#dateofissuanceofpolicy

[seemabhatnagar]

 ‘Date of issuance of Insurance policy is the relevant date for all purposes’

Reliance Insurance Co. Ltd. & Anr. v. Jaya Wadhwani

The Branch Manager Reliance Insurance Co. Ltd. v.  Usha Soni

SLP(Civil) 10954/2019 & 15588/2021

Before Supreme Court of India

Civil Appeals of the Reliance Insurance Company was allowed on 03.01.2024 by the bench comprising Hon’ble Mr. Justice Vikram Nath J & Hon’ble Mr. Justice Rajesh Bindal J. It was held by the Apex Cort that the date of issuance of the policy would be the relevant date for all the purposes and not the date of proposal or the date of issuance of the receipt.

The orders passed by the District Forum, the State Commission, and the National Commission was set aside and the claims of the respondent were rejected.

Common Issue in both the SLP's(Civil)

What would be the date from which the policy becomes effective; whether it would be the date on which the policy is issued or the date of the commencement mentioned in the policy or it would be the date of the issuance of the deposit receipt or cover note.

Background

In these cases National Consumer Dispute Redressal Commission (NCDRC), District Forum & State Commission proceeded considering deposit receipt of premium as the date of commencement of the Policy and had accordingly allowed the complaint filed by the respondents in both the SLP’s.

JAYA WADHWANI

Quotation of policy issued on -14.07.2012

Proposal form submitted by Life assured on -14.07.2012

Receipt of Cheque dt.13.07.2012 issued on -14.07.2012

Policy was issued on i.e. date of commencement -16.07.2012

Assured committed suicide - 15.07.2013

Observation of the Apex Court

1.      Proposal form, was submitted on 14.07.2012 wherein it was mentioned that the receipt is issued subject to the clearance of the cheque.

2.      The insurance protection shall only be provided effective from the date of acceptance of the risk, which happened on 16.07.2012, when the policy was issued and the date of commencement was notified to be the same date.

3.      As such 14.07.2012 can’t be the date of issuance of policy.

4.      The date of issuance of policy is 16.07.2012 which is effective date of commencement of the policy.

5.      Period of 12 months begin from 16.07.2012 & will complete on 15.07.2013.

6.      The incidence of suicide occurred on 15.07.2013, the last day of 12 months.

7. The date of proposal cannot be treated to be the date of policy until and unless on the date of proposal, initial deposit as also the issuance of policy happens on the same date.

8. Merely, tendering a cheque may not be enough as till such time the cheque is encashed, the contract would not become effective.

9.      As the drawer of the cheque may, at any time, after issuing, stop its payment or there may not be enough funds in the account of which the cheque is issued and there could be many other reasons for which the cheque could be returned without being encashed.

10.   The date of issuance of the policy would be the relevant date for all the purposes and not the date of proposal or the date of issuance of the receipt.

USHASONI

Proposal form submitted by life assured on - 26.09.2012

First cheque was issued on - 26.09.2012

Policy was issued on i.e. date of commencement - 28.09.2012

Date of next premium was due on - 28.09.2013

Policy lapsed as premium remained unpaid

Assured paid next premium on - 25.02.2014

Life assured committed suicide - 03.06.2014

Clause of suicide in the policy

The Company will not pay any claim on death if the Life Assured, whether sane or insane, commits suicide within 12 months from the date of issue of this Policy or the date of any reinstatement of this Policy.

In the case of Usha Soni, the next premium was due on 28.09.2013 and the grace period was 30 days as per the terms & conditions of the policy otherwise policy would lapse. Non payment of premium resulted in lapse of policy. However, on payment of premium on 25.02.2014 the policy was reinstated from 25.02.2014. The life assured committed within 12 months of re instatement of the policy well within a year of the re instatement of the policy.

But all the Forums below has taken 28.09.2012 as the date of issuance of policy which apparently lapsed due to non-payment of premium.

Observation of the Apex Court

1.      As mentioned in the Policy that the 12 months period is to commence from the date of the issuance of the policy or the date of any reinstatement of the policy, the reinstatement aspect ought to have been considered. The date of reinstatement of the policy is clearly stated to be 25.02.2014 and that is also the date of commencement of policy, both the dates being the same.

2. Thus, the date of incidence of suicide being 03.06.2014 well within 12 months.

3.      The date of issuance of the policy would be the relevant date for all the purposes and not the date of proposal or the date of issuance of the receipt.

Seema Bhatnagar