Punjab-Haryana High Court
Life Insurance Corporation Of India vs Smt.Bimla Devi on 4 January, 2012
Author: G.S.Sandhawalia
Bench: G.S.Sandhawalia
RSA No.2220 of 1989 1
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
RSA No.2220 of 1989
Date of decision: 4.1.2012
Life Insurance Corporation of India ...Appellant
Versus
Smt.Bimla Devi ...Respondent
CORAM: HON'BLE MR. JUSTICE G.S.SANDHAWALIA
1. Whether Reporters of local papers may be allowed to see the judgment?
2. Whether to be referred to the Reporters or not?
3. Whether the judgment should be reported in the Digest?
Present: Mr.B.R.Mahajan, Advocate for the appellant,
Mr.Amit Kumar Garg, Advocate and
Mr.Amarjit Markan, Advocate,
for the respondent.
G.S.SANDHAWALIA J.(ORAL)
The present regular second appeal has been filed by the appellant-Life Insurance Corporation of India, aggrieved against the judgment of the Courts below dated 09.03.1989 & 07.09.1989 whereby the suit for recovery of Rs.62,640/- filed by the plaintiff-respondent on account of repudiation of the insurance policy due to the death of her husband. The appeal filed by the Corporation has been dismissed by the lower appellate Court on the ground that there was lack of resolution by the Corporation in filing of the appeal. The substantial question of law that arise for consideration before this Court is as under:
1. Whether specific resolution had to be passed for filing of the appeal by the Corporation and RSA No.2220 of 1989 2 whether the delegation of power under Section 49 (2) of the Life Insurance Corporation Act, 1956 and Regulation 41 of the Life Insurance Corporation Regulations, 1959 were sufficient for the Zonal Managers to file the appeal ?
2. Whether the finding recorded by the trial Court that the insured had with-held the material information at the time of filling up of the proposal for insurance was contrary to the evidence on record ?
3. Whether the pre-suit pendente lite and future interest could be awarded at the rate of 15% in view of the prohibition of the payment of interest under the insurance policy and in view of Section 34 of the Code of Civil Procedure?
The facts leading to the issues in dispute are that Shiv Kumar Sharma, the husband of the plaintiff- respondent had taken insurance policy with the defendant- appellant bearing No.76038269 dated 15.09.1984 for a sum of Rs.30,000/-. The said policy was taken through the agent of the appellant-Corporation who had promised that all benefits including accidental benefits arising out of or accruing in terms of the said policy would be given and since Late Shiv Kumar Sharma died on 08.05.1986 due to an accident and the defendant-respondent being the widow of the deceased and the nominee had lodged a claim for compensation under the said policy to make payment of Rs.60,000/- (Rs.30,000/- as insurance amount plus Rs.30,000/- as accidental benefit) under Clause 10(b) of the insurance policy. It was alleged that the deceased had died due to an accident in Medical College, Rohtak and the RSA No.2220 of 1989 3 death certificate, the medical certificate for the cause of death and the post-mortem reports were also enclosed. It was alleged that the appellant-Corporation had been requested several times to make the payments of compensation plus bonus amounts. The defendant- respondent was an unemployed housewife who was living three unmarried daughters and two minor sons. The appellant-Corporation, instead of making prompt payment of compensation, repudiated the claim on 31.03.1987. The ground sought in support of the repudiation of the policy was flimsy, false and frivolous and the repudiation was against the mandatory and statutory provisions of the insurance policy since no false information had been supplied by the insured and no material information had been suppressed. It was also alleged that the insured never suffered from any of the diseases as mentioned in Clause 18(e) of the proposal form and the insured never suffered from giddiness and vertigo and he never remained on leave on medical grounds and in fact if a mention was made, it was a ruse and device to avail of leave and the repudiation was without affording any opportunity of hearing and violated the principles of natural justice and the same was not permissible. In fact, it was alleged that giddiness and vertigo do not fall under Clause 18(e) of the proposal form. Accordingly, a claim was made to recover Rs.30,000/- as insurance amount plus Rs.30,000/- as RSA No.2220 of 1989 4 accidental benefits plus Rs.2,640/- as bonus amount along with interest at the rate of 18% per annum from the date of death of the insured till the date of the payment by the Corporation.
The suit was resisted by filing written statement that since the claim was an early claim, the same was put to investigation and after receipt of the investigation report, it was found that the deceased had died after falling from the roof and he had been an old patient of giddiness and vertigo prior to his taking the policy. The deceased was alleged to have taken leave from 02.05.1983 to 28.05.1983 from his office on medical grounds. The deceased had also willfully suppressed material fact from his proposal form and personal statements and declaration regarding his health, and therefore, the repudiation was valid in law. Clause 18(e) and 21 were reproduced to contend that giddiness and vertigo come under the ambit of the diseases mentioned in Clause 18(e) and the policy was void, and therefore, the repudiation was legal. The Corporation alleged that the insured had suffered from giddiness and vertigo which are diseases of brain and the nervous system and had the proposer disclosed the diseases of giddiness and vertigo and of availing leave on medical grounds, the insurance policy would not have been under written and accordingly it was held that the Corporation was not bound to make any payment under the policy as stated in the RSA No.2220 of 1989 5 earlier paragraphs.
The said allegations were denied by filing replication by the defendant-respondent and accordingly the trial Court framed the following two issues:
Issues
1. Whether the deceased Shiv Kumar had deliberately, willfully and maliciously suppressed material information qua columns 18(c) and 21 of the insurance proposal form? OPD.
2. If the above issue is answered in the negative, whether the impugned repudiation dt.31.03.1987 is liable to be set aside ? OPD
3. Relief.
The defendant-Bimla Devi appeared as PW1 whereas Sh.M.R.Kathuria was examined on behalf of the Corporation as DW1. After taking into consideration the pleadings and the evidence on record, the trial Court came to the conclusion that vertigo and giddiness were never mentioned in column No.18 or any other column of the proposal for insurance (Exhibit P2) and the said column mentioned all the diseases but there was no description of giddiness and vertigo and they could not be read by way of implication into column 18. Reliance was also made to the cross-examination of the witness, Sh.M.R.Kathuria as to on what basis he could say that vertigo and giddiness were connected with the diseases mentioned in Column 18(c), viz., paralysis, insanity, epilepsy, fits of any kind or nervous break-down or any other diseases of the brain or nervous RSA No.2220 of 1989 6 system. Accordingly, the trial Court held that in the absence of any medical expert, the statement of the witness on the basis of personal information was not acceptable. The trial Court also noticed that no show cause was issued to the defendant-respondent as to whether the insurance policy be repudiated and the letters (Exhibit D2 & D3) for leave moved by the deceased who was working as a Secretary of the Market Committee under the Haryana Agriculture Marketing Board were not proved as nobody was examined to show that either the said leave application was signed in their presence. The contents were also referred to and it was noticed that they were only applications for earned leave and no specific illness was mentioned and the SMO, General Hospital had recommended him fit to resume duty. Accordingly, the suit was decreed and the plaintiff was thus held entitled to a sum of Rs.60,640/- along with interest at the rate of 15% from the death of the deceased till the date of institution of the suit and the pendente lite interest and future interest at the same rate.
In the appeal filed by the Corporation through its Divisional Manager it was contended that the said judgment and decree was not maintainable and challenge was also made to the interest element at the rate of 15%. The lower appellate Court, however, dismissed the appeal on the ground that no specific resolution had been passed by the RSA No.2220 of 1989 7 Corporation to file the appeal, and therefore, the same was not maintainable. The lower appellate Court came to the conclusion that Regulation 41 only gave power to the Zonal Managers to institute and conduct or defend the suit and further delegate powers to other officers but in the absence of any resolution to file an appeal, no decision had been taken to file such an appeal, and therefore, dismissed the appeal placing reliance upon Municipal Committee Vs. Surinder Kumar 1970 Current Law Journal 631, Murti Shri Raghunath Ji Vs. Joginder Singh 1971 Current Law Journal 47, Garib Chand Vs. Municipal Committee 1979 PLR 527 and Municipal Committee Vs. Adhu Singh Volume 1986(2) PLR 1. Reliance was also placed upon Punjab Wakf Board Vs. Kishan Chand 1988 PLJ 102 and Punjab Wakf Board Vs. Darb Singh 1988 PLJ 240.
At the time notice of motion was issued, execution proceedings were stayed initially. However, at the time of admission on 08.04.1989, a draft in the sum of Rs.1,03,817/- was given to the widow of the deceased with the direction that it should be deposited in a Nationalised Bank in the shape of fixed deposit and the widow would only be entitled to appropriate interest accruing on the said amount to be paid by the bank authorities every month. The said bank draft is dated 03.11.1989. Counsel for the appellant has contended that the findings recorded by the lower appellate Court are not justified since no resolution RSA No.2220 of 1989 8 had to be passed in filing of appeals or suits since under Section 49 Sub-clause (2) of the Life Insurance Corporation Regulations, the powers and functions of the Corporation can be delegated to the Zonal Managers. It is further contended that the Corporation being a body corporate cannot resolve to take minor decisions like filing of appeals and the said powers have been delegated to the senior employees for effective running of the Corporation. The judgments referred to by the lower appellate Court have been sought to be distinguished by other judgments passed by this Court in the cases of body corporate and companies. Section 49(2)(a) is reproduced as under:
"49(2) In particular, and without prejudice to the generality of the foregoing power, such regulations may provide for-
(a) the powers and functions of the Corporation which may be delegated to the Zonal Managers."
In pursuance of the said Section under Regulation 41 of the Life Insurance Corporation
Regulations, 1959, five Zonal Managers of the Corporation at Bombay, Calcutta, Delhi, Kanpur and Madras were given the authority to institute, conduct, defend and represent the Corporation in all suits, appeals, applications and execution proceedings filed by or against the Corporation. It was further mentioned that the Zonal Managers may delegate any of the authorities aforesaid to any other officer of the respective zonal offices or divisional offices or branch office of the Corporation. In pursuance of the said power, RSA No.2220 of 1989 9 Sh.K.Padmanabhan, Zonal Manager, Northern Zone, delegated his powers to three officers at Karnal, viz., Sh.H.O.Sonig, Divisional Manager, Sh.Rajeswar Nath, Manager(Marketing) DM and Sh.V.S.Saxena, Manager (P & IR), Karnal to exercise the powers vested in him to institute, conduct and represent the Corporation in all suits and appeals on 29.06.1988. This was placed on record of the lower appellate Court also when the appeal was filed through Sh.V.S.Saxena and his signatures finds mention in the power of attorney and on the Court fees plus the application for stay supported by affidavit. The said relevant document is reproduced as under:
" LIFE INSURANCE CORPORATION OF INDIA, NORTHERN ZONE, NEW DELHI Delegation of powers under Regulation No.41 of the life Insurance Corporation Regulations, 1959 framed under Section 49 of the Life Insurance Corporation Act XXXI of 1956.
WHEREAS under Regulation 41 of the Life Insurance Corporation Regulations, 1959, made in pursuanceof Sub-Section (2) of Section 49 of the Life Insurance Corporation Act, XXXI of 1956, powers have been vested as under:-
"The Five Zonal Managers of the Corporation at its Zonal Officers at Bombay, Calcutta, Delhi, Kanpur and Madras may institute, conduct and defend and represent the Corporation in all suits, appeals, applications and execution proceedings by or against the Corporation or to which the Corporation may be a party in all courts of their respective zones and in the case of execution proceedings also in all Courts situate outside their respective Zones to RSA No.2220 of 1989 10 which decrees passed by the Courts in their respective Zones may have been sent for execution. And for the purposes aforesaid they may sign and execute all appearances and vakalatnamas for engagements of advocates, solicitors and others legal professional persons and sign and verify all pleadings, memoranda of appeals, cross-objections, applications for execution, petitions, Counter-petitions and all legal documents of whatsoever nature and make all affidavits for and on behalf of the Corporation and to accept service of Writs of summons and other processes of the Court. The Zonal Manager may delegate any of the authorities aforesaid to any other officer of the respective Zonal Offices or any Divisional Office or Branch Office of the Corporation in their respective Zones."
I, K.Padmanabhan, Zonal Manager, Northern Zone, Life Insurance Corporation of India, having my office at jeevan Bharati, 124, Connaught Circus, New Delhi-110001, in exercise of the powers vested in me under the aforesaid provisions hereby delegate to the following persons individually and each of them severally, viz. -
Sl.No. Name Designation Place
xx xxx xxxx xx
21.Shri H.O.Sonig Divisional Manager Karnal
22.Shri Rajeshwar Nath Manager (Mktg.) DM Karnal
23.ShriV.S.Saxena Manager(P&IR) Karnal xxxx xxxxx xxxxx the power to institute, conduct and defend and represent the Corporation in all suits, appeals, applications and execution petitions by or against the Corporation and for this purpose to sign and execute all appearances and vakalatnamas for engagement of advocates, solicitors and other RSA No.2220 of 1989 11 legal professional persons and sign and verify all pleadings, memoranda of appeal, cross- objections, applications for execution petitions, counter-petitions and all legal documents of whatsoever nature and make all affidavits for and on behalf of the Corporation in all suits, appeals and applications and execution proceedings by or against the Corporation or to which the Corporation may be a party in all Courts, tribunals or authorities and also to accept service of writs of summons and other processes of the Courts.
I, hereby ratify all the acts above referred to, if any, done by them hitherto and the said ratification shall have to effect as if such acts were done in pursuance of the powers delegated by me.
Dated at New Delhi this 29th day of June, 1988.
for LIFE INSURANCE CORPORATION OF INDIA Sd/-
(K.PADMANABHAN) ZONAL MANAGER NORTHERN ZONE, NEW DELHI Jeewan Bharati, 124, Connaught Circus NEW DELHI - 110001"
The lower appellate Court also took into consideration the judgment of Apex Court in Sukhdev Singh & others Vs. Bhagat Ram 1975 SC 1331 wherein the Hon'ble Supreme Court has noticed that the regulations framed by the statutory Corporation had the force of law. Once a specific resolution had been given in favour of the Zonal Manager to institute, conduct, defend and file appeals, as reproduced above, and the powers had been further delegated to the other officials and the Zonal RSA No.2220 of 1989 12 Manager of the Northern Zone as specified, to whom the said powers had been delegated, the lower appellate Court was not correct in coming to the conclusion that a separate resolution had to be passed to file the appeal. This Court in the case of Hindustan Petroleum Corporation Ltd. v. Sardar Chand, 1991 AIR (Punjab) 185 has distinguished the judgment in the case of Punjab Wakf Board v. Darb Singh Lrs, 1988 (1) PLJ 240 and has held that appellant being a registered company governed by its own rules and regulations provided in the Memorandum and Articles of Association which provided to institute, conduct and defend any legal proceedings and the powers could be delegated. Paragraphs 5, 6 & 7 of the judgment passed in the case of Hindustan Petroleum Corporation Ltd. case (supra) reads as under:
"5. Article 147 of the Memorandum and Articles of Association provides powers of Directors of the Board. Under Article 147(A) the powers of the Directors/Chairman and Managing Director can further be delegated. Article 148 of the subject of suits and it reads as under:-
Articles 148(7) - "To institute, conduct, defend, compound, or abandon any legal proceedings by or against the Company, and also to compound and allow time for payment or satisfaction of any debts due to, and of any claims or demands by or against the Company, and to refer any differences to arbitration and observe and perform any awards made thereon."
6. The Board of Directors, thus, was the authority under the Articles of Association, as RSA No.2220 of 1989 13 referred to above to take decision regarding institution or defending the suits. The power was delegated to Sh.Mohinder Kumar Bagai vide power of attorney Annexure A/2, now produced. Mr.M.K.Bagai was director Marketing. Under this attorney, Mr.Bagai was further authorised to delegate the aforesaid powers mentioned therein to officer in the Marketing Division. This action of giving authority to Mr.M.K.Bagai was rectified by the Board of Directors in its meeting held on September 30,1981 vide resolution A-8, copy Annexure A-1. Subsequently, Mr.Bagai delegated the power to Sh.J.Sethi, copy of which was produced alongwith memorandum of appeal filed in the lower appellate Court. Copy has been shown and produced in this Court as well. This attorney was executed on September 16, 1983. Under this authority, power was given to prosecute and defend suits under clause 5(1) and to appeal, from any judgment and order adverse to the Company under clause 5(iv). The matter of taking decision by the Board may differ from Company to Company. In the present case, reference has been made to the Articles and Memorandum of Association showing as to how such decisions were required to be taken by the Board or by the authorities delegated. Thus, it was not a case where the defendant-Corporation was required to pass resolution in every case where the suit was to be filed or an appeal was to be filed in the meeting of Board of Directors. Such authority was delegated by the Board to Mr.Bagai, who was also competent to further delegate it and he did so in favour of Mr.J.Sethi. The appeal having been filed by Mr.J.Sethi under such authority was, therefore, competent. This Court in Pepsu Road Transport Corporation, Patiala v. Kirat Mohinder Singh 1983 PLR RSA No.2220 of 1989 14 219 has held as under:-
"The resolution fully authorised the General Manager to act on behalf of the petitioner in all the cases filed or to be filed by or against it. The passing of any specific resolution is not contemplated under the Act in each and every case. Moreover, it will depend upon the constitution of a Corporation and the matter in which its functions are regulated by the State itself. There cannot be any universal rule that every Corporation must act through resolutions passed by it in each and every case."
7. The learned counsel for the respondents has referred to the decision of this Court in Punjah Wakf Board through its Secretary, Ambala Cantt. v. Darb Singh (deceased) through his L.R.s, 1988(1) CLJ 640 a case under the Wakf Act; wherein it was held that the Wakf Board was to take a decision for filing appeals. The Secretary of the Wakf Board of its own could not take such a decision and file the appeal. The ratio of this decision cannot be applied to the case in hand. That was not a case relating to a Company registered under the Companies Act. The present Corporation is a registered Company and is governed by its own rules and regulations provided in the Memorandum and Articles of Association, which have been discussed above." A reference was also made to the judgment of this Court in Pepsu Road Transport Corporation, Patiala v. Kirat Mohinder Singh 1983 PLR 219, wherein a direction was given to the lower appellate Court who had dismissed the appeal on similar grounds to re-decide the issue. The Court has also observed that there cannot be any universal rule that every Corporation must act through RSA No.2220 of 1989 15 resolutions passed by it, in each and every case which may be filed against it in the Court of law. The relevant observations in the said judgment are reproduced below:
"5. Under Section 2(b) of the Act, Corporation means a Road Transport Corporation established under section 3 thereof. Section 3 provides that the State Government, having regard to, -
(a)the advantage offered to the public, trade and industry by the development of road transport;
(b)the desirability of co-ordinating any form of road transport with any other form of transport;
(c)the desirability of extending and improving the facilities for road transport in any area and of providing an efficient and economical system of road transport service therein;
may, by notification in the official Gazette, establish a Road Transport Corporation for the whole or any part of the State under name as may be specified in the notification. Section 4 provides that every Corporation shall be a body corporate by the name notified under section 3 having perpetual succession and a common seal, and shall by the said name sue and be sued.
Section 5 provides for the constitution of a Road Transport Corporation which shall consist of the chairman and the member. Section II inter alia provides that a Corporation shall meet at such times and places and shall, subject to the provisions of Sub-sections (2) and (3), observe such rules of procedure in regard to transaction of business at its meetings as may be provided by regulations made under this Act; provided that the Corporation shall meet at least once in every three months.
Section 12 reads,-
RSA No.2220 of 1989 16
"A corporation may, from time to time, by resolution passed at a meeting -
(a)appoint committees of its members for performing such functions as may be specified in the resolution;
(b)delegate to any such committee or to the Chairman or Vice-Chairman, subject to such conditions and limitations, if any, as may be specified in the resolution, such of its powers and duties as it may think fit;
(c)authorise the Chief Executive Officer or General Manager or any other officer of the Corporation subject to such conditions and limitations, if any, as may be specified in the resolution to exercise such powers and perform such duties as it may be deem necessary for the efficient day to day administration of its business."
Thus, it is clear that under section 12, a Corporation may authorise its General manager or any other officer to exercise such powers and to perform such duties as it may deem necessary for the efficient day-to-day administration of its business. Thus, by virtue of these powers, the petitioner has authorised its General Manager to engage counsel, representatives, to act appear and plead in suits appeals etc. and to defend the cases filed by or against it in any Court. It could not be successfully argued that the petitioner is expected to take a decision for each and every case which may be filed against it in a Court of Law. The resolution dated March 22, 1976, a copy of which was produced on the file before the lower appellate Court, as well as the resolution dated 14.5.1981 fully authorised the General Manager to act on behalf of the petitioner in all the cases filed or to be filed by or against it. The passing of any specific resolution RSA No.2220 of 1989 17 is not contemplated under the Act in each and every case. Therefore, the cases cited by the learned counsel for the respondent are not at all applicable to the present case. As regards the constitution of the petitioner, it was constituted under the Act. Section 12 thereof clearly provides inter alia that it may authorise any or its officers to perform its duties, as provided therein. In this view of the matter, the order of the lower appellate Court is liable to be set aside."
In the present case also, the Corporation which was set up by the Central Government by notification and is a body corporate has various functions under Section 6 right from the acquisition and disposal of the property, for carrying on business and conduct and exercise the powers vested in the Corporation. By virtue of Section 22, the superintendence and directions of the Zonal Officers can be entrusted to the Zonal Managers and Section 22 is reproduced as under:
"22.Zonal Managers. -
(1)the Corporation may entrust the superintendence and direction of the affairs and business of a zonal office to a person, whether a member or not, who shall be known as the Zonal Manager and the Zonal Manager shall perform all such functions of the Corporation as may be delegated to him with respect to the area within the jurisdiction of the zonal office.
(2)The Corporation may constitute for each zone a Board consisting of such number of persons as it thinks fit to appoint thereto for the purpose of advising the Zonal Manager in RSA No.2220 of 1989 18 respect of such matters as are referred to it under the regulations made by the Corporation.
(3)The Corporation shall constitute in the prescribed manner for each zonal ofice an Employees and Agents Relations committee consisting of such number of persons as it thinks fit and every such Committee shall consist of representatives of the Corporation and of its employees and agents, so however, that the number of representatives of the employees and agents on the Committee shall not be les than the number of representatives of the Corporation and it shall be the duty of the Committee to advice the Zonal Manager on matters which relate to the welfare of the employees and agents of the Corporation or which are likely to promote and secure amity and good relations between them and the Corporation."
Therefore, following the proposition of law laid down in Hindustan Petroleum Corporation Ltd. case (supra) and Pepsu Road Transport Corporation case (supra) and also in the cases of Morinda Co-operative Sugar Mills Limited v. Khem Chand 1989 (2) PLR 665 and Amritsar Improvement Trust, Amritsar v. Pritam Singh 1984 PLJ 211 it is held that there was no need to pass a specific resolution for filing an appeal before the Lower Appellate Court, and the Divisional Manager having been delegated the authority by the duly authorised Zonal Manager could file the appeal on his own behalf. Hon'ble Supreme Court has also observed in United Bank of India RSA No.2220 of 1989 19 v. Naresh Kumar & others AIR 1997 SC 3 as under:
"In cases like the present where suits are instituted or defended on behalf of a public corporation, public interest should not be permitted to be defeated on a mere technicality. Procedural defects which do not go to the root of the matter should not be permitted to defeat a just cause. There is sufficient power in the Courts, under the Code of Civil Procedure, to ensure that injustice is not done to any party who has a just case. As far as possible a substantive right should not be allowed to be defeated on account of a procedural irregularity which is curable.
It cannot be disputed that a company like the appellant can sue and be sued in its own name. Under Order 6 Rule 14 of the Code of Civil Procedure a pleading is required to be signed by the party and its pleader, if any. As a company is a juristic entity it is obvious that some person has to sign the pleadings on behalf of the company. Order 29 Rule 1 of the Code of Civil Procedure, therefore, provides that in a suit by against a corporation the Secretary or any Director or other Principal officer of the corporation who is able to depose to the facts of the case might sign and verify on behalf of the company. Reading Order 6 Rule 14 together with Order 29 Rule 1 of the Code of Civil Procedure it would appear that even in the absence of any formal letter of authority or power of attorney having been executed a person referred to in Rule 1 of Order 29 can, by virtue of the office which he holds, sign and verify the pleadings on behalf of the corporation. In addition thereto and de hors Order 29 Rule 1 of the Code of Civil Procedure, as a company is a juristic entity, it RSA No.2220 of 1989 20 can duly authorise any person to sign the plaint or the written statement on its behalf and this would be regarded as sufficient compliance with the provisions of Order 6 Rule 14 of the Code of Civil Procedure. A person may be expressly authorised to sign the pleadings on behalf of the company, for example by the Board of Directors passing a resolution to that effect or by a power of attorney being executed in favour of any individual. In absence thereof and in cases where pleadings have been signed by one of it's officers a Corporation can ratify the said action of it's officer in signing the pleadings. Such ratification can be express or implied. The Court can, on the basis of the evidence on record, and after taking all the circumstances of the case, specially with regard to the conduct of the trial, come to the conclusion that the corporation had ratified the act of signing of the pleading by it's officer."
The counsel for the defendant-respondent has also not contested this proposition of law but however prayed that instead of the matter being remanded to the lower appellate Court for fresh decision since the matter pertains to the payment of monetary benefit to a widow, the same should be decided by this Court since more than two decades have passed and the said widow has been deprived of the benefits of the insurance policy. Accordingly, the subsequent two questions are thus being answered instead of remanding the matter to the lower appellate Court.
In the present case, it may be noticed that the deceased was serving as a Secretary in the Haryana Agricultural and Marketting Board and died due to an accidental fall in the Medical College premises, Rohtak. This would be clear from the fact that the post-mortem RSA No.2220 of 1989 21 report (Exhibit P4) goes on to show that he is alleged to have died from a fall in the stairs and the cause of death is mentioned as coma and neurogenic shock. The claim of the defendant-respondent was repudiated on the ground that the deceased had with-held material information in the proposal form for insurance dated 14.09.1984. A perusal of the repudiation letter shows that the Insurance Company has taken a specific stand that the deceased was suffering from giddiness and vertigo for the last 14 years and they had undisputed proof of the same, and therefore, there was a deliberate mis-statement and with-holding of material information. The same reads as under:
"RE: Policy No.76038269 on the life of Sh.S.K.Sharma (decd.) With reference to your claim under the above policy on the life of your deceased husband we have to inform you that we have decided to repudiate all liability under the policy on account of the deceased having withheld material information regarding his health at the time of effecting the assurance with us.
In this connection we have to inform you that in the proposal for Assurancedt.14/9/84 he had answered the following questions as under
noted:
QUESTIONS ANSWERS 18(e)Have you ever suffered from or are you suffering from paralysis, insanity, epilepsy, fits of any kind or nervous No breakdown or any other disease of the brain or the nervous system?
21.Have you remained absent from place of your work on ground of health during No the last 5 years?
We may, however, state that all these answers were false as we hold indisputable proof to show that before he proposed for the above RSA No.2220 of 1989 22 policy he was suffering from giddiness and vertigo for the last 14 years and was on leave on medical grounds from 2/5/83 to 28/5/83. He did not however disclose these facts in his proposal form. Instead he gave false answers therein as stated above.
It is, therefore evident that he had made deliberate mis-statement and withheld material information from us regarding his health at the time of effecting the assurance and hence in terms of the policy Contract and the Declarations contained in the forms of proposal for Assurance, we hereby repudiate the claims and accordingly we are not liable for any payment under the above policy and all moneys that have been paid in consequence thereof to us.
For your information we are enclosing herewith a copy of the proposal form referred to above Yours faithfully ENCL : Copy of proposal form Sd/-
MARKETING MANAGER"
It was in pursuance of such a stand that the plaintiff-respondent had specifically pleaded that her husband was not suffering from such diseases and his death was accidental in nature. The Insurance Company has not placed anything on record to rebut this fact or to prove its case that the deceased was suffering from such a disease which could have amounted to deliberate and willful suppression of the material information mentioned in the column 18(e) and Column 21. The onus of proving the same was upon the Insurance Company but apart from examining one Mr.M.R.Kathuria, they failed to bring on record any medical evidence in the form of any document that the deceased was suffering from any disease which would make him ineligible to apply for the insurance or RSA No.2220 of 1989 23 that there was any suppression of the material information. As noticed above, the death of the deceased was un-natural and due to a fall due to which he suffered head injury which would be clear from the medical certificate of the cause of the death (Exhibit P4) issued by the hospital in which also it is specified that the injury is accidental. Even in the claim made before the Corporation, the cause of death was falling from the roof and the place was Medical College, Rohtak and in the certificate of the employer, the deceased was on leave at the time of death from 03.05.1986 to 17.05.1986 on the ground of ill health. However, there is no material on record to show that the deceased was a patient admitted in the Hospital at the time of his death. However, this ground of ill health cannot be a reason to repudiate the claim without having any proof as to the nature of the illness which could lead to the repudiation on the ground that there was material information which was suppressed since in the proposal form, there are various serious diseases from tuberculosis, cancer, tumours, pneumonia, bronchitis etc. Even otherwise, the Insurance Company has placed on record two letters (Exhibit D2 & D3) wherein the deceased had taken leave from 02.05.1983 to 28.05.1983 on the ground that he had fallen ill suddenly and then had chosen to join duty on 18.05.1983 by giving a supporting certificate dated 14.07.1983 to show that he had joined on 18.05.1983. Even otherwise, the said letters were never proved by the authorities by calling the concerned officials and this fact had also been noticed by the trial Court. Even otherwise, the said certificates goes on to show that the employee had opted to go on leave on the pretext of falling ill and then joined on 18.05.1983 which in no manner show that the deceased was suffering from any serious illness which could be imparted to diseases mentioned in column 18(e). It was for the Corporation to prove this fact and it has failed to do so, and therefore, the said issue has to be RSA No.2220 of 1989 24 decided against the Corporation by holding that there was no material information with-held which would lead to repudiation of the insurance claim.
The counsel for the appellant has placed reliance in the case of P.C.Chacko and another v. Chairman, Life Insurance Corporation of India and others 2008 (1) SCC 321. In the said case, the insured was suffering from Adenoma Thyroid and had undergone a major operation 4 years prior to the date of proposal and died in 6 months of taking of the policy and his brother was a Life Insurance Corporation agent. It was in such circumstances, the Hon'ble Supreme Court went on to hold that there was suppression of material facts and the repudiation was up- held. Accordingly, the said judgment of the Hon'ble Apex Court is not applicable in the present case.
On the question of grant of interest at the rate of 15% from the date of death i.e. 8.5.1986 till the date of institution of the suit i.e. 10.11.1987 and further pendente lite interest at the same rate till the realisation of the entire decreetal amount from the date of decree i.e. 9.3.1989. Mr.Baldev Raj Mahajan, learned counsel for the Corporation has contended that the said interest on the pre-adjudication period was not payable. Reliance has been placed on Balwant Kaur v. Life Insurance Corporation of India 2004 (3) PLR 813 to contend that the pre-suit interest could not be awarded to the defendant-respondent since there was prohibition of payment of interest in terms of the policy. The said judgment though expressly covers the issue regarding the grant of interest from the date of death till the date of filing of the suit and the issue in the said case was whether interest was payable in terms of the contract between the parties; and the said issue had been decided against the plaintiff therein. However, it is to be noticed in the present case that in paragraph 9 of the plaint, a specific claim regarding 18% interest was made from the RSA No.2220 of 1989 25 date of death of the insured till the date of payment. In the written statement filed by the Corporation, it was stated that the Corporation was not bound to make payment under the policy as mentioned in the paragraph and no issue was raised regarding the liability of non-payment of interest in terms of the policy and neither any issue has been framed in this regard. Once a matter has not been raised before the Courts below, the Corporation would not be entitled to argue the same for the first time in a regular second appeal and raise an argument which was never discussed by the Courts below. This proposition is settled by various judgments of the Hon'ble Apex Court as in the case of Bachhaj Nahar Vs Nilima Mandal & others AIR 2009 SC 1103 and also in Govindaraju Vs. Mariamman AIR 2005 SC 1008 in which it has been noticed that there must be a foundation in the questions laid in the pleadings which would emerge from the sustainable findings of fact. Then only there can be interference by any Court of law, if any substantial question of law arise.
Similarly, regarding the grant of pendente lite interest at the rate of 15% during the pendency of the suit and its recovery thereafter and while making reference to Section 34, the Court has power to order interest at such rate as it may find appropriate and thus in the present case, the grant of 15% interest form 10.11.1987 to 09.03.1989, when the issue was decided by the trial Court cannot be held to be excessive in the present case which involves repudiation of the claim without justifiable cause of a widow left with three unmarried daughters and two minor sons. The subsequent rate also in the present facts and circumstances from 09.03.1989 till the deposit of the cheque on 03.11.1989 @ 15% interest would also not be excessive especially keeping in view the fact that vide an interim order passed by this Court on 08.11.1989, while admitting the appeal, a draft of Rs.1,03,817/- was directed RSA No.2220 of 1989 26 to be deposited in the nationalised bank in fixed deposit receipt and the plaintiff-respondent was only entitled to appropriate interest accruing from it by the bank authorities every month. The Corporation had filed an application for compliance of this order and it was noticed on 17.01.1990 that the amount had been deposited in the Bank as directed by this Court. So, in order to do complete justice between the parties and the fact that the widow has been deprived of all the amount for more than two decades, it would not be appropriate, at this stage, to modify the rate of interest and reduce it from 15% as she has not been able to utilise this amount for all these years which have passed by.
Accordingly, the above-said question No.1 is answered in favour of the appellant-Corporation to the extent that no specific resolution was required to file the appeal before the lower appellate Court. However, the question No.2 & 3 are answered against the Corporation and the appeal is dismissed. The plaintiff-respondent shall be entitled to the amount deposited by the bank in view of the dismissal of the appeal.
(G.S.SANDHAWALIA) JUDGE 4.1.2012 sailesh/Pka