JUDGMENT H.N. Sarma, J. 1. The decision of the Respondent Life Insurance Corporation of India to repudiate the contract of insurance entered between the husband of the Petitioner late Prabir Kumar Sarma, who insured his life with the Corporation for a sum of Rs. 1 lakh on 28.7.98, is the subject matter of challenge in this writ petition. 2. Heard Ms. B. Devi, learned Counsel appearing for the Petitioner and Mr. K.K. Nandi, learned Counsel appearing on behalf of the Respondents. 3. The husband of the Petitioner (for short insured) while was serving as an Assistant Teacher in the Central Dharamtul Motiram Bora H.S. School in the district of Moraga on since 1.4.1992, insured his life with the Respondent No. 1 (for short 'LICI') for Rs. 1 lakh nominating the Petitioner to get the sum assured in the event of his death, during the continuation of the insurance policy. The relevant materials and material information as required by the LICI was furnished by the insured at the time of submitting his proposal, which were scrutinized and accepted by the Corporation and the policy of insurance was duly issued to him. Premium of the policy was to be paid half yearly at the rate of Rs. 3,385/-. The insured not having paid the premium due on July, 2006 in due time the policy lapsed, but on the prayer of the insured and the premium with due interest having been paid along with necessary compliance of other requirements as per guidelines of LICI, the policy was revived on 1.2.2001. However, unfortunately the insured expired on 6.3.2001 and after his expiry the Petitioner approached the Respondent authorities for payment of the sum assured in terms of the policy; but the Respondents refused to honour the contract and pay the amount. On the ground that the insured withheld material information regarding his health at the time of getting the policy revived and accordingly such revival was declared to be void and the money paid towards revival of the policy and premium paid subsequent thereto were also forfeited in favour of the LICI. The decision of the Respondents was communicated to the Petitioner vide letter dated 20.2.2002 by the Senior Divisional Manager. Although the Petitioner tiled an appeal against the said decision to the Zonal Manager. LICI, Eastern Zone, the same yielded no fruitful result. The decision of the Respondents was communicated to the Petitioner vide letter dated 20.2.2002 by the Senior Divisional Manager. Although the Petitioner tiled an appeal against the said decision to the Zonal Manager. LICI, Eastern Zone, the same yielded no fruitful result. The aforesaid stand of the LICI is also reflected in their counter. According to the LICI the declaration of good health made by the Petitioner was not correct, inasmuch as, the insured was admitted in the Apollo Hospital on 23.2.2001 for necessary treatment. The record of the hospital disclose that the Petitioner had earlier done a C.T. Scan of his head and had severe headache on 22.1.2001 which was associated with vomiting. The discharge memo of the Apollo Hospital reflects that the insured was apparently well till 12.2.2000 when he suddenly fell down from the stairs due to which he became unconscious and when he woke up he was feeling drowsy and was later taken to the Guwahati Hospital wherein C.T. Scan of his head was done and since then he was having regular episode of headache which was gradual in onset, with no aggravating factors but was relieved on taking analgesics and he was taken to Appolo Hospital for further treatment. The report of the C. T. Scan conducted upon the insured at Guwahati on 25.12.2000, however, indicated that mentally, the condition of the insured was normal. The contention of the Respondents is that the Petitioner withheld the said fact of undergoing medical treatment and examination and the C.T. Scan of his head and due to such withholding of material facts the policy though was revived on 1.2.2001 was declared to be void. The provisions relating to revival of a lapsed insurance policy is regulated and guided by certain norms/executive instructions followed by the LICI. The said norms/executive instructions regulating the payment of a lapsed policy is as under: As per the terms of the Policy Contract the Policy holder is required to pay the full installment of premium within the days of grace from the due date. The grace period is one calendar month but not less than 30 days in respect of Policies with Yearly, Half yearly or Quarterly mode of payment and 15 days in respect of policies with monthly mode of payment. The grace period is one calendar month but not less than 30 days in respect of Policies with Yearly, Half yearly or Quarterly mode of payment and 15 days in respect of policies with monthly mode of payment. If the premium is tendered within 14 days after the expiry of Days of Grace the revival charge will be 50 Paise for policies issued prior to 14.9.1972 and Re 1/- for policies issued after 15.9.1972 to 31.12.1986, no matter what the amount of premium may be. In respect of policies issued having risk date on or after 1.1.1987 even if the premium is tendered within 14 days after the expiry of Days of Grace, actual interest at 9% per annum is to be charged for one month subject to a minimum of Rs. 2/- (for policies issued with risk date prior to 1.1.1987 if a premium is paid within 14 days from the expiry of days of grace, without late fee, late fee may be waived). If the premium is received after 14 days from the expiry of the days of grace by within 6 months, the same is to be accepted with interest at the rate of 6% in case of policies issued prior to 14.9.1972 or 7.5% under policies issued after 15.9.1972 but on or before 31.12.1986 and 9% under policies issued on or after 1.1.1987. For certain new plans the rate of interest would be 12%. 4. That apart, so far as revival of lapsed policy is concerned it is provided in the said executive instructions that such revival are of three types namely (a) original revival (b) special revival and (c) revival by installment. The nature of the present policy in question attracts the provision of original revival and the lapsed premium having been offered to be paid after expiry of six months such prayer for revival is required to be made with satisfactory declaration of good health and payment of arrear with interest, without medical examination. The Corporation having found that the insured could duly satisfy with the necessary requirement by issuing declaration of his good health and having offered to pay the lapsed premium with interest, the policy was revived on 1.2.2001. 5. Mr. The Corporation having found that the insured could duly satisfy with the necessary requirement by issuing declaration of his good health and having offered to pay the lapsed premium with interest, the policy was revived on 1.2.2001. 5. Mr. Nandi, learned Counsel for the Corporation submits that as the insured made incorrect declaration about his good health by not mentioning about his treatment and investigation conducted during the lapsed period, the Corporation has rightly repudiated the claim of the policy. According to the learned Counsel after revival of the policy on 1.2.2001, for all intents and purposes the policy has become a new contract with the Corporation and as such the Corporation was well within its jurisdiction to cancel the revival of the policy for furnishing such incorrect information's. 6. In the ailment history of the insured as recorded in the discharge certificate of the Apollo Hospital wherein treatment confirmed from 23.3.01 to 4.3.01 it is stated clearly that the Petitioner became unconscious when he fell down from the stairs on 12.12.2000 and he was treated in the hospital at Guwahati wherein a C.T. Scan of his brain was done on 25.12.2000. The report of the C.T. Scan was prepared by a group of doctors having postgraduate degree and according to the report of the team of doctors, the readings reflected in the C.T. Scan are within the normal limits and no abnormalities were detected. In such a situation, the insured considered not necessary to state that there was something abnormal i.e., about his health in the declaration made for revival of the policy. The declaration given by the insured about his good health is to the following effect. I hereby declare that I am in good health and that 1 have not undergone any operation or suffered from any illness nor I have been advised to go in for any treatment or take an X-Ray ECG, Pathological and other tests since the date of the proposal or last revival to this date. I further declare that no proposal for assurance or any application for revival of a policy on my life is pending or has been withdrawn or dropped, or deferred or declined or accepted at an increased premium or subject to a lien or on terms other than as proposed. 7. I further declare that no proposal for assurance or any application for revival of a policy on my life is pending or has been withdrawn or dropped, or deferred or declined or accepted at an increased premium or subject to a lien or on terms other than as proposed. 7. The purpose of such declaration is admittedly for assessment by the LICI in its discretion as to whether the lapsed policy is liable to be revived or not. Revival of such policy is the normal rule and non-revival is an exception which is done only on the ground of extremely delisinated health conditions. Further, such action also appears to be adopted as a measure to check fraud in obtaining insurance policy. In the instant case however, the report of the C.T. Scan of the insured clearly discloses that no abnormality was detected and accordingly although the insured did not state about such C.T. Scan, which is also not expressly required, it makes no difference. The executive instruction is not entitled to press into service to the situation in hand to repudiate the claim. 8. There is another important feature to note that the LICI accepting the prayer for revival of the policy of the insured accepted the lapsed premium with interest and the policy continued to run as before till the amount in the policy was claimed by the Petitioner after expiry of the insured on 6.3.01. This goes to show that the LICI was duly satisfied about the good health conditions of the insured till the claim was made and raised the issue only after making such claim. That apart, the contemporaneous document which is a certificate issued by the Principal of the School where the insured served, which disclose that the insured was in good health and was attending duty till 10.2.2001, also supports the claim of the Petitioner. That apart, the contemporaneous document which is a certificate issued by the Principal of the School where the insured served, which disclose that the insured was in good health and was attending duty till 10.2.2001, also supports the claim of the Petitioner. Section 45 of the Insurance Act provides a bar for calling in question a life insurance policy after expiry of 2 years from the date of commencement on the ground that the statement so 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, inasmuch as, 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. In the instant case the insurance policy having effected from 28.7.98, the aforesaid statutory period of two years expires on 28.7.2000. Although Mr. Nandi has strenuously urged that the revival of the policy would amount to a new contract but a close scrutiny of Section 45 of the Insurance Act does not favour such interpretation. In taking this view I am fortified with the decision of the Apex Court rendered in the case of Mithoolal Nayak v. LICI, reported in AIR 1962 SC 814 wherein the Apex Court held as follows: 7. We shall presently consider the evidence, but it may be advantageous to read first Section 45 of the Insurance Act, 1938, as it stood at the relevant time. The section, so far as it is relevant for our purpose, is in these terms. We shall presently consider the evidence, but it may be advantageous to read first Section 45 of the Insurance Act, 1938, as it stood at the relevant time. The section, so far as it is relevant for our purpose, is in these terms. "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. It would be noticed that the operating part of Section 45 states in effect (so far as it is relevant for our purpose) that no policy of life insurance effected after the coming into force of the 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, or referee, or friend of the insured, or in policy, was inaccurate or false; the second part of the section is in the nature of a proviso which creates an exception. It says in effect that if the insurer shows that such statement was on 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, then the insurer can call in question the policy effected as a result of such inaccurate or false statement. In the case before us the policy was issued on March 13, 1945 and it was come into effect from January 15, 1968 or at the death of the insured if earlier. The Respondent company repudiated the claim by its letter dated October 10, 1947. Obviously, therefore, two years had expired from the date on which the policy was effected. We are clearly of the opinion that Section 45 of Insurance Act applies in the present case in view of the clear terms in which the section is worded, though learned Counsel for the Respondent company sought, at one stage, to argue that the revival of the policy some time in between the parties and if two years were to be counted from July, 1946, then the period of two years had not expired from the date of the revival. Whether the revival of a lapsed policy constitutes a new contract or not for other purposes, it is clear from the wording of the operative part of Section 45 that the period of two years for the purpose of the section has to be calculated from the date on which the policy was originally effected; in the present case this can only mean the date on which the policy (Ex. P-2) was effected. From the date a period of two years had clearly expired when the Respondent company repudiated the claim. As we think that Section 45 of the Insurance Act applies in the present case, we are relieved of the task of examining the legal position that would follow as a result of inaccurate statements made by the insured in the proposal form or the personal statement etc. in a case where Section 45 does not apply and where the averments made in the proposal form and in the personal statement are made the basis of the contract. 9. in a case where Section 45 does not apply and where the averments made in the proposal form and in the personal statement are made the basis of the contract. 9. On the face of clear and unblemished report of the team of doctors who examined the C.T. Scan report of the insured on 25.12.2000, the insured rightly deemed it not necessary to disclose the same specifically at the time of revival of the policy when there was no occasion to hold that in the event of making such disclosures also his prayer for revival would not be refused. 10. Under the Insurance Act the scheme of insurance is made as a benevolent social scheme. A person gets his life insured through the LICI who has got the monopoly of such business under the Insurance Act 1938, in order to get certain financial benefit in the event of his untimely death which became a solace for the family who lost the earning member of the family. The provision of such scheme is always to be interpreted liberally, in favour of the insured. 11. The instructions placed before the Court by the learned Counsel also discloses that the revival of a policy is a rule and non-revival is an exception. There is nothing in the said instruction that once the policy is revived it can be called back or declared void on the ground of alleged non-declaration about the medical treatment done during the lapsed period. There having no such provision in the said executive instruction it was further incumbent upon the LICI to provide an opportunity of hearing to the insured before declaring the revival as void. Such procedure apparently not having been taken recourse to by the LICI violates the basic principles of Audi alteram pan seem rule having adverse consequences upon the Petitioner as a nominee to get the amount under the policy, rendering the impugned decision and orders as null and void. 12. In almost similarly situated facts, the Apex Court in the case of Life Insurance Corporation of India and Ors. 12. In almost similarly situated facts, the Apex Court in the case of Life Insurance Corporation of India and Ors. v. Asha Goel (Smt.) and Anr., reported in (2001) 2 SCC 160 interpreting Section 45 of the Insurance Act held at paragraph 12 as follows- Coming to the question of scope of repudiation of claim of the insured or nominee by the Corporation, the provisions of Section 45 of the Insurance Act is of relevance in the matter. The section provides, inter alia, that 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 policyholder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose. The proviso which deals with proof of age of the insured is not relevant for the purpose of the present proceeding. On a fair reading of the section it is clear that it is restrictive in nature. It lays down three conditions for applicability of the second part of the section namely: (a) the statement must be on a material matter or must suppress facts which it was material to disclose; (b) the suppression must be fraudulently made by the policy-holder; and (c) the policy-holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose. Mere inaccuracy or falsity in respect of some recitals or items in the proposal is not sufficient. The burden of proof is on the insurer to establish these circumstances and unless the insurer is able to do so there is no question of the policy being avoided on ground of misstatement of facts. Mere inaccuracy or falsity in respect of some recitals or items in the proposal is not sufficient. The burden of proof is on the insurer to establish these circumstances and unless the insurer is able to do so there is no question of the policy being avoided on ground of misstatement of facts. The contracts of insurance including the contract of life assurance are contracts uberrima fides and every fact of material (sic material fact) must be disclosed, otherwise, there is good ground for rescission of the contract. The duty to disclose implies facts continues right up to the conclusion of the contract and also implies any material alteration in the character of the risk which may take place between the proposal and its acceptance. If there are any misstatements or suppression of material facts, the policy can be called into question. For determination of the question whether there has been suppression of any material facts it may be necessary to also examine whether the suppression relates to a fact which is in the exclusive knowledge of the person intending to take the policy and it could not be ascertained by reasonable enquiry by a prudent person. 13. The Apex Court again referring to the case of Mithoolal Nayak v. LICI, reported in AIR 1962 SC 814 held at paragraph 13 as follows: In this connection we may notice the decision of this Court in Mithoolal Nayak v. LIC of India in which the position of law was stated thus: (AIR Headnote) The three conditions for the application of the second part of Section 45 are: (a) the statement must be on a material matter or must suppress facts which it was material to disclose. (b) the suppression must be fraudulently made by the policy-holder and (c) the policy-holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose. (b) the suppression must be fraudulently made by the policy-holder and (c) the policy-holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose. Where the policy-holder, who had been treated, a few months before he submitted a proposal for the insurance of his life with the insurance company by a physician of repute for certain serious ailments as anemia, shortness of breath and asthma, not only failed to disclose in his answers to the questions put to him by the insurance company that he suffered from those ailments but he made a false statement to the effect that he had not been treated by any doctor for any such serious ailment: Held (i) that, judged by the standard laid down in Section 17, Contract Act, the policy-holder was clearly guilty of a fraudulent suppression of material facts when he made his statements, which he must have known were deliberately false and hence, the policy issued to him relying on those statements was vitiated. (ii) The principle underlying the Explanation to Section 19 of the Contract Act is that a false representation, whether fraudulent or innocent, is irrelevant if it has not induced the party to whom it is made to act upon it by entering into a contract. That principle did not apply in the instant case. The terms of the policy made it clear that the averments made as to the state of health of the insured in the proposal form and the personal statement were the basis of the contract between the parties and the circumstance that the policy-holder had taken pains to falsify or conceal that he had been treated for a serious ailment by a physician only a few months before the policy was taken showed that the falsification or concealment had an important bearing in obtaining the other party's consent. A man who has so acted cannot afterwards turn round and say, 'it could have made no difference if you had known the truth'. In the circumstances no advantage could be taken of the Explanation to Section 19 of the Contract Act. The aforesaid decision was relied upon in LIC of India v. G.M. Channabasamma, reported in (1991) 1 SCC 357 in which the following observations were made. In the circumstances no advantage could be taken of the Explanation to Section 19 of the Contract Act. The aforesaid decision was relied upon in LIC of India v. G.M. Channabasamma, reported in (1991) 1 SCC 357 in which the following observations were made. "It is well settled that a contract of insurance is contract uberrima fides and there must be complete good faith on the part of the assured. The assured is thus under a solemn obligation to make full disclosure of material facts which may be relevant for the insurer to take into account while deciding whether the proposal should be accepted or not. While making a disclosure of the relevant facts, the duty of the insured to state them correctly cannot be diluted. Section 45of the Act has made special provisions for a life insurance policy if it is called in question by the insurer after the expiry of two years from the date on which it was effected. Having regard to the facts of the present case, learned Counsel for the parties have rightly stated that this distinction is not material in the present appeal. If the allegations of fact made on behalf of the Appellant Company are found to be correct, all the three conditions mentioned in the section and discussed in Mithoolal Nayak v. LIC of India must be held to have been satisfied. We must, therefore, proceed to examine the evidence led by the parties in the case. 14. In view of the above discussions, I am of the view that the decision of the Respondent authorities in declaring the revival policy of the insured as void and thereby forfeiting the amount paid under the policy was done by adopting a procedure which is not only unfair and inequitable but also devoid of any legal sanction. The decision making process adopted by the LICI in arriving at the impugned decision suffers from illegalities and irregularities and there has been error apparent on the face of the record and is liable to be interfered with, which is hereby done. The impugned decision of the LICI in declaring the revival of the policy of the insured as void stands set aside and quashed. Consequently, the impugned letter dated 22.2.2002 issued by the Senior Divisional Manager, LICI as well as the letter dated 6.7.02 issued by the Manager, LICI, also stands set aside and quashed. 15. The impugned decision of the LICI in declaring the revival of the policy of the insured as void stands set aside and quashed. Consequently, the impugned letter dated 22.2.2002 issued by the Senior Divisional Manager, LICI as well as the letter dated 6.7.02 issued by the Manager, LICI, also stands set aside and quashed. 15. The LICI is directed to pay the amount under the policy to the Petitioner who is the nominee of the policy forthwith with interest due thereon within a period of one month from the date of receipt of a certified copy of the judgment. 16. The petition stands allowed as indicated above. 17. No costs. Petition allowed