1985 Supreme(Bom) 227

Bombay High Court
H.H.KANTHARIA
Asha Goel - Appellant
Versus
Life Insurance Corporation of India - Respondent
Decided On : 09/02/1985

The liability of L.I.C. under a policy of life insurance is a statutory liability and hence a writ can lie under Art. 226 of the Constitution.

Headnote:

WRIT - MANDAMUS - LIFE INSURANCE POLICY - LIABILITY OF L.I.C. - STATUTORY OR CONTRACTUAL - DISPUTED QUESTIONS OF FACTS - WRIT JURISDICTION - SCOPE - FAIRNESS AND REASONABLENESS - L.I.C. OBLIGATIONS TO POLICY-HOLDERS.

Fact of the Case:

The Petitioner, Smt. Asha Goel, is the widow of deceased Naval Kishore Goel who was an employee of the Digvijaya Woollen Mills Ltd., Jamnagar, as a Labour Officer. He submitted a proposal for a life insurance policy at Meerut in Uttar Pradesh on May 29, 1979 which was accepted and he was granted such a policy bearing No. 48264637 for a sum of Rs. 1,00,000 (One lakh). According to the petitioner her husband maintained sound health and was hale and hearty throughout his life. However, he had retrosternal chest pain sometime in Dec. 1979 when he consulted Dr. P. S. Kulkarni, Professor of Medicine, M. P. Shah Medical College, Jamnagar. He was advised rest and was relieved of his ailment within few hours. Thereafter he attended office till Dec. 1, 1980. However, on Dec. 2, 1980 he had again slight pain in the chest. He was attended to by the same Dr. P. S. Kulkarni and was admitted in Irwin Group of Hospitals at Jamnagar on Dec. 3, 1980. But he passed away at the age of 46 leaving behind a young widow and a daughter and a son aged about 18 and 16 respectively on Dec. 12, 1980. The cause of death was certified as Acute Myocardial Infarction and Cardiac arrest. The Petitioner being the nominee of the deceased informed .the Divisional Manager, Meerut City (U. P.) of the Respondent 1, viz., Life Insurance Corporation of India (hereinafter referred to as "L.I.C." for short) about the death of her husband.

Finding of the Court:

1. The liability of L.I.C. under a policy of life insurance is a statutory liability and hence a writ can lie under Art. 226 of the Constitution. 2. Even if the liability of L.I.C. under a policy of life insurance is not a statutory liability and is a contractual liability even then, in my judgment, a writ under Art. 226 of the Constitution can lie against L.I.C. for enforcement of such a liability. 3. There are no disputed questions of facts involved in this case on account of which, as submitted by Mr. Paranjape, writ jurisdiction of the High Court under Art.226 does not lie. 4. The action of LIC in repudiating the claim of the petitioner was irrational, capricious and arbitrary which violates the provisions of Art. 14 of the Constitution.

Issues: 1. Whether the liability of L.I.C. under a life insurance policy is a statutory liability or a contractual liability. 2. Whether a writ of mandamus under Art.226 of the Constitution can be issued in this case. 3. Whether there are disputed questions of facts involved in this case. 4. Whether the action of LIC in repudiating the claim of the petitioner was fair and reasonable.

Ratio Decidendi: 1. The liability of L.I.C. under a policy of life insurance is a statutory liability. This is because S. 45 of the Insurance Act, 1938, which applies to L.I.C. as it applies to any other insurer, provides that no policy of life insurance shall 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 tending 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. 2. A writ of mandamus under Art.226 of the Constitution can be issued in this case because the liability of L.I.C. under a policy of life insurance is a statutory liability. 3. There are no disputed questions of facts involved in this case. This is because the documents produced by the parties are not inconsistent with each other. 4. The action of LIC in repudiating the claim of the petitioner was not fair and reasonable. This is because LIC did not give the petitioner a proper opportunity to present her case and because LIC's decision was based on oral enquiries rather than on documentary evidence.

Final Decision: The Life Insurance Corporation of India and the Respondent 3 are hereby directed to pay to the petitioner an amount of Rs. 1,00,000 (one lakh) arising out of the Life Insurance Policy of her husband deceased Naval Kishore Goel, bearing No. 48264637, together with all the benefits accruing therefrom with interest at the rate of 15% from the date of the death of the petitioner's husband within a month. The LIC is also directed to pay cost of Rs. 2,000/-to the petitioner.