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2022 DIGILAW 1291 (GAU)

Saru Borah v. Life Insurance Corpn. Of India

2022-11-24

SANJAY KUMAR MEDHI

body2022
JUDGMENT : 1. Heard Shri R.K. Bora, learned counsel for the petitioner. Also heard Shri S.P. Choudhury, learned counsel representing the Life Insurance Corporation of India Ltd. (‘the LICI’). 2. Considering the subject-matter in dispute and the fact that the writ petition is pending since the year 2037, the same is taken up for disposal at the admission stage. 3. The brief facts of the case may be narrated as follows. 4. The petitioner is a widow who has instituted the present writ petition. It is the case of the petitioner that her husband Bisheswar Borah during his life time had obtained a Life Insurance Policy with the LICI on 20.03.2013. Prior to obtaining of such Policy, the deceased husband was subjected to a number of medical test by the Panel Doctors of the Corporation and after such clearance, the Policy was entered into. The premium was Rs. 1,11,156. It is not in dispute that the aforesaid premium was required to be paid, on a quarterly basis and the terms of the Policy was 16 years. After entering into the aforesaid contract, 6 numbers of premium were paid. Unfortunately, in the meantime the deceased had health problems and on 20.9.2013, he was diagnosed with liver cancer and such detection was made in the Prince Aly Khan Hospital, Mumbai. The husband of the petitioner had ultimately passed away on 7.8.2014 whereafter the claim was made before the Jorhat Divisional Office of the respondents. After examination of the claim, vide inter office communication dated 30.10.2015, the claim was held, to be not admissible. The aforesaid decision was conveyed to the petitioner vide a communication dated 1.4.12.2015, by which the claim was repudiated. Being faced with such circumstances, the petitioner had submitted a representation on 30.1.2016 which however did not find any favour and the same was rejected vide an order dated 29.4.2016. It is the action of the LICI in repudiating the claim which is the subject-matter of this writ petition. 5. Shri Bora, the learned counsel for the petitioner has submitted that at the time of obtaining the Policy, the deceased, had to undergo a number of medical test before the empanelled doctors of the LICI. By drawing the attention of this court to the Annexures starting from Annexure-2, the learned counsel has submitted that different test were done by Doctors of different disciplines, namely, 1. Dr. Tapan Hazarika, 2. Dr. By drawing the attention of this court to the Annexures starting from Annexure-2, the learned counsel has submitted that different test were done by Doctors of different disciplines, namely, 1. Dr. Tapan Hazarika, 2. Dr. R.K. Bora, 3. Dr. Bhuban Ch. Miri, 4. Dr. P.K. Nath and 5. Dr. D.D. Mili. The examinations included Pathological Test, X-Ray, Urine Analysis, Haemogram, Hb Aly Test. All the aforesaid doctors had consistently opined that the proposed insured was in good state of health and had recommended that such Policy can be offered to him. The learned counsel submits that unfortunately the deceased husband was later on diagnosed with liver cancer for which he had passed away. He submits that there being a contract to indemnify in case of death, the Insurance Company is duty-bound to release the amount which was agreed upon in terms of the Policy. 6. In support of his submission, Shri Bora, the learned counsel for the petitioner places reliance upon a decision of the Hon’ble Supreme Court in the case of Manmohan Nanda v. United India Assurance Company Limited, (2022) 4 SCC 582 , In paragraph 55.5, the following has been stated. “55.5. The Insurance Company has the right to seek details regarding medical condition, if any, of the proposer by getting the proposer examined by one of its empanelled doctors. If, on the consideration of the medical report, the Insurance Company is satisfied about the medical condition of the proposer and that there is no risk of pre-existing illness, and on such satisfaction it has issued the policy, it cannot thereafter, contend that there was a possible pre-existing illness or sickness which has led to the claim being made by the insured and for that reason repudiate the claim.” 7. On the other hand, Shri S.P. Choudhury, learned counsel for the LICI submits that a contract of Insurance is different from an ordinary contract wherein the element of utmost good faith is necessary. Any non disclosure of facts relevant to the issue would be a reason to repudiate a claim. By drawing the attention of the court to the reports of Prince Aly Khan Hospital, Mumbai, the learned counsel for the Corporation has submitted that the report would reflect that since six months, the deceased was having occasional bleeding from the mouth. Any non disclosure of facts relevant to the issue would be a reason to repudiate a claim. By drawing the attention of the court to the reports of Prince Aly Khan Hospital, Mumbai, the learned counsel for the Corporation has submitted that the report would reflect that since six months, the deceased was having occasional bleeding from the mouth. He submits that the report being on 20.9.2013 and the Policy was opened on 20.3.2013 which was exactly six months and, therefore, it can be presumed that there was no candid disclosure from the person insured. He accordingly submits that the repudiation has been done on cogent and justifiable reasons which does not require any interference. By referring to the affidavit-in-opposition filed in this case, Shri Choudhury, the learned counsel for the Corporation has submitted that the reasons for repudiation have been categorically stated and the said reasons are germane and relevant and, therefore, this court would refrain from interfering with the case. 8. In support of his submission, the learned counsel for the Corporation has placed reliance upon the following case laws: 1. Satwant Kaur Sandhu v. New India Assurance Company Ltd., (2009) 8 SCC 316 . 2. Reliance Life Insurance Company Ltd. v. Rekhaben Nareshbhai Rathod, (2019) 6 SCC 175 . 9. In the case of Satwant Kaur Sandhu (supra) the Hon’ble Supreme Court has reiterated that it is a fundamental principle of Insurance Law that utmost good faith must be observed by the contracting parties. It is further been stated that good faith forbids the parties from non-disclosure of the facts which the party was aware of. For ready reference, the relevant paragraphs are extracted herein below: “19. In United India Insurance Co. Ltd. v. M.K.J. Corporation, this court has observed that it is a fundamental principle of insurance law that utmost faith must be observed by the contracting parties. Good faith forbids either party from non-disclosure of the facts “which the party privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary. (Also see : Modern Insulators Ltd. v. Oriental Insurance Co. Ltd.). 20. Good faith forbids either party from non-disclosure of the facts “which the party privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary. (Also see : Modern Insulators Ltd. v. Oriental Insurance Co. Ltd.). 20. MacGillivray on Insurance Law (Tenth Edition) has summarised the assured's duty to disclose as under:“…the assured must disclose to the insurer all facts material to an insurer's appraisal of the risk which are known or deemed to be known by the assured but neither known nor deemed to be known by the insurer. Breach of this duty by the assured entities the insurer to avoid the contract of insurance so long as he can show that the non-disclosure induced the making of the contract on the relevant terms.” 10. In the case of Reliance Life Insurance (supra), the Hon’ble Supreme Court was dealing with a matter where the proposer had set up a defence that signatures were obtained in the format without knowing the contents. Rejecting such submission, the Hon’ble Supreme Court had held that once the contract was signed, the parties will be bound by the terms of the contract. The facts of the said case however do not appear to have much of relevance in the present dispute. 11. There is no dispute to the proposal advanced by Shri S.P. Chodhury, learned counsel of the Insurance Company that a Policy of Insurance is a contract of utmost good faith where the parties are required to disclose all materials facts. With that principle in mind, let us examine the present dispute. The documents which are admitted by the contesting respondents include the Proposal Form along with the Certificates of proper health by at least 5 of the empanelled doctors of the Corporation of different disciplines. In none of the Reports, there has been any indication of any ailment which the deceased was suffering at the time of entering into the Policy. The Policy was ultimately opened on 20.3.2013 and it is not in dispute that there was any lapse in payment of the premium. In none of the Reports, there has been any indication of any ailment which the deceased was suffering at the time of entering into the Policy. The Policy was ultimately opened on 20.3.2013 and it is not in dispute that there was any lapse in payment of the premium. The quantum of Policy involved though important would not be of much relevance in determination of a dispute pertaining the repudiation subject to the condition that there is nothing on record to show that there has been suppression of relevant facts by the insured at the time of entering into the Policy. In fact, Shri Choudhury, learned counsel for the respondents has fairly submitted that there is absolutely no doubt on the competence of their empanelled doctors and the Reports and Certificates given by them. 12. Though in paragraph 9 of the affidavit-in-opposition of the Corporation dated 15.2.2018, it has been stated that from the Reports of the Prince Aly Khan Hospital, Mumbai, it could be presumed that the deceased was suffering from ailment at the time of opening of the Policy, such statement has been verified as per true to the knowledge of the deponent which cannot be accepted by this court. The deponent being an Assistant Secretary of the NE Cell (LEGAL) of the Corporation cannot justify that he had personal knowledge about such facts. That apart, the repudiation is only based on an observation made by the Prince Aly Khan Hospital, Mumbai while examining the deceased. Juxtapositioned the Reports given by the empanelled doctors of different disciplines of the Corporation categorically stated that the deceased was found, to be fit and this is an admitted fact by the respondents. 13. In view of the aforesaid facts and circumstances, this court is of the opinion that the reason assigned for repudiation are not sustainable in law as the said reasons are contrary to the own reports of the Corporation which were given by their empanelled doctors. 14. In view of the above, the repudiation made vide communication dated 14.12.2015 is set aside and the respondent Corporation is accordingly directed to pay the sum assured to the claimant who is the widow of the deceased expeditiously and in any case within an outer limit of 45 days from today. 15. No order as to cost.