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Friday, May 18, 2012

United India Insurance pays Rs 1.16 crore to the widow of a businessman

United India Insurance Company suffered a major blow when the Bombay High Court dismissed its petition and upheld the order to pay a compensation of Rs 1.16 crore to the widow of a businessman who died around nine years ago. On September 30th 2011, the Mumbai Motor Accident Claims had directed United India Insurance to pay an aggregate sum of Rs 69.18 lakh and interest at the rate of 8.5% per annum bringing the total to Rs 1.16 crore to Sugra Varawalla, wife of deceased business man Riyaz Varawalla.

The insurance major moved to the High Court and challenged the dictate on the following grounds:

·            - Sugra Varawalla has already received compensation from LIC and other credit card companies and these were not accounted by the Mumbai Motor Accident Claims while calculating the future loss

         - The insurance company also claimed that the woman’s income was also not included in the calculations for her future loss. Apparently she was a partner of the businesses of her husband.

However the Mumbai High Court rejected their first plea holding that if the received amount is an outcome of separate contracts and had no direct nexus with the accidental death, it cannot be deducted while computing the future loss of income. Their second contention was rejected because the court held that the woman’s earnings could not be taken into consideration to reduce the quantum of loss of annual dependency income on account of the accidental death.

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