Courtroom

Not off the hook

Death of an injured claimant, even if unconnected to the accident, does not let an insurance company off the hook, the Supreme Court has said, in Oriental Insurance Company Vs Kahlon .

Kahlon was severely injured in a motor accident on May 2, 1999. The Motor Accidents Claims Tribunal awarded him ₹1 lakh. Dissatisfied, he appealed to the High Court, but died on November 6, 2015, during the pendency of the appeal. His wife too died soon after. His daughter decided to continue the fight for higher compensation.

In their judgment of August 16, 2021, Supreme Court Navin Sinha and R Subash Reddy, at the very outset, found that the very fact that a claim arising out of injuries caused in a motor accident could reach fruition after more than 20 years was “extremely distressing”.

They refused to let the insurance company off the hook, saying that the legal representatives of the deceased could pursue the claim.

The judgment said, “Property, under the Act, will have a much wider connotation than the conventional definition. If the legal heirs can pursue claims in case of death, there is no reason why the legal representatives cannot pursue claims for loss of property akin to estate of the injured, if he is deceased subsequently for reasons other than attributable to the accident or injuries under Clause 1(c) of Section 166 of Act. Such a claim would be completely distinct from personal injuries to the claimant and which may not be the cause of death.”

They awarded Kahlon’s daughter ₹28.42 lakh along with interest at 9 per cent per annum from the date of filing of the claim petition.

Too clever by half

If a bank has lent against the security of a building, and if the loan becomes an NPA, then the bank can take possession of the building under the SARFAESI Act. However, there is a big ‘but’.

But if the building is occupied by a tenant who has been paying rent, the tenancy cannot be disturbed by the bank, by taking possession of the building. In the case of Bajrang Shyamsunder Agarwal Vs Central Bank of India , a 3-member bench of the Supreme Court had held that “the rights of a rightful tenant cannot be compromised under the SARFAESI Act proceedings.”

Now, in another case, Hemraj Ratnakar Salian Vs HDFC Bank , it appears that the borrowers tried to prevent the bank from taking possession of a building by bringing in a ‘tenant’ (Hemraj Ratnakar). It did not work out for them.

Supreme Court judges, S Abdul Nazeer and Krishna Murari, have viewed Ratnakar’s claim with suspicion, noting that “there is a serious doubt as to the bona fide of the tenant, as there is no good or sufficient evidence to establish the tenancy.”

In any case, the ploy tripped over a point of law. The Supreme Court said, citing previous judgments, if a tenant claims entitlement to the possession of a property for over a year, his claim has to be supported by the execution of a registered instrument. If there is none, and the tenant relies on an unregistered instrument or an oral agreement – sorry!

In the Hemraj Ratnakar Vs HDFC Bank case , all that the ‘tenant’ could produce was some xerox copies of rent receipts. Also, the borrowers never claimed there was a tenant. “Therefore, he is not entitled to any protection of the rent,” the verdict said.