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Allahabad High Court · body

2007 DIGILAW 291 (ALL)

RAM KALI v. LIFE INSURANCE CORPORATION, ALLAHABAD

2007-02-08

PANKAJ MITHAL, R.K.AGRAWAL

body2007
JUDGMENT Hon’ble Pankaj Mithal, J.—The husband of the petitioner had taken an Insurance Policy No. 311438746 in his name for an assured sum of Rs. 40,000/- and was paying half yearly installments. The husband of the petitioner expired on 27.3.2005. Therefore, she made a claim under the policy. The Senior Divisional Manager, Life Insurance Corporation (hereinafter referred to as LIC) vide order dated 31.3.2006 rejected the claim of the petitioner on the ground that the above policy had lapsed for non-payment of premium and was revived w.e.f. 15.10.2004 on the strength of the statement of the insured dated 9.10.2004 which was subsequently found to be false. The said rejection order has been challenged by the petitioner with the prayer that she may be given the claim under the above policy. 2. Sri R.G. Padia has filed counter affidavit on behalf of the respondent LIC to which rejoinder affidavit has also been filed. 3. Heard learned counsel for the parties who agree for final disposal of the writ petition at this stage itself on the basis of the above affidavits. 4. Admittedly, the policy had been revived and it was continuing. A perusal of the statement of the insured on the basis of which the policy had been revived reveals that the statement was in the proforma prescribed and the insured was only required to answer the questions therein in ‘yes’ or ‘no’. The questions contained in the proforma were whether the insured had suffered from any disease for which he was required medical treatment for over one week, whether any surgery has been performed upon him or he had met with an accident resulting in any physical disability of any limb. The insured had answered the above questions in the negative. The insured was not supposed to add any information in the format from his own side. 5. The contention of the respondent L.I.C. is that the husband of the petitioner was suffering from cancer for which he took treatment in a hospital for six months. This fact had been concealed by the petitioner and accordingly his statement given at the time of reviving the policy was found to be false and therefore, the claim has rightly been rejected. 6. This fact had been concealed by the petitioner and accordingly his statement given at the time of reviving the policy was found to be false and therefore, the claim has rightly been rejected. 6. The petitioner has categorically denied the hospitalisation of her husband and his medical treatment for a continuous period of one week or above and also the fact that he was suffering from cancer. There is no document or material on record to even prima-facie establish that the petitioner’s husband was suffering from cancer or was hospitalised in connection thereto for a week or above. The medical certificate of petitioner’s husband filed as Annexure C.A-3, only demonstrate that he had remained in hospital for three days from 13.9.2004 to 15.9.2004 and at the time of discharge he was referred to Kamla Nehru Hospital, Allahabad. There is no material to show that the husband of the petitioner was given any further medical treatment or that he was hospitalised subsequently. There is nothing in the said medical certificate to show or suggest that he was suffering from cancer. In the absence of any material to show that the husband of the petitioner was actually suffering from cancer and that he had remained hospitalised for six months, it cannot be said that the husband of the petitioner (insured) had made any false declaration/statement. 7. In view of the above, we find that the husband of the petitioner had not made any false declaration and he had rightly answered the questions contained in the format while getting the policy revived. Therefore the petitioner’s claim under the policy was not liable to be rejected on the ground that the policy was got revived by making a false statement. 8. It may be remembered that once a policy is renewed or revived, even though a fresh contract comes into existence, it amounts to renewal of the old policy on the same terms and conditions as are contained in the original policy. When the petitioner had taken the original policy he was not suffering from any disease much less from cancer as alleged. Therefore on the death of the insured his beneficiary i.e., the petitioner is legally entitled for a claim under the policy irrespective of the nature of the illness or the case of the death. When the petitioner had taken the original policy he was not suffering from any disease much less from cancer as alleged. Therefore on the death of the insured his beneficiary i.e., the petitioner is legally entitled for a claim under the policy irrespective of the nature of the illness or the case of the death. The respondent LIC is a public authority and therefore no arbitrariness should appear from its actions or decisions. Its decisions must be fair and should be taken in good faith in the interest of the policy holder. The above view finds support from the recent decision of the Division Bench of this Court in the case of Umesh Narain Sharma v. New India Insurance Company Limited and others, 2007 (1) ADJ 11 . 9. In view of the above discussion and the fact that no false statement appears to have been made by the petitioner or her deceased husband, the rejection of the claim by the impugned order on that ground is wholly unjustified and arbitrary in nature. Accordingly, the impugned order dated 31.3.2006 (Annexure 9 to the writ petition) is quashed. The writ petition is allowed with the direction to the respondent LIC to process the claim as expeditiously as possible preferably within a period of three months and to make the payment of the amount found due and payable to the petitioner forthwith. ———