LIFE INSURANCE CORPORATION OF INDIA vs CROWN LIFE INSURANCE CO.

The Supreme Court interpreted the term 'life insurance fund' under Section 10(2) of the Insurance Act, 1938, clarifying that it refers to a separate fund for life insurance business, which includes all receipts and liabilities. The Court held that under Clause (d) of Part B of the First Schedule to the Life Insurance Corporation Act, 1956, 96% of any surplus in the life insurance fund must be allocated to meet liabilities, thus reducing compensation owed to the insurance company. The appeal by the appellants was dismissed, affirming the Insurance Tribunal's award of compensation to the respondent.