NEW DELHI, Nov 1:
An insurance claim can be rejected if the policy has lapsed on account of non-payment of premium, said the Supreme Court which stressed that the terms of an insurance policy have to be strictly interpreted.
The apex court observation came while setting aside an order of the National Consumer Disputes Redressal Commission (NCDRC) that ordered additional compensation in a road accident case.
A bench of Justices Sanjiv Khanna and Bela M Trivedi said it is a well-settled legal position that in a contract of insurance there is a requirement of Uberrima fides i.E. Good faith on the part of the insured.
“It is clear that the terms of insurance policy have to be strictly construed, and it is not permissible to rewrite the contract while interpreting the terms of the policy,” the bench said.
The top court was hearing an appeal filed by the Life Insurance Corporation (LIC) against the judgement of the NCDRC that had set aside the order passed by the State Commission.
In the case, the woman’s husband had taken a life insurance policy under the Jeevan Suraksha Yojana from the Life Insurance Corporation under which a sum of Rs. 3.75 lakh was assured by LIC.
Besides this amount, in case of death by accident an additional sum of Rs. 3.75 lakh was also assured.
The insurance premium of the said policy was to be paid six-monthly, however, there was a default in payment.
On March 6, 2012, the husband of the complainant met with an accident and succumbed to the injuries on March 21, 2012.
The complainant after the death of her husband filed a claim before LIC and was paid a sum of Rs. 3.75 lakh to her. However, the additional sum of Rs. 3.75 lakh towards the Accident claim benefit was denied.
The complainant, therefore, approached the District Forum by filing a complaint seeking the said amount towards the Accident claim benefit. The District Forum allowed the appeal of the woman and directed the payment of an additional sum of Rs. 3.75 lakh towards the 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.(PTI)
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