Hemant Gupta, J.

1. The application is for condonation of delay of 97 days in filing of the present Letters Patent Appeal.

For the reasons mentioned in the application, we find that sufficient cause is made out for condonation of delay. Consequently, we condone the delay in filing of the present Letters Patent Appeal.

Interlocutory Application stands allowed accordingly.

Re.: Letters Patent Appeal No.264 of 2016

The challenge in the present Letters Patent Appeal is to an order passed by the learned Single Bench of this Court on 20th March, 2015 whereby it was, inter alia, held that the writ petition challenging the repudiation of claim after death of the insured is maintainable. It was also held that the decision making process to repudiate the claim is on a basis of non-est and non-existing material to deny the assured amount to the writ applicant. It was also held that even assuming that the appellants had power and jurisdiction to examine the claims after the death of the insured, can the Insurance Company take such a unilateral decision even without complying the principles of natural justice? Relying upon the judgment of the Hon’ble Supreme Court reported as (1980) 4 SCC 379, (S. L. Kapoor v. Jagmohan), it was held that unless the law expressly or by necessary implication excludes the application of principles of natural justice, the Court will read the said requirements in the enactments that are silent in this respect. Even in cases of administrative action having civil consequences, the opportunity of hearing is required to be given to the affected person. After returning such findings, the appellants were directed to pay a sum of Rs. 1 lac along with compound interest @ 9% per annum from the date of death of the husband of the writ applicant till its actual payment.

2. Learned counsel for the appellants raised two fold arguments in the present appeal. Firstly, that principles of natural justice cannot be made applicable prior to repudiation of claim as utmost good faith on behalf of the insured is the pre condition of the issuance of the insurance policy. If it is found that there is concealment of material facts, the Insurance Company is at liberty to repudiate the claim of the insured. Reliance is placed upon Section 45 of the Insurance Act, 1938 (hereinafter referred to as “the Act”). The other argument is that the Court has erred in law in allowing compound interest @ 9% per annum. The learned Single Bench could not have issued such direction.

3. We have heard learned counsel for the appellants and find no error in respect of the first argument raised. Section 45 of the Act confers jurisdiction on an insurer, such as the appellants, to question a policy taken by the insured on the ground that the statement 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 was inaccurate or false, and that such statement was on a material matter or suppressed facts which was bound to be disclosed by the policy holder.

4. In fact, the reading of Section 45 would show that the insurer is entitled to repudiate the claim within two years if the statement in the proposal or report of the medical officer, or a referee, or a friend was inaccurate or false. However, in the case of statement on the material matter or suppression of a fact which the insured was bound to disclose and was fraudulently made, the limit of period of two years is not applicable.

5. Thus, it is apparent that the Insurance Company can repudiate the claim because of information that leads to a finding that the insured has not either disclosed a material fact or suppressed a fact, which the insured was bound to disclose and/or was fraudulently made. If the insurer had any material or information, then it is incumbent upon the Insurance Company to confront such material or information or the reasons to repudiate claim, to the insured or his legal heirs and then take a decision as to whet