The settlement of claims in respect of missing persons being done under the provisions of Section 107 / 108 of the Indian Evidence Act, 1872.
Section 107 deals with the burden of proving whether a missing person is alive or dead and the burden of proving that he is dead is on the person who affirms it.
Section 108 deals with presumption of death and the burden of proving that he is alive is on the person who affirms it.
Further, the Section 108 of the Indian Evidence Act provides that the presumption of death can be raised only after a lapse of seven years from the date of his/her being reported missing and that he has not been heard of for seven years by those who would naturally have heard of him if he had been alive. As the case may be, the nominee / legal heirs have to raise an express presumption of death of the missing person under Section 107/108 of the Indian Evidence Act before a competent court. The claim in respect of a missing person can be settled only if the Court assumes that he/she is dead.
Banks have framed their own policy which would enable them to settle the claims of a missing person after considering the legal opinion and taking into account the facts and circumstances of each case. Individual banks depending upon their risk perception may fix a threshold limit, up to which claims in respect of missing persons could be settled without insisting on production of any documentation other than (i) FIR and the non-traceable report issued by police authorities and (ii) letter of indemnity from the claimants.