Mr. Das, however, is correct in his submission that contents may have been admitted, not its truth. Truth of correctness is to be ascertained from the evidence. A party admitting a document has right to explain that though the document contains such a statement, it is not correct. Explaining Ext. E which discloses that Dr. Thomas had recorded the history which was reported by the patient himself. Mr. Das submitted that Ext. E is not by Dr. Thomas. There is no statement in Ext. E that it was prepared out of the records of the hospital. There is no statement that Dr. Thomas stated to the doctor preparing Ext. E that Debakilal made such a statement. In such circumstances, though the contents of Ext. E might have been admitted, truth or correctness of the statements in Ext. E are not admitted. When Ext. F does not disclose that Debakilal made the statement to Dr. Thomas and Dr. Thomas has not been examined to prove this fact, hear-say statement of the doctor in Ext. E cannot be accepted in the present case.
Orissa High Court
Life Insurance Corporation Of ... vs Narmada Agarwalla And Ors. on 22 July, 1992
Equivalent citations: 1993 ACJ 1023, AIR 1993 Ori 103
1. These two appeals by the defendant arises out of a common judgment in two suits arising out of the same cause of action where the parties are the same, issues are the same and reliefs claimed are the same. Accordingly, they arc heard together.
2. Appellant is a statutory body constituted under the Life Insurance Corporation Act, 1956. After this Act came into force, appellant became the sole authority to have life insurances in India. For insuring a life, a proposal is to be made by the life sought to be insured, the proposer is to be medically examined by a medical examiner approved by the insurer who is to give a confidential report to the insurer and the premium amount required is to be paid. Possessed of these two documents, insurer is to decide the question of acceptance of the proposal. Once the proposal is accepted, contract is complete and policy is to be issued. Where, for reasons indicated in term of the policy, it lapses, the same can be revived as per the terms contained therein. On happening of the event mentioned in the policy, insurer is to pay the sum assured with benefits, if any, either to the insured or his nominee or legal heirs as the case may be.
3. On 7th December, 1970, Debakilal made a proposal (Ext. A) for covering risk of his life for Rs. 30,000/-. On the previous day, i.e. 9-12-1970, he was examined by an approved medical examiner of the insurer who submitted his confidential report (Ext. N). Proposal was accepted by the defendant and policy (Ext. B) was issued on 4-2-1971 effective from 28-8-1970. When the policy was in force, on 13-9-1978, deceased made another proposal (Ext. K) for covering the risk of his life for Rs. 40,000/-. On the same day, the medical examiner approved by the insurer examined him and submitted a confidential report (Ext. P). That day, a special heart report (Ext. O) was also obtained. Possessed of these documents risk was covered for Rs. 40,000/- as per policy issued subsequently (Ext. J) effective from 20-11-1978. Due to non-payment of premium, the second policy (Ext. 5) lapsed but was revived by the insurer on basis of personal statement of the deceased (Ext. H) made on 23rd March, 1981 while both the policies were in force. About one and half year before his death, Debakilal was advised by his doctor to reduce in-take of sugar as he was found to be suffering from diabetes. Two and half months before death, Debakilal was examined in S.C.B. Medical College Hospital for angina pain in his heart. From Cuttack, he was taken to Jaslok Hospital in Bombay. At that stage, he expired on 23-6-1982 in Jaslok Hospital, Bombay while under treatment for his heart disease. On 8-6-1982, request was made to the hospital for admission of Debakilal in Jaslok Hospital as per Admission request form (Ext. D). He was admitted on 12-6-1982 at 10.00 a.m. On admission, Dr. Thomas took history of Debakilal which was reduced to writing (Ext. F). Debakilal expired in the hospital on 2-6-1982 at 2.30 p.m. on account of cardio respiratory arrest due to infraction following coronary bypass surgery for tripple vessel coronary disease as revealed from the certificate of hospital treatment granted by Jaslok Hospital (Ext. E). Dead body was brought to Karanjia and was burried on 24-6-1982 at 5 p.m. in the cremation ground near Deo river bridge, Karanjia (Ext. C). Death was intimated to the insurer. On receipt of the information of death, insurer sent the required forms on 29-7-1982 which were duly submitted. Claim of plaintiffs were repudiated on the ground that policies had become void as it was found that untrue and incorrect statements were contained in the proposals, declaration, personal statement and material information had been withheld.
4. Since the plaintiffs would have been entitled to settlement of the claims but for the repudiation, main question for decision in the suit was the justification of repudiation.
5. Plaintiff No. 3 was examined as P.W. 1 in support of the claims in the suits. Defendant produced documents (Exts. A to O) which were marked on admission.
6. Trial Court accepted statement of P.W. 1 and held that deceased Debakilal did not state before Dr. Thomas that he was suffering from Diabetes since 15 years and was not suffering therefrom during that period and this being the only ground for repudiation, it was not justified and plaintiffs were entitled to a decree.
7. Since unjustified repudiation is the main issue involved in the appeals, Mr. Asoke Mukherjee, learned Counsel for the insurer-appellant, submitted that in view of Section 45 of the Insurance Act, 1938 read with Section 19 of the Contract Act, the claims ought to have been held by the trial Court to have been correctly repudiated as the policies became void on account of non-disclosure and withholding of material facts as would be found from the documents which have been entertained and marked as exhibits on admission.
8. If the death of Debakilal would have been within two years from the dates of commencement of the policies, as per term in the policy, they could have been forfeited on account of untrue or incorrect statement or withholding of any material information. These terms in the policies are subject to the provisions of Section 45 of the Insurance Act, 1938. After two years of commencement of the policies, only Section 45 would be attracted. Untrue statement or withholding of material information in personal statement for revival of the policy would be of no assistance to the insurer in support of repudiation of a claim in view of the principle laid down in AIR 1962 SC 814 (Mithoolal Nayak v. Life Insurance Corporation of India), where it has been observed (at page 818):
"Whether the revival of a lapsed policy constitutes a new contract or not for other purposes, it is clear from the wording of the operative part of Section 45 that the period of two years for the purpose of the Section has to be calculated from the date when the policy was originally effect;...."
In the present case, the policy though effected on 4-2-1971 insurer itself declared that the date of commencement is 20-8-1970. Therefore, two years under Section 45 would start from 28-8-1970 and the insurer could have avoided the contract in the policy on account of untrue statement latest by 28-8-1972. In the other policy which effected on 30-3-1979, date of commencement was stated to be 20-11-1978. Hence the two years for avoidance would not be available after 20-11-1980. Insurer, however, can take assistance of later part of Section 45 to avoid its liability under the policies.
9. In the decision of Supreme Court reported in AIR 1962 SC 814 (supra), it has been held that for application of second part of Section 45, three conditions are to be satisfied. They 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
(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.
In view of the fact that aforesaid three conditions are to be satisfied for avoiding a policy which is a contract, the facts and circumstances of each case are to be examined to find whether the three conditions are satisfied. View taken in one case would not be binding on the other if the facts and circumstances vary. Supreme Court also examined the facts and circumstances in the reported decision to arrive at the conclusion.
10. Mr. Mukherjee relied upon the statement purported to have been made by Debakilal to Dr. Thomas in Jaslok Hospital as revealed from Ext. P which is a photo copy of the statement recorded and attested to be a true copy by Jaslok Hospital & Research Centre. This document has been marked on admission. Accordingly, contents thereof are also admitted by plaintiffs without formal proof. This document contains history of ailment of Debakilal. It is stated therein that Debakilal was suffering from 'Diabetes since 15 years'. To give importance to a history sheet for surgery of a patient, Mr. Mukherjee relied upon the guidance given in a book, "Clinical Methods in Surgery" by K. Das, 11th Edition, wherein it has been stated :
"HISTORY
1. Particulars of the Patient -- Before enquiring about the complaints, it is necessary to record, in the history sheet, the patient's name, religion and race, sex, age, occupation and residence, the significance of those is discussed below:.........
2. Complaints (or presenting symptoms) and their duration :-- .........
3. History of present illness: .........
4. Past History: .........
5. Personal History: .........
6. Family History:........."
Mr. Mukherjee relied on a book "Hatchison's Clinical Methods' where in the first Chapter 'Doctor and Patient', it is written :
"The aim is to get from the person concerned an accurate account of the complaint and to set this against the background of his life as a whole. The findings should be recorded under the following headings:--
1. Present complaint;
2. History of Present illness;
3. Previous history of illness;
4. ...............
5. ...............
6. Family history;
7. Social and occupational history."
Mr. Mukherjee explained that the views of two eminent writers on clinical methods disclose that history of a patient is recorded in a history sheet in regular course of business and thus, there can be no doubt that Debakilal disclosed that he was suffering from Diabetes since 15 years. Apart from the general requirement of history sheet to be maintained which was followed in case of Debakilal in Jaslok Hospital, Mr. Mukherjee relied upon the certificate of hospital treatment (Ext. E) granted in pro forma of the defendant where it is stated that Dr. Thomas had recorded the history who is still in the hospital and the history was reported by the patient himself. This document was also marked on admission and accordingly, Mr. Mukherjee submitted that contents of the document are also admitted which prove that Debakilal himself stated to Dr. Thomas that he was suffering from Diabetes since 15 years.
11. Although Mr. S. D. Das, learned Counsel for respondent-plaintiffs, submitted that in absence of original, copy of a document as Ext. F the history sheet is not admissible, I am not inclined to accept the same. When a document is marked on admission, the question of admissibility recedes to background. It was open to the plaintiffs not to admit the document. If it was wrongly stated to be marked on admission, plaintiffs could have brought the same to the notice of the court to correct the error. Without taking such steps, it is not open to plaintiffs to dispute the document to be a piece of evidence in this case. Once a document is marked on admission, contents thereof are also treated to be admitted. Mr. Das, however, is correct in his submission that contents may have been admitted, not its truth. Truth of correctness is to be ascertained from the evidence. A party admitting a document has right to explain that though the document contains such a statement, it is not correct. Explaining Ext. E which discloses that Dr. Thomas had recorded the history which was reported by the patient himself. Mr. Das submitted that Ext. E is not by Dr. Thomas. There is no statement in Ext. E that it was prepared out of the records of the hospital. There is no statement that Dr. Thomas stated to the doctor preparing Ext. E that Debakilal made such a statement. In such circumstances, though the contents of Ext. E might have been admitted, truth or correctness of the statements in Ext. E are not admitted. When Ext. F does not disclose that Debakilal made the statement to Dr. Thomas and Dr. Thomas has not been examined to prove this fact, hear-say statement of the doctor in Ext. E cannot be accepted in the present case.
12. Mr. S. D. Das, pressed into service statement of P.W. 1 who stated that from Cuttack he accompanied Debakilal, his father. He narrated how his father had to be taken to Bombay for treatment. He asserted that his father not being in a condition to give any life history, no doctor took down the history and he was present with his father throughout. He claimed that he was also not asked about the history. While stating in his examination-in-chief that about one year to one and half years before death his father was advised by doctor to minimise taking of sugar. At that time it was known that he was attacked with diabetes. In cross-examination, he stated that he was not taking any medicine. As regards his statement in respect of Jaslok Hospital, he was only cross-examined about diabetes in answer to which he stated that the doctors had made the diagnosis. No question was put to test correctness of his statement that his father was not in a condition to give life history and he did not give the history. Mr. Das submitted that the confidential reports of the doctors at different times in 1970 and 1978 do not disclose suffering of Debakilal from diabetes and there is no reason why the two doctors on whom the insurer had confidence to have approved them would be disbelieved. Their confidential reports corroborate the statement of P.W. 1 and his statement that diabetes for 15 years as found in the history sheet might have been the opinion formed on diagnosis. When P.W. I has stated on oath and has not been effectively cross-examined and his statements find some corroboration from documents of a period when there was no controversy, I am not inclined to disagree with the trial Court to reverse the finding specially when it had chance to see the witness and mark his demeanour. Therefore, I am inclined to hold on the materials available in this case that Debakilal did not make the statement to Dr. Thomas that he was suffering from diabetes since 15 years.
13. Once the basis on which it was concluded by defendant that material facts were withheld falls, the conclusion itself also becomes arbitrary. Defendant being a statutory body created to carry on the State activity of life insurance, its arbitrary and unfounded conclusion cannot be accepted.
14. Assuring that Debakilal made such a statement to Dr. Thomas, to utilise the same to come to a conclusion that he had knowledge of the same in 1970 or 1978, further materials ought to have been brought on to record. An ordinary man cannot know that he is suffering from diabetes. There is no evidence that before making the statements in the proposals, Debakilal was examined by any expert that he was suffering from the same. Rather, doctors examining his urin confidentally reported facts which would lead to conclusion that there was no trace of diabetes. When doctors who are well versed to diagnose a disease could not find out the same, a statement made which finds support from medical examination cannot be termed as misstatement. On this ground also, the basis of repudiation by defendant fails.
15. Submission of Mr. Das that death being not on account of diabetes, non-disclosure or wrong statement in that regard is not a material statement to attract Sec. 45, is not acceptable in view of clear principle laid down in AIR 1960 Mad 484 (All India General Insurance Co. Ltd. v. S. P. Maheshwari) in respect of the meaning of material statement. All questions in a proposal in pro forma are material. Any statement which is to the knowledge of the proposer not correct would attract the mischief of Section 45 since insurance is a contract of utmost good faith (uberrima fides). However, all the three requirements for application of second part of Section 45 must be satisfied.
16. In this case the statement with regard to diabetes is a statement on a material matter but there is no evidence to come to conclusion that Debakilal suppressed facts which it was material to disclose. Even if it is concluded that there was suppression, there is no material to conclude that the suppression was fraudulently made by Debakilal since it is possible that he made the statement on basis of examination of doctor. But as has been discussed earlier, policy holder had no knowledge at the time of making the statement that it was false or that he suppressed facts which it was material to disclose.
17. In result, there is no merit in these appeals which are accordingly dismissed. There shall, however, be no order as to costs.
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