Insurers have the right to repudiate life insurance policies for suppression of material facts, emphasizing the duty of utmost good faith in insurance contracts.

1. The appellant / nominee had been the son of Shri Ranjit Chandra Sonar since deceased who was favoured with grant of an insurance policy bearing No.466064616 for a sum of Rs.2,00,000 / dated 25.10.2005 by the respondent / corporation during his lifetime.

2. On the demise of the aforesaid policy holder, the claim of the appellant was rejected vide a letter dated 04.10.2006 precisely on the ground of suppression of material fact resulting in repudiation of the aforesaid policy.

3. The petitioner challenged the rejection of the claim in the Court of Learned Civil Judge (Junior Division) Additional Court Asansol in T.S. No.76/2009. The Learned Trial Judge opined in absence of evidence to justify prolonged disease suffered by the policy holder, the letter dated 04.10.2006 was illegal and the plaintiff / nominee was entitled to receive payment of policy money alongside bonuses and other benefits accrued on the said policy. Vide a communication dated 24.03.2007, the Senior Divisional Manager LIC Asansol Division affirmed the repudiation of the claim.

4. The respondent - corporation filed an appeal being Title Appeal No.15 of 2012 in the Court of the Civil Judge (Sr. Division Asansol) whereby the order in T.S. No.76/2009 was set aside considering the claimant to have suppressed facts regarding his health condition in the proposal form, which propelled the appellant / nominee to file the instant appeal.

5. The Learned Advocate representing the appellant submitted that the evidence of Dr. R.K Agarwal who deposed on behalf of the LIC being DW - 3, was conspicuous that the deceased was not suffering from any prolonged disease. Proper reasons were not provided in the impugned judgment for not accepting the medical opinion and deposition of the doctors. It was further submitted the Hon'ble Supreme Court had on numerous occasions held that the court was not the expert with respect to technical issues and medical science, and had to rely on people having scientific knowledge. Moreover, the father of the petitioner being a layman was not competent to understand the medical terminology of COPD and such an ailment was neither prolonged, nor was it material for disclosure and therefore the impugned judgement should be set aside, granting benefits in favour of the petitioner.

6. The Learned Advocate representing the appellant relied on the following decisions with its respective observations: -
a. Mahakali Sujatha v. The Branch Manager, Future Generali India Life Insurance Company Ltd. and Another 2024 SCC OnLine 525 : (AIROnLine 2024 SC 227):
"34. If a fact, although material, is one which the proposer did not and could not in the particular circumstances have been expected to know, or if its materiality would not have been apparent to a reasonable man, his failure to disclose it is not a breach of his duty."
Life Insurance Corporation of India v. Jyotsna Dawn , 2015 0 Supreme (Cal) 198 : AIROnLine 2015 CAL 90.
Fact of the case:
The Insurance Company repudiated the claim of the plaintiff / respondent on the plea that such policy was obtained by the husband / plaintiff / respondent by suppressing material facts regarding rheumatic fever which he suffered at the age of 8 years and subsequently again at the age of 15 years.
Held:
Is there any human being who does not suffer any ailment in his lifetime? Everybody has some or the other disease. But is it possible for anybody to specify the clinical name of the disease which he suffered from?