PER JUSTICE J.M. MALIK

1.      Counsel for the parties present.  Arguments heard.  There is a delay of 43 days in filing the Revision Petition.  In the interest of justice, we condone the delay for the reasons, mentioned in the application for condonation of delay.

2.      The question is, “whether the insured was an alcoholic”? This is an indisputable fact that while filling up the proposal form, he declared that he was not an alcoholic.  The State Commission passed the following order:-

     “The Ld. District Forum  has concluded from the fact available in the medical record that the deceased was suffering from Jaundice for the past 4-5 years where after perusal of the records we find that it cannot be projected from the mention of ‘Jaundice 4-5 years’ that he was continuously suffering from Jaundice.  It is intended that he could have been suffering from Jaundice earlier to 4-5 years continuously then it was the responsibility of the Insurance Company to produce all the medical evidences.  Apart from it, the Ld. District Forum has also accepted this point as proved that the deceased used to drink four quarters a day as has been mentioned in his Medical History.  We after perusal of medical record have found that this is also mentioned in the records of the  hospital that the patient was a habitual drunker of liquor or was dependent on liquor and further to this “?” sign has also put by the Doctor himself and has also mentioned below this that no detail has been provided by his attendant.  At the same time it is also mentioned that when he took the liquor last time, no information is available with the persons attending him.  In this situation the Ld. District Forum has erred in accepting the fact that the deceased used to drink four quarters of liquor a day because no such evidence is on record in support of this statement.  The reason of the death of the deceased was Cardio Respiratory Arrest and the advice of Cardio expert was also taken after admitting him in the hospital.  His death was told due to sudden respiratory failure.  As far as the fact of his non consumption of liquor in the proposal form is concerned, the responsibility to prove this point was of the Insurance Company only because it is apparent from the perusal of the proposal form that the deceased has put his signature in Hindi and the rest of the form has been filled in English which would clearly have been filled by the agent.  No affidavit of such agent has been produced on that basis it could be accepted that all the relevant informations were provided to the deceased before filling the form and all the facts in the proposal form were filled as per his statement only.  It is not safe to come on the conclusion only on the basis of record of S.R.Kalla Memorial Hospital and the deceased would have been suffering from Jaundice for the past 4-5 years.  He had suffered with Jaundice in the past 4-5 years anytime, it is only mentioned in the Medical History that ‘jaundice 4-5 back’.  At the same time though it has been stated to suffer from Acute Alcoholic Liver Disease, no Pathology finding has been produced to support this plea nor there is any affidavit of the Doctor.  The Opposite Party has also not put in their appearance.  Therefore, in the above situation, on the basis of available records we come to the conclusion that Ld. District Fourm has erred in dismissing the complaint of the complainant. We find the appeal acceptable.”

3.      However, we are unable to agree with the Ld. State Commission.  Counsel for the respondent/complainant also submits that the petitioner/respondent has no proof with solid and unflappable evidence that the insured was an alcoholic.  He contended that the agent filled up the form and there are no pathological findings that he was a drunkard.  He has also invited our attention towards Section 45 of the Insurance Act.

4.      All these arguments have left no impression upon us.  First of all, it must be mentioned that the Section 45 does not come into play in favour of insured, whenever he conceals or suppresses the material fact.   The suppression of fact that he was an alcoholic, to our mind, is a material fact. Secondly, whether he died due to being alcoholic or due to respiratory failure has no connection with the present case.   The question to the fore  is  “whether he has suppressed the material fact or not”?  Had he told the Insurance Company that he was having drinks, the Insurance Company would have enhanced the premium or rejected his proposal.  This was a material mistake on the part of the insured.  Furthermore, despite the admission made by the insured before the hospital authorities, there is another factor.  This is the statement of Smt. Vidya Soni, the complainant herself, which bears her signatures to the questions, she replied.

(i)   How many drinks did LA usually have in a week? 

       Answer-not known.

(ii)    How long had he been drinking?

        Answer- exact duration not known.

5.      It is not possible that the doctor would have joined hands with the Insurance Company and made a false statement before the claim was made.  No rebuttal to this evidence was adduced.  This view finds support from the authority reported in the case of “Satwant Kaur Sandhu Vs. New India Assurance Co. Ltd., reported in IV (2009) CPJ 8 (SC), the Hon’ble Apex Court  held as under :-

“12.. ……… Nonetheless, it is a contract of insurance falling in the category of contract ‘uberrimae fidei’, meaning, ‘a contract of utmost good faith, on the part of the assured’.  Thus, it needs little emphasis that when an information on a specific aspect is asked for in the proposal form, an assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge. It is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not.  Of course, obligation to disclose extends only to facts which are known to the applicant and not to what he ought to have known.  The obligation to disclose necessarily depends upon the knowledge one possesses.  His opinion of the materiality of that knowledge is of no moment. (See: Joel Vs. Law Union & Crown Ins. Co. [1908] 2 K.B. 863).

13. In United India Insurance Co. Ltd. Vs. M.K.J. Corporation, III (1996) CPJ 8 (SC)=(1996) 6 SCC 428, this Court has observed that it is a fundamental principle of insurance law that utmost faith must be observed by the contracting parties.  Good faith forbids either party from non-disclosure of the facts which the party privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary.  (Also see: Modern Insulators Ltd. Vs. Oriental Insurance Co. Ltd., II (2000) SLT 323 = I (2000) CPJ 1 (SC) = (2000) 2 SCC 734).

17.  The  term “material fact”  is  not defined  in the Act and, therefore, it has been understood and explained by the courts in general terms to  mean as any fact which would influence the judgment of a prudent insurer in fixing the premium or determining whether he would like to accept the risk.  Any fact which goes to the root of the Contract of Insurance and has a bearing on the risk involved would be “material”.

18.  As stated in Pollock and Mulla’s Indian Contract  and Specific Relief Acts, any fact the knowledge or ignorance of which would materially influence an insurer in making the contract or in estimating the degree and character of risks in fixing the rate of premium is a material fact”. 

6.      Consequently, we hereby accept the Revision Petition, set aside the order passed by the State Commission and dismiss the complaint.  No order as to costs.