A contract of insurance is one of utmost good faith, and any material misrepresentation or suppression of facts vitiates the contract.

Mr. Justice S.S. Sandhawalia, President — For the limited purpose of this order relegating the complainant to her remedy in a Civil Court, it is unnecessary to delve too deeply into the facts and the merits.

2. The complainant Smt. Poonam Mittal and her two children are the widow and off-springs of Shri Roshan Lai (hereinafter called the deceased) who died on the 24th of May, 1989. In this joint complaint, it is the case that on the 15th July, 1987 the deceased had submitted a proposal of Life Insurance Policy of Rs. 50,000/- with a double accident benefit which was accepted on the 9th of September, 1987 and Policy No. 170075473 was issued with regard thereto. In this policy, complainant No. 1 was the nominee. Again on the 15th December, 1988 the deceased made another proposal for a Life Insurance of Rs. 50,000/- with double accident benefit which was also accepted on the 31st of December, 1988 and relevant policy document was issued, wherein complainant No. 2 was the nominee. Curiously on the same aforesaid date i.e. 15th day of December, the deceased made a third proposal for life insurance of Rs. 50,000/- with double accident benefit which was also accepted and policy document was issued, in which complainant No. 3 was the nominee.

3. It is the case of the complainants that when all the aforesaid policies were, taken out the deceased was hale and hearty and was only 33 years of age. He paid the installments and the premier on the said policies. However, on 24th of May, 1989, he suffered a fall in the bath-room and died due to brain hemorrhage. Consequent thereto the complainants as. the nominees made their claims with the Life Insurance Corporation (hereinafter called the L.I.C.), in reply to which certain information’s were sought with regard to the deceased having taken treatment from the Post Graduate Institute of Medical Research & Education (hereinafter called the P.G.I.). To this communication, the complainant gave reply alongwith the Card issued by the P.G.I. which indicated that he was admitted as an indoor patient on the 11th of April, 1989 and was discharged after a month’s treatment on the 10th of May, 1989 with some improvement in his condition. Though the complainants completed the other formalities of their claims yet on the 5th of March, 1990, the L.I.C. in a detailed communication repudiated the liability on all the policies on the ground that the deceased had suffered from indigestion, diarrhoea, nausea and alcohol dependence, long before the time of the proposals and these maladies were deliberately suppressed by the deceased and instead he gave false answers about the condition of his health. The complainants thereafter made representations against the said repudiation but the L.I.C. stuck to its guns, compelling the complainant to knock at the door of this Commission on the 5th March, 1992. A relief to the tune of Rs. 3 Lacs alongwith interest @ 18 per cent per annum is claimed. Reliance was placed on the relevant documents of the proposals and the policies issued.

4. The complaint has been strenuously opposed on behalf of the L.I.C. whilst the broad factual matrix of the basic facts with regard to the three Insurance proposals have been admitted, the core of the defense is that the impeccable hospital record of the deceased policy-holder established that he had a long history of alcohol dependence resulting in a complete damage of his liver and other serious complications. It was the case that this information was fraudulently suppressed when making the proposal, and the contract of insurance being one of utmost good faith stood vitiated by such a suppression. It was the defence that if the correct information about the state of health had been disclosed, the opposite party would never have accepted the risk with such a past medical history. It was stated that even on the question of age there was a mis-statement by the proposer. In particular, it had been averred that the cause of death of the deceas