ORDER (Per: Mr. C.C. Pant, Member) This is Insurance Company’s appeal, filed under Section 15 of the Consumer Protection Act, 1986 against the order dated 19.09.2007 passed by the District Forum, Dehradun, in consumer complaint No. 01 of 2003, whereby the District Forum has allowed the consumer complaint and directed the Insurance Company to pay a sum of Rs. 50,000/- to the complainant together with interest @ 9% per annum from the date of filing the consumer complaint till payment. 2. The facts of the case, in brief, are that Sh. Shamshudin (now deceased), husband of the complainant – Smt. Farjhana Khatoon had taken a life insurance policy on 28.01.1999 during his lifetime from the Branch Manager, Life Insurance Corporation of India, Chakrata Road, Dehradun – opposite party No. 1 (for short “LIC”) on his own life, covering a risk of Rs. 50,000/-. The complainant’s husband, the policy holder, died on 28.06.2001 due to heart failure. The complainant, being nominee in the policy, submitted a claim for the insurance amount to the opposite party No. 1. After some time, she was told by opposite party No. 1 that the claim has been sent to the Divisional Manager, Life Insurance Corporation of India, Haridwar Road, Dehradun – opposite party No. 2. After about one year, a letter was sent to the complainant by the opposite party No. 2 informing her that her claim has been repudiated on the ground that her husband had concealed his ailment at the time of submitting the proposal form. This led the complainant to file a consumer complaint before the District Forum, Dehradun. The District Forum, after an appreciation of the facts of the case, allowed the consumer complaint vide its order dated 19.09.2007 and directed the opposite parties to pay the insurance amount together with interest, as stated above. Aggrieved by the said order, the opposite parties have filed this appeal. 3. We have heard the learned counsel for the parties and perused the material placed on record. 4. The learned counsel for the appellants argued that the appellants under Section 45 of the Insurance Act, are well within their rights to repudiate the claim, if it is found on investigation that the life assured had concealed the material facts about his/her health at the time of taking the policy. 4. The learned counsel for the appellants argued that the appellants under Section 45 of the Insurance Act, are well within their rights to repudiate the claim, if it is found on investigation that the life assured had concealed the material facts about his/her health at the time of taking the policy. Referring to the proposal form at Paper No. 31, the learned counsel submitted that the proposer has answered to all the queries in negative except one relating to usual state of health which has been answered as “good”. On investigation, it was found that the life assured was suffering from kidney ailment. He was under treatment and remained hospitalized in M.K. Surgical Clinic, Dehradun from 21.11.1998 to 03.12.1998. Immediately after about two and a half month, i.e., on 15.02.1999, when he submitted the proposal form, he has answered to the query, whether he had consulted any Medical Practitioner for any ailment requiring treatment for more than a week, in negative. Not only this, he had also answered in negative to the queries whether he had ever been admitted to any hospital or nursing home for general check-up, observation, treatment or operation and whether he had ever suffered from ailments pertaining to liver, stomach, heart, lungs, kidney, brain or nervous system. The learned counsel argued that the insurance contracts, unlike other contracts, are founded on the principle of utmost good faith and hence in the case of life assured, it stands vitiated because he had in contravention to the above principle, deliberately concealed his illness and hospitalization. 5. In support of his arguments, the learned counsel for the appellants pressed into service certain decisions of Hon’ble Supreme Court and Hon’ble National Commission. In the case of P.C. Chacko & Anr. vs. Chairman, Life Insurance Corporation of India & Ors.; III (2008) CPJ 78 (SC), the Hon’ble Supreme Court has observed that Life Insurance Corporation being a State within the meaning of Article 12 of the Constitution of India, its action must be fair, just and equitable, but the same would not mean that it shall be asked to make a charity of public money. In the case of Satwant Kaur Sandhu vs. New India Assurance Company Ltd.; IV (2009) CPJ 8 (SC), the Hon’ble Supreme Court has held that the term “material fact” mean any fact which would influence the judgment of a prudent insurer in fixing the premium or determining whether he would like to accept the risk. Therefore, the learned counsel submitted that had the life assured disclosed his ailment with regard to kidney and his hospitalization, the appellants might have taken a different decision in respect of the amount of premium or with regard to acceptance of the proposal form. The learned counsel further submitted that the Hon’ble National Commission in the case of Life Insurance Corporation of India vs. Krishna Chander Sharma; 2007 (1) CPC 590 has held that as complainant’s wife was guilty of suppressing material facts about her health, therefore repudiation of claim is justified. Similarly, in the case of Usha Rani Gupta & Anr. vs. Life Insurance Corporation & Ors.; II (2013) CPJ 257 (NC), the Hon’ble National Commission has held that the life assured was under obligation to give correct answers pertaining to his health at the time of revival of lapsed policy and as insured suppressed material facts regarding disease and gave false answers, the insurance company has not committed any deficiency in service in repudiating claim of the complainant. The learned counsel also submitted that the Hon’ble National Commission has also observed in this case that the argument advanced by the learned counsel for the petitioner that life assured died due to heart attack and cause of death had no nexus with previous treatment of disease, is devoid of force, because life assured was under obligation to give correct answers pertaining to his health at the time of revival of lapsed policy hether or not cause of death has any nexus with the disease suffered by life assured. Thus, the learned counsel for the appellants submitted that even if the life assured Sh. Shamshudin had died due to heart attack and the previous treatment pertained to the ailment of kidney, it was obligatory for him to state correct facts about his health and hospitalization. By giving false answers, the contract of insurance had vitiated and, therefore, the appellants have rightly repudiated the complainant’s claim. Shamshudin had died due to heart attack and the previous treatment pertained to the ailment of kidney, it was obligatory for him to state correct facts about his health and hospitalization. By giving false answers, the contract of insurance had vitiated and, therefore, the appellants have rightly repudiated the complainant’s claim. The learned counsel for the appellants also referred to the following judgments in support of his arguments:- (1) Decision of the Hon’ble National Commission in the case of LIC of India & Ors. vs. K.A. Chandrakala; II (2009) CPJ 167 (NC) (2) Decision of the Hon’ble National Commission in the case of Life Insurance Corporation of India & Anr. vs. M. Gowri & Ors.; 398 X-1994 (3) CPR (NC) (3) This Commission’s decision in the case of Smt. Kailasho Devi vs. Life Insurance Corporation of India; 2006 (2) UAD 166 (4) This Commission’s decision dated 02.08.2011 in First Appeal No. 370 of 2007: Smt. Sushil Kaur vs. Life Insurance Corporation of India & Ors.; 6. The learned counsel for the respondent reiterated the facts of the case and argued in support of the impugned order. He also submitted that the life assured was an illiterate person. The proposal form was filled up by the agent of the L.I.C. He also pointed out certain discrepancies in the details filled up in the proposal form and submitted that these discrepancies itself show that the statements were not made by the life assured. 7. We considered the submissions made by the learned counsel for the parties. It is true that insurance contracts are based on the principle of utmost good faith and whatever the proposer states in the proposal form, the insurer accepts it in good faith and accordingly takes a decision in respect of the proposal. If it is found at any stage that the information furnished by the life assured is false and he / she had deliberately concealed the material facts, the contract of insurance stands vitiated. This is what the Hon’ble Supreme Court has observed in the judgments cited by the learned counsel for the appellants. But, at the same time, the Hon’ble Supreme Court has also emphasized that the action taken by the L.I.C. must be fair, just and equitable. This is what the Hon’ble Supreme Court has observed in the judgments cited by the learned counsel for the appellants. But, at the same time, the Hon’ble Supreme Court has also emphasized that the action taken by the L.I.C. must be fair, just and equitable. This observation is most significant for the insurance company as well as for the Consumer Fora because fair, just and equitable action cannot be taken in a mechanical way, but it requires consideration of all the facts and circumstances of the case. In the case of “P.C. Chacko & Anr.” (supra) the insured had taken the policy on 21.02.1987 and he died on 06.07.1987, i.e., within five months. But in the instant case, the life assured had died after two years from the date of taking the policy. In the case of “Satwant Kaur Sandhu” (supra) the insured fell ill immediately after taking the mediclaim policy and the insurance company, on investigation, found that he was a known case of “Chronic Renal Failure/Diabetic Nephropathy” and was on regular haemodialysis at his place. Thus, the insurance company succeeded in establishing that the insured had fraudulently concealed the material facts about his ailment at the time of taking the policy. 8. In the instant case, the most significant factor is the illiteracy of the deceased person. From the perusal of the proposal form (Paper Nos. 29-31), it is evident that the proposer was a labourer and was unable to read and write the material printed on the proposal form. The entries in the proposal form have been filled in by the L.I.C.’s agent Sh. D.S. Rawat. It also appears from the perusal of the proposal form that someone had read out the details of the proposal form for the proposer and that person’s signature has also been taken, but neither the signature is legible nor it is mentioned in form who that person was. Therefore, the illiteracy of the life assured and the economic strata to which he belonged make it doubtful whether the life assured was aware of what he was going to sign and the repercussions of the statements made in the proposal form. In this regard, it would be helpful to consider what Section 45 of the Insurance Act says. It says that- “45. In this regard, it would be helpful to consider what Section 45 of the Insurance Act says. It says that- “45. Policy not to be called in question on ground of misstatement after two years–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. Provided that nothing in this section shall prevent the insurer from calling for proof of age at any time if he is entitled to do so, and no policy shall be deemed to be called in question merely because the terms of the policy are adjusted on subsequent proof that the age of the life insured was incorrectly stated in the proposal.” 9. It is important to note that no policy of life insurance can be called in question by the insurer on the ground that a statement made in the proposal form was incorrect or false after the expiry of two years from the date on which it was effected unless the insurer establishes that such a statement was a suppressed fact and it was fraudulently made by the policy-holder. In the instant case, of course, the life assured had not disclosed that he remained hospitalized, but the way the proposal form has been filled up indicates that this fact was not concealed fraudulently by the proposer. Moreover, the death of the insured occurred due to heart attack and there is no evidence on record which leads to prove that the heart attack was the result of renal failure. Moreover, the death of the insured occurred due to heart attack and there is no evidence on record which leads to prove that the heart attack was the result of renal failure. It is true that it was obligatory for the insured to give correct answers to the queries made in the proposal form and it is not necessary to be seen whether the cause of death has any nexus or not with the disease suffered by the life assured, but as discussed above, in the instant case the proposer was totally dependent on the agent for getting the proposal form filled in. The argument, as advanced by the learned counsel for the appellants, that L.I.C.’s agent is the agent of the proposer for the purpose of filling up the proposal form should be considered in the light of the facts and circumstances of the instant case. The most important is the role of the insurance company in such cases as per observations made by the Hon’ble Supreme Court in “P. C. Chacko” case. The Hon’ble Supreme Court has stated that the action taken by the insurer must be fair, just and equitable. The word used by the Hon’ble Supreme Court is “must” and the observations with regard not to make charity of public money follow it. That means, while taking a decision, a mechanical rule that if the life assured has made a false statement, the claim becomes repudiable, should not be followed. Similarly, if it is proved that the life assured had deliberately concealed the material facts, the claim should not be allowed on the garb of fairness and equitability of decision. For a fair, just and equitable decision, the facts and circumstances of a case should be considered in its totality. In the light of the facts and circumstances of the instant case, can we say that the repudiation of the complainant’s claim was just, fair, and equitable? Our answer, after a careful thought, is “No”. What we observed in this case is that the appellants have repudiated the respondent’s claim only on the basis, and in a mechanical way that the fact of hospitalization in the year 1998 was concealed by the life assured. Our answer, after a careful thought, is “No”. What we observed in this case is that the appellants have repudiated the respondent’s claim only on the basis, and in a mechanical way that the fact of hospitalization in the year 1998 was concealed by the life assured. While taking a just, fair and equitable decision, the appellants should have to consider the facts that life assured was illiterate, belonged to a poor category, his death occurred after two years from the date of taking the policy and also that the cause of death was heart attack. Had the decision been taken considering these facts and circumstances of the case, it would have been just, fair and equitable decision and we are sure that such a decision would not have led the insurer in the repudiation of the respondent’s claim. In the light of the aforesaid observations made by us in the instant case, the ratio of the other decisions cited by the learned counsel for the appellants cannot be straightaway applied to this case and we cannot hold in the instant case that the decision taken by the appellants in repudiating the respondent’s claim was fair, just and equitable. Therefore, we are of the view that the judgment and order passed by the District Forum does not require any interference and this appeal is liable to be dismissed. 10. The appeal is dismissed. The order dated 19.09.2007 passed by the District Forum, Dehradun, is hereby confirmed. No order as to costs.