IMPORTANT POINT
The proposer of a life insurance policy is duty-bound to disclose all material facts, and the legitimate expectation doctrine should operate in cases where there is no intention of cheating or fraud.

ORDER :

1. The present writ petition has been filed under Article 226 of the Constitution of India with the following prayers :-

(i) by an appropriate writ, order or direction, the impugned award dated 03.10.2023 (Annexure-8) passed by the learned Permanent Lok Adalat, Sirohi may kindly be quashed and set aside.

(ii) any other appropriate order or direction, which this Hon’ble Court considers just and proper in the facts and circumstances of the case may kindly be passed in favour of the petitioner.

(iii) costs of the writ petition may kindly be awarded to the petitioner.

2. Brief facts of the case are that the respondent had taken two LIC policies in the name of his wife, Mrs. Leela Kanwar from the petitioner-corporation, wherein, one policy bearing had a insurance cover of Rs.3 lacs under LIC Aadhaarshila Plan 944 whose yearly premium was Rs. 10,604/- and the second policy bearing No.155856828 had an insurance cover of Rs.10 lacs under LIC New Endowment Plan 914 whose half-yearly premium was Rs.19,518/-. The aforesaid policies were issued on 28.10.2021. The policies were issued on the aforementioned date but the policy holder with the intent to cheat the Life Insurance Corporation, chose the date of commencement of policy from 28.05.2021 (which is permissible in rules), however, concealed the fact of delivery by cesarean operation. If the facts of cesarean delivery had been mentioned in the column, the petitioner would not have issued the policy in favour of the policy holder before the six months of the surgery. On 23.12.2021, the wife of the respondent died at Mandar Health Centre during medical treatment. After the death of the wife of the respondent, the petitioner-corporation did not pay the insurance claim and being aggrieved of the same, the respondent preferred an application under Section 22 of the Legal Services Authorities Act, 1987, before the learned Permanent Lok Adalat, Sirohi. The petitioner filed a written statement and the learned Permanent Lok Adalat allowed the application vide order dated 03.10.2023 and the petitioner-corporation being aggrieved of the same, preferred the present writ petition.

3. Learned counsel for the petitioner submits that the respondent was duty-bound to disclose all the material facts which also include the treatment undergone by the wife of the respondent i.e. the cesarean operation on 23.06.2021 (Annexure 4). Learned counsel for the petitioner submits that in the proposal form, under the Head of “personal and family details for health”, the respondent’s wife concealed the material fact and answered in ‘NO’, whereas, the column of ‘Ailment’ requiring treatment and any operation undergone. Learned counsel for the petitioner further submits that the sole reason for repudiating the claim of the respondent was suppression of the material facts and the learned Permanent Lok Adalat has completely ignored the same. Learned counsel for the petitioner further submits that the respondent has cheated upon the petitioner-corporation as the LIC policy was taken and issued on 28.10.2021 and the date of commencement of the policy was chosen from 28.05.2021, while concealing the fact that the respondent had undergone a cesarean section on 23.06.2021 and if the fact of the cesarean delivery would have been mentioned in the requisite column, the petitioner-corporation would not have issued the policy before the six months of the surgery which also reflected from the guidelines. Learned counsel for the petitioner also submits that as per the guidelines issued on 11.05.2018 (Annexure-3), there are certain conditions/underwriting medical condition/diseases/complication, where the life insurance policy cannot be issued for the period since operation is of more than six months in which, the Lower Segment cesarean Section (LSCS) is also included. Learned counsel for the petitioner also draws the attention of the Court towards the proposal form filled up by the respondent’s wife (Annexure-9) while submitti