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Asha Goel Vs. Life Insurance Corporation of India and ors. - Court Judgment

LegalCrystal Citation
SubjectInsurance
CourtMumbai High Court
Decided On
Case NumberWrit Petn. No. 1539 of 1984
Judge
Reported inAIR1986Bom412
ActsInsurance Act, 1938 - Sections 45; Constitution of India - Articles 12 and 226; Life Insurance Corporation Act, 1956 - Sections 43
AppellantAsha Goel
RespondentLife Insurance Corporation of India and ors.
Appellant AdvocateP.K. Singhvi and;Geeta Ganapathy, Advs.
Respondent AdvocateM.V. Paranjape, Adv.,;i/b., Little and Co.,;R.C. Master and;S. Shankaran Krishnan, Advs.
Excerpt:
the case debated on whether the liability of the life insurance corporation (l.i.c) under life insurance policy was statutory or contractual - a writ under article 226 of the constitution of india for enforcement of liability was examined in this context - the court held that the such a writ could be vested against the l.i.c for enforcement of the liability - section 3: [s.b. mhase, d.s. bhosale & a.s. oka, jj] offences of atrocities - complaint under held, merely because the caste of the accused is not mentioned in the fir stating whether he belongs to scheduled caste or scheduled tribe, it cannot be a ground for quashing the complaint. after ascertaining the facts during he course of investigation it is always open to the investigating officer to record tht the accused either belongs.....1. a very important question of public importance that arises in this writ petition is whether extraordinary jurisdiction of high court under art. 226 of the constitution could be invoked for issuing a writ of mandamus against the life insurance corporation of india directing it to make payment flowing from a life insurance policy. it arises thus:2. the petitioner, smt. asha goel, is the widow of deceased naval kishore goel who was an employee of the digvijaya woollen mills ltd., jamnagar, as a labour officer. he submitted a proposal for a life insurance policy at meerut in uttar pradesh on may 29, 1979 which was accepted and he was granted such a policy bearing no. 48264637 for a sum of rs. 1,00,000 (one lakh). according to the petitioner her husband maintained sound health and was hale.....
Judgment:

1. A very important question of public importance that arises in this Writ Petition is whether extraordinary jurisdiction of High Court under Art. 226 of the Constitution could be invoked for issuing a Writ of Mandamus against the Life Insurance Corporation of India directing it to make payment flowing from a Life Insurance Policy. It arises thus:

2. The Petitioner, Smt. Asha Goel, is the widow of deceased Naval Kishore Goel who was an employee of the Digvijaya Woollen Mills Ltd., Jamnagar, as a Labour Officer. He submitted a proposal for a life insurance policy at Meerut in Uttar Pradesh on May 29, 1979 which was accepted and he was granted such a policy bearing No. 48264637 for a sum of Rs. 1,00,000 (One Lakh). According to the petitioner her husband maintained sound health and was hale and hearty throughout his life. However, he had retro sterna chest pain sometime in Dec. 1979 when he consulted Dr. P.S. Kulkarni, Professor of Medicine, M.P. Shah Medical College, Jamnagar. He was advised rest and was relieved of his ailment within few hours. Thereafter he attended office till Dec. 1, 1980. However, on Dec. 2, 1980 he had again slight pain int he chest. He was attended to by the same Dr. P.S.Kulkarni and was admitted in Irwin Group of Hospitals at Jamnagar on Dec. 3, 1980. But he passed away at the age of 46 leaving behind a young widow and a daughter and a son aged about 18 and 16 respectively on Dec. 12, 1980. The cause of death was certified as Acute Myocardial Infarction and Cardiac arrest. The Petitioner being the nominee of the deceased informed, the Divisional Manager, Meerut City (U.P.) of the Respondent 1, viz., Life Insurance Corporation of India (hereinafter referred to as 'L.I.C.' for short) about the death of her husband. She was instructed to fill up certain claim forms and was asked to return the same along with the original insurance policy and the death certificate, etc., to the said office. The petitioner accordingly submitted all the necessary documents along with a covering letter (Exh. 'C') and requested the Divisional Manager of the L.I.C. at Meerut City to consider her claim and make the payment at the earliest. The concerned Divisional Manager (Respondent 3) by his letter dt. June 8, 1981 repudiated the liability under the policy and refused to make any payments on the grounds that the deceased has withheld correct information regarding his health at the time of effecting the assurance with L.I.C. He further informed the petitioner that in the proposal for assurance dt. May 29, 1979, the deceased had answered the following questions as under:-

Questions Answers (1) What has been your usual state of health? Good(2) Have you consulted a Medical Practitioner withinthe last five years for any ailments requiring treatment`for more than a week? No(3) Have you remained absent from place of your workon ground of health during the last five years? No

He also informed the Petitioner that the above answers were false and the L.I.C. was in possession of indisputable proof to show that before the proposal for the policy her husband had suffered from various ailments for which he had consulted a medical man and had taken treatment and was on medical leave for 34 days for various periods from 20-8-76 to 6-6-79 which facts he had not disclosed in his proposal for insurance policy and instead he had given false answers. Thereafter the Petitioner herself and through her brother one Mr. K.K.Garg appealed to the various authorities of L.I.C. but with no fruitful result. Even an Advocate's notice was served on the authorities of L.I.C. to review the matter sympathetically but to no avail. The petitioner, therefore, filed the present Writ Petition under Art 226 of the Constitution for a Writ of Mandamus directing the Respondents 3 and L.I.C to pay the petitioner the claim under the insurance policy of her deceased husband together with all other accruing benefits with interest. The petition has been vehemently opposed by L.I.C. both on law and on merits.

3. Mr. M.V. Paranjape, learned counsel appearing on behalf of Respondents 1, 2 and 3, made two-fold submissions. His first submission is that a writ of mandamus under Art. 226 of the Constitution cannot be issued in this case because firstly it is a contractual right that the petitioner is seeking to enforce by a writ of mandamus and secondly there are disputed questions of facts. The second submission of Mr. Paranjape is that in the event this Court coming to a conclusion that writ petition is maintainable, L.I.C. be given an opportunity to lead evidence.

4. In reply, Mrs. P.K. Singhvi, learned counsel appearing on behalf of the Petitioners, submits that under a policy of life insurance, L.I.C. is under a statutory obligation to pay the claim arising out of such a policy and, therefore, this is not a case of enforcement of a contractual right and hence a Writ under Art. 226 can lie. Mrs. Singhvi further submits that even if it is held that this is a case of enforcement of contractual right then also a writ can lie under the peculiar circumstances obtaining in this case. Mrs. Singhvi then submits that no disputed questions of facts are involved here and this Court can easily come to a just conclusion on considering the documents produced by the parties which are adequate to aid the Court and, therefore, the question of allowing L.I.C. to lead evidence does not arise.

5. For proper appreciation of the rival contentions raised by the parties, let us first examine the relevant provision of Art. 226 of the Constitution which reads as under:-

'226(1) Notwithstanding anything in Art.32, every High Court shall have power, throughout the territories in relation to which it exercises jurisdiction, to issue to any person or authority, including in appropriate cases, any Government, within those territories directions, orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and ceritorari, or any of them, for the enforcement of any of the rights conferred by Part III and for any other purpose.

(2) to (4) ...................................................................................'

Thus under Art. 226 of the Constitution, the High Court is empowered to issue writs, directions and orders for enforcement of not only the fundamental rights but also the non-fundamental rights. Therefore, writs, directions and orders can also be issued by the High Court for enforcement of any legal right which has been infringed and which is legally enforceable in a Court of law. These legal rights may include contractual rights under certain circumstances in appropriate cases. The powers of the High Court under Art. 226 are very wide and the High Court may exercise this extraordinary jurisdiction in its direction. In other words, these are discretionary powers vested in the High Court.

6. For the sake of convenience, let it be noted here that it is not in dispute that L.I.C. which is a statutory Corporation, and which carries on business of insurance in the public interest, is an 'authority' or an 'instrumentality' of the State within the meaning of Art. 12 of the Constitution, and is thus amenable to the writ jurisdiction of this Court.

7. Now, dealing with the contentions raised by Mr. Paranjape, the first question that arises for out consideration is whether the liability of L.I.C. under a Life Insurance Policy is a statutory liability or a contractual liability. For answering this question we have to analyse and interpret S. 45 of the Insurance Act, 1938 because S. 43 of the Life Insurance Corporation Act, 1956, among other things, provides that S.45 of the Insurance Act shall apply to the Corporation as it applies to any other insurer. Section 45 of the Insurance Act reads as under :-

'45 .Policy not to be called in question on ground of misstatement after two years. No policy of life insurance effected before the commencement of this Act shall after the expiry of two years from the date of commencement of this Act and no policy of life insurance effected after the coming into force of this Act shall, after the expiry of two years from the date on which it was effected, be called in question by an insurer on the ground that a statement made in the proposal for insurance or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the policy, was inaccurate or false, unless the insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policy-holder and that the policy-holder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose: Provided that..............................................................................................................'

An analysis of this provision of law shows that the insurer (L.I.C. in our case) under the first part of S.45, cannot repudiate any policy of life insurance two years after it was effected merely on the ground tht at the time of taking the policy , in accurate or false statement was made by the policy holder. But under the second part if the insurer can show that such statement was on a material matter or the statement suppressed facts which it was material to disclose and that the suppression was fraudulently made by the policy-holder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose, then the insurer can repudiate the policy. In other words, under the first part of this section, the policy cannot be avoided by the insurer on the ground of inaccurate or false statement after the expiry of two years of effecting the policy but the insurer can do so if it can be established that the statement made by the policy-holder was not only inaccurate or false but it was also on a material matter or that it suppressed fact which it was material to disclose and that it was fraudulently made and the policy-holder knew at the time of making the statement that it was false to his knowledge or that the facts which it was material to disclose were suppressed by him. Therefore, in my judgment , the correct interpretation of S.45 would be that under the first part of this section, the liability cannot be just avoided by an insurer after expiry of two years of effecting the policy. However, under the second part of the Section, the insurer has some chance to avoid the policy if it can establish certain circumstances as narrated above. But a harmonious reading of both the first and the second part of S. 45 would lead to only one conclusion that the liability of an insurer under a contract of life insurance has a sanction of statutory provision of S. 45 of the Insurance Act, 1938. It is true that the relationship of insurer and insured is created under a contract of insurance but the obligation arising out of sucha contract are to be discharged by the insurer under a statute, viz., Section 45 of the Insurance Act. It is by and under a sanction of this provision of law that the insurer had to discharge its legal obligations on the happening of a certain contingency mentioned in the contract. Hence the conclusion is inevitable that under a policy of life insurance, the liability which L.I.C. incurs is a statutory liability. Mr. Paranjape contended that under second part of S. 45 L.I.C. can repudiate the liability and the disputes between the parties can only be resolved in a civil court of law by filing a civil suit for contractual liability to be discharged by L.I.C. Iam not able to persuade myself to agree with Mr. Paranjape in this regard for the simple reason that in may opinion a careful and harmonious reading of the first and the second part of S. 45 makes it crystal clear that once two years are over after the policy was taken, L.I.C. just cannot escape its liability arising out of the policy and has to satisfy the claim of the policy-holder but under second part of S. 45 L.I.C. has some chance to repudiate the contract if certain circumstances are established by it but nonetheless the liability incurred by it under a contract of insurance has a statutory sanction and it has to discharge the said liability only under the statutory provisions of S.45 of the Insurance Act.

8. To bring home this point, Mr. Paranjape invited my attention to an Order passed by the Supreme Court in Civil Appeal No. 4308 of 1984 AIR 1985 SC 1265 arising out of Civil Writ Jurisdiction Case No. 1620 of 1981 in case of Smt. Kiran Sinha v. Life Insurance Corporation of India, : AIR1983Pat142 . In the said case, a Division Bench of Patna High Court had issued a Writ of Mandamus against the Life Insurance Corporation of India in a matter arising under the Insurance Act of 1938 qua the Life Insurance Policy. The matter was taken to the Supreme Court and while granting special leave, the Supreme Court passed the following Order:-

'We have heard the learned Attorney-General and Shri. A.K. Sen, learned counsel for the respondent. The High Court could not have in the circumstances of this case directed the payment of the money claimed under the insurance policies in question in a petition filed under Art. 226 of the Constitution. The only remedy available to the respondent in this case was a suit before a Civil Court. The judgment of the High Court is, therefore, set aside.'

Mr. Paranjape's argument is that the Patna High Court had entertained a Writ Petition under Art. 226 of the Constitution to grant relief to the petitioner in the matter of claim arising out of a life insurance policy and the judgment therein was set aside by the Supreme Court observing that the money claimed under the policies in question could not have been granted in petition filed under Art. 226 of the Constitution which means that the Supreme Court held that a writ under Art. 226 of the Constitution cannot lie in the matters of claims under the life insurance policies. At the first blush, the argument of Mr. Paranjape is attractive but I am afraid the order passed by the Supreme Court in the said matter is of no help to Mr. Paranjape inasmuch as the Supreme Court had set aside the judgment of the Patna High Court in the circumstances of that particular case. The circumstances there were that the deceased-assured had purchased three insurance policies. The wife of the deceased who was the nominee under policies made an application for payment under the policies. The fact of the death of the assured was informed by his wife to the Agent and also to the Development officer. The Corporation refused to pay the sums assured under the policies on the grounds that the Corporation had no knowledge about the death of the deceased and that since the premiums were received after the death of the deceased the policies stood lapsed. It was held by the Patna High Court that the information of the death of the assured to the Agent was an adequate information and it amounted to an information to the Corporation itself, and further, even if the payments were received by the Corporation after the death of the deceased-assured with or without the knowledge of such death, with the Corporation accepting the payment of premium the principle of waiver was precluded (sic) from raising the plea that on the death of deceased policies stood lapsed. The High Court further held that undoubtedly the Corporation had intentionally relinquished a right vested in it that is to say tha the policy had lapsed, by accepting the payment. It could also be said that by the conduct of receiving payment, it had relinquished or abandoned a legal right that the policy had lapsed and this conduct called for an inference of waiver, further held the High Court. Now, these facts and circumstances appearing before the Patna High Court could by no stretch of imagination be compared as same or similar as in the instant case and, therefore, in my opinion they could be well distinguished from the facts and circumstances of our case. Therefore, it was in those peculiar facts and circumstances which appeared in the case before the Patna High Court that their Lordships of the Supreme Court were placed to say that the High Court could not have directed the payment of money claimed under the insurance policies in question in a petition filed under Art. 226 of the Constitution. Here we may also note a submission made by Mrs. Singhvi that in the matter before the Patna High Court, the facts were entirely in dispute and that perhaps was a reason why the Supreme Court came to the conclusion that the High Court could not have exercised its jurisdiction under Art. 226 of the Constitution; whereas so long as our case is concerned in the submission of Mrs. Singhvi there are no disputed facts. In view of the above discussion I hold that the liability of L.I.C. under a policy of life insurance is a statutory liability and hence a writ can lie under Art. 226 of the Constitution.

9. Assuming, for the sake of argument, that the liability of L.I.C. under a policy of life insurance is not a statutory liability and is a contractual liability even then, in my judgment, a writ under Art. 226 of the Constitution can lie against L.I.C. for enforcement of such a liability. Mr. Paranjape urged that in view of five decisions of the Supreme Court and one of a Division Bench of our High Court, contractual liability cannot be enforced by a writ of mandamus under Art. 226. Thus in the case of Har Shankar v. Dy. Excise and Taxation Commr., : [1975]3SCR254 , it was held that a writ petition under Art. 226 is not an appropriate remedy for impeaching validity of contractual obligations. Then in the case of State of Punjab v. Balbir Singh, : (1976)IILLJ4SC it was held by the Supreme Court that the High Court was wrong in allowing the writ petition by quashing the demand, as the demand was made in enforcement of liabilities arising out of mutually agreed conditions of auction, as writ petition was not an appropriate remedy for enforcing contractual obligations. And Mr. Paranjape thereafter pointed out that in case of the Divisional Forest Officer v. Bishwanath Tea Co. Ltd., : [1981]3SCR662 it was held by the Supreme Court that when breach of statutory provision was not proved contractual right flowing from a contract of lease cannot be enforced in writ petition under Art. 226 of the Constitution. Mrs. Singhvi, while dealing with these three judgments, rightly contended that facts disclosed in these three judgments, show that contractual obligation were arising purely out of commercial activities of business conducted by the parties which facts and circumstances can be well distinguished from the facts and circumstances can be well distinguished from the facts and circumstances of our cases where the business activities of L.I.C. were not of a commercial nature but were for the welfare and benefits of the society as it was a primary goal of L.I.C. to promote the welfare of the people. I find lot of substance in the submission of Mrs. Singhvi for the simple reason that in the case of Har Shankar, the Supreme Court clearly pointed out that there was no fundamental right to do trade or business in intoxicants as dispute between the parties there was regarding the conduct of liquor business and the auction sale and licenses etc. The Supreme Court further observed that the State, under its regulatory powers, has the right to prohibit absolutely every form of activity in relation to intoxicants - its manufacture, storage, export, import, sale and possession. In all their manifestations, these rights are vested in the State, and since rights in regard to intoxicants belong to the State,it is open to the Government to part with those rights for a consideration, further observed the Supreme Court. Now, when the business disputes between the parties were with regard to the liquor shops and auction sales and licenses and when the State had so wide powers and pointed out by the Supreme Court, as above, the contractual obligations from such dealings naturally cannot be enforced in the writ jurisdiction of the High Court under Art. 226. In the case of Balbir Singh again the facts were regarding an auction sale for country liquor. So far as the case of the Divisional Forest Officer is concerned, the Company there tried to enforce through writ petition the right to remove timber without the liability to pay royalty where it was held that the Company was not enforcing its right under Rule 37 of the Assam Land and Revenue and Local Rates Regulation, but was seeking to enforce a contractual right under the specific terms of contract of lease agreed to between the Company and the Government and such contractual right could not be enforced in a writ petition. Therefore, the facts and circumstances obtaining in these three cases where the activities of business were purely of commercial nature, they had nothing to do with the welfare of the people. Mr. Paranjape, did submit that after all the activities where the Government contracts were concerned, were meant for the welfare of the people and there is no reason to distinguish such activities from the activities carried out by LIC which are also purely business activities. I am afraid, I cannot agree with Mr. Paranjape as there is certainly lot of difference between the liquor and the timber business involving contracts based solely on profit making motive on the one hand and the LIC business on the other where there is no profit making motive but only service to the community and the nation. The benevolent activities of LIC which are beneficial to the members of the public cannot be compared by any stretch of imagination with the liquor and the timber business. Mr. Paranjape then took me through a judgment of the Division Bench of this Court in case of Rewant v. Divisional Manager, Life Insurance Corporation of India, Nagpur, : AIR1985Bom75 in which it was held that there was no statutory obligation on the part of the Life Insurance Corporation apart from contractual obligation on their party to pay surrender value of a certain policy to the petitioners and as such a writ of mandamus cannot be issued under Article 226 of the Constitution. This decision is also of no help to Mr. Paranjape because the facts and circumstances obtaining in the said case could also be well distinguished from the facts and circumstances appearing in our case. In the case before the Division Bench, a writ petition was filed seeking declaration that Life Insurance Corporation was under a legal obligation to pay the surrender value of the policies even to a Hindu Minor absolute assignee of the policies , through his natural guardian and further to issue a writ of mandamus as a consequential relief for payment of the said surrender value. It was held by the Division Bench that the writ petition was not maintainable as what the petitioner in effect purported to do was to oblige the Corporation to pay the surrender value to the guardian, and the question of payment of the surrender value either to the assignee or to his guardian might arise in a given case under the contract of insurance, which was not the same thing as discharge of statutory duty imposed upon the party to do certain thing. The Division Bench further held that there being no provision either under the Insurance Act or in the enactment under which the Corporation had been incorporated casting upon it any duty or obligation to pay the surrender value to the guardian or the assignee without asking it for any certificate or proof and that it was not possible to spell out from S. 38(5) of the said Act any duty or obligation on the part of the Corporation to pay the surrender value or the sum assured to the transferee or assignee in particular circumstances and that could at the most be subject matter of a suit if there was no other remedy available under the Insurance Act. Therefore, in the said matter there were many questions raised under the Insurance Act and the Guardian and Wards Act and the point involved was regarding the obligation of the Corporation to pay surrender value of the policies to a Hindu minor through his natural guardian and naturally, therefore, under those facts and circumstances a writ under Art.226 may not lie but in the matter of satisfying claim, pure and simple, on a life insurance policy, the matter for consideration would be altogether different which could be agitated under Art.226. Mr. Paranjape also dealt with two Supreme Court rulings referred to and relied upon by the Division Bench viz. the case of the Bihar Eastern Gangetic Fishermen Co-operative Socy. Ltd. v. Sipahi Singh, : [1978]1SCR375 and the case of Kulchhinder Singh v. Hardayal Singh Brar, : (1976)IILLJ204SC and submitted that in these two cases also it was held by the Supreme Court tht contractual obligations cannot be enforced under the writ jurisdiction by the High Court under Art. 226 of the Constitution. I may once again point out that the facts and circumstances obtaining in both the cases are also different and distinguishable from those obtaining in our case and therefore the observations of the Supreme Court made in those cases will not help Mr. Paranjape. Thus in the case of Kulchhinder Singh the Supreme Court held:

The remedy of Art. 226 is unavailable to enforce a contract qua contract. A mere contract agreeing to a quota of promotions cannot be exalted into a service rule or statutory duty. Private law may involve a State, a statutory body, or a public body in contractual or tortious actions. But they cannot be siphoned off into the writ jurisdiction. Although Art. 226 is of wide amplitude to correct manifest injustice, but contractual obligations in the ordinary course, without even statutory complexion cannot be enforced by this sort, though, wrong cut. Hence, a writ petition merely to enforce an agreement entered into between the employees and the co-operative Bank about giving certain percentage of promotions to existing employees is not maintainable.'

Can these observations of the Supreme Court in a service matter, by any stretch of imagination, be useful to Mr. Paranjape in a matter like the one on hand? The answer is obvious, no. Then in the case of the Bihar Eastern Gangetic Fisherman Co-operative Society Ltd. the facts and circumstances discloses that the disputes between the parties there were regarding money matters and settlements arrived at and the instalments asked for and some fishery rights sought to be enforced and all that wherein the Supreme Court ruled that the writ of mandamus cannot be granted to enforce obligations flowing from contract. Is it possible to say that the facts and circumstances in the case before the Supreme Court were same or similar as in our case?

10. As against these decisions, Mrs. Singhvi relied upon the latest decision of the Supreme Court in the case of Gujarat State Financial Corporation v. Lotus Hotels Pvt. Ltd., : AIR1983SC848 in which while dealing with the doctrine of promissory estoppel, (with which doctrine we are not concerned) the Supreme Court laid down that Gujarat State Financial Corporation would be the 'other authority' within Art.12 of the Constitution and a writ of mandamus could be issued directing the said Corporation to perform its statutory duty arising out of contracts. Mr. Paranjape submitted that it is no doubt true that the Supreme Court in case of Gujarat State Financial Corporation has held that even contractual obligations incurred by a Corporation which is the 'other authority' within the meaning of Art.12 of the Constitution can be enforced under the writ jurisdiction of the High Court under Art.226 but these was a judgment by two judges whereas the judgment in the case of Har Shankar and others was a judgment of the Constitution Bench of five judges which has a more binding force. Mr. Paranjape is quite right in this regard but it is nobody's case that the ruling of the Supreme Court in Har Shankar's case is less binding than the ruling in Gujarat State Financial Corporation. In fact, in view of the provisions of Art.141 of the Constitution this Court is bound by the law laid down by the Supreme Court in the case of Har Shankar and others. But it is the submission of Mrs. Singhvi and rightly so that the facts and circumstances obtaining in the case of Har Shankar are so different and distinguishable from the facts and circumstances obtaining in our case that the law laid by their Lordships of the Supreme Court in Har Shankar's case will not be of any help to Mr. Paranjape in the instant case. Thus even in the absence of the observations of the Supreme Court in Gujarat State Financial Corporation, the observations of the Supreme Court in case of Har Shakar would have been of no avail to Mr. Paranjape. Mrs. Singhvi also brought to my notice another Supreme Court judgment in the case of D.F.O. South Kheri v. Ram Sanehi Singh, : AIR1973SC205 in which Supreme Court had held that where the action of a public authority invested with statutory powers is challenged, the writ petition is maintainable even if the right to relief arises out of an alleged breach of contract. Therefore, in substance, the result of this discussion is that even if the liability of LIC under a policy of life insurance is a contractual liability then also writ under Art.226 can lie.

11. Now let us consider whether there are disputed question of facts involved in this case on account of which , as submitted by Mr. Paranjape, writ jurisdiction of the High Court under Art. 226 does not lie. In this connection we may point out that when the petitioner lodged her claim with LIC she annexed Medical Attendant's Certificate (Exh. 'B' to the petition) from one Dr. P.S. Kulkarni, Medical Attendant of the deceased, which shows that prior to the deceased taking out his policy he was not having heart ailment or any other ailment for which he may be refused an insurance policy. This certificate also shows that the primary cause of death was Acute Myocardial Infraction and the secondary cause of death was Cardiac arrest from which ailment he suffered only on the day previous to his admission in the hospital on Dec.3, 1980. In other words, this certificate shows that prior to taking the policy the deceased was not suffering from any heart ailment due to which he died. The petitioner also then submitted to LIC Claim Form B-1 (Exh. 'C' to her affidavit dt. Mar. 28, 1985) which she had obtained from Irwin Group of Hospitals. This document also shows that prior to the deceased taking out insurance policy he had no heart ailment. As against these two documents, LIC produced again the same Claim Form B-1 (Exh.2 annexed to the affidavit of Mr. S.K.Kale, Assistant Secretary (Legal) of LIC, affirmed on 7th Dec. 1984) which LIC had obtained from the hospital in question. This document shows that the deceased had suffered from the same and /or similar ailment of Myocardial Infarction in the year 1976 for which he was treated and this history was given by the patient himself to one Dr. Kowdhe at the time of his admission in the hospital on 3-12-80. In effect thus this document points out that about three years prior to taking out his life insurance policy, in the year 1976, the deceased had suffered from similar heart ailment. According to LIC this fact was concealed or suppressed by the deceased when the life insurance policy was effected. LIC also produced on the record of this Court certificate of deceased's employer which, inter alia, discloses the leave record of the deceased from 1976-77 to 1980-81 according to which from 20th Aug., 1976 to 1st Sept., 1976 the deceased was on sick leave. This fact was also suppressed by him at the time of taking out his life insurance policy according to LIC. Mr. Paranjape submitted that in view of the fact that inconsistent and contradictory documents are produced by both the parties in this Court it requires investigation about the disputed questions of facts inasmuch as it is necessary to find out whether the documents produced by the Petitioner are correct and truthful or those produced by LIC and, therefore, writ under Article 226 of the Constitution cannot lie. Now, in my opinion, this is only a technical contention that has been raised by LIC as to the disputed questions of facts. It is really doubtful whether the 'Claim Form B.1' produced by LIC is correct and genuine document. In this connection it is pertinent to note that this particular document is dt. 21st July 1981 whereas the claim of the petitioner was repudiated by LIC on 8th June, 1981. In other words, LIC repudiated the claim of the petitioner before they came into possession of the so-called 'claim Form B-1' showing the medical history of the deceased of the year 1976. It is also important to note that this document is signed by Dr. V.H. Yajnik but there is no mention anywhere in the record that Dr. V.H. Yajnik, Professor of Medicine, M.P.Sahing Medical College, Jamnagar, was in any way concerned with the treatment of the deceased or with the record of the hospital. Be that as it may, I am not inclined to hold that the matter involves disputed questions of facts just because LIC produced in this Court one document which is inconsistent with those produced by the petitioner. Therefore, there is no substance in the contention of Mr. Paranjape that disputed questions of facts are involved in this matter on account of which writ under Art. 226 cannot lie. Under the circumstances, I do not think it would be proper to compel the poor petitioner into the legal wrangles of the Civil Court to establish her claim arising out of the life insurance policy of her deceased husband. Similarly I am also not satisfied that this is a fit case in which LIC should be granted liberty to lead evidence in this Court. Mrs. Singhvi submitted that in a matter like the one before us, the petitioner should not be forced to go in for a Civil litigation especially when the other party is an 'authority' or 'instrumentality' of the State within the meaning of the Art.12 of the Constitution. To substantiate her point, she referred to and relied upon a Kerala High Court judgment in the case of P.P. Abhubacker v. Union of India, : AIR1972Ker103 wherein Mr. Justice Krishna Iyer, as he then was in Kerala High Court, observed as under:

'But it must be remembered that the State is no ordinary party trying to win a case against one of its own citizens by hook or by crook; for, the State's interest is to meet honest claims, vindicate a substantial defence and never to score a technical point or overreach a weaker party to avoid a just liability or secure an unfair advantage, simply because legal devices provide such an opportunity'

Mrs. Singhvi also invited my attention to the observations made by the Supreme Court in the case of Rohtas Industries Ltd. v. Rohtas Industries Staff Union, : (1976)ILLJ274SC as under :-

'The expensive and extraordinary power of the High Court under Art. 226 is as wide as the amplitude of the language used indicates and so can affect any person - even a private individual - and be available for any (other) purpose - even one for which another remedy may exist.'

12. That takes to examining the matter on merits. It is not disputed that the claim in this case was repudiated two years after the policy was effectuated. This action on the part of LIC was violative of the first part of S. 45 of the Insurance Act. LIC could at the most repudiate the claim under second part of the said S.45 provided it could prove that:

(1) the deceased had at the time of proposal for policy made a false or inaccurate statement; and

(2) Such statement was on a material matter; or

(3) It suppressed facts which it was material to disclose;

(4) it was fraudulently made; and

(5) that the policy-holder knew at the time of making it that the statement was false.

In my judgment, LIC has not brought on the record of this Court satisfactory evidence to establish any of the conditions envisaged in the second part of S. 45. Thus as against one document produced by LIC pointing out prior adverse medical history of the deceased, we have on the record two on behalf of the petitioner which shows that the deceased was not having any heart ailment prior to his taking out insurance policy. Mr. Paranjape urged that LIC had no motive to get any false record prepared and produced in this Court where as Dr. P.S. Kulkarni who was the Medical Attendant of the deceased had every reason to oblige the petitioner by issuing a certificate which could be favourable to the petitioner. I am not inclined to attribute any motives to any of the doctors who had signed these documents but all that I want to say is that between the two versions one which is favourable to the weak party, that is, the poor widow of the deceased who is required to fight this unequal legal battle against the high and mighty Life Insurance Corporation, is acceptable to me. It is also important to note here that the certificate signed by Dr. Yajnik is a certificate based on the so called history given by the deceased to one Dr. P.C. Kowdhe and it is on the record that Dr. Kowdhe is still available in the hospital but for the reasons best known to LIC, no affidavit of Dr. Kowdhe is filed in this Court. Therefore, the certificate signed by Dr. Yagnik loses its credibility. As regards the leave record, all that one can say is that just because it is shown that the deceased was on sick leave from 20-8-76 to 1-9-76 it does not mean that he was really sick during that period. Sometimes when the employees do not want to exhaust their privilege leave, they take sick leave although they may in fact not be sick. And even if it is a fact that from 20-8-76 to 1-9-76 the deceased was sick, the record does not show as to what he was suffering from. From such leave record, therefore, we cannot draw a conclusion that the deceased was having heart ailment in 1976 for which he had taken 13 days sick leave. Hence no much importance can be attached to this record of leave. Thus on merits also LIC has no case.

13. It is pertinent to note here, at the cost of repetition, that much before they obtained the medical certificate in the nature of the one signed by Dr. Yajnik which is dt. 21st July, 1981, LIC repudiated the claim of the petitioner on 8th June, 1981. While explaining away this action on the part of LIC, Mr. Paranjape submitted that it is the practice with LIC to make oral enquiries with the medical authorities of the hospital where the policy-holder dies and it is on the basis of such enquiries which LIC had made in this case that they had ascertained that the deceased had given false and incorrect answers to certain questions put to him in the proposal and, therefore, LIC had repudiated the claim of the petitioner much before they got a certificate dt. 21st July, 1981 from the hospital. I shall be slow in accepting this submission of Mr. Paranjape because if documentary evidence was available to LIC in the nature of a document dt. 21st July, 1981 signed by Dr. Yajnik of the concerned hospital why should LIC be in ugly haste to repudiate the claim of the petitioner on some oral enquiries supposed to have been made by LIC staff with the hospital authorities. In the ordinary course of business and human conduct, I would expect LIC to first get the so-called 'claim Form B-1' certificate dt. 21st July 1981 and then after considering the same qua the one which was submitted by the petitioner and after fully satisfying itself they could have repudiated the claim of the petitioner, if it was so warranted. Therefore, I have every reason to believe that the averment made in para 10 of the affidavit of Mr. S.K. Kale with regard to the oral enquiries, appear to be an after-thought. The way in which LIC, which is a statutory authority, was in a hurry to repudiate the claim on personal information derived orally by one of their Officers goes to show that LIC was not in a mood to consider the whole matter fully before taking a final decision in the claim of the petitioner. It clearly proves that their action in repudiating the claim of the petitioners was irrational, capricious and arbitrary which violates the provisions of Art. 14 of the Constitution. It is well-known that socio-economic justice is the mandate of the Constitution and in our socialist republic of India, 'instrumentality' of State like LIC cannot act in such an arbitrary fashion. The conduct of LIC in this respect, in my opinion, was not fair and reasonable. If LIC goes on rejecting the insurance claims in such perfunctory and cavalier manner, I shudder to think what will happen to innumerable unfortunate young or old widows and thousands and lakhs of people whose bread winners leave for the other world untimely. LIC should for ever be conscious of their constitutional obligations to the people of India who are entitled to socio-economic justice at their hands as a matter of right. LIC should not forget that savings and security of their lakhs and crores of policy-holders are in their hands. It is no doubt true as submitted by Mr. Paranjape that sometimes frauds are committed on LIC by some unscrupulous persons. But the remedy is not to reject legitimate claims. The remedy lies in the LIC officials, investigative and otherwise, and their panel doctors to be more vigilant so as to avoid such frauds. It is no use saying to widows that their husbands had committed fraud. It would be like adding insult to injury. Why can't LIC detect such frauds during the life time of the policy-holders or within two years after the policies are effected?

14. In the result, the Life Insurance Corporation of India and the Respondent 3 are hereby directed to pay to the petitioner an amount of Rs. 1,00,000 (one lakh) arising out of the Life Insurance Policy of her husband deceased Naval Kishore Goel, bearing No. 48264637, together with all the benefits accruing therefrom with interest at the rate of 15% from the date of the death of the petitioner's husband within a month. The LIC is also directed to pay cost of Rs. 2,000/- to the petitioner. Rule is accordingly made absolute. Order accordingly.


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