In Brief
This appeal concerned a life insurance policy dispute arising from a home loan. The bank made insurance a loan condition and debited the premium (Rs. 6,24,172) on behalf of Gokal Chand, who subsequently passed a normal treadmill test. When Chand died days later, the insurer postponed the proposal citing the test result and refunded the premium after learning of the death. The court held that by accepting and retaining the premium while the insured passed medical examination, a concluded insurance contract had formed. The insurer's rejection only after death intimation—via an ante-dated letter—violated the duty of utmost good faith. The court allowed the appeal, directing the insurer to process the claim and remit the payable amount."
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