JUDGMENT
Bhaskar Bhattacharya, J.
1. This mandamus-appeal is at the instance of respondents in a writ application and is directed against the order dated 19th May, 2006 passed by a learned single Judge of this Court in C.O. No. 12580 (W) of 1995 reported in AIR 2006 Cal 247 thereby allowing a writ application filed by the respondent by directing the appellants to pay a sum of Rs. 75,000/- together with interest at the rate of 9% per annum from 1st December, 1988 till the date of payment. His Lordship further awarded costs of 300 GMs. to be paid by the appellants to the respondent/ writ petitioner.
2. The facts giving rise to the filing of this mandamus appeal may be summed up thus:
One Smt. Chhaya Mondal, the wife of the writ petitioner, took out a life insurance policy bearing No. 420094448 with effect from 2nd October, 1987 for a sum of Rs. 37,500/-. She took out another policy bearing No. 42009449 with effect from 28th October, 1987 for an identical sum of Rs. 37,500/-. The writ petitioner was appointed as nominee to receive the amount in the event of death of the insured person. The wife of the writ petitioner died in November, 1988, as a result, claim was made with the appellant, the Life Insurance Corporation. By a letter dated 1st September, 1994, the appellant refused to pay the amount on the ground of non compliance of the requirement of filing Form-E meant for the employer of the insured certifying certain facts mentioned therein.
3. The writ petitioner, at the first instance, filed a suit in the first Court of Munsif, Ranaghat, being Title Suit No. 303 of 1994. The said suit was, however, permitted to be withdrawn with liberty to approach this Court in the writ jurisdiction for appropriate relief as would appear from the order dated 15th June, 1995 passed in the said suit.
4. Subsequently, the writ application was filed thereby praying for a direction upon the Life Insurance Corporation of India to make payment of the total amount of Rs. 75,000/- payable by virtue of the aforesaid two insurance policies with interest thereon.
5. The writ application was contested by the appellants by filing affidavits-in-opposition and in the said affidavits-in-opposition, the Life Insurance Corporation, took the plea that the insured person, in the proposal form, gave a false declaration that she was in the Government service and had also a business. According to the appellants in view of such information given in the application form, the nominee was asked to fill up Form-E which required giving of certificate by the employer of the insured person as regards some information as mentioned therein. In the said affidavits in opposition, it was stated that, the insured person was in fact not a government employee and for the above reason, the nominee was unable to file such certificate of the employer. According to the appellants, the insured person having died within two years from the commencement of the insurance contract, and she having declared false statement in the application form, the Insurance Corporation was entitled to treat the agreement as void and forfeit the premium paid on her behalf.
6. The writ petitioner in his affidavit-in-reply stated that the application form was filled up by an agent of the Life Insurance Corporation and the insured person merely put her signature without verifying its contents and as such, for wrong declaration given therein as regards the occupation of the insured person, the Corporation cannot deny its liability to make payment. According to the writ petitioner, a Government servant cannot simultaneously run a business and on the face of it, the said statement was apparently a wrong statement written by the agent of the insurance company.
7. The learned single Judge on consideration of the materials on record came to the conclusion that the mere fact that the insured person mentioned wrong declaration about her service would not entitle the insurance authority to refuse payment on the death of the insured person. Mis Lordship, therefore, passed a direction for payment of Rs. 75,000/- with interest at the rate of 9% per annum from 1st December, 1988 as the claim was lodged on November 30, 1988.
8. Being dissatisfied, the Life Insurance Corporation has come up with the present mandamus appeal.
9. Mr. Kundu, the learned advocate appearing on behalf of the appellants has vehemently contended before us that the insured person having died within two years from the date of commencement of the insurance-policy and admittedly there being wrong declaration as regards her service with the Government, for such a wrong declaration, the insurance company is entitled to repudiate the contract. In support of such contention, Mr. Kundu relies upon Section 45 of the Insurance Act. He, therefore, prays for setting aside the order passed by the learned single Judge and for dismissal of the writ application.
10. Therefore, the only question that falls for determination in this mandamus appeal is whether for wrong declaration of the insured person in the proposal of insurance that she was in Government service, the insurance company is entitled to repudiate the contract by forfeiting the premium paid by the insured-person.
11. Before we proceed to answer the aforesaid question, it will be profitable to refer to the decision of the Supreme Court in the case of Life Insurance Corporation of India v. Asha Goel reported in (2001) 2 S.C.C. 160 : AIR 2001 SC 549 while dealing with the scope of Section 45 of the Insurance Act. In paragraph 12 of the said judgment, the Supreme Court, while elucidating the scope of Section 45 of the Act made the following observation:
Coming to the question of scope of repudiation of claim of the insured or nominee by the Corporation, the provision of Section 45 of the Insurance Act is of relevance in the matter. The section provides, inter alia, that no policy of the life insurance effected after the coming into force of this Act shall, after the expiry of two years from the date on which it was effected, be called in question by an insurer on the ground that a statement made in the proposal for insurance or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the policy, was inaccurate or false, unless the insurer shows that such statement was on material matter or suppressed fact 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 fact which it was material to disclose. The proviso which deals with the proof of age of the insured is not relevant for the purpose of the present proceeding. On a fair reading of the section it is clear that it is restrictive in nature. It lays down three conditions for applicability of the second part of the section namely: (a) the statement must be on material matter or must suppress fact which it was material to disclose; (b) the suppression must be fraudulently made by the policy-holder; and (c) the policy holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose. Mere inaccuracy or falsity in respect of some recital or items in the proposal is not sufficient. The burden of proof is on the insurer to establish these circumstances and unless the insurer is able to do so there is no question of the policy being avoided on ground of misstatement of facts. The contracts of insurance including the contract of life assurance are contracts uberrima fides and every fact of material (sic material fact) must be disclosed, otherwise, there is good ground for recession of the contract.
12. From the above observation of the Apex Court it is clear that the misstatement alleged must be one of material facts. In the case before us, there is no allegation that the insured suppressed any material fact about her health or illness, she was suffering from. The fact that she was not a nurse in Government hospital but an ordinary nurse attached to various doctors is irrelevant. We have already pointed out that undisputedly the application for insurance was filled up not by the insured but by the agent of the insurance company. In such a situation, if there is any wrong statement in the application recorded by the agent of the insurance company, such fact cannot enable the company to avoid the contract unless it is established that suppression was the deliberate one and was material at the same time.
13. We. therefore, find that in the facts of the present case there was no material suppression of fact as regards the health or any alleged illness of the insured and the wrong statement indicated above did not justify repudiation of the contract at the instance of the Life Insurance Corporation of India.
14. In paragraph 16 of the judgment of the Supreme Court mentioned above, the said Court reminded the Life Insurance Corporation Authority that the public in general and crores of policy holders in particular, look forward to prompt and efficient service from the Corporation. Therefore, the Supreme Court proceeded, the authorities in charge of management of the affairs of the Corporation should bear in mind that its credibility and reputation depends on its prompt and efficient service and the approach of the Corporation in the matter of repudiation of a policy admittedly issued by it, should be one of extreme care and caution.
15. Bearing in mind the aforesaid principles laid down by the Supreme Court, we are of the opinion that the appellants, in the case before us, recklessly declined to pay the insured amount notwithstanding the fact that it could not disclose suppression of any material fact.
16. The learned single Judge, in the facts of the present case, rightly passed the order for payment of the money to the nominee and we do not find any reason to interfere with the decision of the learned single Judge.
17. This mandamus appeal is, thus, devoid of merit and is dismissed accordingly. No costs.
Prabhudha Sankar Banerjee, J.
18. I agree.