Insurer Cannot Invoke ‘Free-Look Period’ to Defeat Claim Based on Proven Policy Mis-Selling: Punjab and Haryana High Court

Case Name: Reliance Nippon Life Insurance Company Limited and Another v. Usha Rani and Others

Date of Judgment: September 9, 2026

Citation: CWP No. 18557 of 2026

Bench: Hon’ble Mr. Justice Suvir Sehgal and Hon’ble Mr. Justice Rajesh Gaur

Held: The Punjab and Haryana High Court held that an insurer cannot use the statutory “free-look period” as a shield against a consumer’s claim where misrepresentation or an unfair trade practice in the sale of the insurance policy has been proved. Where the policy document and its terms and conditions were never supplied to the insured, the insurer could neither contend that the consumer was bound by those terms nor rely upon the consumer’s failure to cancel the policy within the prescribed 15-day free-look period. The insurer was also denied the benefit of the policy condition restricting surrender during the initial two-year period because that condition had never been communicated to the consumer.

Summary: The batch of 22 writ petitions arose from insurance policies alleged to have been mis-sold by Reliance Nippon Life Insurance Company Limited. The lead consumer had purchased an insurance plan and paid the annual as well as renewal premium, but subsequently discovered that the policy sold to her was materially different from the financial plan represented at the time of sale. She accordingly instituted a consumer complaint alleging misrepresentation and mis-selling.

The District Consumer Disputes Redressal Commission, Chandigarh, allowed the complaint and directed the insurer to refund the entire premium with interest at nine per cent per annum, besides awarding compensation and costs. The State Consumer Disputes Redressal Commission dismissed the insurer’s first appeal, and the National Consumer Disputes Redressal Commission affirmed the concurrent findings in second appeal.

Before the High Court, the insurer contended that the consumer had failed to exercise the 15-day free-look option contemplated under Regulation 6(2) of the IRDA (Protection of Policyholders’ Interests) Regulations, 2002. It further argued that the consumer was bound by the policy terms, under which any refund could not exceed the stipulated surrender value.

Rejecting these submissions, the High Court found that the consumer had established before the consumer fora that the policy document was never supplied to her. Consequently, she had no opportunity to acquaint herself with either the nature of the product, its governing conditions or the availability of the free-look option. She became aware of the actual policy plan only when the premium for the following year was demanded. In such circumstances, the insurer could not take advantage of contractual restrictions that had never been disclosed or communicated to the insured.

The Court also noticed that the same order of the National Commission had earlier been challenged by the insurer in two other writ petitions, which were dismissed by a Coordinate Bench on December 15, 2025. As the insurer could neither distinguish the present cases on facts nor raise any materially different ground, the Court found no justification to depart from the view already taken.

Decision: The High Court dismissed all 22 writ petitions filed by Reliance Nippon Life Insurance Company Limited and declined to interfere with the concurrent findings of the District Commission, State Commission and National Commission. The direction requiring refund of the deposited premium with interest at nine per cent per annum, along with compensation and costs, consequently remained undisturbed.