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IN THE HIGH COURT OF ALLAHABAD
M. KATJU, R. S. TRIPATHI
SHANTA BAI - Appellant
Versus
LIFE INSURANCE CORPORATION OF INDIA - Respondents
C. M. W. P. 26862 Of 2002
Decided On : 08/21/2003
Insurance Claim - Insurance Policy - Insurance Act, Section 45 - Fraud vitiates everything
Fact of the Case:
The petitioner, a widow, filed a writ petition seeking to quash the impugned orders and for a mandamus directing the respondents to make payment of the petitioner's insurance claim amounting to Rs. 60,000 with 18 per cent interest. The petitioner's husband had taken two insurance policies from LIC, and after his death, the petitioner applied for the insurance amount as the nominee. The claim was rejected by LIC citing the husband's alleged illness and non-disclosure of hospitalization.
Finding of the Court:
The court found that the petitioner's husband had obtained the insurance policy by misrepresentation and concealing material facts. The court held that fraud vitiates everything and, therefore, dismissed the petition.
Issues: The main issue was whether the petitioner was entitled to the insurance claim amount, considering the alleged non-disclosure of the husband's illness and hospitalization.
Ratio Decidendi: The court relied on the principle that fraud vitiates everything, as established in previous cases such as Dr. Raghvendra Pratap Singh v. Director of Higher Education, U.P., Allahabad, 2003 (52) ALR 185 and Pratap Singh v. State of Punjab, AIR 1964 SC 72.
Final Decision: The court dismissed the petition, holding that the petitioner's husband had obtained the policy by stating false facts and concealing material facts, and therefore, the court was not inclined to exercise its discretion under Article 226 of the Constitution in this case.
( 1 ) THIS writ petition has been filed for quashing the impugned orders dated 25. 11. 2000 and 18. 12. 2001 (Annexure 10 to the petition) and for a mandamus directing the respondents to make payment of the petitioners insurance claim amounting to Rs. 60,000 with 18 per cent interest.
( 2 ) HEARD the learned counsel for the parties.
( 3 ) THE petitioner is a widow of late rewa who was working in the railway on the post of khalasi. It is alleged in para 3 of the petition that the petitioner is now old, infirm and sick and is wholly illiterate.
( 4 ) THE petitioners husband took LIC policy in 1997, copy of which is Annexure 1 to the petition. In 1998 again the petitioners husband took another policy from lic known as Bandobasti Bima. The petitioner was a nominee for the policy vide annexure 2 to the petition.
( 5 ) IN para 9 of the petition it is stated that the insurance policy relating to Table no. 14 is only for the persons who are below 45 years of age and a person above 45 years of age can take the policy only after a medical test vide Annexure 3 to the petition. Petitioners husband was above 45 years of age and hence he appeared for the medical test.
( 6 ) IN para 10 of the petition it is alleged that after taking the above insurance policies, the petitioners husband continuously deposited the premium from time to time. Unfortunately in September, 1998 the petitioners husband died. The petitioner being a nominee under the policies applied to the respondent No. 4, Branch Manager, LIC, district Branch Office, Kamachha, District Varanasi for payment of the insurance amount. Respondent demanded relevant documents which the petitioner supplied vide Annexures 6 and 7 to the petition. Thereafter, payment of earlier insurance policy was made to the petitioner through cheque vide Annexure 8 to the petition. However, since no payment was made in respect of the subsequent insurance policy, the petitioner made another application on 23. 5. 2000 before the respondent No. 5 vide annexure 9 to the petition. The petitioner was thereafter informed on 25. 11. 2000 when she approached respondent No. 3 that her claim has been rejected due to illness of her husband from 18. 5. 1998 to 3. 6. 1998 which had not been disclosed vide Annexure 10 to the petition. In the order dated 25. 11. 2000 the petitioner was informed that if she is not satisfied she can approach the respondent No. 2, Zonal manager, LIC. It is alleged that due to her illness the petitioner could not approach the respondent No. 2 up to May, 2001 and after recovery from illness on 5. 5. 2001 she made an application before the respondent no. 2 regarding her insurance claim vide annexure 11 to the petition.
( 7 ) IN December, 2001 the petitioner was informed by a letter dated 18. 12. 2001 that her claim has been rejected vide Annexure 12 to this petition. It is alleged in para 29 of the petition that the petitioners husband was not having any serious disease, but due to some casual illness he was treated in the hospital, and when the insurance policy was granted a complete medical test of the petitioners husband was done by the doctor and it was only after his full satisfaction that the petitioners husband was granted the insurance policy. Hence, on the ground of alleged illness of the petitioner the respondent cannot withhold the payment.
( 8 ) A counter-affidavit has been filed by lic and we have perused the same.
( 9 ) THE respondents have taken a pre-liminary objection that petitioners remedy is to file a civil suit and we are overruling this objection as alternative remedy is not an absolute bar to a writ petition. The petitioner is widow and if she is relegated to a suit it will take a long time and she will continue to suffer. Hence we are deciding the case on merits.
( 10 ) IN para 4 of the counter-affidavit it is stated that the petitioners claim is not genuine and bonafide and has rightly been repudiated by the Corporation. In para 9 it is stated that when the
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