An insurance coverage utility may very well be refused if the coverage expired because of non-payment of the premium, the Supreme Court docket stated, stressing that the phrases of the insurance coverage coverage have to be strictly interpreted.
The excessive courtroom’s commentary was made in overturning a ruling by the Nationwide Client Dispute Decision Fee (NCDRC), which ordered further compensation within the occasion of a visitors accident.
The panel of judges Sanjeev Khanna and Bela M. Trivedi said that it’s a well-established authorized place that the insurance coverage contract incorporates the Uberrima fides requirement, i.e. good religion on the a part of the insured.
“It’s clear that the phrases of the insurance coverage coverage have to be strictly interpreted, and you can’t rewrite the contract when decoding the phrases of the coverage,” the courtroom stated.
The very best courtroom thought-about an enchantment by the Life Insurance coverage Company (LIC) towards the NCDRC’s determination overturning the State Fee’s ruling.
On this case, the girl’s husband entered right into a life insurance coverage coverage underneath Jeevan Suraksha Yojana from the Life Insurance coverage Company, for which the quantity is in rupees. LIC assured 3.75 lakhs. Along with this quantity, within the occasion of an unintentional demise, an extra quantity of Rs. 3.75 lakhs have been additionally assured.
The insurance coverage premium for this coverage was to be paid each six months, however there was a delay in fee.
On 6 March 2012 the applicant’s husband had an accident and died from his accidents on 21 March 2012.
Following the demise of her husband, the applicant lodged a declare with LIC and she or he was paid an quantity of Rs. 3.75 lakh to her. Nevertheless an extra quantity of Rs. The declare for compensation within the quantity of three.75 lakh in reference to the accident was denied.
Due to this fact, the applicant lodged a criticism with the District Discussion board in regards to the stated quantity in compensation for the accident. The District Discussion board upheld the girl’s enchantment and ordered the fee of an extra quantity of rupees. 3.75 lakh for accident insurance coverage protection.
The State Client Dispute Decision Fee canceled the order, which was later challenged by the Nationwide Client Dispute Decision Fee. NCDRC canceled the State Fee’s ruling.
The upper courtroom said within the current case that there was no situation. 11 coverage stipulates that the coverage have to be in impact on the time of the accident.
“On this case, the coverage expired on October 14, 2011, and it was not legitimate on the date of the accident, that’s, on March 6, 2012. He was requested to reactivate on 9 March 2012, following the accident in query. , and this, too, with out disclosing the actual fact of the accident that occurred on March 6, 2012 “, – says the courtroom ruling of October 29.
The upper courtroom said that other than the truth that the plaintiff didn’t include clear fingers to assert further / further advantages for accident insurance coverage, the coverage in query was not in impact on the date of the accident underneath situation no. 11 of the coverage, the declare for extra compensation in reference to the accident was rightly rejected by the Company.
“Since clause 3 of the stated coverage phrases and situations permitted the renewal of the terminated coverage, the applicant-Company revived the plaintiff’s coverage by accepting fee of the premium after the due date and paid Rs 3.75,000 as assured underneath the phrases. the coverage, nonetheless, as a way to pay the accident profit, the coverage needed to act in relation to the total quantity assured on the date of the accident in accordance with the required situation No. 11, ”stated the bench.
The Supreme Court docket said that the accident profit may solely be claimed and used if the accident occurred after the coverage was renewed.
“The Court docket due to this fact finds that the NCDRC’s contested ruling to overturn the Fee’s ruling and reopen the District Discussion board’s ruling was grossly flawed and will have been put aside,” the panel stated.