Case Note & Summary
The petitioner, Ashwin Liladhar Shah, filed a writ petition under Article 226 of the Constitution of India seeking a mandamus against the Life Insurance Corporation of India (LIC) to honour an insurance policy issued to late Ms. Bharati Bheda, who had nominated the petitioner as beneficiary. The petitioner claimed that LIC failed to pay the policy amount despite the nomination. During the proceedings, LIC agreed to pay and subsequently paid Rs. 45.43 lakhs (inclusive of interest) after tax deduction. However, the petitioner contended that interest was not fully paid. The court examined the limited controversy and directed LIC to pay the balance interest as per the policy terms. The petition was disposed of with directions to LIC to compute and pay the remaining interest within four weeks.
Headnote
A) Insurance Law - Nomination - Payment to Nominee - Life Insurance Corporation Act, 1956 - The petitioner, as nominee of the deceased assured, sought payment under an LIC policy. LIC initially resisted but later paid the principal amount with some interest. The court held that the nominee is entitled to the policy amount and directed LIC to pay the balance interest as per the policy terms. (Paras 1-4)
Issue of Consideration
Whether the petitioner, as nominee of the deceased assured, is entitled to payment under the LIC policy with full interest.
Final Decision
The court disposed of the petition with a direction to LIC to pay the balance interest as per the policy terms within four weeks.
Law Points
- Nominee entitled to policy amount
- Interest on delayed payment
- Writ of mandamus
Case Details
2019 LawText (BOM) (04) 241
WRIT PETITION NO. 2356 OF 2018
Mr. Mayur Khandeparkar with Mr. Umesh Tawari, Mr. Kunal Kamath, Ms. Hetal Vithlani and Mr. Hrishikesh Mastikar i/b.Ms. Trisha Yelve, for the Petitioner. Ms. Pooja P. Joshi, for Respondent No.1. Mr. Durgaprasad Sabnis, for Respondent No.3. Mr. Shriniwas Bhave with Ms. Sunayana Kashid i/b. Bhave & Co., for Respondent No.3.
Life Insurance Corporation of India, The Ld. Insurance Ombudsman, Insurance Regulatory and Development Authority of India
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Nature of Litigation
Writ petition under Article 226 seeking mandamus to direct LIC to honour insurance policy.
Remedy Sought
Petitioner sought direction to LIC to pay policy amount with interest to nominee.
Filing Reason
LIC failed to pay the policy amount to the nominee despite nomination.
Issues
Whether the petitioner, as nominee, is entitled to payment under the LIC policy with full interest.
Submissions/Arguments
Petitioner argued that LIC should pay the policy amount with interest. LIC initially resisted but later paid principal with some interest, but petitioner claimed interest was not fully paid.
Ratio Decidendi
A nominee of a life insurance policy is entitled to the policy amount and interest as per the policy terms. LIC must honour its obligation to pay the nominee.
Judgment Excerpts
This Petition under Article 226 of the Constitution of India, seeks a writ of mandamus to Respondent No.1 Life Insurance Corporation of India (LIC), directing it to honour the LIC Policy (the said Policy) issued to late Ms. Bharati Bheda.
Consequent to the above, on 28th March, 2019 when this Petition came up for consideration, we were informed by the Counsel for the Respondent No.1 LIC that it had in terms of its statement made on 15th March, 2019 paid the amount of Rs.45.43 lakhs (inclusive of interest) after deduction of tax at source under the said policy to the Petitioner.
Procedural History
Petition filed under Article 226. On 15 March 2019, LIC agreed to pay within one week. On 28 March 2019, LIC informed payment of Rs.45.43 lakhs. Petitioner claimed interest not fully paid. Court directed LIC to pay balance interest within four weeks.
Acts & Sections
- Constitution of India: Article 226
