The Supreme Court has said that a contract of insurance is of utmost good faith and a proposer who is keen to obtain a policy of life insurance is duty-bound to disclose all material facts.
A bench comprising Justices D. Y. Chandrachud, Indu Malhotra and Indira Banerjee said: “A contract of insurance is one of utmost good faith. A proposer who seeks to obtain a policy of life insurance is duty-bound to disclose all material facts bearing upon the issue as to whether the insurer would consider it appropriate to assume the risk which is proposed.”
The top court emphasised that it is with this principle in view that the proposal form requires a specific disclosure of pre-existing ailments, which will enable the insurer to arrive at a considered decision based on the actuarial risk.
The top court set aside the March this year a verdict of the National Consumer Disputes Redressal Commission (NCDRC) which dismissed an insurance firm plea challenging the order asking it to pay full death claim along with interest to the mother of the deceased. The insurance company informed the top court during the pendency of the proceedings the entire claim was paid.
The bench, taking into account the age of the deceased’s mother who is seventy years old and the death of the assured on whom she was likely to be dependent, directed that no recoveries of the amount which has been paid shall be made.
Terming the NCDRC bad in law, the top court said: “The medical records which have been obtained during the course of the investigation clearly indicate that the deceased was suffering from a serious pre-existing medical condition which was not disclosed to the insurer.”
The bench noted that the deceased was hospitalised to undergo treatment for a condition in proximity to the date of his death, which was also not disclosed in spite of the specific queries relating to any ailment, hospitalisation or treatment undergone by the proposer in Column 22 of the policy proposal form. “The investigation by the insurer indicated that the assured was suffering from a pre-existing ailment, consequent upon alcohol abuse and that the facts which were in the knowledge of the proposer had not been disclosed”, noted the top court.
In August 2014, a man submitted a proposal for obtaining insurance policy. The life insurance form contained specific questions to health, medical history and also required a specific disclosure on existing ailment, hospitalisation or treatment, which he had undergone.
He answered these queries in the negative and an insurance policy was issued based on these answers. In September 2014, the man died following which a claim was lodged.
During the investigation, it was revealed that he had been suffering from Hepatitis C. The insurance firm rejected the claim in May 2015 citing non-disclosure of material facts.
The nominee initiated a consumer compliant before the district consumer disputes redressal forum. The forum directed the insurance firm to pay claim along with interest.
50% tech startups expect pre-Covid level revenue in 6 months
Indian tech start-ups are now witnessing a gradual road to recovery, with over 50 per cent of them saying that they expect revenue to reach pre-Covid level in less than six months, according to a Nasscom survey released on Wednesday.
Revenue acceleration and funding has improved the cash availability with startups, showed the findings of the “Nasscom Start-up Pulse Survey II”.
The IT industry body revisited its first tech startup pulse survey, conducted back in April-May 2020, to understand what the current perspectives are, what has changed and what the next six months look like for the tech start-up ecosystem in the country.
The results showed that 43 per cent of tech start-ups now have a runway for more than six months, compared to eight per cent in the earlier survey.
“The Indian start-up ecosystem has set a global benchmark in remaining resilient during this disruptive year,” Debjani Ghosh, President, Nasscom, said in a statement.
“Setting an example for many other industries across the globe to follow and learn from how Indian start-ups converted challenges into opportunities. A large tech start-ups pool, strong innovation focus and entrepreneur’s zeal have been the growth drivers of this ecosystem.”
The research showed that there has been an increased interest from venture capital and funding agencies to invest in seed-early stage start-ups.
Government initiatives such as Atmanirbhar Bharat, digitalisation of India, a greater focus on sustainable business models is attracting VC interest for Indian tech start-ups, Nasscom said.
Almost 25 per cent of the surveyed start-ups have been able to raise funds or find prospective investors as compared to seven per cent in the earlier survey.
Sectors like edtech, healthtech and Software-as-a-Service (SaaS) continue to attract investor interests.
While the ecosystem continues to be cautious, it is increasingly looking at hiring talent with the right competencies.
As per the findings of the survey, hiring freeze at tech start-ups dropped by 20 per cent.
Digital skills — data, AI, product management, cloud architects — continue to be in high demand across the tech start-up ecosystem, Nasscom said, adding that four Indian startups became unicorns despite the pandemic.
From November 27, Lakshmi Vilas Bank will cease to exist
From November 27, the 94-year-old Karur-headquartered Lakshmi Vilas Bank (LVB) will cease to exist officially and be amalgamated with DBS Bank India Ltd, a subsidiary of DBS Bank, Singapore.
The Central government on Wednesday notified in the official gazette that the Lakshmi Vilas Bank Limited (Amalgamation with DBS Bank India Limited) Scheme, 2020 will come into force on November 27.
As announced earlier by Reserve Bank of India (RBI) in its draft scheme of amalgamation, the Central government has notified: “On and from the appointed date, the entire amount of the paid-up share capital and reserves and surplus, including the balances in the shares or securities premium account of the transferor bank, shall stand written off.”
“On and from the appointed date (November 27, 2020), the transferor bank shall cease to exist by operation of this Scheme, and its shares or debentures listed in any stock exchange shall stand delisted without any further action from the transferor bank, transferee bank or order from any authority,” the notification states.
As per the amalgamation scheme, all the employees of the LVB shall continue in service and be deemed to have been appointed in DBS Bank India at the same remuneration and on the same terms and conditions of service, as were applicable to such employees immediately before the close of business on November 17 – the day when the LVB board was superseded and an administrator was appointed.
The notified scheme also enables DBS Bank India to discontinue the services of the key managerial personnel of the LVB after following the due procedure at any time after November 27, as it deems necessary, and providing them compensation as per the terms of their employment.
As per the notified scheme, DBS Bank India has the option of merging the 563 branches of LVB according to its convenience or close down or shift as per the instructions issued by the RBI.
Interestingly, DBS Bank India, with about 33 branches, has a deposit base of about Rs 20,000 crore and has much less employees.
On the other hand the LVB, with a branch network of 563, has a deposit base of Rs 20,000 crore spread over 20 lakh depositors.
Member of LVB’s superseded board Shakti Sinha had told IANS that for the bank’s size, the branch network was huge and nearly 200 of them were loss making.
“Nearly 100 branches were unviable. In these days of digital banking, there is all the possibility of DBS Bank India rationalising LVB’s branch network as well as the number of staff. The business per employee in the case of LVB was low compared to its peers,” he said.
He said there is every possibility of DBS Bank India going in for rationalisation of branch network and staff and saving on rent and salaries at a future date.
Petrol and diesel price increase pauses after 5 days
Petrol and diesel prices remained unchanged on Wednesday after five straight days of increase in the wake of firming of international oil rates.
Accordingly, petrol price in Delhi stayed at Rs 81.59 a litre while diesel prices continued to stay at Rs 71.41 a litre.
In other metros and cities too the pump prices of the two petroleum products remained unchanged from Tuesday’s level.
Petrol and diesel prices have been rising since Friday after a nearly two-month-long hiatus in fuel price revision. In five days, petrol price has gone up by 53 paise and diesel rates have risen by 95 paise per litre.
Petrol prices had been static since September 22, and diesel rates hadn’t changed since October 2.
Though the retail pricing of petrol and diesel has been deregulated and oil marketing companies were following a daily price revision formula, the same was suspended for almost two months to prevent volatility in the international oil markets from impacting fuel prices regularly during the pandemic.
But with crude on the boil again on news of a successful coronavirus vaccine launch soon, the patience was lost by OMCs who finally resorted to price increase to cover for their under recovery on the sale of two petroleum products.
The benchmark Brent crude has crossed $48 a barrel on the Intercontinental Exchange (ICE). It has remained over $43 a barrel for most part of November.
The OMCs need almost 40 paise per litre increase in the retail price of petrol and diesel to cover for $1 increase in crude. Going by this yardstick, product prices would have to be increased by up to Rs 2 per litre to cover under recovery on its sale.
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