Section 108 of Indian Evidence Act, 1872 – what the courts said

Let me share a Supreme Court judgment with respect to a death claim which I found very interesting and informative.

You would agree that death is one of the stark realities of life. It is the ultimate truth. Everything in life is uncertain after birth; death is an exception and is certain to happen in one’s life.

But there may be situations where the exact time and manner of death of a person cannot be ascertained or known. Say for example, a person suddenly disappears and his whereabouts are not known thereafter, despite reasonable efforts of his near and dear relatives or people who ought to have known about his existence in the normal course had he been alive.

In such a situation, the question arises as to when the nominees of the missing insured can lay a claim to the benefits of the policies and what their obligations are. Are they bound to continue to pay premium? If so how long are they bound to make payment, and when does the law presume the death of such an insured?

These were the points adjudicated and decided by Supreme Court in the recent case of LIC of India v/s Anuradha. In order to appreciate the facts it is necessary to analyze and understand section 108 of Indian Evidence Act, 1872, which reads as under:

BURDEN OF PROVING THAT THE PERSON IS ALIVE WHO HAS NOT BEEN HEARD FOR SEVEN YEARS. Provided that the question is whether a man is alive or dead and is proved that he is not been heard of for seven years, the burden of proving that he is alive is shifted to the person who affirms it.

Section 108 lays down a general rule as to presumption of existence of a person. This is regard to ONLY death of the person, that too after the lapse of seven years and if time lapsed is only six years and 364 days, the presumption cannot be applied. More importantly, this presumption is not available as to the time of death of the subject person. This fact has to be proved by direct or circumstantial evidence.

In another words only can the death be presumed. It cannot be “assumed that presumed death had synchronized with the date he was reported missing” or that the date and time of death can be correlated to the point of time coinciding the commencement of calculation of seven years backwards from the date of initiation of legal proceeding.

Having understood the presumption of death, let us now revert to the facts of the aforementioned case – One Mr. Sham Prakash Sharma, the late husband of Mrs. Anuradha (Respondent before Supreme Court) had taken a Life Insurance policy (the Petitioner before Supreme Court). The policy was commenced with effect from February 8, 1986. The premium was payable every six months and was paid for two years. The respondent’s husband suddenly disappeared from Bombay on July 17, 1988 and thereafter he was not traceable and his whereabouts were not known. The respondent logged a First Information Report (FIR) with the Police. On July 11, 1988 LIC sent a communication address to Mr. Sham Prakash Sharma, delivered at his residence, informing that the Insurance Policy had lapsed for non-payment of premium. On June 29, 1996, the respondent approached the LIC for release of benefits under the policy proceeding on an assumption that Mr. Sham Prakash was dead as he had not been seen and heard for seven years. The LIC turned down the claim of the respondent relying on Rule 14 of Insurance Manual which reads as under:

“Where a person is reported missing, it is to be advised to the claimant the life insured will be presumed to be dead after seven years of production of decree from the court of law and in the meantime the policy is to be kept in force by making the payment regularly.”

The respondent, aggrieved by rejection approached the State Consumer Disputes Redressal Commission complaining of deficiency of service on the part of Petitioner. The Petitioner, namely LIC, refuted the contention of deficiency and contended that the policy had lapsed, since it was not kept alive, and the claim was not maintainable. The State Commission accepted to the Respondents claim and held that the Rule 14 relied on by the Petitioner had no relevance in view of statutory presumption arising under Section 108 of the evidence Act. The Petitioner namely, LIC, preferred an appeal before the High Court and which was also dismissed.

The Petitioner, LIC, filed an appeal before the Supreme Court against the judgment of High Court and during the course of hearing an appeal, it was submitted for the council of LIC that in case it had no objection to the release of payment due under the policy to the Respondent as ex-gratia payment to honor the judgment of High Court and it was only interested to settle the law in this area.

The Supreme Court held that both High Court and the Commission held wrong in holding that after the lapse of seven years, when the matter came before the court, not only death can be presumed but also time of death could be assumed, which would be the time when the fact of missing was first noticed, the Supreme Court held under Section 108, only death can be presumed and not the time of death. This fact has to be proved by the direct or circumstantial evidence, it further held that High Court and Commission went wrong in holding “that on expiry of seven years by the time issue raised in Consumer Forum or Civil Court, an evidence was addressed that the person was not heard of for a period of seven years by wife and/or family members of the person then only the death can be presumed but it could also be assumed that the presumed death had synchronized with the date when he was reported missing, or date and time could be correlated to the point of time coinciding with the commencement of calculation of seven years from the backward of initiation of legal proceedings.

The Supreme Court further held that in order to successful maintain the claim for the benefit under the insurance policy, it is necessary for the policy to kept alive by punctual payment of premium under the claim was made. The Apex court also held that the Petitioner namely, LIC, was justified in turning down the claims by pleading that the policy had lapsed and the all that could be paid to the Claimants was the paid up value of the policy.

If I have not confused you, the inferences of the whole story are:

1. After the lapse of seven years, ONLY and only death could be presumed by the court.
2. There is no presumption of the time of death under Section 108 of Indian Evidence Act, 1872.
3. Time of death has to be proved by independent evidence.
4. The Claimant in order to successfully maintain the claim in such cases, has to continue to pay premium till the claim is made, failure to payment of premium shall lead to lapse of policy and disentitle the nominee or the Claimant to pay the entire amount payable under the policy.

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