Rajasthan High Court – Jodhpur
Life Insurance Corporation Of India vs Bhagwan Lal Jat on 6 March, 2025
[2025:RJ-JD:12024]
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Civil Writ Petition No. 4067/2025
1. Life Insurance Corporation Of India, Through Branch
Manager Life Insurance Corporation Of India Branch
Office Nimbahera District Chittorgarh (Raj.).
2. Life Insurance Corporation Of India, Through Branch
Manager Life Insurance Corporation Of India Branch
Office Sector No. 2 Gandhi Nagar Kila Road District
Chittorgarh.
----Petitioners
Versus
Bhagwan Lal Jat S/o Hazari Lal Jat, R/o Teja Kheda Tehsil
Kapasan District Chittorgarh (Raj.).
----Respondent
For Petitioner(s) : Mr.Mahesh Joshi, Adv.
For Respondent(s) : -
HON'BLE MR. JUSTICE MUNNURI LAXMAN
Judgment
Judgment Reserved on : 04/03/2025
Judgment Pronounced on : 06/03/2025
1) Heard learned counsel for the petitioner on admission.
2) The challenge in the present writ petition is to the award
dated 03.12.2024 passed by the Permanent Lok Adalat,
Chittorgarh in Case No.100/2023, whereunder the claim of the
respondent for the policy amount was allowed.
3) Challenging the said award, the respondent filed the
present writ petition. For convenience, the ranks of the parties as
were referred before the Permanent Lok Adalat, are maintained.
4) The sum and substance of the case of the claimant is that
the claimant has obtained Children Money Back Plan vide Policy
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[2025:RJ-JD:12024] (2 of 10) [CW-4067/2025]
No.106474476 for assured sum of Rs.3 lacs. The policy period
covers from 28.09.2015 to 28.09.2038. The premium was
required to be paid yearly. There was default of payment of yearly
premium resulting in the lapse of the policy w.e.f. 28.09.2020.
The policy was revived w.e.f. 01.10.2021 upon submission of Form
No.720. The insured has died on 11.09.2022 due to severe
headache and mild fever. The deceased suffered physical disability
prior to 10.10.2019. As such, a disability certificate was obtained
from the Medical Board under Annexure-4. The respondent/
Insurance Company on knowing the suppression of disability of
the insured, vide order dated 25.01.2023, the contract of revival
was repudiated for suppression of the fact of disability sustained
by the insured on the date of revival of the policy and paid
Rs.1,66,181/-, the premium amount.
5) The claimant filed a claim petition before the Permanent
Lok Adlat, Chittorgarh for the balance amount of the assured sum.
6) The case of the respondent/Insurance Company show that
they did not deny the factum of issuance of policy and revival of
the policy. Prior to the revival, the father of the insured has
submitted a Declaration of Good Health (DGH) Form dated
25.09.2021 (Annexure-3) whereunder he has suppressed the
factum of deceased disability, which is clear from the Disability
Certificate dated 10.10.2019. The respondent-Insurance Company
has repudiated the contract of insurance for suppression of
disability sustained by the insured prior to the revival. The fact
suppressed was a pre-existing fact, which is material to the
contract of insurance. According to the respondent/Insurance
Company, the repudiation was done within 3 years from the date
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of commencement of revival in terms of Section 44(4) of
Insurance Act, 1938 (hereinafter referred to as the “Act of 1938”);
and they prayed to dismiss the claim.
7) The Permanent Lok Adalat after conducting summary
proceedings allowed the claim by rejecting the defence set up by
the respondent/Insurance Company, by placing reliance on the
decisions of Hon’ble Supreme Court in the case of Sulbha
Prakash Motegaonkar & Ors. Vs. Life Insurance Corporation
of India [Civil Appeal No.8245/2015], decided on 05.10.2015.
Aggrieved by the same, the present writ petition has been filed by
the respondent-Insurance Company.
8) The main submission of the learned counsel for the
Insurance Company is that the Permanent Lok Adlat having found
that the claimant suppressed the fact relating to the insured
medical condition of suffering disability as is clear from the
Disability Certificate dated 10.10.2019, allowed the claim contrary
to the provisions contained under Section 45(4) of the Act of
1938.
9) The learned counsel for the Insurance Company further
submitted that any suppression of fact, which is not causative
factor for causing of death would also amount to material
suppression and the Insurance Company is entitled to repudiate
such contract of insurance by placing reliance on Section 45(4) of
the Act of 1938. In support of his contentions, he has relied upon
the decisions of Hon’ble Supreme Court in the case of (1)
Satwant Kaur Sandhu Vs. New India Assurance Co. Ltd.,
reported in 2009(5) Supreme 523, (2) Branch Manager, Bajaj
Allianz Life Insurance Co. Ltd. Vs. Dalbir Kaur, reported in
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(2021) 13 SCC 553 and (3) Sarabjit Kaur & Anr. Vs. L.I.C. of
India & Anr. [SLP (C) No.23941/2009], decided on 21.11.2022.
10) In the light of the submissions made by learned counsel for
the petitioner, it is apt to refer to Section 45 of Act of 1938, which
reads hereunder:-
45. Policy not to be called in question on ground
of mis-statement after two 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 of risk or the date of revival of the
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, with
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.
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(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.
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 undertakenby 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 shall be deemed to be
called in question merely because the terms of the(Downloaded on 06/03/2025 at 09:47:13 PM)
[2025:RJ-JD:12024] (6 of 10) [CW-4067/2025]policy are adjusted on subsequent proof that the age
of the life insured was incorrectly stated in the
proposal. “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.”
A reading of the above provisions, it is clear that within 3
years from the date of issuance of policy or date of
commencement of the risk or the date of revival of policy or the
date of rider to the policy, whichever is later, the Insurance
Company can call in question policy on any of the grounds
whatsoever. However, the insurer is entitled to question the policy
within 3 years on the ground of fraud and the same can be done
by communicating the insured or the legal representatives or
nominees or assignees of the insured the ground and material, on
which the decision is taken to repudiate the contract. The policy of
insurance can also be questioned within 3 years on the ground of
any misstatement or suppression of fact material to the
expectancy of the life of the insured, which was incorrectly made
in the proposal or other document on the basis of which policy was
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[2025:RJ-JD:12024] (7 of 10) [CW-4067/2025]issued or revived and such a decision has to be communicated in
writing giving the grounds and material, on which such a decision
is taken. If the decision is taken on the ground of misstatement or
suppression of material fact and not on the ground of fraud, the
premium collected on the policy till the date of repudiation shall be
paid to the insured or the legal representative or nominee within
90 days from the date of such repudiation.
11) The repudiation in the present case is done by invoking
the provisions under sub-section (4) of Section 45 of the Act of
1938 on the ground of misstatement or suppression of material
fact. According to the Insurance Company, the material fact which
is suppressed, is existence of disability prior to the revival of the
policy.
12) Now, the question for consideration is whether
suppression of disability at the time of revival relatable to the
cause of death.
13) Admittedly, in the present case, there is no evidence from
the Insurance Company to show that the disability sustained by
the insured prior to the revival of the policy is causative factor for
the death of the insured. The claimant’s case is that the death of
the deceased was on account of severe headache and mild fever
and not relatable to the disability sustained by the insured. The
Insurance Company has come up with the defence that the
suppression of disability is the causative factor to the cause of
death. No doubt, as per the decision of Hon’ble Apex Court,
particularly the decision in the case of Branch Manager, Bajaj
Allianz Life Insurance Co. Ltd. (cited supra), every detail sought in
the proposal form or any other document is a material fact. Any
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inaccurate answer will entitle the insurer to repudiate its liability.
The decision of the Apex Court in the case of Sulbha Prakash
Motegaonkar (cited supra) was also considered and the view taken
therein was not overruled. However, it was distinguished and was
not made apply to the facts and circumstances existing
thereunder. In Sulbha Prakash Motegaonkar‘s case, the facts
disclosed that there is a suppression of medical condition of pre-
existing lumber spondilitis and the death was on account of
myocardial infarction, and the Hon’ble Supreme Court found that
even though there is a suppression of pre-existing medical
condition of lumber spondilitis, the claim was allowed on the
ground that such a suppressed medical condition is not a
causative factor for causing the death of insured. This means the
principle laid down therein was that every suppression of pre-
existing medical condition do not result repudiation of contract of
insurance unless it is shown that such a suppressed pre-existing
medical condition was the causative factor for the cause of death.
In the case of Branch Manager, Bajaj Allianz Life Insurance Co.
Ltd. (cited supra), the facts disclosed that there is suppression of
vomiting of blood, just one month prior to the issuance of the
policy and hospitalization as a consequential. In the said
background, the Court found that such a suppressed pre-existing
medical ailment was the causative factor for the death. In the said
background of facts, Hon’ble Supreme Court dismissed the claim.
14) In case of Satwant Kaur Sandhu (cited supra), the facts
disclosed that the petitioners suppressed the Chronic Renal
Failure/Diabetic Nephropathy and the death was attributable to
severe breathlessness resulted cardiac arrest and consequential
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death. In the said background, the Court held that the suppressed
pre-existing medical condition had relation to the cause of death.
The facts in hand show that there is no evidence that the death is
attributable to the disability sustained by the insured.
15) In case of Sarabjit Kaur (cited supra), there is a
suppression of pre-existing ailment i.e. Hydronephrosis with
Hydoureter Left Side, which disease is relating to kidney, which is
one of the vital part of the human body. However, the death was
on account of brain cancer. In the said decision, Hon’ble Supreme
Court has not laid down any ratio except dismissing the SLP
agreeing with the stand taken by the National Consumer Disputes
Redressal Commission, which has found that there is material
suppression though such a suppression of pre-existing medical
condition was not a causative factor for the death of the insured
therein. The judgment of Sarabjit Kaur (cited supra) as well as
the judgment rendered in the case of Sulbha Prakash
Motegaonkar (cited supra) was considered by Hon’ble Supreme
Court in the case of Branch Manager, Bajaj Allianz Life
Insurance Co. Ltd. (cited supra). The ratio laid down by the
Apex Court in the case of Sulbha Prakash Motegaonkar (cited
supra) stands in the field.
16) The petitioner/non-claimant in the present case failed to
establish that the death of the deceased was attributable to any
pre-existing medical condition, which is suppressed by the
claimant in the Declaration of Good Health (Form No.720).
Therefore, the judgment relied upon by the learned counsel for
the insurer has no help.
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[2025:RJ-JD:12024] (10 of 10) [CW-4067/2025]
17) The claim of the present respondent-claimant can also be
examined in the light of Section 45(3) of the Act of 1938. A
reading of sub-section (3) of Section 45 of the Act of 1938, which
is an overriding provision, specifically provides that if there is any
misstatement or suppression of a material fact that is within the
knowledge of the insurer, the insurer is not entitled to repudiate
the contract. In the present case, it is not the case of the
Insurance Company that when the policy was issued, they did not
see physical presence of the insured. The presumption is that
revival of the policy was done basing on the physical verification of
the condition of the insured. The disability is a fact which is
apparent and visible to the naked eye. This means the suppressed
fact of pre-existing disability is within the knowledge of the insurer
when the revival of the policy was made. The writ petition of the
Insurance Company can also be dismissed on this ground alone, in
addition to the grounds referred herein-above. In the light of the
above findings, this Court is not inclined to interfere in the
impugned award.
18) In the result, the writ petition is dismissed in limine.
19) In the circumstances, no order as to costs.
20) Pending interlocutory applications, if any, shall stand
disposed of.
(MUNNURI LAXMAN),J
NK/-
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