Under which circumstance Insurance Company can not reject Mediclaim?

 Returning to the facts of the present case, the strict and actual interpretation of Clause 4 reflects that the Insurance Company is permitted to exclude the expenses borne in case the insured person is suffering from any kind of Pre-existing disease(s) until the insured person is continuously covered under the policy for a minimum period of 48 months. What constitutes Pre-existing disease has been provided in the Insurance Policy itself, which reads as follows:-

“Pre-existing condition/disease definition- any condition, ailment, or injury or related condition for which insured person had signs and symptoms and / or were received medical advice/treatment 48 months prior to his/her Super Top Up Medicare policy with the company”

15. The aforesaid definition clause makes it abundantly clear that in order for a disease to be categorized as pre-existing disease, the Insured must have received medical advice/treatment 48 months prior to purchasing the policy for that particular disease. Whereas, the facts are crystal clear that the prior disease on which the Insurance Company has relied to repudiate the claim of the Insured, was last treated in the year 2004 i.e. 5 years before the Policy No. 2 was purchased. Hence, it cannot be said that the case of the Insured fulfils the essentials of the Pre-Existing disease provided in the Insurance policy.

IN THE DELHI STATE CONSUMER DISPUTES REDRESSAL COMMISSION

FIRST APPEAL NO. 161/2016

IN THE MATTER OF

UNITED INDIA INSURANCE COMPANY LTD. Vs

MANMOHAN SINGH 

CORAM:

HON’BLE DR. JUSTICE SANGITA DHINGRA SEHGAL (PRESIDENT)

HON’BLE SH. ANIL SRIVASTAVA, (MEMBER)

PER: HON’BLE DR. JUSTICE SANGITA DHINGRA SEHGAL,

PRESIDENT

JUDGMENT PRONOUNCED ON: 02.08.2021

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Whether Motor accident claim tribunal can rely on certified copy of F.I.R. and spot panchnama if insurance company has not contested the claim on the issue of negligence?

 The documents in question, i.e., certified copy of F.I.R. and spot panchnama were produced by the original claimants along with the claim petition. In para 28 of the claim petition, reference is made to the fact that claimants were relying upon the documents which were produced along with application. In the written statement which is filed by the appellants, there is no dispute raised as regards the documents which are produced along with the application. It appears from the record that the claim application was not defended by the insured and the same was contested by the appellant as per order below in application at Exh. 34 passed under the provisions of Section 170 of the Motor Vehicles Act, 1988. By the said order permission was granted in favour of the appellant to take all defences and to contest the claim on merits. On 24.7.2002, the said application was allowed. After the said application was allowed, additional written statement or further written statement was not filed by the appellant. The evidence was recorded by the Claims Tribunal and on 5.8.2002, the evidence close pursis was filed by the advocate for the appellant. On the next date, i.e., 12.8.2002 written submissions were filed on behalf of appellant and on 21.8.2002 the learned Member of the Claims Tribunal heard the oral submissions made by the advocate for the claimants and the matter was closed for judgment. Thus, no oral submissions were made on behalf of the appellant. I have perused the written submissions of appellant at Exh.  A1. The written submissions are filed raising only dispute as regards quantum of compensation payable to the claimants. Not a single submission is made on behalf of the appellant on the issue of negligence. In the written submissions, it is stated that considering the evidence on record, total income of the deceased will be Rs. 22,000 per annum and after deducting 1/3rd from his income and applying multiplier of 15 years, compensation payable will be Rs. 2,19,000 plus Rs. 10,000 for conventional amount and Rs. 5,000 for funeral. It is very clear that appellant insurance company did not contest claim as far as issue of negligence is concerned. Only contest was on the quantum of amount payable to the claimants. Therefore, a specific case is made out that the respondent Nos. 1 to 4 are entitled to compensation of only Rs. 2,19,000. Though opportunity was granted to the insurance company to defend the claim on behalf of insured both on the issue of negligence and quantum, the said opportunity was not availed of and the contest by the insurance company was restricted only to the quantum of amount of compensation. There were clear averments made in the application as regards negligence by the driver of the jeep. The driver and owner of the jeep though served did not file the written statement. Appellant insurance company even after leave was granted did not contest the case on the issue of negligence. It is obvious that as there was no contest by the appellant on the issue of negligence, the claimants did not examine any eyewitness and did not examine any witness to prove the certified copy of the spot panchnama or F.I.R. {Para 6}

7. In this view of the matter, the contention raised by the appellants that the panchnama and F.I.R. was not admissible in the evidence for want of proof cannot be considered.

 IN THE HIGH COURT OF BOMBAY

F.A. No. 524 of 2003

Decided On: 11.08.2004

Oriental Insurance Co. Ltd. Vs. Sangita Dattatraya Jamdade and Ors.

Hon'ble Judges/Coram:

Abhay Shreeniwas Oka, J.

Citation:  MANU/MH/1406/2004,2006 ACJ 971 Bom.

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Supreme court guidelines for determination of compensation for loss of marriage prospects due to motor accident

 (9) Marriage Prospects

99. The Tribunal held that the Appellant was young, and due to the physical disability, his marriage prospects are now almost nil. The Tribunal awarded to Rs. 20,000/- under this head. The High Court upheld the amount of Rs. 20,000/-.

100. In Sanjay Kumar (supra), this Court observed as under:

14... On the point of loss of marriage prospects, we feel that it is a major loss, keeping in mind the young age of the Appellant and the High Court has gravely erred in not awarding adequate compensation separately under this head and instead clubbed it under "loss of future enjoyment of life" and "pain and suffering". We thereby award Rs. 75,000 towards loss of marriage prospects...

101. In Ibrahim v. Raju and Ors., MANU/SC/1276/2011 : (2011) 10 SCC 634, this Court held:

19. On account of the injuries suffered by him, the prospects of the Appellant's marriage have considerably reduced. Rather, they are extremely bleak. In any case, on account of the fracture of pelvis, he will not be able to enjoy the matrimonial life. Therefore, the award of Rs. 50,000 under this head must be treated as wholly inadequate. In the facts and circumstances of the case, we feel that a sum of Rs. 2 lakhs should be awarded to the Appellant for loss of marriage prospects and enjoyment of life.

102. In Master Ayush (supra), this Court observed that the victim (5-year-old, paraplegic) was entitled to Rs. 3,00,000/-.

14.... The Appellant has not only lost his childhood but also adult life. Therefore, loss of marriage prospects would also be required to be awarded...

103. In view of the aforesaid, we award a sum of Rs. 3,00,000/- towards loss of marriage prospects.

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. 8510 of 2022 

Decided On: 16.11.2022

Sidram Vs. The Divisional Manager, United India Insurance Co. Ltd. and Ors.

Hon'ble Judges/Coram:

Surya Kant and J.B. Pardiwala, JJ.

Author: J.B. Pardiwala, J.

Citation:  MANU/SC/1493/2022.

Read full Judgment here: Click here.

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Supreme court guidelines for determination of compensation for loss of amenities to injured due to motor accident

 The law with respect to the grant of compensation in injury cases is well-settled. The injured is entitled to pecuniary as well as non-pecuniary damages. Pecuniary damages also known as special damages are generally designed to make good the pecuniary loss which is capable of being calculated in terms of money whereas non-pecuniary damages are incapable of being assessed by arithmetical calculations. The pecuniary or special damages, generally include the expenses incurred by the claimants on his treatment, special diet, conveyance, cost of nursing/attending, loss of income, loss of earning capacity and other material loss, which may require any special treatment or aid to the insured for the rest of his life. The general damages or the non-pecuniary loss include the compensation for mental or physical shock, pain, suffering, loss of amenities of life, disfiguration, loss of marriage prospects, loss of expected or earning of life, inconvenience, hardship, disappointment, frustration, mental stress, dejectment and unhappiness in future life, etc. {Para 9}

93. Pain and suffering would be categorized as a non-pecuniary loss as it is incapable of being arithmetically calculated. Therefore, when compensation is to be awarded for pain and suffering, special circumstances of the claimant have to be taken into account including the victim's age, the unusual deprivation the victim has suffered, the effect thereof on his or her future life. This Court in the case of R.D. Hattangadi (supra), while discussing this aspect held that:

10. It cannot be disputed that because of the accident the Appellant who was an active practising lawyer has become paraplegic on account of the injuries sustained by him. It is really difficult in this background to assess the exact amount of compensation for the pain and agony suffered by the Appellant and for having become a lifelong handicapped. No amount of compensation can restore the physical frame of the Appellant. That is why it has been said by courts that whenever any amount is determined as the compensation payable for any injury suffered during an accident, the object is to compensate such injury "so far as money can compensate" because it is impossible to equate the money with the human sufferings or personal deprivations. Money cannot renew a broken and shattered physical frame.

17. .....When compensation is to be awarded for pain and suffering and loss of amenity of life, the special circumstances of the claimant have to be taken into account including his age, the unusual deprivation he has suffered, the effect thereof on his future life. The amount of compensation for non-pecuniary loss is not easy to determine but the award must reflect that different circumstances have been taken into consideration.......

94. This Court in the case of Mahadeva Shetty (supra), while discussing the factors to be taken into consideration while awarding compensation for pain and suffering held that:

18. A person not only suffers injuries on account of accident but also suffers in mind and body on account of the accident throughout his life and a feeling is developed that he is no more a normal man and cannot enjoy the amenities of life as another normal person can. While fixing compensation for pain and suffering as also for loss of amenities of life, features like his age, marital status and unusual deprivation he has undertaken in his life have to be reckoned.

(10) Loss of Amenities

105. This Court in the case of Pappu Deo Yadav (supra), observed:

6. The principle consistently followed by this Court in assessing motor vehicle compensation claims, is to place the victim in as near a position as she or he was in before the accident, with other compensatory directions for loss of amenities and other payments. These general principles have been stated and reiterated in several decisions. [Govind Yadav v. New India Insurance Co. Ltd. [Govind Yadav v. New India Insurance Co. Ltd., MANU/SC/1281/2011 : (2011) 10 SCC 683 .....]

106. In R.D. Hattangadi (supra) it has been held:

12. In its very nature whenever a tribunal or a court is required to fix the amount of compensation in cases of accident, it involves some guesswork, some hypothetical consideration, some amount of sympathy linked with the nature of the disability caused. But all the aforesaid elements have to be viewed with objective standards.

17. ......When compensation is to be awarded for pain and suffering and loss of amenity of life, the special circumstances of the claimant have to be taken into account including his age, the unusual deprivation he has suffered, the effect thereof on his future life.....

107. This Court in the case of Raj Kumar (supra) held:

5. ....A person is not only to be compensated for the physical injury, but also for the loss which he suffered as a result of such injury. This means that he is to be compensated for his inability to lead a full life, his inability to enjoy those normal amenities which he would have enjoyed but for the injuries, and his inability to earn as much as he used to earn or could have earned.....

109. This Court in Govind Yadav (supra) held:

18. In our view, the principles laid down in Arvind Kumar Mishra v. New India Assurance Co. Ltd. MANU/SC/0777/2010 : (2010) 10 SCC 254 and Raj Kumar v. Ajay Kumar MANU/SC/1018/2010 : (2011) 1 SCC 343 must be followed by all the Tribunals and the High Courts in determining the quantum of compensation payable to the victims of accident, who are disabled either permanently or temporarily. If the victim of the accident suffers permanent disability, then efforts should always be made to award adequate compensation not only for the physical injury and treatment, but also for the loss of earning and his inability to lead a normal life and enjoy amenities, which he would have enjoyed but for the disability caused due to the accident.

110. Vijaykumar Babulal Modi (supra), the High Court of Gujarat observed as under:

It appears that the claim under this head is to the tune of Rs. 3 lac. However, the Tribunal has not awarded any sum under the head 'loss of amenities'. We are of the opinion that this head must take into account all aspects of a normal life that have been lost due to the injury caused. As per R.D. Hattangadi's case (supra), this includes a variety of matters such as the inability to walk, run or sit, etc. We include here too the loss of childhood pleasure such as the ability to freely play, dance, run, etc., the loss of ability to freely move or travel without assistance. Then, there is the virtual impossibility of marriage as well as a complete loss of the ability to have sex and to have and nurture children.

113. Before we close this matter, it needs to be underlined, as observed in Pappu Deo Yadav (supra) that Courts should be mindful that a serious injury not only permanently imposes physical limitations and disabilities but too often inflicts deep mental and emotional scars upon the victim. The attendant trauma of the victim's having to live in a world entirely different from the one she or he is born into, as an invalid, and with degrees of dependence on others, robbed of complete personal choice or autonomy, should forever be in the judge's mind, whenever tasked to adjudge compensation claims. Severe limitations inflicted due to such injuries undermine the dignity (which is now recognized as an intrinsic component of the right to life Under Article 21) of the individual, thus depriving the person of the essence of the right to a wholesome life which she or he had lived, hitherto. From the world of the able bodied, the victim is thrust into the world of the disabled, itself most discomfiting and unsettling. If courts nit-pick and award niggardly amounts oblivious of these circumstances, there is resultant affront to the injured victim. [See: Pappu Deo Yadav (supra)]

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. 8510 of 2022 

Decided On: 16.11.2022

Sidram Vs. The Divisional Manager, United India Insurance Co. Ltd. and Ors.

Hon'ble Judges/Coram:

Surya Kant and J.B. Pardiwala, JJ.

Author: J.B. Pardiwala, J.

Citation:  MANU/SC/1493/2022.

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Whether the court can direct insurance company to pay insurance claim to wife of deceased if non payment of two instalments was not wilful?

 The fact regarding hospitalisation of the insured person was not disputed by the second respondent-Insurance Company. The affidavit filed in support of the present writ petition would reveal that the insured was hospitalised for more than two months and died in the hospital itself. The petitioner, who is the wife of the insured, cannot be expected to pay the February and March 2020 premium due amounts. Under those circumstances, this Court is of an opinion that the non-payment of premium dues by the husband of the writ petitioner respectively on 09.02.2020 and 09.03.2020, cannot be construed as willful or intentional one. The nonpayment of premium dues by the husband of the writ petitioner respectively on 09.02.2020 and 09.03.2020 were on account of extraordinary circumstances, wherein the insured fell ill and admitted in the hospital and died after taking treatment in the hospital for more than two months.

{Para 6}

7. Considering the facts and circumstances and the mitigating factors placed before this Court, the petitioner is entitled for the relief on the ground of equity and more-so, there was no wilful or intentional default in non-payment of premium dues for the months of February and March 2020 by the deceased insured person.

Policy holder regularly paid monthly premium on his life insurance policy of Rs.18.40 lakhs taken from SBI Life Insurance Co. from October 2017 to January 2020. But thereafter fell ill and was hospitalised for over 2 months. He died in hospital only on 15.3.2020 without paying 2 instalments due on Feb. and March 2020. Company refused to pay claim due to overdue instalments. On filing writ petition, Madras High Court exercised its discretion and instructed insurance company to pay insurance claim to the wife of the policy holder:

IN THE HIGH COURT OF JUDICATURE AT MADRAS

WP No.17604 of 2020

R.Sasikala Devi Vs The AAO/Assistant Secretary,

CORAM

 MR.JUSTICE S.M. SUBRAMANIAM

DATED : 08-01-2024

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Under which circumstances Circulars issued by IRDAI have retrospective effect?

(ix) It has been argued that the instructions in the

circular dated 12th October 2022 come into

force prospectively. This argument must also be

rejected. The IRDAI has been prompted to

issue the directions in the circular for the sole

reason that it was observed by the regulatory

authority that various insurers were repudiating

the claims on the pretext of the so called

‘exclusions’ in the policy document and hence

the regulatory authority was compelled to issue

the said directions. Thus, it stands to reason

that the directions have been issued to rectify

the arbitrary refusal of claims. Hence, the same

obviously applies to past refusals on the grounds

as mentioned in the circular.

REPORTABLE

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION

WRIT PETITION NO. 2839 OF 2021

Rita Kirit Joshi Vs NEW INDIA ASSURANCE COMPANY,

CORAM : G.S.Patel & Neela Gokhale, JJ.

PRONOUNCED ON : 1st March 2023

JUDGMENT ( Per Neela Gokhale J) :-

Citation: 2023 Lawweb (Bom HC ) 12.

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Whether Insurance Company can recover MACT Compensation Amount from Father of Minor Driver?

 In the light of these findings, I am of the view that the learned Tribunal was justified in not accepting the appellant’s version that the keys of the insured vehicle were taken by his minor son from his bed side drawer without his knowledge and permission. Once the appellant, despite being aware that his son was a minor child, left the keys of his car at home and has failed to give any explanation as to why the keys of the car at home were left unattended when he himself was not there, the defence being taken by the appellant is apparently an afterthought in an attempt to somehow to escape his liability. Even otherwise, the appellant did not lead any independent witness in support of his plea that the car was being driven by his minor son without his knowledge and permission. {Para 7}

8. I may also note that as observed by the learned Tribunal, this plea of his minor son having taken the car without his permission, was not even taken by the appellant either before the concerned police authority or the Juvenile Justice Board. In a matter like this, when the parents of minor children permit him/her to drive a motor vehicle, not only they put the lives of their own children in danger but also endager the life of common citizens.

 Neutral Citation No.2023/DHC/000289

 IN THE HIGH COURT OF DELHI AT NEW DELHI

MAC.APP. 24/2023 & CM APPL 1722-24/2023

SHEKHAR NIJHAWAN Vs IFFCO TOKIO GENERAL INSURANCE CO. LTD. & ORS.

CORAM:

HON'BLE MS. JUSTICE REKHA PALLI

Date of Decision:- 13.01.2023

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Bombay HC: 9% is the appropriate rate of interest to be awarded in motor accident compensation cases

  The Tribunal awarded an interest @ 6% p.a. from the date of application till its realization and I find substance in the submission of the learned counsel to the effect that the interest ought to have awarded @ 9% p.a., which is the appropriate rate of interest to be awarded in case of compensation to be payable for motor accidents and the Apex Court in case of Kaushnuma Begum & Ors. Vs. New India Assurance Co., MANU/SC/0002/2001 : 2001 (1) SCR 8, has observed that 9% is the appropriate rate of interest to be awarded in motor accident compensation cases. Perusal of the latest decision of the Apex Court in case of Parvinder Singh (supra), the compensation is awarded with interest @ 9%.

{Para 21}

IN THE HIGH COURT OF BOMBAY

First Appeal ST No. 96999 of 2020, 

Decided On: 07.03.2022

Manager, National Insurance Co. Ltd. Vs. Nilesh Suresh Bhandari and Ors.

Hon'ble Judges/Coram:

Bharati H. Dangre, J.

Citation: MANU/MH/1455/2022.

Read full Judgment here: Click here

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Whether claimant must prove percentage of loss of earning capacity, arising from a permanent disability in motor accident case?

 When a claimant suffers a disability as a result of such injuries and on ascertaining that the disability is of permanent nature, the assessment of compensation under the head of loss of future earnings, would depend upon the effect and impact of such permanent disability on his earning capacity. It is expected that the mechanical formulae of calculating the loss of earning capacity depending upon the percentage of permanent disability, is not to be applied as in most of the cases, the percentage of economic loss i.e. the percentage of loss of earning capacity, arising from a permanent disability will be different from the percentage of permanent disability.

Accepting the aforesaid principle, it can be seen that as far as the respondent claimant is concerned, the disability certificate has certified his disability to be 83% and the Tribunal has accepted his functional disability to be 83% and therefore, the loss of earning capacity to be 83%. However, if the claim of the claimant is that on 83% disability, he has incurred 100% functional disability, then it was imperative for the claimant to bring on record some evidence to that effect. Since the claimant suffer 83% physical disability in the present case, in order to establish that this amounted to 100% functional disability, none of the witnesses are examined by the claimant to prove the said aspect. The claimant has not projected his case before the Tribunal to the effect that on account of the permanent disability incurred by him, his functional disability is also 100%, which has resulted in loss of 100% earning capacity. In absence of any such specific evidence being brought on record, the submission of learned Advocate Ms. Nandini Chittal to that effect, do not deserve any consideration. {Para 20}

IN THE HIGH COURT OF BOMBAY

First Appeal ST No. 96999 of 2020, 

Decided On: 07.03.2022

Manager, National Insurance Co. Ltd. Vs. Nilesh Suresh Bhandari and Ors.

Hon'ble Judges/Coram:

Bharati H. Dangre, J.

Citation: MANU/MH/1455/2022.

Read full Judgment here: Click here

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What are Special Damages and General Damages under which compensation is awarded in motor accident cases?

 The heads under which compensation is awarded in personal injury cases are the following:

Pecuniary damages (Special Damages)

(i) Expenses relating to treatment, hospitalization, medicines, transportation, nourishing food, and miscellaneous expenditure.

(ii) Loss of earnings (and other gains) which the injured would have made had he not been injured, comprising:

(a) Loss of earning during the period of treatment;

(b) Loss of future earnings on disability. account of permanent

(iii) Future medical expenses.

Non-pecuniary damages (General Damages)

(iv) Damages for pain, suffering and trauma as a consequence of the injuries.

(v) Loss of amenities (and/or loss of prospects of marriage).

(vi) Loss of expectation of life (shortening of normal longevity).

Recording that in routine personal injury cases, compensation will be awarded only under Head 1, 2-A and 4, but in serious cases of injury where there is specific medical evidence, corroboration the evidence of the claimant, that compensation will be granted under the heads (ii)(b), (iii), (v) and (vi), relating to loss of future earnings on account of permanent disability, future medical expenses, loss of amenities (and/or loss of prospects of marriage) and loss of expectation of life.

20. When a claimant suffers a disability as a result of such injuries and on ascertaining that the disability is of permanent nature, the assessment of compensation under the head of loss of future earnings, would depend upon the effect and impact of such permanent disability on his earning capacity. It is expected that the mechanical formulae of calculating the loss of earning capacity depending upon the percentage of permanent disability, is not to be applied as in most of the cases, the percentage of economic loss i.e. the percentage of loss of earning capacity, arising from a permanent disability will be different from the percentage of permanent disability.

IN THE HIGH COURT OF BOMBAY

First Appeal ST No. 96999 of 2020, 

Decided On: 07.03.2022

Manager, National Insurance Co. Ltd. Vs. Nilesh Suresh Bhandari and Ors.

Hon'ble Judges/Coram:

Bharati H. Dangre, J.

Citation: MANU/MH/1455/2022.

Read full Judgment here: Click here

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Whether the court can enhance compensation in motor accident case even if claimant has not filed cross-Appeal or cross-objection?

 The counsel for the claimant/respondent Ms. Nandini would submit that though the claimant has not filed any Appeal, against the inadequate amount of compensation awarded to him, though his claim was to the tune of Rs. 1,50,00,000/-, the compensation is awarded in the meager sum of Rs. 52,63,219/- and this require enhancement.

The said claim of the learned counsel is opposed by the counsel for the appellant but in the wake of the settled legal position, I do not have any hesitancy in accepting the submission of the learned counsel for the claimant that the Court on it's motion is also empowered to enhance the compensation, if it is found that the compensation awarded is not 'just' compensation. {Part 14}

15. The Motor Vehicles Act is a beneficial piece of legislation and provide for some solace to a victim, who meet with an accident or to the family of the victim who is a sufferer, when the bread-earner is disabled or succumb to the said accident. The duty of the Court in granting compensation to the victim or to his family, for its survival and meet the harness is to ensure 'just' compensation, irrespective of whether any plea in that behalf was raised by the claimant. The parameters of awarding compensation and the various heads under which the claimant is entitled for compensation are well determined by the Constitution Bench and the Apex Court in case of National Insurance Co. Ltd. Vs. Pranay Sethi MANU/SC/1366/2017 : 2017(16) SCC 680, and if the compensation is not accorded, in accordance with the legal settled position by the Tribunal, it is the duty of the Court to ensure just and fair compensation.

The learned counsel for the respondent has placed reliance upon the decision of this Court in case of United India Insurance Co. Ltd. and Ors. vs. Kunti Binod Pandey & ors., 2020 (1) BCR, 629, where a similar objection was raised in an Appeal filed by the Insurance Company, challenging the judgment and award of compensation by the MACT, holding that it is a statutory obligation of the Tribunal and the Court to do complete justice and award, 'just compensation', it has been held that by the learned Single Judge of this Court (Justice R.D. Dhanuka), that there can be no restriction to enhance compensation in appropriate case even in absence of cross-Appeal or cross-objection.

 IN THE HIGH COURT OF BOMBAY

First Appeal ST No. 96999 of 2020, 

Decided On: 07.03.2022

Manager, National Insurance Co. Ltd. Vs. Nilesh Suresh Bhandari and Ors.

Hon'ble Judges/Coram:

Bharati H. Dangre, J.

Citation: MANU/MH/1455/2022

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Supreme Court: Insurance Policy Condition Barring Filing Of Claim After Specified Time Period Void Contrary To Section 28 Contract Act

The sole arguments raised by learned counsel for the petitioner is that the claim was not filed within a period of one month or extending condonable period of one month.

We do not find any merit in the said arguments in view of Section 28 of the Indian Contract Act, 1872 (for short, ‘the Act’) which reads as under:-

“28. Agreements in restraint of legal proceedings, void.— [Every agreement,—

(a) by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights; or

(b) which extinguishes the rights of any party thereto, or discharges any party thereto, from any liability, under or in respect of any contract on the expiry of a specified period so as to restrict any party from enforcing his rights, is void to the extent.]”

In view of the aforesaid Section, the condition of lodging claim within a period of one month, extendable by another one month is contrary to Section 28 of the Act and thus void.

IN THE SUPREME COURT OF INDIA

 Special Leave to Appeal (C) No(s). 3978/2022; 

 THE ORIENTAL INSURANCE COMPANY LIMITED Vs SANJESH & ANR.

HEMANT GUPTA; V. RAMASUBRAMANIAN, JJ.

Dated: 11-03-2022

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Whether Insurance Company Can Take A Defense Which Did Not Form The Basis Of Repudiation Of The Claim?

 Mr. Gopal Shankarnarayan, learned senior counsel for the

appellants has argued both on substantive and procedural

points to assail the aforesaid orders. His first submission is

that the insurance company cannot resist a claim petition on

grounds beyond those cited by them while repudiating a claim.

In support of this argument, a decision of this Court in the case

Saurashtra Chemicals Ltd. v. National Insurance Co. Ltd.

[(2019) 19 SCC 70] has been cited. In this judgement, it has

been held:

“23. Hence, we are of the considered opinion that the law, as

laid down in Galada [Galada Power & Telecommunication

Ltd. v. United India Insurance Co. Ltd., (2016) 14 SCC 161 :

(2017) 2 SCC (Civ) 765] on Issue (2), still holds the field. It is

a settled position that an insurance company cannot travel

beyond the grounds mentioned in the letter of repudiation. If

the insurer has not taken delay in intimation as a specific

ground in letter of repudiation, they cannot do so at the

stage of hearing of the consumer complaint before NCDRC.”

{Para 10}

 REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 7630 OF 2022

JSK INDUSTRIES PVT. LTD. Vs ORIENTAL INSURANCE COMPANY LIMITED 

Author: ANIRUDDHA BOSE, J.

Dated: 18th October 2022

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SC: In case of overlapping policies, Courts should adopt a careful approach in considering policy which seeks to exclude liability on part of the insurer

 What is in issue in this present case has been characterized as “double insurance”, i.e., where an entity seeks to cover risks for the same or similar incidents through two different - overlapping policies. There is a wealth of international jurisprudence on the various nuances of double insurance. Such double insurance is per se not frowned upon in law. The courts however, adopt a

careful approach in considering policies which seeks to exclude liability on the part of the insurer. {Para 45}

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 2955 OF 2022

UNITED INDIA INSURANCE CO. LTD. Vs LEVIS STRAUSS (INDIA) PVT. LTD.

Author: S. RAVINDRA BHAT, J.

Dated: MAY 02, 2022.

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Whether Process Of Determination Of Motor Accident Compensation Can Be By A Continuing Mandamus?

The sole question which arises for determination in this

appeal filed by the Insurance Company is whether directions can be passed by the Court while determining compensation under the Motor Vehicle Act, 1988 (hereinafter referred to as “the said Act”) in the manner of a direction in perpetuity for continued maintenance of a prosthetic limb for the injured claimant.

Learned counsel for the appellant has referred two judgments

of this Court before us in Nagappa v. Gurudayal Singh & Others, (2003) 2 SCC 274 and Sapna V. United India Insurance Co. Ltd. & Anr. (2008) 7 SCC 613 opining that while determining compensation under the said Act there is no provision providing for passing of a further award once the final award is passed. The future eventualities are to be taken into consideration at that time. It was observed that:

“23…. Future medical expenses required to be incurred

can be determined only on the basis of fair guesswork

after taking into account increase in the cost of

medical treatment.”

In our view, the process of determination of such compensation

cannot be by a continuing mandamus, in a colloquial sense, and the determination must take place at one go.

The aforesaid principle is not even disagreed to or contested

by the respondents but what is submitted is that there must be a

provision made fixing a lump sum amount for maintenance/

replacement of the prosthetic limb, if necessary. We agree with the

submission and in a larger canvas consider it appropriate to direct

that in such kind of cases of providing facility of prosthetic

limb, appropriate amount may be quantified towards such

maintenance.

 REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No.4576/2021

HDFC ERGO GENERAL INSURANCE CO. LTD. Vs MUKESH KUMAR 

AUTHOR: SANJAY KISHAN KAUL, J.

Dated: 03rd August, 2021.

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Whether Insurance Company is bound to give coverage for mental illness along with physical illness?

Can mental illness be treated differently from physical illness for medical insurance purposes, is the question that arises in the present petition.

3. The petition raises an important issue relating to insurance coverage for mental illnesses and the provision of non-discrimination qua such illnesses as enshrined in Sections 21(1)(a) and 21(4) of the Mental Healthcare Act, 2017 (hereinafter, ‘MHA, 2017’).

27. It is clear from a perusal of the provisions of MHA, 2017, as also the provisions of the IRDAI Act, 1999 that immediately upon the MHA, 2017 coming into force, all insurance products ought to have extended the same treatment for mental and physical illnesses and remove any clause that discriminate between the same. The Insurance Ombudsman’s order which holds that the provisions of the MHA are not relevant to the present Petitioner is untenable. The MHA, 2017 has come into effect from May/July, 2018, and thus the exclusion in the Healthcare Policy of NICL with respect to “all psychiatric and psychosomatic disorders/diseases”, under Clause 4.10 as noted above, is contrary to law.

31. The Insurance Ombudsman’s order failed to consider the fact that the MHA, 2017 recognised the rights of the Petitioner and the conclusion of the Insurance Ombudsman that the provisions of the MHA, 2017 are not relevant, is completely contrary to law and is untenable. The MHA, 2017 and the provisions thereof, are absolutely relevant for a person who was suffering from Schizoaffective Disorder. Thus, the Petitioner was entitled for reimbursement of her claim as per the provisions of the MHA, 2017.

33. It is made clear that NICL and all insurance companies are liable to give effect to Section 21(4) of the MHA, 2017 with effect from the date when it has come into force i.e., 29th May, 2018. Mental illnesses ought to be covered without any discrimination. IRDAI would circulate a copy of this order in order to enable compliance by all the insurance companies.

IN THE HIGH COURT OF DELHI AT NEW DELHI

W.P.(C) 3190/2021

SHIKHA NISCHAL Vs NATIONAL INSURANCE COMPANY LIMITED

CORAM:

JUSTICE PRATHIBA M. SINGH

Date of decision: 19th April, 2021

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Whether Insurance Company can file appeal against award passed by claim tribunal without obtaining its permission as per S 170 of Motor vehicle Act?

 The learned Counsel appearing on behalf of the claimants took preliminary objection to the maintainability of the appeal filed by the respondent No. 3, the Insurance Company. Counsel submitted that the owner of the offending vehicle i.e. the insured has not preferred any appeal and the respondent no 3-insurer had not filed any application under section 170 of the M.V. Act, before the Tribunal. He relied upon the judgment of the Hon'ble Apex Court in the cases of (i) "National Insurance Company Limited, Chandigarh Vs. Nicolletta Rohtagi" (MANU/SC/0810/2002 : (2003) 7 SCC 456) : (2002 (4) ALL MR 874 (S.C.); (ii) "Rekha Jain Vs. National Insurance Company Ltd. & Ors." (MANU/SC/0773/2013 : 2013 SAR (Civil) 921) : (2013 ALL SCR 2833); and (iii) "Josphine James Vs. United India Insurance Co. Ltd. & Anr." (MANU/SC/0845/2013 : 2013 SAR (Civil) 1143). Learned Counsel further relied upon the Judgments of the learned single Judge of this Court in the case of (i) "Sharad Ganpat Deshmukh and Ors. Vs. Smt. Kunda Ashok Polade" (MANU/MH/1170/2002 : 2004 (1) T.A.C. 718 (Bom)); and "United India Assurance Co. Ltd. Vs. Milind Dattaram Bandagle" (MANU/MH/0690/2011 : 2011 (7) ALL MR 299). On the contrary, Mr. Afonso, learned Counsel appearing on behalf of the respondent No. 3 submitted that in view of the judgment of the three Judge Bench of Hon'ble Supreme Court in the case of "United India Insurance Company Limited Vs. Shila Datta and others" MANU/SC/1256/2011 : ((2011) 10 SCC 509) : (2012 (1) ALL MR 411 (S.C.)), the respondent No. 3, Insurance Company has right to file appeal against the judgment and award.

18. In the case of "United India Assurance Co. Ltd. Vs. Milind Dattaram Bandagle" MANU/MH/0690/2011 : (2011 (7) ALL MR 299), the facts were similar to the facts of the present case to the extent that the insurer was permitted by the Tribunal to contest on merits despite not following the procedure laid down under Section 170 of the M.V. Act. Relying upon the decisions of the Apex Court in the case of "Shankarayya and another Vs. United India Insurance Company Ltd. and another" reported in MANU/SC/0980/1998 : AIR 1998 SC 2968 and Nicolletta Rohtagi's case, (2002 (4) ALL MR 874 (S.C.)) (supra), the learned single Judge of this Court held that the appeal filed by the insurance company to challenge the impugned judgment and award on the grounds not covered by Section 149(2) of the M.V. Act, for want of leave under section 170 of the M.V. Act, was not maintainable.

19. Therefore, it follows that in the present case, since the respondent No. 3-Insurance Company had not obtained permission as required under Section 170(b) of the M.V. Act, to avail the defence of the insured to contest the case, it could not have challenged the findings, on merits. Hence, the appeal is not maintainable.

IN THE HIGH COURT OF BOMBAY AT GOA

First Appeal No. 13 of 2014

Decided On: 07.05.2014

 Royal Sundaram Alliance Insurance Co. Ltd. Vs. Hanamava Yamanappa Jedi

Hon'ble Judges/Coram:

U.V. Bakre, J.

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Leading Supreme court judgment on S 170 Motor vehicle Act

A. Motor Vehicles Act, 1988 - Sections 149 (2) & 170 - If the insurer is only a 'noticee' under Section 149(2) and not a party - Respondent or where the claim is initiated suo motu under Section 149(7), 158(6) or 170, it can defend the claim only on the grounds mentioned in S. 149(2). But if the insurer is made a party-respondent, it can raise other grounds also.

B. Motor Vehicles Act, 1983 - Sections 149(2) & 170-A claim petition may be filed only against the driver and owner of the vehicle without making the insurer a party-respondent. If the insurer is not made a party to the claim petition, the Tribunal shall issue notice to the insurer under Section 149(2). Where the insurer is not made a party, the Tribunal shall hold an enquiry into the claim under Section 170 and, if found necessary, suo motu direct that the insurer be treated as a party to the proceedings.

C. Motor Vehicles Act, 1988 - Sections 149(2) & 170 - S.170 does not contemplate an insurer making an application for impleadment The insurer need not seek the permission of the Tribunal under Section 170 to raise grounds other than those mentioned in Section 149(2) if it is already impleaded as a party-respondent.

D. Motor Vehicles Act, 1988 - Section 173-A joint appeal filed by the owner and insurer is maintainable since the owner does not cease to be a 'person aggrieved' even if the insurer joints him to file the appeal.

E. Motor Vehicles Act, 1988 - The following questions have been referred to larger bench for fresh consideration:

(i) Whether the insurance company can challenge the quantum of compensation claimed/awarded if the insurer was only a 'noticee' under Section 149(2)?

(ii) Whether the insurer can be permitted under Section 170 to file an appeal and contest the award if the insured fails to challenge the award even when the award was erroneous or arbitrary?

(iii) Whether the insurer is restricted to defend the claim only on the grounds available under Section 149(2) even in cases where the Company is authorised by the policy to defend the claim in the name of the insured owner?

IN THE SUPREME COURT OF INDIA

C.A. No. 6026 of 2007

Decided On: 13.10.2011

 United India Insurance Company Ltd. Vs.  Shila Datta and Ors.

Hon'ble Judges/Coram:

R.V. Raveendran, H.L. Dattu and K.S. Panicker Radhakrishnan, JJ.

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Guidelines of Supreme Court for protection of money paid to victim of motor accident

The tribunal while awarding the compensation had stated

that the amount payable to the share of Kajal would be kept in a

Fixed Deposit till she attains the age of 18 years. The High

Court while enhancing the amount of compensation has directed

that the enhanced amount be paid to the appellant within 45

days. This is totally contrary to the guidelines laid down by this

Court in General Manager, Kerala State Road Transport

Corporation, Trivandrum v. Susamma Thomas and Ors.15 (1994) 2 SCC 176,

wherein it has been held clearly that the amount payable to the

minors should not be normally released. The guidelines in this

case were as follows :

“17….(i) The Claims Tribunal should, in the case of minors,

invariably order the amount of compensation awarded to

the minor be invested in long term fixed deposits at least

till the date of the minor attaining majority. The expenses

incurred by the guardian or next friend may, however, be

allowed to be withdrawn;

(ii) In the case of illiterate claimants also the Claims Tribunal

should follow the procedure set out in (i) above, but if

lump sum payment is required for effecting purchases of

any movable or immovable property such as, agricultural

implements, rickshaw, etc., to earn a living, the Tribunal

may consider such a request after making sure that the

amount is actually spent for the purpose and the demand

is not a ruse to withdraw money;

(iii) In the case of semiliterate

persons the Tribunal should

ordinarily resort to the procedure set out at (i) above

unless it is satisfied, for reasons to be stated in writing,

that the whole or part of the amount is required for

expanding and existing business or for purchasing some

property as mentioned in (ii) above for earning his

livelihood, in which case the Tribunal will ensure that the

amount is invested for the purpose for which it is

demanded and paid;

(iv) In the case of literate persons also the Tribunal may

resort to the procedure indicated in (i) above, subject to

the relaxation set out in (ii) and (iii) above, if having regard

to the age, fiscal background and strata of society to

which the claimant belongs and such other

considerations, the Tribunal in the larger interest of the

claimant and with a view to ensuring the safety of the

compensation awarded to him thinks it necessary to do

order;

(v) In the case of widows the Claims Tribunal should

invariably follow the procedure set out in (i) above;

(vi) In personal injury cases if further treatment is necessary

the Claims Tribunal on being satisfied about the same,

which shall be recorded in writing, permit withdrawal of

such amount as is necessary for incurring the expenses

for such treatment;

(vii) In all cases in which investment in long term fixed

deposits is made it should be on condition that the Bank

will not permit any loan or advance on the fixed deposit

and interest on the amount invested is paid monthly

directly to the claimant or his guardian, as the case may

be;

(viii) In all cases Tribunal should grant to the claimants

liberty to apply for withdrawal in case of an emergency. To

meet with such a contingency, if the amount awarded is

substantial, the Claims Tribunal may invest it in more

than one Fixed Deposit so that if need be one such F.D.R.

can be liquidated….”

These guidelines protect the rights of the minors, claimants who

are under some disability and also widows and illiterate person

who may be deprived of the compensation paid to them in lump

sum by unscrupulous elements. These victims may not be able

to invest their monies properly and in such cases the MACT as

well the High courts must ensure that investments are made in

nationalised banks to get a high rate of interest. The interest in

most cases is sufficient to cover the monthly expenses. In

special cases, for reasons to be given in writing, the MACT or the

trial court may release such amount as is required. We reiterate

these guidelines and direct that they should be followed by all

the tribunals and High Courts to ensure that the money of the

victims is not frittered away.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 735 OF 2020

KAJAL Vs  JAGDISH CHAND 

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Supreme Court: Motor accident claim tribunal should give interest on compensation from date of application

The High Court enhanced the amount of compensation by

Rs.14,70,000/and

awarded interest @ 7.5% per annum but

directed that the interest of 7.5% shall be paid only from the

date of filing of the appeal. This is also incorrect. We are

constrained to observe that the High Court was not right in

awarding interest on the enhanced amount only from the date of

filing of the appeal. Section 171 of the Act reads as follows :

“171. Award of interest where any claim is allowed.—

Where any Claims Tribunal allows a claim for

compensation made under this Act, such Tribunal may

direct that in addition to the amount of compensation

simple interest shall also be paid at such rate and from

such date not earlier than the date of making the claim

as it may specify in this behalf.”

Normally interest should be granted from the date of filing of the

petition and if in appeal enhancement is made the interest

should again be from the date of filing of the petition. It is only if

the appeal is filed after an inordinate delay by the claimants, or

the decision of the case has been delayed on account of

negligence of the claimant, in such exceptional cases the interest

may be awarded from a later date. However, while doing so, the

tribunals/High Courts must give reasons why interest is not

being paid from the date of filing of the petition. Therefore, we

direct that the entire amount of compensation including the

amount enhanced by us shall carry an interest of 7.5% per

annum from the date of filing of the claim petition till

payment/deposit of the amount.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 735 OF 2020

KAJAL Vs  JAGDISH CHAND 

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