F.A.O.NO. 5108 OF 2005 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH F.A.O.NO. 5108 OF 2005 Date of decision:10th August, 2010 United India Insurance Company Limited .......Appellant Versus Chiman Lal and others ........Respondents F.A.O.NO. 5625 OF 2005 United India Insurance Company Limited .......Appellant Versus Raj Kaur and others ........Respondents BEFORE: HON'BLE MR. JUSTICE K.KANNAN Present: Mr. Vinod Gupta, Advocate, for the appellant. None for the appellants. 1. Whether Reporters of local papers may be allowed to see the judgment? Yes/No 2. To be referred to the Reporters or not?Yes/No 3. Whether the judgment should be reported in the Digest? Yes/No K.Kannan, J.(Oral) 1. Both these appeals address the same issue of liability for payment of interest. In a case where the impleadment of the insurer was at a belated stage, the interest could not have been saddled on the insurer from the date of the accident itself and it could have been ordered to be paid only from the date of their impleadment. F.A.O.NO. 5108 OF 2005 2 2. In FAO No. 5625 of 2005, the date of accident was 9.10.2000, the petition had been filed on 27.2.2001 and the Insurance Company had been impleaded as a party on 29.11.2003. If there had been an admission of liability by the insurer and the Insurance Company was prepared to pay the money on the date of his impleadment, then it could have been stated that by the prolongation of the case, the Insurance Company had been put to loss. In this case, I find that the Insurance Company had taken a plea that the person had not died in the accident and no liability could be fastened on the insurer. In a case where Insurance Company denied its liability and ultimately the Tribunal awarded compensation, it would be immaterial that the impleadment was done at a belated stage. In my view such a plea shall not be available to the insurer where the Tribunal on an adjudication finds the insured's vehicle to be responsible in the accident and makes the insurer liable. The claim for waiver of interest for a period prior to impleadment is therefore, rejected. 3. The insurer also raises issue relating to quantum in FAO No. 5625 of 2005, which shall not be available to the insurer to urge in a case where there was no permission granted under Section 170 of the Motor Vehicles Act. In the connected case i.e. F.A.O. No. 5108 of 2005, the claim petition had been filed on 16.07.1994, the award had also been passed against the insured and the driver initially filed a review application on 30.04.1998. It appears that it was an ex parte decree and on the F.A.O.NO. 5108 OF 2005 3 application filed by the insured, the award was set aside and on information furnished by the insured, the insurer had been added as a party on 12.06.2004. The Insurance Company had filed a reply that there had been no cause of action against the insurer and the driver did not even have a valid driving licence. It was also contended that the claim petition had been filed in connivance with the owner of the driver and therefore, the petition was not maintainable. The Insurance Company did not lead any evidence with regard to his contentions that there had been any collusion between the insured and the claimant. If it was to be further contended that the Insurance Cover would not be liable to be paid interest for a period earlier then the impleadment, it could be so held if the Insurance Company would have settled the claim. If there had been any deliberate lapse on the part of the insured in failing to give the details of the insurance and if there are terms of the policy that would allow the insurer to plead to make the insured liable, it would become independently possible for the insurer to make an issue against its insured only. 4. By a long pendency of the case before the Tribunal and the delay in disposal cannot affect the right of a litigant to obtain interest when he obtains an adjudication 10 years later. Interest is a method of off-setting the inflationary trend and recompense for the delay caused, of not making the amount which the party should have otherwise obtained. The waiver of interest for a claimant for the insured's act of original by suffering F.A.O.NO. 5108 OF 2005 4 an ex parte decree and later furnishing information to the claimants regarding the insurer could not be put against the claimant. If the insurer has a grievance against the insured by remaining ex parte and seeking for a fresh adjudication for a length of time, the insurer will address its own right against the insured by independent proceedings. The award granted with particular reference to interest cannot suffer any alteration to prejudice the claim of the claimants. Reserving to the appellant/insurer any right of action which it may feel worthwhile to pursue against the insured by attributing any lapse or deliberate conduct, the appeal by the insurer is dismissed. Since the liability for payment of interest is confirmed only by this order, the insurer will be entitled to plead and secure any appropriate period for exclusion of claim of bar of limitation in independent proceedings. [K.KANNAN] JUDGE 10th August, 2010 Shivani Kaushik