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Satya Rani Vs. Life Insurance Corporation of India - Court Judgment

LegalCrystal Citation
SubjectInsurance
CourtPunjab and Haryana High Court
Decided On
Case NumberRegular Second Appeal No. 574 of 1980
Judge
Reported in[1987]62CompCas64(P& H)
ActsInsurance Act, 1938 - Sections 45
AppellantSatya Rani
RespondentLife Insurance Corporation of India
Appellant Advocate A.N. Mital, Adv.
Respondent Advocate D.V. Sehgal, Sr. Adv.,; B.R. Mahajan and; P.S. Rana,
DispositionAppeal partly allowed
Cases ReferredLife Insurance Corporation of India v. Shakuntala Bai
Excerpt:
.....order or to choose a tenuous plea that even though he knew about the order, he was waiting for its formal communication to seek redress against the same in appeal. if a party does not know about the making of the order either actually or constructively it may claim that the period of limitation would start running from the date it acquires knowledge of the making of an order but one cannot understand how a party, who has acquired knowledge of the making an order either directly or constructively can ignore the same and belatedly seek redress just because the authority making the order had made a default in formally communicating the order to him. allowing a party to do so would amount to placing a premium on the lack of diligence of a party, who is remiss in seeking a remedy that was..........policies. dateamountdetails of the documents24-7-1969rs. 5,000 exhibits d-10 tod-12, proposal form, personal statement and medical report.29-5-1970rs. 5,000 exhibits d-7 tod-9, proposal form, personal statement and medical report.26-4-1971rs. 20,000 exhibits d-4 tod-7, proposal form, personal statement and medical report.2. he died on october 6, 1971, and his widow, smt. satya rani, claimed the entire amount under the three policies. the life insurance corporation of india (hereinafter referred to as 'the lic') finally repudiated the claim on september 4, 5, 1972, and, consequently, she filed a suit for recovery of rs. 30,000. she challenged the basis on which the claim was repudiated. 3. the lic contested the suit and pleaded that the policies were obtained by tilak raj by.....
Judgment:

Gokul Chand Mital, J.

1. Tilak Raj got the following life insurance policies.

Date

Amount

Details of the documents

24-7-1969

Rs. 5,000

Exhibits D-10 toD-12, Proposal form, personal statement and medical report.

29-5-1970

Rs. 5,000

Exhibits D-7 toD-9, Proposal form, personal statement and medical report.

26-4-1971

Rs. 20,000

Exhibits D-4 toD-7, Proposal form, personal statement and medical report.

2. He died on October 6, 1971, and his widow, Smt. Satya Rani, claimed the entire amount under the three policies. The Life Insurance Corporation of India (hereinafter referred to as 'the LIC') finally repudiated the claim on September 4, 5, 1972, and, consequently, she filed a suit for recovery of Rs. 30,000. She challenged the basis on which the claim was repudiated.

3. The LIC contested the suit and pleaded that the policies were obtained by Tilak Raj by suppressing the material facts as he gave wrong answers to the declaration contained in the proposal form and in his personal statement. It was specifically pleaded that Tilak Raj was admitted to P.G.I., Chandigarh, on September 2, 1971, and he was suffering from such a disease which was material to be disclosed in the proposal form and personal statement and since the admission in the P.G.I, for the illness from which he was suffering was suppressed, the LIC rightly repudiated the policy. The trial court decreed the suit but on appeal by the LIC, the lower appellate court allowed the appeal and dismissed the suit after recording a finding that the policies were obtained by suppression of material facts and the LIC was trapped. The plea taken up by the LIC regarding the admission of the deceased in PGI was specifically denied in the replication. As a result, the LIC had to produce lot of evidence to prove that it was the deceased who was admitted in the PGI. The LIC had also to lead evidence about the means of the deceased. The lower appellate court found that the deceased had no business as was depicted from the income-tax returns for the years 1968-69 and 1969-70. It was also proved that he was a kabari (hawker) and had shifted from Ambala Cantonment to Pathankot. The particulars of the deceased were correctly stated in the PGI record and since he had shifted to Pathankot, his Pathankot address was mentioned therein. Therefore, it was not only that in the proposal form and in the personal statement there was suppression of facts, but false plea was also taken in the replication. This is plaintiff's appeal.

4. After hearing learned counsel for the parties and on perusal of the record, I am of the view that the decision of the lower appellate court with regard to the admission of the deceased in the PGI is fully borne out from the material on record and even the slightest point has not been made out to upset.the finding. All other particulars tally except the place of residence. From the documentary evidence on the record coupled with the oral evidence, it was undisputably proved that the deceased had shifted from Ambala Cantonment to Pathankot. That is why there was variation in the address.

5. It is also proved on the record that the deceased was a man of no means and had some paltry work of kabari (hawker). His income for the year 1968-69 was disclosed to be Rs. 2,040 and for the year 1969-70, Rs. 4,040. After his death, the plaintiff filed return in his name in the year 1972-73 showing an income of Rs. 20,990. This was a self-serving evidence purposely created by the plaintiff. Hence, I endorse the finding of the court below that the deceased was a man of no means and the policy for Rs. 20,000 which was obtained on April 26, 1971, three months after his admission in the PGI for a serious ailment like malignant hypertension, giddiness, headache and breathlessness and was an addict to alcohol as was revealed from the history of the deceased taken from PGI was rightly repudiated by the LIC. From the statement of Dr. Chug, Associate Professor of PGI, it was also proved that he was suffering from very high blood pressure and other diseases referred to above. He remained as an indoor patient from January 22, 1971, to February 12, 1971, and when he was discharged, there was no material improvement. The third policy was obtained within two years of the death of the deceased and, therefore, under Section 45 of the Insurance Act, 1938 (hereinafter called 'the Act'), different considerations would be applicable to this policy. In fact, within 2 1/4 months of the discharge from the PGI, the policy was obtained and he died within six months thereafter. Therefore, I endorse the finding of the lower appellate court that the policy of Rs. 20,000 was obtained by suppression of material facts by a person who could not live long due to the serious disease from which hewas suffering, which was not disclosed either in the proposal form or in the personal statement. Accordingly, the LIC was right in repudiating this policy.

6. Adverting to the other two policies, they were obtained two years prior to the death of the deceased. It was strenuously argued by Shri D. V. Sehgal, advocate, appearing for the LIC that from the history-sheet of the patient as shown in exhibit DW-6/4, and as contained in the PGI record, it is clear that the deceased was a known case of hypertension for the last 7 years, and, therefore, it should be held that it was necessary for the insured to mention the disease in the proposal form as also in his personal statement and since this relates to a material fact, the decision of the lower appellate court regarding these two policies should also be upheld. I am not at one with the learned counsel. Mere hypertension is such a disease which may be continuous or intermittent, and that by itself may not be considered material for disclosing in the proposal form or in the personal statement. Justice O. Chinnappa Reddy had an occasion to deal with the non-mentioning of minor ailments in the proposal form and in the personal statement in Life Insurance Corporation of India v. Shakuntala Bai, AIR 1975 AP 68, and it was ruled that non-mentioning of the same did not amount to suppression of material facts so as to entitle the LIC to repudiate the policy. The very history-sheet on which reliance was placed by Mr. Sehgal shows that about a month and half back, the deceased had haematuria lasting for 7 days or so and that there was no family history of hypertension or diabetes. At the time of discharge, the following observations were made :

' ...the diagnosis of malignant hypertension cause cronic pydonepa-ribs.'

7. From the history it is clear that the condition of the deceased aggravated a month and a half before he was admitted to the PGI and earlier thereto he was simply suffering from hypertension. Therefore, a serious disease cannot be taken to be existing on the date of the earlier two policies. I am of the view that the same consideration cannot apply to the first two policies, which has been applied to the third policy. On the material on record, it cannot be said that when the first two policies were obtained, the deceased was suffering from such an ailment which was necessary to be disclosed. In any case, since more than two years had elapsed, the consideration for decision would be different in view of Section 45 of the Act. To this extent, the decision of the lower appellate court has to be modified.

8. For the reasons recorded above, this appeal is partly allowed and the plaintiff's suit is decreed for recovery of Rs. 10,000 under the first two policies. The appellant would be entitled to proportionate costs.


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