The central legal point established in the judgment is the principle of suppression of material fact and the requirement of utmost good faith in insurance contracts.

Mr. Justice M.S. Parikh, President—This appeal arises from order dated 15.1.2003 rendered by the learned Consumer Disputes Redressal Forum, Sabarkantha in Complaint No. 13 of 1998 directing the opponent Life Insurance Corporation of India (LIC for short) to pay to the complainant Rs. 50,000/- being the amount of life insurance policy taken by the predecessor of the complainants-deceased Devkaran Dhulabhai Patel, on or around 11.8.1995 and to pay interest at the rate of 9% and compensation in the sum of Rs. 5,000/-. The complainants challenged the repudiation of the claim by the opponent LIC on the ground that the insured did not know about the existence of disease of cancer on the date of proposal of insurance and on the ground of want of nexus between the cause of death being heart attack and the disease of cancer. Opponent LIC resisted the claim on the same ground namely, suppression of material fact of existence of disease of cancer and knowledge thereof in the proposal for insurance. The learned Forum came to the conclusion that the opponent failed to prove the fact of knowledge of existence of such disease on the part of the insured on the date of insurance and in any event failed to establish nexus between the ailment of cancer and cause of death. The learned Forum, therefore, passed the impugned order resulting into filing of the appeal by opponent LIC of India.

2. We have heard the learned Advocates for the parties. We have gone through the impugned order. We have also gone through the decisions which have been submitted by the learned Advocates.

3. For the purpose of finding out the facts with regard to whether the insured suffered from disease of cancer and whether he had knowledge of such disease on the date of proposal, namely 11.8.1995, it would be necessary to have a glance at the material placed on the record of the case. The opponent LIC of India placed on record of the complaint, documentary evidence with regard to the treatment taken by the insured in M.P. Shah Cancer Hospital under Dr. Rajan Tankshali. The certificate of hospital treatment indicates the date of admission of the insured to be 10.7.1995. The proposal for insurance was submitted to the opponent LIC of India on 23.7.1995. It is an admitted fact that the insured did not disclose the existence of the ailment and the facts with regard to having taken treatment prior to the date of making proposal for insurance. He positively stated that he did not suffer from any ailment and he was healthy. Thus, the certificate of hospital treatment and the affidavit of the doctor placed on the record of the complaint before the learned Forum prima facie indicated that the insured was admitted to the Civil Hospital on 10.7.1995 for swelling on his neck and painful deglutition from which the insured suffered for a period of two months prior to his admission. Upon admission of the insured to the hospital, biopsy was done and that suggested the diagnosis of cancer of left lateral pharyngeal wall with secondaries in neck. Thus, on the date on which the proposal was submitted to the opponent LIC of India, admittedly, the insured had not only been admitted in cancer hospital (Civil Hospital) for the aforesaid ailment but had that ailment in existence two months prior to the date of his admission. It might be that diagnosis might not have been made two months prior to the date of his admission to the hospital. But he very well knew that he was admitted to the hospital for a particular ailment of his neck and he also knew that it was diagnosed as cancer. Yet, he submitted proposal form for insurance in question on 23.7.1995. It also appears from evidence that he was given radiotherapy while he was admitted in the hospital. In this background of the material placed on record, finding recorded by the learned Forum that the insured did not know that he was suffering from cancer cannot be accepted.

4. It has been submitted before this Commission that there is no nexus betwe