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Insurance companies can't avoid our orders : HC
10/31/2014 11:32:00 PM
Early Times Report

Srinagar, Oct 31 : The Jammu and Kashmir High Court has ruled that insurance companies cannot avoid its order, rejecting the averments by one of them, Bajaj Allianz General Insurance Company, that it would attract wrath of Insurance Regulatory and Development Authority (IRDA) if it settles a claim of more than Rs 20,000 without receiving a report from the loss assessor. "The objections (raised by the company) are totally devoid of merit. 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," a division bench of Chief Justice M M Kumar and Justice Ali Mohammad Magrey said. "Moreover, the Insurance Companies 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." In its status report, the company had raised an objection that it was a private company and was subject to the regulatory control and authority of IRDA, established under Section 3 of the Insurance Regulatory & Development Authority of India Act, 1999. The Bajaj Allianz General Insurance Company had made a reference to Section 64UM(2), forbidding an Insurance Company from settling a claim of more than Rs.20,000 unless it receives a report from the loss assessor under the Act. In respect of motor vehicles, the four PSGICs have stated that they are also following the policy in vogue with the Bajaj Allianz General Insurance Company i.e. a Cash loss Basis for partially damaged vehicles and the insured was to be given the options to take vehicles to garage of their choice to get the same repaired and serviced. "The assured may also take the vehicle to any mechanic and If the amount spent Is more than the amount received then It could still be settled by the Insurance Company which is the policy adopted by the Bajaj Allianz General Insurance Company." The Court has directed insurance companies to contact all the claimants in whose favour cheques have been prepared. "The Insurance Company shall contact all such claimant in whose favour cheques have been prepared asking them to file undertaking and then handover the cheques to them," the court said. Confronted with the query on whether the cases where preliminary survey report has been received, the order of 50% could continue to operate or the amount as per the preliminary survey report has to be paid, the court said: "In cases where the survey report has been received then the amount has to be disbursed as per the assessment made by the surveyor." The court also directed the companies to file latest status report before November 18, next date of hearing in the case.
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