Reliance Life Insurance Company Ltd. & Anr. v. Jaya Wadhwani

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.

Insurance – Insurance Policy – Date from which the policy becomes effective – Assured persons committed suicide – Claims filed by respondent, allowed – Revision filed by the appellant was dismissed, NCDRC affirmed the orders passed by the District Forum and the State Commission holding that the appellant was liable to pay the amount of the sum assured on the death of the assured – Forums below proceeded on the basis that the date of issuance of the initial deposit receipt of premium is the date of commencement of the Policy – Propriety:

Held: 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 – 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 – Merely tendering a cheque may not be enough as till such time the cheque is encashed, the contract would not become effective – Clause 9 of the terms and conditions inter alia stated that the Company will not pay any claim on death if the Life Assured committed suicide within 12 months from the date of issue of the Policy or the date of any reinstatement of the Policy – Once it is 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 DIGITAL SUPREME COURT REPORTS ought to have been considered – In the case of ‘US’, the date of reinstatement of the policy was clearly stated to be 25.02.2014 and that was also the date of commencement of policy, both the dates being the same – Thus, the date of incidence of suicide being 03.06.2014, it was well within 12 months – Further, in the case of ‘JW’, proposal form was submitted on 14.07.2012 with respect to the cheque dated 13.07.2012 – 14.07.2012 cannot be taken to be the date of issuance of policy – The date of issue of policy being 16.07.2012 was actually the date from which the policy commences and becomes effective – Period of 12 months from

16.07.2012 would complete on 15.07.2013 – It would be the last day of 12 months as from the next day, i.e., 16.07.2013 the next month will start – Incidence of suicide was on 15.07.2013, the last day of 12 months – Stand taken by the appellant approved – Impugned orders set aside – Claims of the respondent rejected. [Para 5, 8, 9-11, 15 and 16] List of Citations and Other References Life Insurance Corporation of India and Another vs. Dharam Vir Anand [1998] 2 Suppl. SCR 295:(1998) 7 SCC 348; Life Insurance Corpn. of India vs. Mani Ram [2005] 2 Suppl. SCR 342:(2005) 6 SCC 274 – referred to.