Smt. Gouri Sethi Vs. the Divisional Manager of L.i.C. and ors. - Court Judgment

Excerpt:
insurance - policy - suppression of fact - petitioner was wife of deceased - diseased was insured with respondent corporation - diseased died - after maturity of policy, petitioner made several representation to respondents for releasing of amount of policy - respondent denied to release amounts of policy on grounds of suppression of facts of his physical deformity, actual age and medical leave, which he availed prior to taking policy - hence present petition - held, it is settled principle of law suppression of illness not affecting expectation of life cannot be ground to repudiate policy - in case at hand, life assured was said to have undergone treatment by medical officer for acid peptic disease, and allergic, which cannot be said to have affected expectation of life - so, far as age is concerned deceased was died during service period therefore, it is naturally he was below of 60 years - respondent were directed to release amounts of policy to petitioner - petition allowed accordingly - labour & services pay scale:[tarun chatterjee & r.m. lodha,jj] fixation - orissa service code (1939), rule 74(b) promotion - government servant, by virtue of rule 74(b), gets higher pay than what he was getting immediately before his promotion - circular dated 19.3.1983 modifying earlier circular dated 18.6.1982 resulting in reduction of pay of employee on promotion held, it is not legal. statutory rules cannot be altered or amended by such executive orders or circulars or instructions nor can they replace statutory rules. - determination of the question of maintainability of the writ depends on consideration of several factors, like, the nature of dispute raised, the nature of enquiry necessary for determination of the dispute etc. good he further submitted that as found from the counter affidavit of opp. air1968mad324 ,referring several decisions of different high courts and supreme court a division bench of madras high court held as follows':thus, there is ample authority for the proposition that, an insurer could avoid a contract of insurance after the expiry of period of two years mentioned in the first part of section 45 of the insurance act only on the ground of suppression of illness, which affects the expectation of life of the insured and not mere temporary or trivial illness and that unless the disease he was suffering from is clearly established and it is alto established that disease would have a material bearing on the insurability of the policy holder, the policy cannot be invalidated.r.n. biswal, j.1. late surendra sethi, the husband of the petitioner who was serving as a gate keeper in s.e. railway, balasore, (kharagpur division) assured his life for rs. 50,000/- (fifty thousand only) under opp. party no. 1, with effect from 28.12.1994 vide policy no. 580885 328, which was to mature on 28.12.2009, wherein the petitioner was shown as nominee. he went on depositing the premium of rs. 2260/- till his death, on 13.4.1996, due to cardiac vascual arrest and hemiplegia. the petitioner made several representations to the opp. parties for settlement of the assured value of the l.i.c. policy undertaken by her deceased husband, but to no effect. ultimately she served a notice on opp. party no. 2, through her advocate on 22.2.1997, in respnse to which he sought for some documents with intention to delay the matter. so she filed the writ petition to direct the opp. parties to release the assured amount in her favour.2. in their counter affidavit opp. parties 1 to 3 contended that the writ petition should be dismissed inasmuch as the deceased suppressed the fats of his physical deformity, actual age and the medical leave, which he availed prior to taking the policy, besides answering to question nos. 17 to 12 of the proposal form falsely, in negative. had he disclosed .the fact of availing medical leave, his physical deformity and actual age and answered question nos. 17 to 22 of the proposal form correctly, the proposal would not have been accepted. it is the further case of the opp. parties that since the policy is a pure contract between the policy holder and the l.i.c. the relief sought for cannot be enforced in a writ forum. hence they prayed to dismiss the writ petition.opp. party no. 4 in a separate counter affidavit averred that late surendra sethi before his death held one of the safety category posts which is only held by a person with sound physique after being duly certified as such by the government doctor so there was no question of any physical deformity of the life assured. however, basing on his service record, opp. party no. 4 gave details of his leave/absence/ sick period as follows :1) 24.5.1992 to 3.6.1992 - 9 days sick leave2) 11.1.1993 to 24.1.1993 - 14 days sick leave3) 6.6.1993 to 20.6.1993 - 15 days leave4) 15.8.1993 to 9.9.1993 - 5 days leave5) 1.9.1993 to 9.9.1993 - 9 days leave6) 2.4.1995 to 25.4.1995 - sick commuted leave24 x 2 = 48 days.7) 26.4.1995 to 17.5.1995 - 22 days sick leave8) 14.2.1996 to 15.2.1996 - 2 days absent9) 26.3.1996 to 30.3.1996 - 5 days leave10) 31.3.1996 to 12.4.1996 - 13 days sick.opp. party no. 4 contended that the railways being no way responsible for non-disbursement of the assured money, if any, in favour of the petitioner, the case is liable to be dismissed against him.3. learned counsel appearing for opp.party nos. 1 to 3 submitted that since the l.i.c. policy was a contract between the policy holder and the corporation, the dispute cannot be decided in a writ forum. in support of his submission he relied upon the decision in state of bihar and ors. v. jain plastics and chemicals ltd.; : air2002sc206 . in this case the appellant invited tender for supply of p.v.c. pipes and fittings and the tender of the respondent-company was accepted. respondent-company delayed the supplies for which appellant terminated the contract and purchased fittings at a higher price. while paying the final bill to the respondent, the difference of amount, which required to be incurred by the appellant, was deducted. it was pleaded on behalf of the respondent-company that since the appellant did not supply the road permits, the respondent could not supply the p.v.c. pipes and fittings in time. the question was whether non-supply of road permits by the appellant would justify the breach of contract by the respondent since it would depend upon facts and evidence, it was held in the said decision that the writ petition was not maintainable. the writ jurisdiction under article 226 of the constitution of india is very vast. the constitution does not lay any fetter in exercising this extraordinary jurisdiction. so, it cannot be said that in no case this court can entertain a writ petition to enforce a claim arising out of contract. determination of the question of maintainability of the writ depends on consideration of several factors, like, the nature of dispute raised, the nature of enquiry necessary for determination of the dispute etc. in a case, where the claim of an insured or a nominee raises serious dispute and it is found that the dispute is genuine and it requires oral and documentary evidence, then the appropriate remedy is civil suit and not a writ petition. the matter is to be considered in the facts and circumstances of each case. in the case at hand, as would be discussed now, no serious dispute requiring oral evidence is raised on behalf of the opp. parties. the documents filed by the parties are sufficient to decide the us. as such, in our view the writ petition is maintainable.4. learned counsel for opp. parties 1 to 3 submitted that the deceased-life assured gave false statements to the questionnaire in the proposal form vides. no. 11 by answering 'no' and suppressed his age and physical deformity. he drew our attention to the questionnaire in sl. no. 11 of the proposal form and the answer given thereto by the life assured. the questionnaire and the answers are quoted hereunder: _________________________________________________________________________ personal history answer if yes', yes' or please give 'no' full details _________________________________________________________________________ (a) during the last five years did you consult a medical practitioner for any ailment no requiring treatment for more than a week? _________________________________________________________________________ (b) have you ever been admitted to any hospital or nursing home for general no check up, observation, treatment or operation? __________________________________________________________________________ (c) have you remained absent from place of work on grounds of health during no the last 5 years? ___________________________________________________________________________ (d) are you suffering from or have you ever suffered from ailments pertaining no to liver, stomach, heart, lungs, kidney, brain or nervous system? ___________________________________________________________________________ (e) are you suffering from or have you ever suffered from diabetes, tuberculosis, high blood pressure, no low blood pressure, cancer, epilepsy, hernia, hydrocele, leprosy or any other d_isease? ___________________________________________________________________________ (f) do you have any bodily defect or deformity? no _____________________________________________________________________________ (g) did you ever have any accident or injury? no _____________________________________________________________________________ (h) do you use or have you ever used alcoholic drinks, narcotics or any other no drugs? _____________________________________________________________________________ (i) what has been your usual state of health? good ______________________________________________________________________________he further submitted that as found from the counter affidavit of opp. party no. 4, the employer of the life assured, the latter took leave in six different spells on medical ground, but he suppressed it in the proposal form. similarly, even though the age of the deceased was 60 years as on 1.1.1994 as found from the voter identity card (annexure a/1) he falsely stated in the proposal form that he was aged 45 years on 30.11.1994, when the proposal was made. further more, as per the report of the medical officer, s.e. railway, he was limping and taking the help of a stick to walk, but he suppressed it in the proposal form. again as found from the report of the medical officer, s.e. railway, the life assured was suffering from acid peptic disease for the period 24.5.1992 to 3.6.1992, allergic from 1.9.1993 to 9.9.19.93, hypertension from 2.4.1993 to 17.5.1995 and general debility from 31.3.1996 to 12.4.1996. so, learned counsel for opp. party nos. 1 to 3 submitted that the statements of the life assured leading to the issue of the policy being false and inaccurate, the insurer can repudiate the policy.5. it is profitable to quote here section 45 of the insurance act which reads as follows :policy not to be called in question on ground of mis-statement 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 a statement made in the proposal for insurance or in any report of a medical officer, or referee, or friend of he 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.6. in the case at hand since the opp. parties 1 to 3 repudiate the claim of the petitioner two years after the commencement of the insurance policy, burden lies on them to prove that the life assured made false or inaccurate statements on a material matter or suppressed facts, which it was material to disclose. in its counter affidavit opp. party no. 4 did not disclose the specific disease, for which the life assured took leave on medical ground in six different spells. the medical officer, s.e. railway in his report specifically opined that he never treated the deceased for any heart ailment, for which he died during his tenure from 28.4.1991 to 12.4.1996. of course, the report shows that he treated him for acid peptic disease from 14.5.1982 to 3.6.1992, allergic from 1.9.93 to 9.9.1993 and hypertension for the period 2.4.1995 to 17.5.1995.7. in the case of life insurance corporation of india v. janaki ammal; : air1968mad324 , referring several decisions of different high courts and supreme court a division bench of madras high court held as follows':thus, there is ample authority for the proposition that, an insurer could avoid a contract of insurance after the expiry of period of two years mentioned in the first part of section 45 of the insurance act only on the ground of suppression of illness, which affects the expectation of life of the insured and not mere temporary or trivial illness and that unless the disease he was suffering from is clearly established and it is alto established that disease would have a material bearing on the insurability of the policy holder, the policy cannot be invalidated.as per this decision suppression of illness not affecting the expectation of life cannot be a ground to repudiate the policy. in the case at hand, the life assured was said to have undergone treatment by the medical officer, s.e. railways for acid peptic disease, and allergic, which cannot be said to have affected the expectation of life. he was also treated by the same doctor for hypertension from 2.4.1995 to 17.5.1995. the life of the deceased having been assured on 30.11.1994, it cannot be said that he was suffering from hypertension on that date (30.11.1994) or prior to it, in absence of any other material. with regard to physical deformity of the life assured, it is found from the report of the medical officer, s.e. railway that the deceased was limping and taking the help of a stick to walk. as discussed earlier, it was averred by opp. party no. 4 in the counter affidavit that the post held by the life assured was under safety category. persons with sound physique and after being duly certified as such by the railway doctor are only appointed in such category of posts. as found from the certificate of the hospital treatment of the deceased (annexure-2 series) he was suffering from hemi paresis since two months before his death, but he was able to walk with support. in other words the deceased suffered from the said disease from 14.2.1996 till he expired on 13.4.1996. as such he was not limping on the date when his life was assured or prior to it. if in fact he was limping and taking the help of a stick to walk it could not have escaped from the notice of the medical examiner in whose presence the proposal form was filled up. as regards the age of the life assured, it is an admitted fact that he died while in service. if, infact he was aged 60 years on 1.1.1994, he would have completed 62 years by the time of his death, on 23.4.1996 and in that event he would not have been allowed to continue in service after the age of superannuation. so the age of the deceased as reflected in the voter identity card cannot be accepted as correct. there is no dispute regarding the contract of life assurance between late surendra sethi and the corporation and the claim of the petitioner as nominee therein.8. therefore, under such facts and circumstances the writ petition is allowed and opp. parties 1 to 3 are directed to release the claim of the petitioner within a period of two months of receipt of this order.p.k. mohanty, j.19. i agree.