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2022 Supreme(Gau) 1491
IN THE HIGH COURT OF GAUHATI
SANJAY KUMAR MEDHI, J.
Saru Borah - Petitioner
Versus
Life Insurance Corpn. Of India and Others - Respondents
WP(C) No.3388 Of 2017
Decided On : 24-11-2022
For the Petitioner: Mr. R.K. Bora.
For the Respondents: Mr. S.P. Choudhury.
The duty of utmost good faith must be observed by the contracting parties in an insurance contract, and non-disclosure of material facts by the insured can be a reason for repudiation of the claim.
Headnote:
Insurance - Life Insurance Policy - 20.03.2013 - 16 years - repudiation of claim - medical test - liver cancer - repudiation not sustainable - Manmohan Nanda v. United India Assurance Company Limited, (2022) 4 SCC 582 - Satwant Kaur Sandhu v. New India Assurance Company Ltd., (2009) 8 SCC 316 - Reliance Life Insurance Company Ltd. v. Rekhaben Nareshbhai Rathod, (2019) 6 SCC 175
Fact of the Case:
The petitioner, a widow, filed a writ petition against the Life Insurance Corporation of India Ltd. (LICI) for repudiating the claim on her husband's life insurance policy. The deceased had obtained the policy on 20.03.2013, paid six premiums, and was diagnosed with liver cancer, leading to his demise. The LICI repudiated the claim citing non-disclosure of health issues.
Finding of the Court:
The court found that the reasons for repudiation were not sustainable in law as they were contrary to the reports of the Corporation's empanelled doctors. The court set aside the repudiation and directed the respondent Corporation to pay the sum assured to the claimant within 45 days.
Issues: The main issue was the validity of the repudiation of the claim by the LICI based on non-disclosure of health issues by the deceased at the time of obtaining the policy.
Ratio Decidendi: The court held that the reasons for repudiation were not sustainable as they were contrary to the reports of the Corporation's empanelled doctors, and directed the LICI to pay the sum assured to the claimant.
Final Decision: The repudiation made by the LICI was set aside, and the respondent Corporation was directed to pay the sum assured to the claimant within 45 days.
JUDGMENT :
1. Heard Shri R.K. Bora, learned counsel for the petitioner. Also heard Shri S.P. Choudhury, learned counsel representing the Life Insurance Corporation of India Ltd. (‘the LICI’).
2. Considering the subject-matter in dispute and the fact that the writ petition is pending since the year 2037, the same is taken up for disposal at the admission stage.
3. The brief facts of the case may be narrated as follows.
4. The petitioner is a widow who has instituted the present writ petition. It is the case of the petitioner that her husband Bisheswar Borah during his life time had obtained a Life Insurance Policy with the LICI on 20.03.2013. Prior to obtaining of such Policy, the deceased husband was subjected to a number of medical test by the Panel Doctors of the Corporation and after such clearance, the Policy was entered into. The premium was Rs. 1,11,156. It is not in dispute that the aforesaid premium was required to be paid, on a quarterly basis and the terms of the Policy was 16 years. After entering into the aforesaid contract, 6 numbers of premium were paid. Unfortunately, in the meantime the deceased had health problems and on 20.9.2013, he was diagnosed with liver cancer and such detection was made in the Prince Aly Khan Hospital, Mumbai. The husband of the petitioner had ultimately passed away on 7.8.2014 whereafter the claim was made before the Jorhat Divisional Office of the respondents. After examination of the claim, vide inter office communication dated 30.10.2015, the claim was held, to be not admissible. The aforesaid decision was conveyed to the petitioner vide a communication dated 1.4.12.2015, by which the claim was repudiated. Being faced with such circumstances, the petitioner had submitted a representation on 30.1.2016 which however did not find any favour and the same was rejected vide an order dated 29.4.2016. It is the action of the LICI in repudiating the claim which is the subject-matter of this writ petition.
5. Shri Bora, the learned counsel for the petitioner has submitted that at the time of obtaining the Policy, the deceased, had to undergo a number of medical test before the empanelled doctors of the LICI. By drawing the attention of this court to the Annexures starting from Annexure-2, the learned counsel has submitted that different test were done by Doctors of different disciplines, namely, 1. Dr. Tapan Hazarika, 2. Dr. R.K. Bora, 3. Dr. Bhuban Ch. Miri, 4. Dr. P.K. Nath and 5. Dr. D.D. Mili. The examinations included Pathological Test, X-Ray, Urine Analysis, Haemogram, Hb Aly Test. All the aforesaid doctors had consistently opined that the proposed insured was in good state of health and had recommended that such Policy can be offered to him. The learned counsel submits that unfortunately the deceased husband was later on diagnosed with liver cancer for which he had passed away. He submits that there being a contract to indemnify in case of death, the Insurance Company is duty-bound to release the amount which was agreed upon in terms of the Policy.
6. In support of his submission, Shri Bora, the learned counsel for the petitioner places reliance upon a decision of the Hon’ble Supreme Court in the case of Manmohan Nanda v. United India Assurance Company Limited, (2022) 4 SCC 582, In paragraph 55.5, the following has been stated.
“55.5. The Insurance Company has the right to seek details regarding medical condition, if any, of the proposer by getting the proposer examined by one of its empanelled doctors. If, on the consideration of the medical report, the Insurance Company is satisfied about the medical condition of the proposer and that there is no risk of pre-existing illness, and on such satisfaction it has issued the policy, it cannot thereafter, contend that there was a possible pre-existing illness or sickness which has led to the claim being made by the insured and for that reason repudiate the claim.”
7. On the other hand, Shri S.P. Choudhury, learned counsel for the LICI submits that
