- In the case of Oriental Insurance Company Limited vs Sanjesh and anr. the Apex Court has held that any condition in an insurance policy which bars the filing of claim after any specified period is violative of section 28 of the Indian Contract Act and is hence void.
- It is pertinent to note that section 28 of the Indian Contract Act states that any agreement which puts a restraint on the right of the party to institute legal proceedings to enforce his rights under any contract on the expiry of a specific time period is void.
- In this case, the insurance company had challenged the order of the permanent Lok Adalat of Muzaffarnagar dated 4 January, 2020 in the Allahabad HC, by which the claim of Smt. Sanjesh was allowed and the insurance company was directed to pay Rs. 5 lacs to Smt. Sanjesh under the Mukhyamantri Kisan Evam Sarvhit Bima Yojana.
- The Counsel for the petitioner had argued that the accident took place on August 29, 2017 and the injured man had succumbed to his injuries on 5 September, 2017. The claim was filed on 20 December, 2017, after a period of three months.
- The Counsel argued that according to the contract that had been executed between the Government and the Insurance Company, in the event of delay for a period longer than one month, the Collector had the power to condone the delay only upto the period of one month. Thus, it was argued that the claim was time barred.
- The above plea was dismissed by the HC and it was observed that the actual delay was, in effect, only a month. There is no clause in the policy which bars the consideration of the claim by the Court concerned even when the delay went beyond the period of two months. The Court also observed that insurance is essentially a welfare policy and considering the fact that the claim had already been paid, the delay can be condoned.
- The Insurance Company had filed an appeal against this order before the Apex Court. While dismissing the appeal, the Hon’ble Supreme Court held thus,
- “In view of the aforesaid section 28, the condition of lodging claim within a period of one month, extendable by another month is violative of section 28 of the Act and thus, void… The SLP is accordingly dismissed”.
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