The Bombay High Court dismissed the writ petition seeking to issue a direction to the insurance company to pay to the petitioner the amount payable under policy Nos.256487214 and 256487400. A single judge bench of this Court comprising of Hon’ble Justice Kshitij Shailendra held that the term "material fact" is not defined in the Act and, therefore, any fact which goes to the root of the Contract of Insurance and has a bearing on the risk involved would be "material".
Brief Facts:
The instant writ petition was filed by one Smt. Parul Agarwal, wife of late Vishal Agarwal challenging the impugned order dated 10.09.2015 whereby the Insurance Ombudsman, (Western U.P. and Uttarakhand), had dismissed the complaint filed by the petitioner against rejection of her claim by the Senior Divisional Manager of the Life Insurance Corporation (‘the Corporation’) concerning the insurance policy Nos.256487214 and 256487400 vide order dated 14.03.2014 was also challenged. Further prayer is to issue a direction to respondent no.1 to pay the petitioner the amount payable under policy Nos.256487214 and 256487400.
The background facts are that Vishal Agarwal, i.e. husband of the petitioner, was the holder of three insurance policies issued by the Corporation and he died on 11.11.2013, whereafter, the petitioner, as his widow, preferred a claim against the aforesaid three policies. It was pleaded that the claim of the petitioner in respect of policy Nos.256487214 and 256487400 was rejected by the Corporation vide impugned order dated 14.03.2014 on the ground that the husband of the petitioner did not disclose the previous policy No.224492798 in the proposal form.
The present writ petition was founded on the premise that the Corporation, accepting the personal statement of the deceased to be correct, issued the policies without any protest and that there is nothing on record from which it can be inferred that the insured ever made any concealment or misrepresentation at the time of commencement of insurance policy and, therefore, the impugned orders of the Corporation as well as the Insurance Ombudsman are unsustainable.
Contentions of the Petitioner:
The learned Counsel for the Petitioner contended that no fraud/misrepresentation/concealment was made by the insured. The proposal form is filled up by the agents of the insurance company themselves and, in case, there was something left blank in ‘Column No.9’, the petitioner cannot be non-suited on such ground, rather, the same would be attributable to the insurance company whose agent had filled up the form and left something blank.
Contentions of the Respondent:
The learned Counsel for the Respondent submitted that the existence of the two policies above was well within the knowledge of the insured but in one of the forms, disclosure of only one policy bearing no. 256487214 was made whereas in another form, the words “none” were mentioned.
Observations of the Court:
The Court noticed that the dispute between the parties is as to whether the non-disclosure of two policies in ‘Columns 9’ of the two proposal forms was fatal to the claim made by the petitioner. Further, it was noticed that the present case was not where ‘Column No.9’ was left blank. Rather, it is a case where, in one of the forms, disclosure of one policy No.256487214 was made without disclosing anything about policy No.224492798 and in, another form, words “none” were mentioned. ‘Columns 9’ as such, in both the proposal forms were not left blank.
Considering the aforesaid judgments and relevant statues, the Court found out that the existence of two policies bearing nos.256487214 and 224492798 was in a special knowledge of the insured Vishal Agarwal but only existence of policy No.256487214 was disclosed in one form and the policy bearing No.224492798 was not disclosed in either of the proposal forms and, therefore, by invoking the principle of adverse inference and estoppel, respectively contained in Section 114(g) and Section 115 of the Act 1872, which would apply to the representative of the deceased Vishal Agarwal, i.e. the petitioner herein, no advantage of non-disclosure can be given to the petitioner so as to claim any relief regarding the two policies repudiated under the impugned orders.
Further, on the argument raised by the learned Counsel for the petitioner that the information disclosed was not relevant, the view of the Court was that the term "material fact" is not defined in the Act and, therefore, it has been understood and explained by the courts in general terms to mean as any fact which would influence the judgment of a prudent insurer in fixing the premium or determining whether he would like to accept the risk. Any fact which goes to the root of the Contract of Insurance and has a bearing on the risk involved would be "material".
The decision of the Court:
The Bombay High Court rejected the claim of the petitioner that since forms are filled up by the agents/officers of the Corporation, anything omitted would not constitute a ground for repudiation/rejection of the claim, cannot be accepted.
Case Title: Smt. Parul Agarwal vs L.I.C. And 3 Others
Coram: Hon’ble Justice Kshitij Shailendra
Case no.: WRIT - C No. - 3149 of 2016
Advocate for the Petitioner: Neeraj Tripathi, Abhinav Ojha
Advocate for the Respondent: Manish Goyal, P.Misra, Udai Shanker Mishra
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