SARNAM SINGH Vs. LIC OF INDIA

JUDGEMENT

(1.) In this petition, filed under Art. 226 of the Constitution of India, the petitioner has sought the quashing of the order dated 1st March 1985, as contained in Annexure P-8 whereby the three life insurance polices of the petitioner were cancelled and all the monies paid by him were forfeited by respondents.

(2.) The broad facts may be briefly stated:-

(3.) The petitioner had deposited the premium amounting to Rs. 9940. The petitioner had not disclosed the fact that his earlier proposal of his life insurance was declined by the respondent-Corporation on the ground that he was diabetic. Later on, when the fact came to the knowledge of the respondent, his above stated three policies were cancelled and the premium deposited was forfeited. The declaration, which is required to be submitted by the proposer, itself provides that one has to tender all the relevant and correct information in the proposal. The petitioner to the question "Whether he was suspected of diabetes or was suffering from diabetes" had replied in 'No'. The fact that his earlier proposal was turned down by the Corporation was also not disclosed but the petitioner had admitted the conditions of the proposal that if any information was found to be incorrect or untrue, the contract of the policy would be null and void and all the monies paid by him in that respect shall stand forfeited to the Corporation. Under the condition of the agreement which the petitioner had declared to be sound and had accepted them, it is not open to the petitioner to challenge those conditions and in view of the fact that the earlier proposal of his life insurance was admittedly declined by the Corporation, since he was suffering from diabetes, was also not disclosed by him, no inquiry was legally necessary to be held before cancelling he polices and forfeiting the deposited amount. The petitioner had misstated the facts in the proposal which came to be accepted by respondents on mis-representation and under the agreed terms and conditions, the respondents had the right to cancel the polices and forfeit the monies deposited. The action of respondent under Annexure P/8 cannot therefore be said to be arbitrary, unfair or unreasonable.