Directs for settlement of claims as per court directions
The Jammu and Kashmir High Court has directed insurance companies to pay 50 percent of insured amount for policies above Rs 25 lakh and 95 percent for policies below Rs 25 lakh as interim relief to the flood-affected people in the State. The court, however, made it clear that in cases where the survey report has been received, the amount should be disbursed as per the assessment made by the surveyor.
“The spirit of the order passed by this court on September 26 and 30, and October 1, 2014 is that expeditious disbursement of the amount be made so that the party that has suffered extra-ordinary damages may start their life and in such cases an undertaking was required to be filed,” a division bench of Chief Justice M Mkumar and Justice Ali Muhammad Magrey said in its order on a Public Interest Litigation.
The bench however said, “In cases where the survey report has been received, the amount be disbursed as per the assessment made by the surveyor which would, of course, be considered under protest, as the remedy to challenge the preliminary or final survey report would remain open to the claimant under the ordinary law,” the bench ruled.
The bench made it clear that in cases where the preliminary or final survey report has been received, a copy of the same shall be furnished to the assured so that he may be able to analyze the report and avail his remedy in accordance with the law.
The court also asked the assured who has been paid the amount of 50% under the direction of the court to cooperate with the Insurance Company by furnishing essential documents available with them so that final settlement is arrived at.
To a plea by senior counsel Z A Shah that in many cases cheques have been prepared in claims where insured sum is above Rs 25 lakh but these have not been handed over to the claimants, senior Additional Advocate General JavedKawoosa submitted that cheques have not been handed over to those claimants who have not submitted the undertakings .
Observing that it is not for the assured to chase the Insurance Company all the time, the bench said, “We feel that if a cheque is prepared on 12th October, 2014, it must be on the basis of claim made by claimant wherein he must have given his cell or contact number. Therefore, the Insurance Company shall contact all such claimants in whose favourcheques have been prepared, asking them to file undertaking and then handover the cheques to them.”
To the contention of Bajaj Allianz General Insurance Company that it’s a private company and therefore not ‘State’ within Article 12 of the Constitution, the court said, “It is well settled that the High Court in exercise of its writ jurisdiction under Article 226 of the Constitution of India read with Section 103 of the State Constitution can issue writ to anybody-private or public to undue injustice.”
Turning down the plea by the company that it is subject to regulatory control and authority of the Insurance Regulatory and Development Authority and the conduct of its business is bound by the Insurance Act 1938 which forbids the Company from settling a claim of more than Rs 20,000 unless it receives a report from the loss assessor, the court said the objections are devoid of merit.
Moreover, the Insurance Companies, the court said, are discharging public functions and they cannot avoid “Mandamus” issued under the provisions of Article 226 particularly in the circumstances obtaining in the Valley created by unprecedented floods.
The court observed that the miseries of people have to be eased out by giving them some relief.
Citing dismissal of SLP by the Supreme court that was filed by the four Insurance Companies, the bench said “ Once the court has taken notice of extra-ordinary situation which has been approved by Hon’ble Supreme Court then said objections are simply ‘frivolous’.”
“Therefore, we direct the Bajaj Allianz to comply with the direction instead of proceeding on the basis of survey reports alone,” the bench added.
In respect of motor vehicles, the four PSGICs stated before the court that they are also following the policy in vogue with the Bajaj Allianz General Insurance Company.