Shardaben Kantilal Panchal vs Lief Insurance Corporation of India

A.P. Ravani, J.—The petitioner's husband had taken out two policies, each of Rs.50,000. Unfortunately, the petitioner's husband dies. In respect of one policy, the Corporation had accepted the claim under the policy and the amount assured, i.e., Rs.50,000, has been paid to the petitioner. The dispute is with regard to the amount of the other policy. Learned counsel for the petitioner submits that there was no dating back with regard to another policy and the agent of the deceased or the deceased himself never wrote to the Corporation giving consent with regard to the dating back. In these circumstances, the Corporation could never have said that the policy has lapsed. The respondent-Corporation has filed a detailed affidavit-in-reply. In paragraphs 5 and 6 of the affidavit-in-reply, the facts relating to this particular policy have been mentioned. It appears that disputed question of fact do arise in view of the contentions raised in the affidavit-in-reply. One such circumstances may be noted. It is stated in the affidavit-in-reply that a consent letter in writing regarding back date was obtained from the deceased but the letter is missing from the file of the branch office of the Corporation. This circumstances indicates that there may be some mischief with regard to the records of the Corporation.

Who has done this mischief, or how the letter is missing is a question of fact. There are other disputed question also, such questions cannot be decided in a petition under article 226 of the Constitution of India. In the above view of the matter, the proper remedy for the petitioner would be to file a civil suit for claiming the amount assured under the policy in question. Hence rejected. Notice discharged. Ad interim relief stands vacated.

The judgment of the court was delivered by

Gokulakrishnan, C.J.

This Letters Patent Appeal is against the order of the learned single judge dismissing the Special Civil Application No. 3822 of 1987. The gravamen in the Special Civil Application is that in the policy for Rs.50,000, the policy holder nor his agent consented for dating back of the said policy. The prayer in the main Special Civil Application is for declaring as illegal and bad in law the impugned decision and action of the respondent Corporation to treat Policy No. 49718948 of Mr. K. V. Panchal (deceased) as lapsed and to deny the payment of claim under that policy to the appellant as per their letters dated August 13, 1986 (annexure ""I"" to the Special Civil Application) and June 9, 1987 (anexure ""L"" to the Special Civil Application) and to quash and set aside the same. The learned single judge, after considering the facts of the case, thought it fit to relegate the parties to the civil court and on that score, dismissed disputed questions of fact and as such, the remedy will be only before the civil court. It is as against that order, the present Letters Patent Appeal has been filed.

Mr. Pujara, learned counsel appearing for the appellant, contends that the matter can be decided on the record available with the insurance company and also the affidavits filed by the respective parties and there is no point in driving the parties to the civil court, which will unnecessarily consume time and energy. According to learned counsel, even though the policyholder took the policy in March, 1985, and dies on August 3, 1985, the first premium receipt and the subsequent deductions were received by the wife of the deceased, who is the appellant, herein, much later to the death of the policy holder. Hence, according to Mr. Pujara, the facts on records will, definitely, reveal that there is absolutely no consent for dating back the insurance policy which is in dispute as at present.

The facts reveal that the deceased took two policies out of which one has been paid and the dispute is in respect of the other policy for Rs.50,000. According to the appellant, there was no dating back with regard to this policy and the agent of the deceased or the deceased himself never wrote to the Corporation, giving consent with regard to the dating back. On the other hand, it is the case of the Corporation that there was dating back and that that was decided much earlier to the death of the policy-holder. The policy was taken in the month of March, 1985, and the premium was also entered in the books of the Corporation much earlier to the death of the policy-holder. Admittedly, the policy-holder died in August, 1985. Mr. Pujara wanted to distinguish the decision of the Supreme Court in the case of LIC of India v. Kiran Sinha AIR 1985 SC 1265 , and referred to in the reply-affidavit of the Corporation and said that, that case arose under different circumstances and that cannot be made applicable to the facts of the present case. The said Supreme Court decision arose out of the judgment rendered by the Patna High Court in the case of Smt. Kiran Sinha Vs. Life Insurance Corporation of India and Others, . In that decision, the Bench of the Patna High Court granted the prayer in the writ petition by directing the Corporation to pay the amount. That was a case in which the deceased assured had purchased three insurance policies. The wife of the deceased, who was the nominee under the policies, made an application for payment under the policies. The fact of the death of the assured was informed by his wife to the agent and also to the development officer. The Corporation refused to pay the sum assured under the policies on the ground that the Corporation had no knowledge about the death of the deceased, and that the policies stood lapsed. In those circumstances, the Patna High Court held that the information of the death of the assured to the agent is an adequate information an it amounts to an information to the Corporation itself, and further, even if the payments were received by the Corporation after the death of the deceased-assured with or without the knowledge of such death, with the Corporation accepting the payment of premium, the principle of waiver was attracted and the Corporation was precluded from raising the plea that on the death of deceased, policies stood lapsed. It is as against this judgment, the Supreme Court had occasion to consider the effect of such directions given by the High Court in the decision in the case of LIC of India v. Kiran Sinha AIR 1985 SC 1265. In that case, the Supreme Court held:

The High Court could not have in the circumstances of this case directed the payment of the money claimed under the insurance policies in question in a petition filed under article 226 of the Constitution. The only remedy available to the respondent in this case was a suit before a civil

court. The judgment of the High Court is, therefore, set aside.

As far as the present case is concerned, the main dispute is as to whether there was a consent by the deceased or whether the insurance company had made out a case that there was a consent for dating back with regard to the policy, which is under dispute now. Such a question, in our opinion, cannot be decided by affidavits and the records alone and the same has to depend upon the evidence that has to be let in by the respective parties for the purpose of finding out as to where there is a consent for dating back of the policy. Even with regard to the contention raised by Mr. Pujara to the effect that there is no notice as contemplated u/s 50 of the Insurance Act, the same can be agitated before the civil court, when the main issues, which we have referred to above, are contested before the civil court. We need not, as at present, discuss the provisions of section 50 of the Insurance Act and as to whether the notice contemplated was not issued by the insurance company or not, except quoting section 50 of the Insurance Act herein:

Notice of options available to the assured on the lapsing of a policy.- An insurer shall, before the expiry of three months from the date on which the premiums in respect of a policy of life insurance were payable but not paid, give notice to the policy-holder informing him of the options available to him unless these are set forth in the policy.

Underlining is given by us for the purpose of showing that many matters raised by learned counsel appearing for the appellant are disputed questions which have to be decided only in a property framed civil suit. For all these reasons, we are in complete agreement with the reasoning and finding of the learned single judge and accordingly, the Letters Patent Appeal is dismissed.