RAJESHWARIBEN UPENDRAKUMAR SHAH vs ORIENTAL INSURANCE CO. LTD.

THIS appeal by the complainant is directed against the Order datedl7th June, 1993passedbytheGujarat State Commission at Ahmedabad directing the opposite party to pay Rs. 2,21,000/- to the complainants with interest at the rate of 12% on the principal amount of Rs. 2 lakhs from the date of the order till the date of realisation besides costs of Rs. 3,000/-.

SINCE this is a quantum appeal of the complainants based on the findings of fact recorded by the State Commission, we notice bare facts only. One Upendrakumar was covered by insurance policy dated 21st March, 1990 and he met with an accident on 14.1.91 and succumbed to the injury on 26.1.91. The opposite party admitted that they were liable to pay insurance amount of Rs. 2 lakhs. The complainants submitted the prescribed Claim Form No. 21 on 24th March, 1991 to the opposite party. The State Commission rejected the contention of the opposite party that the claim forms were submitted on 24th May, 1991. The opposite party did not settle the claim but sent the vouchers for settlement for the first time on 17th August/1992. At that stage the complainants enquired about the interest and also claimed fund for the children''s education by the letter dated September 14,1992. That letter was replied by the Insurance Company in their letter dated November 25, 1992. The State Commission came to the finding that right from March 24,1991 to November 24,1992 the opposite party did not settle the claim. The complainants had claimed the amount of interest from 26.1.91 to 26.11.91 at the rate of 18%. The State Commission, however, granted interest at the rate of 12% to the complainants and calculated this at a figure of Rs. 21,000/-. That is how the direction was given by the State Commission to pay Rs. 2,21,000/- with interest at the rate of 12% on the principal amount of Rs. 2 lakhs from the date of order till realisation. The submission of the learned Counsel for the appellant is that the State Commission should have awarded interest at the rate of 18% per annum as has been the practice of the State Commission and the National Commission in such cases. It is further submitted that the calculation of the interest from 24.3.91 to 25.11.91 at the rate of 12% allowed by the State Commission is erroneous as the interest for the period of 20 months comes to Rs. 40,000/-. In our view the order of the State Commission regarding the rate and quantum of interest is entitled to be modified. The State Commission rightly rejected the contention of the opposite party that it had received the claim form on 24th May, 1991. It appeared that there were over-writings and corrections and there was no explanation as to why the words ''May'' were written over the rubber stamp of ''Mar'' indicating the month of March in the subsequent correspondence. The complainants always referred to the claim and requisite documents submitted on 24th March, 1991. There was inordinate delay of the opposite party in settling the claim and the vouchers were sent for the first time on August 17, 1992. The complainant rightly enquired about the interest payable for the long delay in settlement of the claim. In these circumstances the complainants are entitled to the award of interest at the rate of 18% per annum from 24.3.91 to 25.11.92 which comes to Rs. 60,000/-.

THE order of the State Commission is modified to the extent that the opposite party shall pay Rs. 2,60,000/- to the complainants with interest at the rate of 18% per annum on the principal amount of Rs. 2 lakhs from 17th June, 1993 till the date of realisation. The complainants are also awarded costs assessed at Rs. 1,000/-.