Orissa High Court
M/S. Shriram Life Insurance Co. Ltd vs Santosh Behera And Anr. .... Opp. ... on 25 June, 2024
Author: S.K. Panigrahi
Bench: S.K. Panigrahi
Signature Not Verified
Digitally Signed
Signed by: BHABAGRAHI JHANKAR
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 18-Jul-2024 16:37:51
IN THE HIGH COURT OF ORISSA AT CUTTACK
WP(C) No.16722 of 2016
and
batch of Writ Petitions
(In the matters of applications under Articles 226 and 227 of the
Constitution of India, 1950).
(In W.P.(C) No. 16722 of 2016)
M/S. Shriram Life Insurance Co. Ltd. .... Petitioner(s)
-versus-
Santosh Behera and Anr. .... Opp. Party(s)
Advocates appeared in the case through Hybrid Mode:
For Petitioner (s) : Mr. G.P. Dutta, Adv.
-versus-
For Opp. Party(s) : Mr. Sunil Ku. Panda, Adv.
(for O.P.1)
CORAM:
DR. JUSTICE S.K. PANIGRAHI
DATE OF HEARING:-17.05.2024
DATE OF JUDGMENT:-25.06.2024
WP(C) No.16722 of 2016
along with
W.P.(C) Nos.9048 of 2016, 16725 of 2016, 16727 of 2016, 16729 of
2016, 16731 of 2016, 2491 of 2017, 2927 of 2017, 16404 of 2017,
21620 of 2017, 23482 of 2017, 23483 of 2017, 23484 of 2017, 23485 of
2017, 23486 of 2017, 23487 of 2017, 27203 of 2017, 27204 of 2017,
27205 of 2017, 27209 of 2017, 27210 of 2017, 2104 of 2018 , 2146 of
2018, 4319 of 2018 and 8463 of 2019.
Dr. S.K. Panigrahi, J.
1. Since common question of facts and law are involved in all the above-
mentioned Writ Petitions, the same were heard together and are being
Location: ORISSA HIGH COURT, CUTTACK
disposed of by this common judgment. However, this Court felt it
apposite to deal the W.P.(C) No.16722 of 2016 as the leading case for
proper adjudication of all these cases.
2. The Petitioner/ Shriram Life Insurance Co. Ltd., in W.P.(C) No.16722 of
2016, has made a prayer to quash the award dated 30.05.2016 passed in
PLA Case No.319 of 2015 by the Permanent Lok Adalat for Public
Utility Services, Ganjam at Berhampur directing the Petitioner/ Shriram
Life Insurance Co. Ltd. to pay the death benefit under policy
No.NP141400146244 with all benefits available under the said policy
with interest @ 6% per annum from the date of application in favour of
the present Opposite Party No.1 within a period of two months from
the date of that order.
I. FACTUAL MATRIX OF THE CASE:
3. The facts narrated in the Writ Petition by the Petitioner/ Shriram Life
Insurance Co. Ltd. are that the deceased-life assured (in short 'DLA')
Sabitri Behera, mother of the Opposite Party No.1, had taken a life
insurance policy i.e. "Shriram New Shri Raksha" bearing
No.NP141400146244 from the Petitioner/ Shriram Life Insurance Co.
Ltd. on 18.10.2014. The base sum assured for the aforesaid policy was
Rs.5,00,000/- in case of death, the risk cover would be double the sum
assured, i.e., Rs.10,00,000/-. The premium was payable at yearly
frequency @ Rs.55,733/-. The insured died unexpectedly on 23.11.2014.
The Opposite Party No.1 being the registered nominee-cum-legal heir
of the DLA raised death claim and submitted all required documents as
sought for. The Petitioner insurer, however, repudiated the death claim
Location: ORISSA HIGH COURT, CUTTACK
on 21.05.2015 on the ground that the DLA had suppressed material
facts regarding her pre-existing diseases and her annual income.
4. The Opposite Party No.1 being aggrieved by such order of repudiation
which has caused harassment and mental agony, there being no pre-
existing disease to his knowledge and when the DLA has sufficient
mean to pay the sum assured, alleging "deficiency in service",
approached the Permanent Lok Adalat for Public Utility Services,
Ganjam at Berhampur in P.L.A. Case No.319 of 2015 claiming the death
benefit along with cost and compensation. The application was
supported by affidavit. The Opposite Party No.1 had produced photo
copy of order of repudiation, copy of proposal premium payment
receipt, copy of death certificate copy of bank pass book and copy of
voter's ID card of the DLA.
5. The Permanent Lok Adalat for Public Utility Services, Ganjam at
Berhampur taking into account the factual aspect of the case, vide order
dated 30.05.2016 passed in P.L.A. Case No.319 of 2015 and held the
order of repudiation of claim passed by the Petitioner/ Insurance
Company was neither reasonable nor bonafide. Accordingly, the order
of repudiation dated 21.05.2015 passed by the Petitioner/ Insurance
Company was set aside and the Petitioner/ Insurance Company was
directed to pay the death benefit as stated supra.
6. Being aggrieved by the order dated 30.05.2016 passed in P.L.A. Case
No.319 of 2015 by the Permanent Lok Adalat for Public Utility Services,
Ganjam at Berhampur, the Petitioner/ Insurance Company is
constrained to approach this Court by way of this Writ Petition..
Location: ORISSA HIGH COURT, CUTTACK
II. PETITIONER'S SUBMISSIONS:
7. Learned counsel for the Petitioner earnestly made the following
submissions in support of his contentions.
(i) The life assured had suppressed about her actual income, previous
ailment i.e. she was suffering from Gallbladder Cancer prior to two
years and also age. It is the admitted fact that the life assured belongs
to BPL category, but the declaration made in the proposal form that she
was doing business and earning Rs.5,00,000/ - per annum being false,
the claim was liable to be repudiated. Had the policy holder provided
the correct information regarding income then this could have
influenced the Petitioners in assessing the risk of the life of the
deceased and the decision could have been different to cover the risk
on the life of the deceased life assured. But, the Permanent Lok Adalat
in a cryptic manner has awarded the amount in favour of the applicant/
Opposite Party No.1. Hence, the award under Annexure-1 is
unsustainable and is liable to be quashed.
(ii) Since the death of the deceased occurred within two years from the
date of commencement of the policy i.e. within 35 days from the date of
commencement of the policy, the matter was investigated in view of
Section 45 of the Insurance Act, 1938. After investigation, as it was
found that the life assured (deceased) had suppressed the material fact
regarding her income, health condition and the existing life insurance
policy, the claim has rightly been repudiated by the Petitioners on
21.05.2024. However, the Permanent Lok Adalat has failed to take note
of the same and passed the impugned award.
Location: ORISSA HIGH COURT, CUTTACK
(iii) Learned Permanent Lok Adalat has committed error of law in
holding that Annexures-A to E filed by the petitioners i.e. Annexure-A-
Copy of policy document with proposal form and premium payment
receipt; Annexure-B- copy of the investigation report; Annexure-C-
copy of order of repudiation; Annexure-D- copy of claim form-A
(Claimant statement) and Annexure-3- copy of claim form-B (Medical
attendant's statement) are not admissible as some of those documents
are photo copies and author of those documents have not been
examined admittedly when those documents have been marked
without objection. It is well settled proposition of law that once a
document is admitted in to evidence without any objection then
subsequently it cannot be said that the contents of those documents are
not admissible being photo copies or not being proved and as such the
findings of the learned forum below is unsustainable and is liable to be
quashed.
(iv) It was further submitted that since from the proposal form as per
Annexure-4, it is evident that the life assured gave a declaration that if
any statement is untrue or inaccurate or if any matter that might
influence the terms of the proposal or not disclosed, the contract shall
be null and void. In the instant case, the life assured had admittedly
suppressed the material fact. Hence, the award dated 30.05.2016 passed
in PLA Case No.319 of 2015 by the Permanent Lok Adalat for Public
Utility Services, Ganjam at Berhampur cannot be sustained and is liable
to be set aside.
Location: ORISSA HIGH COURT, CUTTACK
III. SUBMISSIONS OF THE OPPOSITE PARTY NO.1
8. Per contra, learned counsel for the Opposite Party No.1 earnestly made
the following submissions in support of his contentions:
(i) The mother of the Opposite Party No.1 had insured her life with the
Petitioner vide Policy No.NP141400146244 commencing from
18.10.2014 by paying annual premium amount of Rs.57,500/- (Rupees
fifty seven thousand five hundred only) for an assured sum of
Rs.5,00,000/- (Rupees five lakhs only), but in case of death of the life
assured, the risk covers double the sum assured i.e. Rs.10,00,000/-. The
Petitioner was standing as a nominee in the said policy.
(ii) Unfortunately, the life insured i.e. the mother of the present Opposite
Party No.1 died on 23.11.2014. After death of his mother, the Opposite
Party No.1 alongwith other family members became helpless. The
Opposite Party No.1 intimated the matter to the Petitioner claiming the
insurance benefits of his late mother under the said policy. After receipt
of the death intimation and prolonged follow-ups, the Petitioner issued
claim form etc., which has been submitted with the Petitioner for
consideration and settlement of genuine claim of the Opposite Party
No.1. The Opposite Party No.1 submitted all the original documents
with the Petitioner as per their requirement for settlement of the
genuine claim. But, the petitioner intentionally repudiated the genuine
claim of the Opposite Party No.1 without going to the merit vide order
dated 21.05.2015, which tantamounts gross negligence and deficiency
of service on the part of the Petitioner.
Location: ORISSA HIGH COURT, CUTTACK
(iii) The Opposite Party No.1 being aggrieved by such order of
repudiation, approached the Permanent Lok Adalat for Public Utility
Services, Ganjam at Berhampur in P.L.A. Case No.319 of 2015 claiming
the death benefit along with cost and compensation. The application
was supported by affidavit. The Opposite Party No.1 had produced
photo copies of order of repudiation, copy of proposal premium
payment receipt, copy of death certificate copy of bank pass book and
copy of voter's ID card of the DLA.
(iv) The Permanent Lok Adalat for Public Utility Services, Ganjam at
Berhampur taking into account the factual aspect of the case, vide order
dated 30.05.2016 passed in P.L.A. Case No.319 of 2015 held the order of
repudiation of claim passed by the Petitioner/ Insurance Company was
neither reasonable nor bonafide. Accordingly, the order of repudiation
dated 21.05.2015 passed by the Petitioner/ Insurance Company was set
aside and the Petitioner/ Insurance Company was directed to pay the
death benefit as stated supra.
(v) In such view of the matter, he contended that there is no reasonable
ground to interfere with the impugned order. Therefore, the Writ
Petition filed by the Petitioner is liable to be dismissed.
IV. COURT'S ANALYSIS AND REASONING:
9. In the present case, the vital issue for consideration is "whether the
DLA had suppressed the pre-existing diseases and her annual income
which was within her knowledge as alleged? and/ or "whether the
Opposite Party No.1/nominee is entitled to get the benefit under life
insurance policy in the event of death of the life insured if she while
Location: ORISSA HIGH COURT, CUTTACK
submitting the insurance proposal form had suppressed the fact of pre-
existing diseases and her annual income?
10.Admittedly, the DLA is the mother of the Opposite Party No.1 and the
Opposite Party No.1 is the nominee of the insurance policy. The
Petitioner insurer has repudiated the death claim vide order dated
21.05.2015 on the ground that the DLA had suppressed material facts
regarding her pre-existing diseases and her annual income.
11.In order to adjudicate the aforesaid issue, it would be proper to have a
look on the impugned order dated 30.05.2016 passed in P.L.A. Case
No.319 of 2015 by the Permanent Lok Adalat for Public Utility Services,
Ganjam at Berhampur. Paragraphs-7 to 10 of the impugned order are
extracted as follows:
"7. The claim investigation report, Anx-B reveals that at the
time of death, the DLA was in between 50-55 years old, she
was a housewife as well as laborer, had no personal income
what so ever, she belonged to a BPL family and was
illiterate. The Anx-B also reveals that the DLA was
suffering from "Gall Bladder Cancer" for last 2-3 years and
as per the version of the neighbors, she was under treatment
in Kalinga Hospital, Bhubaneswar and another hospital at
Vishakapatana of which address was not known to them.
Eventually, the DLA died on 25.11.2015 (23.11.2014 ?) at
her home. The investigator had also visited the local Gram
Panchayat Office but could not collect any incriminating
documents pertaining to medical treatment of the DLA. The
investigator had also visited all local medical stores of that
vicinity, the M.K.C.G Medical College Hospital & the City
Hospital, Berhampur but found no medical treatment
reports in the name of the DLA at anywhere, The
investigator also visited Kalinga hospital, Bhubaneswar,
where the hospital took 15 days to search for records in the
name of the DLA but could not trace any medical treatment
Location: ORISSA HIGH COURT, CUTTACK
papers. Unfortunately, the investigator in its cul- de-sac
observation has noted that the DLA was suffering from Gall
Bladder Cancer for last 2-3 years. It shows hyper
interestedness and biased conduct of the investigator. Even
though, the investigator was convinced that no material
before him in support of his conclusion but showing a
mischievous conduct he has given such findings apparently
to help the insurer. This investigator is to be reported
against to the IRDA. Having knowledge of the nature of the
investigator's report that no iota of material to support of
the theory of Gall Bladder Cancer could be collected by him,
the respondent insurer gave a good-bye to the theory of
Cancer and adverted to claim form-B, the Anx-E, the
medical attendant's certificate to show that the DLA was
suffering from Asthma prior to the date of commencement of
risk. Admittedly, the Anx-C is dtd.21.05.2015. It shows as
per claim form-B, the DLA was suffering from Asthma
though the insurer was aware from Anx-B, dtd.07.05.2015
that there was no hints of Asthma therein as the DLA died
of cancer as alleged by the investigator. In claim form-B, Dr.
P.K. Pattanik has put his signature on 19.03.2015 but it is
not referred in Anx-B, dtd.07.05.2015. befar apart, the
certificate Anx-E reveals that the husband of the DLA
divulged before the insurer that the DLA was under
treatment of Dr. P. K. Patnaik of CARE hospital,
Berhampur on 04.11.2014. That the so called Doctor has
given medical attendant's certificate, the Anx-E. That report
reveals that the DLA was under his treatment on
04.11.2014 and certified that she was suffering from
breathlessness and cough for a period of one year preceding
04.11.2014. Neither the signature of the husband of the
DLA appended in Claim form-B nor any medical treatment
papers except a photo copy of prescription dtd.04.11.2014
appended thereto. Incidentally, no signature or thumb mark
of the DLA found in that prescription where the age of the
DLA is given as 49 years and the date of prescription over
written from 04.11.2013 to 04.11.2014. Moreover, all
medical treatment papers of CARE Hospital neither
Location: ORISSA HIGH COURT, CUTTACK
produced or any affidavit of the Doctors filed. The medical
prescription is meant for the patient. How CARE Hospital
could produce such a document is any body's guess. If it is
copied from any register, absence of such register is fatal
particularly when the investigator's report dtd.07.05.2015
is conspicuous by its absence this medical paper
dtd.04.11.2014. Apparently, therefore, there was no such
document seen the light of the day as on 07.05.2015. Only
when the insurer found no medical document to discard the
claim, the insurer fabricated Anx-E with connivances of
their penal Doctor Mr. Prasanta Kumar Patnaik of CARE
Hospital, Berhampur. How the CARE Hospital, Berhampur
dare to file copy of the alleged medical prescription without
signature of the DLA cannot be brushed aside lightly. It has
to be reported against to the competent Authority. Sifting
the buck on the husband of the DLA cannot be resolved the
insurer of its liability, if any. So, we discard Anx-E with
alleged medical prescription of CARE Hospital, there being
no truth in that document. It supports a case of fraud
committed by the Shriram Life Insurance Co. Ltd. to avoid a
purported claim. Discarding Anx-E and tainted Anx-B
where there is no grain of truth, the plea of pre-existing
disease falls like a house of cards. That apart, the claimant
statement (Form-A), the Anx-D reveals that Santosh
Behera, the son of the DLA divulged before the insurer that
his mother was under treatment of Dr. P.K.Pattanaik. This
declaration was dtd.21.02.2015. If the husband of the DLA
had divulged before the said Dr. P.K. Patnaik that his wife
was under his treatment, there was no occasion for the
insurer to change the informer. The applicant has denied to
have given any such information, when her mother was not
suffering either from Gall Bladder Cancer or from Asthma.
8. We would repeat that the penal doctor of the insurer has
manipulated Anx-B & Anx-E, the Doctor having failed to
produce any inch of paper to show that the DLA has ever
undergone any treatment under him either in CARE
Hospital or in his chamber. Non-production of original
Location: ORISSA HIGH COURT, CUTTACK
medical treatment document relating to DLA, alternatively,
absence of any affidavit of the said Dr. P. K. Patnaik has
adversely affected the claim of the insurer that the DLA was
suffering from pre- existing disease which was to her
knowledge and had suppressed such material information in
the proposal form. No credible evidence in support of the
plea of suppression of material fact about previous illness
being brought on record, we are of the considered opinion
that no implicit reliance can be placed in a tainted document
like Anx-B, D & E to discard the nominee, the plan when
obtained to secure his future. The thrust of submission of the
learned counsel for the applicant that the deceased-life
assured having no pre-existing disease to her knowledge and
he having not undergone any treatment relating to any such
disease under any Doctor or at any Hospital at any time
preceding 18.10.2014, date of risk, there is no suppression of
"material fact" within the meaning of Sec.45 of the
Insurance Act, 1938. Admittedly, the DLA died at her home
and not En any hospital. This is a circumstance which
supports the claim of the applicant that the DLA had no
knowledge any pre-existing diseases, she having not taken
any medicine from any medical stores nor undergone any
treatment at anywhere. The CARE Hospital has failed to
produce any medical treatment papers in support of her
treatment. The photo copy of prescription sans signature of
the DLA or any of his relatives in the fact and
circumstances, when the DLA died at her home, lends
absolute assurance to the plea of the applicant.
9. The learned counsel for the applicant would also contend
that since there were no symptoms of Gall Bladder Cancer or
Asthma to their knowledge as well as to the knowledge of his
deceased mother before the policy was taken, the question of
even linking up the symptoms of breathlessness on
04.11.2014 as inserted in Anx-E with any pre-existing
disease does not arise. If this is so, then every person should
do medical studies and further, should not take any
insurance policy. Most of the people are totally unaware of
Location: ORISSA HIGH COURT, CUTTACK
the symptoms of the disease that they suffer and hence, they
cannot be made liable to suffer because of certain exclusion
clauses. Common people are not at all familiar with medical
knowledge and so they cannot diagnose their own disease. If
they were expected to be so aware of their medical condition
at all times, there would be no use of insurance policies.
(Refer: Prabin Damani Vs. Oriental Insurance Company
Ltd IV (2006) CPJ 189 (NC). That being the fact and there
being no evidence worth consideration that the DLA had
pre-existing diseases, the repudiation made by the
respondent on that count without any pinch of evidence
amounts to "deficiency in service".
10. Turning to the other plea of the respondent that the DLA
was a BPL category person, had exaggerated her extent of
income and consequently, there was suppression of
"material fact" is heard to be rejected in view of the National
Consumer Dispute Redressal Commission findings in
Meena Bare case decided on 15th January, 2016 wherein it
is held. 'it is common practice for insurance Agent to obtain
consumer's signature on a blank proposal form with the
assurance that all formalities will be attended to. Agents
often fill up wrong information which leads to policy being
issued but problem occurring when a claim is lodged'. The
finding of the National Commission is that an insured
cannot be penalized for wrong information filled in by the
agent in the proposal form. A person is free to take as many
policies as he wishes so long as he can pay the premium.
Here, the Anx-IV, copy of the bank pass book in the name of
the DLA reveals the transactions as such, it cannot be said
that she had no resources to pay the premium. Moreover, the
BPL card is recorded in the name of husband of the DLA.
Even if it is assumed for the moment that the DLA during
her lifetime was wife of a BPL card holder, that does not
mean that she had no capacity to pay insurance premium.
The transaction made in bank pass book establishes her
financial status. She had paid the proposal premium and
there is nothing on record to hold that she died of Cancer or
Location: ORISSA HIGH COURT, CUTTACK
the cause of death was Asthma. That being the matrix
brought on record, there is absolutely no material
suppression of fact with suppression of pre-existing diseases
and misstatement as to the income status of the DLA to her
knowledge. In such scenario, the Insurer has no legal right
to repudiate the insurance claim by alleging that she was
suffering from Asthma before the risk commencement age
and there was suppression of income status of the DLA.
Consequently, we are of the considered opinion that the
insurance company is not justified in repudiating the death
claim under Anx-I/C in respect of policy no.
NP141400146244 and therefore, is in "deficiency in
service" as contended. Under such circumstances, the agony
of the applicant and the loss caused to her is understandable.
(Refer: 2002 (3) CPR 231 Life Insurance Corporation of
India through Branch Manager Vs. Smt. Susita Devi
Agarwal). There is no suppression of any material fact. 'It
needs little emphasis that when an information on a specific
aspect is asked for in the proposal form, an assured is under
a solemn obligation to make a true and full disclosure of the
information on the subject which is within his knowledge. It
is not for the proposer to determine whether the information
sought for is material for the purpose of the policy or not. Of
course, the obligation to disclose extends only to facts which
are known to the applicant and not to what he ought to have
known. The obligation to disclose necessarily depends upon
the knowledge one possesses. His opinion of the materiality
of that knowledge is of no moment. (See Joel v Law Union
& Crown Insurance)."
12. On a bare perusal of the materials on record, averments made in the
Writ Petition and the Paragraphs-7 to 10 of the impugned order, it is
apparent that the DLA had no knowledge about any pre-existing
diseases, she having not taken any medicine from any medical stores
nor did she undergo any treatment anywhere. No credible evidence in
support of the plea of suppression of material fact about previous
Location: ORISSA HIGH COURT, CUTTACK
illness had been brought on record. Therefore, there is no suppression
of "material fact" within the meaning of Section 45 of the Insurance
Act, 1938. If I may refer to the Section 45 of the Insurance Act, 1938
which reads as follows:
"Policy not to be called in question on ground of
misstatement 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 & 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 the 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 & that
it was fraudulently made by the policy-holder & 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.
Xx xx xx xx xx xx".
From a plain reading of the aforesaid provision it can be concluded that
there are three conditions for application of the second part of Section
45 of the Insurance Act, which are:
a. the statement must be on a material matter or must suppress
facts which it was material to disclose;
b. the suppression must be fraudulently made by the policy-
holder; and
Location: ORISSA HIGH COURT, CUTTACK
c. the policy-holder must have known at the time of making the
statement that it was false or that it suppressed facts which it was
material to disclose.
13.Applying the above principle of law in the case in hand suppression of
material fact about previous illness and age at the proposal stage has
no bearing on the risk undertaken by the insurer i.e. the mother of the
Opposite Party No.1 in view of the fact that the DLA had no
knowledge about any pre-existing diseases, she having not taken any
medicine from any medical stores nor did she undergo any treatment
at anywhere. As per Section 45 of the Insurance Act, it does not qualify
the materiality or material facts and it cannot be construed as
fraudulent suppression to repudiate the contract of insurance.
14.It is well settled principle of law that the insurance claim cannot be
repudiated on the ground of suppression, false or non- discloser of
facts in the proposal form which does qualify as a material facts or
having no bearing on the risk of the insurer as per Section 45 of the
Insurance Act.
15.In the case of Rohini Nandan Goswami v. Ocean Accident &
Guarantee Corporation1, while considering the duty of a insured to
disclose material facts and the right of the insurer to avoid the
insurance policy in case of such non-disclosure, the Court observed
that as to whether a particular fact is material depends upon the
circumstances of a particular case. Evidence of materiality is not always
necessary. Materiality of a particular fact may be obvious from its very
AIR 1960 Calcutta 696
Location: ORISSA HIGH COURT, CUTTACK
nature. The test to determine materiality is whether the fact has any
bearing on the risk undertaken by the insurer. If the fact has any
bearing on the risk, it is a material fact; if not it is immaterial
16.A Division Bench of Madras High Court in the case of Life Insurance
Corporation of India V. Janaki Ammal2; has observed 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
& not mere temporary or trivial illness & that unless the
disease he was suffering from is clearly established & it is
also established that disease would have a material bearing
on the insurability of the policy holder, the policy cannot be
invalidated. We are, therefore, clear that in the
circumstances of this case, the mere fact that the deceased
had been taking medicines & injections without proof of
anything more would not be sufficient to invalidate the
policy."
17.The Apex Court in the case of Life Insurance Corporation of India and
Ors. v. Smt. Asha Goel and Anr3., has observed as follows:
"In course of time the Corporation has grown in size & at
present it is one of the largest public sector financial
undertakings. The public in general & crores of policy-
holders in particulars look forward to prompt & efficient
service from the Corporation. Therefore the authorities in-
charge of Management of the affairs of the Corporation
should bear in mind that its credibility & reputation depend
AIR 1968 Mad 324
2001 SCW 161
Location: ORISSA HIGH COURT, CUTTACK
on its prompt & efficient service. Therefore, the approach of
the Corporation in the matter of repudiation of a policy
admittedly issued by it should be one of extreme care &
caution. It should not be dealt with any mechanical &
routine manner."
18.A division Bench of this Court has dealt with a similar case i.e. in the
case of Smt. Gouri Sethi v. Divisional Manager of L.I.C. and Ors. AIR
2007 (Orissa) 19, wherein a similar situation, the LIC had repudiated
the claim on the ground that the deceased insured had furnished false
statement to the questionnaire contained in the proposal form and had
suppressed his age and physical deformity. Referring to the
aforementioned decision of the Madras High Court in Life Insurance
Corporation of India V. Janaki Ammal (supra) this Court hold that the
deceased insured had not stated in the proposal form that he was
suffering from Acid Peptic disease and Allergic and has been treated
for Hypertension prior to taking of the insurance policy. Admittedly,
the deceased insured died of Cardiac Vascular Arrest and Hemiplegia.
The suppression of prior ailment not affecting the expectation of life
cannot be a ground to repudiate the policy. Accordingly, this Court
directed the LIC to release the claim of the Petitioner therein. Similarly,
in the case of Kuni Lata Sahoo -vs- Senior Manager, L.I.C. of India &
Anr.4 it has been settled:
"The Insurance policy/ apart from its special feature/ is a
contract between a person seeking to be insured & the
insurer. In interpreting the terms of contract of insurance,
they should receive fair, reasonable & sensible construction
AIR 2010 Ori 19
Location: ORISSA HIGH COURT, CUTTACK
in consonance with the purpose of the contract as intended
by the parties. Emphasis in such cases is laid more upon a
practical & reasonable, rather than on a literal & strained
construction. In interpreting the contract of insurance
neither the coverage under a policy should be unnecessarily
broadened, nor should the policy be rendered ineffective in
consequence of unnatural or unreasonable construction. An
attempt should be to construe a contract in liberal manner
so as to accomplish the purpose or the object for which it is
made. In the absence of ambiguity, neither party can be
favoured but where the construction is doubtful, the Courts
lean strongly against the party who prepared the contract.
Where there is a susceptibility of 2 interpretations, the one
favourable to the insured is to be preferred."
19.Therefore, in light of the discussion above, keeping the settled
principles of law in mind and considering the rival contentions made
by both the learned counsel for the Parties, this Court is of the view
that there is no error apparent in the award dated 30.05.2016 passed in
PLA Case No.319 of 2015 by the Permanent Lok Adalat for Public
Utility Services, Ganjam at Berhampur so as to warrant interference by
this Court. Hence, W.P.(C) No.16722 of 2016 is dismissed.
20.Accordingly, all the above-mentioned Writ Petitions are dismissed.
21. Interim order, if any, passed earlier, in any of the Writ Petitions, stands
vacated.
( Dr. S.K. Panigrahi )
Judge
Orissa High Court, Cuttack,
Dated the 25th June, 2024/B. Jhankar
