Allahabad High Court
The Oriental Insurance Company ... vs Avdhesh Singh And Others on 13 October, 2023
Bench: Pankaj Bhatia
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
?Neutral Citation No. - 2023:AHC-LKO:67248
Court No. - 8
Case :- WRIT - C No. - 1000440 of 2014
Petitioner :- The Oriental Insurance Company Ltd. Thru Divisional Manager
Respondent :- Avdhesh Singh And Others
Counsel for Petitioner :- Vashu Deo Mishra
Counsel for Respondent :- C.S.C.
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 09.07.2013 passed by the Permanent Lok Adalat, Lucknow in P.L.A. Case No. 60 of 2013 (Avdhesh Singh and otherd 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. 1000/- 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 succession certificate.
5. It is further submitted that though the succession certificate 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. In the present case, there were two claimants but the application was moved by only one claimant that is why, in the interest of the parties, without there being any ill-intention, the succession certificate was asked to be produced.
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 nos. 1 & 2 by asking for the succession certificate in good faith and in the interest of claimants though it is not required under the agreement but the same was asked to be produced as only respondent no. 1 had filed the claim and there were two claimants of the amount so in precaution, the succession certificate was asked to be produced.
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 that 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.
Order Date :- 13.10.2023
Arun
