ORDER
1. The facts leading to this writ petition inter alia are that on or about 28th March, 1978 Smt. Radha Rani Singh since deceased, the wife of the writ petitioner took out two policies of Life Insurance bearing Nos. 33456592 and 33456593 each for Rs. 50,000/- from the defendant No. 1 and the petitioner was appointed the nominee under S. 39 of the Insurance Act in both the policies. The said policies were issued by the respondents after full and proper medical examination of the insured lady. In or about the last week of the month of Jan., 1984. The said Smt. Radha Rani Singh suddenly fell ill and on 28th Jan., 1984 she was admitted to the Calcutta Medical research Institute at 7/2, Diamond Harbour Road, Calcutta for treatment and on 29th Jan., 1984 she expired at the said Hospital. The said insured during her life-time had duly paid all insurance premiums which were payable up to the time of her death and by letter dt. 3rd Feb., 1984 the petitioner lodged his claim to the sums insured on the aforesaid two policies as nominee thereof to the Branch Manager, City Branch Unit No. 14 of the Life Insurance Corporation of India who is respondent No. 3 herein who by his letter dt. 12th Mar., 1984 informed the petitioner that the said letters of the petitioner have been forwarded to the Senior Divisional Manager, Death Claim, Calcutta Divisional Office of the Life Insurance Corporation of India, the Respondent No. 2 herein. It has been alleged in the writ petition that after submission of all documents as demanded by the respondents thepetitioner made several written and verbal requests to the respondents to make payments of the amounts of the claim in respect of the said policies to the petitioner as nominee under the same. On 19th June, 1986 the petitioner had to make a complaint regarding the conduct of an employee of the said hospital who is also an agent of the respondents and who threatened to defeat the claim of the petitioner unless money is paid to him. By letter dt. 2/4th July, 1986 the respondents repudiated all liabilities under the said policies on account of the deceased having withheld material information regarding her health at the time of effecting the assurances with the respondents. In reply to the said letter of the respondents dt. 2/4th Jly, 1986 the petitioner on 13th July, 1986 wrote letter enquiring whether the said letter dt. 2/4th July, 1986 was reply to the complaints made by him in his letter dt. 19th June, 1986 and in reply to the same respondents finally repudiated the claim by his letter dt. 19th July, 1986 affirming the letter dt. 2/4th July, 1986. It is the contention of the petitioner that the refusal of the respondents to make payment of the sums assured under the said life insurance policies to the petitioner as nominee thereof is utterly illegal, wrongful and arbitrary as no information regarding the health of the deceased was suppressed by her at the time of effecting the said policy as alleged. In this writ petition the petitioner has challenged the said actions of the respondents to repudiate all the liabilities under the Policy No. 33456592 and 33456593 on the life of the insured Smt. Radha Rani Singh, deceased by their aforesaid letters dt. 2nd July, 1986 and 19th July, 1986 respectively.
2. The learned Advocate for the petitioner submitted that since the death of the insured the petitioner as nominee wrote several letters and made also verbal representations and also produced and/or submitted all documents as asked for by the respondents. The respondents, however, only by letter dt. 2/4th July, 1986 repudiated the liability to make any payment on the alleged ground of the deceased's having withheld material information regarding her health at the time of effecting assurance. The respondents further alleged in the said letter thatthe answers given to the questions at the time of her medical examination were false. The relevant and material portion of the said letter is quoted hereinbelow:
'In this connection: we have to inform you that in the proposals and personal statement signed by the deceased assured on 19-1-78 and 27-12-77 respectively at the time of her medical examinations, she had answered the following questions as under:
Questions Answers17(A)What has been your usual state ofhealth? Good 18. Have you ever suffered from or are you suffering from
a) Persistent cough, asthma, bronchitis,Pneumonia, Pleurisy, spitting of blood,tuberculosis or any other of lungs? No We may, however, state that all these answeres were false as we hold indisputable proof to show that about eight years before she proposed for the above policies, she had been suffering from astham for which she had consulted medical men and had taken treatment from them. She however, did not disclose these facts in her personal statements, instead she gave false answers therein as stated above. It is, therefore, evident that she had made deliberate misstatements and withheld material information from us regarding her health at the time of effecting to assurances and hence in terms of the policy contracts and the declarations contained in the forms of personal statements, we hereby repudiate the claim and accordingly we are not liable for any payment under the above policies and all moneys that have been paid on consequence thereof belong to us.'
The learned Advocate for the petitioner submitted that the refusal of the respondents to make payment of the sum assured under the said Life Insurance policy to the petitioner as nominee on the alleged ground mentioned in the said letter that the petitioner has suppressed material information on the plea that 'about 8 years before she proposed for the above policies she had been suffering fromasthma for which she had consulted medical men and had taken treatment from them 'is absolutely untenable in view of the fact that the certificate of the medical attendant Dr. A. N. Mukherjee which had been forwarded to the respondents mentions that she had been suffering from bronchities for the last four years before her death. It has been submitted that certificate by hospital in Form--B(I) should not have been relied upon by the respondents. The learned Advocate for the petitioner also relied upon S. 45 of the Insurance Act, 1938 and submitted that in view of the provisions contained therein no policy of Life Insurance effected after coming into force of the said Act after the expiry of two years from the date on which it was effected be called in question on the ground that a statement made in the proposal for insurance or in any report of a Medical Officer of 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. In the instant case no such allegation has been made by the insurer to the effect that the insured fraudulently suppressed the material fact that she was suffering from asthma and that the policy holder knew at the time of making that the said statement was false or she suppressed fact which it was material to disclose. Under such circumstances the petitioner submitted that the respondent acted illegally and arbitrarily and without jurisdiction and malafide in repudiating the liability under the policies long after the period of 2 years from the commencement of the same i.e. 28th Mar. 1977 by the impugned letters dt 2/4 July, 1985 and 19th July, 1986. It has also been submitted on behalf of the petitioner that the respondent Life Insurance Corporation being a statutory body is bound to act in accordance with the provision of the statute, rules and regulations. In the instant case, according to the petitioner the respondent hasViolated the provisions of S. 45 of the Insurance Act in repudiating the liability for payment of the sums assured.
3. The learned Advocate for the respondent, on the other hand submitted that this court will not interfere in the writ jurisdiction in view of the disputed questions of facts involved in this writ petition. The learned Advocate further submitted that even from the medical certificate issued by Dr. Amar Nath Mukherjee which has been relied upon by the petitioner being Annexure 'D' to the petition it appears under Col. 9 and 10 that the said doctor was attending the deceased for last 15-20 years as stated by the doctor in answer to question No. 9 and in answer to question No. 10 the doctor mentioned that he treated the deceased for minor effects of cold bronchities preceding his last illness. Therefore, the learned Advocate submitted that the petitioner was suffering from minor effects of cold bronchities and the said doctor was treating him cannot be disputed. But the said fact was suppressed while the policy holder made her declaration. The learned Advocate for the respondent referred to certificate of hospital treatment where in answer to Col. 5(a) it was mentioned that the patient had a past history of asthmatic since 10-15 years and that the patient had taken bronchodilator and stereyods. The learned Advocate further submitted that in view of the aforesaid fact of the deceased having suffered from the said illness appearing from the certificate of the medical attendant as also of the hospital treatment Certificate several questions and controversies arose and the Life Insurance Corporation repudiated the liability to make payment on the ground of material suppression of the fact of illness which the deceased suffered but which was not mentioned in declaration form at the time when the said insurance proposal was effected. The learned Advocate argued in any event these are disputed and controversial questions of facts for which the proper remedy, if any, for the petitioner lies in suit and not in writ proceeding. The writ court should not interfere in a matter involving controversial and disputed questions of facts. The learned Advocate for the respondent relied upon S. 45 of theInsurance Act and submitted that the Life Insurance Corporation is entitled to repudiate the claim on the ground of the policy holder having suppressed material information at the time when the declaration was made by the policy holder in the declaration form for effecting the said policy. In support of his contention the learned Advocate relied upon a judgment of the Supreme Court in the case of Mithoolal Nayak v. Life Insurance Corporation of India reported in : AIR1962SC814 . The learned Advocate submitted that in that case the facts were inter alia that the policy holder who had been treated a few moths before he submitted a proposal for insurance of his life with the Insurance Company by a physician of repute for certain serious ailment anaemia, shortness of breath and asthma not only failed to disclose his answer to the questions put to him by the insurance company that he suffered from those ailments. But he made a false statement to the effect that he had not been treated by any doctor for any such serious ailments. The Supreme Court held that judged by the standard laid down in S. 17 of the Contract Act the policy holder was clearly guilty of fraudulent suppression of material facts when he made his statements which he must have known were deliberately false and hence the policy issued to him relying on those statements was vitiated. It was also held that the principle underlying the Explanation to S. 19 of the Contract Act is that a false representation whether fraudulent or innocent is irrelevant if it has not induced the party to whom it is made to act upon it by entering into a contract. The terms of the policy made it clear that the averments made as to the state of Health of the insured in the proposal form and the personal statement were the basis of the contract between the parties and the circumstance that the policy holder had taken pains to falsify or conceal that he had been treated for a serious ailment by a physician only a few months before the policy was taken showed that the falsification or concealment had an important bearing in obtaining the other party's consent. A man who has so acted cannot afterwards turn round and say, 'It could have made no difference if you hadknown the truth.' In the circumstances no advantage could be taken of the Explanation to S. 19 of the Contract Act.
4. On the basis of the aforesaid principles the Supreme Court decided that no refund could be made in respect of the amounts paid by the policy holder to the Life Insurance Corporation. The said principles, however can not apply to the facts of the instant Writ Petition.
5. The learned advocate also referred to the judgment and decision in the case of Rohini Nandan Goswami v. Ocean Accident & Guarantee Insurance Company Limited reported in : AIR1960Cal696 .
6. The learned Advocate for the respondent also submitted that the Life Insurance Corporation being a stututory corporation is under an obligation to act in terms of the stutute. Under S. 45 of the Insurance Act the Life Insurance Corporation is under an obligation to check up all claims and is entitled to repudiate the liability for such suppression of material facts as has been done by the policy holder while effecting the policy. The learned Advocate further submitted that no writ lies against the Corporation in respect of the contract for the recovery of the amount based on the contract of policy of Life Insurance.
7. I have considered the respective submissions of the parties and the decisions cited from the bar. It appears to me to be necessary to consider the decision and interpret the provisions contained in Section 45 of the Insurance Act in the manner laid down by the Supreme Court in the case of Mithoolal Nayak v. Life Insurance Corporation of India : AIR1962SC814 (supra). The said section so far as it is relevant for our purpose is set out herein below:
'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 proposalfor 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.
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It would be noted that the operating part of S. 45 states (so far as it is relevant favour purpose) that no policy of life insurance effected after coming into force of the Act after the expiry of two years from the date on which it was effected be called in question by a 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 that if the insurer shows that such statement was on 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 cell in question the policy effected as a result of such inaccurate or false statement. The policy in the instance case was effected on 28th Mar. 1978. There cannot be any dispute that the two years time had expired from the date on which the policy was effected. In my opinion Section 45 of the Insurance Act is, therefore, clearly attracted in the facts of the present case. The question, therefore, arises-what is the scope of S. 45 of the Insurance Act. The Supreme Court in the case of Mithoolal Nayak v. Life Insurance Corporation of India : AIR1962SC814 (supra) really laid down three conditions for the application of the second part of S. 45 which are as follows:
(a) The statement must be on material matter or must suppress facts which it Was material to disclose.
(b) The suppression must be fraudulently made by the policy holder.
(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.
The crucial question is as observed by the Supreme Court whether these three conditions were fulfilled, On a proper consideration of the facts already noted it does not appear to me that all the three conditions have been fulfilled in the instant case. I have also considered the affidavit of Hiralal Shil affirmed on 30th October 1987 on behalf of the Life Insurance Corporation of India. It has not also been alleged in the said affidavit that the material information alleged to have been suppressed by the insurer was made fraudulently and that the policy holder knew at the time when he made such statement that it was false or that the policy holder suppressed facts which it was material for her to disclose. It was alleged in the letter dt. 2/4th July, 1986 whereby the respondent repudiated the liability to make any payment that the deceased withheld information regarding her health at the time of effecting assurance. The respondent further alleged in the said letter that the answers given to the question at the time of her medical examination were false. The relevant questions and answers of questions No. 17A and question No. 18 have already been noted. It was also recorded in the said letter that the respondents had indisputable proof to show that about 8 years before she proposed for the above policy she had been suffering from asthma for which she had consulted medical men and had taken treatment from them. She, however, did not disclose aforesaid facts in her personal statement. Instead she gave false answers therein. The contention of the petitioner was that the respondents came to the said conclusion that the material facts were suppressed by the deceased on the basis of the certificate of the medical attendant Dr. A.N. Mukherjee which was forwarded to the respondents asalso from the certificate by hospital Form-B(I) and both the documents should not have been relied upon by the respondents. The learned Advocate for the respondent relying upon the said documents urged that the policy holder suppressed material facts or information while effecting the policy at the time of her declaration. The learned Advocate for the respondent particularly referred to questions and answers in Cl. 9 and 10 of the certificate of the attending doctor from which it appears that the said doctor was attending the deceased for last 15/20 years as mentioned in Col. 9 and in answer to question No. 10 doctor mentioned that he treated the deceased for minor effect of cold bronchities preceding her last illness. Taking both the questions and answers thereof together it does not really mean that the deceased policy holder was suffering from bronchities for last 15/20 years. The doctor might have been attending him for 15/ 20 years but his answer to question No. 10 is very clear that the policy holder was suffering from minor effects of cold bronchi-ties immediately preceding his last illness. It would be wrong to interpret the answer as the policy holder was suffering from bronchities for last 15/20 years. With regard to the certificate of hospital treatment also it would be wrong to come to a definite finding on the basis of the said hospital treatment certificate particularly with regard to answer to question No. 6A which is not at all clear, namely those answers were supplied by the patient party who really gave those answers whether the patient herself or any body else on behalf of the patient, whether he was authorised or not nothing is clear from the said answer. It would be wrong to assume the said answer in the hospital certificate to be an indisputable proof that the policy holder really suffered from such illness and suppressed those material information. The said hospital medical treatment cannot constitute proper evidence on the basis of such vague answers and particularly when it has been alleged that the petitioner had to make a complaint regarding the conduct of an employee of the hospital who is also an agent of the respondents and who threatened to defeat the claim of the petitioner unless money is paid to him. It wasundisputed that such a complaint was received by the Life Insurance Corporation of India. However, no enquiry was made as to the genuineness of such complaint. The respondents were given sufficient opportunity to produce any other document upon which they rely in support of their contention that they hold indisputedly proof to the effect that the policy holder suppressed material facts in her declaration form at the time of-effecting life insurance policy. No such document could be produced on behalf of the life insurance corporation except the said two documents, namely, certificate of doctor A. N. Mukherjee and also of the hospital treatment in respect of which I have already expressed my reservations.
8. In the case of Rohini Nandan v. O. A. & G. Corporation : AIR1960Cal696 (supra) relied upon by the respondent the claim on account of the policy was repudiated by the insurer on the ground that the policy holder failed to disclose material fact namely, previous burglary which was an admitted event and which was a fact really concealed by the claimant and should have been disclosed. In this connection the learned Judge observed as follows (at p. 701 of AIR):
'The law is clear that a defence of concealment is available to the insurer and, if established, will avoid the policy. In order to establish its defence of concealment the insurer must prove -
(1)that the facts alleged to have been concealed by the assured were true
(2) that they were material facts, and (3) that they were within the special knowledge of the assured. Burden of proving these three facts is on the defendant but sets up this defence. In the instant case it has been proved indeed admitted by the plaintiff himself, that in 1949 a burglary was committed in the ground floor of the same premises. It has been further proved that the plaintiff had knowledge of this burglary having been committed in 1949 when he submitted his proposal for insurance in June, 1954.'
9. It was held in the aforesaid decision that the said admitted facts of previousburglary was also material fact which was suppressed. The facts in the instant case, however, are different and as such the aforesaid decision is of no assistance to the respondents.
10. The learned Advocate for the respondents also submitted that the writ petition involves disputed questions of facts and as such this Court should not interfere in writ jurisdiction. In my opinion the respondent Life Insurance Corporation is wrong in repudiating the liability for the reasons disclosed in its letter dt. 2nd/4th July, 1986 and 19th July, 1986. The Life Insurance Corporation of India being a statutory body is amenable to the writ jurisdiction in case there is apparent error in its action. In the case of Gunwant Kaur v. Bhatinda Municipality reported in : AIR1970SC802 , it was observed by the Supreme Court at page 805 of the said report that 'the High Court is not deprived of its jurisdiction to entertain a petition under Article 226 of the Constitution of India merely because in considering the petitioner's right to relief questions of fact may fall to be determined'. It was further held by the Supreme Court in paragraph 15 of the said judgment at page 805 that the High Court has jurisdiction to determine questions of fact even if there is dispute and the present, in our judgment is a case in which in the interest of both the parties should have entertained the petition and called for an affidavit-in-reply from the respondents, and should have proceeded to try the petition instead of relegating the appellant to a separate suit'. The same principles were again reiterated by the Supreme Court in the case of Babubhai Mulji Lal Patel v. Nandlal Khodidas Barot reported in : [1975]2SCR71 .
11. Considering the facts and circumstances as aforesaid in my opinion the petitioner should succeed in this writ petition. Accordingly the Rule is made absolute. A writ of mandamus will be issued directing the respondents not to give effect to the said letters dt. 2nd/4th July, 1986 and 19th July, 1986 being collectively marked Annexure 'I' to the writ petition. Respondent Life Insurance Corporation is further directed todispose of the claim made by the petitioner on account of the insurance policies of the deceased in accordance with law within a period of six weeks from date. There will be no order as to costs.
12. The Department and all parties to act on a signed copy of the operative part of this judgment.
13. Petition allowed.