Allahabad High Court
Oriental Insurance Company Ltd. Thru ... vs Smt Shashibala And Ors on 5 December, 2023
Author: Pankaj Bhatia
Bench: Pankaj Bhatia
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
?Neutral Citation No. - 2023:AHC-LKO:79625
Court No. - 8
Case :- WRIT - C No. - 9856 of 2018
Petitioner :- Oriental Insurance Company Ltd. Thru Senior Div.Manager Lko
Respondent :- Smt Shashibala And Ors
Counsel for Petitioner :- Rehana Khan
Counsel for Respondent :- C.S.C,Naresh Singh
Hon'ble Pankaj Bhatia,J.
1. Heard learned counsel for the petitioner and learned standing counsel for the State.
2. The present writ petition has been preferred by the petitioner for quashing of the order dated 15.08.2018 passed by the Permanent Lok Adalat, Lucknow in P.L.A. Case No.99 of 2016 (Shashibala & Others vs. O.I.C. Ltd. and Ors.) by which the Permanent Lok Adalat has awarded a sum of Rs. 1,00,000/- against the Insurance claims, Rs. 1,50,000/- as penalty and Rs. 5000/- as litigation expenses.
3. The Agreement has been entered into between the State of UP and the petitioner-Insurance Company on 19.11.2009 with an object to insure the farmers of Uttar Pradesh aged between 12 to 70 years for Rs. 1 lakh whose names were in the revenue records of the State of Uttar Pradesh as the owner of the agricultural land under the Janta Personal Accident Policy.
4. Learned counsel for the petitioner-Insurance Company has submitted that the claims of the respondents were repudiated as they had not provided the proper postmortem identification.
5. It is further submitted that though the said document is not required under Clause 4 of the agreement dated 19.11.2009 in the list of documents which are to be submitted by the claimants at the time of filing of the claim.
6. The second submission raised by the learned counsel for the petitioner-Insurance Company is that imposition of maximum penalty as provided under Clause 22(b) of the Agreement is illegal and exorbitant as there was no fault on the part of petitioner-Insurance Company while rejecting claim of the claimants. It is further submitted that in the almost identical matters wherein also the judgments of the Permanent Lok Adalat were under challenge pertaining to dispute for rejection of claims of the claimants under the Agreement dated 19.11.2009 have been decided by this Court in Writ Petition Nos. 20736 of (M/S) of 2018 (The Oriental Insurance Company Limited Thru. Divisional Mgr. Vs. Chote Singh & Ors.) and 5324 of (M/S) 2015 (Oriental Insurance Company Ltd. Thru its Divisional Manager Vs. Smt. Ramkali @ Rajkumari and others) wherein this Court has quantified and reduced the penalty from Rs. 1,50,000/- to Rs. 50,000/- and Rs. 75,000/- respectively. The relevant portion of the judgment passed in the case of Chote Singh (supra) is reproduced hereunder for ready reference:-
"Insofar as the quantum of penalty questioned in the present petition is concerned, it is true that the imposition of penalty in a situation of denial of claim is Rs. One Lakh Fifty Thousand but the present case in a situation of repudiation letter dated 7.4.2011 not being final, can only be treated to be a case of delayed payment, therefore, the quantification of penalty to the tune of Rs. One Lakh Fifty Thousand is clearly illegal and arbitrary and beyond the scope of clause 22(b) of the agreement. This Court would also note that every Permanent Lok Adalat is under a bounden duty to undertake the process of conciliation before advancing to adjudicate a claim on merit. This aspect of the matter has also not been dealt with by the Permanent Lok Adalat in a manner prescribed under law, therefore, the imposition of maximum penalty, in my humble view, is exorbitant.
This Court having regard to the facts and circumstances of the present case as well as the resultant delay would quantify the amount of penalty at Rs. Fifty Thousand and to this extent, the impugned award deserves to be modified.
The amount of penalty modified to the aforesaid extent is thus affirmed. The award is accordingly modified. The petitioner is directed to discharge the liability not later than a period of one month from today."
7. The relevant part of the judgment passed in the case of Smt. Ramkali @ Rajkumari and others (supra) is reproduced hereunder for ready reference:-
"7. However, considering the fact that the present case is almost identical to that one of the subject matter of judgement dated 13.8.2018 passed in Writ Petition No.20736 (MS) of 2018, interest of justice would meet if the present writ petition is also disposed of with direction to the petitioner-Insurance Company to pay the insured amount of Rs.1 Lakh with interest @9% per annum from the date of the order passed by the Permanent Lok Adalat. The amount of penalty is reduced from Rs.1,50,000/- to Rs.75,000/- to be deposited within a period of six weeks from today. The amount of Rs.1 Lakh along with interest @9% per annum from the date of the order of the Permanent Lok Adalat as well as the amount of penalty of Rs.75,000/- to be deposited before the Permanent Lok Adalat, shall be released in favour of the opposite parties forthwith after due verification of their identities. Any amount deposited in pursuance of the interim order dated 11.9.2015, shall be adjusted against the total amount to be paid by the petitioner-Insurance company in pursuance of the order passed today. "
8. After arguing at some length, learned counsel for the petitioner has confined his prayer to the extent that penalty imposed under Clause 22(b) of the agreement may be reduced as it has already been reduced in other similar matters.
9. Learned counsel for the respondents has no objection to the prayer made by learned counsel for the petitioner-insurance company.
10. After hearing learned counsel for the parties and going through the record of this case, the position which emerges out is that the petitioner-insurance company has repudiated the insurance claim of the respondent no. 1 on grounds not required under the agreement.
11. This Court having regard to the facts and circumstances of the case as well as the resultant delay would quantify the amount of penalty at Rs. 75,000/- and to this extent, the impugned judgment is modified. The amount of Rs.1 Lakh along with interest @ 9% per annum from the date of the order of the Permanent Lok Adalat as well as the amount of penalty of Rs.75,000/- to be deposited before the Permanent Lok Adalat within a period of six weeks and shall be released in favour of the opposite parties forthwith after due verification of their identities. If any amount was deposited earlier and amount deposited before this Court shall be adjusted against the total amount to be paid by the petitioner-Insurance company in pursuance of the order passed today.
12. For the foregoing reasons, as mentioned above, the petition is partly allowed in so far, it relates to reduction of amount of penalty imposed under Clause 22(b) of the agreement only.
13. The petition is therefore, disposed of as partly allowed in the manner, indicated above.
14. The amount deposited by the Insurance Company before this Court shall be remitted to the PLA for disbursal as directed above.
Order Date :- 5.12.2023
Arun
