Claims should not be rejected on mere technicalities, and penalties imposed under insurance agreements should be reasonable and not exorbitant.

JUDGMENT :

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 13.10.2017 passed by the Permanent Lok Adalat, Lucknow in P.L.A. Case No. 18 of 2016 (Smt. Sunita Devi and another vs. O.I.C. Ltd. and Ors.).

3. Learned counsel for the petitioner-Insurance Company have submitted that the judgment passed by the Permanent Lok Adalat is against Clause 4 of Agreement dated 19.11.2009 entered into between the Government of Uttar Pradesh and the petitioner-Insurance Company. It is further submitted that as per Clause 4 of the Agreement, the documents mentioned in said clause are required to be produced to the petitioner-Insurance Company for claim process which includes computerized khatauni but the claimants had failed to provide the computerized khatauni to the petitioner-Insurance Company therefore, their claims were liable to be rejected.

4. It is further submitted that the petitioner-Insurance Company had acted on the basis of Clause 4 of the Agreement which is quoted hereunder for ready reference:-

"Scope of Cover:-Oriental Insurance Company Limited hereby agrees, subject to the terms, conditions and exclusions contained or otherwise expressed in the policy document, to pay to the insured a sum not exceeding the sum insured during the tenure of the policy, if any of the insured Person dies due to or suffers disability as mentioned in the benefit table due to sustaining any bodily injury resulting from accident, caused by external, violent and visible means, to the extent and in the manner hereinafter provided. The accident will included death due to snake bite, drowning in River, Tank, Pond or well, collapse of roof or falling of tree, falling from roof or tree, vehicle (including tractor/trolley and tempo) accident, dacoity, riot, scuffle. Enmity, violence, terrorist activities, fire, flood, lightning thunder & electric shock etc.

Necessary documents will be required to establish the cause of death. The following documents will be required to be produced to Oriental Insurance Company Limited for claim processing.

(1) Fully complete claim Form

(2) Computerized Khatauni

(3) Age proof in following order of priority-

(a) Matriculation Certificate/High School Certificate

(b) Parivar Register

(c) Ration Card

(d) Voter ID card/Voter List

(e) Any other age proof

(4) Post Mortem Report

(5) Copy of FIR/GD (in case of death due to snake bite)

(6) Death Certificate

(7) Police panchnama

(8) CMO Certificate in cases of disability

Postmortem report will not be insisted upon where body is irrecoverable, say due to flood or body is in such a shape after accident the post mortem is not possible. Also in case of drowning and snakebite, FSL/CA report will not be insisted upon to establish the cause of death. Disablement, to the extent mentioned in the benefit table, caused due to an accident defined above, shall be covered. The Policy covers accidental death and disability/arising out of an accident only as elaborated in the policy document."

5. 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 fro