Supreme Court: In a civil appeal challenging the decision of Division Bench of Patna High Court regarding the liability of insurance company against the election authorities for death caused during election duty, the Division Bench of Sanjay Kishan Kaul* and Abhay S. Oka, JJ. set aside the High Court’s judgment finding the same unsustainable. The Court reiterated that the terms of an insurance contract must be read as a whole in a harmonised manner, since it is a bilateral agreement mutually agreed upon by the parties.

Facts of the matter reflect that the deceased was a Constable who died in 2000 due to a sun stroke while performing election duty for the Bihar Legislative Assembly. The insurance company and the State Chief Electoral Officer had entered a Memorandum of Undertaking (‘MoU’) providing insurance cover to persons deployed on election duty for payment of compensation in the event of death resulting solely and directly from accident caused by external violent and any other visible means.

The matter was initiated in 2008 when the wife approached the election authorities for claim. The Assistant Election Officer found the claim of payment to the deceased’s wife inadmissible, since death had occurred on account of heat stroke and not any external violent activity or accident. The deceased’s wife filed a writ petition before Patna High Court for quashing the said communication by the Assistant Election Officer and sought payment of compensation amount of Rs.10 lakhs as per the insurance policy on account of deceased’s death while performing election duty.

The High Court’s Single Judge decided the matter in favour of the insurance company, due to the delay and as the liability to pay the amount to the deceased wife was assigned to the Chief Electoral Officer and the District Magistrate. The decision of the Single Judge was challenged before the Division Bench of Patna High Court in Chief Electoral Officer v. Chinta Devi, 2017 SCC OnLine Pat 1622, which was decided in favour of the Chief Electoral Officer holding the insurance company liable to pay the amount to the deceased’s wife. The Chief Electoral Officer had paid the compensation amount to the deceased’s wife during pendency of appeal before the High Court.

The Court observed that the factual controversy and the legal controversy in the present matter were quite different. Thus, the Court flagged two aspects as pointed below:

1. The consequences of the delay in claiming the amount from the insurance company.

The Court noted that the deceased’s wife never raised a claim till 2008, i.e., seven and a half years after the incident. Thus, the claim was beyond any reasonable time period. The Court said that it was the duty of the Chief Electoral Officer to lodge the claim immediately on the occurrence with the insurance company as provided under the MoU, and added that “It cannot countenance the submission that while on one hand the claim made by the wife was initially rejected, subsequently, it is reexamined, almost as if making it a pre-condition to fasten the liability on the insurance company.”

The Court commented that the Chief Electoral Officer never thought it to be a case to be lodged with the insurance company. Thus, their conduct would not entitle them to fasten the liability on the insurance company and would have to be borne by them if they were of the view that such an amount ought to have been made.

2. Whether at all the insurance policy covered the scenario of the death of the constable.

The Court elucidated the principles on which a claim under any insurance policy is examined. Further, itreferred to Justice K Kannan, Principles of Insurance Law Chapter 3 (Volume 1, 10th ed. 2017, pg. 31) and said that “insurance contracts are special class of contracts having distinctive features such as utmost good faith, insurable interest, indemnity subrogation, contribution and proximate cause which are common to all types of insurances. Each class of insurance also has individual features of its own. The law governing insurance contracts is thus to be studied in three parts, namely:

I) general characteristics of insurance contracts, as contracts;

II) special characteristics of insurance contracts, as contracts of insurance, and

III) individual characteristics of each class of insurance.”

The Court referred to Suraj Mal Ram Niwas Oil Mills (P) Ltd. v. United India Insurance Co. Ltd., (2010) 10 SCC 567 regarding the paramount importance of insurance contracts, Export Credit Guarantee Corpn. of India Ltd. v. Garg Sons International, (2014) 1 SCC 686 regarding restricted interference of Courts with the terms of insurance agreements, Vikram Greentech (I) Ltd. v. New India Assurance Co. Ltd., (2009) 5 SCC 599 reiterating that the insured cannot claim anything more than what is covered by the insurance policy.

While scrutinizing the specific clause of the MoU, the Court concluded that it provides for death caused by external violence wherein, ‘any other visible means’ would also read in the context of external violent death and not in isolation. The Court referred to the elucidation in Alka Shukla v. LIC, (2019) 6 SCC 64 in support of the above context.

The Court analysed the insurance policy in the above context and commented that the cause arising from a sun stroke cannot be included within the parameters of the ‘Scope of Cover’ in the insurance policy which defines the circumstances when such insurance amount would become payable. The Court held that the insurance company is not liable to pay the amount.

Thus, the Court found the decision of Division Bench of High Court unsustainable and set aside the same. The Court observed that the amount has already been paid to the deceased’s wife in pursuance of the decision of Single Judge of the High Court. The Court also did not deem it right to permit the Chief Electoral Officer to recover any amount from the deceased’s wife.

[National Insurance Co. Ltd. v. Chief Electoral Officer, 2023 SCC OnLine SC 115, judgment dated 8-02-2023]

*Judgment authored by: Justice Sanjay Kishan Kaul

Justice Sanjay Kishan Kaul — A torch bearer of Freedom of Speech and Expression

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