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2015 DIGILAW 1525 (KER)

Nandini Jayarajan v. Insurance Ombudsman

2015-11-02

K.HARILAL

body2015
JUDGMENT : K. Harilal, J. 1. The petitioner is the wife of late P.B. Jayarajan, a workman in the Bharath Petroleum Corporation Limited (BPCL). The petitioner's husband P.B. Jayarajan, died on 30.12.2005, was an employee of the BPCL and while working in Kochi Refinery and at the time of accident, he was working in the course of employment, in the Kochi Refinery. The late P.B. Jayarajan was an insured employee under a scheme of Insurance Policy, namely, Group Personal Accident Insurance Scheme (GPAI). Under the said Scheme, BPCL/Kochi Refinery used to pay the premium on his behalf to the respondent Insurance Company and in the event of death or bodily injury to any workman, while on duty, the Insurance Company will indemnify the company and pay the compensation amount to the injured/dependents of deceased workman. While so, the petitioner's husband died on 30.12.2005, while attending a Hydrogen Sulphide gas leakage in gas pipeline in sulphur recovery unit of the diesel hydro desulphurication Plant of Kochi Refinery. At about 10.15 a.m., while Jayarajan was tightening the bolts in the flange of the leaking pipe, he suddenly became unconscious and fell backwards on the platform. He was first taken to the Occupational Health Centre (OHC) of the refinery and then to Vijayakumaran Memorial Hospital, Tripunithura, where it was certified that he was brought in dead. The sad and sudden death of Jayarajan was immediately reported to the police and F.I.R. No. 218 of 2005 dated 30.12.2005 was registered on the basis of the First information Statement given by the informant. Thereafter, based on the postmortem findings, clinical findings and other corroborating circumstances, the final opinion of the cause of death was issued by the Police Surgeon, the Department of Forensic Medicine, Medical College, Allappuzha. The opinion as to the cause of death reads thus: 'There is no evidence of natural disease or violence to account for death. Possibility of death due to inhalation of poisonous gas cannot be ruled out". 2. The petitioner filed a claim under the Group Personal Accident Insurance Policy Scheme, to which his late husband was a beneficiary. The opinion as to the cause of death reads thus: 'There is no evidence of natural disease or violence to account for death. Possibility of death due to inhalation of poisonous gas cannot be ruled out". 2. The petitioner filed a claim under the Group Personal Accident Insurance Policy Scheme, to which his late husband was a beneficiary. But, the Insurance Company arbitrarily repudiated the claim on the ground that the chemical analysis of the deceased revealed that he was highly intoxicated at the time of accident, even though the reason for his death reported by the Police Surgeon and by investigating officer alike was due to inhalation of Hydrogen Sulphide, and there was no reference to alcohol consumption by the deceased. The 1st respondent also upheld the total repudiation of the claim. 3. Thereafter, the petitioner filed W.P.(C). No. 32243 of 2008 before this court, challenging the order dated 30.04.2008, rejecting the claim by the Ombudsman. This Court, after elaborate consideration of the matter in issue, quashed the order of the Ombudsman dated 30.04.2008 and directed to reconsider the complaint, after affording an opportunity to both parties to adduce evidence for and against, including the oral evidence of expert, etc., and to pass a fresh award. 4. In compliance of the said order, the Insurance Ombudsman reconsidered the matter and after trial, entered into the findings that there are clear violations of various Rules under the Kerala Chemico-Legal Examination Rules 1959, while conducting chemical examination and also declared that the repudiation of the claim is bad and unsustainable. Accordingly, the award was passed directing the respondent insurer to pay compensation of Rs. 9,45,300/- with cost of Rs. 5,000/- to the petitioner. The grievance of the petitioner is that even though the 1st respondent allowed her claim, no amount had been given, as interest for the delay of six years occurred, in the payment of insurance claim. According to the petitioner, the denial of interest is arbitrary and unreasonable and cannot be justified in view of the decision laid down by this Court and the Apex Court. Thus, this Writ Petition is filed challenging the denial of interest for the award passed by the Ombudsman. 5. I heard the learned counsel for the petitioner and the learned counsel appearing for the Insurance Company. 6. Thus, this Writ Petition is filed challenging the denial of interest for the award passed by the Ombudsman. 5. I heard the learned counsel for the petitioner and the learned counsel appearing for the Insurance Company. 6. The learned counsel for the petitioner submits that the petitioner's husband died on 30.12.2005 and immediately after the death, the claim petition was filed before the Insurance Company; but after a period of 1½ years, the Insurance Company totally repudiated the claim, without sufficient reasons. Thereafter, the petitioner filed W.P.(C) 32243 of 2008 before this Court and this Court found that the Insurance Ombudsman has the power to take evidence in a claim and the same was denied to the petitioner and on that findings Insurance Ombudsman was directed to reconsider the petition and also directed to provide sufficient opportunities to the parties to adduce evidence and after the remand the final order was passed on 14.10.2011. Thus, the long delay of more than 6 years was caused by the callousness and wrongful act of the Insurance Company alone and thereby, the petitioner is entitled to get interest for the claim amount from the date of petition. The learned counsel further cited the decision reported in Thazhathe Purayil Sarabi v. Union of India (2009 (4) KLT 370 (SC)), the decision of this Court in M.F.A. No. 16 of 2008 and the decision in United India Insurance Co. Ltd. v. M.K.J. Corporation ( (1996) 6 SCC 428 : 1996 KHC 974). 7. Per Contra, the learned standing counsel for the respondent Insurance Company advanced arguments to justify the denial of interest. According to the learned standing counsel there is no provision to grant interest under R.12 of the Insurance Ombudsman, the Redressal of Public Grievances Rules, 1998. In the absence of a specific provision for granting interest, the petitioner has no right to claim interest as of right and the Ombudsman is justified in denying the interest. It is also contended that the interest was denied on sufficient reasons and that the denial was a bona fide one and not intended to cause delay in granting the compensation. 8. It is also contended that the interest was denied on sufficient reasons and that the denial was a bona fide one and not intended to cause delay in granting the compensation. 8. In view of the rival submissions, the question that arises for consideration in this Writ Petition is, whether the petitioner, who has been granted an award by the Ombudsman, in exercise of the power under R.12 of the Insurance Ombudsman, Redressal of Public Grievances Rules, 1998, is entitled to get interest for the award. 9. Going by the Rule 12 of the Ombudsman for Insurance, the Redressal of Public Grievance Rules, 1998, it is seen that as rightly submitted by the learned standing counsel for the Insurance Company, there is no provision for granting interest, when passing an award. But, going by the sequences of events from 30.12.2005, the date of death of the petitioner's husband, it could be seen that the petitioner was fighting for getting the compensation before this Court and the Insurance Ombudsman and such a circumstance was caused by the unilateral repudiation of claim by the respondent. It is also pertinent to note that such repudiation was made on 09.04.2007 and the petitioner was constrained to seek indulgence of this Court to get the grievance redressed. After the remand order passed by this Court, final award was passed on 14.10.2011 only. 10. It is true that there is no provision for granting interest under the said Rules. But, under the similar situations, where no provision was provided to award interest, under the Railway Claims Tribunal Act, 1987 the Apex Court in 2009 (4) KLT 370 (SC) (Thazhathe Purayil Sarabi v. Union of India) held that even in the absence of a specific provision for granting interest in the concerned statute, the power to grant interest is a matter left with discretion of the authority or the tribunal, as the case may be under the provisions of Section 3 of the Interest Act and Section 34 of the Code of Civil Procedure. In the above decision, the Apex Court further held that in the cases where a statute does not provide any provisions for payment of interest on any awarded sum, the power of the court to grant interest can also be inferred to from the above provisions of the Interest Act, 1978 and the Code of Civil Procedure. In the above decision, the Apex Court further held that in the cases where a statute does not provide any provisions for payment of interest on any awarded sum, the power of the court to grant interest can also be inferred to from the above provisions of the Interest Act, 1978 and the Code of Civil Procedure. A Similar view was taken by this Court in M.F.A. No. 16 of 2008 also. In this decision, this Court relied on ( 2008 ACJ 783 ) Union of India v. Oinam Keirungba Meetal. There, the court held that payment of interest may be considered to be a part of compensation itself and even if there is no provision to pay interest, interest is payable to the claimant, at the discretion of the court. In view of the proposition laid down by the Apex Court the principle that can be relied on is that, even in the absence of specific provision for granting interest, it is a matter left with the discretion of the courts or tribunals, as the case may be. In the instant case, the delay was caused by the callousness and wrongful attitude taken by the respondent Insurance Company. It could also be seen that there was no basis or bona fides in the denial of claim, and unilateral total repudiation put the petitioner to irreparable injury and great loss and she was constrained to fight for justice, for a long period of six years. It is a fundamental principle of Insurance Law that utmost good faith must be observed by both contracting parties. Good faith forbids both parties from raising contentions, without bona fides to draw the other into bargain, when they actually believe otherwise. Obligation of good faith applies to both insured and insurer equally. Here, total reputation of claim was an unfounded one made without bona fides. In this view of the matter, I find that the denial of interest to the petitioner is arbitrary and unreasonable. The petitioner is entitled to get interest. The 2nd and 3rd respondents are directed to pay interest to the award amount @ 8% p.a. from the date of petition till the date of Ext. P4 award, within a period of 2 months from the date of receipt of a copy of this judgment. This Writ Petition is disposed of accordingly.