RELIANCE LIFE INSURANCE COMPANY LTD. & ANR. versus JAYA WADHWANI
[2024] 1 S.C.R. 65, Supreme Court of India, 2024
Outcome: Appeal(s) allowed (Granted)
Segment: Issues
* Author
[2024] 1 S.C.R. 65 : 2024 INSC 10
Case Details
Reliance Life Insurance Company Ltd. & Anr.
v.
Jaya Wadhwani
(Civil Appeal No. 35 of 2024)
03 January 2024
[Vikram Nath* and Rajesh Bindal, JJ.]
Issue for Consideration
What would be the date from which the policy becomes effective; 
whether it would be the date on which the policy is issued or the 
date of the commencement mentioned in the policy or it would 
be the date of the issuance of the deposit receipt or cover note.
Headnotes
Insurance – Insurance Policy – Date from which the policy 
becomes effective – Assured persons committed suicide – 
Claims filed by respondent, allowed – Revision filed by the 
appellant was dismissed, NCDRC affirmed the orders passed 
by the District Forum and the State Commission holding that 
the appellant was liable to pay the amount of the sum assured 
on the death of the assured – Forums below proceeded on the 
basis that the date of issuance of the initial deposit receipt 
of premium is the date of commencement of the Policy – 
Propriety:
Held: Date of issuance of the policy would be the relevant date 
for all the purposes and not the date of proposal or the date of 
issuance of the receipt – Date of proposal cannot be treated to 
be the date of policy until and unless on the date of proposal, 
initial deposit as also the issuance of policy happens on the 
same date – Merely tendering a cheque may not be enough as 
till such time the cheque is encashed, the contract would not
become effective – Clause 9 of the terms and conditions inter alia 
stated that the Company will not pay any claim on death if the 
Life Assured committed suicide within 12 months from the date of 
issue of the Policy or the date of any reinstatement of the Policy 
– Once it is mentioned in the Policy that the 12 months period is 
to commence from the date of the issuance of the policy or the 
date of any reinstatement of the policy, the reinstatement aspect
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DIGITAL SUPREME COURT REPORTS
ought to have been considered – In the case of ‘US’, the date of 
reinstatement of the policy was clearly stated to be 25.02.2014 
and that was also the date of commencement of policy, both the 
dates being the same – Thus, the date of incidence of suicide 
being 03.06.2014, it was well within 12 months – Further, in the 
case of ‘JW’, proposal form was submitted on 14.07.2012 with 
respect to the cheque dated 13.07.2012 – 14.07.2012 cannot be 
taken to be the date of issuance of policy – The date of issue of 
policy being 16.07.2012 was actually the date from which the policy 
commences and becomes effective – Period of 12 months from 
16.07.2012 would complete on 15.07.2013 – It would be the last 
day of 12 months as from the next day, i.e., 16.07.2013 the next 
month will start – Incidence of suicide was on 15.07.2013, the 
last day of 12 months – Stand taken by the appellant approved – 
Impugned orders set aside – Claims of the respondent rejected. 
[Para 5, 8, 9-11, 15 and 16]
List of Citations and Other References
Life Insurance Corporation of India and Another vs. 
Dharam Vir Anand [1998] 2 Suppl. SCR 295:(1998) 
7 SCC 348; Life Insurance Corpn. of India vs. Mani 
Ram [2005] 2 Suppl. SCR 342:(2005) 6 SCC 274 – 
referred to.
List of Keywords
Consumer Protection; Insurance; Insurance Policy; Effective date 
of policy; Suicide.
Other Case Details Including Impugned Order and 
Appearances
CIVIL APPELLATE JURISDICTION :
Civil Appeal No.35 of 2024.
From the Judgment and Order dated 06.02.2019 of the National 
Consumers Disputes Redressal Commission, New Delhi in RP 
No.2909 of 2018.
With
Civil Appeal No.36 of 2024.
Appearances:
Sachin Subhash Daga, Rajesh Kandari, Vikas Upadhyay, Arjun Singh 
Tomar, Ms. Ankita Kashyap, Advs. for the Appellants.
[2024] 1 S.C.R. 
67
RELIANCE LIFE INSURANCE COMPANY LTD. & ANR. v. 
JAYA WADHWANI
Nitin S. Tambwekar, Seshatalpa Sai Bandaru, Advs. for the 
Respondent.
Judgment / Order of The Supreme Court
Judgment
Vikram Nath, J.
Leave granted.
2.	
These two appeals raise a common question of law. As such they are 
being analogously dealt with by this common order. The challenge in 
both these appeals is to the orders passed by the National Consumer 
Disputes Redressal Commission1, New Delhi, whereby the revision 
filed by the appellant has since been dismissed and the orders 
passed by the District Forum as also the State Commission have 
been affirmed holding that the appellant is liable to pay the amount 
of the sum assured on the death of the assured. 
3.	
The sole question involved in these appeals is as to what would 
be the date from which the policy becomes effective; whether it 
would be the date on which the policy is issued or the date of the 
commencement mentioned in the policy or it would be the date of the 
issuance of the deposit receipt or cover note. The District Consumer 
Disputes Redressal Forum2, the State Consumer Disputes Redressal 
Commission3 and the National Commission have proceeded on the 
basis that the date of issuance of the initial deposit receipt of premium 
is the date of commencement of the Policy and have accordingly 
allowed the complaint filed by the respondent.
4.	
The relevant dates in both the cases are summarised hereunder:
4.1	 In the appeal of
Jaya Wadhwani, the quotation of Policy was 
issued on 14.07.2012. The proposal form was submitted by 
the life assured on 14.07.2012. Receipt of the Cheque dated 
13.07.2012 was also issued on 14.07.2012. On 16.07.2012, the 
Policy was issued and at all relevant places, it was mentioned in 
the policy that the date of commencement of the policy would be 
16.07.2012. On 15.07.2013, the life assured committed suicide.
1	
NCDRC
2	
District Forum
3	
State Commission
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DIGITAL SUPREME COURT REPORTS
4.2	 In the appeal of Usha Soni, the date of submission of proposal 
form by the life assured is 26.09.2012. The date of issue of policy 
as also the date of commencement of policy was 28.09.2012. 
The date of next premium due was 28.09.2013. As the next 
premium was not paid, the policy lapsed. The assured paid 
the next premium on 25.02.2014 and the lapsed policy was 
reinstated from that date. On 03.06.2014, the life assured 
committed suicide. 
5.	
The Clause relevant for consideration is clause 9 of the Policy 
conditions and privileges and the terms and conditions mentioned 
therein. Clause 9 reads as follows:
“9. Suicide: The Company will not pay any claim on death 
if the Life Assured, whether sane or insane, commits suicide 
within 12 months from the date of issue of this Policy or 
the date of any reinstatement of this Policy.”
6.	
From the documents on record in the case of Usha Soni, we find 
that the first cheque was issued on 26.09.2012. The policy issuance 
and commencement date in the Policy is mentioned as 28.09.2012. 
Further, the next premium due was on 28.09.2013. Grace period 
is 30 days under Clause 1(iv) of the terms and conditions. Clause 
5 mentions that the policy would lapse. Clause 6 provides for 
reinstatement. However, since the renewal amount was not paid within 
the time allowed, the policy stood lapsed and subsequently, upon 
payment of the premium against the lapsed policy on 25.02.2014, the
policy was reinstated from the said date. The life assured committed 
suicide on 03.06.2014, which was well within the period of 12 months. 
7.	
On a perusal of the orders passed by the District Forum, the State 
Commission, and the National Commission, we find that although 
clause 9 of the terms and conditions has been referred to but the 
aspect of reinstatement of a lapsed Policy has not been considered. 
They have wrongly taken the date of issue of policy only as the 
relevant date to count 12 months, i.e., from 28.09.2012.
8.	
Once it is mentioned in the Policy that the 12 months period is to 
commence from the date of the issuance of the policy or the date of 
any reinstatement of the policy, the reinstatement aspect ought to have
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RELIANCE LIFE INSURANCE COMPANY LTD. & ANR. v. 
JAYA WADHWANI
been considered. The date of reinstatement of the policy is clearly 
stated to be 25.02.2014 and that is also the date of commencement 
of policy, both the dates being the same. Thus, the date of incidence 
of suicide being 03.06.2014, it was well within 12 months.
9.	
Now, coming to the case of Jaya Wadhwani, the proposal form, no 
doubt, was submitted on 14.07.2012 with respect to the cheque dated 
13.07.2012 of the premium amount wherein also it was mentioned that 
the receipt is issued subject to the clearance of the cheque and further 
that the insurance protection shall only be provided effective from 
the date of acceptance of the risk, which happened on 16.07.2012, 
when the policy was issued and the date of commencement was 
notified to be the same date.
10.	 14th July 2012, therefore, cannot be taken to be the date of issuance 
of policy. It is only the date of issue of receipt of the initial premium. 
The date of issue of policy being 16.07.2012 is actually the date 
from which the policy commences and becomes effective. 
11.	 In the present case, period of 12 months from 16.07.2012 will complete 
on 15.07.2013. It would be the last day of 12 months as from the 
next day, i.e., 16.07.2013 the next month will start. Unfortunately, the 
incidence of suicide is on 15.07.2013, the last day of 12 months. The 
date of proposal cannot be treated to be the date of policy until and 
unless
on the date of proposal, initial deposit as also the issuance of 
policy happens on the same date where, for example, the premium 
is paid in cash then, immediately, the policy could be issued. Merely, 
tendering a cheque may not be enough as till such time the cheque 
is encashed, the contract would not become effective. The drawer 
of the cheque may, at any time, after issuing, stop its payment or 
there may not be enough funds in the account of which the cheque is 
issued and there could be many other reasons for which the cheque 
could be returned without being encashed. 
12.	 We may also refer to the two judgments relied upon by the counsel 
for the appellants, in support of his submission that the terms and 
conditions of the contract as contained in the policy should be strictly 
adhered to. Otherwise mentioning of the terms and conditions would 
be a futile exercise, if any other interpretation is given or terms and 
conditions are relaxed.
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13.	 In this connection, it would be useful to reproduce the extract which 
form part of paragraph 6 in the case of Life Insurance Corporation 
of India and Another vs. Dharam Vir Anand4. It reads as follows:
“6. Having examined the rival submissions and having 
examined the policy of insurance which is nothing but 
a contract between the parties and having considered 
the expressions used in Clause 4-B of the terms of the 
policy, we are persuaded to accept the submissions made 
by Mr. Salve, the learned Senior Counsel appearing for 
the appellant. In construing a particular Clause of the 
Contract, it is only reasonable to construe that the words 
and the terms used therein must be given effect to. In other 
words, one part of the Contract cannot be made otiose by 
giving a meaning to the policy of the contract. Then again, 
when the same Clause of a contract uses two different 
expressions, ordinarily those different expressions convey 
different meanings and both the expressions cannot be 
held to be conveying one and the same meaning. Bearing 
in mind the aforesaid principle of construction, if Clause 
4-B of the terms of policy is scrutinized, it become crystal 
clear that the date on which the risk under the policy has 
commenced is different from the date of the policy. In the 
case in hand, undoubtedly the date on which the risk under 
the policy has commenced is 10.5.89 but the date of the 
policy is 31.03.1990 on
which date the policy had been 
issued. Even though the Insurer had given the option to 
the Insured to indicate as to whether the policy is to be 
dated back and the insured indicated that the policy should 
be dated back to 10.05.1989 and did pay the premium 
for that period, thereby the risk under the policy can be 
said to have commenced with effect from 10.5.1989 but 
the date of the policy still remains the date on which the 
policy was issued i.e. 31.03.1990. The death of the life 
assured having occurred as a result of suicide committed 
by the assured before the expiry of three years from the 
4	
 (1998) 7 SCC 348
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RELIANCE LIFE INSURANCE COMPANY LTD. & ANR. v. 
JAYA WADHWANI
date of the policy, the terms contained in Clause 4-B of the 
policy would be attracted and, therefore, the liability of the 
Corporation would be limited to the sum equal to the total 
amount of premium paid under the policy without interest 
and not the entire sum for which the life had been insured. 
The Forums under the Consumer Protection Act committed 
gross error in construing Clause 4-B of the policy and giving 
the same meaning to the two expressions in the aforesaid 
Clause 4-B namely “the date on which the risk under the 
policy has commenced” and “the date of the policy”. The 
construction given by us to the provisions contained in 
Clause 4-B get support, if the proviso to Clause 4-B is 
looked into. Under the proviso, if the life assured commits 
suicide before expiry of one year reckoned from the date 
of the policy, then the provisions of the Clause under the 
heading “suicide” printed on the back of the policy would 
apply. In a case therefore where a policy is dated back for 
one year prior to the date of the issue of the policy, the 
proviso contained in Clause 4-B cannot be operated at all. 
When parties had agreed to the terms of the contract, it 
is impermissible to hold that a particular term was never 
intended to be acted upon. The proviso to Clause 4-B will 
have its full play if the expression “the date of the policy” 
is interpreted to mean the date on which the
policy was 
issued and not the date on which the risk under the policy 
has commenced. In the aforesaid premises, we are of the 
considered opinion that under Clause 4-B of the policy the 
date of the policy is the date on which the policy had been 
issued and not the date on which the risk under the policy 
had commenced by way of allowing it to be dated back. 
In view of our aforesaid construction to Clause 4-B, in the 
case in hand, the respondent in law would be entitled to 
only the sum equal to the total amount of premium paid 
under the policy without any interest inasmuch as the 
death of the life assured has occurred before the expiry 
of three years from the date of the policy, i.e., 31.3.1990…
………”
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14.	 Relying upon the above judgment in the case of Dharam Vir Anand 
(supra), this Court again in the case of Life Insurance Corpn. of 
India vs. Mani Ram5, reiterated the same view and held that the 
date of issue of policy would be the relevant date even if there was 
backdating as has been done in the case of Dharam Vir Anand 
(supra). 
15.	 In the present appeals, we do not find any such issue of back 
dating but the date of issuance of the policy would be the relevant 
date for all the purposes and not the date of proposal or the date 
of issuance of the receipt. In view of the above, the stand taken 
by the appellant is approved. The impugned orders are thus liable 
to be set aside.
16.	 Accordingly, the orders passed by the District Forum, the State 
Commission, and the National Commission are set aside and the 
claims of the respondent are rejected. The appeals are accordingly, 
allowed as above.
17.	 There shall be no order as to costs.
Headnotes prepared by: Divya Pandey Result of the case: Appeals allowed.
5	
(2005) 6 SCC 274