New Delhi, Apr 29: Sending a warning to insurance companies, the Supreme Court has said that if it is found that they were contesting genuine claims by victims' relatives to frustrate the provision for quick relief under the motor vehicles act, heavy costs will be imposed on them. Directing new India Assurance Company Ltd to pay up Rs six lakhs compensation to the family of an engineer who died in a bus accident with interest, a bench comprising justice S N Variava and Justice H K Sema said instead of abiding by the terms and conditions of insurance policy it has been seen that insurance companies were hotly contesting valid claims. Lamenting breach in the terms and conditions, the bench said "insurance companies must bear in mind that they are the trustees of the public and keeper of the public offer."
"Often, even genuine claims are being hotly contested in a routine manner by dragging the parties to the courts, wasting enormous time and money of the claimants to get their claims settled," it said.


The act like motor vehicles act being a beneficial legislation aimed at quick redressal of the victims of accidents arising out of the use of motor vehicles, the attitude routinely adopted by the insurance company would render the object of the act frustrated, the court said.

"If such instances are brought to the court, the court would be obliged to dismiss the appeal with heavy costs, apart from deprecating such practices," the bench said.
Bureau Report