1975 Supreme(Raj) 50

Rajasthan High Court
Gupta, J.
Smt. Top Kanwar - Appellant
Versus
The Life Insurance Corporation of India, Bombay - Respondents
S.B. Civil Regular First Appeal No. 28 of 1970
Decided On : April 14, 1975

Headnote:Insurance Act, Sec. 45(a) and (b) Revival of policy—Insured person failing to state that he had suffered from diabetes mellitus—Held that it amounted to suppression of material fact—However in the circumstances of the case it could not be said to be fraudulent—Claim decreed.

       The questions regarding the physical and mental illness of the assured during the period prior to the application for revival of the lapsed policy, as also whether he had taken any medical treatment during that period, no doubt, appear to be material from the point of view of the insurer as it is on the basis of those facts that the insurer could possibly come to the conclusion as to whether the lapsed policy should be revived or not The amount of risk involved in respect of the life of to assumed can only be ascertained by the insurer from a fair statement on the part of the assured about the illness, injury or disability, suffered by him during the period since his last medical examination in connection with the policy in qucstion. lt may, of course, be observed in this respect that a policy holder while applying for revival may not be able to state the particulars of minor illness suffered by him, such as headache, fever or cold and as a matter of fact the assured may not be in a position to give the details of medical treatment in respect of such minor ailments. However, questions 3(a) and (b) of the form Ex. A-7 required the assured to disclose his illness and the treatment undergone since the date of his last medical examination and not only since the policy had lapsed, it must be held that the information about the hospitalisation of the insured J. in the month of November, 1960 for treatment of diabetes mellitus and coma was a material information, which should have been disclosed by him while filling the personal statement of health in respect of the revival of his policy. The facts that J deceased suffered from diabetes mellitus and was admitted as an indoor patient at the M.G. Hospital, for treatment in respect of the same in a state of coma and remained an indoor patient there for more than 10 days no doubt appear to be material facts and the denial on the part of the assured in answer to questions 3(a) and (b) therefore clearly amounted to suppression of facts which it was material for the assured to disclose.

       Held = The next question that arises for consideration is as to whether the suppression of facts made by J. in not disclosing that he suffered from diabetes mellitus and remained as an indoor patient at the M. G. Hospital in November, 1960 was fraudulent non-disclosure of such facts on his part and as to whether he knew at the time of making such statement that it was material for him to disclose the aforesaid illness and hospitalisation. Mr. O.P. Gupta, Senior Divisional Manager of the Corporation has admitted in his deposition that persons living in a big city where facility for medical supervision exists and having favourable occupation could be considered for insurance subject to the diabetic patient having completely adjusted to the diabetic regimen of insu-line and/or diet. The short medical report Ex. A-8 which was made by Dr S. C. Mathur, Medical Officer Incharge, Govt. Hospital, Bilara, who examined the deceased J. on January 20, 19$ 3 at the time of making the application for revival of the lapsed policy, states on urine analysis of J. no sugar or albumen was discovered. The medical report Ex. A-8 and the statement of Dr. Mathur show that diabetes mellitus, from which J. suffered, was duly controlled and that he had reacted the stage of stabilisation. Thus after the stage of stabilisation was achieved the fact that J. suffered from diabetes did not appear to be of much importance. It should be noticed in this connection that the revival application was submitted more than two years after J. was treated in the hospital for diabetes in November, 1960 and even if this fact would have been disclosed in answers to questions 3(a) and (b) in Ex A-7 it would have been hardly of any effect on the revival of the lapsed policy. After a waiting period of two years even a new insurance policy is permissible in case of diabetic patients and in these circumstances, J. might not have realised that it was incumbent upon him to disclose that he was suffering from diabetes mellitus particularly as it was in a stabilised condition, In view of the clear medical report by a medical consultant recognised by the Corporation appearing at the back of the personal statement Ex A-2, it appears probable that the importance of Js. suffering from diabetes was not realised at the time when the form Ex. A-7 was filled in One more im-portant fact requires to be considered namely, that the Corporation has absolutely failed to lead any evidence whatsoever to show that the death of J. was in any manner connected with his suffering from diabetes mellitus. It cannot, therefore, be held that the death of J. occurred on account of his suffering from diabetes. It is also equally important to notice that although J. was admitted as an indoor patient in the M. G. Hospital on account of his suffering from diabetes in November, 1960, yet after his discharge from that hospital he remained alive for more than three years and nothing has been brought on record on behalf of the Corporation to prove that during this period of three years J. had any complaint on account of diabetes. All these facts go to show that J. might have been able to control diabetes by observing diet restrictions and as his condition might have stabilised, he might have thought that he no longer suffered from that disease, so long as he took the necessary precautions and maintained the diet control. It would not, therefore, be reasonable in these circumstances to expect the assured, who was an ignorant layman, to disclose the existence of the aforesaid disease in his personal statement Ex. A-7 as he might not have thought it of sufficient importance. From the evidence on record it is difficult to come to the conclusion that there was any intentional misrepresentation on the part of J. from which the existence of fraud could be definitely concluded. Although there is no doubt that he had a duty to make a full and frank disclosure of all material facts and he should have been accurate in the representations which he made as to the material facts on account of fraud. In my opinion, the Corporation has failed to do so. As a mere suppression of facts, even if material, could not lead to the conclusion that it was caused as a result of fraud, a high decree of probability is required to be proved to show that the suppression of certain material facts was made by J. as a result of wilful and deliberate fraud on the part of the assured. In view of these facts, it no doubt appears that the personal statement made by J suffered from non-disclosure of material facts, yet it has been proved by the Corporation that the alleged suppression was wilfully or fraudulently made by the insured and that at the time of making the statement he was aware of the fact that it was material to disclose such facts. As a result of the findings arrived at by me, it cannot be held that the contract of revival of the insurance policy of J. deceased was null and void as the existence of fraud had not been proved. ( paras 21, 22. 25 and 28 )