Madras HC imposes Rs 15,000 cost on insurance company

MADURAI: The Madurai Bench of the Madras High Court recently imposed a Rs 15,000 cost on an insurance company for belated payment of medical reimbursement amount to a man.

Justice Battu Devanand passed the order on a contempt petition filed by P Muthu alleging delay in the implementation of an order passed by the court in 2019, directing the district-level empowered committee of Dindigul, headed by the district collector, to reconsider his claim for medical reimbursement within three months.

Though the collector had reconsidered Muthu’s claim and sent necessary recommendations to the insurance company in 2020 and 2021, the company kept the matter in cold storage for more than two years, Justice Devanand noted.

Since the court, in the 2019 order, had not issued any direction to the insurance company fixing the time limit to disburse the amount, the company cannot be charged with contempt of court, the judge held.

However, he also observed that being a public sector undertaking, the insurance company has to follow the terms and conditions of the policy issued after collecting the premium from the petitioner and it is the legitimate duty of the company to settle the claim within a reasonable time.

He directed the company to pay Rs 15,000 to Muthu within two weeks and recover the amount from the official responsible for the delay.