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Rajasthan High Court · body

2016 DIGILAW 736 (RAJ)

Oriental Insurance Company Ltd. v. Tulsi Devi

2016-05-23

ARUN BHANSALI

body2016
ORDER Mr. Arun Bhansali, J. This writ petition has been filed by the petitioners aggrieved against the order dated 12.12.2008 passed by the Permanent Lok Adalat, whereby while accepting the application filed by the respondent, it has ordered the Insurance Company to pay interest @ 15% p.a. from the date of death of the claimant's son. 2. The application was filed before the Permanent Lok Adalat inter-alia with the allegation that a Nagrik Suraksha Policy was taken on the life of Dhagla Ram, which was in currency from 14.1.2004 to 13.1.2008 for a sum of Rs. 3 Lac. Dhagla Ram died on 21.12.2004 and claim was filed on 28.1.2005, however, the amount was not paid seeking various requirements and therefore, the respondents approached the Permanent Lok Adalat in the year 2005 itself. The Permanent Lok Adalat, held in favour of the respondents and directed for payment of amount of policy i.e. Rs. 3,00,000/- along with interest @ 15% p.a. from the date of death of Dhagla Ram i.e. 21.12.2004 and compensation to the tune of Rs. 1000/-. It is submitted by learned counsel for the petitioners that the amount of Rs. 3,01,000/- (amount of policy + the compensation awarded) had already been deposited by the Insurance Company. It is further submitted that the awarded interest @ 15% is highly excessive and no reason has been recorded in the order for awarding interest @ 15% p.a. 3. It is submitted that the petitioner - Insurance Company is prepared to make payment of interest at reasonable rate from the date claim was lodged in the Insurance Company and therefore, the award be modified to the said extent. 4. Learned counsel for the respondents vehemently opposed the submissions made by learned counsel for the petitioners. It was submitted that there is no reason to interfere with the award passed by the Permanent Lok Adalat. The award of interest @ 15% p.a. is justified in the circumstances of the case and therefore, the writ petition deserves to be dismissed. 5. I have considered the submissions made by learned counsel for the parties and have perused the material available on record. 6. The award of interest @ 15% p.a. is justified in the circumstances of the case and therefore, the writ petition deserves to be dismissed. 5. I have considered the submissions made by learned counsel for the parties and have perused the material available on record. 6. The insured – Dhagla Ram died on 21.12.2004 and after giving intimation on 18.1.2005, application was made claiming the insured sum on 28.1.2005 and when the same was not paid, the respondents immediately approached the Permanent Lok Adalat and therefore, to the extent the Permanent Lok Adalat directed the payment of interest on the death of Dhagla Ram, appears to be justified as the Insurance Company should have immediately made payment as soon as the application was made. 7. So far as award of interest @ 15% p.a. is concerned, the same appears to be excessive in the circumstances of the case, as the Permanent Lok Adalat failed to indicate any reason for awarding interest at such high rate. The nature of proceedings before the Permanent Lok Adalat cannot assume the character beyond any of the proceedings either before a civil court or any tribunal and therefore, the Permanent Lok Adalat also has to act on reasonable ground and therefore, the awarded interest @ 15% p.a. without recording any reason for award of such interest cannot be sustained. Though this Court is aware of the restriction within which the powers under Article 226 or 227 of the Constitution of India are to be exercised, however, such excessive award of interest by Permanent Lok Adalat cannot be countinanced. 8. In the circumstances of the case, the interest @ 9% p.a. from the date of death of Dhagla Ram i.e. 21.12.2004 till the date of actual payment made by the petitioner appears to be justified in the circumstances of the case. 9. In view of the above, the writ petition filed by the petitioners is partly allowed. The award passed by the Permanent Lok Adalat dated 12.12.2008 is modified to the extent that the instead of payment of interest @ 15% p.a., the petitioner-Company would be liable to make payment of interest @ 9% p.a. from 21.12.2004 till the date of actual payment of amount by the petitioner-Company. The required amount of interest be now paid within a period of six weeks.