HARIDASI DEBI Vs. MANUFACTURERS LIFE ASSURANCE CO LTD

JUDGEMENT

(1.) The plaintiffs sue the defendant company upon a policy of insurance for Rs. 18,000 and interest,, effected upon the life of Kali Prasad Chakrabarty in favour of his wife, plaintiff 1. The plaint was admitted on 8 December 1934. The defendant company resists the claim on the ground of fraud, which was the only issue raised by counsel on behalf of the company, namely "Were the representations specified in para. 3 of the written statement or any of them fraudulently made knowing the same to be untrue?" The allegation of fraud was added to the written statement by a somewhat belated amendment made by leave on 28 April 1936, when the suit was already in the peremptory list for hearing. The policy was issued on 12th June 1934, and the assured died on 3 August 1934. The premium was Rupees 194-10-0 payable quarterly, the assured having been accepted as a first-class life, after examination by a doctor appointed by the company. The company's agent reported that he had known the applicant for about three months, that he was in thoroughly good health, that his general reputation as to character and morals was good and that he unqualifiedly recommended him for insurance at ordinary rates. The medical examiner reported inter alia that his blood pressure was normal. Previously, on 31 May 1934 the assured had applied for insurance to the Crown Life Insurance Company in two sums of Rs. 40,000 and Rs. 10,000, respectively, and policies for these sums were issued to him, after examination and recommendation by two doctors appointed by that company, and acceptance as a first-class life. The premiums were Rs. 392 and Rs. 98, respectively, payable quarterly. Claims in respect of these insurances are still pending. Certain provisions and options formed part of the contract made between the assured and the defendant company. Provision 4 is as follows: Incontestability. This policy is issued in consideration of the application therefor and of the statements and agreements therein contained, and together with the application constitutes the entire contract and is based on statements made by the insured, which shall, in the absence of fraud, be deemed representations and not warranties. After this policy has been in force during the life time of the insured for two years from its date of issue, it shall be incontestable except for fraud or non- payment of premium, etc.

(2.) These statements were in the handwriting of the medical examiner and were made in answer to printed questions on the application form. They were, inter alia, as follows, and these were the only statements which counsel for the defendant company sought to rely upon at the trial.

(3.) (a) Has any member of your family ever suffered from Consumption or Insanity? No.; (b) Have you lived in the same house or been associated in any way with a case of Tuberculosis within two years? No. 6. Have you ever had or consulted a medical practitioner for: (a) Fits, Convulsions, or disease of Brain or Nervous System? No. 7. (b) What Physician or Physicians, if any, not named above have you consulted or been treated by within the last five years, and for what illness or ailment? (Give full details; if none, so state) None. 3. A great deal of evidence both medical and otherwise, has been given on each side, which it is unnecessary for me to recapitulate in detail. It will be sufficient to state the result. There is evidence to show that a maternal aunt of the assured, who lived with him in the same house, was under occasional or periodical but not regular medical treatment by doctors and Kavirajes for haemoptysis or spitting of blood which was diagnosed as indicative of pulmonary tuberculosis, from the e April, 1930 to the e November, 1933. For part of the time the evidence is both oral and documentary. This aunt died in April 1934 at a very advanced age, she was probably about 80-84 years old. There is no evidence to show what she died of, except a statement made at the burning ghat-that she had died of malaria. For several years prior to her death, she had been in failing health, and had suffered a good deal from malaria, cholera, dyspepsia and stomach troubles, and other minor ailments to which old people are susceptible. That the medical men suspected and diagnosed tuberculosis, and were treating the patient accordingly was known to the assured. There is evidence to show that the assured occasionally had fainting fits, which were probably caused by blood pressure, and this according to the evidence of the witness Dr. Amulyadhone Ghose, was probably due to over-indulgence in food and drink. The assured was a tall stout man of a type susceptible to blood pressure, and there is not sufficient evidence to establish that his blood pressure was due to any specific disease. There is evidence that the assured had consulted or had been attended by one or more medical practitioners occasionally during the five years immediately prior to the date of his application, for such ailments as influenza, malaria, asthma, palpitation and blood pressure, and on one occasion in November 1933 for a fainting fit due to blood pressure. There is no evidence to show that the assured died of any of such ailments, and certainly not of tuberculosis. Several medical men attended to him either at the time of, or during the period of three weeks immediately prior to his death. No definite diagnosis could be arrived at, but the probable cause of death was stated to be suspected peritonitis or perityphlitis due to the bursting of an abdominal abscess. After very careful consideration I have come to the conclusion that I must accept this positive evidence, rather than the negative evidence given on behalf the plaintiffs and I am satisfied that these facts were known to the assured and that his relative statements, therefore, were not strictly speaking and literally true. But the crucial question to be decided is whether he made these statements fraudulently knowing them to be untrue, which is the only issue which has been raised on behalf of the defendant company. Fraud is defined in Section 17, Contract Act, as follows: Fraud means and includes any of the following acts committed by a party to a contract, or with his connivance or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into contract: (1) The suggestion as to a fact, of that which is not true by one who does not believe it to be true; (2) the active concealment of a fact by one having knowledge or belief of the fact; (3) a promise made without any intention of performing it; (4) any other act fitted to deceive; (5) any such act or omission as the law specially declares to be fraudulent. Explanation.-Mere silence as to facts likely to affect the willingness of a person to enter into a contract is not fraud, unless the circumstances of the case are such that, regard being had to them, it is the duty of the person keeping silence to speak, or unless his silence is, in itself, equivalent to speech.