Supreme Court in its judgement made it difficult for Insurance Companies to run away from their Obligations
In the case of
Sangita Arya v Oriental Insurance Co. Ltd.[1],
Jts. Indu Malhotra (single judge bench) held that in case of providing the insurance
cover for any accident, not only the average income of the victim's will be considered, but also the prediction must be made by the
court about his future income looking at the circumstances.
In this
case, Mr. Harish Arya (Late) on 18 June 2007, died in a road accident. The family
of the victim demanded the insurance claim from the Oriental Insurance
Corporation. The Motor Vehicle Claim Tribunal, Haldwani considering his last income tax return ordered the insurance company to
provide the family with Rs. 12,55,000, which the Insurance company challenged
in the High Court of Uttarakhand. HC reduced compensation amount to Rs.
5,81,000, as the HC only admitted the average of his last three years of Income
Tax return i.e. Rs 52,635 and did not considered his last Income Tax return (that was his actual present income), which was of Rs. 1,00,000.
Supreme Court using the power u/a 142 of the Constitution held that, not only the past Income, but also on the basis of Circumstances the court should calculate the Income of the victim i.e.,
he had a total of 5 members in the
family who were dependent upon him. which shows his ability and responsibility to earn in future. And therefore, the court took an average of his last 16 years Annual Tax Returns (which then increased by 40% as assuming his possible future Income) that tantamount to Rs. 16,80,000 plus adding other expenses and with the
rate of interest of 7% on the sum amount from the date of filling of the case to be paid to the
victim’s family within a period of 12 weeks by the company.
Observation:
This major judgment will surely impact the society positively and provide relief to such victims. I believe that the court
should have also provide with the punishment to the insurance companies who purposely delay the insurance claim by extending the legal matters and delaying the justice.
[1] Smt Sangita Arya & Ors v Oriental Insurance Co. Ltd. & Ors, SC 2020
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