Ramibai vs Life Insurance Corporation of India

U.N. Bhachawat, J.—This appeal is by the plaintiff against the judgment and decree dated the 31st of January, 1976 of the Court of Second Additional District Judge, Bhopal, in regular Civil Suit No. 28-B of 1973, whereby plaintiff''s suit for Rs. 25,000/- on the basis of insurance policy of her deceased husband has been dismissed.

The plaintiff is the widow of one Topandas who died at Bairagarh in Bhopal on 8-8-1971 on account of congestive cardiac failure secondary to myocardial infection. Shri Topandas (hereinafter referred to as the deceased) life was insured with defendant/respondent herein under policy No. 28 300 784, dated 29-5-1970, with effect from 18-3-1970, which was to mature on 18-3-1976, for Rs. 25000/-.The assured sum of Rs. 25000/- was payable either on the death of the insured or on maturity of the policy. The premium was payable in annual installment each installment being of Rs. 1892.25 paisa. The first installment was paid on 18-3-1970 and the second on 10-4-1971. The plaintiff was the nominee of the deceased u/s 39 of the Insurance Act, 1938.

The deceased had declared his age 48 years in the proposal (Ex. P/1) as well as in his personal statement (Ex. P/2) and had submitted the horoscope (Ex P/6) in proof of his age on the basis of which the respondent had admitted the said age.

On the death of the deceased, the appellant made a claim for Rs 25000/- as nominee of the deceased in the aforesaid policy of the deceased. The respondent repudiated the claim of the plaintiff vide its letter dated 8-3-1973 (Ex. P/15) on the ground that at the time of insurance the deceased was of an non-insurable age but he had induced the respondent to insure him giving a false statement about his age.

On the refusal of the respondent to pay the appellant''s claim, the appellant had filed the present suit contending that the deceased was born on 14-3-1922, his age on the date of the proposal (Ex.P/1) was 48 years as stated therein and the personal statement (Ex. P/2); that the age stated by the deceased was true; it was proved to the satisfaction of the respondent by producing horoscope (Ex. P/6) and thereafter it was admitted by the respondent; that a highly qualified doctor, N.P. Mishra (P. W. 1), who was appointed by the respondent, had after due examination of the deceased certified the age of the deceased to be 48 years on the date of the proposal; that after the proposal (Ex.P/1) was made by the deceased the respondent who had received a complaint about the age of the deceased had deputed its two officers to make enquiry about the age of the deceased and after the receipt of the report of those two officers, being satisfied about the correctness of deceased statement about his age, the respondent had accepted the proposal, and, therefore, the respondent was stopped from challenging the correctness of the age of the deceased and was liable to pay the sum assured to the appellant.

The respondent who resisted the claim of the appellant Inter alia contended in is written statement that the age of the deceased was admitted by it on the basis of fraudulent misrepresentation regarding his date of birth as stated in the spurious horoscope that was produced by the deceased and that the admission of the age by the respondent was subject to the terms and conditions contained in the insurance policy (Ex. P/9); that no enquiry was made by respondent''s officials about the age of the deceased before the acceptance of the proposal or issuance of the policy (Ex. P/9) as there was no complaint received regarding the deceased''s age at that time; that the insurance policy (Ex. P/9) was issued in utmost good faith on the basis of the statement that was made by the deceased in his proposal form (Ex. P/1) and his personal statement (Ex. P/2) and the declarations made therein; that as the deceased had died within 1-1/2 years of the insurance, in accordance with the practice prevalent the respondent made enquiry with regard to the bonafides about the claim; that the enquiry so made revealed that on the date of proposal (Ex. P/1), i.e., on 28-2-1970, the deceased was, in fact, aged about 66 years and it was with the intention to defraud and cheat the respondent, the deceased, whose duty since contracts of insurance are of the class of contracts uherrimae fidei, was to disclose all material facts relating to his age, health and habits honestly and correctly, intentionally and fraudulently made a false statement with regard to his age and that had the deceased made a correct statement about his age, the respondent would not have insured him as he was of non-insurable age, i.e., above 60 years.

The trial Court on the pleadings of the parties framed various issues and dismissed the suit of the appellant. The trial Court found it as a fact that the deceased at the time he made the proposal (Ex, P/1) was above 60 years of age; that he had deliberately made a false statement about his age with an intention to defraud and cheat the respondent and the respondent was led to accept the proposal (Ex. P/1) and issue the policy (Ex. P/9) on this deliberate untrue statement.

The learned counsel for the appellant raised two contentions before us. First that, in fact, the age of the deceased on the date of the proposal (Ex. P/1) was 48 years and the deceased made a correct statement about his age, and second, even if the statement regarding the age by the deceased was incorrect, the policy would not be void u/s 45 of the Insurance Act 1938 in view of the proviso to that section.

The first point that arises for consideration, and which is a vital one, is as to what was the age of the deceased on the date he made the proposal (Ex. P/1). Parties have laid oral as well as documentary evidence on this question. The documentary as well as the oral evidence laid on behalf of the appellant is as under :--

Documentary evidence:--

(i) Ex. P/2, confidential report dated 28-2-1970;

(ii) Ex. P/3, Medical attendant''s certificate, dated 13-91971;

(iii) Ex. P/4, death certificate, dated 8-8-1971;

(iv) Ex. P/6, horoscope; and

(v) Ex. P/9, Insurance Policy.

Oral evidence;--

(i) Dr. N. P. Mishra (P.W. 1);

(ii) Narayan Das (P.W. 2);

(iii) Shri Hatechand (P.W. 3); and

(iv) Premchand (P.W. 4).

The evidence laid on behalf of the respondent consists of;

Documentary evidence:--

(i) Ex. D/1, deed of partnership dated 19-8-1957 between the deceased Topandas and Hazarimal;

(ii) Ex. D/2, deed of partnership dated 31-8-1964 between the deceased Topandas and Hazarimal;

(iii) Ex. D/4, copy of investigation report, dated 9-12-1970 by B. S. Jaggi and K. Lal;

(iv) Ex. D/5, application dated 20-7-1958 for the registration of the partnership firm of the deceased;

(v) Ex. D/6, Letter dated 25-8-1973 from the Deputy Collector, Bhopal furnishing the particulars in respect of the deceased when he arrived from Pakistan in India on the basis of the entries in the register;

(vi) Ex. D/7, entry in the voters list as on 16-8-1969 relating to the deceased; and

(vii) Ex. D/8, entry in the voters list relating to the deceased as on 10-11-1966.

Oral evidence:--

(i) Shri C. L. Jain (D.W. 1), income tax Inspector;

(ii) Shri Balbeer Singh (D W. 2); Branch Manager, Life Insurance Corporation, Bhopal;

(iii) P. V. Karanjawankar (D W. 3); and

(iv) Harsahaya Verma (D.W. 5), Development Officer, Life Insurance Corporation, Bhopal.

The trial Court has taken into account the whole evidence and on its evaluation it has come to the conclusion already indicated hereinabove. We have been taken through the evidence and we concur with the view taken by the trial Court on this evidence. As we are affirming the view taken by the trial Court, it is not necessary for us to re-state the effect of the evidence and re-iterate the reasonings of the trial Court. We shall, however, allude to the important and the clinching evidence and shall also deal with the criticism leveled by the learned counsel for the appellant with regard to the admissibility and the evidentiary value of certain documentary evidence produced on behalf of the respondent.

In the partnership deed Ex. D/1 which is dated 19-8-1957, the age of the deceased is mentioned -''56 years". As per this on 28-2-1970, the age of the deceased comes to about 68-1/2 years & Ex. D/2 the another partnership deed, dated 31-8-1964, the age of the deceased is mentioned "about 64 years". As per this also, the age of the deceased comes to about 70 years on the date of the proposal (Ex. P/1). In the application filed before the Registrar of Firms. Ex. D/5 dated 20-7-1958, the age of the deceased is declared to be 54 years. As per this also, the age of the deceased on 28-2-1970 comes to 66-1/2 years. The partnership deeds (Ex. D/1 and Ex. D/2; were produced by C. L. Jain (D W. 1), the Inspector, income tax Department The criticism of the learned counsel as 10 the evidentiary value of these deeds was that these are private documents and there is no evidence to prove the signature of the deceased on these two documents. In absence of the proof of the signature, these partnership deeds cannot be held to be proved and as such mention of the age of the deceased in these deeds cannot be relied as an admission of the deceased about his age on the dates mentioned therein. The argument of the learned counsel ex facie appears very attractive but on a probe into the evidence on record, we find there is an intrinsic evidence which satisfactorily proves the execution of these partnership deeds by the deceased. Before we proceed to dwell upon the evidence relating to the proof of the signature of the deceased on these deeds, it would be pertinent to point out that these deeds do not fall into the category of those documents which by law are required to be attested and, therefore, for the proof of these deeds section 68 of the Evidence Act would not apply. It is section 67 which would apply. Section 67 does not lay down any particular mode of proof for proving that a particular writing or signature is in the hand of a particular person. Thus, the signatures may be proved in any one or more of the following modes :--

(i) By calling a person who signed or wrote a document;

(ii) By calling a person in whose presence the documents are signed or written;

(iii) By calling handwriting expert;

(iv) By calling a person acquainted with the handwriting of the person by whom the document is supposed to be signed or written;

(v) By comparing in Court, the disputed signature or handwriting with some admitted signatures or writing;

(vi) By proof of an admission by the person who is alleged to have signed or written the document that he signed or wrote it;

(vii) By the statement of a deceased professional scribe, made in the ordinary course of business, that the signature on the document is that of a particular person;

A signature is also proved to have been made, if it is shown to have been made at the request of a person by some other person, e.g. by the scribe who signed on behalf of the executants;

(viii) By other circumstantial evidence.

It is in the light of the aforesaid legal position we proceed to examine whether the partnership deeds (Ex. D/1) and (Ex. D/2) are proved to have been signed by the deceased. It is undisputed that these deeds were produced from the income tax Department. C. L. Jain (D.W. 1), the income tax Inspector, who had appeared as a witness with the concerned income tax record and produced these partnership deeds from that record, has deposed that the deceased was an assessee. There is no cross-examination directed to this witness to challenge this fact. Narayan Das (P W. 2) who is the son of the deceased, has admitted in his deposition that his deceased father was carrying on business in partnership with Hazarimal The partnership deed (Ex. D/1) is in between the deceased and Hazarimal. Partnership deed (Ex. D/2) is in between the deceased, Hazarimal and Narayandas, son of the deceased. Narayandas (P W. 2) has also admitted the fact that even after the death of his father, Hazarimal continued the business with him. He has also admitted the fact that the business was being carried on in the firm named "Topandas Santoomal". It is mentioned in both the partnership deeds (Ex. D/1 and Ex. D/2) that the partnership business was being carried on in the firm named and styled "M/s. Topandas Santoomal" Narayandas (P.W. 2) has also admitted that partnership firm was registered. Under the provisions of the income tax Act, section 26-A of the 1922 Act and section 184 of the 1961 Act, an application for registration had/has to be made by all the partners personally and the original partnership deed had/has to be filed. Then under the provisions of the said Acts, the registration could be done only when the income tax Officer on enquiry was satisfied into the genuiness of the firm and its constitution as specified in the instrument of partnership. In view of this aforesaid factual and legal position, it can be held without hesitation that there is reliable intrinsic evidence to prove that partnership deeds (Ex. D/1 and Ex. D/2) were executed by the deceased and the objection of the learned counsel for the appellant that the signatures on Ex. D/1 and Ex. D/2 are not proved and the trial Court was wrong in relying on these deeds has to be rejected. Ex D/5, the application for registration of the partnership firm M/s. Topandas Santoomal has been produced by p. V. Karanjagaonkar (D.W. 3) from the record of the Registrar of Firms. The particulars mentioned in this application tally with the particulars given in the partnership deed (Ex. D/1). The fact that there was a partnership firm ''M/s. Topandas and Santoomal'' and the deceased was a partner therein has been held by us hereinabove, to have been proved In such a situation, this application (Ex. D/5) for the registration of the firm which bears the signature of the deceased as also the declaration by him should be held to have been made by the deceased. The contention of the learned counsel that there is no proof that this application was signed by the deceased has to be rejected in the facts and the circumstances of the case.

In the light of the foregoing discussion, we would reiterate that all the aforesaid three documents (Ex. D/1, Ex. D. 2; and Ex. D/5) are proved to have been executed by the deceased. It is significant to note that according to these three documents, the age of the deceased on the date of the proposal i.e., 28-2-1979, comes to more than 66 years. This fact further stands corroborated by Exs. D/7 and D/8, the entries in the voters list It is true that the entry in the electoral roll is not conclusive but it has an evidentiary value unless it is proved to be incorrect, According to Ex D/7 and Ex. D/8, the age of the deceased on 1-1-1966 was 65 years. Calculating on this basis, the age of the deceased on 28-2-1970 would be about 69 years, In Ex. D/5, in the declaration made about the correctness of the statement made in the application, the deceased has mentioned his age 54 years on 20-7-1958. Similarly, in Exs. D/l and D/2, which have been held to be executed by the deceased, the age mentioned is 56 years and 64 years on 18-8-1957 and 31-8-1964, respectively Unless there is something cogent to indicate that it was wrongly stated, there is no reason to discard the evidentiary value of these statements about the age. Even if the age in these documents were stated on estimation it is difficult to hold that the deceased would make an error in the estimation of his own age of more than 18 years.

The learned counsel for the appellant had laid great stress on the evidence of the doctor, N. P. Mishra (P. W. 1). His argument was that he is a qualified doctor and there is no reason to discard his evidence. It would suffice to say that as is obtainable from the evidence of this witness, his estimation was based predominantly on the statement about his age made by the deceased in his proposal (Ex. P/1) and personal statement (Ex. P/2). It is true that this witness has also deposed that he had estimated the age on the appearance of the deceased also, it is obtainable from the various judicial decisions that even in the estimation, of age made after ossification test there is a possibility of error ranging between one to three years. In the instant case, this witness had not based his estimation on an ossification test. Thus when there is a possibility of error ranging between one to three years in the estimation which is based on an ossification test, the possibility of a greater error in the estimation on appearance cannot be eradicated. In this view of the matter, we are of the opinion that in the facts and circumstances of the case, the trial Court was justified in discarding the testimony of this witness about the age of the deceased. We find no cogent reason to take a view contrary to one taken by the trial Court, The confidential report (Ex. P/2), the certificate (Ex. P/3) and the death certificate (Ex. P/4) are all by Dr. N. P. Mishra (P. W. 1) and when we have already discarded his estimation of the age for the reasons stated herein above, no reliance can be placed on these documents.

The horoscope (Ex. P/6) is not a genuine document for the reasons recorded in paragraph 14 of the impugned judgment. The learned counsel for the appellant was unable to point out any cogent reason to persuade us to take a view contrary to the one taken by the trial Court regarding this document. It may also be mentioned that we have looked into the original document and from its very appearance it appears to be a spurious document.

In view of the fact that the age in Ex, P/9, the insurance policy of the deceased was admitted by the respondent on the basis of the horoscope (Ex, P/6) and that has been found to be not genuine and spurious, the admission of age of the deceased in Ex. P/9 loses all its force and does not bind the respondent.

In the light of the foregoing discussion, who hold that the age of the deceased was more than 60 years on the date of the proposal, i.e., 28-2-1970. This disposes of the first contention that was advanced by the learned counsel for the appellant.

We now turn to consider the second contention. The learned counsel for the appellant had based his argument in support of this contention on the interpretation of section 45 of the Insurance Act. We would, therefore, like to set out section 45 of the Insurance Act. This section reads as under:--

Policy not to be called in question on ground of misstatement after two years--No policy of life insurance effected before the commencement of this Act shall after the expiry, of two years from the date of commencement of this Act and no policy of 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 incurable or false, unless the insurer shows that such statement was on a material matter or suppressed facts 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 m king it that the statement was false or that it suppressed facts which it was material to disclose:

Provided that nothing in this section shall prevent the insurer from calling for proof of age at any time if he is entitled to do so, and no policy shall be deemed to be called in question merely because the terms of the policy are adjusted on subsequent proof that the age of the life insured was incorrectly stated in the proposal.

The learned counsel for the appellant relied on the expression "no policy shall be deemed to be called in question merely because the terms of the policy are adjusted on subsequent proof that the age of the life insured was incorrectly stated in the proposal." Relying on this expression, his argument was that the policy is not vitiated on account of incorrect statement of the age. He argued that only remedy if the statement about the age is found to be incorrect is to adjust the premium with reference to the correct age.

On the analysis of section 45, quoted hereinabove, we find the policy cannot be avoided on the ground of mis-representation unless the following are established by the insurer :--

(i) the statement was incorrect or false;

(ii) such statement was on a material matter or that the statement suppressed facts which it was material to disclose;

(iii) the statement was fraudulently made; and

(iv) the policy-holder knew at the time of making the statement that it was false to his knowledge or the facts which it was material to disclose have been suppressed.

In other words, it is imperative that to avoid the contract insurer must prove that material facts have been suppressed with the full knowledge of the assured. Proof of material and deliberate fraud is imperative.

It is on the above analysis of section 45, we have to examine whether the policy is vitiated or not. In other words, we have to see whether the deceased deliberately made a false statement about his age and thus practiced a fraud on the respondent. The respondent in its letter dated 8-3-1973 (Ex. P/15), whereas it refused to pay the claim of the appellant, as also in the written statement, clearly averred that the deceased had made a false statement about his age and practiced fraud on the respondent and that had the correct age been stated as it was beyond the insurable age, the respondent would not have insured the life of the deceased. It is obtainable from the unrebutted evidence of Manohar Somani (DW. 4) who is the Superindent of new business Department of the Life Insurance Corporation of India, Indore, that according to the Insurance Manual, the insurable age limit ii 60. No person having age above 60 years is insurable. There is no cross-examination directed to this witness nor during the course of the argument anything was pointed to the contrary by the learned counsel for the appellant Thus, it is clear that the fact of age was a material fact which would have affected the decision of the respondent to insure the deceased. From the discussion of the evidence, while dealing with contention No 1, it is evidence that the deceased on the date of the proposal very well knew that he was aged over and above 60 years. Knowing this fact, the deceased deliberately made a false statement about his age that he was only 48 years of age By making this deliberate false statement he led the respondent to insure his life and thus practiced a fraud. In this view of the matter, the policy (Ex. P/9) cannot be enforced. We may point out that the proviso to section 43 on its plain reading is an enabling provision. It enables the insurer to readjust the premium payable by the insured when the age stated in the proposal is found to be incorrect on calling for the proof of age after issuance of the insurance policy on the basis of the age that was mentioned in the proposal. It does not take away the right of the insurer under the body of the section to avoid the policy on the ground of fraud. In the instant case, we have already found hereinabove that the deceased had practiced fraud on the respondent. In such a view of the matter, the respondent was right in avoiding the policy and refusing the payment of the claim. The learned counsel for the appellant had relied on the following decisions :--

(i) Hemmings v. Sceptre Life Association, Ltd. 1905 Chancery Division 365.

(ii) Allianz Und Stuttgarter Life Insurance Bank Ltd. Vs. Hemanta Kumar Das, .

(iii) Maneklal Kalidas Shah Vs. The Yorkshire Insurance Company Limited, ; and

(iv) Daulat Ram v. Bharat Insurance Co. AIR 197 Del 180.

These decisions, as would be indicated hereinafter, are distinguishable from the facts of the instant case and do not advance the case of the appellant.

The principle discernible in Hemming''s case (supra) is capsulised in its head-note, which reads as under :--

A policy of life assurance was granted upon the basis of a proposal which concluded with a declaration that the answers given in the proposal were true to the best of the proposer''s knowledge and belief, and an agreement that the proposal and declaration should be the basis of the contract, and that if it should thereafter appear that the proposer had made any untrue statement therein the policy should be void and the premiums forfeited. In the proposal the assured made a mistake as to her age, and stated that she was three years younger than she was. The policy, after reciting the declaration and the statement by the assured as to her age, evidence of which the insurance company required to be produced, derived for the payment by the company of the policy moneys upon proof of the death of the assured, or of her having attend the age of sixty years, and it contained a provise for avoidance of the policy and forfeiture of the premium in the event of the policy having been obtained by willful misrepresentation. After discovery of the mistake as to the age of the assured the company accepted two annual premiums : --

Held (1) following Fowks v. Manchester and London Life Assurance and Loan Association. (863) 3 B & S 9,7, that the declaration was to be read with the policy, and that the company were not entitled to avoid the policy and forfeit the premiums unless the statement in the proposal was designedly untrue, although upon the discovery of the mistake they might have declined to continue the policy upon returning the back premiums, (2) that by accepting premiums after knowledge of the facts they must be taken to have affirmed the policy as it stood, and that consequently they were bound to pay the policy moneys upon the assured actually attaining the age of sixty years, and were not entitled to postpone payment until the assured had attained that age upon the assumption of her age at the date of the proposal having been as therein stated.

The very reading of the head-note indicates the distinguishing feature of that case with the instant case. In the instant case, it has been found that the statement in the proposal was designedly untrue and that there is no evidence that the respondent had accepted the premium even after it was fully satisfied that the statement of the age made in the proposal was incorrect. In Alliauz Hud Stutrgarter Life Insurance Bank''s case (supra), the proposal was accepted after the proof of the age to the satisfaction of the Insurance company and the insurance company had admitted the age which is not the position in the instant case, (ii) the horoscope which was submitted in support of the proof of the age was not found to be a forged document. The observation in the judgment of Panckridge, J. "I imagine such a course to be permissible if it could be shown that the admission has been obtained by fraud, as for example by the production of a forged horoscope" is very significant. In the instant case, we have found that the admission was obtained on the basis of a forged horoscope. Manaklal''s case (supra) lies down that correctness of age admitted by the company cannot be disputed unless the admission was procured by fraud. In the instant case, the Corporation has discharged the burden of proof that the admission of age was obtained on the basis of a forged document, i.e. by fraud. Daulat Ram''s case (supra) simply lays down that it is not every false statement or suppression the ipse facto enables that insurer to avoid the insurance when it is repudiated after two years from the date of the insurance contract. Insurers must establish the conditions laid down in section 45 i.e. the statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policyholder and that the policyholder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose and in that case the statement concerning the illiteracy of the insured or her observing Parda was not considered a material consideration within section 45 and found that the material facts of the insured suffering from diabetes was not proved. In the instant case, the fraud required to be proved u/s 45 has been held to be proved.

We may in the passing state that in the instant case the insured had died before two years from the date of the insurance. For this reason also section 45 could not be brought into aid by the appellant. But in view of the fact that assuming that section 45 even applies, as we have found that the policy was obtained by fraud, we do not consider in detail as to whether the two years'' period should be counted upto the date of death of the insured or upto the date of actual refusal of the claim.

In the result, the appeal fails and is dismissed with costs. Counsel''s fee as per schedule, if certified.