No risk to be assumed unless premium is received in advance
Section 64VB of the Insurance Act, 1938 deals with no risk to be assumed unless premium is received in advance. No insurer shall assume any risk in India in respect of any insurance business on which premium is not ordinarily payable outside India unless and until the premium payable is received by him or is guaranteed to be paid by such person in such manner and within such time as may be prescribed or unles The Act came into force on 01 Jul 1939.
(1) No insurer shall assume any risk in India in respect of any insurance business on which premium is not ordinarily payable outside India unless and until the premium payable is received by him or is guaranteed to be paid by such person in such manner and within such time as may be prescribed or unless and until deposit of such amount as may be prescribed, is made in advance in the prescribed manner.
(2) For the purposes of this section, in the case of risks for which premium can be ascertained in advance, the risk may be assumed not earlier than the date on which the premium has been paid in cash or by cheque to the insurer.
Explanation. --Where the premium is tendered by postal money order or cheque sent by post, the risk may be assumed on the date on which the money order is booked or the cheque is posted, as the case may be.
(3) Any refund of premium which may become due to an insured on account of the cancellation of a policy or alteration in its terms and conditions or otherwise shall be paid by the insurer directly to the insured by a crossed or order cheque or by postal money order and a proper receipt shall be obtained by the insurer from the insured, and such refund shall in no case be credited to the account of the agent.
(4) Where an insurance agent collects a premium on a policy of insurance on behalf of an insurer, he shall deposit with, or dispatch by post to, the insurer, the premium so collected in full without deduction of his commission within twenty-four hours of the collection excluding bank and postal holidays.
(5) The Central Government may, by rules, relax the requirements of sub-section (1) in respect of particular categories in insurance policies.
1[(6) The Authority may, from time to time, specify, by the regulations made by it, the manner of receipt of premium by the insurer.]
Section 64VB, The Insurance Act, 1938 (Act 4 of 1938).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
-
Deokar Exports Pvt. Ltd. v. New India Assurance Co. Ltd.
Court's Decision & Legal Precedent
Judgment of Main Case order-7.pdf 2008-09-23 DATE-CHECK VERIFY: auto DATE-CHECK flagged filename reuse; body is the named R.V. Raveendran + Lokeshwar Singh Panta REPORTABLE 23 Sep 2008. Isolate: Insurance Act s.64VB — no risk unless premium is received in advance; a policy may assume risk retrospectively but not earlier than the date premium was paid by cheque (here 26.8.1988), so a fire on 10.2.1990 after the one-year cover expired is not covered; equity cannot rewrite the policy period. Map 64VB only — do not pad Limitation 14 (already filled).
On this section: Insurance Act s.64VB bars assuming risk before premium is received; a policy may start from the cheque-receipt date but cannot be stretched by equity beyond the stated one-year period (Deokar Exports fire after 25.8.1989).
-
National Insurance Co. LTD vs Seema Malhotra
Court's Decision & Legal Precedent
When an insured gives a cheque towards payment of insurance premium and the cheque is subsequently dishonoured by the bank due to insufficiency of funds, the insurer is not liable to the insured or their legal heirs to honour the insurance contract or pay claims arising from accidents that occurred before the cheque was dishonoured. This is because: (1) a cheque is a conditional promise to pay, not actual payment; (2) Section 64-VB of the Insurance Act requires that premium must be received before the insurer assumes any risk; (3) an insurance contract consists of reciprocal promises, and when the insured fails to pay the premium, the insurer is absolved from providing coverage; (4) the insurer's statutory liability to third parties under the Motor Vehicles Act is distinct from and does not extend to claims by the insured or their legal heirs.
On this section: Provision requiring that no insurer shall assume any risk unless and until premium is received or guaranteed; the Court held this section bars the insurer's liability when premium cheque is dishonoured
-
National Insurance Co. Ltd. v. Seema Devi
Court's Decision & Legal Precedent
Final Order order-1.pdf 2003-09-25 DATE-CHECK VERIFY: auto DATE-CHECK flagged filename reuse; body is S.K. Mahajan J. FAO 325/2003 dated September 25, 2003. Isolate: even after a premium cheque bounces, Insurance Act s.64VB does not let the motor insurer avoid third-party liability — public interest in the certificate of insurance prevails (Oriental Insurance v. Inderjit Kaur); pay the third party and recover from the insured. Map 64VB only — do not pad MV 149 (already filled) or invent MV 163A.
On this section: A bounced premium cheque does not let a motor insurer avoid third-party liability under Insurance Act s.64VB; public interest in the issued policy prevails and the insurer recovers from the insured (National Insurance / Seema Devi, following Inderjit Kaur).
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Made under this section, and citing it
2 instruments name this provision in its title or its text without being made under it.
Questions about Section 64VB
What have the courts held on Section 64VB of the Insurance Act?
Deokar Exports Pvt. Ltd. v. New India Assurance Co. Ltd. (23 Sep 2008) is the leading judgment on this section among those set out below: Insurance Act s.64VB bars assuming risk before premium is received; a policy may start from the cheque-receipt date but cannot be stretched by equity beyond the stated one-year period (Deokar Exports fire after 25.8.1989). Another 2 judgments on this section are set out below, 2 of them from the Supreme Court. They run from 2001 to 2008.
How do I find court cases under Section 64VB of the Insurance Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Insurance Act 1938 64VB, section 64VB Insurance Act 1938, section 64VB of the Insurance Act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 3 reported judgments on this section are set out on this page, beginning with Deokar Exports Pvt. Ltd. v. New India Assurance Co. Ltd. (23 Sep 2008).
What should I read with Section 64VB of the Insurance Act, and has it changed?
2 other provisions in this corpus refer back to it. 2 instruments name it without being made under it, most recently Insurance Regulatory and Development Authority of India (Registration of Corporate Agents) Regulations, 2015 (2016), then Insurance Regulatory and Development Authority (Licensing of Banks as Insurance Brokers) Regulations, 2013 (2013).
When did Section 64VB of the Insurance Act come into force?
Section 64VB of the Insurance Act, cited as Insurance Act 1938 64VB, came into force on 01 Jul 1939, having been enacted on 26 Feb 1938. It is in force as at the date shown on this page.
Other sections of this Act
- 37A. Power of Authority to prepare Scheme of Amalgamation1733 words
- 3. Registration1612 words
- 2. Definitions1604 words
- 106. Power of Court to order restoration of property of insurer or compensation in certain cases1514 words
- 114A. Power of Authority to make regulations1275 words
- 6A. Requirements as to capital structure and voting rights and maintenance of registers beneficial owners of shares1136 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 14 Oct 2026. This page is not a substitute for legal advice.