Case Title: MAHAKALI SUJATHA versus THE BRANCH MANAGER, FUTURE GENERALI INDIA LIFE INSURANCE COMPANY LIMITED & ANOTHER
Summary
The Supreme Court ruled that the insurance company failed to satisfy the burden of proof by demonstrating that the insurer had other policies in place while acquiring a policy. The insurance company had issued the insured with a life insurance policy, and after the insured’s passing, her daughter submitted an insurance claim to the insurer. The insurer rejected the claim on the grounds that the insured had concealed the existence of his existing policies prior to purchasing the new policy. The appellant appealed the National Consumer Dispute Redressal Commission’s decision to deny their insurance claim to the Supreme Court.
The insurance company argued that the insured’s claim was properly rejected, citing the Supreme Court’s ruling in Reliance Life Insurance Co Ltd vs. Rekhaben Nareshbhai Rathod, which upheld the insurance company’s repudiation of the claim due to the suppression of the existence of other existing policies. The appellant emphasized that the insurer had neglected to discharge the burden of proof by failing to demonstrate the existence of any policy at the time the insured acquired the new policy from the insurer.
The Supreme Court distinguished the Rekhaben case from the present case, as the appellant did not acknowledge any previous policies taken by the insured. The insurer is obligated to demonstrate that the insured had concealed information regarding the previous policies in accordance with Section 45 of the Insurance Act, 1938, in the current instance. The insurer was ordered to pay the appellant the insurance claim under both policies, amounting to Rs. 7,50,000/- and Rs. 9,60,000/-, with interest at a rate of 7% per annum from the date of the complaint and until the actual realization.
About the case
The Supreme Court observed that the insurance company failed to satisfy the burden of proof by demonstrating that the insurer had other policies in place while acquiring a policy, despite the fact that the insurance claim was upheld after the insurance company rejected it on the basis of suppression of policies already held by the insured.
“The cardinal principle of burden of proof in the law of evidence is that “he who asserts must prove.” Consequently, if the respondents in this case had claimed that the insured had already purchased fifteen additional policies, they were required to provide the requisite evidence to substantiate this assertion.” Consequently, it is possible to infer that the respondents (insurance company) have not adequately demonstrated the insured-deceased’s fraudulent concealment of information regarding their existing policies with other insurance companies during the execution of the insurance contracts with the respondents in this case. Consequently, the Bench, which consisted of Justices BV Nagarathna and AG Masih, declared that the policy’s repudiation was without any foundation or justification. The insurer has issued the insured with a life insurance policy. Following the insured’s passing, her daughter (appellant) submitted an insurance claim to the insurer in her capacity as a nominee. The insurer rejected the claim on the grounds that the insured had concealed the existence of his existing policies prior to purchasing the new policy. The appellant had elected to appeal the National Consumer Dispute Redressal Commission (“NCDRC”)’s decision to deny their insurance claim to the Supreme Court. Additionally, the Supreme Court has declined to vacate the conviction in a rape case, despite the fact that the victim was not suggested the case of the accused under S.313 CrPC during cross-examination. The insurance company argued before the Supreme Court that the insured’s claim was properly rejected, citing the Supreme Court’s ruling in Reliance Life Insurance Co Ltd vs. Rekhaben Nareshbhai Rathod, which upheld the insurance company’s repudiation of the claim due to the suppression of the existence of other existing policies. Conversely, the appellant emphasized that the insurer had neglected to discharge the burden of proof by failing to demonstrate the existence of any policy at the time the insured acquired the new policy from the insurer. Additionally, refer to the Supreme Court Weekly Round-Up for the period of May 13, 2024, to May 18, 2024.
The denial of the appellant’s insurance claim was without any basis, as the respondents/insurer had failed to discharge the burden of proof to demonstrate that the insured had suppressed information about the existing policies with other insurance companies while entering into the insurance contracts with the respondents/insurer in the present case, according to the Judgment authored by Justice BV Nagarathna, which found force in the appellant’s contention. Additionally, the Supreme Court has ruled that criminal proceedings by the “real” owner are also impermissible, as a civil suit to enforce a claim in Benami property is prohibited. According to the respondents, they have merely presented a summary of the other policies that the insured-deceased owned. In addition, the information regarding policy numbers and issuing dates is absent from the aforementioned tabulation, which also contains varying birth dates. Additionally, the assertion concerning this information has not been substantiated by any other documents in accordance with the law. The deceased policyholder, the appellant’s father, was not examined by any officer of any other insurance company to verify the table of policies that was purportedly taken. Additionally, the court noted that the table generated is inconsistent and insufficient in terms of the insured’s date of birth. Evaluation of Rekhaben Nareshbhai Rathod’s Distinguished The insurer argued that the Supreme Court in the Rekhaben case upheld the repudiation of the insurance claim because the fact of other extant insurance policies was suppressed. This was in support of the repudiation of the Insurance claim. Nevertheless, the court was unable to concur with the respondent/insurer’s argument and distinguished the case of Rekhaben from that of the present case. While the Rekhaben case acknowledged the insured’s suppression of prior policies, the current case does not.
“However, the aforementioned judgment (Rekhaben case) is distinguishable from the present case insofar as the appellant herein does not acknowledge any previous policies taken by the insured.” In the Rekhaben case, the Court was solely responsible for determining whether the fact about previous policies qualified as a “material fact” that was suppressed, following the policyholder’s admission. Nevertheless, the insurer is obligated to demonstrate to the Court that the insured had concealed information regarding the previous policies in accordance with Section 45 of the Insurance Act, 1938, in the current instance. The court noted that the insurer must fulfill this burden of proof in accordance with the law of evidence.
In conclusion, on the basis of the aforementioned premise, the insurer/respondent was ordered to pay the appellant the insurance claim under both policies, which amounts to Rs. 7,50,000/- and Rs. 9,60,000/-, with interest at a rate of 7% per annum from the date of the complaint and until the actual realization.
