LIC of India Vs. Insure Policy Plus Service Pvt. Ltd. & Ors.
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Head Note
Civil Law - Insurance claim
Insurance Act, 1938, Section 38 (as amended by Amendment Act, 2015) - Insurance - Assignment and Transfer of Policies- Section 38 as it now stands gives the insurer the discretion to decide whether or not to accept a transfer or assignment of an Insurance Policy - Amendment Act, 2015 is neither a declaratory or clarificatory piece of legislation - The language of the extant Section 38 cannot be interpreted to mean that this is what Section 38 had meant all along - Furthermore, had the Legislature intended to amend Section 38 retrospectively, it would have said so explicitly - Instead, it has incorporated sub-section (9), which protects rights and remedies of assignees that arose prior to the commencement of the Amendment Act - Parliament intended to allow all previous assignments and transfers provided that they complied with the requirements laid out in Section 38.
Civil Law - Insurance claim
Insurance Act, 1938, Section 38 (prior to Amendment Act, 2015) - Insurance - Assignment and Transfer of Policies - Held that on transfer or assignment of a policy and on the requisite procedure being complied with, the assignee alone has an absolute interest in the policy -Insurer was bound by the provisions of Section 38 to accept such a transfer or endorsement - Only limitations placed on transferring a policy were in terms of the procedure laid out in Section 38, and subject to the terms of policy itself - Section left no scope for the insurer to dispute the right to transfer or assign the policy. Section 38 was thus clearly mandatory and substantive - As the statute permitted, at the relevant time, the assignment and/or transfer of life insurance policies, but the delegate, through its Circulars, has attempted to nullify that provision of law - The circulars held to be ultra vires the Statute and must therefore be made ineffectual.
Topic(s)-Insurance - Assignment and Transfer of Policies - Circular quashed