Case: P.C. Chacko and Anr Vs. Chairman, Life Insurance Corporation of India and Ors

Application of Section 45 of the Insurance Act, 1938 is in question in this appeal which arises out of a judgment and order dated 17th December, 2004 passed by a Division Bench of the High Court of Kerala at Ernakulam in A.F.A. No. 18 of 2000 setting aside the judgment and order of a learned Single Judge dated 23rd September, 2000 passed in Appeal Suit No.633 of 1993 confirming the judgment and decree passed by the Subordinate Judge of Kozhikode in OS No. 240 of 1990 dated 27th February,in the suit are the appellants herein. They filed the said suit inter alia for recovery of the amount of insurance on the death of one Chackochan (hereinafter referred to as. The insured took an insurance policy on 21st February, 1987. He died on 6th July, 1987. On his death, the appellants herein claimed the insured amount. On the premise that the insured 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 ofnow 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:Did you ever have any operation, accident or injury? The answer was(b) Have your remained absent from place of your work on ground of health during the last 5 years ? To which answer was(c) What has been your state of health? The answer wasfact that the said answers were incorrect is not in dispute. The suit filed by the appellants, however, wasan appeal preferred by the respondents, on the premise that despite such wrong answers, as the injured died on account ofa learned Single Judge of the High Court opined that there was nothing to indicate that if the injured had disclosed the factum of previous operation, the appellant-Corporation might not have inclined to insure and insisted on a higher premium and thus there was no material to show that the non-disclosure was of a material fact justifying repudiation of the policy by thean intra court appeal, the Division Bench of the High Court, however, by reason of the impugned judgment opined that the parties are bound by the warranty clause contained in the agreement which is also clear from the declaration signed by the insured and the non-disclosure related to a material fact which was required to be answered correctly under question No.22(a).

Court's reasoning:
A deliberate wrong answer which has a great bearing on the contract of insurance, if discovered may lead to the police being vitiated in lawt has not been shown in this case that repudiation of the contract of insurance was not done by the respondent with extreme care and caution or was otherwise invalid in law. The Division Bench of the High Court has taken all the aspects of the matter in consideration and,arrived at a just decisiono case has been made out for our interference with the impugned judgment.