Gokal Chand (D) thr legal representatives Vs Axis Bank limited & Anr (Supreme court) *
Date-15th December, 2022
Sub-*Whether an insurance company even after receiving the insurance premium, can refuse to honour its contract when the insured person dies immediately after taking the home loan.*

An interesting issue arose in this case when the insured obtained a home loan from Axis Bank and as part of the loan mandatory insurance was taken from Max NewYork Life and a premium of Rs 6.24 lacs was also debited.After such debit, *treat mill test (TMT) test **was conducted in which there was no abnormality and there was no adverse communication from either bank or the insurer. However, 15 days after TMT, the insured died of a heart attack and when the insurer was informed to honour the claim, the insurance company back dated a letter declining to take insurance policy on the pretext of adverse TMT Finding. The Supreme Court relying on *D. Srinivas vs. SBI Life Insurance Company Limited and Others(2018) 3 SCC 653(SC) **came down upon heavily upon the insurance company as well as the bank that when the insurance premium was debited followed by a TMT test which was a normal test, the contract of insurance was valid and the backdated letter which was established, could not be relied upon.

This judgement will be helpful in insurance matters where the claims are not paid on flimsy grounds.

Ramesh Patodia
16-12-2022