Motor Accident Claim: Allahabad High Court Imposes ₹5 Lakhs Cost On Insurance Co. For 'Keeping Litigation Alive' For 20 Yrs

The Allahabad High Court recently imposed Rupees Five Lakhs on an insurance company while noting that it kept the litigation alive for almost 20 years in connection with a Motor Accident Claims case.

The Bench of Justice Dinesh Kumar Singh imposed the exemplary cost on the Insurance Company as they made the complainant (whose husband died in a motor accident in the year 1999) and her five minor children suffer beyond imagination.

The case in brief

Essentially, Opposite party no.2/Claimant along with her five minor children filed a Motor Accident claim in 1999 before the Tribunal, Raebareli as her husband died in an accident. The said claim petition was contested by the Insurance Company, however, later on, counsel for the Insurance Company abstained and did not appear in the claim petition.

Therefore, the Tribunal vide ex-parte judgment and award dated August 29, 2001, awarded compensation to the tune of Rs.11,94,472/- with 10% simple interest per annum in favor of opposite party no.2/wife of the man who died in an accident.

After the award, the Insurance Company filed an application under Order 9 Rule 13 CPC along with an application for condonation of delay under Section 5 of the Indian Limitation Act on December 19, 2001, however, the Tribunal rejected the application for condonation of delay and also dismissed the said application filed under Section 5 of the Indian Limitation Act.

Further, the Tribunal also directed for initiation of proceedings under Section 340 Cr.P.C. against the Insurance Company as allegedly they had fabricated the documents filed in support of the application. Challenging this very order, the insurance company moved to the HC.

Court's observations

Perusing the impugned order, the Court did not find that the Tribunal committed any error of jurisdiction or law. Further, the Court termed it as very unfortunate that the victims were not been paid the compensation, which was awarded to them way back in the year 2001.

The Court noted that the HC, on March 26, 2003, had stayed the impugned order without recording any reason whatsoever. Further, the Court also remarked thus:

"It is really painful to notice that the victims, whose bread earner had died leaving behind a widow and five children, had to suffer so much because of the pendency of this writ petition before this Court for almost 20 years."

In view thereof, the writ petition was dismissed without being any merit and substance. Petitioner-Insurance Company was directed to deposit the entire amount of the compensation along with interest as directed by the Tribunal within a period of one month.

Further, the Court also imposed a cost of Rs.5,00,000/- (Rupees Five Lakhs) on the insurance company (to be disbursed in favour of the claimants after due verification) as it had kept the litigation alive for almost 20 years before the HC.

"This exemplary cost has been imposed on the Insurance Company as they had made the complainant and her five minor children suffer beyond imagination. If the money awarded was paid on time, the victims could have built up their lives," the Court added as it parted with the order.

Case title - United India Insurance Co. Ltd. Thru Its Divisional Manager v. Motor Accident Claim Tribunal
Case Citation: 2022 LiveLaw (AB) 121

Click Here To Read/Download Order