From insurance claims to accident policy, here’re the key court orders | Business Standard News

SC upholds insurance claim rejections

Life insurance companies won three cases in the Supreme Court last week as it upheld the rejection of claims on various grounds. In its judgment in one of these three cases, Reliance Life Insurance Co vs Rekhabai, the court set aside the order of the National Consumer Commission which allowed the claim. The deceased had taken life policies from both Reliance and Max New York. The wife collected money from Max and then approached Reliance with a claim. Reliance stated that her husband had not disclosed that he had another policy, which was against the principle of utmost good faith in insurance law. The court accepted the argument. It also rejected her excuse that the policy was filled up by the insurer’s agent and her spouse had only signed it. The court stated that when the form is filled up, the agent was not acting on behalf of the insurer but as that of the insured. The court, however, allowed the woman to keep Rs 5 lakh paid by the insurer according to its interim order.

Death not covered in accident policy

In the case, Alka Shukla vs LIC, the deceased person had taken out three accident benefit policies. While riding a bike, he felt chest pain and fell, resulting in injuries. The dispute was about the nature of death. The deceased’s wife argued that the death was caused by the fall while the insurer contended that it was caused by myocardial infarction. The district forum and the Chhattisgarh consumer courts accepted the woman’s version. But the national commission and the Supreme Court held the death was due to a cardiac problem, which was not covered by the policies. In another judgment, the Supreme Court upheld the judgment of the National Consumer Commission (LIC vs Manish Gupta). The claim was repudiated because the deceased had failed to disclose a pre-existing cardiac vascular problem. The district consumer forum and the Punjab state consumer commission had allowed the claim. But the national commission rejected it. The Supreme Court upheld the national commission’s order.

Customs dept must follow procedural rules

Customs authorities cannot jump a few steps in the rules of procedure; they should proceed sequentially, the Supreme Court stated in its judgment in Anil Kumar vs Commissioner of Customs. In this case, a Delhi firm imported electric decorative lighting from China. The authorities revalued the consignment and alleged that there was an undervaluation. They imposed a penalty, which was upheld by the Customs, Excise, Service Tax Appellate Tribunal (CESTAT). On appeal, the Supreme Court stated that “there appears to be a fundamental mistake committed in the manner of implementation of the statutory Rules. Once the statutory Rules exist and provide for sequential implementation, the assessing authority has no option but to proceed in accordance with those Rules, in that manner.” The principal commissioner was directed to reconsider the case.

Ex gratia not part of compensation

While computing the compensation in a road accident death, the ex gratia given to the kin of the deceased from his employer should not be deducted from the total income. However, if the amount is received under a government rule, it can be deducted. This was stated by the Supreme Court in the case, National Insurance Company vs Mannat Johal. It rejected the appeal of the insurance company, which argued that the Rs 48-lakh compensation granted by the Punjab and Haryana High court, was too high. In this case, a 38-year-old executive died when an oil tanker hit his car while returning from Kaziranga with his wife and two children. As he was a young man with five dependents, the motor accident compensation tribunal granted awarded Rs 38 lakh. On appeal, the high court raised it but reduced the interest from 12 per cent to 7.5 per cent. Both the insurer and the dependents appealed to the Supreme Court. Both appeals were dismissed as the court held that the compensation was fair and just. The reduction in the interest rate was also justified stating that it was the normal rate in such cases.

Aggravated offences in trademark

The Delhi High Court last week analysed factors which aggravate offences in trademark and design violations and imposed heavy punitive damages on a group of related firms, which passed off beard trimmers of a global firm. The judgment carried a rough chart as a guide in such cases, and stated that ordinary compensatory damages were inadequate to punish the offenders for their “outrageous” conduct and therefore, to deter them from repeating it, it awarded “aggravated/exemplary damages”. In this case, Koninklijke Philips NV vs Amazestore, the court passed injunction against a group of companies. It also ordered one of the violators, Omni Exim Private Ltd, to pay Rs 1,19,96,000, and two others, Nova Manufacturing Industries Ltd and Badri Electro Supply and Trading Co LLC, Rs 1,95,75,000 jointly and severally. The order was justified stating that not only Nova, a subsidiary of Badri, in contempt of an earlier injunction order, but the firms also deliberately changed their modus operandi and routed the products through Omni Exim showing their mala fide intention.

Govt can keep excess auction proceeds

A three-judge Bench of the Delhi High Court last week answered a few questions on the law of customs referred to it by a smaller Bench in the case of Gillette India Ltd vs Commissioner of Customs. It held that where the redemption fine in lieu of confiscation is not paid within the time stipulated, the central government is entitled to retain the excess auction sale proceeds of the confiscated goods, after adjustment of the duty, penalty, interest and other statutory dues. The government in such circumstance is under no obligation to return the excess amount to the importer. The court had earlier taken a different view in a case involving MMTC. The present judgment held that the MMTC ruling was wrong. In this case, Gillette had imported a large number of shaving cartridges and power toothbrushes, which were warehoused. The dispute arose when the goods were confiscated and auctioned. Gillette argued that even if an auction sale had taken place, the excess amount will have to be handed over to the importer. The division bench referred the issue involving Sections 125 and 126 of the Customs Act to the larger bench. Dismissing the firm’s contention, the court has now ruled that once the vesting of the goods in the government is absolute, it would be inconsistent with the character of that vesting to contend that the government should return the excess to the owner of the goods.

via From insurance claims to accident policy, here’re the key court orders | Business Standard News

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