ORDER
Shylendra Kumar, J.
1. Petitioner's husband was working as a Beekeeping Organiser in the Industries & Commerce Department, Z.P. Wing, Mandya. Petitioner's husband being an employee of the State Government, was under an obligation to take out a policy of insurance on his life during his tenure of employment and this is governed by the Karnataka Government Servants (Compulsory Life Insurance) Rules, 1958 ('the Rules' for short). Under Rule 6 of these Rules, insurance is compulsory for Government servants and a premium amount of 6 1/4 % of the average salary of the employee is required to be remitted to the Government for issuing a life assurance policy under these Rules. Under the Rules, there is an option given to an employee to have a life assurance policy over and above this amount also and on payment of higher premium.
2. During his life time, the said employee, the husband of the petitioner had taken out three life assurance policies. Claim was not settled in respect of the Policy bearing No. 1347653 dated 01.01.1996 pursuant to the death of the employee on 13.09.1996, inasmuch as the Karnataka Government Insurance Department who had issued the policy repudiated the policy and rejected the request of the petitioner who is the wife and nominee under the policy, for payment of the policy amount.
3. It is this repudiation of the policy on the part of the respondent which is questioned in this Writ Petition contending that the repudiation is not bonafide, not in consonance with the terms of the policy, that the respondents have unjustly denied payment to the petitioner and as such directions are to be issued from this Court to the respondents to settle the claim put forth by the petitioner in respect of this policy and interest at 18% with other consequential benefits.
4. The premium that was being deducted from out of the salary payable to the petitioner's husband on account of the policy was Rs. 110/- per month and the policy itself had been taken out for a sum of Rs. 20,680/-.
5. It appears that the petitioner being aggrieved by the repudiation of the policy on the part of the respondents, had approached the District Consumer Redressal Forum by lodging complaint No. 495/98 before it and the District Consumer Forum had entertained the complaint and allowed the same as per its judgment dated 21.10.1997 directing the respondents to pay the petitioner the policy amount with interest at 15% per annum from 10.01.1997 till payment and with costs of Rs. 1,000/-.
6. However, the respondents had preferred an appeal to the State Consumer Disputes Redressal Commission in Appeal No. 29/00 as against the order passed by the District Forum and the appeal came to be allowed on 09.02.2001 and the order passed by the District Consumer Forum was set aside inasmuch as the Commission having taken the view in an earlier case that disputes in respect of insurance policies between the Government employees and the State will not come within the purview of the Consumer Protection Act, following the same, allowed the appeal and dismissed the application.
7. It is in these circumstances that the petitioner has approached this Court challenging the action on the part of the respondents in repudiating the contract and for a direction to direct the respondents to pay the policy amount to the petitioner. In the grounds urged in support of the petition, though it is urged that the order passed by the State Commission holding that the dispute relating to the settlement of a policy as between a Government employee and the Karnataka Government Insurance Department is not a dispute which can be agitated under the Consumers Protection Act, is not valid and sought to be questioned, no relief in this regard having been sought for, for setting aside the order dated 09.02.2001 passed by the Karnataka State Consumer Redressal Commission in Appeal No. 29/00 and inasmuch as the grievance of the petitioner is looked into independent of the same, it is not necessary for this Court to go into the question as to whether the State Commission is right in its view in holding that the subject matter was not one which could have been agitated under the provisions of the Consumers Protection Act.
8. Sri Maharudrappa, learned Counsel appearing for the petitioner submitted that the repudiation by the respondents as per communication dated 28.03.1998 on the premise that the petitioner's husband had suppressed vital material and true facts, is neither in terms of the provisions of the policy nor in terms of the Rules and is contrary to the ruling and law laid down by the Supreme Court in the matter of repudiation by insurance companies. Learned Counsel, elaborating this submission points out that the only ground on which the policy was sought to be repudiated is that the petitioner's husband had been bed-laid due to fever and had been advised rest for a month by the doctor in this connection and this is sought to be used as a material which was withheld at the time of furnishing the declaration on the policy of the assured and the same amounts to suppression of material facts and such the policy was repudiated. The medical certificate dated 03.08.1993 issued by the Lady Medical Officer, Primary Health Unit, Yellapur, Uttara Kannada had been produced by the petitioner's husband before the employer at the time of availing leave and this is used as a material to indicate suppression on the part of the petitioner's husband and for repudiating the policy of insurance. Learned Counsel submits that the certificate does not indicate any ailment, much less any ailment of serious nature for which the petitioner's husband was suffering; that it was a certificate which just indicated that the petitioner's husband had fever and general weakness for which he was advised rest for a month and it was during the year 1993 whereas the policy itself was taken in the year 1996 and the policy was taken particularly because the petitioner's husband's salary having gone up due to his promotion, he was required to take an additional policy to make good the minimum premium amount that is required to be contributed by an employee. Learned Counsel submits that in the circumstances there was absolutely no suppression or withholding of any material facts on the part of the petitioner's husband and the repudiation is not supported and not justifiable in law. Learned Counsel in this regard has placed reliance on the following decisions:
1. LIC OF INDIA AND ANR. v. CONSUMER EDUCATION AND RESEARCH CENTRE AND ORS., 1995 SCW 3834
2. LIFE INUSRANCE CORPORATION OF INDIA AND ORS. v. SMT. ASHA GOEL AND ANR., AIR 2001 SC 549
9. Learned Counsel urges that by the application of law as laid down by the Supreme Court in these decisions, this is a fit case where this Court should issue necessary directions.
10. Statement of Objections has been filed on behalf of the resp6ndents. It is interalia asserted that the petition is not tenable, it is frivolous and vexatious. It is also lacking in merits and bona fides and no case is made out for issue of writ by this Court and the writ petition deserves to be dismissed. It is sought to be pointed out that in response to the question in the prescribed format which was required to be filled up by the petitioner's husband at the time of taking out the policy 'have you consulted any medical practitioner in the last five years, if so give details etc.', the petitioner's husband has indicated in the negative whereas the very medical certificate dated 03.08.1993 had indicated that the petitioner's husband had consulted a medical practitioner about three years prior to the issue of policy and as such it was a misstatement on the part of the petitioner's husband. It is also asserted that as the petitioner's husband, at the relevant time was less than forty years, a non-medical proposal had been made and while doing so, leave taken on medical ground had not been revealed and as such it amounted to suppression of facts on the part of the petitioner's husband. The very records available with the employer having indicated that the petitioner's husband had been given such leave for a period of one month, the record itself was proof of such factum of suppression and nothing more is required such as examining the doctor who had issued certificate.
11. Sri Ramanjaneya Gowda, learned Government Advocate submits that the petition in the first instance itself is not tenable inasmuch as it involves a dispute relating to service conditions of a Government employee and as such this Court cannot entertain a petition under Article 226 of the Constitution of India for the relief sought for in this regard. Learned Government Advocate secondly submits that the subject matter being repudiation of a policy taken out in the name of the petitioner's husband and involving disputed facts or at any rate requiring enquiry into the facts and circumstances leading to repudiation, this is not a fit matter for consideration under Article 226 of the Constitution of India and in this regard relies upon a Division Bench decision of this Court in LIFE INSURANCE CORPORATION OF INDIA AND ORS. v. AJIT GANGADHAR SHANBHAG AND ORS., : AIR1997Kant157 as also the decision of the Supreme Court in STATE OF ORISSA v. DIVISIONAL MANAGER, LIC AND ANR., : [1996]3SCR527 . The latter decision is relied upon in support of the submission having regard to the fact that the relationship between the petitioner's husband and the respondent is undisputed and the petitioner's husband being an employee, a dispute or grievance if any in this regard, cannot be made subject matter of complaint before the Consumers' Redressal forum,
12. In so far as the first preliminary objection raised on behalf of the respondent by the learned Government Advocate is concerned, in a matter involving a service dispute and in the contest of the service conditions between an employee and State Government, it is no doubt true that this Court will not exercise jurisdiction under Article 226 of the Constitution of India having regard to the provisions of the Administrative Tribunals Act. However, in the present case, the question is not one of a dispute in the context of service conditions of a employee. The dispute primarily arises in the context of repudiation of a policy of Insurance. It is essentially a contract and is governed by the terms of the policy. It is no doubt true that the petitioner's husband was an employee of the State Government, but the terms of the policy are over and above the service conditions of an employee and the policy itself though might have been brought about because of a statutory rule governing the service conditions of an employee it nevertheless has led to creation of a contract of insurance policy between the respondents and the petitioner's husband and the embargo placed on the entertaining of disputes relating to service conditions of a State Government employee cannot be expanded to the examination of the terms of the subsequent contract of insurance policy and the action on the part of the insurer in repudiating this policy and denying the beneficiary payment under these policies as it is essentially the repudiation that is the subject matter. I am of the view this Court in a fit and justifiable case, can examine this question in the exercise of jurisdiction under Article 226 of the Constitution of India.
13. Even with regard to the objection that the Court should not entertain the Writ petition as it involves a question of the validity of repudiation of a policy, I am of the view that the learned Counsel for the petitioner is well supported in his submission that this Court can entertain the Writ petition in the light of the view taken by the Supreme Court in Asha Goel's case AIR 2001 SC 549 - LIFE INSURANCE CORPORATION OF INDIA AND ORS. v. SMT. ASHA GOEL AND ANR. In this case the Supreme Court took the view that in a given case the High Court may entertain a Writ petition under Article 226 of the Constitution of India for examining the question as to whether the repudiation on the part of the Insurance Company was for bona fide and tenable reasons and it is not necessary that in all such cases a beneficiary should be relegated to the Civil Court. The Court also stressed as to under what circumstances the right of repudiation is exercised under bonafide circumstances by an Insurance Company. In this case the Court observed that repudiation of claim by the Life Insurance Corporation of India merely on grounds that the insurer who died of Myocardial infraction and cardiac arrest had not disclosed correct information regarding his health at the time of effecting insurance with the Corporation is not proper. The Supreme Court also observed that the condition which attracted repudiation of the policy by the Insurance Company was that the incorrect statement must be on a material matter and on suppression of facts which was very material to be disclosed; that the suppression must be fraudulently made by the policy holder and policy holder must have known at the time of making the statement that it was false or that he suppressed facts which it was material to disclose. Such conditions generally applies to a situation where an Insurance Company like the respondent also repudiates the policy.
14. The medical certificate which is relied upon for arriving at the conclusion that the petitioner's husband had suppressed material fact and had furnished incorrect particulars, clearly indicates that the petitioner's husband had only fever and nothing else. That was an' incident about three years back and the certificate had been produced by the petitioner's husband at the time of seeking leave. The certificate did not indicate that the petitioner's husband suffered from any ailment or disease. At any rate it cannot be said that non-mentioning of this fever by the petitioner's husband in his declaration was with any fraudulent object of suppressing or withholding material information which could have otherwise resulted In non-issue of policy or altering the conditions of policy. An innocuous fever suffered by an employee about three years back cannot be held against the beneficiary of a life insurance policy for the death of the person about nine months after the issue of the policy. It cannot be said that there was any such material suppression of fact which could have led to the respondents' exercising their right of repudiation in a bonafide manner.
15. Moreover, petitioner's husband being an employee of the Government, it is not as though such material was not within the knowledge and reach of the employer. It is also significant to note that the very proposal for taking out the policy is routed through the proper channel and through the superior officers of the petitioner's husband. The policy having been issued in the context of the earlier policies, the premium paid under the earlier policies falling short of the minimum premium that was to be contributed every month by the petitioner's husband, no such mala fides can be attributed to the petitioner's husband when the policy dated 01.01.1996 was taken up. In the circumstances, there was absolutely no justification for repudiation of the policy by the respondents. In fact the repudiation is done in a rather general and casual manner and by taking a highly technical view of the terms of the policy governing repudiation of contract of insurance for suppression or misrepresentation. The exercise of right of repudiation of the policy by the respondents in the present case cannot be accepted as a bona fide exercise of such right on the touchstone of the law laid down by the Supreme Court in this regard.
16. In the circumstances, this writ petition is allowed. The respondents are directed to make payment of the amount due to the petitioner under policy No. 1347653 dated 01.01.1996 within a period of four weeks from the date of receipt of a copy of this order with interest at the rate of 10% per annum on the same from the date it was due till the date of payment.
17. Rule issued and made absolute.