Excelsior Correspondent
Srinagar, Oct 18 : High Court held that the Insurance Company is bound to pay claim amount to the insured notwithstanding the fact the person has been paid relief of damages from the Government
The division bench headed by Chief Justice said the Insurance Company cannot reduce or withheld the payment to a claimant on the ground that the insured person has been paid ex gratia relief from the Government.
Dismissing a Miscellaneous Appeal filed by an Insurance company against an award of Redressal Commission, the court said the Company is under obligation to pay the insured claim to the insured and it is not the business of the Insurance Company to see whether the person suffering damages has been paid some sort of relief from other sources or not.
The case claimant has suffered damages to his Wine Shop, during the eruption of violence in Kishtwar in August 2013. The shop was insured by Oriental Insurance Company and after a thorough assessment, the total loss was estimated by the appointed surveyor.
However, the insurance company approved a lower payout after deducting some amount, which the shop had received as ex gratia relief from the government. Aggrieved by the insurance company, the shopkeeper approached the then J&K State Consumer Disputes Redressal Commission, which awarded him Rs 19.11 lakhs along with 10% interest from the date of the claim.
The insurance company challenged the order of Commission before the High Court in a Miscellaneous Appeal on the ground that since the shop owner had already received Rs 3.50 lakhs from the government as relief, this amount should be deducted from the insurance claim.
The bench rejected the plea of Insurance Company by observing the duties of insurance companies and the implications of ex gratia payment. The court said that the insurance company did not contest the fact that the claimant’s shop had suffered extensive damages.
“…that ex gratia payments made by the government are acts of grace and have no legal bearing on the liability of insurance companies. In alignment with these observations the appeal filed by Oriental Insurance Company was dismissed, and the award along with interest and litigation costs, as previously ordered by the Consumer Disputes Redressal Commission, was upheld”.
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