No Claim Beyond Statutory Mandate of Section 64VB of the Insurance Act
Marine Cargo Annual Turnover Policy for Rs.1200 crores for 2010 and the premium payable in two equal instalments.
The appellant sought increase of coverage on account of increase in turnover.
On 7.11.2010, the fire took place in the container freight station containing 41,481 cotton bales stored in it. On that day, the turnover was Rs.1724.12 crores. However, the respondent did not pay the additional premium before the fire incident.
The surveyor of the appellants had assessed the loss at Rs.22,01,29,271/- However, the appellant appointed second surveyor. However, the second report was not given.
On 14.12.2010, the Divisional Manager of the appellants asked for payment of additional premium to the tune of rs.86,86,125/- for the coverage of Rs.1500 crores.
On 17.12.2010, the additional premium was paid.
On 27.7.2012, the claim was repudiated.
Judgment dated 18.8.2026 of the Supreme Court of India Nos.7687-7688 of 2025 of The New India Assurance Company Limited and others Vs. M/s ouis Dreyfus Commodities India Pvt Ltd.
Section 64VB of the Insurance Act that no risk to be assumed unless premium is received in advance & Conditions of the Insurance Policy
the turnover of the respondent was a central aspect in the functioning of the Marine Cargo Annual Turnover Policy insurance cover so provided. The agreement was extended to INR 1200 Crores and adjustable under the special conditions as per the actual turnover.
The amount for which the respondent stood insured was exceeded in terms of turnover on 10.07.2010 itself, well before the incident. It was, therefore, incumbent upon the respondent, in view of the clear stipulation under Section 64VB, to either extend the coverage by paying the amount based on estimated turnover or at least guaranteeing to pay the same within a particular time period.
Section 64VB itself places statutory restriction on the insurer itself.
