IMPORTANT POINT
The judgment established the importance of materiality, fraudulent intent, and knowledge of the policy-holder in cases of misstatement or suppression of facts in relation to insurance claims.

ORDER :

1. Heard Mr.Ramesh Bura, learned counsel appearing on behalf of the Petitioner and Mr. Srinivas Karra, learned counsel appearing on behalf of the respondents.

2. PRAYER:

Petitioner approached the Court seeking prayer as under:

“To issue Writ order or direction more in the nature of Mandamus declaring the impugned Ref: 4334212/OPS/22-23/CL/R/93941 Dated:04/07/2022 issued by Respondents, repudiating the insurance death claim, under the Policy No. 1G401794406 on the life of Late Cheemala Ramaswamy under plan UIN: 111N089V03, on the ground of ‘suppression of material fact’ is illegal, arbitrary and violation of Articles 14 and 21 of Constitution of India and consequently set aside the impugned Ref: 4334212/OPS/22-23/CL/R/93941 Dated: 04.07.2022 issued by Respondents and direct the Respondents to release the insurance claim to the petitioner with simple interest at the rate of 18 percent per annum in the interest of justice.”

3. PERUSED THE RECORD:

The order impugned dated 04.07.2022 issued by the Respondents vide Ref. 4334212/OPS/22-23/CL/R/ 93941, reads as under:

“This is with reference to your claim under the policy no. 1G401794406 on the life of Late Cheemala Ramaswamy. We are sad to note the unfortunate demise of Late Cheemala Ramaswamy.

On scrutiny of claim documents, we have noted that in the proposal for insurance dated 19.10.2019, Late Cheemala Ramaswamy had answered the questions in the proposal form as follows:

But Late Cheemala Ramaswamy had not disclosed details of Policy availed from Exide Life Insurance Company in 2018.

Life insurance contract is a contract of utmost good faith. This policy was issued on the basis of the information disclosed in the proposal form believing the information to be true. However, we have sufficient evidence to prove that Late Cheemala Ramaswamy had not disclosed details of other Life insurance policy held by him at the time of submission of the proposal form.

As these material facts were not disclosed in the proposal form, the claim is hereby repudiated on the grounds of suppression of material facts.

Please note that an amount of Rs. 54720/- (Fifty Four Thousand Seven Hundred Twenty Only) has been transferred to your saving account no. ***4063 held in State Bank of India, NRI Branch Khammam branch, on 29/06/2022, as per terms and conditions of the policy.

In case, you are not satisfied with the above decision and feel that we have not considered any particular facts and circumstances in support of your claim, you may send your representation for re-consideration of your claim to our Claims Review Committee, situated at the following address:

Head Claims, SBI Life Insurance Co. Ltd. 8th Level, Seawoods Grand Central, Tower 2, Plot No. R-1, Sector-40, Seawoods, Nerul Node, Navi Mumbai-400706.

The decision taken by the Committee would be communicated to you.

Thanking You,

Yours sincerely,

AVP: Claims, SBI Life Insurance Company Ltd.

Ph: 022-66456509, Claims@sbilife.co.in

This is a system generated letter and does not require any signature.”

4. Counter affidavit filed by the Respondents, in particular, Paras 4 to 10 read as under:

“4. It is submitted that the Deceased Life Assured, Mr. Cheemala Ramaswamy (hereinafter referred to as the “DLA”) had applied for SBI Life-E Shield-Level Term vide proposal bearing No. 1GPZ073593 dated 19/10/2019. A copy of the proposal form is appended as ANNEXURE-A. That in reply to the question in the proposal form,