Shanta Bai alias Basanta Devi vs L.I.C. of India and Others

M. Katju, J.—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 Petitioner''s Insurance Claim amounting to Rs. 60,000 with 18% interest.

Heard learned Counsel for the parties.

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.

The Petitioner''s husband took an L.I.C. Policy in 1997, copy of which is Annexure-1 to the petition. In 1998 again the Petitioner''s husband took another policy from the L.I.C. known as BANDOBASTI BIMA. The Petitioner was a nominee for the policy vide Annexure-2 to the petition.

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. The Petitioner''s husband was above 45 years of age and hence he appeared for the medical test.

In para 10 of the petition it is alleged that after taking the above Insurance Policies, the Petitioner''s husband continuously deposited the premium from time to time. Unfortunately in September, 1998 the Petitioner''s husband died. The Petitioner being a nominee under the policies applied to the Respondent No. 4, Branch Manager L.I.C., District Branch Office Kamachha, District Varanasi for payment of the insurance amount. The Respondent demanded relevant documents which the Petitioner supplied vide Annexures-6 and 7 to the petition. Thereafter, payment of the 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, L.I.C. It is alleged that due to her illness the Petitioner could not approach Respondent No. 2 upto 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.

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 Petitioner''s 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 Petitioner''s husband was done by the Doctor and it was only after his full satisfaction that the Petitioner''s husband was granted the Insurance Policy. Hence, on the ground of alleged illness of the Petitioner the Respondent cannot withhold the payment.

A counter-affidavit has been filed by the L.I.C. and we have perused the same.

The Respondents has taken a preliminary objection that the Petitioner''s remedy is to file 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.

In para 4 of the counter-affidavit it is stated that the Petitioner''s claim is not genuine and bona fide and has rightly been repudiated by the corporation. In para 9 it is stated that when the Petitioner''s husband took the policy he submitted a proposal form, and in the said proposal form he gave a declaration that he does not suffer from any kind of ailment. The proposal was with a declaration that in case anything is found to be untrue then the policy will be repudiated. A true copy of the proposal form is Annexure-C.A. 1 to the counter-affidavit.

It is alleged that the Petitioner''s husband deliberately concealed the material facts about his ailment from the medical examiner as well as gave untrue facts in his personal statement. A true copy of the report of the medical examiner is Annexure-C.A. 2 to the counter-affidavit.

In para 17 it is stated that the insured died within two months from the date of taking of the policy and hence by virtue of Section 45 of the Insurance Act, it was incumbent upon the Respondents to conduct an investigation. On investigation it was revealed that the deceased was hospitalised from 18.5.1998 to 3.6.1998 and was under constant medical supervision. This information was given by the North-Eastern Railway Hospital, Allahabad. The insured never disclosed about the fact of being hospitalised in the proposal form. He also did not disclose that he had taken one policy earlier from a different branch. A true copy of the policy bond issued on 18.8.1998 is Annexure-C.A. 3 to the counter-affidavit. It is alleged that fraud vitiates everything and hence the Petitioner has no right to get any payment and a policy based upon misrepresentation is liable to be repudiated.

A rejoinder-affidavit has also been filed and we have perused the same.

In para 8 it is stated that the Petitioner''s husband was not suffering from any serious ailment as is obvious from the death certificate. A true copy of the death certificate is Annexure-R.A. 1.

A perusal of the impugned order dated 25.11.2000 (Annexure-10 to the petition) shows that the Petitioner''s husband was hospitalised from 18.5.1998 to 3.6.1998 in the North-Eastern Railway Hospital, Allahabad. In the policy form when a specific query was made whether during the preceding 5 years the applicant suffered from an illness due to which he had to get treatment for more than one week, he replied in the negative to this query. He also replied in the negative to the query whether he had to be hospitalised and that he was absent from work due to illness. The Petitioner''s husband gave false answer to this specific query also and hence, it is evident that he obtained the policy by misrepresentation. We are thus satisfied that L.I.C. was perfectly justified in rejecting the Petitioner''s claim as, in our opinion, her husband had obtained the policy by stating false facts and concealing facts.

It is settled that fraud vitiates everything vide Dr. Raghvendra Pratap Singh v. Director of Higher Education, U.P. Allahabad and others 2003 (52) ALR 185 and S. Pratap Singh Vs. The State of Punjab, , etc.

Since the Petitioner''s husband played fraud on the L.I.C. by concealing material facts, we are not inclined to exercise our discretion under Article 226 of the Constitution in this case. Petition is dismissed.