NAGAMMA Vs. DIVISIONAL MANAGER L I C RAICHUR

JUDGEMENT

(1.) In this writ petition in which the petitioner has sought for the issue of a writ of mandamus directing the Life Insurance Corporation to make payment pursuant to the two policies which had been taken by the husband of the petitioner during his life time, the following two questions of law arise for consideration: (1) Whether in view of Section 45 of the Life Insurance Act, 1938, the Life Insurance Corporation cannot repudiate the claim under a life insurance policy after the expiry of two years from the date of its issue, even if it has in its possession evidence to prove that the policy holder had suppressed material information which he ought to have disclosed or had made deliberate false statements in respect of a material matter? and (2) If the repudiation of the claim under a Life Insurance policy by the Corporation, is on the ground that the policy holder had suppressed material information which he ought to have disclosed or on the ground that he had made deliberate false statements in respect of a material matter, on the basis of evidence it has in its possession and its correctness is disputed by the claimant, a writ petition under Article 226 of the Constitution of India can be entertained for deciding such a dispute?

(2.) The facts of the case, in brief, are as follows : The late husband of the petitioner Narasing Rao Jatla was a cloth merchant at Bidar. During his life time he had insured his life with the Life Insurance Corporation of India ('the Corporation' for short). He was holding three Life Insurance Policies. The husband of the petitioner died on 3-1-1984. One of the policies taken for a sum of Rs.25,000-00 was settled by the Corporation. Regarding the other two policies, the Corporation repudiated the claim on the ground that the husband of the petitioner had deliberately made mis-statements and withheld material information regarding his health at the time of effecting the insurance. Thereafter, the petitioner got issued a legal notice on 4-5-1987 (Annexure-G) calling upon the Corporation to settle the claim. In reply the Corporation informed that for the reasons set out in their earlier letters, the Corporation had repudiated its liability under the two policies and they have nothing further to add in the matter. Thereafter, the petitioner has presented this petition praying for the issue of a writ of mandamus directing the Corporation to settle the claim in respect of the two policies.

(3.) With reference to the first question, the learned counsel for the petitioner submitted that in view of Section 45 of the Insurance Act which applies to the Corporation by virtue of Section 43 of the Act, the Corporation after the expiry of two years cannot under any circumstance repudiate the claim under an Insurance Policy on the ground that the policy holder had made mis-statements or false statements in respect of his health. Section 45 of the Insurance Act, on which the learned counsel relies reads: