Judgment:
Tirath S. Thakur, J.
1. This writ petition calls in question two communications both dated February 3, 1993, issued by the respondent-Corporation whereunder it has repudiated the claim made by the petitioner in respect of two insurance policies secured by her deceased husband.
2. Two insurance policies, one for a sum of Rs. 60,000 and the other for a sum of Rs. 90,000 were secured by the petitioner's husband in terms of proposal forms, annexures A and A-1, to the writ petition. The petitioner was the only nominee in both the policies to claim the benefits flowing from the same in the event of the death of the holder thereof. Nearly three years after the issue of the policies the insured died due to cardiac arrest in a nursing home at Mysore. The petitioner informed the competent authorities and made a claim for the benefits flowing from the policies. Upon examination of these claims the Corporation by its communications dated February 3, 1993, repudiated the same under section 45 of the Insurance Act, 1938, on the ground that the insured had made deliberate misstatements and withheld material information regarding the state of his health at the time of securing the policies. The Corporation pointed out that the deceased had falsely stated that he had not remained absent from his place of work on the ground of ill-health during the period of five years immediately before the policies were secured. The insured is also alleged to have falsely stated that he had not consulted any medical practitioner for any ailment requiring treatment for more than a week within a period of five years preceding the date on which the policies were secured. These statements, according to the respondent-Corporation, were false for the insured had about five months before the proposals for the policies were initiated, taken treatment from a doctor for traumatic arthritis and remained absent from his place of work for a period of 16 days between June 10, 1988, and June 25, 1988. The non-disclosure of the true facts as aforementioned were, according to the Corporation, sufficient to entitle it to repudiate the claim. Aggrieved, the petitioner has filed the present writ petition.
3. Mr. Satish Doddamani, learned counsel appearing for the petitioner, argued that the respondent-Corporation being a statutory body and an instrumentality of the State was bound to act fairly and abide by the minimum requirements of the principles of natural justice in the matter of repudiation of claims flowing from life insurance policies issued by it. Inasmuch as no notice was issued to the petitioner before repudiating the claims, contended learned counsel, the Corporation violated the principles of natural justice thereby rendering the impugned orders unsustainable. Counsel appearing for the respondent-Corporation on the other hand submitted that the repudiation of a contract of insurance on the ground that the same was vitiated by non-disclosure of material facts was referable to section 45 of the Insurance Act, 1938, which did not cast any obligation on the Corporation to issue a show-cause notice or afford any opportunity of being heard in the matter before the Corporation could repudiate its liability. He urged that the repudiation, in the instant case, was based on facts about which there was no dispute and any opportunity to the petitioner to show cause as to why the claim should not be repudiated would have been an idle formality.
4. I have given my anxious consideration to the submissions made at the Bar. That a public authority, particularly one created under a statute like the respondent, is bound to act fairly and in tune with the requirements of natural justice cannot be disputed specially when its action is likely to affect adversely the rights of a citizen. It is equally well settled that the principles of natural justice, not being codified rules cannot be put in a straitjacket and that they apply differently in different situations. What is required to be seen is whether in the context of a given situation the principles of fair play in action, equity and good conscience required an opportunity to be granted and also whether the denial of any such opportunity has in any manner caused any material prejudice to the person against whom the order has been passed. Viewed thus, the argument advanced by Mr. Doddamani does not appear to me to be well founded. I say so for, precisely speaking, two reasons. Firstly, because the petitioner has not made any grievance in the writ petition that the non-issue of any notice to her or the absence of any opportunity of being heard in the matter has caused any prejudice. The plea raised at the Bar does not find any place in the writ petition let alone has any prejudice been claimed on account of the absence of a notice. Indeed if absence of a notice had really caused any prejudice as claimed by Mr. Doddamani, there is no reason why the same should not have been claimed in the writ petition by raising a specific plea to that effect. Secondly, because the petitioner has in the writ petition clearly admitted the essential facts on which the orders of repudiation proceed. As pointed out earlier, the repudiation is founded on the plea that the deceased insured had remained under treatment of a doctor between June 10, 1988, and June 25, 1988, and that he had remained absent during that period from his place of work. These facts were admittedly not disclosed in the proposal forms. The petitioner's husband had on the contrary claimed that he had never remained absent from his place of work and also that he had never been under the care of any doctor for any ailment requiring a treatment of more than a week during a period of five years immediately preceding the initiation of the proposals. It is thus apparent that the non-disclosure of the information referred to in the repudiation orders is admitted. That being so, the question is whether the non-disclosure was in any way material for purposes of bringing about a valid contract. According to the petitioner, the treatment given to her husband was for a minor ailment which had nothing to do with his death. This, however, is a matter which would require a proper investigation in a properly constituted civil action filed before the competent civil court. As to whether the non-disclosure of the disease from which the petitioner's husband was suffering and the fact of his having taken treatment would have made any material difference in so far as the validity of the contract of insurance is concerned, cannot obviously be determined in the present extraordinary writ proceedings. Suffice it to say that even if a notice had been given to the petitioner and the petitioner had set up the defence that the disease was minor and unconnected with the ultimate cause of the death of the insured, it would have made little difference to the ultimate view the Corporation took in the matter. This is particularly so when according to the respondent-Corporation, the non-disclosure was fraudulent and had the effect of completely vitiating the contract of insurance which proceeds on a solemn assumption that the particulars disclosed are factually correct. I have, therefore, no hesitation in rejecting the first limb of the petitioner's case.
5. Mr. Doddamani, then argued that non-disclosure of a minor disease like the one suffered by the deceased was not tantamount to a fraudulent suppression of the facts so as to entitle the Corporation to repudiate the contract of insurance under section 45. In support he placed reliance upon a single Bench decision of the Bombay High Court in Dipashri v. LIC of India : AIR1985Bom192 . The facts in the said case were entirely different. That was a case where the allegation against the deceased insured was that he had not disclosed the details of ailments like influenza, dysentery, bleeding, piles and fever suffered by him in the past or his absence from his office on account of the said ailments. Pendse J., who delivered the judgment, held that ailments like the ones mentioned above were minor in nature and that it was not necessary for the deceased to disclose such trivial details. It was held that people in Bombay do not consult medical practitioners for such petty ailments and yet medical certificates were to be produced before the employer in accordance with the service conditions for taking sick leave. That such certificates were produced by the deceased was held to be insufficient for the Corporation to have repudiated the contract of insurance. The position in the instant case is different. Here the allegation is that the petitioner's husband had suffered traumatic arthritis, by no means a minor disease like influence or dysentery. Besides, the non-disclosure is relevant also from the point of view of the time taken by the deceased insured for getting treatment for the said disease. It is apparent from the proposal form that one of the questions that was required to be answered was whether the insured had at any time during the past five years suffered any ailment requiring treatment for more than one week. The answer, according to the Corporation, to this question ought to have been in the affirmative keeping in view the fact that the deceased had remained absent from office for more than 16 days just one year and six months before the issue of the policies. The non-disclosure of the ailment and the suppression of the fact regarding the petitioner having undergone treatment for a period of 16 days cannot, therefore, be equated with the non-disclosure of a minor ailment like influenza, dysentery, etc., referred to in the judgment cited by Mr. Doddamani.
6. That question relating to the fraudulent nature of suppressions and the like involved in the repudiation of insurance contracts can be sorted out more appropriately in a civil suit is also well settled. Reference in this connection can be made to LIC of India v. Ajit Gangadhar Shanbhag [1998] 93 Comp Cas 93 (Kar) and a single Bench judgment of this court in Laxamma v. LIC of India (W.P. No. 13034 of 1994, decided on 24th October, 1994). Mr. Doddamani, however, submitted that the period of limitation prescribed for filing any such suit has already expired with the result that the petitioner may be rendered without any remedy in case she is forced to approach a civil court. Counsel appearing for the Corporation on the other hand made a solemn statement that the Corporation shall not raise limitation as a defence in the suit that the petitioner may file on the basis of the policies in question. He, however, submitted that the suit must not be delayed inordinately and that the option available to the petitioner should be exercised within four months from today. In the circumstances, therefore, while dismissing this writ petition, I reserve liberty to the petitioner to file a suit for an appropriate relief in a competent civil court within four months from today, in which event the respondent-Corporation shall not set up limitation as a defence against any such claim. Any such suit if filed shall be disposed of by the court uninfluenced by any observation made by this court in this order. No costs.