M. Rama Jois, J.
1. In this writ petition in which the petitioner has sought for the issue of a writ of mandamus directing the Life Insurance Corporation to make payment pursuant to the two policies which had been taken by the husband of the petitioner during his life time, the following two question of law arise for consideration :
(1) Whether in view of section 45 of the Life Insurance Act, 1938, the Life Insurance Corporation cannot repudiate the claim under a life insurance policy after the expiry of two years from the date of its issue, even if it has in its possession evidence to prove that the policy-holder had suppressed material information which he ought to have disclosed or had made deliberate false statement in respect of a material matter and
(2) If the repudiation of the claim under a life insurance policy by the Corporation, is on the ground that the policy-holder had suppressed material information which he ought to have disclosed or on a material matter, on the basis of evidence it has in its possession and its correctness is disputed by the claimant, at writ petition under article 226 of the Constitution of India can be entertained for deciding such a dispute
2. The facts of the case, in brief, are as follows : The late husband of the petitioner, Narasing Rao Jatla, was a cloth merchant at Bidar. During his life time he had insured his life with the Life Insurance Corporation of India ('the Corporation', for short). He was holding three life insurance policies. The husband of the petitioner died on January 3, 1984. One of the policies taken for a sum of Rs. 25,000 was settled by the Corporation Regarding the other two policies, the Corporation repudiated the claim on the ground that the husband of the petitioner had deliberately made misstatement and withheld material information regarding his health at the time of effecting the insurance. Thereafter, the petitioner got issued a legal notice on May, 4, 1987, (annexure-G), calling upon the Corporation to settle the claim. In reply, the Corporation informed the appellant that for the reasons set out in their earlier letters, the Corporation had repudiated its liability under the two policies and they have nothing further to add in the matter. Thereafter, the petitioner has presented this petition praying for the issue of a writ of mandamus directing the Corporation to settle the claim in respect of the two policies.
3. With reference to the first question, learned counsel for the petitioner submitted that in view of section 45 of the Insurance Act which applies to the Corporation by virtue of section 43 of the Act, the Corporation after the expiry of two years cannot under any circumstance repudiate the claim under an insurance policy on the ground that the policy-holder had made misstatements or false statement in respect of his health. Section 45 of the Insurance Act, 1938, on which learned counsel relies reads :
'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 Act and no policy of life insurance effected after 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 show 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.'
4. A reading of the above section at once indicates that the contention urged by learned counsel for the petitioner is patently untenable. Section 45 of the Act has got two parts. According to the first part,e even if there were to be inaccurate or misstatements about the several particulars furnished in the proposal from, an insurer cannot repudiate the policy after the expiry of two years. To illustrate, if in giving information about the number of his brothers and sisters, the proposer had given the number or brother and sisters living and had failed to include the brothers and sisters who had died, it would not be a case of furnishing false information in respect of a material fact. Therefore, after the expiry of two years, the Corporation cannot repudiate the policy on that ground. According to the second part, the insurer, however, has the right to repudiate the claim under circumstances expressly stated therein. This question is covered by the judgment of the Supreme Court in the case of Mithoolal Nayak v. Life Insurance Corporation of India [1962] 32 the three conditions for the application of the second part of section 45 of the Act. They are (at page 184) :
'(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.'
5. In the said case, the Supreme Court held that the conditions set out in the second part of section 45 was satisfied and, therefore, the Corporation was right in repudiating the claim.
6. In the present case, the grounds on which the two policies in respect of which proposals were made on December 28, 1979, and August 17, 1980, were repudiated, have been set out in the letters dated December 29, 1984, and February 12, 1985 (annexures E and F, respectively). The relevant of annexure E reads :
'In this connection, we have to inform you that in the proposal for assurance dated December 28, 1979, and also personal statement regarding health signed by the deceased life assured on 4th May, 1982, he had answered the following question as undernoted :
Questions Answers17(a) What has been your usual stateof health ?18(a) Have you suffered from or are goodyou suffering from :High or low blood pressure, rheumaticfever, pain in chest, breathlessness,palpitation infarction or any otherdisease of the heart or arteries no(b) Any disease of kidney, prostateor urinary system no19 Have you ever suspected or diabetesor are you suffering from diabetesor have ever passed sugar, pus orblood in urine noWe may, however, state that all these answers were false as we hold indisputable proof to show that about one year before he proposed the above policy he had suffered from micturition, breathlessness and giddiness for which he had consulted a medical man and had taken treatment from him.
He did not, however, disclose these facts in his proposal but instead he gave false answers therein as stated above.
It is, therefore, evident that he had made deliberate misstatements and withheld material information from us regarding his health at the time of effecting the assurance and hence in terms of policy contract and the declaration contained in the form of proposal for assurance, we hereby repudiate the claim and accordingly, we are not liable for any payment under the above policy and all moneys that have been paid in consequence thereof belongs to us.'
7. Similarly, in respect of the proposal dated August 17, 1980, the Corporation stated in annexure-F as follows :
'With reference to your claim under the above policy, on the life of your deceased husband, we have to inform you that the policy was allowed to lapse by non-payment of half-yearly premium due February, 1979, without acquiring any paid-up value. The policy was revived on August 17, 1980, for the full sum assured on the strength of a personal statement regarding health and made by the deceased on 30th June, 1980, and short medical report.
In the said personal statement of the said short medical report completed by the deceased, he had answered the following question as stated below :
Question Answers2. Since the date of your proposal are yousuffering from :(ii) High blood pressure or any diseaseof the heart no(iii) Any disease of kidney, prostateor urinary system no4. Are you in sound health all present yes.We hold indisputable evidence to show that the assured had suffered from micturition, breathlessness and giddiness for which he took medical treatment from 1978 onwards. He did not, however, disclose these facts in his said personal statement.
It is, therefore, evident that he had made deliberate misstatements and withheld material information from us regarding his health at the time of getting the policy revived and hence in terms of the declaration signed by him at the foot of the said personal statement the revival of the policy is hereby declared void and all money towards revival of the policy and subsequent thereto belong to us.
The policy had run only for two years prior to the date of revival. It has, therefore, not acquired any paid-up value. As such nothing is payable under the policy.'
8. From the contents of the replies furnished, it is clear that if what the Insurance Corporation has stated in the two replies is true, the second part of section 45 of the Act would be clearly attracted, therefore, there is no substance in the contention of the petitioner that after the expiry of two years, the insurance company could not repudiate the claim under section 45 of the Act.
9. Learned counsel for the petitioner, however, submitted that the Corporation itself had settled the claim under another policy held by late husband of the petitioner for a sum of Rs. 25, 000 and that being the position, the Corporation could not repudiate the claim under the two policies. In the petition, the petitioner had not mentioned about the date of the policy which had been settled by the Corporation. However, learned counsel had taken time where the matter came up on the last occasion and today he submitted that the said policy was taken in the year 1972. It is obvious that there was no ground falling under the second part of section 45 of the Act in respect of the policy taken in the year 1972, which was more than 7 to 8 years earlier to the two policies in respect of which the Corporation has repudiated the claim. Therefore, the fact that the amount due under the said policy has been settled has no relevance at all to the repudiation of the claim under the two later policies.
10. The being the position, the only course open to the petitioner is to file a civil suit against the Corporation and in such a suit it would be for the Corporation to prove the grounds set out in the two communications, in order to sustain its action of repudiating the claims under the two policies.
11. Learned counsel for the petitioner,however, submitted that even the question as to whether the grounds mentioned in the two letters were true or not, could also be decided in this writ petition itself. In support of this, learned counsel relied on the judgment of the Bombay High Court in the case of Smt. Asha Goel v. Life Insurance Corporation of India : AIR1986Bom412 Learned counsel pointed out that having come to the conclusion that notwithstanding the fact that the relationship between the Corporation, the insurer and the insured was contractual, the Bombay High Court held that a writ of mandamus would lie to the Corporation to make the payment of the amount due under the insurance policy and the court proceeded to decided as to whether the grounds on the basis of which the Corporation repudiated the claim under the life insurance policy in exercise of its right under the second part of section 45 of the Insurance Act were justified or not. The court recorded a finding of fact that the grounds on the basis of which the Corporation repudiated the claim did not exist and consequently issued a writ of mandamus directing the Corporation to pay the amount due under the policy.
12. As far as the maintainability of a writ petition under article 226 of the Constitution of India against the Life Insurance Corporation which is established under an Act of parliament, the Life Insurance Corporation Act 1956, is concerned, it is beyond doubt. The Corporation is 'State' as defined under article 12 of the Constitution and, therefore, amenable to the writ jurisdiction of the High Court under article 226 of the Constitution. Further, it is also beyond doubt that a writ of mandamus can issue to the Life Insurance Corporation for payment of money due under a policy, provided the withholding of the payment is contrary to law. For instance, if, in a given case, there are no grounds which entitle the corporation to repudiate the claim in exercise of its right given to it under the second part of section 45 of the Insurance Act, certainly a writ of mandamus can issue to the Corporation to make the payment, But when there is a reasonable basis for the Corporation to repudiate the claim under an insurance policy in exercise of its right under the second part of section 45 of the Insurance Act, no petition under article 226 of the Constitution can be entertained, for, the question as to whether such grounds are true or not could be decided only after recording oral and documentary evidence, which cannot be done in a petition under article 26 of the Constitution. In this behalf, the observations of the Supreme Court in the case of Radhakrishna Agarwal v. state of Bihar, AIR 1977 SC 1496:( 1977 ) 3 SCC 457, in which an obligation under under a contract was sought to be enforced in a petition under article 226 of the Constitution, are apposite. They read (at page 1500) :
'If those facts are disputed and require assessment of evidence the correctness of which can only be tested satisfactorily by taking detailed evidence, involving examination and cross-examination of witnesses, the case could not be conveniently or satisfactorily decided in proceedings under article 226 of the Constitution.
The same in the position in the present case. Whether the grounds specified in the two communications (annexures E and F) which prima facie attract second part of section 45 of the Insurance Act are true or not, can be decided only on recording documentary and/or oral evidence. This can be done only in a civil suit. Therefore, the writ petition cannot be entertained.
It is true that in the case of Asha Goel : AIR1986Bom412 , the learned judge of the Bombay High Court, who decided the case, even after having come to be conclusion that the grounds on the basis of which the claim under a policy was repudiated attracted the second part of section 45 of the Insurance Act, proceeded to record a finding as to whether the grounds were true or not. As can be seen from the facts of he said case, the husband of the petitioner therein who was an employee of Digvijay Cotton Mills, had insured his life with the Corporation. After his death, the Corporation repudiated the claim on the ground that the policy-holder had made false statement on material matters which attracted the second part of section 45 of the Insurance Act. The two material pieces of evidence on which the Corporation relied were, that at the time when the husband of the petitioner therein was admitted to a nursing home in the year 1980, he himself had made a statement before Dr. P. C. Kowdhe that he had suffered from a similar aliment of myocardial infarction in the year 1976, for which he was treated and, secondly, there was the evidence about the husband of the petitioner therein having taken sick leave from August 20, 1976, to September 1, 1976. The learned judge proceeded to record a finding as to whether these two grounds were true or not. As far as the statement made by the deceased policy-holder himself about his illness in the year 1976 was concerned the learned judge rejected it on the ground that no affidavit of Dr. Kowdhe was filed in the High Court. As regarding the leave records produced by the Corporation, the learned judge said (at p. 725 of 65 Comp cas) :
'Sometimes, when the employees to not want to exhaust their privilege leave, they take sick leave although they may in fact not be sick. And even if it is a fact that from August 20, 1976, to September 1, 1976, the deceased was sick, the record does not shows as to what he was suffering from.'
13. The learned judge recorded a finding of fact that both the grounds on which the Corporation repudiated the claim did not exist. With great respect to the learned judge, I am unable to agree that the High Court in exercise of its extraordinary jurisdiction under article 226 of the Constitution could proceed to record a finding of fact on such issues, which, as observed by the Supreme Court in the case of Radhakrishna Agarwal, AIR 1977 SC 1496:( 1977 ) 3 SCC 457, require the adducing of documentary evidence and examination of witnesses, which involves examination and cross-examination of the witnesses concerned. Proceedings to record a finding on such a disputed question of fact in a petition under article 226 of the Constitution would result in the denial of opportunity to the Corporation to prove the truthfulness of its plea by adducing documentary evidence and examining witnesses to prove its contents.
14. For the reasons aforesaid, I answer the question set out first, as under :
(1) In view of section 45 of the Insurance Act, 1938, the Life Insurance Corporation can repudiate the claim under a life insurance policy, after the expiry of two years from the date of its issue if it has in its possession evidence to prove that the policy-holder had suppressed material information which he ought to have disclosed or had made deliberate false statement in respect of a material matter.
(2) If the repudiation of the claim under a life insurance policy by the Corporation is on the ground that the policy-holder had suppressed material information which he ought to have disclosed or on the ground that he had made deliberate false statement in respect of a material material on the basis of the evidence it has in its possession and its correctness is disputed by the claimant, a writ petition under article 226 of the Constitution of India cannot be entertained for deciding such dispute.
15. Accordingly, I make the following order :
(i) The writ petition is rejected leaving liberty for the petitioner to file a civil against the Corporation if she is so advised.
(ii) No costs.