Premium First, Risk Later – Affirms Consumer Commission
Repudiation of Claim for Non-Payment of Premium before Due date
Judgment dated 1.10.2026 of the National Consumer Disputes Redressal Commission in Consumer Complaint No.2463 of 2018 of Neo Essel Dispoware Pvt Ltd Vs. Oriental Insurance Co Ltd
Present Complaint has been preferred on behalf of the Complainant aggrieved against the repudiation of claim by Oriental Insurance Company (OP) citing non-compliance of Section 64VB(1) of the Insurance Act, 1938 and claiming that premium in respect of the policy in question was paid by the Complainant beyond the next succeeding month on which the risk was assumed by OP, despite the fact that assurance was given by OP through e-mail dated 17.10.2014 granting facility to pay within 120 days subject to furnishing of Bank Guarantee by the Complainant.
The respondent issued All Risk Policy to the Complainant engaged in the manufacturing of food grade plastic.
on the basis of furnishing Bank Guarantee facility, the policy in question was issued for the period 17.10.2016 to 16.10.2017 with sum assured of Rs.96,08,00,000/- for fire, Rs.50,40,00,000/- for machinery break-down and Rs.10,000,000/- for fire loss of profit. The Bank Guarantee was furnished on behalf of the Complainant before the commencement of the policy with validity upto 15.02.2017 against insurance premium for Rs.28,00,000/-
In an unfortunate incident of fire at 11.00 p.m. on 29.10.2016 in the insured premises, Complainant suffered loss and claim form was accordingly submitted. As per the Complainant, in terms of the Bank Guarantee, insurance premium of Rs.28,00,000/- (Rupees Twenty Eight Lacs Only) was paid on 18.01.2017 through cheque dated 17.01.2017, which was within the stipulated period of 120 days of validity of Bank Guarantee facility provided by OP and the Bank Guarantee was to expire on 15.02.2017. However, despite issuance of the policy and acceptance of the premium amount, OP repudiated the claim citing non compliance of Section 64VB(1) of the Insurance Act, 1938 r/w Rule 58(i) of the Insurance Rules, 1939 vide letter dated 08.05.2018.
the premium of Rs.28,00,000/- for the Industrial All Risk Policy dated 17.10.2016 was paid to be paid before 30.11.2026. However, it was paid on 17.01.2017, against the express provisions of Section 64VB of the Insurance Act, 1938 r/w Rule 58 of the Insurance Rules, 1939
