T. Nandakumar Singh, J.
1. By this writ petition, the writ petitioner, 1 who is an unfortunate widow, is assailing the decision of the Manager (PS/SSS/Claims) vide letter dated 23.12.1996 (Annexure-A to the writ petition) to the writ petitioner, wherein Life Insurance Corporation of India had denied the claim of the petitioner for the sum assured amounting to Rs. 1 lakh under the Policy No. 490445746 through Churachandpur Branch of Life Insurance Corporation of India and also the order/letter dated 4.11.1998 (Annexure-D to the writ petition) for upholding the repudiation of the said claim for the sum assured by the Silchar Divisional Office of Life Insurance Corporation of India.
2. Heard Mr. S.T. Kom, learned Counsel appearing for the petitioner as well as Mr. T. Gogonchandra, learned Counsel appearing for the respondents.
3. A short factual matrix of the petitioner's case leading to the filing of the present writ petition is required to be recapitulated for deciding the matter in issue in the present writ petition. The petitioner's husband, namely, Langsutbum Kom, a resident of Sagang Village, Churachandpur District opened a LIC policy of Life Insurance Corporation of India under policy No. 490445746 through Churachandpur Branch of Life Insurance Corporation of India and admittedly, the date of commencement of the said policy was 15.3.1994. A copy of the said policy is available at Annexure-R/7 to the affidavit-in-op-position filed by the respondents. Admittedly, the matter regarding the insurance in the present case is covered by the Insurance Act, 1938. One of the conditions of the said Insurance Policy is that there shall be forfeiture of the sum assured under the said policy in case requirements mentioned in Section 45 of the Insurance Act, 1938 are not fulfilled. For easy reference, the said conditions i.e. condition No. 5 of the said policy as well as Section 45 of the Insurance Act, 1938 are quoted hereunder:
Condition No. 5 of the Policy No. 490445746
5. Forfeiture in certain events: In case the premiums shall not be duly paid or in case any condition herein contained or endorsed hereon shall be contravened or in case it is found that any untrue or incorrect statement is contained in the proposal, personal statement, declaration and connected documents or any material information is withheld then and in every such case but subject to the provisions of Section 45 of the Insurance Act, 1938, wherever applicable, this policy shall be void and all claims to any benefit in virtue hereof shall cease and determine and all moneys that have been paid in consequence hereof shall belong to the Corporation, excepting always in so far as relief is provided in terms of the Privileges herein contained or may be lawfully granted by the Corporation.
Section 45 of the Insurance Act, 1938.
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 statement made in the proposal 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.
4. Admittedly, the provision of Section 45 of the Insurance Act, 1938 is applicable to the said policy. The said policy was lapsed after some time but it was revived on 04.12.1995. Within some days from the date of revival of the said policy, the petitioner's husband, i.e. the insured, died on 17.12.1995. After the death of the insured, i.e. the petitioner's husband, the petitioner made a claim for the sum assured amounting to Rs. 1 lakh but the respondents, LICI, by taking recourse to the conditions of the said policy quoted above and also Section 45 of the Insurance Act, 1938, had called in question of the said insurance policy on the grounds supported by materials documents that the petitioner's husband i.e. the insured had suppressed materials fact that during last five years from the date of opening the insurance policy, he had consulted medical practitioner for his ailment requiring treatment for more than a week and that he was suffering from stomach ailment and treated by the Doctor for his stomach ailment.
5. The Life Insurance Corporation of India, in support of their case, annexed a copy of the duly filled-up form for opening the insurance policy (Annexure R-l), the order/letter for revival of the said insurance policy (Annexure R-2) and the letter of the Doctor dated 14th June, 1996 to the LICI (Annexure R-4) in their affidavit-in-opposition.
6. On perusal of the copy of the said duly filled up form (Annexure R-1), it is clear that the petitioner's husband, the insured, had been asked to answer a number of questions regarding his health conditions. Some of the questions are:
(a) During the last five years did you No
consult a Medical Practitioner for any ailment requiring treatment for more than a week?
(b) Have you ever been admitted to No any hospital or nursing home for general check up, observation treatment or operation?
(c) Have you remained absent from No place of work on grounds of
health during the last 5 years?
(d) Are you suffering from or have No you ever suffered from ailments pertaining to Liver, Stomach, Heart, Lungs, Kidney, Brain or Nervous system?
The petitioner's husband, i.e. the insured, answered the questions in negative.
7. The Doctor, namely, Dr. L.R. Kom, who treated the petitioner's husband (the insured) during his life time, had stated in his letter dated 14.6.1996 (Annexure R-4) to the LICI that the petitioner's husband (the insured) was under his medical supervision for one to two years prior to his death and he was suffering from Peptic Ulcer Syndrome and since mid 1993, he used to prescribe him different medicines for his stomach ailments.
On bare perusal of the said duly filled up form (Annexure R-1), the said letter/order for revival (R-2) and the said letter of the Doctor dated 14.6.1996 (Annexure R-4) to the Life Insurance Corporation of India, it appears that the petitioner's husband was suffering from stomach ailments at the time of filling the said form for opening the said insurance policy as well as at the time of revival of the said policy on 04.12.1995.
8. Mr. S.T. Kom, learned Counsel appearing for the petitioner, strenuously contends that LICI cannot repudiate or/question the said insurance policy after expiry of two years inasmuch as the Life Insurance Corporation of India can only question the insurance policy within two years from the date of commencement of the insurance policy. To the contra, Mr. T. Gogonchandra, learned Counsel appearing for the respondents contends that the Life Insurance Corporation of India can question or repudiate the policy even after the expiry of two years from the date of commencement of the policy by taking recourse to the second part of Section 45 of the Insurance Act, 1938 if the three conditions: (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 are fulfilled. In order to bolster up his submission, Mr. T. Gogonchandra has heavily relied on the decision of the Hon'ble Apex Court in Mithoola Nayak v. Life Insurance Corporation of India : AIR1962SC814 .
9. The question as to whether or not the insurance Company can question or repudiate a insurance policy after the expiry of two years from the date of commencement of the policy had been discussed and decided by the Hon'ble Apex Court in Mithoola Nayak (supra). The fact in that case was that the insurance policy in question was come into effect from January, 15, 1945 and the company i.e. Insurance Company repudiated the claim by its letter dated October 10,1947. The Hon'ble Apex Court for the reasons mentioned in para No. 7 of the judgment in Mithoola Nayak (supra), held that the second part of the Section (Section 45) is in the nature of a proviso, which create an exception and there are 3 (three) requirements for attracting the said exception. For easy reference, para No. 7 and the relevant portions of the para No. 8 of the judgment in Mithoola Nayak (supra) are quoted hereunder:
(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:
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 noted 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, 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 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, then the insurer can call in question the policy effected as a result of such inaccurate or false statement. In the case before under section, the policy was issued on March 13. 1945 and it was to come into effect from January 15. 1945. The amount insured was payable after 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 the 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 July. 1946 constituted in law a new contract between the parties and if two years were to be counted from July, 1945, 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 that 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.
(Emphasized by me)
(8) 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.
10. Mr. T. Gogonchandra, learned Counsel appearing for the respondents contends that from the ratio laid down by the Hon'ble Apex Court in Mithoola Nayak (supra), it is crystal clear that the second part of the Section 45 of the Insurance Act, 1938 is in the nature of a proviso, which create an exception under which the Insurance Company could question or/repudiate a insurance policy even after the expiry of two years from the date of commencement of the insurance policy provided 3 (three) conditions mentioned in Mithoola Nayak (supra) are fulfilled. Relying on this ratio, Mr. T. Gogonchandra, learned Counsel submits that Life Insurance Corporation of India can repudiate the sum assured amounting to Rs. 1 lakh under the said policy, on the ground mentioned above, such as suppression of the materials fact regarding the health conditions of the petitioner's husband at the time of opening the policy and also at the time of revival of the policy.
11. The ratio laid down by the Hon'ble Apex Court in Mithoola Nayak (supra) is also followed by the Hon'ble Apex Court in a later case i.e. Life Insurance Corporation of India v. Smt. G.M. Channabasamma : AIR1991SC392 wherein the Hon'ble Apex Court held that Section 45 of the Insurance Act, 1938 has made a special provision for a 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. Mr. T. Gogonchandra, further, contends that the ratio laid down by the Hon'ble Apex Court in Mithoola Nayak (supra) that LICI can question a policy on the 3 (three) conditions indicated in Mithoola Nayak (supra) case even after the expiry of two years from the date of commencement of the policy was reiterated by the Hon'ble Apex Court in Life Insurance Corporation of India v. Smt. G.M. Channabasamma (supra).
For the reasons discussed above, this Court is of the considered view that repudiation of the claim for the sum assured by the Life Insurance Corporation of India in the present case is in consonance with Section 45 of the Insurance Act, 1938 and therefore, the objections raised by Mr. S.T. Kom, learned Counsel appearing for the petitioner is not sustainable in the eye of law.
As it has been held above that the Life Insurance Corporation of India had questioned the insurance policy in consonance with Section 45 of the Insurance Act, 1938 on the materials supported by the relevant facts and documents, it appears that no materials have been made out for interfering with the impugned letters dated 23.12.1996 and 04.11.1998 of the Life Insurance Corporation of India in the present writ petition. Accordingly, the present writ petition is devoid of merit and it is dismissed.