A single judge bench comprising of Justice Arindam Sinha allowed a Writ petition under Article 226 & 227 for setting aside the impugned repudiation of a life insurance claim which was based on allegation of fraud by the nominee. The court held that no question whatsoever can be raised after 3 years of taking a life insurance policy.
Facts
The petitioner is nominee under 4 life insurances taken by her nephew from LIC. The Deceased Life Assured (DLA) met an accident 3 years after taking the life insurance policy. The insurance claims of the Petitioner were rejected on grounds of fraud as DLA was mentally retarded and the school and income certificate submitted were also false. LIC also filed a criminal complaint which resulted in an enquiry by the CBI and a criminal case, in which all the accused were later acquitted. There was further no appeal from the acquittal.
Observations by the court:
Section 45(1) of the insurance Act 1938 is clear in mandating that after three years no question whatsoever can be raised with respect to a life insurance policy. Sub-section (2) allows a policy to be questioned on the ground of fraud, which may be after three years from date of issuance of the policy, in event said period stands extended by date of commencement of risk or revival or rider to the policy. However, in the present case, there was no extension of the three year period on the policies by commencement of risk or revival or rider to them.
Decision:
The impugned repudiation was set aside and LIC was ordered to pay for the policies. In the event of non-payment, an interest at the rate of 5% p.a. on the aggregate amount is to be imposed from the date of presentation of Writ till the payment
Citation: WP(C) No.3252 of 2016
Case: Jollyrani Mohapatra Vs LIC of India, Mumbai & Ors.
Coram: Justice Arindam Sinha
Decided On: 11th October 2022
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