INSURANCE CORPORATION OF INDIA AND ANOTHER versus SUNITA

Citation: [2021] 10 S.C.R. 180 · Decided: 29-10-2021 · Supreme Court of India · Bench: SANJIV KHANNA · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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180
SUPREME COURT REPORTS
[2021] 10 S.C.R.
180
LIFE INSURANCE CORPORATION OF INDIA AND ANOTHER
v.
SUNITA
(Civil Appeal No. 6537 of 2021)
OCTOBER 29, 2021
[SANJIV KHANNA AND BELA M. TRIVEDI, JJ.]
Insurance: Insurance policy – Construction of – Held: Terms
of insurance policy have to be strictly construed – It is not
permissible to rewrite the contract while interpreting the terms of
the Policy – In a contract of insurance there was a requirement of
Uberrima fides-good faith on the part of the assured – On facts,
condition of the Policy clearly stipulated that the policy has to be in
force when the accident takes place – Policy was lying in a lapsed
condition and was not in force on the date of accident – It was
sought to be revived after the accident and that too without disclosing
the fact of accident which took place three days before – Thus, the
complainant did not come with clean hands to claim the extra
Accident benefit of the policy – The said Accident benefit could
have been claimed and availed of only if the accident had taken
place subsequent to the renewal of the policy –  Claim for Accident
benefit was not payable to the respondent as per the conditions of
the contract of insurance – Thus, the claim for extra Accident benefit
rightly rejected by the Corporation – Consumer Protection Act,
1986.
Allowing the appeal, the Court
HELD: 1.1 At the time of making payment of premium on
09.03.2012, it was not disclosed by the complainant or her husband
to the appellant-Corporation about the accident which had taken
placed on 06.03.2012. The said conduct on the part of the
complainant and her husband in not disclosing about the accident
to the corporation not only amounted to suppression of material
fact and lacked bona fides but smacked of their mala fide intention,
and therefore, the Accident benefit claim of the complainant was
liable to be rejected on the said ground alone. In a contract of
insurance there is a requirement of Uberrima fides i.e. good faith
on the part of the assured. [Para 8][185-G-H; 186-A-B]
[2021] 10 S.C.R. 180
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1.2 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. In the instant case,
condition no. 11 of the Policy clearly stipulated that the policy
has to be in force when the accident takes place. The policy had
lapsed on 14.10.2011 and was not in force on the date of accident
i.e. on 06.03.2012. It was sought to be revived on 09.03.2012
after the accident in question, and that too without disclosing the
fact of accident which had taken place on 06.03.2012. Thus, apart
from the fact that the respondent-complainant had not come with
clean hands to claim the add on/extra Accident benefit of the
policy, the policy in question being not in force on the date of
accident as per the condition no. 11 of the policy, the claim for
extra Accident benefit was rightly rejected by the appellant-
Corporation. Since, clause 3 of the said terms and conditions of
the policy permitted the renewal of discontinued policy, the
appellant-Corporation had revived the policy of the respondent-
complainant by accepting the payment of premium after the due
date and paid Rs. 3,75,000/- as assured under the policy,
nonetheless for the Accident benefit, the policy had to be in force
for the full sum assured on the date of accident as per the said
condition no. 11. The said Accident benefit could have been
claimed and availed of only if the accident had taken place
subsequent to the renewal of the policy. The policy was lying in a
lapsed condition since 14th October, 2011 and, thus, was not in
force as on 06.03.2012, resultantly, the claim over Accident benefit
was not payable to the respondent as per the conditions of the
contract of insurance. Thus, the impugned order passed by the
NCDRC setting aside the order passed by the State Commission
and reviving the order passed by the District Forum was highly
erroneous and is set aside.The claim of the respondent towards
Accident benefit stands rejected. [Para 9-11][186-H; 187-A-F]
Vikram Greentech (I) Ltd. & Anr vs New India Assurance
Co. Ltd (2009) 5 SCC 599 : [2009] 5 SCR 437; Life
Insurance Corporation of India Vs. Jaya Chandel
(2008) 3 SCC 382:  [2008] 2 SCR 559; General
Assurance Society Ltd. v. Chandmull Jain (1966) 3 SCR
LIFE INSURANCE CORPORATION OF INDIA v. SUNITA
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SUPREME COURT REPORTS
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