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Insurance policies issued prior to 2015 amendment are freely tradable and assignable

Supreme Court : While upholding the order of the Bombay High Court, the division bench of Vikramajit Sen and S.K. Singh, JJ.,  held that in accordance with the Insurance Act, 1938, the policies issued by the appellant are both assignable and transferable.The bench also ruled that it is not appropriate to import the principles of public policy, which are always imprecise, difficult to define, into contractual matters.

The Court, on perusing the contentions and concerned statutory provisions, dismissed the appeal and observed that the amended Section 38 of the Insurance Act is not declaratory and was not intended by the legislature to make it retrospective in nature. The Court referred to its judgment in Avinder Singh v. State of Punjab, (1979) 1 SCC 137 and Agricultural Market Committee v. Shalimar Chemical Works Ltd., (1997) 5 SCC 516 wherein it has been held that “Legislature cannot face itself by delegating its plenary powers unless the delegate functions strictly under its provisions.” [LIC of India v. Insure policy plus services pvt. Ltd., 2015 SCC OnLine SC 1384,  decided on 29th December, 2015]

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