In Brief
A widow challenged a finance company's attempt to recover her deceased husband's personal loan after he died within 18 days of obtaining it. The husband had paid the insurance premium meant to secure the loan, but the finance company delayed forwarding it to the insurance company, resulting in policy issuance only 32 days after loan disbursement instead of at loan sanction. The Supreme Court held that under the Insurance Act, risk coverage commences from premium payment date, so the loan should have been adjusted against the insurance proceeds. The finance company was liable for deficiency of service in delaying policy issuance. The Court set aside the National Commission's order and awarded the widow Rs. 50,000 compensation and Rs. 25,000 costs.
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