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2023 Supreme(Del) 3598
IN THE HIGH COURT OF DELHI AT NEW DELHI
V. Kameswar Rao, Anoop Kumar Mendiratta, JJ.
National Insurance Company Limited – Appellant
Versus
Smt. Manju Devi & Ors. – Respondents
W.P.(C) 10163 of 2018 & CM APPL. 39609 of 2018
Decided On : 22-08-2023
Mr. Manoj Ranjan Sinha and Mr. Deepak Sain, Advocates, for the Petitioner.
The main legal point established in the judgment is that the liability for paying interest on delayed insurance claims is determined by the provisions of the Insurance Act, 1938, and in this case, the delay in informing the insurer about the accident shifted the liability to the party responsible for the delay.
Headnote:
Insurance Claim - Interest Payment - Insurance Act, 1938 - Section 28 - Section 64- VB - Section 64-VC
Fact of the Case:
The case involved a dispute over the payment of interest on delayed release of an insurance claim. The respondent's husband, a member of a group insurance policy, died in a road accident. The petitioner, an insurance company, paid the insurance amount after a delay, and the respondent sought interest on the delayed payment.
Finding of the Court:
The court found that the delay in informing the petitioner about the accident led to the delayed payment, and therefore, the liability for paying interest rested with the Delhi Fire Service, not the petitioner.
Issues: The main issue was determining the party liable to pay interest on the delayed release of the insurance claim.
Ratio Decidendi: The court relied on the provisions of the Insurance Act, 1938, particularly Section 28, Section 64-VB, and Section 64-VC, to interpret the liability for interest payment in cases of delayed insurance claims.
Final Decision: The court disposed of the writ petition, directing the petitioner to claim the interest amount from the Delhi Fire Service, and if such a claim is made within two months, it should be honored by the Delhi Fire Service within one month thereafter.
JUDGMENT
V. Kameswar Rao (Oral)
1. The challenge in this Writ Petition is to two orders dated March 06, 2018 in O.A. 368/2016 and August 01, 2018 passed in R.A. 111/2018, whereby the Tribunal has allowed the Original Application and dismissed the Review Application filed by the petitioner company.
2. The claim of the respondent no. 1 in the Original Application was in respect of interest on Rs.5,00,000/- as paid in terms of policy, taken by the respondent No.3 for its employees. The respondent no.1's husband late Rishi Pal was working as a Fireman in Delhi Fire Service Department. He died in a road accident on May 11, 2009. The Delhi Fire Service Department has a group insurance policy operated by the petitioner herein i.e. National Insurance Company Limited. As per the said policy, insurance claim of Rs. 5 lacs is admissible in case of road accident. Respondent no.1's husband was a member of the said policy. The respondent no. 1 made an insurance claim in terms of the said policy. As she was not getting the due consideration from the petitioner as well as from Delhi Fire Service, she approached the Tribunal by filing O.A. 3552/2013, which was disposed of vide order dated July 31, 2014. The operative para read as under:
"3. In view of the stand taken in the counter reply filed on behalf of respondents, the OA is disposed of with direction to respondent no.2 to pursue the matter with respondent no.3 and ensure that final decision is taken in the matter within four weeks from the date of receipt of a copy of this order. If the grievance of the applicant still survives, she would be at liberty to approach the appropriate forum, in accordance with law."
3. The petitioner in terms of the claim and the order of the Tribunal, paid Rs. 5 lacs to the respondent no. 1 on March 20, 2015. The claim of the petitioner in the second O.A. being O.A. 368/2016, wherein the impugned order has been passed, was primarily with regard to payment of interest on delayed release of the insurance amount.
4. The Tribunal vide paragraphs no. 5 & 6 of the judgment has stated as under:
"5. Under these circumstances, I am of the view that the applicant is entitled for receiving interest at a reasonable rate for delayed release of the insurance claim. Considering the fact that the applicant died on 11.05.2009 and at least 3 months are normally required to settle such a claim, 1am of the view that the applicant is entitled for receiving interest from 01.09.2009.
6. In the conspectus of discussions in the foregoing paragraphs, this O.A. is disposed of with a direction to the respondents to pay interest @ 8% per annum to the applicant on the amount of Rs. 5 lacs from 01.09.2009 to 20.03.2015. It is clarified that the interest is to be paid out of the fund, which is operated by respondent No.3 on behalf of respondent Nos. 1 &2. This shall be done within a period of three months from the date of receipt of a copy of this order. There shall be no order as to costs."
5. Mr. Sinha, learned counsel appearing for the petitioner has, at the outset, drawn our attention to the order dated May 10, 2019, passed by this Court, which reads as under:
"Issue notice to the respondents returnable on 17th September, 2019.
In the meanwhile, the petitioner shall pay interest to the legal heirs of the deceased, as directed by the Central Administrative Tribunal vide order dated 6" March, 2018 in O.A.No.368/2016.
This Court would only consider the question whether the petitioner is liable to recover the interest on account of the delay caused by the Department.
List on 17th September, 2019."
6. Mr. Sinha also states, in terms of the order of the Tribunal dated March 06, 2018, the petitioner has paid interest component also to the respondent no.1 of Rs. 2,22,137/- on May 17, 2019. His only submission is that the interest amount is not payable by the petitioner company. According to him, as per the terms of the policy, the factum of the accident was required to be informed within one mo
