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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 Supreme Court of India

The endeavour of the court must always be to interpret the words in which the contract is expressed by the parties. The court while construing the terms of policy is not expected to venture into extra liberalism that may result in rewriting the contract of substituting the terms which were not intended by the parties. The insured cannot claim anything more than what is covered by the insurance policy. The aforesaid has been upheld by the Supreme Court of India while adjudicating the case of Life Insurance Corporation Of India And Another v. Sunita [ Special Leave Petition (Civil) No. 13868 OF 2019] which was decided upon by a single judge bench comprising Justice Bela M. Trivedi on 29th October 2021.

The short facts giving rise to the present appeal are that Mr. Pradeep Kumar, the husband of the respondent herein (original 1 complainant) had taken/purchased a life insurance policy under the Jeevan Suraksha Yojana on 14.04.2021 from the appellant-Life Insurance Corporation, under which a sum of Rs. 3,75,000/- was assured by the corporation, and in case of death by accident an additional sum of Rs. 3,75,000/- was also assured. The insurance premium of the said policy was to be paid six monthly. The next premium was due to be paid by the said insured Pradeep Kumar on 14th October, 2011. However, he committed a default. On 06.03.2012, the said Pradeep Kumar i.e. the husband of the complainant met with an accident and succumbed to the injuries on 21.03.2012. In the meantime, he deposited the due premium of October, 2011 on, 09.03.2012 for reviving the policy. The complainant after the death of her husband filed a claim before the appellant-Corporation. The appellant paid a sum of Rs. 3,75,000/- to the complainant, however, did not pay the additional amount of Rs. 3,75,000/- towards the Accident claim benefit. The complainant, therefore, approached the District Forum by filing a complaint seeking the said amount towards the Accident claim benefit. The said complaint was resisted by the Life Insurance Corporation contending, inter alia, that the day when the husband of the complainant met with an accident, the said policy had already lapsed on account of non-payment of the due premium.

The court perused the facts and arguments presented. it was of the opinion that “apart from the fact that the respondent7 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. 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 in the instant case was lying in a lapsed condition since 14th October, 2011 and, therefore, 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. The Court, therefore, is of the opinion that the impugned order passed by the NCDRC setting aside the order passed by the Commission and reviving the order passed by the District Forum was highly erroneous and liable to be set aside.”

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Judgment reviewed by Aryan Bajaj

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