The central legal point established in the judgment is the requirement to prove fraudulent misrepresentation by the policyholder in order to repudiate an insurance policy, as outlined in Section 45 of the Insurance Act and supported by legal precedents.

Mr. B.K. Taimni, Member—Petitioner was the opposite party before the District Forum where the respondent-complainant had filed a complaint alleging deficiency in service on the part of the petitioner. District Forum dismissed the complaint, but on appeal being filed by the complainant, the State Commission allowed the appeal as also the complaint. It is against this order that petitioner Insurance Company has filed this revision petition.

2. Briefly, the facts of the case are that the late husband of the respondent/complainant had obtained a life insurance policy from the petitioner, which was issued on 30.11.1995 with a commencement date mentioned as 28.8.1995. When unfortunately the insured died on 3.3.1996 and upon a claim being preferred by the complainant who was the nominee as per insurance Policy — it was repudiated on the ground that at the time of taking policy the insured had concealed information on the existing ailments like cirrhosis of lever and diabetic mellitus. It is in these circumstances that the respondent before us, filed a complaint before District Forum who after hearing the parties and material produced dismissed the complaint holding, the ‘repudiation’ in order. On an appeal filed by the complainant, the State Commission allowed both the appeal and the complaint, hence this petition by the revision petitioner. Upon issue of notice to the respondent/complainant a reply was filed rebutting grounds of revision.

3. It is argued by the learned Counsel for the petitioner that as per investigations carried out by the petitioner, the insured was suffering from cirrhosis of lever and diabetic mellitus which he concealed while filing the form. As per record obtained from the doctor who treated the insured on January, 1996 based on information given by the wife of the insured (complainant in this case), the insured has these problems. The insured died of heart failure within six months of taking the policy. Cirrhosis of lever and diabetic mellitus do not appear so soon to hasten the end. As per medical literature there is a direct nexus between these ailments and heart failure. District Forum was correct in arriving at the conclusion, it did. State Commission erred on two counts, one that no post-mortem was done to ascertain the cause of the death and two, that the insured had mentioned in the application form for obtaining the policy that he takes liquor in smaller quantity, and two that the nexus between the cause of death and the disease has not been established. On the other hand it was argued by the amicus curiae appointed by this Commission that in fact there has been no concealment of any information. Whatever information was required to be given and was within the knowledge of the insured, was given. He also drew our attention to Section 45 of the Insurance Act which prohibits repudiation on the grounds of concealment after two years of taking the policy. It was also his case that doctor whose certificate is relied upon to repudiate the case was not examined. He also reiterated the arguments as advanced by the complainant in the reply filed before the Commission. It was his case that the order of the State Commission is correct hence need to be upheld.

4. We heard the arguments and perused the material on record. There is no dispute that insurance policy was issued on 31.10.1995 effective 28.8.1995. Letter of repudiation was issued on 30.9.1997. Section 45 of the Insurance Act reads as follow :

“No policy of life insurance effected before the commencement of the 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 proposal for insurance or in any report of a medical officer or referee or friend or the insured on in any other document leading to is