WP(C)/4403/2016
2021 Latest Caselaw 140 Gua

                                                                   Page No.# 1/14


GAHC010021082016




                    THE GAUHATI HIGH COURT
       (THE HIGH COURT OF ASSAM, NAGALAND, MIZORAM & ARUNACHAL PRADESH)



                             WP(C) 4370 / 2016

        SYED SAIDUR ISLAM NOMINEE
        BROTHER OF LT. SAIFUL ISLAM INSURED PERSON,
        R/O H/NO.81, PUB JYOTINAGAR, P.O. NOONMATI,
        DIST- KAMRUP METRO, PIN-781020, ASSAM
                                       .................. Petitioner

                      -Versus-

        1) LIFE INSURANCE COPORATION OF INDIA
           LICI, 1ST FLOOR, YOGKESHEMA,
           CENTRAL OFFICE JEEVAN BIMA MARG,
           PB NO.19953, NARIMAN POINT, MUMBAI-21,
           MAHARASTRA, INDIA, REP. BY ITS CHAIRMAN

        2) THE CHIEF REDRESSAL MANAGER LICI
          14TH FLOOR YOGAKSHEMA J.B. MARG
          MUMBAI-21 MAHARASTRA INDIA NARIMAN POINT

        3) THE INSURANCE OMBUDSMAN
           REP. BY THE DY. SECY. OMBUDSMAN LIC INDIA
           5TH FLOOR, S.S. ROAD, PANBAZAR, GHY-1
           KAMRUP METRO, ASSAM

        4) THE SR. / DIVISION MANAGER
           LICI GUWAHATI DIVISION, O/O LIC
           JEEVAN DEEP PAN BAZAR, GHY-1
           GUWAHATI BRANCH, KAMRUP METRO, ASSAM

        5) THE BRANCH MANAGER OF CARRIER AGENT BRANCH, CAB
           FANCYBAZAR, GHY-1, KAMRUP METRO, ASSAM
                                                               Page No.# 2/14

6) KHAIRUL HAQUE
  LICI AGENT CODE NO.471/437
  CARRIER AGENT BRANCH CAB, FANCYBAZAR
  GHY-1, KAMRUP METRO, ASSAM
                                              ...................Respondents

WP(C) 4403 / 2016

SYED NUR MOHAMMED NOMINEE F/O LT. SAIFUL ISLAM INSURED PERSON R/O H/NO.81,PUB JYOTINAGAR P.O. NOONMATI, DIST- KAMRUP METRO PIN-781020, ASSAM .................. Petitioner

-Versus-

1) LIFE INSURANCE CORPORATION OF INDIA 1ST FLOOR, YOGKESHEMA, CENTRAL OFFICE JEEVAN BIMA MARG PB NO.19953, NARIMAN POINT, MUMBAI-21 MAHARASTRA, INDIA, REP. BY ITS CHAIRMAN

2) THE CHIEF REDRESSAL MANAGER, LOCI 14TH FLOOR, YOGAKSHEMA, J.B. MARG MUMBAI, MAHARASTRA, INDIA-21 NARIMAN POINT

3) THE INSURANCE OMBUDSMAN REP. BY THE DY. SECY. OMBUDSMAN LIC INDIA, 5TH FLOOR, S.S. ROAD PANBAZAR, GHY-1, KAMRUP METRO, ASSAM

4) THE SR./DIVISION MANAGER, LICI GUWAHATI DIVISION OFFICE OF LIC JEEVAN DEEP PAN BAZAR, GUWAHATI BRANCH GHY-01, KAMRUP METRO, ASSAM

5) THE BRANCH MANAGER OF GUWAHATI BRANCH OFFICE GBO-II LAKSHMI SERVICE STATION, SILPUKHURI GHY-3, KAMRUP METRO, ASSAM

6) J. KALITA, LICI AGENT CODE NO.1510/548 GUWAHATI BRANCH OFFICE GBO-II LAKSHMI SERVICE STATION, SILPUKHURI GHY-3, KAMRUP METRO, ASSAM ...................Respondents Page No.# 3/14

Advocate for the Petitioners : Mr. B. Sinha Advocate for all the Respondents : Mr. S. Nath Date of Judgment & Order : 19th January, 2021

BEFORE HON'BLE MR. JUSTICE MANISH CHOUDHURY JUDGMENT & ORDER

These 2 (two) writ petitions under Article 226 of the Constitution of India have been preferred against non-disbursement of the claims submitted by the petitioners before the respondent Life Insurance Corporation of India ('the LIC' and/or 'the respondent corporation', for short) as nominees of the deceased life assured in connection with three nos. of life insurance policies taken by the deceased life assured. The name of the deceased life assured is Saiful Islam. The petitioner in the writ petition, WP(C) no. 4370/2016 i.e. Syed Saidur Rahman is the brother of the deceased life assured whereas the petitioner in the writ petition, W.P.(C) no. 4403/2016 i.e. Syed Nur Mohammed is the father of the deceased life assured. The petitioner in W.P.(C) 4370/2016 was the nominee made by the deceased life assured in respect of the Policy No. 484626286. On the other hand, the petitioner in W.P.(C) no. 4403/2016 was the nominee for the deceased life assured in respect of two policies - Policy No. 485046083 and Police No. 485046459. When the respondent LIC did not disburse the sum assured in respect of the policies referred above after submissions of claims by the petitioners, the petitioners have approached this Court by way of these two writ petitions seeking directions to the LIC to disburse the sum assured in favour of the petitioners in connection with the afore-mentioned three policies.

2. As the issue involved in both the writ petitions is common and inter-connected, the two writ petitions are taken up together at the request of the learned counsel for the parties. The necessary facts required for the purpose of determination of the common issue involved in the two writ petitions may be stated as follows :-

2.1 The deceased Saiful Islam was a small-time businessman who used to deal in milk. It Page No.# 4/14

has been stated that he used to manage his family from the income generated from his business. During his lifetime, the deceased had insured himself with five nos. of life insurance policies under the respondent corporation and the same are as under :-

SL.   Branch           Policy No.   Date       of Sum Assured Nominee
No.                                 commencement
1.    Guwahati Branch 485393594     28.01.2010    5,00,000/-    Syed Saidur Islam
      Office   No.  I                                           (brother)
      (Panbazar)
2.    Guwahati Branch 485229408     09.02.2010    10,00,000/-   Sharmala    Khatun
      Office     No.III                                         (mother)
      (Fancybazar)
3.    Guwahati Branch 485046083     11.02.2010    5,00,000/-    Syed             Nur
      Office       No.II                                        Mohammad
      (Silpukhuri)                                              (petitioner/ father)
4.    Guwahati Branch 485046459     23.02.2010    2,00,000/-    Syed             Nur
      Office       No.II                                        Mohammad
      (Silpukhuri)                                              (petitioner/ father)
5.    Carrier     Agent 484656286   23.03.2010    2,00,000/-    Syed Saidur Islam
      Branch     (CAB),                                         (brother)
      (Fancybazar)




2.2    From the above table, it is evident that the petitioner in W.P.(C) no. 4370/2016 was

made the nominee in respect of two nos. of insurance policies - Policy No. 485393594 and Policy No. 484626286 whereas the petitioner in W.P.(C) no. 4403/2016 was made the nominee by the deceased in respect of two other policies - Policy No. 485046083 and Policy No. 485046459. After getting himself insured with the aforesaid policies, the deceased died on 20.02.2011 due to Acute Gastro Enteritis (AGE) with Septicemia in shock and respiratory failure at an young age of 21 years leaving behind his father, his mother and his brother. A death certificate was issued on 01.03.2011 by the Department of Health Services, Government of Assam recording the date of death of the deceased as 20.02.2011.

3. The case projected on behalf of the petitioners is that after the death of Saiful Islam, Syed Saidur Islam being the nominee of the deceased, submitted the claims for the two policies - Policy No. 485393594 and Policy No. 484626286 - on 24.02.2012 along with the Page No.# 5/14

requisite documents. When he did not receive any intimation from the respondent corporation, Syed Saidur Islam submitted a complaint in the office of the Insurance Ombudsman, Guwahati Centre on 04.04.2012 with regard to the death claims and the said complaint was registered as Complaint no. 24/001/005/L/12-13/Ghy.

3.1 Similarly, after the death of the deceased, Syed Nur Mohammed i.e. the father of the deceased being the nominee for the two policies - Policy No. 485046083 and Policy No. 485046459 - submitted the claims before the concerned office of the respondent corporation on 05.03.2012. When the claims were not entertained within a reasonable time period, Syed Nur Mohammed also approached the Insurance Ombudsman, Guwahati Centre filing a complaint on 04.04.2012. On receipt of the said complaint, it was registered as Complaint no. 24/001/004/L/12-13/Ghy.

3.3 Notices were issued to the respondent corporation seeking its response in respect of the said two complaints. In both the complaint cases before the Insurance Ombudsman, the respondent corporation submitted its replies in the form of Self Contained Note (SCN).

3.4 When the said complaints were pending before the Insurance Ombudsman, the claims made by Syed Nur Mohammed in respect of the Policy No. 485046083 and Policy No. 485046459 were repudiated by the respondent no. 4 by its letter dated 30.06.2012 on the ground that the deceased withheld correct information regarding his other policy particulars. Similar order was also passed on 30.06.2012 in respect of the other two policies where Syed Saidur Islam is the nominee. The Insurance Ombudsman after hearing the parties and upon perusal of the materials on record, passed an order dated 22.08.2012 in respect of the Complaint no. 24/001/004/L/12-13/Ghy and an order dated 23.08.2012 in respect of the Complaint no. 24/001/005/L/12-13/Ghy. Since during the pendency of the two complaint cases the respondent corporation repudiated the claims on 30.06.2012, the Insurance Ombudsman took up the two complaints with regard to such repudiation.

3.5 By the order dated 22.08.2012 passed in Complaint no. 24/001/004/L/12-13/Ghy, the Insurance Ombudsman held that the respondent corporation had rightly repudiated the death Page No.# 6/14

claims in respect of the Policy No. 485046083 and Policy No. 485046459. By the other order dated 23.08.2012 passed in Complaint no. 24/001/005/L/12-13/Ghy, the Insurance Ombudsman rejected the death claim in respect of the Policy No. 484626286 by holding that the decision of the respondent corporation regarding repudiation of the claim was justified. The Insurance Ombudsman had found that the negotiation of the claim in respect of the Policy No. 485393594 was not justified and it was directed to the respondent corporation to settle the claim under Policy No. 485393594 within 15 (fifteen) days from the date of receipt of the letter of acceptance of the award from the complainant.

3.6 Aggrieved thereby, the two petitioners have approached this Court by these two writ petitions seeking directions, as mentioned above.

4. Heard Mr. B. Sinha, learned counsel for the petitioners and Mr. S. Nath, learned counsel appearing for all the respondents.

5. Mr. Sinha has submitted that the repudiation of the claims by the respondent corporation in respect of the three policies was arbitrary and the grounds taken by the respondent corporation for such repudiation are not tenable. He has submitted that there was no suppression of material facts on the part of the deceased and the petitioners being the nominees of the deceased life assured, cannot be deprived of the benefits under the aforesaid three policies. He has further submitted that the deceased had taken the policies where the concerned LIC agents had filled up the necessary details in the proposal forms. He has further submitted that in respect of the two policies where the father of the deceased was the nominee, the agent involved was the same. On the other hand, in the insurance policies taken by the deceased where his brother was the nominee, it was another agent. As the particulars in the proposal forms were filled up by the agents on behalf of the deceased life assured, it cannot be said that there was suppression of material facts on the part of the deceased, he submits. Further, there was no role attributed to the petitioners who were mere nominees and they should not be deprived as nominees under the insurance policies.

6. Mr. Nath, learned counsel appearing for the respondent has submitted that the Page No.# 7/14

deceased died at the young age of 21 suffering from Acute Gastro Enteritis (AGE) with Septicemia in shock and respiratory failure. According to the proposal forms, the deceased was an owner of a grocery shop. He has submitted that the deceased during his lifetime, had taken five nos. of life insurance policies for a total sum assured Rs. 24,00,000/-, that too, from the four different branches of the respondent corporation. All those five policies were taken within a short period of 1 month 23 days. The first policy was taken by the life assured on 28.01.2010 and the last of the five policies was taken on 23.03.2010. When the claims were received by the respondent corporation for all the five policies, the claims with regard to the first two policies had been settled by the respondent corporation but in respect of the other three policies, the same were repudiated in view of the fact that the deceased did not disclose correctly about the existence of three other policies save and except one policy. Had those facts were honestly disclosed, the risks involved could have been assessed correctly by the respondent corporation and a decision could have been taken as to whether proposals were to be accepted or not. In the aforesaid fact situation, the decision to repudiate the claims in respect of the three policies was justified in view of the provisions of Section 45 of the Insurance Act, 1938. He has further relied upon the decision of the Hon'ble Supreme Court of India in Reliance Life Insurance Co. Ltd. vs Rekhaben Nareshbhai Rathod, reported in (2019) 6 SCC 175 .

7. I have considered the submissions advanced by the learned counsel for the parties and also perused the materials available on record. I have also considered the decision cited in support of the submission advanced on behalf the respondents.

8. From the table above, it is evident that the deceased life assured took five nos. of life insurance policies from the respondent corporation. The total sum assured for the aforesaid five nos. of policies was Rs. 24,00,000/-. It is an admitted position that the claims submitted by the petitioner (Syed Saidur Islam) in W.P.(C) no. 4370/2016 in respect of the Policy No. 485393594 for the sum assured of Rs. 5,00,000/- was settled by the respondent corporation. It is admitted by the learned counsel for the petitioners that the claim in respect of another Policy i.e. Policy No. 485229408 for a sum assured or Rs. 10,00,000/- where the mother of the deceased was the nominee, had also been settled. Thus, it was in respect of the afore-

Page No.# 8/14

mentioned three policies where the total sum assured was Rs. 9,00,000/- the respondent corporation had repudiated the claims submitted by the petitioners. It is also evident from the table above that first of the policy was taken by the deceased on 28.01.2010 and the last of the polices was taken on 23.03.2010, that is, within a period of 1 month 23 days. Conspicuously, all those five policies were taken from four different branches of the respondent corporation.

9. On perusal of the orders dated 30.06.2012 whereby the claims were repudiated, it is found that the ground of repudiation for all the three claims is common. It was mentioned that the decision to repudiate the liabilities under the afore-mentioned three policies had to be taken on account of the fact that the deceased had withheld correct information regarding his other existing policies. It was pointed out that had the history of previous policies been disclosed at the time of effecting the afore-mentioned three policies, special medical investigation reports for FBS, Lipidogram, Elisa for HIV and HB% would have been required for assessment of risk. Suppression about the previous policies was a false statement made by the deceased in the proposals. Specific reference was made to the Question no. 7 and Question no. 9 contained in the proposals and the answers given thereto by the deceased wherein the deceased as the proposer, did not disclose existence of any previous policy, save and except one policy, with the respondent corporation. Those proposals were submitted when the other policies were in existence. For example, in connection with proposal form submitted in connection with Policy No. 484626286, the deceased in the proposal form had disclosed the existence of only one policy i.e. Policy No. 485046459. The proposal for the said policy was submitted on 23.03.2010. While repudiating the claims it was observed that the deceased life assured had made incorrect statement and withheld correct information from the respondent corporation regarding his insurance policies existing from prior dates at the time of effecting the assurance in terms of the policy contracts and the declaration contained in the forms of the proposals for assurance, the claims were repudiated and it was informed to the petitioners that the respondent corporation were not liable for any payment in respect of the afore-mentioned policies.

10. In the complaint case, referred above, the aforesaid facts were brought to the notice Page No.# 9/14

of the Insurance Ombudsman. It was further represented that the deceased had shown different annual income in different proposals. The Insurance Ombudsman had observed that there was withholding of correct information regarding previous policy particulars in the proposal forms submitted in respect of the aforementioned three insurance policies. It was further observed that had the history of previous insurance policies been disclosed at the time of effecting the afore-mentioned policies, special medical investigation reports would have been required for assessment of risks, thus, suppression of previous policy particulars by the deceased had affected the process of assessment of risk and underwriting of the proposals in respect of the three policies. It was further observed that suppression of the same had induced the respondent corporation to issue the afore-said three policies on a false statement made by the deceased in the proposals. Observing as above, the Insurance Ombudsman had held that the decision of the respondent corporation in respect of the repudiation of claims for the afore-mentioned three policies was justified. The Insurance Ombudsman found that the claim made in respect of the Policy No. 485393594 did not suffer from suppression of any material fact and accordingly, direction was made to settle the claim for the said policy within the stipulated time.

11. It is settled that the relationship between the insurer and the insurance is considered to be one which is dependent on trust and good faith. The assured has a duty to disclose the facts which are within his knowledge correctly in the proposal to be submitted to the insurer. The acceptance of the proposal is dependent on the facts disclosed in such proposal forms as the insurer will be underwriting the proposal on the basis of the risks associated with it on the basis of the facts disclosed in the proposal form. The proposal is the basis of the contract of insurance.

12. At this stage, it is apposite to quote Section 45 of the Insurance Act, 1938 in its entirety.

Section 45 : Policy not be called in question on ground of misstatement after three years.-

(1) No policy of life insurance shall be called in question on any ground whatsoever after the expiry of three years from the date of the policy, i.e., from the date of issuance of the policy or the date of commencement risk or the date of revival of the Page No.# 10/14

policy or the date of the rider to the policy, whichever is later. (2) A policy of life insurance may be called in question at any time within three years from the date of issuance of the policy or the date of commencement of risk or the date of revival of the policy or the date of the rider to the policy, whichever is later, on the ground of fraud:

Provided that the insurer shall have to communicate in writing to the insured or the legal representatives or nominees or assignees of the insured the grounds and materials on which such decision is based.

Explanation I.- For the purposes of this sub-section, the expression "fraud" means any of the following acts committed by the insured or by his agent, which intent to deceive the insurer or to induce the insurer to issue a life insurance policy:-

(a) the suggestion, as a fact of that which is not true and which the insured does not believe to be true;

(b) the active concealment of a fact by the insured having knowledge or belief of the fact;

(c) any other act fitted to deceive; and

(d) any such act or omission as the law specially declares to be fraudulent.

Explanation II.- Mere silence as to facts likely to affect the assessment of the risk by the insurer is not fraud, unless the circumstances of the case are such that regard being had to them, it is the duty of the insured or his agent keeping silence, to speak, or unless his silence is, in itself, equivalent to speak. (3) notwithstanding anything contained in sub-section (2), no insurer shall repudiate a life insurance policy on the ground of fraud if the insured can prove that the misstatement of or suppression of a material fact was true to the best of his knowledge and belief or that there was no deliberate intention to suppress the fact or that such misstatement of or suppression of a material fact are within the knowledge of the insurer:

Provided that in case of fraud, the onus of disproving lies upon the beneficiaries, in case the policyholder is not alive.

Explanation.- A person who solicits and negotiates a contract of insurance shall be deemed for the purpose of the formation of the contract, to be the agent of the insurer.

(4) A policy of life insurance may be called in question at any time within three years from the date of issuance of the policy or the date of commencement of risk or the date of revival of the policy or the date of the rider to the policy, whichever is later, on the ground that any statement of or suppression of a fact material to the expectancy of the life of the insured was incorrectly made in the proposal or other document on the basis of which the policy was issued or revived or rider issued:

Provided that the insurer shall have to communicate in writing to the insured or the legal representatives or nominees or assignees of the insured the grounds and materials on which such decision to repudiate the policy of life insurance is based:

Provided further that in case of repudiation of the policy on the ground of misstatement or suppression of a material fact, and not on the ground of fraud, the premiums collected on the policy till the date of repudiation shall be paid to the insured or the legal representatives or nominees or assignees of the insured within a period of ninety days from the date of such repudiation.

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Explanation.- For the purposes of this sub-section, the misstatement of or suppression of fact shall not be considered material unless it has a direct bearing on the risk undertaken by the insurer, the onus is on the insurer to show that had the insurer been aware of the said fact no life insurance policy would have been issued to the insured.

(5) 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 are adjusted on subsequent proof that the age of the life insured was incorrectly stated in the proposal.

13. It is also settled that the contracts of insurance including the contract of life assurance are contracts uberrima fides and every material fact must be disclosed in the proposal form which leads to the contract of insurance. Thus, a duty is cast upon the proposer to disclose all the material facts leading to the conclusion of the contract. As per the definition provided in Regulation 2B of the Insurance Regulatory and Development Authority (Protection of Policy Holders Interest) Regulations, 2002, "Proposal Form" means a form to be filled up by the proposer for insurance, for furnishing all material information required by the insurer in respect of a risk, in order to enable the insurer to decide whether to accept or decline, to undertake the risk, and in the event of acceptance of the risk, to determine the rates, terms and conditions of a cover to be granted. In the explanation provided thereto, it mentions that "material" for the purpose of these regulations shall mean and include all important, essential and relevant information in the context of underwriting the risk to be covered by the insurer.

14. Provisions of Section 45 of the Insurance Act, 1938 came up for consideration before the Hon'ble Supreme Court of India in Reliance Life Insurance Co. Ltd. (supra). With regard repudiation of a claim in connection with insurance policy vis-à-vis the provisions of Section 45 of the Insurance Act, 1938, the Hon'ble Supreme Court of India in Reliance Life Insurance Co. Ltd. (supra) has observed as under :-

28. Materiality of a fact also depends on the surrounding circumstances and the nature of information sought by the insurer. It covers a failure to disclose vital information which the insurer requires in order to determine firstly, whether or not to assume the risk of insurance, and secondly, if it does accept the risk, upon what terms it should do so. The insurer is better equipped to determine the limits of risk-taking as it deals with the exercise of assessments on a day-to-day basis. In a contract of insurance, any fact which would influence the mind of a prudent insurer in deciding whether to accept or not accept the risk is a material fact. If the proposer has knowledge of such fact, she or he is obliged to disclose it particularly while answering questions in the proposal form. An inaccurate answer will Page No.# 12/14

entitle the insurer to repudiate because there is a presumption that information sought in the proposal form is material for the purpose of entering into a contract of insurance.

29. Contracts of insurance are governed by the principle of utmost good faith. The duty of mutual fair dealing requires all parties to a contract to be fair and open with each other to create and maintain trust between them. In a contract of insurance, the insured can be expected to have information of which she/he has knowledge. This justifies a duty of good faith, leading to a positive duty of disclosure. The duty of disclosure in insurance contracts was established in a King's Bench decision in Carter v Boehm, where Lord Mansfield held thus:

"Insurance is a contract upon speculation. The special facts, upon which the contingent chance is to be computed, lie most commonly in the knowledge of the insured only; the underwriter trusts to his representation, and proceeds upon confidence that he does not keep back any circumstance in his knowledge, to mislead the underwriter into a belief that the circumstance does not exist, and to induce him to estimate the risque, as if it did not exist."

30. It is standard practice for the insurer to set out in the application a series of specific questions regarding the applicant's health history and other matters relevant to insurability. The object of the proposal form is to gather information about a potential client, allowing the insurer to get all information which is material to the insurer to know in order to assess the risk and fix the premium for each potential client. Proposal forms are a significant part of the disclosure procedure and warrant accuracy of statements. Utmost care must be exercised in filling the proposal form. In a proposal form the applicant declares that she/he warrants truth. The contractual duty so imposed is such that any suppression, untruth or inaccuracy in the statement in the proposal form will be considered as a breach of the duty of good faith and will render the policy voidable by the insurer. The system of adequate disclosure helps buyers and sellers of insurance policies to meet at a common point and narrow down the gap of information asymmetries. This allows the parties to serve their interests better and understand the true extent of the contractual agreement.

31. The finding of a material misrepresentation or concealment in insurance has a significant effect upon both the insured and the insurer in the event of a dispute. The fact it would influence the decision of a prudent insurer in deciding as to whether or not to accept a risk is a material fact. As this Court held in Satwant Kaur "there is a clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance". Each representation or statement may be material to the risk. The insurance company may still offer insurance protection on altered terms.

32. In the present case, the insurer had sought information with respect to previous insurance policies obtained by the assured. The duty of full disclosure required that no information of substance or of interest to the insurer be omitted or concealed. Whether or not the insurer would have issued a life insurance cover despite the earlier cover of insurance is a decision which was required to be taken by the insurer after duly considering all relevant facts and circumstances. The disclosure of the earlier cover was material to an assessment of the risk which was being undertaken by the insurer. Prior to undertaking the risk, this information could potentially allow the insurer to question as to why the insured Page No.# 13/14

had in such a short span of time obtained two different life insurance policies. Such a fact is sufficient to put the insurer to enquiry.

33. Learned counsel appearing on behalf of the insurer submitted that where a warranty has been furnished by the proposer in terms of a declaration in the proposal form, the requirement of the information being material should not be insisted upon and the insurer would be at liberty to avoid its liability irrespective of whether the information which is sought is material or otherwise. For the purposes of the present case, it is sufficient for this Court to hold in the present facts that the information which was sought by the insurer was indeed material to its decision as to whether or not to undertake a risk. The proposer was aware of the fact, while making a declaration, that if any statements were untrue or inaccurate or if any matter material to the proposal was not disclosed, the insurer may cancel the contract and forfeit the premium. MacGillivray on Insurance Law formulates the principle thus:

"..... In more recent cases it has been held that all-important element in such a declaration is the phrase which makes the declaration the "basis of contract". These words alone show that the proposer is warranting the truth of his statements, so that in the event of a breach this warranty, the insurer can repudiate the liability on the policy irrespective of issues of materiality."

34. We are not impressed with the submission that the proposer was unaware of the contents of the form that he was required to fill up or that in assigning such a response to a third party, he was absolved of the consequence of appending his signatures to the proposal. The proposer duly appended his signature to the proposal form and the grant of the insurance cover was on the basis of the statements contained in the proposal form. Barely two months before the contract of insurance was entered into with the appellant, the insured had obtained another insurance cover for his life in the sum of Rs 11 lakhs. We are of the view that the failure of the insured to disclose the policy of insurance obtained earlier in the proposal form entitled the insurer to repudiate the claim under the policy.

15. In the said decision, it has been held that disclosure of previous insurance policies obtained by the assured is material for assessment of the risk to be undertaken by the insurer. Reverting back to the facts of the case in hand, it is found that the deceased life assured had taken five policies from four different branches of the respondent corporation for a total sum assured of Rs. 24,00,000/- within a short period of time 1 month 23 days wherein he nominated three different persons as nominees i.e. his mother as the nominee in one policy, his father as a nominee in two policies and his brother as a nominee in two policies. Prior to undertaking the risk covered for the aforesaid five policies, such information of existence of other policies would have allowed the insurer to assess the risk properly and to underwrite the same and to arrive at a decision as to whether the insurer should issue the policies or not. Considering the fact that the deceased life assured had died at an age of 21 Page No.# 14/14

years suffering from Acute Gastro Enteritis (AGE) with Septicemia in shock and respiratory failure on 20.02.2011 after taking five nos. of policies during the period from 28.01.2011 to 23.03.2011 the contention of the respondent corporation that had those material facts been disclosed at the time of taking those policies occasion would have arisen to assess the risks after conducting medical tests seems justified. In view of the observations made in paragraph 34 in Reliance Life Insurance Co. Ltd. (supra), the submission advanced on behalf of the petitioners that the proposals were filled up by the concerned agents cannot be countenanced.

16. In view of the observations made in Reliance Life Insurance Co. Ltd. (supra) and in the light of the discussions made above concerning the fact situation obtaining in the cases in hand, this Court is of the considered view that the decision to repudiate the claims in respect of the three policies in question by the respondent corporation is justified and no interference is called for. Consequently, these two writ petitions are found to be bereft of any merit and deserve to be dismissed which I accordingly do. There shall, however, no order as to costs.

JUDGE

Comparing Assistant