Supreme Court Holds No Coverage Without Premium, Agent's Assurance Cannot Override Section 64VB

Case Snapshot

• Case Name: The New India Assurance Company Limited & Ors. v. M/s Louis Dreyfus Commodities India Pvt. Ltd.

• Citation: 2026 INSC 876

• Bench: Justice Sanjay Karol and Justice Nongmeikapam Kotiswar Singh

• Date of Judgment: August 18, 2026

• Area of Law: Insurance Law, Contract Law, Agency Law, Consumer Protection

The Judgment in One Line

Insurer not liable where turnover exceeded coverage and additional premium was paid only after the incident; agent's assurance cannot override Section 64VB.

Why This Judgment Matters

This judgment is significant as it clarifies the interplay between Section 64VB of the Insurance Act, 1938, and the doctrine of agency in insurance contracts. The Supreme Court has held that the statutory embargo on assuming risk without prior receipt of premium cannot be circumvented by an agent's assurance, especially when such assurance contradicts internal directives and statutory requirements. The judgment also clarifies the scope of actual, implied, and ostensible authority of insurance agents, emphasizing that authority to administer a policy does not include authority to rewrite it or to waive statutory preconditions. This decision will impact all insurance claims where the insured exceeds coverage limits without prior premium payment.

Background

The respondent secured a Marine Cargo Annual Turnover Policy from the appellants for INR 1200 Crores for the period January 1, 2010, to December 31, 2010. The premium was payable in two instalments. The respondent's turnover increased, and they

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