Summary
A constable on election duty in Bihar died of heat stroke while group insurance arranged by the Chief Electoral Officer was in force; his widow first claimed in 2008, the Electoral Officer rejected the claim as not accidental, and the Patna High Court Division Bench fastened liability on the insurer on the agency principle in Basanti Devi. The Supreme Court allowed the insurer's appeal: the memorandum required immediate intimation and the Electoral Officer, having itself treated the claim as inadmissible, could not shift liability to the insurer eleven years later; in any event insurance terms are strictly construed and death 'solely and directly from accident caused by external violent and any other visible means' does not cover sun stroke. The amount already paid to the widow was not to be recovered.
Issues
- Whether an insurer can be held liable under a group insurance memorandum for election staff where the claim was intimated to it eleven years after the death and the insured's employer had itself treated the claim as inadmissible.
- Whether death by heat stroke falls within cover for death resulting solely and directly from accident caused by external violent and any other visible means.
Provisions considered
- Clause 3 'Scope of Cover' and clause on 'Invoice of Claim', Memorandum of Understanding dated 09.02.2000 between National Insurance Company and the Chief Electoral Officer, BiharCover extends only to death resulting solely and directly from accident caused by external violent and any other visible means, and claims were to be intimated to the insurer immediately on occurrence; neither condition was met where death was from sun stroke and intimation came in 2011. (¶¶ 2, 23, 31, 34)
- Section 182 (agency), as applied in Delhi Electric Supply Undertaking v. Basanti Devi, Indian Contract Act, 1872The agency principle, under which an employer deducting and remitting premium acts as the insurer's agent so that its default in remitting does not defeat the claim, concerned a different factual and legal controversy and had no relevance to the question whether this death was covered or whether the claim was timely. (¶¶ 9, 10, 11)
Held
- The widow raised no claim for seven and a half years and the Chief Electoral Officer in its own wisdom never lodged a claim with the insurer; having initially rejected the claim, it could not re-examine it as a device to fasten liability on the insurer, and any amount it chose to pay must be borne by it for its own negligence. (¶¶ 22, 23, 24)
- Following Suraj Mal Ram Niwas Oil Mills, Garg Sons International and Vikram Greentech, insurance contracts are construed strictly and courts cannot add or substitute words; the clause confines cover to death from an accident caused by external violence, 'any other visible means' takes colour ejusdem generis, and under Alka Shukla a death from a normal activity rather than accidental means is not covered, so a sun stroke falls outside the scope of cover. (¶¶ 26, 27, 28, 29, 30, 31, 32, 33, 34, 35)
- The Single Judge's order rested on the Electoral Officer's own admission, from which it later sought to resile; since the widow has enjoyed the amount paid for many years, the Electoral Officer shall not recover it from her and that aspect is closed. (¶ 36)
Result
Appeal allowed with parties bearing their own costs; Patna High Court Division Bench judgment dated 03.10.2017 in LPA No. 1049 of 2011 fastening liability on the insurer set aside; the Chief Electoral Officer not to recover from the widow the amount already paid to her.