Insurance companies can't reject claim by delaying cheque presentation

The Bombay High Court ruled that an insurer cannot reject a claim by delaying the deposit of a valid premium cheque, holding the insurance company liable for deficiency in service

Gayatridham Phase Co-operative Housing Society had taken a standard fire and special perils policy from New India Assurance. The insurer issued the policy on July 25, 2004, and it was valid till  April 25, 2005. 

Before the expiry date, the society paid the renewal premium of ₹18,910 on July 17, 2005, by a cheque drawn on The Thane District Central Cooperative Bank. The insurer issued the renewed policy for the period July 25, 2005, to July 24, 2006. 

On July 26, 2005, torrential rains struck Mumbai, causing severe damage across the city. To avoid liability, the insurer did not deposit