The judgment establishes the principle that the onus lies on the insurer to prove fraudulent suppression of material facts by the policy-holder, as per Section 45 of the Insurance Act, 1938.

JUDGMENT :

Dr. D.P. Choudhury, J.

Challenge has been made to the order dated 27.8.2008 passed by the learned Insurance Ombudsman in Complaint No.21-001-0235 vide Annexure-12 under which the learned Insurance Ombudsman accepted the submissions of the insurer-opposite parties.

2. The unshorn details of the case of the petitioner is that the late husband of the petitioner was the policy-holder and the deceased policy holder has assured his life under the Life Insurance Corporation of India (hereinafter called as “the Corporation”) vide Policy Nos.580631663, 580631960, 584766253 and 585424076 commencing from 28.9.1992, 28.11.1992, 28.8.2002 and 28.3.2004 respectively. Be it stated, the deceased policy-holder was working as Joint Managing Partner of M/s.Durga Construction. During the year 2000 to 2002, due to illness of the mother of the deceased policy-holder, there was financial crunch for which the petitioner could not deposit the premium amount for the policy Nos.580631663 and 580631960. In the year 2004, the Corporation floated an intensive revival campaign wherein on payment of interest at a reduced rate along with unpaid premium, the lapse policies can be revived. Since the financial condition of the deceased policy-holder improved by then, said two policies were revived on 20.5.2004. On 22.8.2004, the deceased policy-holder fell ill and while being treated in SCB Medical College and Hospital, Cuttack, he expired on 26.8.2004 and the primary cause of death was diagnosed by the doctors to be “Septicaemia” and secondary cause as “Drug Rash”. After the death of the deceased policy-holder, the petitioner obtained the legal heir certificate and made representation to the opposite parties 2 to 5 for settlement of the claims. But, the opposite parties, without settling the claim of the petitioner, repudiated the same under flimsy grounds vide Annexure-8 series stating that the deceased policy-holder had made deliberate mis-statements and withheld material information to the Corporation about the reasons of his health condition at the time of proposing his policies revived.

3. It is the further case of the petitioner that being aggrieved by the repudiation letters (Annexure-8 series), the petitioner made representation to the learned Insurance Ombudsman on 26.9.2006 for settlement of the claims and the Secretary of the learned Insurance Ombudsman, on receipt of the same, directed the petitioner to file a detailed complaint in the prescribed format. Accordingly, the petitioner, on 21.12.2006 filed a complaint before the learned Insurance Ombudsman, but the learned Insurance Ombudsman, without appreciating the materials, rejected the complaint filed by the petitioner. Learned Insurance Ombudsman relied upon the bed-head ticket of the deceased policy-holder wherein the doctor has observed that the deceased policy-holder had undertaken treatment for “Seizure Disorder” since 1995 and as such, he has suppressed material facts and since he has suppressed the material facts, learned Insurance Ombudsman rejected the claim of the present petitioner holding that she is not entitled to the claim amount as the deceased policy-holder has suppressed the material facts at the time of proposal made in the year 2002 and 2004. It is the further case of the petitioner that as Section 45 of the Insurance Act, 1938 (in short “the Act”) has not been properly followed by the opposite parties, the petitioner is bound to knock the door of this Court under Articles 226 and 227 of the Constitution of India for the reliefs, as prayed for.

SUBMISSIONS

4. Mr. Dwibedi, learned counsel for the petitioner submitted that the deceased husband of the petitioner was admitted in SCB Medical College and Hospital, Cuttack on 26.8.2004 at 10:00 AM and died on the same day at 2:05 PM due to ”Septicaemia” but not due to “Seizure Disorder”. The claim of the petitioner was repu