Introduction:
The case of Damyanti Negi v. State of Uttarakhand (Writ Petition Misc. Single No. 2446 of 2026) came before the Uttarakhand High Court, where a crucial issue concerning entitlement to benefits under an accidental death insurance scheme was examined. The matter was adjudicated by Justice Pankaj Purohit, who was called upon to determine whether a bank could deny insurance benefits to the widow of a deceased police constable solely on the ground that his name was not included in the list of covered employees. The petitioner, the widow of the deceased constable, approached the Court seeking enforcement of her rightful claim under a scheme introduced by the respondent-bank titled “Complimentary Police Accidental Death Insurance Cover.” Her husband, who was serving in the Uttarakhand Police and on deputation with the State Disaster Response Force (SDRF), tragically died in a road accident during the course of service on 07.08.2021. It was undisputed that the deceased had been maintaining a salary account with the respondent-bank since 2015 and that his salary was regularly credited into the said account. Despite fulfilling all essential conditions under the scheme, the claim was rejected by the bank on the sole ground that his name did not appear in the list of covered employees. This raised a significant legal question regarding administrative accountability, fairness, and the applicability of constitutional guarantees under Article 14 of the Constitution of India.
Arguments on Behalf of the Petitioner (Widow of the Deceased Constable):
The petitioner strongly contended that the denial of insurance benefits by the respondent-bank was arbitrary, unjust, and contrary to the very purpose of the scheme. It was argued that her husband squarely fell within the category of beneficiaries contemplated under the scheme, as he was a police personnel maintaining a salary account with the bank. The petitioner emphasized that the scheme was automatic in nature and did not require any separate application, registration, or nomination by the employees.
It was further submitted that the scheme explicitly provided that the premium was to be borne by the bank itself, thereby eliminating any requirement for contribution from the employees. In such circumstances, the petitioner argued that the bank could not shift the burden of administrative lapses onto the beneficiaries.
The petitioner also highlighted that the bank had complete knowledge of the deceased’s status as a police constable, as evidenced by the regular credit of his salary and the sanctioning of a loan against his salary account. This, according to the petitioner, established that the bank was fully aware of his eligibility under the scheme.
The primary grievance of the petitioner was that the claim had been rejected solely on the ground that the deceased’s name was not included in a list of covered employees. It was argued that such non-inclusion was an administrative lapse arising from lack of coordination between the bank and the police department, and that the petitioner could not be penalized for such omissions.
The petitioner further contended that the denial of benefits in these circumstances amounted to a violation of Article 14 of the Constitution, as it resulted in arbitrary discrimination between similarly situated individuals. She urged the Court to set aside the impugned communication and direct the bank to release the insurance amount along with appropriate interest.
Arguments on Behalf of the Respondent (Bank):
The respondent-bank, in its defense, contended that the insurance scheme was not universally applicable to all police personnel maintaining salary accounts with the bank. It was submitted that the scheme was implemented based on a list of 676 employees provided by the police department, and that only those whose names were included in the list were covered under the scheme.
The bank argued that since the name of the deceased constable did not appear in the list, no premium was deposited in respect of him, and therefore, no insurance benefit could be extended. It was further contended that the responsibility for providing accurate and complete details of eligible personnel rested with the police department, and that the bank could not be held liable for omissions in the list.
The respondent also sought to justify its decision by asserting that the scheme did not operate automatically and that inclusion in the list was a necessary precondition for coverage. It was argued that extending benefits to individuals not included in the list would amount to going beyond the terms of the scheme.
Additionally, the bank contended that the absence of premium payment in respect of the deceased further disentitled the petitioner from claiming the benefit. It was submitted that insurance coverage is contingent upon payment of premium, and in the absence of such payment, no liability could be fastened upon the bank.
Judgment:
After a detailed consideration of the facts, submissions, and the nature of the scheme, the High Court delivered a reasoned judgment addressing the core issue of whether administrative lapses could defeat substantive entitlements. The Court began by noting that certain foundational facts were undisputed: the deceased was a police constable, his salary account was maintained with the respondent-bank, his salary was regularly credited, and he died during the currency of the insurance scheme.
The Court observed that the only ground for denial of the claim was the non-inclusion of the deceased’s name in the list of covered employees. It held that such non-inclusion was clearly an administrative lapse arising from lack of coordination between the bank and the police department. Importantly, the Court emphasized that the petitioner could not be made to suffer for such lapses.
The Court further rejected the contention of the bank that it lacked knowledge of the deceased’s status. It noted that the bank had been maintaining his salary account for several years and had even sanctioned a loan based on his employment, thereby demonstrating full awareness of his status as a police personnel.
Addressing the issue of premium payment, the Court held that the scheme itself provided that the premium was to be borne by the bank. Therefore, the absence of premium payment in respect of the deceased could not be used as a ground to deny the benefit. The Court observed that allowing such a defense would enable the bank to take advantage of its own omission, which is impermissible in law.
The Court also examined the nature and purpose of the insurance scheme, noting that it was intended to provide financial security to police personnel and their families in the event of accidental death. It held that a hyper-technical interpretation of the scheme, which defeats its object, cannot be sustained.
In a significant observation, the Court held that the denial of benefits in the present case was arbitrary and violative of Article 14 of the Constitution. It emphasized that similarly situated individuals cannot be treated differently based on administrative errors, and that such discrimination undermines the principles of equality and fairness.
Consequently, the Court set aside the impugned communication rejecting the claim and directed the respondent-bank to pay an amount of ₹25 lakh to the petitioner under the insurance scheme. The Court further directed that the amount be paid along with interest at the rate of 5% per annum from the date of entitlement until actual payment.
The writ petition was accordingly allowed, and the judgment stands as a significant reaffirmation of the principle that administrative inefficiencies cannot override substantive rights. It underscores the duty of institutions to act fairly, reasonably, and in accordance with constitutional principles.