The Oriental Insurance Company Limited vs Smt Rachna Singh And 2 Others

HIGH COURT OF JUDICATURE AT ALLAHABAD
WRIT - C No. - 16530 of 2026
The Oriental Insurance Company Limited
…..Petitioner(s)
Versus
Smt Rachna Singh and 2 others
…..Respondent(s)
Counsel for Petitioner(s) : Ankur Mehrotra
Counsel for Respondent(s) : C.S.C., Sanjeev Kumar Saxena
A.F.R.
Reserved on April 30, 2026
Delivered on July 31, 2026
Court No. - 40
HON’BLE SARAL SRIVASTAVA, J.
HON'BLE GARIMA PRASHAD, J.
(Delivered by Hon’ble Garima Prashad. J.)
1. Heard Sri Ankur Mehrotra, learned counsel for the petitioner-
Insurance Company, Sri Sanjeev Kumar Saxena, learned counsel for the
private respondent and learned Standing Counsel for the State.
2. The present writ petition has been filed by the petitioner-Insurance
Company challenging the order dated 29.11.2025 passed by the District
Magistrate, Kanpur Nagar whereby compensation of Rs.5,00,000/- has
been directed to be paid in favour of respondent no.1 under the
Mukhyamantri Kisan Evam Sarvhit Bima Yojna on account of the
accidental death of her husband, late Bhanu Pratap Singh.

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3. The facts, briefly stated, are that the husband of respondent no.1
died in a road accident on 29.11.2018, following which respondent no.1
submitted a claim under the Scheme seeking compensation on account
of the accidental death of the earning member of the family. The claim,
however, came to be repudiated by the petitioner-Insurance Company on
the ground that the same had not been submitted within the prescribed
limitation period contemplated under the Scheme. Aggrieved thereby,
respondent no.1 approached this Court and pursuant to the directions
issued therein, the District Magistrate reconsidered the matter and
thereafter passed the impugned order directing payment of compensation
to respondent no.1 under the Scheme.
4. Learned counsel for the petitioner Insurance Company submits
that the Scheme is governed by the contractual terms and conditions
contained in the Memorandum of Understanding executed between the
State Government and the petitioner-Insurance Company and therefore
compensation could not have been directed contrary to the contractual
stipulations. It is further contended that the District Magistrate could not
have travelled beyond the terms of the contract executed between the
parties. 
5. It has also been submitted that the issue relating to delayed claims
and limitation under the Scheme, as considered by the Division Bench of
this Court in Gautam Yadav v. State of U.P., reported in 2020 SCC
Online All 1379 presently remains pending consideration before the
Hon’ble Supreme Court and the operation of the judgment has been
stayed in interim proceedings arising therefrom.
6. In view of the submissions advanced, the principal issue which
arises for consideration before this Court is:
“Whether a writ petition at the instance of the petitioner-Insurance
Company is maintainable under Article 226 of the Constitution of
India to assail an order of the competent authority granting
compensation under the Mukhyamantri Kisan Evam Sarvhit Bima

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Yojna on the ground that such order is contrary to the terms and
conditions of the Memorandum of Understanding governing the
contractual arrangement between the petitioner and the State
Government?”
7. At the outset, it is necessary to notice the nature and character of
the Scheme itself. The Mukhyamantri Kisan Evam Sarvhit Bima Yojna is
not an ordinary commercial insurance arrangement between private
parties. The Scheme has been framed by the State Government as a
welfare and social security measure intended to provide immediate
financial assistance to economically vulnerable families, including poor
farmers and persons engaged in allied occupations, upon accidental
death or disability of the sole earning member of the family.
8. At the same time, insofar as the petitioner-Insurance Company is
concerned, the arrangement arises out of the Memorandum of
Understanding (MoU) executed between it and the State Government
pursuant to a negotiated contractual framework and against payment of
substantial premium by the Government. The petitioner voluntarily
undertook the risk under the Scheme after assessing its commercial
viability and accepted the terms of the MoU to its satisfaction.
Consequently, while the Scheme possesses a public welfare character
vis-à-vis its beneficiaries, the rights asserted by the petitioner against the
State Government remain essentially contractual and commercial in
nature.
9. The beneficiaries under the Scheme are neither parties to the
Memorandum of Understanding nor to the contractual arrangement
between the petitioner and the State Government. Their entitlement
arises from the welfare Scheme framed by the State and not from the
contractual rights and obligations existing inter se between the petitioner
and the State Government.
10. A distinction therefore has to be maintained between:

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(i) a claim seeking enforcement of public law rights or
welfare entitlements under a governmental scheme; and
(ii) a dispute arising substantially out of contractual liability
and indemnification between the insurer and the State
Government.
11. Where an eligible beneficiary seeks enforcement of welfare
entitlements under a governmental scheme, proceedings under Article
226 seeking mandamus against the State authorities are clearly
maintainable since the source of the entitlement arises under a
governmental welfare scheme.
12. The position of the petitioner-Insurance Company, however,
stands on an entirely different footing. The petitioner does not seek
enforcement of any statutory or constitutional right in public law. Its
grievance is essentially that compensation has been directed contrary to
the contractual stipulations governing limitation, claim procedure and
liability allocation under the Memorandum of Understanding executed
with the State Government. The writ petition is, therefore, an attempt to
enforce rights asserted under the MoU rather than any independent
public law right.
13. Learned counsel for the petitioner has placed reliance upon ABL
International Ltd. v. Export Credit Guarantee Corporation of India Ltd.
reported in (2004) 3 SCC 553 to contend that the existence of a
contractual relationship does not, by itself, bar the exercise of writ
jurisdiction where the action of the State or its instrumentality is
arbitrary and the dispute involves a public law element. The said
principle, however, has no application to the present case.
14. The petitioner is not seeking enforcement of any public law right
against the State. Rather, it seeks to resist compensation granted to a
beneficiary under a welfare scheme by relying upon alleged breach of
the contractual stipulations contained in the Memorandum of
Understanding executed with the State Government. The beneficiary is

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WRIC No. - 16530 of 2026
neither a party to the Memorandum of Understanding nor to the
contractual arrangement between the petitioner and the State
Government and cannot be compelled to defend disputes arising out of
contractual terms to which she is a stranger.
15. On the contrary, the present case squarely falls within the
principles laid down in State of Bihar v. Jain Plastics and Chemicals
Ltd., reported in (2002) 1 SCC 216, Kerala State Electricity Board v.
Kurien E. Kalathil reported in (2000) 6 SCC 293 and Joshi Technologies
International Inc. v. Union of India reported in (2015) 7 SCC 728
wherein the Hon’ble Supreme Court has consistently held that disputes
concerning interpretation, enforcement and breach of contractual
obligations ordinarily fall within the realm of private law and must be
adjudicated before ordinary civil, commercial or arbitral forums rather
than in writ jurisdiction.
16. The reliance placed upon the pendency of proceedings before the
Hon’ble Supreme Court arising from the judgment in Gautam Yadav
(supra) does not advance the case of the petitioner. In the said decision,
the Division Bench examined the validity of the limitation prescribed
under the Scheme, which also formed part of the agreement executed
between the State Government and the Insurance Company. The Court
held the prescribed period to be arbitrary and unreasonable and directed
that claims made within three years from the date of death or rejection be
treated as within limitation. The issue arising therein thus concerned the
validity and interpretation of a term governing the Scheme generally and
had the effect of modifying the contractual and legal framework
governing claims under the Scheme, thereby directly affecting the
obligations assumed by the insurer. It is in that context that the Insurance
Company’s contractual rights may legitimately arise for consideration.
17. The present controversy stands on a different footing. This Court
is not called upon to alter, invalidate or reinterpret any general term of
the Scheme or the agreement entered into between the petitioner and the
State Government. The challenge is to the determination of an individual

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claim by the District Magistrate, who has been designated as the
competent authority under the Scheme. Once such authority has applied
the Scheme and found a beneficiary eligible and entitled to
compensation, the Insurance Company cannot invoke writ jurisdiction to
assail that determination merely by alleging that the claim was dealt with
contrary to the contractual conditions agreed upon with the State
Government.
18. Thus, while a question concerning the validity or alteration of a
term of the Scheme, having a general bearing upon the contractual
obligations of the insurer, may stand on a different footing, the petitioner
does not possess a corresponding locus to challenge the application of
the Scheme in each individual case. In view of the distinction noticed
above, the pendency of the proceedings arising from Gautam Yadav
(supra) does not, in the considered view of this Court, affect the issue
arising for consideration in the present writ petition.
19. The extraordinary jurisdiction under Article 226 cannot be
permitted to become a routine remedy available to Insurance Companies
for challenging compensation determinations under welfare schemes
merely by alleging breach of the Memorandum of Understanding with
the State Government. Entertaining such petitions would convert the writ
jurisdiction into a parallel appellate forum for adjudicating inter se
contractual disputes between the insurer and the State Government,
thereby defeating the object of the Scheme. 
20. The petitioner, having voluntarily undertaken the contractual
obligations under the Memorandum of Understanding after assessing the
commercial risks and accepting the premium payable by the State
Government, cannot ordinarily invoke Article 226 to resist disbursement
directed by the competent authority in favour of a beneficiary under the
Scheme.
21. The consequences of entertaining such petitions would be
extremely serious. Poor farmers, widows and dependent family

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members, already devastated by the accidental death of the sole
breadwinner of the family, would be compelled to run from court to
court defending constitutional proceedings initiated by the Insurance
Company merely because the insurer disputes its contractual liabilities
towards the State Government. Welfare compensation intended for
immediate financial relief cannot be permitted to be indefinitely
obstructed until the Insurance Company is fully satisfied regarding every
contractual or procedural aspect of its arrangement with the
Government.
22. Accordingly, for the reasons recorded above, this Court holds that
the present writ petition, at the instance of the petitioner-Insurance
Company, is not maintainable under Article 226 of the Constitution. The
issue framed above is answered accordingly against the petitioner.
23. Even otherwise, this Court finds no ground to interfere with the
impugned order. The District Magistrate has recorded a categorical
finding that the claim was submitted within the prescribed period and
that respondent no.1 was entitled to compensation under the Scheme. No
perversity, jurisdictional error or manifest illegality in the said findings
has been demonstrated so as to warrant interference under Article 226 of
the Constitution.
24. Once the District Magistrate, being the competent authority,
adjudicated the claim and held the beneficiary entitled to compensation
under the Scheme, the petitioner-Insurance Company cannot deny
payment on the basis of its own interpretation of the contractual
stipulations governing the Memorandum of Understanding with the State
Government. To hold otherwise would virtually permit the Insurance
Company to sit in appeal over every determination made by the District
Magistrate under the Scheme, a course neither contemplated by the
Scheme nor by the contractual framework governing the parties.
25. The impugned order was passed on 29.11.2025. Yet, despite
respondent no.1 having been found entitled to compensation, the benefit

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under the Scheme remains unpaid. Such delay is wholly inconsistent
with the object and spirit of the Scheme, which is intended to provide
timely financial relief to distressed families. 
26. The writ petition is, accordingly, dismissed.
27. The petitioner-Insurance Company shall comply with the
impugned order dated 29.11.2025 by releasing the compensation payable
to respondent no.1 within a period of three months from the date of this
order.
28. However, it is observed that dismissal of the present writ petition
shall not preclude the petitioner from availing such remedies as may
otherwise be available in law against the State Government before the
appropriate civil, commercial, arbitral or other competent forum in
relation to its alleged contractual grievances arising out of its
Agreement / Memorandum of Understanding governing the Scheme.
(Garima Prashad, J.) (Saral Srivastava, J.)
July 31, 2026
Kuldeep
Digitally signed by :-
KULDEEP SINGH
High Court of Judicature at Allahabad