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IN THE HIGH COURT OF KERALA AT ERNAKULAM
HARISANKAR V. MENON, J.
Deepa S. W/o. Late Rahul Chandran - Appellant
Vs.
Permanent Lok Adalat(For Public Utilities) - Respondent
WP(C) NO.24247 OF 2018
Decided On : 10-06-2025
Yes; receipt of premium without objection or demur forms a binding contract; a written policy is not legally essential for non-marine insurance contracts. (Para 12 )
No; such late clarifications are an afterthought and cannot cure the delay or defeat the claim. (Para 10 )
No; the insured's failure to dispute does not extinguish the petitioner's statutory right to seek relief. (Para 11 )
The date of premium receipt is the relevant date, not the policy commencement or issuance date. (Para 13 )
JUDGMENT :
The petitioner has filed the captioned writ petition seeking to challenge Ext.P4 award passed by the 1st respondent herein by which certain insurance benefits claimed by her with respect to the death of her husband were rejected.
2. The short facts necessary for the disposal of this writ petition are as follows: -
The petitioner’s deceased husband had obtained two housing loans from the 5th respondent and on the insistence of the said respondent, insurance was obtained from respondents 2 to 4, by including the cost of the premium in the loan amount. The first disbursement of the insurance is stated to have taken place on 29.06.2015, inclusive of the premium payable to respondents 2 to 4. It is stated that the 5th respondent paid the premium directly to respondents 2 to 4 on 29.06.2015. However, Ext.R2(a) insurance policy is issued starting the coverage from 14.07.2015 alone. The petitioner’s husband, in the meantime, was hospitalised on 21.09.2015 and passed away after a Cardiac Arrest on 10.10.2015. The petitioner sought for the insurance benefit based on the policy referred to above, and she was informed that the claims are inadmissible since the deceased was suffering from a pre-existing disease and since three months had not expired from the policy date when her husband passed away. In such circumstances, the petitioner filed the claim petition before the 1st respondent authority under Section 22C (1) and 22A of the Legal Services Authorities Act, 1987 (for short, the “Act”). The Insurance Company sought to justify the repudiation of the claim on account of the two reasons noticed above.
3. The 1st respondent authority issued Ext.P4 award dated 20.02.2018 finding that: -
i. The stand of the Insurance Company that there was a pre- existing disease is not correct.
ii. The death of the petitioner’s husband was on 10.10.2015, i.e., within a period of three months from the date of commencement of the insurance policy-14.07.2015.
iii. The stand of the petitioner that the relevant date for calculation of the 90 days should be 29.06.2015/30.06.2015 (date of payment of premium), cannot be accepted.
4. It is in such circumstances that the captioned writ petition has been filed by the petitioner seeking to challenge Ext.P4.
5. A counter affidavit has been filed by the 2nd respondent, dated 15.11.2018, contending that the petitioner’s husband had a pre-existing illness- Pemphigus Vulgaris, and that an irregular finding by the 1st respondent authority cannot be used by the petitioner. It is further pointed out that the calculation of 90 days was made properly, and hence, the death having occurred within the period of 90 days, the petitioner is not entitled to the benefits.
6. I have heard Sri. Thomas T. Varghese, the learned counsel for the petitioner and Sri.Latheesh Sebastian, the learned counsel for respondents 2 to 4 and Sri.P.Paulochan Antony, the learned counsel for the 5th respondent.
7. The challenge before the 1st respondent authority at the instance of the petitioner was with respect to the two reasons for repudiation as noticed earlier and the first reason having been found against the Insurance Company, the petitioner has challenged the second reason, which is found in favour of the Insurance Company by the 1st respondent.
8. The petitioner’s deceased husband had availed the insurance policy from respondents 2 to 4 based on the premium being paid on 29.06.2015. However, the policy is seen issued only from 14.07.2015. The question arising for consideration is as to whether the insurance policy obtained by the petitioner’s husband is valid with reference to the date of payment of the premium or the date of commencement as shown in the policy.
9. Straight away, it may be noticed that this Court, noticing the rival contentions, on 19.03.2025, had directed the Insurance Company to come on record with reference to the date of receipt of the insurance premium. The Insurance Company has, therefore, filed an additional affidavit dated
An insurance policy's validity is determined by the date of premium payment, not the policy issuance date, establishing that a binding contract can exist even without a formal policy document.
An insurance policy is valid if the premium is paid before the proposer’s death, and the insurer cannot deny liability due to processing delays.
A lapsed insurance policy cannot be revived post-death, and the Insurance Ombudsman lacks authority to bypass contract terms based on equity.
An insurance policy lapses if the premium is not paid within the grace period; revivals after the insured's death are impermissible under contract terms.
Effective date of Insurance Policy – Date of issuance of policy would be relevant date for all purposes and not date of proposal or date of issuance of receipt.
Insurance liability is contingent on the effective date of coverage as defined in the insurance policy, which prevails over the timing of premium receipt.
An insurer is statutorily bound to assume risk from the date and time of premium receipt. The insurer cannot postpone the commencement of coverage to a later date via policy conditions if the premium....
(1) Significance of Policy Documentation – Policy documents issued by the appellant contained a “dash” in the column for pre-existing diseases. This serves as an admission by the insurer that no such....
Collection of Premium – The insurance agent is not even has authority to collect premium of insurance policy at all, which is applicable in the facts of the present case also.
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