A bench of Justice Sanjiv Khanna and Justice Bela M Trivedi observed that it is a well-established legal position that a contract of insurance requires Uberima i.e. good faith on the part of the insured.
“It is clear that the terms of the insurance policy have to be strictly understood, and it is not permissible to rewrite the contract by interpreting the terms of the policy,” the bench said.
was hearing an appeal filed by the apex court life insurance corporation (LIC) against the decision of the NCDRC which quashed the order passed by the State Commission.
In this case, the woman’s husband had taken a life insurance policy from the Life Insurance Corporation under the Jeevan Suraksha Yojana, under which an amount of one lakh rupees has been given. LIC had given an assurance of 3.75 lakhs.
In addition to this amount, in case of accidental death, Rs. 3.75 lakh also assured.
NS insurance premium The said policy was to be paid for six months, however, there was a default in payment.
On March 6, 2012, the husband of the complainant had an accident and died on March 21, 2012.
After the death of the husband the complainant filed a claim before LIC and was paid an amount of Rs. 3.75 lakhs to him. However, an additional amount of Rs. 3.75 lakh accident claim benefit was denied.
Therefore, the complainant approached the District Forum by registering a complaint demanding the said amount for accident claim benefit. The District Forum, accepting the appeal of the woman, directed to pay an additional amount of one lakh rupees. 3.75 lakh towards accident claim benefit.
The State Consumer Disputes Redressal Commission set aside the order which was further challenged in the National Consumer Disputes Redressal Commission.
The NCDRC set aside the order passed by the State Commission.
The top court said in the instant case, condition no. 11 of the policy stipulated that the policy should be in force in the event of an accident.
“In the present case, the policy had lapsed on October 14, 2011, and was not in force on the date of accident i.e. March 6, 2012. It was sought to be revived on March 9, 2012, after the accident concerned, and That too without disclosing the fact of the accident that happened on March 6, 2012,” the apex court said in its October 29 order.
The apex court held that apart from the fact that the complainant did not come with clean hands to claim the accident benefit in addition to the policy, the policy under consideration on the date of accident as per condition no. 11 of the policy, the claim of Additional Accident Benefit was rightly rejected by the Corporation.
“Since clause 3 of the said terms and conditions of the policy allowed the renewal of the discontinued policy, the appellant-corporation revived the complainant’s policy by accepting the payment of premium after the due date and paid Rs. policy, however, for accident benefit, the policy should be in force for the entire sum insured as on the date of accident in terms of condition no. 11 above,” the bench said.
The apex court said that the accident benefit could be claimed and the same could be availed only in case of an accident after the renewal of the policy.
“The Court is of the opinion that the impugned order passed by the NCDRC to quash the order passed by the Commission and revive the order passed by the District Forum is grossly incorrect and is liable to be set aside,” the bench said.