The Allahabad High Court has held that an unmarried sister is not disqualified from receiving the Rs. 5,00,000/- accidental death benefit under the Mukhyamantri Kisan Evam Sarvahit Bima Yojana merely because a sister is not named in the list of family members covered by the Scheme.

The Court held that the clause listing covered family members and the clause directing payment of the insured sum to the nominee or legal heir on the accidental death of the head or breadwinner operate separately. It held that the latter does not confine the legal heir to the relationships named in the family composition clause.

The bench of Justice Prakash Padia and Justice Garima Prashad held,

“We accordingly hold that an unmarried sister is not disqualified from receiving the personal accident death benefit merely because she is not separately listed as a covered family member.”

Petitioner's brother died in a road accident on 18.05.2019. It was pleaded that after the death of their parents he cultivated the family agricultural land as head and breadwinner of the household, and that the petitioner, who is unmarried, depended upon him.

Her claim was rejected by the Oriental Insurance Company Limited on the ground that a sister was not included in the definition of family in the Memorandum of Understanding. The District Committee, Basti, acting on the report of the Sub-Divisional Magistrate, Harraiya, recorded that the deceased was the head of the family and directed the Company to pay. The Company maintained its rejection by communication dated 16.04.2021, which was challenged in the writ petition.

Counsel for the Insurance Company argued that the rights of the parties are governed by the Memorandum of Understanding and the policy, which do not include a sister, and that the beneficial object of the Scheme could not compel payment of an uncovered claim.

The Court observed that the Scheme keeps personal accident insurance for the head or breadwinner separate from post-accident medical benefits, which extend to covered family members as well, and that the nominee or legal heir category is repeated in the claim procedure. The person whose accident is insured and the person paid after that person's death are therefore separately identified by the contract, held the Court.

“The Company's interpretation would add such a restriction to the words “nominee/legal heir”. It would require those words to be read as “nominee/legal heir who is also a covered family member”, although the agreement contains no such qualification.”

Relying on Oriental Insurance Company Ltd. v. Smt. Uma Devi and others, the Court held that insurance liability is governed by the contract, whose words must be given effect without addition or substitution and whose provisions must be read together.

Distinguishing The Oriental Insurance Company Limited and others v. State of U.P. and others and Smt. Rajwati Devi v. State of U.P. and others, it held that neither decides that a sister cannot receive a death benefit as legal heir, the objection here being to the claimant's relationship and not to an excluded cause of death.

Noting that no competing claimant or different basis of succession had been put forward, the Court held that the rejection was vitiated. It clarified the limits of its finding.

“This finding concerns receipt of the death benefit and does not enlarge the categories of persons whose own accidental injury or medical treatment is insured under the Scheme.”

Accordingly, the Writ Petition was allowed and the rejection communicated on 16.04.2021 was quashed. The Company was directed to pay Rs.5,00,000/- to the petitioner within four weeks from the date of production of a certified copy of the judgment.