Be considerate in trying times, HC tells insurance firms

Insurance companies should be sensitive to the suffering being endured by the public at large due to the loss of income during the COVID-19 lockdown, and shouldn’t seriously contest even reasonable motor accident claim awards in the current scenario, the Madras High Court has said.

Justice N. Anand Venkatesh made the observation while rejecting an appeal preferred by a private insurance company against the award of Rs. 9.05 lakh as compensation to the parents of a seven-year-old road accident victim by a motor accident claims tribunal in Ariyalur district.

The insurance company had approached the High Court, contending that the notional income of ₹9,000 per month fixed by the tribunal for the child, who was a Class II student at the time of his death, was speculative and, as such, the ultimate award of ₹9.05 lakh was too high.

Disagreeing with such a contention, the judge said that the State insisted upon compulsory motor insurance fundamentally for the benefit of innocent victims. He added that the use of the expression ‘just compensation’ under Section 168 of the Motor Vehicles Act of 1988 had a specific purpose. “The value of any life cannot be determined on a golden scale to arrive at the exact compensation. Hence, an element of guesswork or estimation is inevitable and unavoidable,” the judge said, and added that the role of an appellate court was to check whether the award was perverse.

Convinced that the award of ₹9.05 lakh in the present case was neither unfair nor unjust, the judge said, “Merely because the victim was a minor, it is not as if no income can be notionally fixed. It has to be necessarily fixed as longevity in India is accepted at 70 years.”

Justice Venkatesh added, “More importantly, we are facing a viral pandemic crisis where there is a huge pressure on the incomes of every family in the country. This aspect is not irrelevant or otiose while assessing just compensation, in this case, in the present circumstances.

“The court is not so objective or rule-bound that it will not, or should not, be influenced by the surrounding circumstances, which are too obvious to be missed. This court is not factoring the pandemic as a permissible head for assessment of compensation, but the insurer must also be sensitive to the circumstances, and not too seriously contest such awards in the present scenario.” He directed the insurance firm to deposit the entire amount of the award within two weeks, along with interest at the rate of 7.75%, and permitted the claimants to withdraw the money.

Source: The Hindu