Summary
The Supreme Court upheld the insurer’s reliance on a policy clause excluding suicide within twelve months of issue or reinstatement. A premium-receipt date did not replace the specified issue and commencement date, and reinstatement of a lapsed policy restarted the contractual exclusion period. Both claims fell within that period.
Issues
- Which date governed the twelve-month suicide exclusion under the policies: proposal or premium receipt, policy issue, or reinstatement.
- Whether consumer fora had correctly applied the exclusion to the two claims.
Held
- The policy’s suicide clause expressly operated for twelve months from issue or any reinstatement. Both expressions had to be given effect. In the Usha Soni claim, the policy lapsed for non-payment and was reinstated on 25 February 2014; the death on 3 June 2014 was within twelve months of reinstatement. The consumer fora erred by counting only from the original issue date. (¶¶ 5, 6, 7, 8, 12, 13, 14, 15)
- In the Jaya Wadhwani claim, the proposal and premium receipt were dated 14 July 2012, but protection was expressly subject to risk acceptance, which occurred on 16 July 2012 when the policy was issued and commenced. The earlier receipt did not itself issue the policy. The death on 15 July 2013 occurred on the final day of the twelve-month exclusion and was covered by it. (¶¶ 9, 10, 11, 15)
- Insurance terms must be construed so that the contractual words and distinct date references retain their effect. These appeals involved no backdating question; the Court applied the express issue and reinstatement provisions rather than substituting the proposal or receipt date. (¶¶ 12, 13, 14, 15, 16)
Result
Both appeals allowed. The District Forum, State Commission and National Commission orders were set aside and the claims rejected. No order as to costs.