SURENDRA PRASAD SINGH Vs. STATE OF BIHAR

JUDGEMENT

(1.) Against an insurance policy, claims were raised in the latter half of 2007 by the writ petitioner. As is usual, on some pretext or the other or on some pretence or the other, lacking promptness, the claims were substantially rejected. This ensued dispute. It appears that the United India Insurance Company Limited (for brevity, the Insurance Company), not being satisfied with the first survey report, got another survey report done and, on basis of that, substantially reduced the claims, tendered payment after more than two years of the incidence. Naturally, the writ petitioner refused to accept the settlement. He filed two writ petitions in this Court being CWJCs No 6065 and 6395 of 2010 in respect of the two claims. It may be noted that there were two insurance policies but the insurable claim event was one. The writ petitions were dismissed. Letters Patent Appeals being LPAs No 455 and 468 of 2012 were preferred by the writ petitioner which, after hearing the parties, were allowed by common judgment and order dated 19.05.2015 clearly holding that the Insurance Company was liable to pay the insurance claim as per the first survey reports dated 13.11.2007 and 19.11.2007 in respect of the two policies and not those reports obtained subsequently. After that, review applications were filed in the two LPAs which were also dismissed.

(2.) As is usual, as no expense has to be met out from the pocket of the officers of the Insurance Company, it carried the matter to the Apex Court without success. It was not left there. The SLP having been dismissed by the Apex Court, further review applications were filed before the Apex Court which was also dismissed. Now having been left with no option, payment had to be made as per orders in the two LPAs.

(3.) It may be noted here that after the judgment of the Division Bench of this Court in the Letters Patent Appeal, when compliance was not being made, the present contempt proceedings were initiated. In the meantime, the Insurance Company preferred the SLP. The contempt proceedings were adjourned. The SLP, being dismissed, it preferred review before the Apex Court which was also dismissed. Now, when the contempt application is taken up, instead of immediately complying, it waited. We wonder for what? We then passed an order, in peremptory terms, directing that if the order of the LPAs is not complied, the Managing Director of the Insurance Company will be present in the Court. It is upon this order that payment was made. What followed is even more intense. The petitioner pointed out that he had asked for payment of interest along with the principal, which is statutorily provided. The reply he got was that there is no Court order to pay interest. A further clarification this Court had to give that interest liability is a liability by law and there has to be no order of the Court. The moment a claim is settled and if there is a delay in that, the law provides for interest to be paid then automatically alongwith the claim settlement, the interest component has to be paid. Surely, the Insurance Company was waiting further for something and delaying the payment. Now, a show cause has been filed again seeking to introduce a dispute with regard to the liability to pay interest. This dispute is based upon Clauses (5) and (6) of Regulation 9 of the Insurance Regulatory and Development Authority (Protection of Policyholders' Interests) Regulations, 2002 (for brevity, the Regulations). As the name of the Regulations would show that it purported to be for the protection of the policyholders' interest, but it is being used to negate the interest of policyholders. What is urged on basis of sub-clauses (5) and (6) of Regulations 9 is that, if upon receipt of the surveyor's report, settlement is delayed beyond 30 days, there would be liability to pay interest. The first stand that is taken is that the liability to pay the principal amount arose only as a consequence of the judgment and order of the Letters Patent Appeals which were of 19.05.2015. Therefore, the interest liability would only be from 19.05.2015. We have noted this only to show the hollowness and the ridiculous stand, the Insurance Company can take. What the Letters Patent Appeals found was that the liability arose, when first survey report was submitted, way back in 2007. On the plain reading of the Regulations aforesaid, any layman, but senior officers of the Insurance Company, would understand that the interest, which is compensatory in nature, would accrue from the day liability to pay accrues. The liability to pay was of the year 2007 but for reasons best known, another dispute was sought to be raised and interest being tendered is only for the period 2015 to 2016.