Summary
The Court rejected an additional accidental-death benefit where the accident occurred while the life policy was lapsed for unpaid premium. Payment and revival after the accident, though before death, did not retrospectively restore accident cover under the policy’s express condition. Failure to disclose the intervening accident also breached the insured’s duty of good faith. The basic life assurance already paid was distinguished from the separate accident benefit.
Issues
- Whether revival after the accident but before death entitled the claimant to the additional accident benefit.
- Whether failure to disclose the accident on seeking revival independently justified rejection.
Held
- Insurance terms must be construed as agreed without rewriting the coverage. Condition 11 required the policy to be operative when the accident occurred; the policy was lapsed then, and its subsequent revival did not confer the additional accident benefit for that earlier event. (¶¶ 7, 9)
- The intervening accident was not disclosed when the overdue premium was paid. This suppressed a material fact and violated the good-faith obligation in an insurance contract, independently supporting rejection of the accident claim. (¶¶ 8, 9)
- Acceptance of the overdue premium and payment of Rs.3,75,000 basic life assurance did not establish liability for a further Rs.3,75,000 accident benefit. The separate condition tied that benefit to an accident after revival, rather than merely death after revival. (¶¶ 3, 9, 10, 11)
Result
Appeal allowed; NCDRC order set aside and additional accident-benefit claim rejected. Pending applications disposed of.