Oriental Insurance Company Lts. Lko v. Alka Rathore and 2 Others

Court No. - 19 Case :- MATTERS UNDER ARTICLE 227 No. - 2910 of 2024 Petitioner :- Oriental Insurance Company Lts. Lko Respondent :- Alka Rathore And 2 Others Counsel for Petitioner :- Rehana Khan Counsel for Respondent :- Rinku Verma,C.S.C. Hon'ble Manish Kumar,J.

¶1Heard Ms. Rehana Khan, learned Counsel for the petitioner-Standing Counsel and Shri Rinku Verma, learned Counsel for the respondent no. 1-caveator.

¶2With the consent of the parties, the writ petition is decided at the admission stage itself.

¶3By means of the present writ petition, the judgment and order dated 16.03.2024 passed by the Permanent Lok Adalat, Lucknow (hereinafter referred to as, the P.L.A.) in P.L.A. Case No. 33/2018 has been assailed by the petitioner-company whereby the petitioner-company was directed to pay to respondent an amount of Rs. 5 lacs as insured amount within a period of one month from the date of judgment alongwith penalty of Rs. 1000/- per week from 05.02.2018 i.e. the date of repudiation of claim of the respondent no. 1 by the petitioner-company till the date of judgment and 9% simple interest on insured amount and penalty amount from the date of filing of the claim i.e. 23.01.2018 till the actual payment is made. It has also been directed to pay a cost of Rs. 5000/-.

¶4Learned Counsel for the petitioner-company has submitted that after the demise of Ankur Rathore on 22.01.2017, respondent no. 1 i.e. the mother of Ankur Rathore had filed a claim under Mukhyamantri Kisan Evam Sarvahit Bima Yojana (hereinafter referred to as, the MKSBY) issued on 14.09.2016 before the Insurance Company submitting that her son namely Ankur Rathore (deceased) died in an accident on 22.01.2017, who was the breadwinner of the family.

¶5It is further submitted that the claim of the respondent no. 1 was duly considered and thereafter, repudiated by the petitioner-company by its order dated 03.02.2018.

¶6It is further submitted that after the repudiation of the claim of the respondent no. 1, filed a Case bearing No. 33 of 2018 before PLA, Lucknow for settling the claim, which was allowed by impugned judgment and order dated 16.03.2024 and accepted the claim and has directed the petitioner-company to pay the compensation as per the said scheme apart from imposing the penalty and interest on the delay payment of compensation alongwith cost of the said case.

¶7It is further submitted that the PLA had failed to appreciate that the deceased was serving as a driver and he must be having some income as such, which was not disclosed by the respondent no. 1 otherwise, family income would have been more than 75,000/-.

¶8It is further submitted that the income-certificate filed by the respondent no. 1 before the PLA shows that it was issued for Grahani i.e. the respondent no. 1 i.e. the mother of the deceased hence, the claim raised by the respondent no. 1 was not covered under MKSBY dated 14.09.2016.

¶9On the other hand, learned Counsel for respondent no. 1/caveator has submitted that in the income certificate issued by the competent authority, total income of the family has clearly been mentioned and the said issue was dealt by the PLA and given a specific finding for the same that by merely writing one sentence that issued for Grahani could not belie the fact that the said certificate is for the total income of the family, which was Rs. 54,000/- per annum i.e. less than Rs. 75,000/-.

¶10It is further submitted that in the FIR, the brother of the deceased himself stated that his brother late Ankur Rathore was working as a driver so nothing is required to be proved whereas from the perusal of the FIR, which has been filed alongwith present petition it is nowhere mentioned that he was employed as a driver. The sentence, which was mentioned in the FIR that the deceased was driving a vehicle Hyundai i-20 car and on the instructions of the car owner after dropping him at Bareilly, he was returning. The FIR does not disclose that the deceased was working as a driver with someone or the owner of the said vehicle.

¶11On the other hand, the Permanent Lok Adalat has considered that though the petitioner had disputed the said facts stated by the claimants but no evidence was filed by the petitioner contesting the facts stated before the Permanent Lok Adalat and it is in the aforesaid circumstances there was no material to accept objections raised by the petitioner and accordingly the Permanent Lok Adalat accepted the contention raised by the claimants and allowed the claim. The petitioner before this Court while challenging the judgment of the Permanent Lok Adalat dated 16.03.2024 has submitted the PLA has erred in accepting the contentions raised by the claimants which require interference in the present writ petition.

¶12He has further submitted that though there is a provision for grant of penalty for the delayed payment of compensation but there is no provision with regard to grant of interest and to that extent the relief granted by the PLA is beyond the provisions contained in the agreement dated 14.09.2016 and consequently the grant of interest is arbitrary and deserve to be set aside.

¶13Learned counsel for respondent no. 1-caveator on the other hand have supported the impugned order. It has been submitted that her claim was wrongly repudiated by the petitioner despite the fact that the applicant was squarely covered under the provisions of Mukhya Mantri Kisan Avam Servahit Bima Yojana and also that the deceased at the time of his death was wholly engaged in agricultural work and he was the sole bread earner and he was supporting the entire family. There was sufficient material adduced by the claimant before the PLA and there was no other material available before them to take a contrary view. The petitioner though has contested the said fact, but no material or evidence was produced by it to establish that the facts were otherwise. He further submits that there is no infirmity in the impugned order and prayed for dismissal of the writ petition.

¶14I have heard the arguments of the parties and perused the record.

¶15The first question which arises for consideration is as to whether the claimant fulfilled all the conditions prescribed under the MKSBY for claiming compensation on the ground of death of Ankur Rathore. In this regard, a perusal of the scheme dated 14.09.2016 would indicate that it was to be implemented with effect from the date it was entered and as per the provisions of the scheme, in case of death arising out of an accident pertaining to the head of the family/bread earner of the family during the operation of the agreement, the insurance company is bound to make the compensation @ Rs. 5 lakh to the nominee/legal heirs.

¶16Late Ankur Rathore, the son of the claimant had died due to an accident occurred on 22.01.2017. A claim was preferred before the petitioner-insurance company which was rejected on

03.02.2018 on the ground that the deceased was not the head of the family and he was employed as a driver, hence, would not be covered under the said scheme.

¶17A perusal of the impugned judgment clearly indicates that before the Permanent Lok Adalat, it was stated that the deceased Ankur Rathore was involved in agricultural work and from that income the family was being maintained and was the bread earner of the family. There was no other evidence available on record nor did the petitioner file any evidence which may suggest that deceased was not the bread earner of the family. It was in the aforesaid circumstances that the PLA came to a conclusion that the deceased was in fact the bread earner of the family and was squarely covered under the scheme of 14.09.2016 and the claimant was entitled for the compensation.

¶18The PLA had also given a specific finding that the petitioner company had failed to adduce any evidence that the deceased was employed as a driver.

¶19Before this Court also though this issue has been agitated by learned counsel for petitioner but there is no material to interfere in the findings given by the PLA or is there any evidence to the contrary available on record and nor filed any with the writ petition so as to enable this Court from recording satisfaction contrary to the findings of the PLA, accordingly contention of the petitioner in this regard is rejected.

¶20The second issue which arises for consideration is as to whether the PLA was correct in granting 9% interest on the delayed payment of compensation from the date of filing of the claim till the date of payment. In this regard, learned counsel for petitioner relies upon the judgment of a coordinate bench of this Court in the case of Oriental Insurance company Vs. State of U.P. (Matter under Article 227 No. 27 of 2021). She has submitted that the claimant is entitled for compensation only under the specific provisions contained in the MKSBY issued on 14.09.2016, where there is no provision of grant of interest, and the only provision is of penalty of Rs. 1000/- per week form repudiation of claim till date of actual payment.

¶21The liability of the petitioner is under the aforesaid contract and the payment can only be made in accordance with the aforesaid terms and conditions of the scheme. She submits that though the provisions for imposition of penalty is provided for in the said scheme but there is no provision for grant of interest and accordingly the said direction issued by the PLA is arbitrary and contrary to the said scheme. This Court while deciding the aforesaid issue in the case of Oriental Insurance Company (Supra) has observed as under:- "13. Question no.(i) is answered accordingly in favour of claimant. Question No.(ii) : Whether award of interest in addition to penalty indicated in the agreement amounts to double jeopardy?

¶14With regard to the second question, it transpires that agreement dated 14.09.2016 provides for imposition of penalty upon the Insurance Company in case payment is not made to claimant in accordance with the terms and conditions of the agreement. It appears that earlier an amount of Rs.2500/- per week had been imposed as penalty, which was subsequently reduced to Rs.1,000/- per week.

¶15Apparently, the imposition of penalty upon the Insurance Company is a measure not only of encouragement to adhere to the terms and conditions of the agreement but is also in the nature of cost imposed upon the Insurance Company in case the claim is wrongly repudiated and compensation is not made to the nominee/legal heir of the insured.

¶16By means of impugned order, while the Permanent Lok Adalat has imposed the aforesaid penalty, at the same time interest at the rate of 9% has also been imposed upon the Insurance Company.

¶17It is trite that when claims are made and are to be decided in terms of a contract, it is only the conditions of contract which are required to be adhered to. The court concerned cannot on its own volition impose a condition which is not contemplated in the agreement. In the present case, it appears that a steep penalty of Rs.1000/- per week has been imposed upon insurance Company for repudiating or not providing compensation in terms of the insurance scheme. Award of penalty by Permanent Lok Adalat as such appears to be in conformity with agreement dated 14.09.2016. However, so far as award of interest at the rate of 9 percent per annum is concerned, the Permanent Lok Adalat in its impugned order does not indicate any provision or condition of agreement under which interest has been awarded over and above penalty imposed in terms of the agreement nor does the agreement contain any clause regarding payment of interest to claimant over and above the penalty clause. As such, in the considered opinion of this Court, the permanent Lok Adalat travelled beyond the conditions of agreement dated 14.09.2016 in granting interest while ignoring the fact that a steep penalty of Rs.1,000/- per week has already been imposed and is payable by the Insurance Company in terms of the agreement.

¶18As has been indicated herein above that when claim is made in terms of mutually agreed and binding contract, it is only the conditions of contract which are adhered to without imposition of extraneous considerations. As such, once a penalty is clearly indicated under the contract for a party to fulfill in case of breach of contract, it is only that penalty which can be imposed and in the considered opinion of this Court, no further penalty or costs can be imposed which is beyond the terms and conditions of such contract.

¶19In the present case, it is apparent that neither any statutory provision has been indicated for grant of interest nor does agreement dated 14.09.2016 stipulate grant of any interest. As such, grant of interest over and above the penalty clearly amounts not only to Double Jeopardy but unjust enrichment and is unsustainable.

¶20In view of aforesaid, Question no.(ii) is answered in favour of petitioner-Insurance Company.

¶21In terms of aforesaid, order dated 27.12.2019 passed in PLA Case No.15 of 2018(Shameena Khatoon & others v. The Oriental Insurance Co. Ltd. & others) is set aside only to the extent of grant of interest on the claimed amount.

¶22The petition as such is partly allowed in terms of aforesaid. Parties shall bear their own costs."

¶22A perusal of the aforesaid issue, it is evident that it has been rightly observed that according to the agreement there is no provision providing for grant of interest and grant of the same would be extraneous to the agreement and such an order cannot be sustained. Accordingly, this Court also subscribes to the view taken by the coordinate bench and accordingly impugned order passed by Permanent Lok Adalat, Lucknow dated

16.03.2024 is set aside only to the extent of grant of interest on the claimed amount. Accordingly the impugned order is modified to the extent that award of interest @ 9% is set aside.

¶23Accordingly, the writ petition is partly allowed in terms of the aforesaid. Parties shall bear their own cost. Order Date :- 1.7.2024 Ashish High Court of Judicature at Allahabad, Lucknow Bench