Life Insurance Corporation of India vs MRS. KAILASHI DEVI CHAUDHARY

THESE two appeals, involving common questions of law and facts, arise under the following circumstances : Smt. Harkuri Devi @ Smt. Dholi Devi, the deceased insured, was the sister and sister-in-law of Shri Ras Lal Chaudhary and his wife Smt. Kailashi Devi respectively, the complainant-respondents in these appeals. She was married to Shri Harji Ram s/o Shri Sheo Ram Saran, Jat by caste, of village Lakhi Lai, Teh. Phagi, District Jaipur sometimes in the end of Eightees. The wedlock had given to the couple a female child who could, however, not survive for long and died soon after her birth. The marriage was not successful and the husband of the deceased insured deserted her after about 7 years of the marriage on the ground of non-procreation of children and insufficiency of dowry. For the last about 8 or 9 years, prior to her death on 8.8.1998, she was living at Jaipur with her brother Shri Ras Lal, who happens to be a police personnel as an Asstt. Sub-Inspector.

ON 14.3.1996, the deceased insured had filed an application under Section 125 of the Code of Criminal Procedure, 1973 against her husband in the Family Court at Jaipur. ON 20.9.1996, a settlement was recorded between the parties out of the Court whereunder a sum of Rs. 45,000/- was paid to her through her brother towards permanent alimony. Thereafter the application under Section 125 of Criminal Procedure Code was dismissed on 8.1.1997 for want of prosecution by the applicant. On 24.11.1997, the deceased insured obtained an Endowment Policy No. 191306079 for Rs. 1 lakh from Sanganer Branch of the Life Insurance Corporation of India, the appellant in both the appeals. In this policy, she was described as "Harkuri Devi" with her residential address at BB-28, Jai Ambey Nagar, Tonk Road, Jaipur. Shri Ras Lal respondent, her brother was her nominee in this policy.

On 28.7.1998, the deceased insured obtained yet another Endowment Policy No. 191457969 for Rs. 50,000/- from Jhotwara Branch of the LIC appellant. In this policy, her particulars were described as Smt. Dholi Devi with residential address at village Datool, Post Office Madhorajpur, Teh. Fatehgarh, District Jaipur. Smt. Kailashi Devi respondent, her brother''s wife, was her nominee in this policy.

ON 6.8.1998, she was admitted to Jaipuriya Hospital at Jaipur for treatment of diarrhoea and vomiting on 7.8.1998 her medical attendant Dr. Shashi Jain advised her men to take her to S.M.S. Hospital, Jaipur for treatment. But she was not taken to S.M.S. Hospital and died on 8.8.1998 at 7.30 a.m. at Jaipuriya Hospital, Jaipur. The nominees under the aforesaid two policies filed their claims with the LIC appellant. The appellant Corporation got both the claims investigated by Shri V.P. Cheema, their Sr. Branch Manager at Sanganer Branch who vide his report dated 21.1.1999 reported both the claims to be false and fraudulent. The appellant Corporation, vide their letters dated 31.3.1999 repudiated both the claims on the ground of the deceased insured having suppressed true and material information relating to her marital status, source of income, state of health at the time of submitting her proposals.

ON repudiation of their respective claims Shri Ras Lal, the brother nominee in Policy No. 191306079 for Rs. 1 lakh, filed Complaint No. 1149 of 2000 and Smt. Kailashi Devi, his wife nominee in Policy No. 191457969 for Rs. 50,000/- filed Complaint No. 1150/2000 before the District Forum. The District Forum held that on the material, placed by the parties on the records of their respective complaints, proved that the repudiation was not justified on facts and in law in this case. The Forum, therefore, decreed the claims of both the complainants in toto vide his although commonly worded but separate orders of the even date i.e., 16.7.2001. The orders so made by the District Forum in Ras Lal''s complaint No. 1149/2000 has given rise to appeal No. 1166 of 2001 and in Smt. Kailashi Devi''s complaint No. 1150/2000 to appeal No. 1167/2001 by the LIC appellant. The facts as stated above are borne out of the material available on the record of the two complaints. Those could also not be disputed by either of the parties before us. The learned Counsel for the appellant vehemently urged that the District Forum erred in not appreciating the evidence on the records of the two cases in right perspective. It was submitted that the very facts of purchase of two policies for a total sum assured of Rs. 1,50,000/- within a span of less than one year by an issueless and penniless deserted and broken middle aged woman and then of her dying within twelve days after the purchase of second policy and unearthing of such vital facts, having material bearing upon the very legality and validity of the contracts for insurance in these cases, by the investigator, clearly and fully spoke of good faith on the part of the LIC appellant, in repudiating the claims of the husband and wife respondents for valid and sound reasons. We find force in these arguments advanced by the learned Counsel.

THE Chronological record of events, as stated earlier, attending upon the married but later on separated life of the deceased insured, her being dependent for her bread and butter and living, upon her brother and sister-in-law, her purchasing two insurance policies in quick succession and then dying in a hospital as an unattended and encared patient may reasonably persuade one to think and say that something is rotten in the land of Denmark. It needs no undue effort to point out that the deceased insured was a penniless, issueless, deserted and broken lady when she is stated to have proceeded to purchase two policies in quick succession. In her adventure of purchasing two successive policies for considerably sufficiently large amounts, as compared to her means, it is noteworthy that the first policy was obtained from Sanganer Branch with her name as Harkuri Devi and place of residence at BB-28, Jai Ambey Nagar, Tonk Road, Jaipur. But the second policy was obtained with her name as Dholi Devi from another Branch office of the appellant and with totally different address. In both the policies, the nominees were none else but her brother and his wife. Why such changes in the name, address and nominees of the deceased insured and the issuing offices were considered necessary could not be explained before us.

A contract of insurance is a contract essentially based on utmost good faith on the parts of both the parties. In the facts and circumstances of these cases, one may reasonably say, as was stated before us, that the concerned agent/employee, who had obtained the missing proposals from or to whom such proposals were delivered by or on behalf of the deceased insured might have connived with the deceased insured or her nominees for getting business, which may be to his own advantage but to the disadvantage of the Corporation and, therefore, the deceased insured or the beneficiary of her two policies, may not be solely blamed in the formation of the contract. Even if it were so, such assumed connivance on the part of appellant''s agent or employee would not absolve the proposer or the beneficiaries of his/her policies to make full and complete disclosure of all such relevant and material facts by the proposer regarding his/her state of health and other factors attending upon purchasing the policies. In any case, lack of good faith on the part of the deceased insured/her nominees oughtweighs the supposed connivance by the agent or employee of the Corporation in the facts and circumstances of these two cases. To sum up the discussion, we hold that in the facts and circumstances of these cases, as spelt out above, the appellant had sufficiently sound and valid reasons to repudiate the claims of the respondents and that such repudiations were made by the appellant in good faith after holding due inquiry and investigation into such claims. We, accordingly, conclude that by repudiating the claims of the respondents in these cases, the appellant did not render deficient service to the respondents.

In the result, the impugned orders in both the complaints are set aside and both the appeals allowed. Consequently, the complaints of the respondents in these appeals are dismissed with cost on parties throughout. Appeals allowed.