answer given by the deceased policy-holder was not correct and he has
fraudulently suppressed the material facts because while he was treated
as an indoor patient before his death, there was an endorsement of the
doctor to the effect that he was suffering from “Seizure Disorder” since
1995 and stopped medication since 2001. It is not brought out by the
learned counsel for the Corporation as to who has made such statement
to the doctor of the Corporation and the said endorsement does not
disclose that for such disease, he was ever hospitalized. Moreover, such
endorsement does not disclose that he has undergone any test for such
disease. It may not be out of place to mention here that the Corporation
has not examined any doctor to prove such endorsement. It may not be
also out of place to mention here that the deceased policy-holder died
on 26.9.2004 after remaining for five days as an indoor patient. The
deceased policy-holder took the policies in the year 2002 and 2004.
Even if assuming that his medication continued up to 2001, obviously on
the date of policy undertaken, he was not suffering from any serious
illness and Annexure-7, which is the opinion of the treating doctor of
SCB Medical College and Hospital, Cuttack shows that the deceased
policy-holder died due to “Septicaemia” as primary cause and “Drug
Rash” is a secondary cause. The doctor has not been examined to prove
the basic source of information about “Seizure Disorder” the deceased
policy-holder was suffering from 1995 till 2001 and thereafter on the
date of taking the policies also, the policy-holder was suffering from
such disease.
HIGH COURT OF ORISSA,CUTTACK
W.P. (C) No.5265 of 2009
Mrs. Mamata Satpathy
Versus
The Zonal Manager,
LIC of India and others
PRESENT :
THE HON’BLE DR. JUSTICE D.P.CHOUDHURY
Date of judgment:16.01.2017
Citation: AIR 2017 Orissa 54
Dr. D.P.Choudhury, J. Challenge has been made to the order dated
27.8.2008 passed by the learned Insurance Ombudsman in Complaint
No.21-001-0235 vide Annexure-12 under which the learned Insurance
Ombudsman accepted the submissions of the insurer-opposite parties.
2. The unshorn details of the case of the petitioner is that the
late husband of the petitioner was the policy-holder and the deceased
policy holder has assured his life under the Life Insurance Corporation of
India (hereinafter called as “the Corporation”) vide Policy
Nos.580631663, 580631960, 584766253 and 585424076 commencing
from 28.9.1992, 28.11.1992, 28.8.2002 and 28.3.2004 respectively. Be
it stated, the deceased policy-holder was working as Joint Managing
Partner of M/s.Durga Construction. During the year 2000 to 2002, due
to illness of the mother of the deceased policy-holder, there was
financial crunch for which the petitioner could not deposit the premium
amount for the policy Nos.580631663 and 580631960. In the year
2004, the Corporation floated an intensive revival campaign wherein on
payment of interest at a reduced rate along with unpaid premium, the
lapse policies can be revived. Since the financial condition of the
deceased policy-holder improved by then, said two policies were revived
on 20.5.2004. On 22.8.2004, the deceased policy-holder fell ill and while
being treated in SCB Medical College and Hospital, Cuttack, he expired
on 26.8.2004 and the primary cause of death was diagnosed by the
doctors to be “Septicaemia” and secondary cause as “Drug Rash”. After
the death of the deceased policy-holder, the petitioner obtained the
legal heir certificate and made representation to the opposite parties 2
to 5 for settlement of the claims. But, the opposite parties, without
settling the claim of the petitioner, repudiated the same under flimsy
grounds vide Annexure-8 series stating that the deceased policy-holder
had made deliberate mis-statements and withheld material information
to the Corporation about the reasons of his health condition at the time
of proposing his policies revived.
3. It is the further case of the petitioner that being aggrieved
by the repudiation letters (Annexure-8 series), the petitioner made
representation to the learned Insurance Ombudsman on 26.9.2006 for
settlement of the claims and the Secretary of the learned Insurance
Ombudsman, on receipt of the same, directed the petitioner to file a
detailed complaint in the prescribed format. Accordingly, the petitioner,
on 21.12.2006 filed a complaint before the learned Insurance
Ombudsman, but the learned Insurance Ombudsman, without
appreciating the materials, rejected the complaint filed by the petitioner.
Learned Insurance Ombudsman relied upon the bed-head ticket of the
deceased policy-holder wherein the doctor has observed that the
deceased policy-holder had undertaken treatment for “Seizure Disorder”
since 1995 and as such, he has suppressed material facts and since he
has suppressed the material facts, learned Insurance Ombudsman
rejected the claim of the present petitioner holding that she is not
entitled to the claim amount as the deceased policy-holder has
suppressed the material facts at the time of proposal made in the year
2002 and 2004. It is the further case of the petitioner that as Section 45
of the Insurance Act, 1938 (in short “the Act”) has not been properly
followed by the opposite parties, the petitioner is bound to knock the
door of this Court under Articles 226 and 227 of the Constitution of India
for the reliefs, as prayed for.
SUBMISSIONS
4. Mr.Dwibedi, learned counsel for the petitioner submitted that
the deceased husband of the petitioner was admitted in SCB Medical
College and Hospital, Cuttack on 26.8.2004 at 10:00 AM and died on the
same day at 2:05 PM due to ”Septicaemia” but not due to “Seizure
Disorder”. The claim of the petitioner was repudiated by the Corporation
and the learned Insurance Ombudsman illegally rejected the complaint
basing on no material on record. He referred to Annexure-3, the form to
be used in every case of hospital death and it has been mentioned
therein that the deceased policy-holder died due to suffering from
“Septicaemia”. He further submitted that the deceased policy-holder was
examined medically at the time of taking the policies by the doctor of
the Corporation and at that point of time, the doctor has certified him
healthy and basing on the report of the doctor, the policies have been
issued to the deceased policy-holder. Therefore, there was no
suppression of material facts while his policies were revived. He further
submitted that the order of the learned Insurance Ombudsman rejecting
the claim of the petitioner is based on no evidence and he has erred in
law by relying on the submission of the Corporation inasmuch as the
bed-head ticket cannot be final opinion of the doctor whereas the
discharge certificate shows that the deceased policy-holder died having
suffered from “Septicaemia” and “Drug Rash” which are also evident
from Annexure-7 wherein the medical attendant has replied negative
about any other disease the deceased policy-holder suffered being
diagnosized in the hospital.
5. Learned counsel for the petitioner further submitted that the
order of the learned Insurance Ombudsman suffers from material
irregularity as there is no document of treatment to show that the
deceased policy holder was being treated for Seizure Disorder from 1995
and stopped medication in 2001 and the finding of the learned
Insurance Ombudsman, basing on the endorsement of the doctor in the
bed-head ticket on this score, as a wrong finding in absence of the
examination of the concerned doctor to prove the basis of his
information or diagnosis made to prove the same. On the other hand, he
submitted that the finding of the learned Insurance Ombudsman is
based on no evidence for which it is illegal and improper.
6. Mr.Dwibedi, learned counsel for the petitioner, referring to
the provisions of Section 45 of the Act, further contended that the precondition
for refusing the claim as required being not met by the
insurer, the order of the learned Insurance Ombudsman is otherwise
illegal and in-intelligible. In support of his contention, he relied upon the
decision rendered in the case of Mithoolal Nayak –V- Life Insurance
Corporation of India; AIR 1962 SC 814. So, he submitted to quash
the order passed by the learned Insurance Ombudsman and to direct
the Corporation to allow the claim made by the petitioner.
7. Mr.Kar, learned counsel for the Corporation submitted that
since the deceased policy-holder has suppressed the material facts with
regard to his health while giving answers to the necessary questions
regarding the disease, the concerned authorities are justified in refuting
the claim of the petitioner. He further submitted that on 28.9.1992, the
deceased policy-holder proposed the policies which are lapsed and
subsequently revived in the year 2002. Since there is suppression of
material facts by the deceased policy-holder at the time of taking - 6 -
policies and made misstatement, the Corporation was correct in its
approach to stop the settlement of the claim under Section 45 of the
Act. He submitted that the order of the learned Insurance Ombudsman,
being proper and legal, should be upheld.
POINTS FOR DISCUSSION
8. The main points for consideration are as to whether (i) the
deceased policy-holder had fraudulently suppressed any material facts
with regard to his health condition at the time of proposal/revival in the
year 2002 and 2004 by making misstatement; and (ii) whether the
petitioner is entitled to any claim made in the writ petition?
DISCUSSIONS
9. It is admitted fact that the deceased policy-holder had two
policies originally and revived the same in 2002 and 2004. It is admitted
fact that the insurer has refuted the claim in respect of Policy
Nos.584766253 and 585424076 wherein the present petitioner is the
nominee. It is not in dispute that revived Policy No.584766253
commenced on 28.8.2002 and revived Policy No.585424076 commenced
on 28.3.2004. It is also not in dispute that the deceased policy-holder
died on 26.8.2004 and the learned Insurance Ombudsman has rejected
the claim of the present petitioner by observing that the insurer has
established that there was material suppression by the deceased policyholder
at the time of proposal.- 7 -
10. Before proceeding further, it is relevant to go through the
provisions of law governing the field on the issue in question. Section 45
of the Act states as follows:
“45. Policy not to be called in question on ground
of mis-statement 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 and
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 and that it was
fraudulently made by the policy-holder and 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:
Provided that 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 shall be deemed to be
called in question merely because the terms of the
policy are adjusted on subsequent proof that the age of
the life insured was incorrectly stated in the proposal.”
11. The aforesaid provisions of law is well discussed in the
decision reported in the case of Mithoolal Nayak vs Life Insurance
Corporation Of India; AIR 1962 SC 814 and at paragraphs-7 and 8,
Their Lordships, have observed as follows
“7.
Xx xx xx xx
It would be noticed that the operating part of Section
45 states in effect (so far as it is relevant for our
purpose) that no policy of life insurance effected after
the coming into force of the Act shall, after the expiry - 8 -
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; the second part
of the section is in the nature of a proviso which creates
an exception. It says in effect that if the insurer shows
that such statement was on a material matter or
suppressed facts which it was material to disclose and
that it was fraudulently made by the policy-holder and
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, then the insurer can
call in question the policy effected as a result of such
inaccurate or false statement. In the case before us the
policy was issued on March 13, 1945, and it was to
come into effect from January 15, 1945. The amount
insured was payable after January 15, 1968, or at the
death of the insured, if earlier. The respondent
company repudiated the claim by its letter dated
October 10, 1947. Obviously, therefore, two years had
expired from the date on which the policy was effected.
We are clearly of the opinion that section 45 of the
Insurance Act applies in the present case in view of the
clear terms in which the section is worded, though
learned counsel for the respondent company sought, at
one stage, to argue that the revival of the policy some
time in July, 1946, constituted in law a new contract
between the parties and if two years were to be
counted from July, 1946, then the period of two years
had not expired from the date of the revival. 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 on which the policy was
originally effected; in the present case this can only
mean the date on which the policy (Ex. P-2) was
effected. From that date a period of two years had
clearly expired when the respondent company
repudiated the claim. As we think that section 45 of the
Insurance Act applies in the present case, we are
relieved of the task of examining the legal position that
would follow as a result of inaccurate statements made
by the insured in the proposal form or the personal
statement etc. in a case where section 45 does not
apply and where the averments made in the proposal - 9 -
form and in the personal statement are made the basis
of the contract.
8. The three conditions for the application of the
second part of section 45 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.”
12. With due regard to the above decision, it appears that
second part is exception to first part of Section 45 of the Act. On the
other hand, if the three conditions as discussed above at paragraph-8 of
the judgment are proved, then the claim can be repudiated by the
insurer and the onus lies on the insurer to prove the above three preconditions
for the application of the second part of Section 45 of the Act.
13. It is reported in the case of Life Insurance Corporation of
India –V- Smt. G.M. Channabasemma; AIR 1991 SC 392 and at
paragraph-7 of the said judgment, Their Lordships have held in the
following manner:
“7.xx xx xx xx
It is well settled that a contract of insurance is contract
uberrim fides and there must be complete good faith on
the part of the assured. The assured is thus under a
solemn obligation to make full disclosure of material
facts which may be relevant for the insurer to take into
account while deciding whether the proposal should be
accepted or not. While making a disclosure of the
relevant facts, the duty of the insured state them
correctly cannot be diluted. Section 45 of the Act has
made special provisions for a life insurance policy if it is
called in question by the insurer after the expiry of two - 10 -
years from the date on which it was effected. Having
regard to the facts of the present case, learned Counsel
for the parties have rightly stated that this distinction is
not material in the present appeal. If the allegations of
fact made oh behalf of the appellant Company are
found to be correct, all the three conditions mentioned
in the section and discussed in Mithoolal Nayak v.
Life Insurance Corporation of India (1962) Supp.
2 SCR 571, must be held to have been satisfied. We
must, therefore, proceed to examine the evidence led
by the parties in the case.”
14. With due respect to the aforesaid decision, it is clear that
Section 45 of the Act has made special provision for a life insurance
policy if it is called in question by the insurer after expiry of two years
from the date on which it was effected. Moreover, all the three
conditions as mentioned in the Section as discussed above in the case of
Mithoolal Nayak vs Life Insurance Corporation Of India
(Supra)are proved by the Corporation by leading evidence. So, it is for
the insurer to prove the facts in issue by leading the evidence. As such,
the aforesaid decision has been well followed in the decision reported in
the case of Life Insurance Corporation of India and others –VSmt.
Asha Goel and another; AIR 2001 SC 549. Moreover, Their
Lordship in the said case, at paragraph-16, have observed as follows:
“16.In course of time the Corporation has grown in size
and at present it is one of the largest public sector
financial undertakings. The public in general and crores
of policy-holders in particular look forward to prompt
and 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 and reputation depend on its prompt and
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
and caution. It should not be dealt with in a mechanical
and routine manner.”- 11 -
15. With due respect to the above decision, learned counsel for
the petitioner asserted that the approach of the Corporation in the
matter of repudiation of a policy should be made with one extreme care
and caution and the same should not be dealt with in a mechanical and
routine manner.
16. Thus, learned counsel for the petitioner, while relying upon
the aforesaid decision, submitted that no evidence whatsoever has been
led by the present Corporation before the learned Insurance
Ombudsman except producing the bed-head tickets to show that
deceased policy-holder has suppressed his illness while the insurance
policies were taken by him. He further submitted that the pre-conditions
of Section 45 have not been proved by evidence by the Corporation for
which the conclusion arrived at by the learned Insurance Ombudsman is
indefensible. Contravening the contention of the learned counsel for the
petitioner, learned counsel for the Corporation has relied upon the
decision rendered in the case of P.C. Chacko and another –VChairman,
LIC of India and others; AIR 2008 SC 424 and at
paragraph-16 of the said judgment, Their Lordships have observed as
follows:
“16. The purpose for taking a policy of insurance is not,
in our opinion, very material. It may serve the purpose
of social security but then the same should not be
obtained with a fraudulent act by the insured. Proposal
can be repudiated if a fraudulent act is discovered. The
proposer must show that his intention was bona fide. It
must appear from the face of the record. In a case of
this nature it was not necessary for the insurer to
establish that the suppression was fraudulently made
by the policy-holder or that he must have been aware - 12 -
at the time of making the statement that the same was
false or that the fact was suppressed which was
material to disclose. A deliberate wrong answer which
has a great bearing on the contract of insurance, if
discovered may lead to the police being vitiated in law.”
17. Mr.Kar, learned counsel for the Corporation, relying upon
the said decision, submitted that it was not necessary for the insurer to
establish that suppression was fraudulently made at the time of making
proposal statement by assured or the same was false or that the fact
suppressed was material one.
18. After going through the above decision, with due respect it
appears in that case, the deceased policy-holder died within six months
from the date of taking the policy and he had undergone major
operation of Adenoma Thyroid four years prior to the date of proposal
made by him but did not disclose about the same while proposing the
insurance policy. Moreover, in the said case, the insured’s brother being
an agent of the Corporation, was presumed to have got knowledge and
mis-statement of facts by the policy-holder for which Their Lordships
have observed that in case of such nature, it was not necessary for the
insurer to establish the pre-conditions as appears in the second part of
Section 45 of the Act.
19. From the discussion of the aforesaid decisions, it is settled
position of law that the onus always lies on the insurer to prove preconditions
of second part of Section 45 of the Act but where on the face
of the record, it appears that there was suppression of material facts
fraudulently, the insurer is relieved of establishing fact of such - 13 -
suppression being made fraudulently by the policy-holder or that he
must have aware at the time of making the statement that the same
was false or that the fact was suppressed which was material to
disclose.
20. Now adverting to the case in hand, it appears that the
Corporation has not filed the copy of the personal statement of policyholder
regarding his health before the learned Insurance Ombudsman to
know about the statement of the policy-holder. So, this Court, vide
order dated 25.9.2015, asked the Corporation to file the medical
examination report of the policy-holder prepared by the doctors of the
Corporation while proposal is made for the insurance policy by the
deceased policy-holder, and documents were filed by the Corporation on
20.11.2015 before this Court. On going through the medical examiner’s
confidential report in respect of Policy No.584766253, the doctor is
found to have given the final report in the following manner:
“4. Ascertain from the life to be assured whether at any time in the past
he/she
i) has been hospitalized?
ii) was involved in accident?
iii) he undergone any Radiological, Cardiological, Pathological or any
other tests?
iv) is currently under any treatment/
No
No
No
No
IF THE ANSWER TO ANY OF THE NEXT 9 QUESTIONS (QN.5 TO QN.13)
IS “YES” PLEASE GIVE FULL DETAILS.
5. Is there any abnormality of the Cardiovascular system? No
6. Is there any swelling of joints enlargement of thyroid lymphatic, glands
or scars (for earlier surgery)?
No
7. Is any abnormality found on examination of Mouth, Ear, Nose, Throat
Eyes?
No
8. Is there partial total blindness or deafness or any other physical
impairment?
No
9. Are there any symptoms or signs suggesting abnormality or disease of
the Respiratory system?
No
10. Is there any evidence of enlargement of live or spleen ? No.- 14 -
11. Is there any abnormality in abdomen or abnormality of pelvis? No.
12. Is Hurnia present? No
13. Is there any evidence of disease of Central peripherial Nervous
System?
No
14 Is there any evidence of operation?
If so state?
a) The year of operation
b) Its natue and cause
c) Its location, size and condition of scar
d) degree of impairment, if an7
No
15. Is there any evidence of injury due to accident or otherwise? If so,
state.
i) the year in which the injury occurred
ii) nature of injury
iii) degree of impairment, if any
iv) duration so unconsciousness in the case of head injury No
16. Is there any other adverse feature in health or habit, past or present,
which you consider relevent?
If so, give details No
17. For female lives only
a) Is there any disease of breasts ?
b) Is there any evidence of pregnancy ?
c) If so, give duration.
d) Do you suspect any disease of uterus, cervix or ovaries?
I hereby certify that I have, this day examined the above life to be assured
personaly, in private and recorded in my own hand (i)the true and correct findings (ii)
the answers to Question No.4 as ascertained from the person examined.
I declare that the person examined signed (affixed his/her thumb impression) in
the space marked below in my presence and that I am not related to him/her or the
Agent or the Development officer.
Dated at Cuttack on the 31st day of (month) Aug., 2002 at 7.00 p.m.
Sd/-Ranjan Kumar Satpathy Sd/-Dr.Sukanta Ku. Nanda”
So far as Policy No.585424076 is concerned, the relevant portion
of the medical examiner’s confidential report of the Corporation is also
produced below:
“5. Ascertain from the L.A. whether at any time in the past he/she
a) was hospitalized
No
b) was operated
c) met with accident
d) has undergone any bio-chemical,
radiological, Cardiological or other test.
e) is currently under any treatment
6. Is there any abnormality observed on
examination of Eyes (partial/total blindness.)
Ears (deafness). Nose, Throat or Mouth or any - 15 -
physical impairment. No
7. Is there any externally visible selling of lymph
glands joints or other organ No
8. Are there any symptoms and/or signs suggestive of abnormality of
(a) Cardiovascular system
No
(b) Respiratory system
(c) Central or peripheral nervous system
(d) Abdomen or pelvis
9. Is there evidence of enlargement of liver or
spleen?
No
10 Is hernia present? No
11 Is there any evidence of operation, if so state-
(a) Date of operation
No
(b) Nature & Cause
(c) Location, size & condition of scar
(d) Degree of impairment.
12 Is there any evidence of injury due to accident
or otherwiseNo
(a) Date of injury
(b) Nature of injury
(c) Degree of impairment.
(d) Duration of unconsciousness, if any,
13 Are there any other adverse features in habit
or health. past or present. Which you consider
relevant, if so give detailsj. No
14 For female only
(a) Is there any disease of breasts ?
(b) Do you suspect any disease of uterus,
cervix or ovaries?
(c) Is there any evidence of pregnancy, if so
give duration?
15. On examination whether he/she appears
health?
Yes
I certify that I have, this day, examined the above life to be assured
personally, in private and recorded in my own hand (i) the true correct
findings (ii) the answers to Question No.5 as ascertained from the person
examined.
I declare that the person examined, signed (affixed his/her thumb
impression) in the space ear marked below in my presence and that I am not
related to him/her or the Agent or the Development Officer.
Dated at Cuttack on the 31st day of March, 2004 at 10 AM
Sd/-Ranjan Kumar Satpathy Sd/-Dr.Hemana Ku. Nayak”
21. From the aforesaid material, it appears that except question
No.4 in respect of Policy No.584766253 and question no.5 in respect of - 16 -
Policy No. 585424076, all other answers have been prepared by the
doctor after examining the deceased policy-holder. With reference to
question nos.4 and 5, the questions have been answered in negative by
the policy-holder to the doctor for which the same was recorded
accordingly. On the other hand, on the date of proposing the policy, the
doctor of the Corporation did not find any infirmity with the policy-holder
to insure his life under the relevant policy.
22. The opposite party-Corporation has taken a plea that the
answer given by the deceased policy-holder was not correct and he has
fraudulently suppressed the material facts because while he was treated
as an indoor patient before his death, there was an endorsement of the
doctor to the effect that he was suffering from “Seizure Disorder” since
1995 and stopped medication since 2001. It is not brought out by the
learned counsel for the Corporation as to who has made such statement
to the doctor of the Corporation and the said endorsement does not
disclose that for such disease, he was ever hospitalized. Moreover, such
endorsement does not disclose that he has undergone any test for such
disease. It may not be out of place to mention here that the Corporation
has not examined any doctor to prove such endorsement. It may not be
also out of place to mention here that the deceased policy-holder died
on 26.9.2004 after remaining for five days as an indoor patient. The
deceased policy-holder took the policies in the year 2002 and 2004.
Even if assuming that his medication continued up to 2001, obviously on
the date of policy undertaken, he was not suffering from any serious
illness and Annexure-7, which is the opinion of the treating doctor of
SCB Medical College and Hospital, Cuttack shows that the deceased
policy-holder died due to “Septicaemia” as primary cause and “Drug
Rash” is a secondary cause. The doctor has not been examined to prove
the basic source of information about “Seizure Disorder” the deceased
policy-holder was suffering from 1995 till 2001 and thereafter on the
date of taking the policies also, the policy-holder was suffering from
such disease.
23. The form supplied by SCB Medical College and Hospital,
Cuttack used in every case of hospital death (Annexure-3) indicates that
the deceased policy-holder was suffering from “Septicaemia” has
provisional diagnosis as per Column No.6 of that form. In Column
Nos.12 and 13, such “Septicaemia” has been also taken as a final
diagnosis. It is utter surprise to find out that “Seizure Disorder” and
“Drug Rash” have been entered subsequently as clear from the face of
the report. Moreover, Annexure-3 shows the provisional diagnosis and
final diagnosis relates to “Septicaemia” as observed earlier. Therefore, it
cannot be said on the face of the record that the answers made by the
deceased policy-holder to the doctor of the Corporation at Column Nos-4
and 5 in the respective policies are false and such misstatement was
made fraudulently suppressing the material fact with regard to his
health.
24. From the foregoing discussions, the opinion of the doctor
that the cause of death after diagnosis was due to suffering from
“Septeicaemia” and not due to “Seizure Disorder” being proved, it must
be held that neither the deceased policy-holder has given any
misstatement before the doctor of the Corporation by suppressing any
material facts of serious illness nor the doctor, while examining the
deceased policy-holder, has given any wrong report. Moreover, this
Court is of the view that when there is nothing available from the face of
the record that the policy-holder had fraudulently made suppression of
material facts while undertaking the policy, it was incumbent on the part
of the Corporation to lead evidence to prove the conditions of Section 45
of the Act, but has not done so. Therefore, this Court is of the view that
the conclusion arrived at paragraph-15 by the learned Insurance
Ombudsman is based on no evidence. On the other hand, the Court is of
the view that the deceased policy-holder has not made any
misstatement by fraudulently suppressing any material facts with regard
to his health while he was insured under the relevant policies. Issue
No.1 is answered accordingly.
ISSUE NO.II
25. Mr.Dwibedi, learned counsel for the petitioner submitted that
the present petitioner is the widow and legal heir of the deceased policyholder
as per the legal heir certificate (Annexure-5) and she has made
representation time to time under relevant form but the claim has been
repudiated by the Corporation illegally and finally she approached the
learned Insurance Ombudsman which created by Grievance Redressal
Rules framed under the Act, but the learned Insurance Ombudsman also
without appreciating the claim of the petitioner, denied to settle the
same in her favour. On the other hand, learned counsel for the
Corporation supports the finding given by the learned Insurance
Ombudsman.
26. It has been already held in the aforesaid paragraphs that the
deceased policy-holder has neither made any misstatement nor
fraudulently suppressed any material fact of illness while proposing the
policies. It has also been observed that the learned Insurance
Ombudsman gave the finding in favour of the insurer without
appreciating any evidence in its proper perspective. Where there is no
fraudulent suppression of material fact by deceased policy-holder or he
made statement falsely within his knowledge while making statement
with regard to material fact which he was required to disclose at the
time of undertaking the policies, the finding of the learned Insurance
Ombudsman is otherwise illegal and improper. Thus, the Court is of the
opinion that the petitioner, being the widow and legal heir of her
deceased husband, is entitled to the claim made by her before the
insurer. Issue No.II is answered accordingly.
CONCLUSION
27. From the foregoing discussions, the Court is of the view that
the deceased policy-holder has neither made any fraudulent suppression
of material fact nor made any statement falsely as to material fact with
regard to his health and he died out of “Septicaemia” only after two
years of Policy No.584766253 commenced on 28.8.2002 and after six
months from Policy No.585424076 commenced on 28.3.2004. It is also
observed above that the finding of the learned Insurance Ombudsman
vide Annexure-12 is not based on evidence for which the Court is of the
view that the same should be quashed and the Court do so. Since the
petitioner, being the widow and legal heir of the deceased policy-holder,
is entitled to the claim under said policies as admissible under the
provisions of law, the opposite party no.1-Corporation is directed to
release the claim amount under the policies of the deceased policyholder
by making payment of money under the respective policies with
interest @ 9% per annum from 3.11.2005 when the Corporation
repudiated the claim of the petitioner, till actual payment to the
petitioner within three months from today failing which, the same shall
be payable by opposite party no.1-Corporation @ 12% interest per
annum till actual payment.
The writ petition is disposed of accordingly.
……......……………….........……
Dr.D.P.Choudhury,J.
Orissa High Court,Cuttack
Dated the 16th Day of January,2017.
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