L.I.C Of India &Ors. vs Smt. Shanta Gupta(Deceased) ...
2010 Latest Caselaw 5636 Del

 *             IN THE HIGH COURT OF DELHI AT NEW DELHI
 +                      RFA No. 388/1999
 %                                              10th December, 2010


 L.I.C OF INDIA &ORS.                                ...... Appellants

                                    Through:    Mr. Mahinder Singh,
                                                Advocate.
                        VERSUS

 SMT. SHANTA GUPTA(DECEASED) &ORS.                   .... Respondents

Through: None.

CORAM:

HON'BLE MR. JUSTICE VALMIKI J.MEHTA

1. Whether the Reporters of local papers may be allowed to see the judgment?

2. To be referred to the Reporter or not?

3. Whether the judgment should be reported in the Digest?

VALMIKI J. MEHTA, J (ORAL)

1. The appellant-Life Insurance Corporation of India by means of

present appeal u/s 96 Code of Civil Procedure, 1908, seeks to impugn

the judgment and decree dated 30.01.1999 of the trial Court whereby

the suit of the respondent-plaintiff-widow was decreed for Rs.99,000/-

with interest @6% per annum from the date of the suit till realization.

The decree for recovery was passed in the suit which came to be filed

on account of the appellant-Corporation refusing to pay the entire

amount of the life insurance policies.

2. The facts of the case are that the insured-late Sh.J.P.Gupta, the

late husband of erstwhile respondent (now represented by legal heirs)

took out four policies of Rs.40,000/-, Rs.10,000/-,Rs.10,000/- and

Rs.20,000/- of which the first was taken on 24.12.1975 and the last

three on 28.03.1975. On one occasion only due to the fault of the

agent the premium was not paid by which the policies got lapsed,

however, the same were thereafter renewed/revived by the appellant-

corporation on payment of the necessary insurance premium and other

charges. Sh. J.P.Gupta expired on 20.07.1987. On filing of the

insurance claims, though the value of policies was Rs.80,000/- and

bonus of Rs.43,040/- totaling to Rs.1,23,040/-, however, the appellant

only paid a sum of Rs.45,103/- i.e. amount due up to the date of revival

of the policies and not for the amount thereafter. Accordingly, the

widow Smt. Shanti Gupta filed the suit for recovery of Rs.77,937/- with

interest and a consolidated figure of Rs.99,000/- was claimed.

3. The suit was contested by the appellant. The main issue which

has been argued before this Court and which was also urged before

the trial Court was issue Nos. 3 which reads as under:-

3. Whether the rejection of the claim of the plaintiff was based on perverse and superfluous grounds and reasons ? OPP

4. Finding of the trial Court with regard to the issue No. 3 is

relevant and the same reads as under:-

"The burden of proof of this issue was on the plaintiff. It was the plaintiff to prove the rejection is on superfluous grounds. The ld. cl. for pltff. argued that when the policy has been revived then the effective date is to be counted from the date initially certificates were issued. The ld. cl. for deft. has not shown any authority that certificate is to be computed from the date of revival. It is apparent from the documents placed on the record that were executed in 1975 that time no suppression of facts is alleged regarding these documents. Even otherwise from the evidence it is established that the medical was got done at the time of renewal and to that effect Sh.R.P.Gupta has stated that the deceased was not suffering from any problem as per his statement and on the reports, however, deceased of cancer but at the particular time he was suffering by disease he has not confirmed and even he stated that the seriousness of the lever was never detected. Therefore, the rejection of the claim could not be on the sound ground and even otherwise when policy has been revived then the date when initially the policies were taken that date is material and on that date no allegation has been made of suppression of fact, accordingly, this issue is decided against the defendant and in favour of the plaintiff."

5. The trial Court by discussing and analyzing the facts, evidences

and the documents has come to a conclusion that there was no

concealment of facts by the deceased at the time of renewal of the

policies. Trial Court has also found that in fact the deceased was not

suffering from cancer at the time when the policies were renewed.

The Trial Court has, therefore, rightly held that appellant is not justified

in not releasing the complete maturity amount and the bonus amount,

for the benefit of the estate of the deceased.

6. Before this Court, learned counsel for the appellant has argued

that the deceased did not disclose that he was suffering from grave

ailments and which becomes clear from the documents Ex.DW-2/P2,

Ex.DW-2/P3,Ex.DW-2/P4, Ex.DW-2/P6 and PW-1/1. It is argued that the

deceased had violated the principle of utmost good faith and thus as

per settled law was not entitled to the complete amount under the

policies.

I have looked at the aforesaid documents. Before the trial Court

it appears that on the basis of these documents it was argued that the

deceased could have been suffering from cancer and, therefore, these

documents ought to have been brought to the notice of the appellant-

corporation. I have gone through the aforesaid documents Ex.DW-

2/P2, Ex.DW-2/P3,Ex.DW-2/P4, Ex.DW-2/P6 and PW-1/1 and find that in

none of the documents it is found that deceased was suffering from

any cancer or any grave and serious ailments; and that therefore he

ought to have disclosed this to the appellant-corporation. In fact these

documents show on the contrary that there was mo malignancy. Every

human being at some point of time and at every stage in life does have

some or the other ailment, however, these non-serious ailments are

not what are required to be disclosed to the appellant-corporation what

an insured is required to disclose are only serious or life threatening

diseases or deep rooted malignant ailments which would have a

bearing on the grant of a policy. An apprehension of any ailment

whatsoever is not a disclosure requirement.

7. Sitting as an Appellate Court, I am entitled to interfere with the

findings and conclusions of the trial Court only if the same are perverse

or illegal. Merely because another view is possible from a reading of

the facts and the evidence in the case would not mean this Court

would be entitled to interfere in exercise of its powers under Section 96

CPC more so when interference is not warranted in the interest of

justice.

I must point out that appellant-corporation has very easily taken

money at the time of renewal of the policies and is happy to renew

lapsed policies, however, when the unforeseen event of death

happened to the insured person every objection, whether they be

genuine or not, is being sought to be raised to defeat valid claims of

the legal heirs of the insured/deceased. This is indeed not a happy

state of affairs. Also it is not a case that the deceased had taken the

policies and had he died immediately thereafter so that doubts could

be cast on the intention to take the policies. The insured had paid the

premiums due for over a decade before his demise. The lack of good

faith, I am afraid is not on the part of the deceased but on the part of

the appellant corporation in failing to pay the total amount due. The

present case is one in which the documents on record show that the

insured was not suffering from such grave ailment or serious disease,

which was life threatening and that the failure to disclose the same

would be violative of the principle of uberrimae fidei.

8. The counsel for the appellant still tried to vehemently contend

that the law in this regard needs to be settled. I fail to understand his

argument because law in regard of utmost good faith is now well

settled for decades by the judgments of the Supreme Court and the

issue in this case is only factual in nature and the impugned judgment

in the present case on facts shows that there is no violation of principle

of utmost good faith.

9. The appeal is therefore dismissed, leaving the parties to bear

their own costs.

Trial court record be sent back.

DECEMBER 10, 2010                                VALMIKI J. MEHTA, J
mr