“SUPREME COURT RULES THAT DEATH OF AN OFFICIAL ON ACCOUNT OF SUN STROKE DURING ELECTION DUTY NOT COVERED UNDER THE SCOPE OF CLAUSE – DEATH SHOULD BE RESULTING SOLELY AND DIRECTLY FROM ACCIDENT CAUSED BY EXTERNAL VIOLENT AND ANY OTHER VISIBLE MEANS”
In this case an Insurance company and State Government Department entered into a Memorandum of Understanding (MoU) on 09.02.2000 to provide insurance cover to the persons deployed for election related work for Bihar Legislative Assembly Elections in the year 2000.
The relevant Clause in question of the MoU is Clause 3, which reads as under:
“Scope of Cover, The insurance is intended to provide for the payment of compensation in the event of death only resulting solely and directly from accident caused by external violent and any other visible means.”
On the MoU being executed, the State Government opted for a Group Insurance Scheme vide letter dated 10.02.2000 to cover its premium paying employees, who were appointed for election related activities.
An official died due to a sun stroke/heat stroke while performing election duty for the Bihar Legislative Assembly.
The wife of the deceased official referred above after lapse of eight years in November, 2008 filed a claim for compensation before the concerned Government official against the death of her husband on official duty.
However the claim was rejected for the reason that death had occurred on account of heat stroke on 26.05.2000 during election duty and had not occurred on account of any external violent activity/accident.
Aggrieved by the above rejection of claim by the official, the wife filed a writ petition before the Patna High Court and sought quashing of the decision of the government rejecting her claim and prayed for compensation of Rs. 10 Lacs.
The concerned government official/deptt. raised a claim before the Insurance Company to pay as per the MoU which was in existence at the time of death however the insurance company refused to pay since the claim was not raised on time by the concerned govt. deptt.
Accordingly the High Court in terms of precedence of law held the primary responsibility of the the government deptt. to pay compensation since it did not raised the claim on time to the Insurance co.
The government deptt. filed an appeal against the above order of the single judge before the division bench of Patna High Court.
The division bench of Patna High Court ruled as under:
- that the net premium for the policy was paid to the insurance company by the Headquarters of concerned government deptt. directly after deducting from the salaries of the deceased official personnel;
- Secondly, insurance was taken on behalf of the deceased official under the signature of the concerned government deptt.
- Thirdly, the deceased official personnel was prohibited under rules from making any direct contact with the insurance company and all communications were restricted between the concerned Government Headquarters and the insurance company;
- Fourthly, the deceased official personnel did not had an individual right to take out the policy.
- On the issue of time for raising the insurance claim, it was opined that no time limit was prescribed.
Since all pre-requisites to the claim for the insurance policy were available, it was the exclusive liability of the insurance company to pay the insured amount.
Aggrieved of the order of the above division bench of Patna High Court, the insurance company filed an appeal before Supreme Court contending that the concerned government deptt. had actually rejected the claim in November, 2009 but subsequently sought to admit their liability in the writ petition before Patna High Court and paid the claim to the wife of the deceased official and that their endeavor is to somehow fasten the liability on the Insurance Company.
The policy was also stated to have expired by efflux of time in June, 2000 and also that the cause of death was due to a sun stroke/heat stroke and was not even covered within the scope of the policy as the Scope of Cover’ of the MoU required it to be “external violent and any other visible means.
On the other hand it was contended by the Government deptt. that the insurance company as the insurer was under an obligation to honour the promise of paying the insured amount in case of death of an employee while on election duty during the existence of the insurance policy.
Upon the observation of the material on records of the case and previous judgments, the Hon’ble Supreme Court flagged two issues i.e., firstly, the consequences of delay in claiming the amount from the insurance company; and secondly, whether at all the insurance policy covered the scenario of the death of the official.
On the first aspect, the admitted position is that the wife of the deceased official never raised a claim even on the Government Deptt. concerned till the letter in November, 2008 after seven and a half years. Thus, it was held that by any standards this claim was beyond any reasonable time period since the conditions of the MoU required the claim to be made immediately on the occurrence.
Thus, it was held whether the claim was admissible under the insurance policy or not, the conduct of the Government deptt. would not entitle them to fasten the liability on the Insurance Company and would have to be borne by them if they are of the view that such an amount ought to have been made.
It was observed by the Supreme Court that it is trite to say that the terms of the insurance policy are to be strictly construed. The insurance contracts are in the nature of 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.
The Supreme Court re-emphasized based on previous judicial pronouncements that the words used in a contract of insurance must be given paramount importance and it is not open for the Court to add, delete or substitute any words. Insurance contracts are in the nature where exceptions cannot be made on ground of equity and the Courts ought not to interfere with the terms of an insurance agreement. Insured cannot claim anything more than what is covered by the insurance policy.
The terms of the contract have to be construed strictly, without altering the nature of the contract as the same may affect the interests of the parties adversely. The clauses of an insurance policy have to be read as they are.
The insurance contract must be read as a whole and every attempt should be made to harmonise the terms thereof, keeping in mind that the rule of contra proferentem does not apply in case of commercial contract, for the reason that a clause in a commercial contract is bilateral and has mutually been agreed upon.
That from the clause in MoU in the present case it is quite apparent that the admissibility of the claim is in the event of death which is only in the scenario where the consequent situation arises, i.e., it has to be solely and directly from an accident caused by external violence. Here the death is by sun stroke. There was no aspect of any violence being the cause of death.
Hence the Hon’ble Supreme Court based on the above findings set aside the judgment of the division bench of the High Court of Patna holding insurance company liable to pay or entitle the government deptt. to recover the compensation paid to the deceased wife from the Insurance Company.
***