My and my two parents have a 22 year old Mediclaim policy with Oriental Insurance. The premium is due by 26th Feb., I gave a cheque to the agent on 19th feb. At that time there was ample fund in my bank account. However on 25th a payment of credit card bill was made and funds dropped transiently for 2 days. At the same time I flew to New York for a medical conference on 26th.
Cheque presented on 26th was dishonored. My agent called up on 28th and I asked him to deposit cash. Normally they have a one month grace period for renewal of policy. However Oriental refused to accept the cash. I returned back on 5th March and have been visiting them number of times. They maintain that the grace period of one month is there but not after a cheque has been dishonored. If I had not given the cheque, there would have been no problem even today in accepting the cash. If I had issued a cheque with wrong signature, they say, no problems. Wrong date, no problems. But insufficient funds at time of presentation - big problem!
What is the legal standpoint on this? They quote some supreme court decision that once the cheque is dishonored even once, the chapter is closed for renewal of policy.
Isnt that too draconian?
