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Accountability of Insurer for Delay – Pre-reference Interest

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The petitioner had taken insurance fire policy for Rs.30 crores for 2016-2017.  On 25.4.2017, there was fire in the godown.    The petitioner submitted claim for Rs.37,27,22,010/-.  The surveyor had assessed the loss of Rs.20,65,27,032/- vide report dated 9.7.2018.  However, the respondent unilaterally reduced the said loss to Rs.65,86,125/- as full and final settlement after 20 months of surveyor assessment.

Pre-reference interest for inordinate delay of 18 months in settlement of claim – Entitlement – Regulation 15 of the IRDAI Regulations –

IRDA Regulations, particularly Regulation 15, to settle or reject the claim within thirty days from receipt of the Survey Report. However, the respondent herein took an inordinate delay of eighteen/twenty months before offering the sum of Rs. 65 Lacs towards full and final settlement of the claim.

the Courts have time and again stressed that interest is not a penalty or punishment. Rather, it is the normal accretion on capital. Delving on the aspect of grant of interest as being compensatory, where a person is deprived of the use of his money to which he is legitimately entitled.

Judgment dated 10.4.2026 of the High Court of Delhi in O.M.P. (COMM) 8/2024 of Panchanan International  Vs   The Oriental Insurance Company Ltd

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