In Brief
Dravya Finance, a non-banking finance company accepting life insurance policies as collateral, challenged LIC's circulars restricting policy assignments. After the High Court quashed these circulars and the Supreme Court's appeals were disposed with interim orders, a dispute arose about when interest should be payable. The Supreme Court clarified that LIC must pay interest at the prevailing bank rate (without penal interest) from 30 days after the policy's date of death or maturity, or from 4th April 2008 (when the interim order took effect), whichever is later. The bank rate was not reduced despite LIC's request, as the interim order had prevented Dravya from claiming funds on time.
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