Judgment :- RAMAMURTI J The Life Insurance Corporation of India (Unit : The Oriental Government Security Life Assurance Co. Ltd. Bombay) hereinafter called the company, is the appellant in this appeal. The respondent Srimathi Parvathavardhini Ammal who is the widow of one V S N C ) has filed the suit, O S No. 62 of 1958, on the file of the Sub-Court, Tirchirappalli, to cover a sum of Rs. 20, 000 due under an Insurance Policy No. 1733287, dated 22nd May, 1954 and a sum of Rs. 30, 000 due under another Insurance Policy No. 1855372, dated 26th March, 1955, on the ground that the said policies were accepted at the ordinary rate by the insurance company certifying the life of V S N C aforesaid as a first class one by four eminent doctors of the company, that the plaintiff (respondent) was the nominee under the aforesaid two policies, that the said assured died on 20th May, 1955 on account of coronary thromobosis which attack set in on 17th May, 1955, and that the insurance company had wrongfully repudiated the claim of the plaintiff on 26th November, 1957 The three grounds on which the plaintiff's claim was resisted by the company were : (i) that V S N C the assured, was suffering from high blood- pressure and diabetes with high percentage of sugar and albumen in his urine and that he did not disclose the same to the company at the time when the two proposals were made by him. (ii) that V S N C did not disclose to the company that he made a proposal in 1929 for insurance to the branch of the Oriental Insurance Company at Tirchirappalli, and that it was accepted with an extra amount but that it did not materialise for that reason, and (iii) that the correct ages of the parents of V S N C at the time of their deaths were not given by him, when the proposals for the suit policies were made, but that he deliberately and fraudulently gave incorrect and false dates. As the policies were repudiated more than two years after the expiry of two years from the date on which they were effected under section 45 of the Insurance Act. As the policies were repudiated more than two years after the expiry of two years from the date on which they were effected under section 45 of the Insurance Act. the burden of proving that the policies were vitiated by any fraudulent misrepresentation or fraudulent suppression of material facts was rightly placed upon the company The learned Subordinate Judge, in a very carefully considered judgment fully analysed the oral and documentary evidence adduced on both sides and came to the conclusion that the defendant company not only had not discharged the burden but that the plaintiff had satisfactorily proved that V S N C the deceased was not guilty of any fraudulent misrepresentation or suppression of material and important facts when he made the proposal for insurance which were accepted by the company. We have ourselves carefully scrutinised the evidence both oral and documentary, bearing upon the three relevant aspects mentioned above, and we are glad to say that the learned Subordinate Judge's respective of approach and his assessment of the oral and documentary evidence are quite sound and satisfactory. We have no hesitation in accepting, completely, his reasonings and conclusions. We have ourselves carefully scrutinised the evidence both oral and documentary, bearing upon the three relevant aspects mentioned above, and we are glad to say that the learned Subordinate Judge's respective of approach and his assessment of the oral and documentary evidence are quite sound and satisfactory. We have no hesitation in accepting, completely, his reasonings and conclusions. As we will presently show this is one of those cases in which not only the defendant company has totally failed to discharge the burden arising under section 45 of the Insurance Act, but the plaintiff has positively proved that the policy was not vitiated by any of the circumstances mentioned in section 45 of the Act We shall first take up the question as to whether the assured was suffering from diabetes and high blood pressure, with sugar and albumen in urine and whether he frauculently suppressed this important information when he made the proposal for insurance [His Lordship referred to the evidence and proceeded:] To sum up, therefore we are clearly of the opinion that there is acceptable satisfactory proof on the plaintiff's side that V S N C did not suffer from bold-pressure or diabetes or from any other serious ailment We then pass on to the next point: "Whether the policies were vitiated by the alleged ground that the assured did not disclose to the company that he made a proposal in 1929 for insurance to the branch of the Oriental Insurance Company at Triuchirappalli, that it was accepted with an extra amount, but that it did not materialise for that reason." * * * * * For all these reasons, we are of the opinion that there is no substance in this point of an alleged infructuous proposal of insurance in the year 1929, We now pass on to the last point, i.e the assured did not give the correct ages of his parents at the time of their deaths when the proposals for the policies in question were made. Here too, we are clearly of the opinion that the defendant not discharged the burden. * * * * To sum up, therefore the defendant has not laid the proper foundation for their plea by proving that the ages mentioned in exhibit B/. 45 are the correct ages. Here too, we are clearly of the opinion that the defendant not discharged the burden. * * * * To sum up, therefore the defendant has not laid the proper foundation for their plea by proving that the ages mentioned in exhibit B/. 45 are the correct ages. Under those circumstances it is futile for the defendants to charge the assured with having given any false or incorrect answers. On this portion of the case too, we accept the reasonings and findings of the learned judge and hold that the policies were not vitiated for this alleged false or incorrect representation Even though some other points were raised in the lower court, learned counsel for the appellant raised only the above three points and did not advance any serious arguments and we have dealt with the three aspects which were stressed by learned counsel In view of the findings of fact which we have arrived at, it is not really necessary to consider in great details case-law regarding the duty of disclosure on the part of the assured and the scope of the presumption under section 45 of the Insurance Act and how it should be discharged by the company. We may first refer to the following observations of a Bench of this court in Kulla Ammal v Oriental Government Security Life Assurance Co. Ltd. as regards the perspective of approach in such cases "A principle or theory, if pushed to extreme logical conclusions, may more often than not, result in grave injustice as in present case, if not absurdity. It is true that hard cases must not be allowed to make bad law. But on the contrary good law should not be permitted, by misapplication, to be pushed to such literal and technical extremes, as in the defence of the present action, to degenerate into mechanical machinery which results in injustice without regard to the human background facts, and circumstances. But on the contrary good law should not be permitted, by misapplication, to be pushed to such literal and technical extremes, as in the defence of the present action, to degenerate into mechanical machinery which results in injustice without regard to the human background facts, and circumstances. Judicial resource in the direction of achieving justice should be quite equal to the task of minimising if not eliminating hard cases, which at first blush appear to be necessitated by settled law, called good, under which if too many hard cases cannot be avoided there should then result a radical change in the law." * It is true that special features are attached to a contract of insurance and these contracts are uberrima fide resting upon a complete and truthful disclosure of all the facts by the insured. In such contracts the principle of caveat emptor has absolutely no application. Non-disclosure of material facts would go to the root of the matter, it being regarded as fatal to the validity of the contract. Under section 45 of the Insurance Act, as amended in 1941, the legislature has eliminated the nice distinction of English common law with regard to the doctrine of warranty. The insurer, under the Indian law, as amended has no right to avoid the contract by merely making out some inaccuracy or falsity in respect of some of the recitals or items in the proposal for insurance or even in the report of the medical officer or any other document connected with the contract of insurance. Under the section, it is imperative that to avoid the contract the insurer must prove that material facts have been suppressed and that either the suppression of material facts or the fraudulent representation of material facts occurred with the full knowledge of the assured. Under the two years' rule proff of material and deliberate fraud is necessary and not mere constructive fraud Reference may be made in this connection to a Bench decision of the Punjab High Court in Lakshmi Insurance Company v Bibi Padmavati (1) 1961 (31) CC 96 which contains an elaborate discussion of the legal position and the relevant case law, both English and Indian. The scope of section 45 came up for detailed consideration before a Bench of the Andhra Pradesh High Court in New India Assurance Co. v. T S Ranghava Reddi (2) 1961 (31) CC 90. The scope of section 45 came up for detailed consideration before a Bench of the Andhra Pradesh High Court in New India Assurance Co. v. T S Ranghava Reddi (2) 1961 (31) CC 90. It was held that, under section 45 the policy cannot be avoided on the ground of mis-statement on utter answers unless the insurers establish : (a) that the statements were inaccurate or false, (b) that such statements were on material facts or that material facts were suppressed and not disclosed, and (c) that the assured knew at the time of making those statements that they were false to his knowledge or knew that those facts were material to disclose and deliberately suppressed. It was pointed out that all these conditions should be cocurently satisfied under section 45. The principle of this decision would apply to this case with regard to the defendant's plea on the question of the proposal of the year 1929 and the correct ages of the partners of the insured at the time of their death. The doctors examined on the side of the plaintiff have given evidence that the longevity of the partners of the assured has no relevance on the question of insurance effected by: (a) that it was a mis-statement of material facts and (b) the insured was aware of the true ages and deliberately gave false ages There is a useful discussion of the scope of section 45 to the same effect in a Bench decision of the Assam High Court in New India Assurance Co. v Sulochana There also it has been pointed out that section 45 of the Act has materially modified the common law when the policy is sought to be challenged on account of mis-statements or suppression of material facts after the expiry of two years. This decision has also held that section 45 has to a great extent mitigated the rigorous of the rule that any mis-representation within the ambit of the warranty covered by the terms of the insurance policy would be sufficient to successfully challenge the policy Reference may also be made to the discussion of the legal principles in All India General Insurance Co v. S P Maheshwari (2) A I R 1960 Mad, 484. a recent Bench judgment to which one of us was a party, for the statement of the law regarding the scope of section 45 and the measure of the burden of proff cast upon the assured. In that case the assured took a policy on 2nd January, 1948 and died on 13th June, 1948 within the two years' period and the question arose as to how far the failure of the assured to disclose that the assured was addicted to drinking habits and was having syphilis would entitle the insurance company to repudiate the policy. On the fact, the learned judge took the view that there was a fraudulent and deliberate supression of material facts and there was no question of the applicability of the rule of special burden embodied in section 45 In a recent judgment of the Supreme Court in Mighoolal v Life Insurance Corporation of India (3) 1962 (32) CC 77 (S C). the scope of section 45 was considered. In that case the repudiation took place after tow years had expired from the date on which the policy was effected. But on the facts, it was held that the assured had fraudulently suppressed the facts that he had certain serious ailments such as anemia, shortness of breath, etc. The Supreme Court pointed out that in order to apply section 45 three conditions must be satisfied: (a) the statement of the assured must be of a material to disclose, (b) the suppression must be fraudulenly made by the policy-holder and (c) the policy-holder must have be fraudulently made by the policy-holder must have known at the time of making the statement that it was false or that he suppressed facts which it was material to disclose. It is unnecessary to refer to the other cases on the point Judge from any test we are clearly of the opinion that the defendant has totally failed to discharge any of the conditions aforesaid and the heavy burdens laid upon it Before parting with this case, we would like to make an observation. The business of life insurance has been nationalised and, in the matter of its business activities the Life Insurance Corporation has a great responsibility to the public. Whenever claims are repudiated and disputes come to courts of law, the Life Insurance Corporation should not put up a fight on the pattern of ordinary litigants. The business of life insurance has been nationalised and, in the matter of its business activities the Life Insurance Corporation has a great responsibility to the public. Whenever claims are repudiated and disputes come to courts of law, the Life Insurance Corporation should not put up a fight on the pattern of ordinary litigants. But it must be on a higher plane, so as to inspire confidence in the public that claims are not resisted on frivolons pleas and reckless allegations. All the relevant materials gathered by the Corporation in the course of its investigation of a particular claim should be before the court to enable it to adjudge the truth. There should be a frank and full disclosure of all the material evidence and no attempt should be made to suppress or withhold the same It is familiar knowledge that decisions of courts relating to insurance claims acquire great publicity in the area out of which the claims or such disputes arise and a big scare will be created in the minds of the public, if impression gains ground that claims are resisted without a careful scrutiny or a proper investigation of facts to support the defence. Doctors of the company who certify to the good health of the assured and responsible branch managers of the corporation under whose supervision the policies are effected must be examined so that the courts can have the assistance of their evidence while determining the truth. In case where the defence raises a case of fraud and conspiracy between the assured and the employees of the company, in fairness the corporation should in the first instance take immediate and suitable action against those employees so as to satisfy interests alike demand that the corporation should not retain such dishonest employees in its service (without taking action against them) but at the same time repudiate the claims under the policy by reason of fraud or conspiracy on the part of such employees In this case we cannot exonerate the corporation for its omission to examine Mr. Bhat, Madura branch secretary or manager (who is still in service) who had played a prominent part in the effecting of the policy. Bhat, Madura branch secretary or manager (who is still in service) who had played a prominent part in the effecting of the policy. We cannot equally exonerate the corporation for its omission to examine the employees of the company who gathered the materials in the stage of investigation and gave instructions for the preparation of the written statement For all these reasons we dismiss the appeal with costs.