Motor Insurance Claims : Civil courts cannot refuse to record compromise: HC

A civil court cannot refuse to record a compromise reached between the litigants even if such settlement had been reached after the passing of a decree in favour of one of the parties, the Madras High Court Bench here has held.

Justice C.T. Selvam passed the ruling while allowing a civil revision petition filed by Royal Sundaram Allianz Insurance Company challenging the refusal of a Motor Accident Claims Tribunal in Sivaganga district to record a compromise reached in a road accident case.

The petitioner’s counsel, S. Srinivasa Raghavan, pointed out that a family of five had raised a claim for compensation before the tribunal pursuant to the death of their relative in an accident.

The tribunal ordered the insurance company to pay Rs. 7.57 lakh with interest at the rate of 7.5 per cent.

However, the company negotiated the matter with the claimants and said that it would not go on appeal against the decree if the family accepted to receive Rs. 5 lakh with interest at the rate of 7.5 per cent. The family agreed and a total amount of Rs. 5.63 lakh was deposited with the tribunal.

Thereafter, a joint memo was filed informing the tribunal of the compromise and urging it to record the settlement and permit the claimants to withdraw the amount. But the tribunal refused to do so by stating that an attempt was being made to pressurise it to accept a lesser award.

The tribunal also held that such a compromise could be recorded and the matter could be settled finally only if the claimants had filed a petition to execute the decree or if the insurance company had gone on appeal challenging the decree by depositing 50 per cent of the award.

Not in agreement with such a stand taken by the tribunal, Mr. Justice Selvam said: “The order of the tribunal reflects a most hyper-technical approach. It is always open to the parties to a dispute to arrive at a compromise and this is more so and all the more common in money decrees.

“The requirement of Order 21 Rule 2 of the Code of Civil Procedure that a decree holder has to certify the payment or adjustment made to the court stands satisfied in the present case. While so, it becomes the duty of the court which has the power to execute the decree to record the same.”

 

http://www.thehindu.com/news/cities/Madurai/article3220844.ece