Uttarakhand HC Cuts ₹5 Lakh Insurance Award To ₹1 Lakh For Election-Duty Home Guard’s Widow Under Group Cover

National Insurance Company provided group insurance cover to Home Guards serving in Uttarakhand for one year, from 4 February 2005 to 3 February 2006.

Vishan Singh Chauhan, a Home Guard, died while on election duty on 7 October 2005.

His widow’s claim under the policy was repudiated, and she successfully challenged that decision in a writ petition.

The Single Judge directed the insurer to pay her ₹5 lakh with interest at 9% per annum.

The insurer appealed, challenging only the amount awarded and relying on the policy bond, which provided cover of ₹1 lakh per Home Guard.

The insurer’s liability under a group insurance policy is governed by the cover provided in the policy.

The policy bond in this case provided insurance cover of ₹1 lakh for each of the 3,299 Home Guards covered by it.

The appellate court identified no statutory provision or precedent as the basis for its decision.

The appeal was confined to the amount payable; the insurer did not challenge the basis for allowing the widow’s claim.

The Court examined the policy bond and found that the cover for Home Guards was ₹1 lakh. Because the Single Judge’s award of ₹5 lakh exceeded that specified cover, the Court held that the award should be modified to match the policy limit.

The Court modified the Single Judge’s judgment and directed the insurer to pay the respondent ₹1 lakh with interest in accordance with the group insurance cover.

The Registry was directed to refund to the insurer the balance of the ₹5 lakh deposited, after accounting for the 50% already released to the respondent, upon application and within two weeks.

The respondent was left at liberty to pursue any benefit available under Oriental Insurance Company Ltd.’s insurance cover before the appropriate forum.