Orissa High Court
Jollyrani Mohapatra vs Lic Of India on 11 October, 2022
IN THE HIGH COURT OF ORISSA AT CUTTACK
WP(C) No.3252 of 2016
(Through Hybrid mode)
Jollyrani Mohapatra .... Petitioner
-versus-
LIC of India, Mumbai and others .... Opposite Parties
Advocates appeared in this case :
For Petitioner : Mr. S. K. Singh, Advocate
For Opposite Parties : Mr. S. P. Panda, Advocate
CORAM: JUSTICE ARINDAM SINHA
JUDGMENT
11.10.2022
1. Mr. Singh, learned advocate appears on behalf of
petitioner and submits, his client is nominee under four life
insurance policies taken by her nephew, since deceased. All
four policies were taken from opposite party no.1 (LIC of
India). Particulars of the policies are given below:-
(i) Policy nos.570631410 and 570632038, both dated
28th July, 2001;
(ii) Policy no.570856771 dated 11th February, 2002;
and
(iii) Policy no.571151649 dated 28th June, 2002.
2. He submits, long thereafter on 27th July, 2005, the
Deceased Life Assured (DLA) met with motor accident. On
30th July, 2005 the DLA succumbed to the injuries. Opposite
party no.1 rejected claims on the policies on 9th October, 2007.
Impugned is the rejection. He points out therefrom, basis of
the repudiation was calling into question, the policies. It could
not have been done as barred by section 45 in Insurance Act,
1938. There was complaint made at instance of opposite party
no.1, which resulted in investigation by Central Bureau of
Investigation (CBI) and a criminal case. Petitioner was
accused no.4. By judgment dated 27th September, 2014, the
Special Judge, CBI Court acquitted all the accused. On query
from Court he submits, charges against his client were under
sections 120-B/420/511 IPC.
3. Mr. Panda, learned advocate appears on behalf of the
insurance company. He submits, there was fraud practiced.
There was misrepresentation. The DLA was mentally
retarded. The school certificate and the income certificate
submitted were false. Answers to questions in the proposal
forms were also false. In the circumstances the repudiation
was duly made as covering claims under all four policies.
4. On query from Court he submits, the criminal case
before the Special Judge, CBI Court was the only adjudication
on the charges brought against his client's officials as well as
petitioner. No civil proceeding was initiated on allegation of
fraud. On further query from Court he submits, prior to the
repudiation, his client had not called into question the policies.
5. Fraud stands defined in section 17 of Contract Act,
1872. The definition finds place in explanation I under section
45 in the Act of 1938. Sub-section (2) under section 45 is
reproduced below.
"(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."
Court has ascertained that the policies were not called into
question on the ground of fraud under above provision.
6. Section 120-B in Indian Penal Code is criminal
conspiracy to commit an offence, section 420 is regarding,
inter alia, cheating and thereby dishonestly inducing to deliver
property and section 511 is attempting to commit offences
punishable as provided thereunder. These charges were
subject matter of the criminal case dealt with by said judgment
dated 27th September, 2014. Paragraph-22 from the judgment
is extracted and reproduced below.
"In ultimate appraisal of the totality of the
evidence on record I am driven to hold that the
prosecution has failed to prove its case against
the accused beyond all reasonable doubt. I,
therefore, find all the accused persons not guilty
of the offences under Sections 120(B)/420/511 of
the IPC and accused Raj Kishore Samal and
Pitabas Sahoo not guilty of the offence under
Section 13(2) read with Sec. 13(1)(d) of the P.C.
Act, 1988 and acquit them under Sections 248(1)
Cr.P.C. The bail bonds stand cancelled.
The seized documents be returned from
whom seized and the zimanama, if any, be
cancelled four months after the appeal period is
over, if no appeal is preferred and in the event of
an appeal subject to order of the Hon'ble
Appellate Court."
(emphasis supplied)
On query from Court Mr. Panda submits, there was no appeal
against the judgment.
7. Court is convinced that opposite party no.1 could not
have called into question any of the policies by impugned
repudiation. Sub-section (1) in section 45 in the Act of 1938 is
clear in mandating that after three years no question
whatsoever can be raised. Sub-section (2) allows a policy to
be questioned on the ground of fraud, which may be after
three years from date of issuance of the policy, in event said
period stands extended by date of commencement of risk or
revival or rider to the policy. There was no extension of the
three year period on the policies by commencement of risk or
revival or rider to them.
8. Impugned repudiation is set aside and quashed.
Opposite party no.1 will forthwith pay on the policies. In
event payment is not made by 31st October, 2022, the
aggregate amount will carry interest at the rate of 5% per
annum simple calculated from 22nd February, 2016 (date of
presentation of the writ petition) till date of payment.
9. The writ petition is disposed of.
(Arindam Sinha)
Judge
RKS
