereof, the writ petition (of insurance company against tribunal’s order) is dismissed. Petitioner – insurance company-- is directed to deposit the entire amount of compensation along with interest as directed by the tribunal,” said the court.
“It is very unfortunate that the victims have not been paid the compensation which was awarded to them way back in the year 2001,” said the court.
The case
Mithilesh Sharma and her five minor children had filed a claim petition before the Motor Accident Claim Tribunal, Rae Bareli in 1999 after her husband died in a road accident. The insurance company opposed the petition. Later, the company’s lawyer did not attend proceedings of the tribunal.
The tribunal on August 29, 2001, passed an ex-parte judgment directing the insurance company to pay claim amount of ₹11,94,472 to Sharma with a simple interest of 10%.
The tribunal on February 17, 2003 had rejected insurance company’s application for condonation of delay in payment of compensation amount to the applicant.
Thereafter, the insurance company took stay order from the Lucknow high court on March 26, 2003, against the tribunal‘s order.
