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Urmila JaIn Vs. the Oriental Fire and General Insurance Co. Ltd. - Court Judgment

LegalCrystal Citation
SubjectInsurance;Motor Vehicles
CourtMadhya Pradesh High Court
Decided On
Judge
Reported in2(1986)ACC411
AppellantUrmila Jain
RespondentThe Oriental Fire and General Insurance Co. Ltd.
Excerpt:
- - we fail to understand that when the policy was for the period 27-7-1980 to 26-7-1981 how the proposal form could have been of a subsequent date i......to the petitioner he has taken out a personal accident and sickness insurance policy under the proposal form on 27 9.1980 for a sum of rs. 2,50,000/-mentioning the petitioner as a nominee. her husband met with a car accident on 9.8.1980 between sehore and ashta and died. the petitioner lodged a claim with the respondent no. 1 insurance company but the company avoided to make payment and ultimately by letter dated 21.1.1983 directed the petitioner to produce a succession certificate for paying the amount due under the policy. according to her, the insurance company was bound to make the payment to her, as she being the nominee under the policy. for this purpose she relies on the proposal form dated 27-9-1980, which was submitted by her late husband for the policy which was issued for.....
Judgment:

C.P. Sen, J.

1. This is a petition under Article 226 of the Constitution by the widow of the insurer challenging the order of the Insurance Company directing the petitioner to produce a succession certificate for paying the amount due under the policy taken out by her late husband for personal accident and sickness insurance.

2. The petitioner is the widow of late Santosh Kumar Jain. According to the petitioner he has taken out a personal accident and sickness insurance policy under the proposal form on 27 9.1980 for a sum of Rs. 2,50,000/-mentioning the petitioner as a nominee. Her husband met with a car accident on 9.8.1980 between Sehore and Ashta and died. The petitioner lodged a claim with the respondent No. 1 Insurance Company but the Company avoided to make payment and ultimately by letter dated 21.1.1983 directed the petitioner to produce a succession certificate for paying the amount due under the policy. According to her, the insurance Company was bound to make the payment to her, as she being the nominee under the policy. For this purpose she relies on the proposal form dated 27-9-1980, which was submitted by her late husband for the policy which was issued for the period 27-7-1980 to 26-7-1981. According to the petitioner, the insurance company being a wholly Government subsidised company it a State within the meaning of Article 12 of the Constitution and a writ can be issued. The respondent No. 1 in its return admitted that its entire share capital is subscribed by the Central Government but it is a distinct and separate entity from the Government and even assuming that it is state still the present dispute arises out of a contractual obligation under the policy in question and a writ is not the proper remedy for enforcing that contractual obligation. On merit, it is denied that the petitioner's late husband submitted a proposal form on 27-9-1980. According to it, her late husband submitted a proposal form under, the prescribed form on 12-7-1979 in which no nominee was mentioned ; this proposal form was accepted and insurance policy was issued. On expiry of the policy, it was renewed on payment of premium for the period 27-7-1980 to 26-7-1981 bearing No. 1633/302/00/719/41(01)/80/00000 this policy does not have a nominee; as such the petitioner can only be paid the amount due under the policy on production of a succession certificate; besides, in order to avoid loss of interest on the sum assured, the insurance company had deposited the amount of Its. 2,50,000/- in fixed deposit in a Bank of the petitioner's choice and the provisions regarding payment to the nominee under the Insurance Act of 1938 is applicable to the life policies she cannot apply to a personal accident and sickness policy.

3. It is not disputed that under the General Insurance Business Nationalisation Act, 1972, the general insurance business has been taken over by the Government on the appointed day and the shares in the insurance companies stood transferred to and vested in the Central Government. The Government was empowered to constitute a General Insurance Corporation of India for carrying out the general insurance business. The respondent No. 1 is subsidiary of the General Insurance Corporation of India, respondent No. 2. Section 33 of the Act provides that subject to such exceptions, restrictions and limitation, if any, as the Central Government may, by notification, specify in this behalf, the Insurance Act shall apply to or in relation to the Corporation and, very acquiring company, as if the Corporation or the acquiring company, as the case may be, were an insurer carrying on general insurance business within the meaning of that Act. However, the Central Government by notification published in the Gazette of India Extraordinary dated 29-12-1972 specified certain sections of the Insurance Act as not being applicable to the General Insurance Corporation of India. Among the exceptions is Section 39 of the Insurance Act which is excluded in its operation so far as the general insurance business done by the respondent No. 2 is concerned. In view of this notification, Section 39 of the Insurance Act is not applicable. There could have been a provision nomination in the personal accident and sickness policy taken out by the deceased husband of the petitioner but in the policy there is no nominee, Section 39 of the Insurance Act provides for payment of the amount due under the policy on the death of policy-holder to his nominee Cut Sub-section (2) requires that any such nomination in order to be effectual shall, unless it is incorporated in the text of the policy itself, be made by an endorsement on the policy communicated to the insurer and registered by him in the records relating to the policy and any such nomination may at any time before the policy matures for payment be cancelled or changed by an endorsement or a further endorsement. The copy of the policy which has been produced by the insurance company does not contain and endorsement The original policy must be with the petitioner but the same has not been produced, obviously because there is no such endorsement in the policy nominating the petitioner. As such, the insurance company could not make the payment to her, even under Section 39 of the Insurance Act. Under the circumstances, the insurance company would be justified in insisting on the petitioner to produce a succession certificate in order to make the payment due under the policy. The insurance company has already safeguarded her interest by keeping the amount of Rs. 2,50,000/- in fixed deposit in a bank of the petitioner's choice. The petitioner had produced a photo state copy of the proposal form dated 27-9-1980 in which the petitioner has been mentioned to be the nominee or the policy holder. The insurance company has denied that any such proposal form has been submitted to it by the deceased policy holder. We fail to understand that when the policy was for the period 27-7-1980 to 26-7-1981 how the proposal form could have been of a subsequent date i.e. 27-9-1980- Therefore, we are not prepared to accept the contention that the petitioner was made the nominee in the policy of her deceased husband.

4. Accordingly the petition fails and it is dismissed. There shall be no order as to costs. The outstanding amount of security be refunded to the petitioner.


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