JUDGMENT R.K. Agrawal and Saroj Bala, JJ.
1. This writ petition, under Article 226 of the Constitution of India, has been filed for issuance of a writ, order or direction in the nature of mandamus commanding the respondents to make payment of Rs. 50,000/-
P.T. 124-15 with interest under the Life Insurance Policy No. 310786680.
2. The facts leading to the writ petition put briefly are these:
The petitioner's husband Ashok Babu Sahu had purchased Life Insurance Policy No. 310786680 on 31.10.1998 for a sum of Rs. 50,000/-, The petitioner's husband who was admitted in Anand Hospital, Allahabad on 10.1.2000 expired on 14.1.2000 at 8 a.m. due to brain heamorrhage. The petition/nominee tiled assurance claim before the respondents which was repudiated on the score that the answers given to the question No. 11(a) (b), (d) and (i) of proposal for insurance were incorrect as the assured suffered from various liver disorders such as cirrhosis, recurrent jaundice episode and hepatic encephalopathy since June 1997 and was operated for piles in July 1998. The petitioner filed a writ petition against the order of repudiation of claim dated 30.8.2000 before this Court which was registered as Civil Misc. Writ Petition No. 43751 of 2001-Smt. Meena Sahu alias Meenu Sahu Versus Life Insurance Corporation of India and Ors. This Court vide order dated 21.12.2001 finally disposed of the writ petition and directed the respondent to decide the pending representation within a time bound period. In compliance of the order of this Court the petitioner filed a representation dated 25.1.2002. The representation of the petitioner in relation to Life Insurance Policy No. 310786680 was rejected vide order dated 27.3.2002 on the ground that on the date of proposal the life assured was a patient of jaundice and he suppressed this material fact while filling in the proposal from. The assured had taken another Life Insurance Policy of Rs. 50,000/- under table and term 74-15 on 25,9.1997 being policy No. 310474179. The claim of the petitioner in relation to the said Life Insurance Policy was accepted. The contention of the petitioner is that the claim has been repudiated on flimsy grounds without any enquiry. According to the petitioner her claim for the amount assured under Life Insurance Policy of her husband has been illegally repudiated by the respondents, therefore, she is entitled to interest at the rate of 18% per annum.
3. On behalf of the respondents Sri Sant Lal, Deputy Manager of Life Insurance Corporation of India, Divisional Office 19-A, Tagore Town, Allahabad, has filed a supplementary counter affidavit. The respondents have admitted that the life insurance policy in question was issued by the corporation in favour of the assured deceased under the proposal form submitted on 31.10.1998 (Annexure-3 to the supplementary counter affidavit). The respondents have admitted that the Medical Examiner, L.I.C. of India had submitted confidential report on 31.10.1998 (Annexure-4 to the SCA). According to the respondents the life insurance policy was issued in favour of the assured by the corporation on 3.11.1998 (Annexure-5 to the SCA).
4. The petitioner has filed a supplementary rejoinder affidavit reiterating the averments made in the writ petition. According to the petitioner her husband died due to brain hemorrhage as is evident from the death certificate. She has denied that material facts about illness were concealed by her husband. The petitioner in her supplementary rejoinder affidavit has emphatically stated that her husband was not suffering from any disease at the time of purchasing the policy in question. According to her the respondents have not produced any evidence in support of their allegation that the assured was suffering from jaundice prior to and on the date of filling of the proposal form.
5. We have heard Sri R.S. Pandey, the learned Counsel appearing on behalf of the petitioner and Sri Prakash Padui, learned Counsel for the respondents and have scrutinized the record in minute details.
6. This fact has not been challenged that the life insurance policy No. 310786680, for sum assured Rs. 50,000/- was issued on 3.11.1998 under proposal form dated 31.10.1998 (Annexure-3 to the SCA) in favour of the assured, the husband of the petitioner. The petitioner's husband/assured died on 14.1.2000 at Anand Hospital, Allahabad. The claim of the petitioner for the assured amount of Rs. 50,000/- under the life insurance policy No. 310786680 has been repudiated on the ground that the material information about his health was suppressed by the deceased at the time of filling the proposal form. According to the respondents the life assured remained admitted in the Raj Nursing Home from 29.6.1997 to 2.7.1997 for the treatment of hepetic encephalopathy and was suffering from jaundice since June 1998. The contention of the respondents is that the assured had answered all the questions posed in column No. 11 of the proposal form in negative.
7. The proposal form (Annexure-3 to the SCA) has not been filled in the own hand writing of the assured. The assured was not an educated person as in column No. 5, which relates to the educational qualification, home education has been mentioned. Column No. 11 (a) to (i) have been filled in by an agent. Column No. 3 of the confidential report of the agent enclosed with the form indicates that the assured was aged 36 years and was a healthy person. The Development Officer submitted the certificate stating that the facts stated in the proposal form are true and correct to his knowledge and belief. The medical examiner's confidential report (Annexure-4 to the SCA) annexed with the proposal form bears certificate dated 31.10.1998 of medical examiner, L.I.C. of India stating that life assured was examined personally, in private and has recorded the true and correct findings. The answers to question No. 4 have been written after ascertainment from the person examined. Column No. 10 of the medical examiner's confidential report which was filled in after ascertaining from the assured relates to the questions of hospitalisation, involvement in accident, radiological, cardiological, pathological tests under gone and current treatment. All these questions have been answered in the negative. The findings to the questions No. 5 to 13 of medical examiner's confidential report are based on personal medical examination of assured by the medical examiner of the L.I.C. of India. The question No. 10 of the report relates to the presence of evidence of enlargement of liver or spleen. The medical examiner of L.I.C. of India has recorded his findings in the negative. The finding with regard to question No. 7 which relates to abnormality found in the examination of mouth, ear, nose, throat or eyes has been recorded by the Medical Examiner in the negative. The judicial notice can be taken of the fact that the jaundice is a disease characterised by yellowing of eyes, skin etc. and enlargement of liver.
8. The deceased having died within two years of taking Life Insurance Policy the provisions of Section 45 of the Insurance Act are not applicable to the present case. The matter is governed by Section 19 of the Indian Contract Act, which runs as under;
19. When the consent to an agreement is caused by coercion, fraud or misrepresentation the agreement is a contract viodable at the option of the party whose consent was so caused. A party to a contract, whose consent was caused by fraud or misrepresentation, may, if the thinks fit, insist that the contract shall be performed, and that he shall be put in the position in which he would have been if the representation made had been true.
Exception-If such consent was caused by misrepresentation or by silence, fraudulent within the meaning of Section 17, the contract, nevertheless, is not viodable, if the party whose consent was so caused had the means of discovering the truth with ordinary diligence.
Explanation-A fraud or misrepresentation which did not cause the consent to a contract of the party on whom such fraud was practiced, or to whom such misrepresentation was made, does not render a contract viodable."
"Misrepresentation" as defined under Section 18 of the Contract Act means and includes-
(1) the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true;
(2) any breach of duty which without an intent to deceive, gains an advantage to the person committing it, or any one claiming under him, by misleading another to his prejudice or to the prejudice of anyone claiming under him;
(3) causing however innocently a party to an agreement to make a mistake as to the substance of the thing which is the subject of the agreement.
9. The Corporation has repudiated the claim on the ground of suppression of material facts. There is no allegation of playing fraud. The pleas taken by the respondent Corporation for avoiding its liability under the policy in question are that the deceased made a declaration in the proposal form that the statements and answers contained therein were true in every particular and that the assured suppressed the material facts about his health. The learned Counsel for the respondents submitted that the assured having suppressed material facts about his health, the policy is void. It was argued that acceptance of the proposal was recommended by the doctor and agent because of misstatements and suppression made by the assured. The learned Counsel for the respondent in support of his contentions relied on the decision in Mitthoolal Nayak v. L.I.C. of India .
10. In the instant case, the proposal form was not filled in by the deceased in his own hand writing. The deceased had no educational qualification. The deceased being a man of 36 years was supposed to be a healthy person. The medical examiner's confidential report enclosed with the policy in question reveals that no sign or symptoms of suffering from any physical disorder more particularly of jaundice were found in the medical examination of life assured by the doctor of the corporation nor the Life Insurance Corporation has produced any evidence to show that there was misrepresentation of facts which if know earlier would have stopped the Corporation from issuing the policy. The medical examiner of the Corporation having examined the assured and submitted a favourable report regarding his health, the Life Insurance Corporation cannot wriggle out of the contract by saying that it was void or voidable at its option. It is not a case where the L.I.C. of India would not have consented to the contract of the insurance but for misrepresentation or suppression of material facts. The facts of the present case are distinguishable from Mitthoolal Nayak's case (supra). In the said case the policyholder had taken policy a few months before his death. In the present case there is no evidence that the policyholder was treated for any serious ailment short time before the taking of the policy. The L.I.C. of India, its development officer and. other staff including the medical practitioner who has examined the person insured owe a responsibility to the person to whom they sell insurance and they are presumed to be acting in the interest of the Corporation. The L.I.C. of India cannot disclaim the liability to make payment of assured amount under life policy No. 310786680 for the acts and omissions of its development officer or medical practitioner appointed by it to examine the deceased before accepting the proposal.
11. In view of the forgoing discussion, we allow the writ petition with no order as to costs. The respondents are directed to make payment of the assured amount with interest at the rate of 10% per annum from the of making the claim under the life policy No. 310786680 within a period of one month from the date of production of a certified copy of this order.