AI Structured Summary
Not yet generated for this judgment
Judgment
Ramamurti, J.—The plaintiff, Kalyani Achi alias. Thenammai Achi, has filed the present to recover a sum of one lakh of rupees claiming the
same under an Insurance Policy bearing No. 11370591 dated 20th October, 1958 issued by the defendant, the Life Insurance Corporation of
India (hereinafter referred to as the L. I. C.) in favour of S.M. Valliappa Chetti the husband of the (plaintiff) in pursuance of a proposal made by
Valliappa on 9th June, 1958. This policy was accepted by L. I. C. on 26th August, 1958 and the first half yearly premium was paid on 8th
September, 1958. Valliappa died of pneumonia and secondary heart failure at his native place, Rayavaram, on 15th March, 1960. On the next
day, 16th March, 1960 the plaintiff informed the L. I. C. of the death of her husband with a request that the necessary claim papers concerning the
policy aforesaid may be seat to her. While the plaintiff''s claim was pending investigation with the defendant, the latter obtained information that the
deceased, Vallipappa was suffering from various ailments which had been fraudulently suppressed by him at the time when the policy was taken
and after investigation the defendant sent a letter to the plaintiff on 26th April, 1961 in which the plaintiff''s claim was repudiated on the ground that
Valliappa was extremely weak, was of indifferent health for many years prior to his death, that he had been suffering from sprue, anaemia,
diarrhoea, extreme weakness, T. B. etc., that he had been taking treatment therefrom various doctors, ayurvedic and allopathic, in his place, as
well as in various other places, and that the policy was vitiated by fraud and suppression of material and vital facts, with the result that the contract
of insurance became null and void. On 25th February, 1963 under Ex. P-4, the plaintiff reiterated her claim by the issue of a lawyer''s notice to the
L. I. C. which again met with a similar repudiation under Ex. P-5 dated 28th March, 1963 the reply seat by the Council for the L. I. C. though in
the meanwhile the plaintiff had filed the present action. Apart from other pleas in general, the main ground on which the policy was repudiated has
been put forward in para. 12 of the written statement containing reference to the various deceases referred to earlier from which Valliappa was
suffering and which however, it is claimed, had not been disclosed to the L. I. C. but fraudulently suppressed at the time when the policy was
taken. In a recent Bench decision of this Court (to which I was a party) L. I. C. of India v. Parvathavarthini Ammal (1964) 2 M. L. J. 212=77
L.W. 363 the significance of the amendment of S. 45 of the Insurance Act is 1941 had been pointed out. There it has been held, following the
judgment of the Supreme Court in Mithoolal Nayak Vs. Life Insurance Corporation of India, that if the policy is repudiated more than two years
after the date when the policy took effect, the burden of proof is upon the insurer and the following three conditions must be satisfied : (i) The
statement of the assured must be on a material matter or must suppress facts which it was material to disclose; (ii) the suppression must be
fraudulently made by the policy holder; (iii) the policy holder must have known at the time of making the statement that it was false or that it
suppressed facts which it was material to disclose. In the instant case the policy was repudiated more than two years after it took effect, and there
can be no doubt about it that the burden is upon the defendant to make out circumstances which would render the policy null and void under S. 45
of the Insurance Act, and it will avail the defendant nothing if it merely establishes some inaccuracy or falsity in respect of some recitals or items in
the proposal for insurance. It is imperative upon the defendant to satisfactorily establish that vital and material facts and information have been
suppressed and that there has been a fraudulent misrepresentation of material facts to the knowledge of the insured. Valliappa Chettiar (hereinafter
referred to as the assured) bad taken two policies in the Oriental Life insurance Co., one in 1950 for a sum of Rs. 30,000 and another in 1954 for
one lakh of rupees. He made the proposal in res respect of the policy in dispute en 9th June 1958 under Ex. D. 11, and the purpose of the policy,
as stated in the proposal, was for providing the estate duty that may be payable on his estate at the time of his death. As the policy amount was a
large sum of one lakh of rupees, the assured was examined by three doctors, on behalf of the Insurance Company, one Abraham Paul, examined
as D.W. 1, on commission, one Dr. N. C. Subramaniam examined as D.W. 2 on commission and one Dr. Cherian, not examined. Ex. D. 1 is the
confidential report of Dr. Abraham Paul dated 18th June 1958 enclosing the personal statement of the assured. Ex. D. 2 is the confidential medical
report dated 15th July 1958 of Dr. N. C. Sabramaniam along with the personal statement of the assured. Ex. D. 10 is the confidential report of Dr.
Cherian dated 19th June 1958 along with the assured''s personal statement. These doctors who examined the assured at the time of the proposal
on behalf of the L. I. C. are all doctors of repute, experience and large standing and except for a very small difference of minor details their reports
were uniform and all the three doctors certified the life as a ""first class life"". So far as the three personal statements of the assured are concerned,
the details and the information furnished by him therein are all sane except that in the personal statements given to Dr. Abraham Paul and
Subramaniam in Collum 11, with reference to the question ""State the name and address of your usual Medical attendant"", the assured had given the
Answer, Nil, while in the personal statement given to Dr. Cherian, with reference to that column the assured has mentioned the name of Dr.
Satagopa Naidu, Pudukottai, who has been examined as D.W. 3 on commission. I may extract here the relevant portions of the personal statement
given by the assured to Dr. Cherian :
3 (a) Has any of your relations, living, or dead, suffered from insanity, epilepsy, gout, asthma., tuberculosis, cancer, leprosy, diabetes, haemophilia,
or any other hereditary disease? If so give details. ... No
(b) Have you lived during the last three years with any person suffering from tuberculosis, leprosy, or any other infectious diseases ? If so, give
details.... No
4 (a) What has been your usual state of health.... Good
(b) Have you any bodily defect or deformity ? If so give details.... No
(c) Is your weight stationary, increasing or decreasing ?... Stationary
(d) Have you consulted a medical practitioner within the last five years ? If so, give details... No
5 (a) Have you had small pox ? If so, when.... No
(b) Have you been vaccinated successfully against small pox ? If so, when were you last vaccinated?... Yes 1956.
Have you ever suffered from any of the following ailments ?
(a) Giddiness, fits, neurasthenia, neuralgia paralysis, insanity, nervous breakdown or any other disease of the brain or the nervous system?...No
(b) Persistent cough, asthma, pneumonia, pleurisy, spitting of blood, tuberculosis or any other affection of lungs? No
(c) Fainting attacks, pains, in chest, breathlessness, palpitation or any disease of the heart. No
(d) Sprue, jaundice, anaemia, piles, dysentery, cholera, abdominal pain, appendicitis is or any disease of the stomach, liver, spleen or intestines?
No
(e) Any skin eruption? No
(f) Hernia, hydrocele, varicocele, fistula or varicose veins? No
(g) Any affection of kidney, or bladder, dropsy, rheumatism, gout, gonorrhoea, syphilis or any other venereal disease? No
(h) Cancer or leprosy? No
(i) Any disease of the ear, nose, threat or eyes including defective sight or hearing ? No
In case of discharge from the ear, state when it was last noticed ?
(j) Malaria, typhoid, influenza, kala hazard filariasis or any other fever lasting for a week? No
(k) Any other illness within last five years requiring treatment for more than a week. No
10 (a) Have you ever had an electrocardiogram, X-Ray or fluoroscopic examination made, or your blood examined ? If so give details No
(b) Have you ever been in any hospital, asylum or sanatorium for check up, observation, treatment or any operation ? If so, give details. No
State name and address of your usual medical attendant..... Dr. Satagopa Naidu.
This is followed up by the usual declaration by the proposer that he had not withheld any information, and that his personal statement together with
the proposal for insurance constitutes the basis of the contract of insurance.
In support of their defence, the defendant relied upon the evidence of Dr. Satagopa Naidu, of Pndukottai, examined as D.W. 3, Dr. Balasubbu
of Rayavaram, a place about 12 miles from Pudukottai examined as D.W. 4 and Dr. Thiagarajan of Pudukottai, D. W. 5 and Mr. V. V.
Narasimhan, D.W. 6, the Investigating Officer of the defendant. The defend also placed considerable reliance upon the prescription, marked as
Ex. D-5 dated 21st January, 1957 alleged to have been given by Dr. Thiagarajan in which he had mentioned the disease as "" pulmonary
tuberculosis "" agonised by him when Dr. Thiagarajan examined the assured at Pudukoltai on 21st January, 1957. The defendant further relied upon
the entries in the diary Ex. D-6 of Balasubbu showing that Dr. Balasubbu has given streptomycin injections to the assured on 26, 28, 29, 30 and
31st January, 1957 and on 1, 2, 3, 4, 5, 6, 7th of February, 1957 and 19, 20, 22 and 23rd of June, 1957. The entries dated 7th February, 1957
and 23rd June, 1956 are relied upon to show that Valliappa had made a payment of Rs. 24 and Rs. 5 to Dr. Balasubbu in connection with his
treatment. Besides these, the defendant also relied upon Ex. D-18, the report of Mr. Narasimhan, the investigating officer, as to the information
that was gathered or secured by him in the initial stages of the investigation. The evidence of all the doctors, D. Ws. 1 to 5, was taken'' on
commission by the Commissioner, an advocate of this Court, and it is in the commission enquiry that all the documents of both sides were filed, in
particular the diary of Dr. Balasubbu, Ex. D-6, and Dr. Thiagarajan''s prescription, Ex. D-5. The plaintiff was examined in Court, as well D. W. 6
the investigating officer. Having regard to the stakes involved and the nature and the great importance of the evidence of Dr. Balasubbu and Dr.
Thiagarajan, I felt that these two important witnesses should be recalled to give evidence in Court on matters on which the Court wanted some
clarification. I also felt that their appearance before me in open Court is absolutely necessary to enable me to form the correct impression about
their evidence, with reference to their demeanour, etc., and accordingly after the evidence of D. W. 6 was finished, these two doctors were
examined again in open Court on 21st March, 1966. I put some questions to the two witnesses and this was followed by the Counsel for the
defendant and a further cross examination by the Counsel for the plaintiff. Needless to say that this has considerably enabled and helped me to
satisfactorily assess the truth of the rival versions of the parties. As Dr. Satagopa Naidu''s evidence was general in character to the effect that ho
was the family doctor and had treated Valliappa for over 20 years for certain diseases, and as he was very old and as it was represented to me
that he could not freely move about I did not desire that he should also be examined over again in open Court.
From the foregoing it will be seen that if the evidence of Dr. Thyagarajan taken along with his prescription Ex. D-4 and the evidence of Dr.
Balasubbu taken along with the entries made by him in his diary Ex. D-6 is accepted, it must be held that the defendant had discharged the heavy
burden of proof cast upon it under S. 45 of the Insurance Act and that the policy has to be declared as vitiated by misrepresentation, fraud and
suppression of material and vital facts and information to the knowledge of the assured.
On behalf of the plaintiff the attack is made that the prescription Ex. D-5 as well as the diary Ex. D-6 with the entries therein are all subsequent
fabrications brought into existence by the connivance of the two doctors, Dr. Balasubbu and Dr. Thiagarajan with a view to support the defendant.
In the case of Dr. Balasubbu the suggestion that is made in cross examination was that disappointed at a refusal for a financial accommodation
asked by D. W. 4 from Valliappa D. W. 4 was giving false evidence, and had also fabricated this diary in a sense of frustration or disappointment,
while the suggestion against Dr. Thiagarajan, D. W. 5 was that he has been recently made one of the medical examiners on behalf of the L. I. C.
and therefore the witness was giving false evidence and had also brought into existence Ex. D-5 the prescription. The charge of fabrication is a
very serious charge and cannot lightly be accepted. When the case was started on 15th February, 1966 and when I noticed that D. W. 4 has
produced only one diary, Ex. D-6 of the year 1957 it excited my suspicion and when I was told that this doctor, D. W. 4 has been in the practice
of maintaining such diaries making entries therein from day to day concerning his professional work, treatment of patients, visits, consultation by
patients, and professional fees received, I directed (at the time of the examination of the doctor in open Court) that D. W. 4 should produce his
diaries for other years. Accordingly all his diaries from 1954 to 1964 except for the year 1963 have been produced and filed into Court. Learned
Counsel for the plaintiff had inspection of all the diaries.
At this stage I may also refer to one important fact, i.e., Valliappa Chettiar was ailing from fever, pain over the right chest and cough for a period
of nine days prior to his death and it is Dr. Thiagarajan D. W. 5 who attended upon Valliappa Chettiar right upto the moment of his death. The
medical attendance terminal certificate, marked as Ex. D-9 dated 5th May, 1960 was naturally give by Dr. Thiagarajan. It is necessary to extract
hereunder the particulars contained in columns 5, 7, 8, 9, 10 and 12 of Ex. D-9:
5 (a) What was the Primary cause exact cause of death - Pneumonia. Besides defining the disease or other cause of death in such terms as you
consider appropriate, kindly add the distinctive technical name,.....(rt.) heart failure Secondary cause.
(b) Was it ascertained by examination after death or inferred from any symptoms and appearance during life? Inferred from signs and symptoms
during life.
(c) How long had he been suffering from this disease before his death ? 9 days
(d) What were the symptoms of illness ? Fever, pain over the rt. chest and cough.
(e) When were they first observed by the deceased? 6-3-1960.
(f) What was the date on which you were first consulted during the illness ? 6-3-1960.
(g) Did you attend him during the whole of its course... Yes
If not, during what period. Does not arise.
What other disease, or illness (i) preceded (ii) or co-existed with that which immediately caused his death ?
i. none to my knowledge.
ii. do.
Give history of such disease or illness stating
(a) date when such first observed Does not arise
(b) By whom treated ? do.
(c) By whom history reported to you do.
(a) Was the deceased treated during his last illness by any other Medical practitioner or in any hospital before you were consulted ? None to my
knowledge, (b) Did any other Medical practitioner attend on him in consultation with yourself? If so, please state their names and addresses.... Nil
9(a) Were you deceased''s usual medical attendant... No.
(b) If so, for how long?...Does not arise.
(c) If not, please state, name and address of his usual medical attendant ?... No usual medical attendant.
When and for what ailments did you treat the deceased during the three years preceding his last illness ?... Nil.
I have not treated him before at any time for any illness.
Have you any other information or remarks to make in connection with this claim concerning deceased''s ailments, habits, mode of living etc....
Nil
It is significant to mention that even though Dr. Thiagarajan (as now claimed by him) was consulted by Valliappa for suspected T.B., that the
doctor diagnosed the disease as pulmonary T.B. and also gave the prescription Ex. D. 5 mentioning in particular at the top ""Disease-Pulmonary
T.B."" no reference whatsoever was made by D. W. 5 to this fact, in the terminal illness certificate Ex. D. 9. Naturally considerable reliance was
placed by the plaintiff upon this negative aspect of the matter as bearing upon the proper assessment of the evidence of Dr. Thiagarajan and the
genuineness of Ex. D. 5, the prescription given by him.
Before I discuss the oral evidence and consider the question as to how far Ex. D. 5, the prescription, and Ex. D. 6 the entries in the diary should
be relied upon, it is necessary to mention at the outset the difficulties that I experienced in assessing the oral evidence, and the anxious
consideration which I brought to bear upon the truth of the rival contentions of the parties. I am free to confess the question for decision, though
one of fact, is by no means easy of solution. I noticed that the evidence given by Dr. Balasubbu and Dr. Thiagarajan (I am putting out of account
the evidence of the investigating officer, D. W. 6, being the party''s own evidence) was unsatisfactory and the answers given by them on several
portions were false and false to their knowledge and that they have not come out with the truth completely and there has been no frank disclosure.
(After discussing in detail, the evidence on this aspect of the case, His Lordship proceeded to hold as follows :)
X X X X
I am adverting to all these aspects at the threshold only to indicate the difficult problems which this case poses, particularly when the decision of the
case rests upon the oral evidence of D. W. 4, Dr. Balasubbu, and D. W. 5 Dr. Thiagarajan. I decided that so far as their oral evidence was
concerned I would accept only that portion of their evidence, only if it was corroborated either by documents or other clinching features of the
case.
X X X X X
For all these reasons, I reject the evidence of D. W. 5 and the prescription Ex. D-5.
It only remains for me to consider the evidence of Dr. Sadagopan who was examined as D. W. 3.
X X X X X X X
From a reading of the evidence of Dr. Sadagopan as a whole, I am unable to hold that this evidence discharges the burden which lies upon the
defendant. If Dr. Sadagopan is such a willing and obliging witness, by passing that letter Ex. D-4 in those terms, he would be equally willing to
mention all the ailments in his evidence. His evidence, as observed earlier, shows that he is really in possession of records of his professional work,
and he is withholding the same for the reason that if produced, they would show that he never treated Valliappa for any of these ailments. That
would also disprove that he gave any injections to Valliappa. For all these reasons, this evidence too has to be rejected.
While dealing with the scope of S. 45 of the Insurance Act and the heavy burden that is cast upon the Insurance company, learned Counsel for
the plaintiff drew my attention to the following decisions : L. I. C. of India v. Parvathavardhini Ammal (1964) 2 M. L. J. 212=77 L.W. 363, New
India Assurance Co. Sulochana A. I. R. 1962 Assam 65, New India Assurance Co. v. T. S. Raghavachari A. I. R. 1961 A. P. 295, and Lakshmi
Insurance Co. Ltd. Vs. Bibi Padma Wati, First of all there must be satisfactory proof that the assured was suffering from the ailments which means
there must be proof of a proper diagnosis which is totally absent in this case. There must also be further proof that the doctor had communicated to
the assured that he was suffering from particular diseases or the assured himself knew that he was suffering from those ailments. It is only if such
knowledge is made out that the question of a failure to disclose at all would arise. So far as Dr. Sadagopan is concerned, there is no proof that he
told Valliappa what his ailments were. In fact Dr. Sadagopan had stated that the other ailments like anaemia, diarrhoea, etc., all formed part and
parcel of one disease, sprue; not that there was diagnosis and treatment as separate ailment. So far as tuberculosis is concerned it rests only upon
the evidence of D. W. 4, who is claimed to have told Valliappa that he was suspected of tuberculosis. I am not prepared to accept the evidence of
D. W. 4. It is unnecessary to refer to all the cases in detail as the principles are well established and it is only a question of the application of the
same to the facts of the particular case.
I may also say that I was not impressed with the evidence of the plaintiff either and in very many portions her evidence is false. She stated that
during her husband''s lifetime she had never been to Pudukottah. She stated that she does not even know Ramachandrapuram, a place two miles
from her place. These are all obvious lies. Her answers regarding the execution of the will by her husband and why she is not able to produce it
were very unsatisfactory. First she evaded cross examination; but later on she had to admit execution of the will and that in litigation in Pudukottai
Court the will had been filed. Her evidence that she does not known Dr. Balasubbu of Rayavaram cannot be believed. Equally her evidence that
when there were some ailments she never went to any doctor and she herself prepared kashayam and kaimarunthu are all false. These answers
have been given to make out that none of the members of her family including her husband, the late Valliappa, had any occasion to go to a doctor.
It is unnecessary to burden this judgment by further reference to the answers given by her in cross-examination as they are all of the same pattern.
Further this case has got to be disposed off on the assessment of the evidence of the defendant in the matter of discharge of the burden under S.
45 of the Insurance Act.
Some argument was advanced by learned Counsel for the defendant that this policy had been taken for securing the payment of Estate duty,
and that the plaintiff is not entitled to recover the money and that if at all it is only the Estate duty department that can claim the payment of the
money. I am neither able to follow nor accept this argument. Once the insurance company had repudiated and consequent upon this when the
estate duty department pursued the plaintiff for the payment of the estate duty, the very foundation of the contract is completely altered and the
plaintiff is entitled to recover the money from the defendant based upon the repudiation. Suppose, for instance, in this case if distress and coercive
proceeding had been taken by the Estate Duty department and the entire estate duty has been paid the defendant cannot resist the payment of the
policy amount of the plaintiff. The estate duty department cannot recover anything for the simple reason the estate duty had been paid completely.
It is meaningless to say that in such a situation the plaintiff too cannot recover even if it is established that the policy is not vitiated by any fraud or
misrepresentation. In this case, it is represented by learned Counsel for plaintiff that a sum of Rs. 45,000 has already been paid towards estate
duty levied Rs. 7500 by the plaintiff, and that there is only a balance of about Rs. 30,000 and that there is also an appeal preferred by the plaintiff
against the assessment. In my opinion this aspect does not affect the rights of parties, and it is only a question of moulding the relief in an
appropriate manner.
There will be a decree against the defendant for the entire amount claimed in the plaint. The plaintiff will obtain a voucher or an authenticated
communication from the Estate Duty department, as regards the actual balance new due as per the assessment without reference to the pending
appeal. The amount mentioned in that communication shall be paid by the defendant to the Estate Duty department. The plaintiff will be entitled to
recover the balance from the defendant either by execution or otherwise. Or if the plaintiff obtains a full quittance from the Estate Duty department,
the plaintiff will be entitled to recover the entire amount as decreed. Subject to the above directions, there will be a decree in favour of the plaintiff
as prayed for with full costs. At the time of the opening of the case I desired some clarification about the instructions issued to the local agent in the
matter of effecting of policies and about the precautions taken by the L. I. C. when policies are taken for heavy amounts, and at my request, Mr.
K.S. Ramamurti, Senior Divisional Manager L.I.C., Madras, came to Court and explained the situation. I am thankful to him for his elucidation of
the matter. I fix Counsel''s fees for senior and junior at Rs. 3500.