Case Note & Summary
The petitioner, Ravi Agrawal, a differently abled person, filed a Public Interest Litigation under Article 32 of the Constitution challenging the condition in the Jeevan Aadhar Policy (Table 114) issued by the Life Insurance Corporation of India (LIC) that annuity is payable to the disabled dependant only after the death of the proposer/life assured. The policy is designed to provide benefits under Section 80DD of the Income Tax Act, 1961, which allows a deduction of up to Rs. 75,000 (or Rs. 1,25,000 for severe disability) for amounts paid towards a scheme for the maintenance of a disabled dependant. Sub-section (2)(a) of Section 80DD requires that the scheme provides for payment of annuity or lump sum for the benefit of the dependant in the event of the death of the individual or HUF member. The petitioner argued that this condition denies disabled persons the benefit of receiving annuity during the lifetime of the parent/guardian, unlike other insurance policies, thereby violating Article 14. The petitioner had previously lodged complaints with the Insurance Regulatory and Development Authority (IRDA) and the Chief Commissioner for Persons with Disabilities, who advised the Central Board of Direct Taxes (CBDT) to re-examine the matter. The Supreme Court examined the statutory scheme and the policy terms. It held that the condition is in strict compliance with Section 80DD(2)(a), which mandates payment only upon death. The Court found no violation of Article 14 as the classification is reasonable and based on the statutory framework. The petition was dismissed.
Headnote
A) Constitutional Law - Right to Equality - Article 14 - Jeevan Aadhar Policy - The petitioner challenged the condition that annuity is payable only after death of proposer, arguing discrimination against disabled dependants. The Court held that the policy terms are consistent with Section 80DD(2)(a) which mandates payment only in the event of death of the individual or HUF member. No violation of Article 14 as the classification is reasonable and based on statutory scheme. (Paras 1-10) B) Income Tax Act - Deduction for Disabled Dependant - Section 80DD - Interpretation - Section 80DD(1)(b) allows deduction for amounts paid under a scheme approved by the Board. Sub-section (2)(a) requires that the scheme provides for payment of annuity or lump sum for the benefit of a disabled dependant in the event of death of the assessee. The Jeevan Aadhar Policy complies with this condition. (Paras 2-5) C) Insurance Law - Jeevan Aadhar Policy - Maturity Claim - The policy does not have a maturity claim; annuity is payable only on death of proposer. CBDT Circular dated 24.01.2008 clarifies that no benefit can be paid to dependant till proposer survives. The Court upheld this as per the statutory framework. (Paras 4-5) D) Public Interest Litigation - Disability Rights - Grievance Redressal - The petitioner had approached IRDA and Chief Commissioner for Persons with Disabilities, who advised CBDT to re-examine the matter. The Court found no merit in the petition and dismissed it. (Paras 6-8)
Issue of Consideration
Whether the condition in Jeevan Aadhar Policy that annuity is payable only after the death of the proposer/life assured violates Article 14 of the Constitution and is contrary to Section 80DD of the Income Tax Act, 1961.
Final Decision
The Supreme Court dismissed the writ petition, holding that the condition in Jeevan Aadhar Policy is in strict compliance with Section 80DD(2)(a) of the Income Tax Act, 1961, and does not violate Article 14 of the Constitution.
Law Points
- Section 80DD Income Tax Act
- 1961
- Jeevan Aadhar Policy
- Article 14
- Public Interest Litigation
- Disability Rights
- Annuity Payment
- CBDT Circular
