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2025 Supreme(Online)(NCDRC) 2545
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
DR. INDER JIT SINGH, PRESIDING MEMBER, DR. JUSTICE SUDHIR KUMAR JAIN, MEMBER
LIFE INSURANCE CORPORATION OF INDIA – Appellant
Versus
SMT SHWETA SINGH – Respondent
SECOND APPEAL NO. NC/SA/329/2025 | NC/IA/7462/2025 | NC/IA/7463/2025 | NC/IA/7464/2025
For the Appellants/Petitioners: MR. RAJAT BHALLA, ADV A/W MR. C.S. GUPTA, AUTH REP
For the Respondents:
Revival of a life insurance policy resets the suicide exclusion period under standard terms, maintaining the consumer's reasonable expectations.
Headnote:(A) Insurance Act, 1938 - Section 45 - Insurance contract disputes - Suicide exclusion clause - Court upheld State Commission’s ruling that revival of policy resets exclusion period for suicide during insurance policy. - The clause concerning suicide states conditions under which claims are admissible. (Paras 4, 5, 6)
(B) Interpretation of contracts - Insurer’s obligations to honor policy terms must be broadly read to ensure consumer expectations are met. In the context of COVID-19, the Supreme Court’s exemption of limitation periods applies to this case.
Result: The appeal is dismissed, and the State Commission's order is upheld.
| Table of Content |
|---|
| 1. factual background and prior findings of lower courts. (Para 2) |
| 2. legal arguments and implications of the suicide exclusion clause. (Para 3 , 4) |
| 3. court's reasoning on the applicability of the suicide clause. (Para 5) |
| 4. final decision and reaffirmation of the prior ruling. (Para 6 , 8) |
ORDER
1. Heard counsel for the Appellant.
2. Challenge is to the order dated 27.05.2025 of the State Commission vide which appeal ( First Appeal) filed by the Appellant herein was dismissed. Earlier the District Commission allowed the Complaint with following directions “The complaint is partly allowed.
The OP is directed to pay the insurance amount of Rs.5,00,000/- ( five lakh rupees) and Rs.5000/- ( five thousand rupees) as litigation expenses of policy No.566773249 within 30 (thirty days) from the date of the order. In case of not doing so, simple interest at the rate of 6% ( six percent) per annum will be payable on the entire amount from the date of filing the complaint till the date of final payment. “
3. In the present case, there are concurrent findings of both the Fora below against the Appellant herein. In the memorandum of Appeal, following questions of law have been raised:
a. Whether the revival of a lapsed life insurance policy resets the one year exclusion period for suicide under standard policy terms?
b. Whether an insurer can be held liable for non-disclosure of exclusion clauses even when the policy bond is issued?
c. Whether the period of 12 months from the date of suicide i.e. 06.11.2020 is to be calculated from the issuance of the policy i.e. 25.6.2019 or from the date when the policy was revived i.e. 25.8.2020, as per the Suicide clause contained in the policy.
d. Whether the presence of the clause mentioned in the policy that 12 months' period is to commence from the date of reinstatement of the policy, the reinstatement aspect ought to have been considered as held by the Apex Court in judgment of the Hon'ble Apex Court in the case of Reliance Life Insurance Company Ltd. Vs. Jaya Wadhwani [ (2024) 2 SCC 427 ] e. Whether in the absence of any averment by the Respondent / complainant regarding the alleged non-receipt of the policy terms and conditions in the original complaint, the same was an afterthought and hence the reliance of the Ld' State Commission on the judgment of the Hon'ble Apex Court in the case of (2023) 1 SCC 428 titled as Texco Marketing Ltd.
Vs. Tata AIG Insurance Co. Ltd. was misplaced.
f. Whether a consumer forum can override explicit statutory provisions like Section 45 of the Insurance Act, 1938 , by applying equitable considerations?
g. Whether the terms of insurance contract have to be strictly read and natural meaning as held in the cases of Vikran Greentech (I) Ltd. Vs. New India Assurance Co. Ltd., (2209) 5 SCC 599, United India Assurance Co. Ltd. Vs. M/s Harchand Rai Chandan Lal JT 2004 (8) SC 8, Oriental Insurance Co. Lt. Vs. Sony Cheriyan (1999) 6 SC 451, National Insurance Co. Ltd. Vs. Laxmi Narain Dhut ( Appeal (Civil) 1140 of 2007 , National Insurance Co. Ltd. Vs. Ms. Mohini ; General Assurance Society Ltd.Vs. Chandmull Jain and Anr. (1996) ACJ 267 (SC).
h. Whether the findings of the State and District Consumer Commissions suffer from material irregularity, perversity and illegality justifying interference under Section 51 of the Consumer Protection Act, 2019?
4. Counsel for the Appellant submits that policy in question was issued on 25.06.2019. The next premium was due on 25.06.2020 but was not paid. The grace period expired on 25.07.2020 and the premium was paid on 25.08.2020 and hence policy was revived w.e.f. 25.08.2020. The insured committed suicide on 06.11.2020 which is within one year from the date of revival of the policy and according to counsel for the appellant, this is under exclusion clause. He admits that suicide is beyond one year if counted from the date of original policy. He has drawn our attention to following clause of the policy:
3. Suicide : This policy shal
