The duty of utmost good faith in life insurance contracts and the burden of proof on the insurer to establish fraudulent intention and deliberate suppression of material facts.

CHANDRAKANTARAJ, J.

( 1 ) THIS appeal is by the Life Insurance Corporation of India, by its Zonal Manager at Madras and also the Divisional Manager of the same Life Insurance Corporation of India at Udupi. The appeal is directed against the judgement and decree of the Additional Civil Judge at Shimoga in O. S. No. 17/1972. The Judgement is dated 20th Jan. 1976.

( 2 ) THE facts leading to the Suit and consequently this Appeal may be states as follows :- respondent Vasappa, who was the plaintiff in the trial Court prayed for a decree against the respondents the present appellants before us) in the sum of Rs. 1,05. 030-30 together with costs and current interest. The said sum was claimed under two insurance policies taken out by his father bearing Nos. 395964 for Rs. 5,000/- and 39681872 for Rs. 1,00,000. 00. Notice charges of Rs. 30/- was included in the claim. The suit became necessary because the Life Insurance Corporation of India refused to pay the claim made by the plaintiff. Their repudiation of their obligation was based on the provisions contained in S. 45 of the Insurance Act, 1938 (hereinafter referred to as the Act ).

( 3 ) THE plaint averments were as follows : the Plaintiff's (the assured) died on 30th June, 1970. On 10/12th Sept. 1970, a reply was issued by the Divisional Manager at Udupi that on Policy No. 39595964, only a sum of Rs. 1,167/- and in respect of the other Policy that being premature matter regarding the net amount payable would be decided only on admitting the liability. On 19th Jan. 1971, the Zonal Manager addressed a letter to the plaintiff that the amount under Policy No. 3968172 was repudiated and intimated that all monies payable under the said policy stood forfeited. The reason being that the deceased father of the plaintiff had given his age as 49 years and the horoscope sent in support thereof together with the earlier policy showed that the date of birth was different and he did not disclose his correct age in his proposals. He further made it clear in the said letter that the deceased was not less than 50 years of age at that time of insurance. The plaintiff did not accept the repudiation. He got a notice issued through his Counsel from Udupi. The notice was also replied by the appellants, representing the Life Insurance Corporation of India. Plaintiff had done no more than reiterating his claim of insurance in the Lawyer's Notice.

( 4 ) IN the written statement, the fact of taking out the Policies on 24-11-1965 and the second policy on 24-1-1969 was admitted. The policy was for Rs. 5,000/- and the second policy was for Rs. 1,00,000/- was also admitted. That the plaintiff was the nominee under the Policies was admitted by the defendants. The date of death of the plaintiff was also admitted the written statement, the defendants related what had been stated by the Divisional Manager in his earlier letter. They contended that the age given by the Assured was incorrect and that amounted to fraud as he was more than 50 years of age and therefore, there was no liability on the part of the Life Insurance Corporation of India to pay on the policy. They also said that they had information that the plaintiff's father had suppressed information in obtaining the polices and on enquiry the Life Insurance Corporation had found that he had grossly understated the age and therefore the Policy had been obtained with fraudulent intention. In that circumstances, they repudiated liability to pay on the two policies.

( 5 ) ON such pleadings, the Court below framed as many as 8 issues, which are as follows :-" (1) What was the age of the deceased Kadapp Gowda can the date of the proposals relating to the two policies ? (2) Whether the defendants are estopped from questioning the correctness of any information, after the age was admitted by the defendants ? (3) Whether on the death of the insured, the defendants are entitled to re-adjust the premia and reduce the claim up to Policy No. 39595964, on the ground tha

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