Ruling on a marine cargo turnover-based insurance policy where a fire caused losses exceeding the insured's declared annual turnover coverage, the Supreme Court has held that Section 64VB of the Insurance Act, 1938 places an absolute embargo on an insurer assuming additional risk unless the corresponding premium is received in advance.
Since the insured paid additional premium to cover its enhanced turnover only after the fire loss had already occurred, the Court held the insurer was not liable beyond the originally covered sum insured — and that an insurance agent's assurance of extended cover cannot override the statutory requirement of advance premium payment, however genuinely that assurance may have been given or relied upon.
The ruling is a clear warning for any business operating a turnover-linked or declaration-based insurance policy: coverage enhancement is not retroactive, and an agent's informal assurance carries no legal weight against the statute's own advance-payment requirement.