IMPORTANT POINT
The court established that conciliation proceedings under the Legal Services Authorities Act are mandatory, and failure to adhere to this process invalidates any resultant award.

JUDGMENT :

Hon'ble Prakash Padia, J.

The petitioner has preferred present writ petition inter alia with the prayer to quash the award dated 8.12.2021 passed by respondent No. 1 namely Permanent Lok Adalat, Moradabad, U.P.

2. The facts in brief as contained in the writ petition are that petitioner namely H.D.F.C. Standard Life Insurance Company Ltd. is a company registered under Companies Act, 1956 and as per Section 3 of the Insurance Act, 1938 carrying on life insurance business. The life assured namely late Ravi Kiran has approached the petitioner-insurance company for issuance of insurance policy in the year 2018 and has submitted the proposal form and other required documents to obtain the insurance policy. Upon his instructions and the declaration made thereunder, the petitioner considering the same to be true and correct in all aspect issued the policy. The salient features of the policy are as under :

3. On 4.8.2018 petitioner received the claim intimation form, from the respondent No. 2 informing that the life assured died on 27.3.2018. Since the death of the life assured occurred within two months from the risk commencement date of the subject policy, the petitioner has conducted a statutory investigation as per Clause 8 (3) of the Insurance Regulatory and Development Authority of India (Protection of Policy Holder's Interest) Regulations, 2002. During investigation it was revealed that life assured has submitted incorrect income and occupation in the proposal form.

4. It is argued that life assured has no permanent job and was absconding from home since past two months and he died due to unknown accident on 27.3.2018. According to panchanama death was due to falling from a vehicle & sustaining injury, leading to death. No FIR was registered and only a general diary bearing number GD No. 017, dated 27.3.2018 was recorded on the basis of statements of Sunil Kumar, son-in-law of respondent, along-with respondent three sons and complainant went to police station and gave a statement that insured is a habitual chronic alcoholic & is always intoxicated and insured never listened to family member's advice of giving up alcohol. In the post-mortem report cause of death was recorded as hemorrhage & shock. The immediate cause was mentioned as shock due to anti-mortem injury. It has been mentioned in the post-mortem report that stomach contents smell of alcohol. It is argued that life assured had taken policy by concealing the material information from the petitioner. Due to non disclosure of material facts and untrue statement contained in the proposal form petitioner repudiated the claim of the respondent and refunded the fund value of Rs. 56,521.55/- and intimated the said facts to the respondent No. 2 vide letter dated 30.11.2018.

5. Being aggrieved by the repudiation of the claim, respondent No. 2 filed a complaint on 9.7.2019 before the respondent No. 1. After receiving the summons petitioner company assigned the matter to the local counsel. The insurance company was under the impression that local counsel is attending the matter regularly and written arguments were filed by him. However, on receipt of the impugned order it was revealed that the local counsel did not appear in the said matter, therefore, complaint was decided ex parte.

6. A contract of insurance is one of utmost good faith. A proposer who seeks to obtain a policy of life insurance is duty bound to disclose all material facts bearing upon the issue as to whether the insurer would consider it appropriate to assume the risk which is proposed. It is with this principle in view that the proposal form requires a specific disclosure