The Supreme Court has taken a firm stand against insurance companies that bury rightful compensation claims under piles of technical objections, calling out the growing trend of filing needless appeals to delay justice.
A Bench of Justices Manoj Misra and N. Kotiswar Singh ruled that an insurer cannot shrug off its responsibility when an employee is injured in the course of work. The Court reinstated an order by the Commissioner for Workmen’s Compensation, which had directed both the employer and the insurance company to jointly and severally pay compensation to the injured worker.
This decision came after the Calcutta High Court had relieved the insurer of liability, pinning the entire burden on the employer and suggesting the employer could later seek reimbursement from the insurer. The Supreme Court reversed that position, observing that such reasoning ignored the clear obligations under the Employees’ Compensation Act, 1923 and the insurance contract itself.
“When a contract of insurance exists between the employer and the insurer, the insurer is bound to indemnify the employer,” the Bench noted. “In this case, there was no dispute over the insurer’s liability—only an attempt to sidestep it.”
The judges were particularly critical of what they called an “unfortunate practice” — insurance companies filing appeals on flimsy procedural grounds even when they do not deny ultimate liability. The Court said this strategy not only delays justice but unfairly withholds compensation from injured workers who depend on it.
Expressing clear frustration, the Bench remarked, “We must express our anguish at insurance companies unnecessarily filing appeals by raising technical pleas, more so when they admit their liability under the contract of insurance.”
As a consequence, the Court slapped a cost of ₹50,000 on the insurer for what it termed a “frivolous appeal” before the High Court — an action that delayed payment to the injured worker.
The ruling also faulted the High Court for taking an excessively rigid view and overlooking the humanitarian and statutory intent of the 1923 Act, which aims to provide prompt relief to employees rather than bog them down in litigation.
With its sharp words and decisive ruling, the Supreme Court has sent a strong signal to the insurance industry: justice delayed through technical gamesmanship will no longer be tolerated.
