Allahabad High Court
Vijai Kumar Kohli And Others vs The Life Insurance Corporation Of India ... on 30 July, 1991
Equivalent citations: II(1993)ACC686, 1993ACJ597, AIR1992ALL45, AIR 1992 ALLAHABAD 45, 1991 ALL CJ 2 1146, (1993) 2 ACC 686, (1993) 1 ACJ 597, (1991) 18 ALL LR 578, 1991 SCD 998, (1992) 2 ALL WC 1273
ORDER N.N. Mithal, J.
1. By means of this petition the petitioners seek a direction to the respondent for making payment of the amount due for the life insurance policy taken by the deceased Lalit Kumar Kohli on 15th June, 1982. At the time of filing the petition Sri R.G. Padia appeared on behalf of respondent and he was granted a month's time to file counter-affidavit. Thereafter on 6th of Feb., 1991 again further three weeks time was granted to the respondent to file counter-affidavii. When the matter was taken up on 6-3-91 Sri R.G. Padia, the learned counsel for the respondent stated that despite his writing letters to the respondent there was no response. In the circumstances we proceeded to hear the petition in the absence of counter affidavit and dictated the order in Court allowing the same. Before the order was signed some doubt about the maintainability of the petition arose in our mind and therefore, we did not sign the order and directed the office to list the petition again for hearing to clarify the doubts in our mind. This is how the petition has again been listed for hearing before us.
2. Before we consider the controversy raised on merits we would like to dispose of an objection taken by the petitioner on the propriety of re-hearing of the petition by the Court. The petitioner's submission is that having once dictated the order in open Court allowing the petition, the Court has no right to go back upon its order and re-hear the petition. In support he has relied on Vinod Kumar Singh v. Banaras Hindu University, AIR 1988 SC 371.
3. We have heard the learned counsel for the parties both on this preliminary question as also on the merits of the case at length. As for the preliminary objection it need not detain us much. There cannot be any disagreement with the principles set out in that decision and we agree entirely that an order dictated in open Court should normally be adhered to. But this cannot be laid down as inviolable rule. If the Court finds, before such an order is signed by it, that there is something which needs clarification or some doubt arises as to the correctness of the view taken due to, say, for example, some decided case of the Supreme Court on the point involved, coming to its notice, the court is not bound to stick to its view merely because the order had been dictated in open Court. Certainly, this should not be done without affording an opportunity to the counsel for the parties but when parties are again heard and have had the opportunity to remove the doubts entertained by the Court, then in our judgment there is no impropriety even if the Courts were to change its earlier view. The question in such cases is not of Court's jurisdiction in varying the order but merely of procedure that should be followed which ought to be dictated by reason and be fair and not in denial of opportunity of hearing to them. Even in the judgment relied upon the Supreme Court has observed thus :
"Rule 3 of S. 20, Civil P.C. permits alterations or additions to a judgment so long as it is not signed. It is only after the judgment is both pronounced and signed that alterations or additions are not permissible, except under the provisions of S. 152 or S. 114 of the Civil P.C. or, in very exceptional cases, under S. 151 of the Civil P.C. But, while the Court has undoubted power to alter or modify a judgment delivered but not signed, such power should be exercised judicially, sparingly and for adequate reasons. When a judgment is pronounced in open Court, the parties act on the basis that it is the judgment of the Court and that the signing is a formalit to follow. Ordinarily judgment is not d livered till the hearing is complete by listening to submission of counsel and perusal of records and a definite view is reached by the Court in regard to the conclusion. Once the stage is reached and the Court pronounces the judgment the same should not be reopened unless there be some exceptional circumstance or a review is asked for and is granted. When the judgment is pronounced, parties present in the Court know the conclusion in the matter and often on the basis of such pronouncement they proceed to conduct their affaris. If what is pronounced in Court is not acted upon, certainly litigants would be prejudiced. Confidence of the liligant in the judicial office would be shaken A judgment pronounced in open Court should be acted upon unless there be some exceptional feature and if there be any such, the same should appear from the record of the case".
4. Coming now to the facts of the case. A life Insurance policy bearing No. 58643473 was issued in favour of the deceased Lalit Kumar Kohli for a sum of Rs. 50,000/- and payment of premium was made regularly until his death due to cardio vascular failure on 30th Nov., 1982. Intimation about his death was given to the insurer by the nominee on 16th July, 1983 Thereafter when the Corporation sought some information regarding the cause of death, the death certificate and other documents the same were also provided to the Corporation, but inspite of this no payment under the policy was made. The mother of the insured was his nominee. She also died on 9-6-1985 and the petitioners claim to be her legatees under a Will dt. 23rd Apr., 1984 left by her. The petitioners have placed on record the copy of the order passed by the High Court granting letters of administration to them, Annex. 'X'.
5. From the various annexures filed by the petitioners it is apparent that the L.I.C. does not dispute the fact that it had issued the policy on the life of the deceased and insured him in the sum of Rs. 50,000/-. However, the claim under the policy was repudiated on the ground that the insured had given an incorrect declaration about, the state of his health. It also took the stand that the deceased had concealed the material fact of his younger brother's death due to heart-attack. Although the petitioners had been pressing for payment of the amount due under the policy ever since 1982 the L.I.C. continued to assure the petitioner that the matter was being investigated even up to January, 1986. However, soon thereafter the petitioner's claim was repudiated by letter dt. 29th Mar., 1986. The stand of the petitioner is that under Sec. 45 of the Insurance Act the insurer cannot repudiate the claim after the expiry of two years from the date when the insurance was effected. His further case is that the ground on which the repudiation has been made are incorrect and have no basis. As mentioned earlier, the Life Insurance Corporation had not filed any counter-affidavit when we had heard this case earlier on 6-3-1991. However, when the matter was heard again a counter-affidavit has since been filed on its behalf.
6. The doubts which we had entertained was as to whether the Court should at all exercise its jurisdiction under Art. 226 of the Constitution in a matter raising a factual controversy regarding correctness or otherwise of the ground for repudiation or the parties should be relegated to seek remedy by way of a suit. Learned counsel for the petitioner, However, tried to emphasise that in this case there was infact no dispute regarding facts alleged by the petitioner as the facts asserted by the petitioner have not been controverted by the Corporation and, therefore, these assertions should be accepted as correct. He also submitted that the petitioner was heard finally on 6-3-1991 and the rehearing should be limited to the material which was before the Court then no advantage should be given to the opp. parties now merely because the Court for some reasons wanted to re-hear the matter.
7. Besides, he urged that since repudiation has taken place after more than two years from the date of policy the opp. party was debarred for raising that question. In support he relies on Dilip Kumar Ghosh v. New India Assurance Co. Limited, AIR 1990 Cal 303, where a claim was raised in respect of Marine Insurance and the Court held that in a claim arising out of policy of insurance the High Court can in exercise of powers under Art. 226 of the Constitution direct payment of the claim and the petitioner cannot fail on the alter of alternative remedy.
8. Whether or not this Court should exercise jurisdiction under Art. 226 of the Constitution would largely depend upon the nature of dispute. In case we find that the controversy cannot be resolved without going into the factual controversy the Court may be relunctant to act. If, however, there is no factual controversy then the position may be different. In the instant case the policy has been repudiated on the ground that the insured had given inaccurate particulars on two material points; one about his illness and the other regarding the death of his younger brother due to heart-attack. Here it may be necessary to refer to the letter of repudiation sent by the Life Insurance Corporation on 29-3-1986 which in no uncertain terms states that it was possessed of indisputable proof that the insured had suffcrred from 'paranoid endegenus depression' two months before the proposal was made.
9. Apart from the facts that the opposite party did not file any counter-affidavit when the matter was last heard in March, 1991 we think it cannot be permitted to supplement its defence now by filing the counter-affidavit. Yet even if we were to permit this the counter-affidavit contains no proof or evidence in support of the alleged false statement said to have been made in the proposal form. Even the date of death of his younger brother due to heart-attack has not been stated. In the absence of that date one cannot say with certainty whether the younger brother of the assured had died before or after the date of the proposal. If indeed the Life Insurance Corporation was possessed of uncontrovertible proof about the alleged false statement as it claims to have, the same ought to have been disclosed or at least filed along with the counter affidavit but even this was not done. There is thus no prima facie proof in support of the alleged misstatements in the proposal form. The Court is, therefore, quite competent to exercise jurisdiction under Art. 226 of the Constitution in this situation as the facts alleged in the petition remains uncontrovert-ed and defence plea unsubstantiated. In M/s Hyderabad Commercial v. Indian Bank, 1990 ALJ 872: (AIR 1991 SC 247). Supreme Court took the following view (at page 248) of AIR :--
"Since the basic facts regarding the unauthorised transfer of the disputed amount from the appellant's account as well as the Bank's liability was admitted, there was no justification for the High Court to direct the appellant to file suit on ground of disputed questions of fact. The respondent Bank is an instrumentality of the State and it must function honestly to serve its customers."
10. In view of what we have said above the Court has ample power to grant relief under Art. 226 of the Constitution of India.
11. Coming now to the second question as to the right of the LIC to repudiate the claim beyond two years. Reference may be made to LIC v. Smt. G. M. Channabas-samma, (1991) 1 Supreme Court Cases 357 where it was held as under :--
"A contract of insurance is contract uber-rimae fidei and there must be complete good faith on the part of the assured. The assured is thus under a solemn obligation to make full disclosure of material facts which may be relevant for the insurer to take into account while deciding whether the proposal should be accepted or not. While making a disclosure of the relevant facts, the duty of the insured to state them correctly cannot be diluted. S. 45 of the Act has made special provisions for a life insurance policy, it cannot be called in question by the insurer after the expiry of two years from the date on which it was effected "unless the insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policy holder and that the policy holder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose." The burden of providing that the insured had made false representations and suppressed material facts is undoubtedly on the Corporation.
12. From the above dictum of the Supreme Court two important things emerge. Firstly, burden of proof for any false statement made by the insured is on the LIC. In the instant case the objection taken by the Insurance Corporation is that the assured had suppressed information regarding his alleged illness. If on enquiry the LIC came in possession of some material on the basis of which it has chosen to repudiate the claim it was necessary for it to place that material before the Court so that the petitioners may be in a position to counter it. This has not been done. As regards the second objection as to the suppression of the fact that one of his brother had died of heart attack. Suffice it to say that the date of death of the brother has not been mentioned. There is no material to suggest that he had died on account of heart attack. If the Corporation was possessed of any evidence in this respect the same ought to have been placed on record. But this too has not been done. There is nothing to support the case of the Corporation that the claim of the petitioner had been repudiated on any acceptable ground. In view of this we find no reason why the Corporation should not have satisfied the claim under the insurance policy to the petitioner.
13. Apart from this the Bombay High Court in Smt. Asha Goel v. L.I.C., AIR 1986 Bombay 412 where this question was directly in issue, learned single Judge in that case held that "being a statutory Corporation carrying on the business of insurance which was an 'authority' or an 'instrumentality' of the State within the meaning of Art. 12 of the Constitution. Its activities not being entirely commercial but meant for the welfare and benefit of the Society its primary goal was to promote the welfare of the people even though the liability of the Corporation may not be a statutory liability and even if it be a contractual one yet the Courts power under Art. 226 can be exercised to enforce that liability."
14. No other ground for non payment of the amount due under the policy has been set up in the counter affidavit. In view of this we find that the petitioner was entitled to a direction in the nature of mandamus against the Insurance Corporation.
15. Accordingly, the writ petition succeeds and is hereby allowed. Let a mandamus be issued to the respondent directing it to pay the sum due under Policy No. 58643473 on the life of Lalit Kumar Kohli (deceased) along with interest at the rate of twelve and half per cent on the sum due from the date of his death till the date of payment. The amount shall be paid by the opp. party within three months from the date of presentation of a certified copy of this order before the divisional manager concerned. We, however, make no order as to costs.
16. Petition allowed.