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Calcutta High Court issues notice to Centre on plea challenging constitutional validity of Section 39(7) of Insurance Act

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Calcutta Aug 23(ILNS): The Calcutta High Court issued notice to the Central government on a petition challenging the constitutional validity of Section 39(7) of the Insurance Act.

A Single Bench comprised of Justice Rajasekhar Mantha issued notice to the Additional Solicitor General on August 19, while hearing a petition filed by Malabika Ghosh, challenging the constitutional vires of Section 39(7) of the Insurance Act, 1938, which was brought into force on December 26, 2014, by the Insurance Laws (Amendment) Act, 2015.

The petitioner also prayed for a writ of mandamus restraining the Insurance Company from disbursing any sum of money to the respondents under two life insurance policies taken out by her deceased husband. Respondent no 2 is the mother of the deceased and mother-in-law of the petitioner.

The petitioner was aggrieved by the amendment in so far as it makes family members of the insured, who were named as nominees, to be raised to the status of beneficial owners.

Subject to the maintainability of the petition as raised by the Counsel for the Union of India as well as the private respondents, the petition is admitted. The Court directed the insurance company to extend the proceeds of the insurance policy in favor of the petitioner’s mother-in-law “as expeditiously as possible, preferably within a period of 10 days from the date of receipt of a copy of this order”.

The Court clarified that in the event the petitioner is able to demonstrate before a Civil Court any rights and particularly, rights over and above the respondents as directed hereinabove, the payment to the respondents shall abide by such decision of the Civil Court.

“In view of the presence of the Additional Solicitor General, formal notice to the Attorney General is dispensed with. Pendency of the writ application shall not stand in the way of the petitioner establishing her rights in respect of the policy before the appropriate civil forum.

“Let an affidavit in opposition be filed within a period of six weeks from date. Reply, if any, be filed four weeks thereafter. Liberty to mention after completion of pleadings,” the Court ordered./ILNS/AP/SNG

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