IMPORTANT POINT
For the purposes of Section 45 of the Life Insurance Act, 1938, the period of two years has to be counted from the date on which the Policy was originally effected and not from the date of the revival of the Policy.

Ashok Bhan, President—Life Insurance Corporation of India-petitioner herein, who was the Opposite Party before the District Consumer Disputes Redressal Forum, Jalandhar (hereinafter referred to as ‘the District Forum’ for short) has filed this Revision Petition against the Order of the State Consumer Disputes Redressal Commission, Chandigarh, Punjab (hereinafter referred to as ‘the State Commission’ for short) in First Appeal No.1337 of 2005. By the impugned Order, State Commission has upheld the Order of the District Forum.

2. Shortly stated, the facts of the case are:

Shri Kailash Chander (since deceased) got himself insured with the petitioner-Corporation in the sum of Rs.1,00,000/- on 09.04.2000. The Policy had lapsed because of non-payment of premium. On payment of due premium and other dues, the Policy was revived on 07.05.2002. Kailash Chander died of heart failure on 04.04.2003. The complainant-respondent herein, widow of Kailash Chander, being the nominee under the Policy, lodged the complaint before the petitioner-Corporation which was repudiated on the ground that the deceased was suffering from Diabetic Mellitus two years before the date of revival and that he was getting treatment for the same for the last two years prior to the revival of the Policy.

3. On receipt of the letter of repudiation dated 13.09.2003, respondent filed a complaint before the District Forum challenging the repudiation of the claim and seeking a direction to the petitioner-Corporation that the complainant should be paid the insured amount. District Forum, after appreciating the evidence produced by the parties, allowed the complaint in the following terms:-

“14. As such repudiation of the claim was unjustified and repudiation amounts to deficiency of service. As such we allow the complaint for recovery of insured amount with 8% interest from the date of filing of the complaint till payment. Interest would serve as compensation. Complainant is further awarded Rs.5,000/- as costs of litigation expenses. Compliance of the order be made within one month from the receipt of the copy of this order. Copies of the order be sent to the parties free of costs under the rules. File be consigned to the record room.”

4. Being aggrieved, the petitioner filed an Appeal before the State Commission, which has been dismissed by the impugned Order.

5. Shri Ashok Kashyap, learned Counsel appearing for the petitioner, submitted that the declaration given by the deceased, at the time of getting the Policy revived on 07.05.2002, regarding his state of health, was incorrect. Following were the questions and the answers given at the time of revival of the Policy:-

Questions Answers

a) Have you ever suffered

from any illness/disease

requiring treatment for a

week or more? No

b) Did you ever have any operation/accident or injury? No

c) Did you ever undergo ECG,

X-Ray, Screening, Blood, urine

or stool examination? No

d) Are you at present in sound

health? Good

6. It is not disputed before us that the Policy was not repudiated on the ground that at the time when initial Policy was taken, there was any misrepresentation or intentional concealment of facts by the deceased-insured. In the present case, two years have elapsed after the issuance of the Policy and the burden to prove that the deceased had concealed the facts was on the Insurance Company in terms of Section 45 of the Life Insurance Act, 1938. It was then submitted by Shri Kashyap that revival of the Policy constituted a new contract between the parties and two years have to be counted from the date of revival of Policy. This submission cannot be accepted in view of the Judgment of the Hon’ble Supreme Court of India in Mithoolal Nayak v. Life Insurance Corporation of India1 in which the Hon’ble Supreme Court of India has clearly held that for the purposes of Section 45 of the Life Insurance Act, 1938, the period of two years has to be counted from the date on which the Policy was originally