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]
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 appellantCorporation. 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 respondentcomplainant 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 500; Oriental Insurance Co. Ltd. v. Sony Cheriyan AIR 1999 SC 3252 : [1999] 1 Suppl. SCR 622; United India Insurance Co. Ltd. v. Harchand Rai Chandan Lal (2004)
8 SCC 644 : [2004] 4 Suppl. SCR 662 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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