TMI Blog2007 (11) TMI 655X X X X Extracts X X X X X X X X Extracts X X X X ..... suppressed material facts, the policy had been repudiated by the respondent on 10th February, 1989. Non-disclosure and mis-statement in the proposal form to the various questions to which answers were given by the insured is said to be the reason for the aforementioned repudiation of the contract of insurance. 4. It now stands admitted that the insured had undergone an operation for Adenoma Thyroid. The particulars furnished by him while filling up the application form for obtaining the said policy were as under :- (a) Did you ever have any operation, accident or injury? The answer was No. (b) Have your remained absent from place of your work on ground of health during the last 5 years ? To which answer was No. (c) What has been your state of health? The answer was good. The fact that the said answers were incorrect is not in dispute. The suit filed by the appellants, however, was decreed. 5. On an appeal preferred by the respondents, on the premise that despite such wrong answers, as the injured died on account of polyneuritis, a learned Single Judge of the High Court opined that there was nothing to indicate that if the injured had disclosed the factum of previ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was submitted that undergoing of an operation having a direct nexus with the health of the insured, suppression thereof has rightly been considered with all seriousness by the Corporation. It was argued that the operation underwent by the insured being a major one, was a material fact which ought to have been disclosed. Not only the insured had given wrong answers to the questions, his brother himself being a Life Insurance Corporations agent and furthermore in view of the fact that a declaration was given by the insured that no untrue averment was made therein, the contract of insurance was null and void and all monies which had been paid in respect thereof would stand forfeited to the Corporation. Learned counsel for the Corporation has placed strong reliance on Mithoolal Nayak vs. Life Insurance Corporation of India : 1962 Suppl (2) SCR 571. 10. The basic fact of the matter is not in dispute. The insured had undergone an operation for Adenoma Thyroid. It was a major operation. Although the said operation was undergone by him four years prior to the date of the proposal made by him, he did not disclose thereabout prior to obtaining the insurance policy. We may notice that he d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial 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. [See Mithoolal Nayak (supra] 14. The insureds brother was an agent of the Life Corporation of India. It was he, who had asked the insured to take the insurance policy. He, being an authorized agent of the Life Insurance Corporation, presumably knew the effect of misstatement of facts. Misstatement by itself, however, was not material for repudiation of the policy unless the same is material in nature. 15. The insured furthermore was aware of the consequence of making a misstatement of fact. If a person makes a wrong statement with knowledge of consequence therefor, he would ordinarily be estopped from pleading that even if such a fact had been disclosed, it would not have made any material change. 16. The purpose for taking a policy of insurance is not, in our opinion, very material. It may serve the purpose of social security but then the same should not be obtained with a fraudulent act by the insured. Proposal can be repudi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the proposer to answer every question put to him with complete honesty. Honesty implies truthfulness. But it happens that no man can do more than say what he believes to be the truth. 19. Whether in a given case the court should take judicial notice of practice followed in such cases or not would depend upon the facts and circumstances of each case. If it is found that the agent himself was interested in getting the policy executed by the Life Insurance Corporation, such common knowledge takes a back seat. In S.P. Maheshwari (supra), it was stated : (27) This brings us on finally to the topics of nondisclosure or misrepresentation which are practically the positive and negative aspects of the same thing. The effect of misrepresentation on the contract is precisely the same as that of non-disclosure; it affords the aggrieved party a ground for avoiding the contract. There are a number of dicta and one decision to the effect that life insurance is an exception to the general rule that innocent misrepresentation may afford grounds for avoiding a policy and that the misrepresentation must be fraudulent to have this effect upon a policy of life insurance. But in order to give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed counsel for the appellants on Allianz Und Stuttgarter Life Insurance Bank Ltd. v. Hemanta Kumar Das [AIR 1938 CAL 641] wherein in regard to some purported statements made by the proposor in regard to his age was not found to be material as would appear from the following : It is to be borne in mind that this was an insurance by a man who admittedly was, at any rate, at the age of over forty-five years. He himself stated that he was fifty four. Therefore, the transaction came within the category of those proposals which require at the outset the furnishing by the proponents of proof of their age. Noot Behari Das was required to furnish proof of his age. He produced a horoscope. The horoscope was accepted by the company as being sufficient. Therefore, we may take that the company issued the policy upon the footing that they were insuring the life of a man whose age was fifty four. This is not a case where the proposer says that his age was fifty four and the Company merely accepted that statement at its face value and proceeded to issue a policy on that footing and subsequently, either shortly afterwards or a long time afterwards, admitted the age as stated in the policy in a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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