JUDGMENT 1. - This first appeal under section 96 CPC has been filed against the judgment and decree dated 24.7.1993 passed by Addl. District Judge No. 1, Alwar (hereinafter 'the trial court') Whereon the respondent plaintiff's (hereinafter 'the plaintiff') money suit for Rs. 53,100/- has been decreed along-with interest @ 18% p.a. from the date of filing of the suit till the recovery is made. 2. The facts of the case are that the plaintiff's husband late Shri Murari Lal Gupta took a life insurance policy (hereinafter 'LIC') for Rs. 50,000/- on 28.1.1988 pursuant to his proposal duly filed and submitted on 21.1.1988. The medical examination of the insured Late Murari Lal Gupta was conducted in the light of the information furnished by him in his proposal form. In the proposal form Ex.A/3 the insured stated in response to queries in para 18 that he neither suffered from persistent cough nor from any disease of the throat at any point of time or currently. The agent of the appellant defendant (hereinafter 'the defendant') who insured the deceased Murari Lal Gupta (insured) was his own nephew namely; Roopnarain. Within 12 days of taking the policy aforesaid on 28.1.1988 the insured was admitted to Sinha Nursing Home, Alwar on 10th February 1988 and remained there for treatment as an indoor patient till 16.2.1988. Subsequently the insured was again admitted for treatment at Sinha Nursing Home, Alwar for the period 28.2.1988 to 3.3.1988, 5.4.1988 to 6.4.1988 and lastly 12.4.1988 to 17.4.1988 for the treatment of Cancer of Larynx. In-fact he had been advised to under-go operation during his hospitalization between 28.2.1988 to 3.3.1988 but had refused. The insured Murari Lal Gupta died on 10.7.1988. Under the policy No. 190144302 dated 28.1.1988 the plaintiff as the wife of the insured claimed the insurance amount. However in view of the fact that the insured had died within six months of the issue of the policy, the insurance company initiated an inquiry into circumstances in which the insured Murari Lal Gupta had died within six months of the issue of a policy. On the investigation made it transpired that the insured had been suffering from persistent cough and throat disease for years and died due to Cancer of Larynx. It also transpired on investigations made that the insured had received treatment at Sinha Nursing Home, Alwar on several occasions. On the investigation made it transpired that the insured had been suffering from persistent cough and throat disease for years and died due to Cancer of Larynx. It also transpired on investigations made that the insured had received treatment at Sinha Nursing Home, Alwar on several occasions. The requisite documents were collected by the appellant insurance company and the claim was repudiated on 29.3.1989 on the ground that the insured made deliberate mis-statement and with-held material information from the insurance company regarding his state of health in his proposal form and consequent to which the policy of insurance was issued. 3. Consequent to the repudiation, the plaintiff laid the money suit claiming Rs. 50,000/- as the policy amount + Rs. 3100/- on account of the bonus accrued on the policy along-with future interest @ 18% p.a.The suit was contested by the appellant insurance company inter-alia on the ground that the contract of life assurance is based on principles of good faith i.e. uberrimae fides and concealment of material fact by the insured with regard to his state of health at the time of submitting the proposal form entitled the insurance company to repudiate any claim under such policy. It was submitted that the proposer was the only person who has special knowledge and details of his over all state of health and he was under a legal duty to disclose all material facts with regard thereto. The disclosures have an absolute bearing on the decision to issue the policy for the proposer's life assurance by the insurance company. 4. On the pleadings of the parties, the trial court framed two issues : 1. Whether the defendant insurance company had rightly repudiated the claim of the plaintiff? 2. Relief? 5. Three witnesses were examined on behalf of the plaintiff and five witnesses on behalf of the defendant insurance company. Various documents filed by the Chief amongst those was Ex.A1 the record of the treatment of the deceased assured at the Sinha Nursing Home, Alwar, soon- after the issue of the life policy on 28.1.1988 and Ex.A5 the proposal form on which the life policy was issued to the deceased assured Murari Lal Gupta. 6. On consideration of the. matter, the trial court decreed the plaintiff's suit for Rs. 53,100/- along-with interest @ 18% p.a from the date of filing of the suit till recovery is made. 6. On consideration of the. matter, the trial court decreed the plaintiff's suit for Rs. 53,100/- along-with interest @ 18% p.a from the date of filing of the suit till recovery is made. The judgment and decree dated 24.7.1993 passed by the trial court is under challenge in this appeal. 7. Heard and perused the impugned judgment passed by the trial court. 8. Counsel for the appellant Insurance Company has submitted that the trial court failed to appreciate that the very foundation of the life assurance policy issued to the deceased assured Murari Lal Gupta was vitiated by fraud, it was submitted that a contract of insurance is a special category of contract requiring utmost good faith between the parties with each party being under a legal duty to disclose all material facts in its special knowledge and silence in respect thereof itself constitutes fraud. It has been submitted that from the evidence on record, Ex.A5, the proposal form it is established that the deceased assured at the time of submitting the proposal form had deliberately stated in response to the query in column No. 18 that he had never suffered or was suffering from persistent cough or expectoration or disease of the throat. Inquiries made following the death of the deceased on 10th July 1988 i.e. within less than 6 months of the life assurance policy dated 28.1.1988 showed that the deceased was suffering for years from persistent cough with expectoration and even hoarseness of the throat/voice for over eight months. Infact he was diagnosed with Cancer of Larynx in the Month of April. This counsel submitted is established from documents exhibited before the trial court i.e. Ex.A-1 as proved by DW-3 Harish Gupta, DW4-R.C. Handa and DW5-R.K. Dixit. It is submitted that in-fact on the date of admission of insured Murari Lal Gupta in Sinha Nursing Home, Alwar on 10.2.1988 i.e. within 13 days of the issue of the policy, his condition was serious enough for attending the doctor to suspect Cancer of Larynx and investigation was made for this purpose. On 13.2.1988 it has been recorded by the attending doctor that the patient suffered from hoarseness of voice for about last eight months. On 13.2.1988 it has been recorded by the attending doctor that the patient suffered from hoarseness of voice for about last eight months. Counsel submitted that the chronology of events make it extremely probable that in-fact the insured was aware of the seriousness of his illness and therefore in collusion with his nephew (Roopnarain) who was an agent of the insurance company deliberately suppressed the same and fraudulently obtained the policy of insurance. It was submitted that the trial court therefore in the facts of the case committed a gross error in holding that the insurance company had wrongly repudiated the insurance policy. Counsel for the appellant further submitted that the trial court has erred in holding that the defendant insurance company had failed to prove that the insured was suffering from a serious disease prior to the submission of the proposal form on 21.1.1988 and the issuance of insurance policy on 28.1.1988. It has been submitted that the issue before the trial court was not as to whether the defendant insurance company had failed to prove the seriousness of the disease-Cancer of the larynx - suffered by the insured before the issue of the policy but as to whether insured had disclosed all the material facts relevant to the disease of the insured to the insurance company or not. Counsel has also drawn the attention of this Court to the declaration made by the proposer - insured in the proposal form (Ex.A5) on 21.1.1988 stating that the information and the statements in the proposal form were given after fully understanding the questions in the proposal form and the same were true and complete in every particular, nothing material had been with-held and further that the proposer agreed and declared that the information given by him and statements made were the basis of assurance between him and the LIC of India. The declaration further stated that if any untrue averment was found to be contained in the proposal form, the contract based thereon would be absolutely null and void and all money/premium paid for the insurance would stand forfeited by the respondent Corporation. Counsel submitted that the trial court over looked the solemn declaration of the proposer on whose proposal, the contract of insurance was entered into between the assured and the insurance company. It has been reiterated that the evidence of DW3-Dr. Counsel submitted that the trial court over looked the solemn declaration of the proposer on whose proposal, the contract of insurance was entered into between the assured and the insurance company. It has been reiterated that the evidence of DW3-Dr. Harish Gupta, DW4-R.C. Handa and DW5-R.K. Dixit as also Ex.A1 established that the assured was suffering for years from persisted cough with expectoration accompanied with hoarseness of voice for the last about eight months. It has been submitted that in this view of the matter the trial court ought to have dismissed the challenge to the repudiation of the claim by the insurance company as also the money claim under the repudiated policy. 9. Mr. R.K. Mathur, Sr. Advocate appearing with Mr. Aditya Mathur for the plaintiff decree-holder has supported the judgment of the trial court. He has submitted that the burden of proving fraud in obtaining the policy of insurance company dated 28.1.1988 was on the defendant insurance company and it woefully failed to discharge the same. It has been submitted that it is an admitted fact that deceased assured was medically examined by the doctor of the insurance company on the basis of the proposal dated 21.1.1988 and only thereupon a policy of insurance was issued. He has submitted that if on medical examination the defendant insurance company was not able to detect any illness it is inconceivable and unfair to suggest that the assured a layman was aware of any illness serious enough to be noted and disclosed or had committed fraud on the insurance company by suppressing it at the time of obtaining of policy of insurance. 10. Heard and considered. 11. It is well-settled that a contract of insurance is a contract of utmost good faith. A person seeking insurance has a duty to disclose all the material facts having relevance to the contract of insurance. Suppression of material facts is fatal to the contract of insurance. In the instant case it is an admitted fact that the claim on the policy of life insurance dated 28.1.1988 arose on 10.7.1988 i.e. within six months on the death of the assured. The matter was thereupon investigated by the defendant insurance company owing to suspicious circumstances of early death following the issue of a life policy. In the instant case it is an admitted fact that the claim on the policy of life insurance dated 28.1.1988 arose on 10.7.1988 i.e. within six months on the death of the assured. The matter was thereupon investigated by the defendant insurance company owing to suspicious circumstances of early death following the issue of a life policy. A bare look at the proposal form Ex.A/5 dated 21.1.1988 indicates that in Column 18, the proposer Murari Lal Gupta (subsequently assured) had stated on a specific query that he was not suffering or had suffered from any persistent cough or any disease of the throat. It is also important to keep in mind the facts that the agent through whom the insured had submitted his proposal form and obtained the life policy with the insurance company was the nephew of the insured and none-else, who has since been taken on record in this appeal as the legal representative of the widow of the deceased (who initially laid the suit) - on her death. The information supplied by the insured for obtaining the life policy dated 28.1.1988 has been completely falsified by evidence on record Ex.A/5 read with Ex.A/1 and statement of DW3-Harish Gupta, DW4-R.C. Handa and DW5-R.K. Dixit. The evidence on record establishes that the assured Murari Lal Gupta was suffering from the serious ailment of a persistent cough for several years and hoarseness of voice along-with for about 8 months - which he suppressed - while obtaining the life policy. 12. The Hon'ble Supreme Court in the case of P.C. Chacko & Anr. v. Chairman, Life Insurance Corporation of India & Ors., III (2008) CPJ 78 (SC) has held that three conditions apply to the repudiation of a policy of insurance : "(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." 13. The Hon'ble Supreme Court in the above case cited has approved the principle enunciated by the Madras High Court and held that the rule of good-faith obliges the proposer/insured to answer to every question put to him with complete honesty.Further reliance has also been placed on the case of Life Corporation of India & Ors. v. Asha Goel (Smt.) & Anr., I (2001) SKT 89 , where the Hon'ble Supreme Court has held as under: "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 material 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." 14. In the context of the aforesaid unquestionable state of law, in my considered opinion it was the utmost duty of the deceased assured at the time of submitting the proposal from on 21.1.1988 and even thereafter till 28.1.1988 before the policy of life assurance was issued to inform the insurance company with regard to his persisted cough for the last about many months accompanied by hoarseness of voice for the last over eight months prior to the submission of the proposal from. This was not admittedly done. Contrarily it was suppressed in answer to a specific query in the proposal form. In my considered opinion the suppression of the illness aforesaid by assured was suppression of a material fact affecting the decision of the defendant insurance company to enter or not to enter into a contract of insuring his life. This was not admittedly done. Contrarily it was suppressed in answer to a specific query in the proposal form. In my considered opinion the suppression of the illness aforesaid by assured was suppression of a material fact affecting the decision of the defendant insurance company to enter or not to enter into a contract of insuring his life. In the facts of the case and in terms of the declaration of insured Murari Lal Gupta in the proposal form submitted by him, referred to above, the insurance company was well within its rights to repudiate the contract of insurance and refuse to pay the claim laid, on Murari Lal Gupta's death on 10.7.1998, by his wife. The trial court in my considered opinion completely misdirected itself both in fact and in law in decreeing the suit as laid by the respondent plaintiff. The burden on the insurance company to establish fraud/mis-representation in obtaining the policy of life insurance by the deceased assured Murari Lal Gupta was fully discharged from the evidence laid by it before the trial court. 15. Consequently in the facts of the case the judgment and decree dated 24.7.1993 passed by the Addl. District Judge No. 1 Alwar is liable to be quashed and set aside and the suit led by the plaintiff (since deceased and now represented by non other than his nephew, the agent who colluded with the deceased assured Murari Lal gupta to defraud the defendant insurance company) is liable to be dismissed. 16. Before concluding, it would be necessary to refer to the interim order dated 24.9.1993 passed by this Court where-under it was provided that in the event of the appeal of the defendant appellant LIC being allowed, the decreetal amount if disbursed would be liable to be recovered by the LIC along-with interest @ 18% p.a. from the date of disbursement to the date of repayment. This appeal having been allowed, it is directed that the LIC would be entitled to restitution and recovery of the amount disbursed under the judgment and decree dated 24.7.1993 (now set-aside) along-with interest @ 18% p.a. from the date of disbursal till the date of recovery. Decree be drawn accordingly.Appeal Allowed. *******