25.08.2025 Pronounced on Life Insurance Corporation of India Life Insurance Corporation of India v. Smt. Vijay Sharma & Others Smt. Vijay Sharma
Case Details
1994 (O&M) RSA-2326-1994 (O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA IN THE HIGH COURT OF PUNJAB AND HARYANA IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH AT CHANDIGARH RSA-2326-1994 (O&M) RSA Reserved on: 20.08.2025 Reserved on: Pronounced on:25.08.2025 Pronounced on Life Insurance Corporation of India Life Insurance Corporation of India .....Appellant VERSUS Smt. Vijay Sharma & Others Smt. Vijay Sharma .....Respondents HON'BLE MS. JUSTICE MANDEEP PANNU CORAM: HON'BLE MS. JUSTICE MANDEEP PANNU HON'BLE MS. JUSTICE MANDEEP PANNU Mr. Prateek Mahajan, Advocate and Present: Mr. Prateek Mahajan, Advocate and Mr. Prateek Mahajan, Advocate and Mr. Kunal Soni, Advocate for the appellant. Mr. Kunal Soni, Advocate for the appellant. Mr. Kunal Soni, Advocate for the appellant. Mr. Akshit Pathania, Amicus Curiae, Mr. Akshit Pathania, Amicus Curiae, Mr. Akshit Pathania, Amicus Curiae, for the respondent. for the respondent. MANDEEP PANNU, J MANDEEP PANNU, J 1. Life The present Regular Second Appeal has been filed by the Life The present Regular Second Appeal has been filed by The present Regular Second Appeal has been filed by Insurance Corporation of India (appellant/defendant Insurance Corporation of India Smt. Vijay Sharma defendant) against Smt. Vijay Sharma and others (respondents (respondents/plaintiffs), challenging findings of the ), challenging the concurrent findings of the 19.04.1994. ourts below recorded in judgments and decrees dated 25.11.1992 and 19.04.1994 ourts below recorded in judgments and decrees dated Courts below recorded in judgments and decrees dated Brief Facts 2 Chand Sharma, PCMS, was insured by the defendant Dr. Abnash Chand Sharma, PCMS, was insured by the defendant Chand Sharma, PCMS, was insured by the defendant Dr. ₹10,000 was taken on under two life insurance policies. Policy No. 22755994 for ₹10,000 was taken on under two life insurance policies. Policy No. 22755994 for under two life insurance policies. Policy No. 22755994 for 05.10.1982, and Policy No. 229390414 for , and Policy No. 229390414 for ₹50,000 was taken on ₹50,000 was taken on 26.04.1980. Bo 1980. Both the policies lapsed for sometime on account of non the policies lapsed for some
Legal Reasoning
It was further argued that there is no dispute regarding the correctness It was further argued that there is no dispute regarding the correctness It was further argued that there is no dispute regarding the correctness It was further argued that there is no dispute regarding the correctness riginal policies issued in 1980, but the dispute arises only with respect to of the original policies issued in 1980, but the dispute arises only with respect to riginal policies issued in 1980, but the dispute arises only with respect to riginal policies issued in 1980, but the dispute arises only with respect to payment the revival of those policies. Since the policies lapsed on account of non-payment the revival of those policies. Since the policies lapsed on account of non the revival of those policies. Since the policies lapsed on account of non yearly premium due in October 1984, the assured applied for revival of of the half-yearly premium due in October 1984, the assured applied for revival of yearly premium due in October 1984, the assured applied for revival of yearly premium due in October 1984, the assured applied for revival of and Ex. licies on the basis of personal statements of health, Ex. D2 and Ex. licies on the basis of personal statements of health, Ex. D the lapsed policies on the basis of personal statements of health, Ex. D D7, dated 03.05. 1985. In those statements, the insured again made 03.05.1985 and 22.05.1985. In those statements, the insured again made 1985. In those statements, the insured again made a declaration of good health. It was specifically provided in the revival forms that a declaration of good health. It was specifically provided in the revival forms that a declaration of good health. It was specifically provided in the revival forms that a declaration of good health. It was specifically provided in the revival forms that s untrue, the contract would be void. if the declaration was untrue, the contract would be void. if the declaration wa 16. Learned counsel drew the attention of the Court to the questions asked Learned counsel drew the attention of the Court to the questions asked Learned counsel drew the attention of the Court to the questions asked Learned counsel drew the attention of the Court to the questions asked in the personal statements. One question was whether the assured had suffered in the personal statements. One question was whether the assured had suffered in the personal statements. One question was whether the assured had suffered in the personal statements. One question was whether the assured had suffered ich he replied from any illness requiring treatment for more than a week, to which he replied from any illness requiring treatment for more than a week, to wh from any illness requiring treatment for more than a week, to wh “No.” Another question was whether he was suffering from any disease of the “No.” Another question was whether he was suffering from any disease of the “No.” Another question was whether he was suffering from any disease of the “No.” Another question was whether he was suffering from any disease of the lungs, to which he again answered “No.” According to learned counsel, these lungs, to which he again answered “No.” According to learned counsel, these lungs, to which he again answered “No.” According to learned counsel, these lungs, to which he again answered “No.” According to learned counsel, these statements were false, and the assured had deliberately suppressed material facts. statements were false, and the assured had deliberately suppressed material facts. statements were false, and the assured had deliberately suppressed material facts. statements were false, and the assured had deliberately suppressed material facts. one month of revival of the policies, he died on 13.06.1985. one month of revival of the policies, he died on Within one month of revival of the policies, he died on 17. Chand Sharma was Learned counsel pointed out that Dr. Abnash Chand Sharma was Learned counsel pointed out that Dr. Learned counsel pointed out that Dr. admitted to Ram Saran Dass Kishori Lal Charitable Hospital admitted to Ram Kishori Lal Charitable Hospital, Amritsar on 1985. 1985 and referred to PGI Chandigarh, where he was admitted on 13.06.1985. 1985 and referred to PGI Chandigarh, where he was 01.06.1985 and referred to PGI Chandigarh, where he was The case history at PGI revealed that the assured was suffering from chronic active The case history at PGI revealed that the assured was suffering from chronic active The case history at PGI revealed that the assured was suffering from chronic active The case history at PGI revealed that the assured was suffering from chronic active hepatitis and pneumothorax, that he had been taking injections for 10 years, and hepatitis and pneumothorax, that he had been taking injections for 10 years, and hepatitis and pneumothorax, that he had been taking injections for 10 years, and hepatitis and pneumothorax, that he had been taking injections for 10 years, and had been suffering from jaundice with low-grade fever since 14 mon had been suffering from jaundice with low ths. Being a grade fever since 14 months. Being a doctor himself, the assured was well aware of his medical condition, and yet he doctor himself, the assured was well aware of his medical condition, and yet he doctor himself, the assured was well aware of his medical condition, and yet he doctor himself, the assured was well aware of his medical condition, and yet he made false declarations while seeking revival of the policies. made false declarations while seeking revival of the policies. made false declarations while seeking revival of the policies. 18. It was argued that the findings of the Courts below are contrary to It was argued that the findings of the Courts below are contrary to It was argued that the findings of the Courts below are contrary to It was argued that the findings of the Courts below are contrary to , PGI, proved the case history which clearly evidence. DW9 Dr. S. Verma, PGI, proved the case history which clearly , PGI, proved the case history which clearly evidence. DW9 Dr. S. Verma TRIPTI SAINI 2025.08.28 11:24 I attest to the accuracy and integrity of this document 1994 (O&M) RSA-2326-1994 (O&M) -7- mentioned that the patient was suffering from chronic active hepatitis and mentioned that the patient was suffering from chronic active hepatitis and mentioned that the patient was suffering from chronic active hepatitis and mentioned that the patient was suffering from chronic active hepatitis and grade fever for 14 months pneumothorax and had a history of jaundice and low-grade fever for 14 months pneumothorax and had a history of jaundice and low pneumothorax and had a history of jaundice and low evidence, however, was prior to his death. He was also addicted to injections. His evidence, however, was prior to his death. He was also addicted to injections. His prior to his death. He was also addicted to injections. His ignored by the Courts below merely on the ground that the insured was examined ignored by the Courts below merely on the ground that the insured was examined ignored by the Courts below merely on the ground that the insured was examined ignored by the Courts below merely on the ground that the insured was examined by the doctors of Life Insurance Corporation by the doctors of before issuance of the original Life Insurance Corporation before issuance of the original Life policies. Learned counsel submitted that the medical examination by Life policies. Learned counsel submitted that the medical examination by policies. Learned counsel submitted that the medical examination by Insurance Corporation doctors at the time of insurance was based on the answers urance Corporation doctors at the time of insurance was based on the answers doctors at the time of insurance was based on the answers given by the life assured in the proposal form. Had he disclosed the true facts, the given by the life assured in the proposal form. Had he disclosed the true facts, the given by the life assured in the proposal form. Had he disclosed the true facts, the given by the life assured in the proposal form. Had he disclosed the true facts, the corporation would have examined him more thoroughly and referred him to corporation would have examined him more thoroughly and referred him to corporation would have examined him more thoroughly and referred him to corporation would have examined him more thoroughly and referred him to ling these ailments, the assured deprived the corporation of specialists. By concealing these ailments, the assured deprived the corporation of ling these ailments, the assured deprived the corporation of specialists. By concea that opportunity. that opportunity. 19. ant relied In support of his contentions, learned counsel for the appellant relied In support of his contentions, learned counsel for the appell In support of his contentions, learned counsel for the appell Harpreet Kaur and Others v. upon a judgment of this Court passed in the case of Harpreet Kaur and Others v. upon a judgment of this Court passed in the case of upon a judgment of this Court passed in the case of LIC of India and Others, 2019 (3) RCR (Civil) 801 LIC of India and Oth held that ers, 2019 (3) RCR (Civil) 801, wherein it was held that concealment of material facts relating to serious ailments such as valve concealment of material facts relating to serious ailments such as valve concealment of material facts relating to serious ailments such as valve concealment of material facts relating to serious ailments such as valve replacement surgery and bypass surgery justified repudiation of the insurance replacement surgery and bypass surgery justified repudiation of the insurance replacement surgery and bypass surgery justified repudiation of the insurance replacement surgery and bypass surgery justified repudiation of the insurance t fully applies to the present claim. According to learned counsel, this judgment fully applies to the present claim. According to learned counsel, this judgmen claim. According to learned counsel, this judgmen case. 20. Life It was also argued that the Courts below erred in holding that Life It was also argued that the Courts below erred in holding that It was also argued that the Courts below erred in holding that could only repudiate the policy within two years under Insurance Corporation could only repudiate the policy within two years under could only repudiate the policy within two years under Insurance Corporation Section 45 of the Insurance Act, 1938. Learned counsel submitted that Section 45 Section 45 of the Insurance Act, 1938. Learned counsel submitted that Section 45 Section 45 of the Insurance Act, 1938. Learned counsel submitted that Section 45 Section 45 of the Insurance Act, 1938. Learned counsel submitted that Section 45 permits repudiation even after two years if material misstatement is proved. Since permits repudiation even after two years if material misstatement is proved. Since permits repudiation even after two years if material misstatement is proved. Since permits repudiation even after two years if material misstatement is proved. Since ersonal statements of health in May 1985, revival of the policy was based on personal statements of health in May 1985, ersonal statements of health in May 1985, revival of the policy was based on p suppression of material facts therein entitled LIC to repudiate the contract, suppression of material facts therein entitled LIC to repudiate the contract, suppression of material facts therein entitled LIC to repudiate the contract, suppression of material facts therein entitled LIC to repudiate the contract, irrespective of the time elapsed from the date of original policies. irrespective of the time elapsed from the date of original policies. irrespective of the time elapsed from the date of original policies. TRIPTI SAINI 2025.08.28 11:24 I attest to the accuracy and integrity of this document 1994 (O&M) RSA-2326-1994 (O&M) -8- 21. On the other hand, learned amicus curiae On the other hand, learned for the respondents amicus curiae for the respondents supported the judgments of the Courts below. He argued that there is no illegality supported the judgments of the Courts below. He argued that there is no illegality supported the judgments of the Courts below. He argued that there is no illegality supported the judgments of the Courts below. He argued that there is no illegality in the concurrent findings. He submitted that the revival of the policies was merely in the concurrent findings. He submitted that the revival of the policies was merely in the concurrent findings. He submitted that the revival of the policies was merely in the concurrent findings. He submitted that the revival of the policies was merely of the Act a continuation of the original policies issued in 1980. Hence, Section 45 of the Act a continuation of the original policies issued in 1980. Hence, Sect a continuation of the original policies issued in 1980. Hence, Sect squarely applies, and the burden was upon the corporation to establish that the squarely applies, and the burden was upon the corporation to establish that the squarely applies, and the burden was upon the corporation to establish that the squarely applies, and the burden was upon the corporation to establish that the suppression of facts was fraudulent and material. Learned counsel submitted that suppression of facts was fraudulent and material. Learned counsel submitted that suppression of facts was fraudulent and material. Learned counsel submitted that suppression of facts was fraudulent and material. Learned counsel submitted that no such proof has been furnished by the corporation. He further argued that the no such proof has been furnished by the corporation. He further argued that t no such proof has been furnished by the corporation. He further argued that t no such proof has been furnished by the corporation. He further argued that t insured was examined by LIC doctors, declared medically fit, and that mere insured was examined by LIC doctors, declared medically fit, and that mere insured was examined by LIC doctors, declared medically fit, and that mere insured was examined by LIC doctors, declared medically fit, and that mere grade fever in the case history could not amount to mention of jaundice or low-grade fever in the case history could not amount to grade fever in the case history could not amount to mention of jaundice or low concealment of a material disease. He therefore contended that the judgments of concealment of a material disease. He therefore contended that the judgments of concealment of a material disease. He therefore contended that the judgments of concealment of a material disease. He therefore contended that the judgments of the Courts below do not call for interference. the Courts below do Findings of this Court Findings of this Court 22. This Court has carefully considered the rival submissions and This Court has carefully considered the rival submissions and This Court has carefully considered the rival submissions and This Court has carefully considered the rival submissions and examined the record. It is not in dispute that the initial policies Ex. D1 and Ex. D3 examined the record. It is not in dispute that the initial policies Ex. D1 and Ex. D examined the record. It is not in dispute that the initial policies Ex. D1 and Ex. D examined the record. It is not in dispute that the initial policies Ex. D1 and Ex. D payment of dues, and that were issued in 1980, that they lapsed on account of non-payment of dues, and that were issued in 1980, that they lapsed on account of were issued in 1980, that they lapsed on account of they were revived by documents Ex. D2 and Ex. D they were revived by documents Ex. D 1985 and Ex. D7 on 03.05.1985 and 22.05.1985 1985, within one respectively. It is also admitted that the insured died on 13.06.1985, within one respectively. It is also admitted that the insured died on respectively. It is also admitted that the insured died on month of revival. month of revival. 23. ase history proved by DW9 The appellant has placed reliance on the case history proved by DW9 The appellant has placed reliance on the c The appellant has placed reliance on the c Dr. S. Verma, which records chronic active hepatitis, pneumothorax, jaundice, and Dr. S. Verma, which records chronic active hepatitis, pneumothorax, jaundice, and Dr. S. Verma, which records chronic active hepatitis, pneumothorax, jaundice, and Dr. S. Verma, which records chronic active hepatitis, pneumothorax, jaundice, and fever for 14 months prior to death. However, merely because these ailments were fever for 14 months prior to death. However, merely because these ailments were fever for 14 months prior to death. However, merely because these ailments were fever for 14 months prior to death. However, merely because these ailments were straightaway not mentioned by the insured, the claim of the plaintiffs cannot be straightaway not mentioned by the insured, the claim of the plaintiffs cannot be not mentioned by the insured, the claim of the plaintiffs cannot be rejected. Reliance in this regard has rightly been placed by the Courts below on the rejected. Reliance in this regard has rightly been placed by the Courts below on the rejected. Reliance in this regard has rightly been placed by the Courts below on the rejected. Reliance in this regard has rightly been placed by the Courts below on the testimony of DW10, Shri D.K. Sharma, Divisional Manager of LIC, who admitted testimony of DW10, Shri D.K. Sharma, Divisional Manager of LIC, who admitted testimony of DW10, Shri D.K. Sharma, Divisional Manager of LIC, who admitted testimony of DW10, Shri D.K. Sharma, Divisional Manager of LIC, who admitted TRIPTI SAINI 2025.08.28 11:24 I attest to the accuracy and integrity of this document 1994 (O&M) RSA-2326-1994 (O&M) -9- that the insured was examined by the medical officer at the time of issuance of the that the insured was examined by the medical officer at the time of issuance of t that the insured was examined by the medical officer at the time of issuance of t that the insured was examined by the medical officer at the time of issuance of t policies and was declared medically fit. policies and was declared medically fit. 24. It is also relevant that DW9 Dr. S. It is also relevant that himself admitted in DW9 Dr. S.Verma, PGI himself admitted in examination that jaundice is only a symptom and not a disease in itself. cross-examination that jaundice is only a symptom and not a disease in itself. examination that jaundice is only a symptom and not a disease in itself. examination that jaundice is only a symptom and not a disease in itself. t or material for the called concealment cannot be treated as fraudulent or material for the called concealment cannot be treated as fraudulen Thus, the so-called concealment cannot be treated as fraudulen purposes of avoiding the policy. purposes of avoiding the policy. 25. Section 45 of the Insurance Act, 1938, as applicable, clearly provides Section 45 of the Insurance Act, 1938, as applicable, clearly provides Section 45 of the Insurance Act, 1938, as applicable, clearly provides Section 45 of the Insurance Act, 1938, as applicable, clearly provides that no policy of life insurance shall be called in question after two years from the that no policy of life insurance shall be called in question after two years from the that no policy of life insurance shall be called in question after two years from the that no policy of life insurance shall be called in question after two years from the round of misstatement, unless the insurer date on which it was effected, on the ground of misstatement, unless the insurer round of misstatement, unless the insurer date on which it was effected, on the g shows that the misstatement was material and made fraudulently. In the present shows that the misstatement was material and made fraudulently. In the present shows that the misstatement was material and made fraudulently. In the present shows that the misstatement was material and made fraudulently. In the present case, the policies were effected in 1980 and revived in 1985. The lower appellate case, the policies were effected in 1980 and revived in 1985. The lower appellate case, the policies were effected in 1980 and revived in 1985. The lower appellate case, the policies were effected in 1980 and revived in 1985. The lower appellate the case Court has rightly applied the judgment of the Hon’ble Supreme Court in the case Court has rightly applied the judgment of the Hon’ble Court has rightly applied the judgment of the Hon’ble of LIC of India, Bombay , holding that revival relates back to the original LIC of India, Bombay (supra), holding that revival relates back to the original , holding that revival relates back to the original policy, and once revival takes place, the original policy comes into force. policy, and once revival takes place, the original policy comes into force. policy, and once revival takes place, the original policy comes into force. policy, and once revival takes place, the original policy comes into force. Consequently, the two years’ period must be computed from the date of the Consequently, the two years’ period must be computed from the date of Consequently, the two years’ period must be computed from the date of Consequently, the two years’ period must be computed from the date of original policies, and the burden was on the corporation to establish material original policies, and the burden was on the corporation to establish material original policies, and the burden was on the corporation to establish material original policies, and the burden was on the corporation to establish material suppression. 26. Harpreet The reliance placed by learned counsel for the appellant on Harpreet The reliance placed by learned counsel for the appellant on The reliance placed by learned counsel for the appellant on Kaur v. Life Insurance Corporation Life Insurance Corporation of India (supra) is misplaced. In that case, of India (supra) is misplaced. In that case, was concealment of serious surgeries such as valve replacement and bypass, there was concealment of serious surgeries such as valve replacement and bypass, was concealment of serious surgeries such as valve replacement and bypass, was concealment of serious surgeries such as valve replacement and bypass, which were clearly material facts. In the present case, however, there is no such which were clearly material facts. In the present case, however, there is no such which were clearly material facts. In the present case, however, there is no such which were clearly material facts. In the present case, however, there is no such threatening disease. At best, the insured was concealment of a grave or life-threatening disease. At best, the insured was threatening disease. At best, the insured was concealment of a grave or life grade fever, which by themselves are not sufficient suffering from jaundice or low-grade fever, which by themselves are not sufficient grade fever, which by themselves are not sufficient suffering from jaundic to disentitle the claim, particularly when the medical officer of LIC had declared to disentitle the claim, particularly when the medical officer of LIC had declared to disentitle the claim, particularly when the medical officer of LIC had declared to disentitle the claim, particularly when the medical officer of LIC had declared him fit and the policies were approved. him fit and the policies were approved. TRIPTI SAINI 2025.08.28 11:24 I attest to the accuracy and integrity of this document 1994 (O&M) RSA-2326-1994 (O&M) -10- 27. ngs of This Court, therefore, finds no illegality in the concurrent findings of This Court, therefore, finds no illegality in the concurrent findi This Court, therefore, finds no illegality in the concurrent findi the Courts below. The findings are based on proper appreciation of evidence and the Courts below. The findings are based on proper appreciation of evidence and the Courts below. The findings are based on proper appreciation of evidence and the Courts below. The findings are based on proper appreciation of evidence and correct application of Section 45 of the Insurance Act. correct application of Section 45 of the Insurance Act. correct application of Section 45 of the Insurance Act. Conclusion 28. In view of the above discussion, this Court holds that the plaintiffs In view of the above discussion, this Court holds that the plaintiffs In view of the above discussion, this Court holds that the plaintiffs In view of the above discussion, this Court holds that the plaintiffs to the sum assured under the policies. The appeal filed by were rightly held entitled to the sum assured under the policies. The appeal filed by to the sum assured under the policies. The appeal filed by were rightly held entitled the Life Insurance Corporation of India has no merit and is accordingly dismissed. the Life Insurance Corporation of India has no merit and is accordingly dismissed. the Life Insurance Corporation of India has no merit and is accordingly dismissed. the Life Insurance Corporation of India has no merit and is accordingly dismissed. There is no illegality in the concurrent findings of the Courts below warranting There is no illegality in the concurrent findings of the Courts below warranting There is no illegality in the concurrent findings of the Courts below warranting There is no illegality in the concurrent findings of the Courts below warranting interference in second appeal. interference in second appeal. 29.
Arguments
payment of premiums. Policy time on account of non-payment of premiums. Policy for ₹10,000 was revived by him on ₹10,000 was revived by him on 03.05.1985 and the policy for ₹50,000 was 1985 and the policy for ₹50,000 was revived on 22.05.1 after payment of arrears of dues to the defendant 22.05.1985, after payment of arrears of dues to the defendant after payment of arrears of dues to the defendant corporation. TRIPTI SAINI 2025.08.28 11:24 I attest to the accuracy and integrity of this document 1994 (O&M) RSA-2326-1994 (O&M) -2- 3. Dr. Abnash Chand Sharma died on Dr. 1985, leaving behind the Chand Sharma died on 13.06.1985, leaving behind the plaintiffs as his legal heirs. Plaintiff No. 1 Vijay Sharma is his widow, and plaintiffs his legal heirs. Plaintiff No.1 Vijay Sharma is his widow, and plaintiffs 1 Vijay Sharma is his widow, and plaintiffs Nos. 2 and 3, Abishek e his sons. The plaintiffs applied for payment Abishek and Ankush, are his sons. The plaintiffs applied for payment e his sons. The plaintiffs applied for payment of the amounts under the two policies, but the defendant of the amounts under the orporation refused. two policies, but the defendant-Corporation refused. Feeling aggrieved, they filed a suit for recovery of ₹75,000. Feeling aggrieved, they filed a suit for recovery of Feeling aggrieved, they filed a suit for recovery of 4. orporation, upon notice, appeared and contested the orporation, upon notice, appeared and contested t The defendant-Corporation, upon notice, appeared and contested t The defendant Sharma and the suit. It was pleaded that the contract between Dr. Abnash Chand Sharma and the suit. It was pleaded that the contract between Dr. suit. It was pleaded that the contract between Dr. orporation was void on account of incorrect statements made by him defendant-Corporation was void on account of incorrect statements made by him orporation was void on account of incorrect statements made by him orporation was void on account of incorrect statements made by him regarding his health on 03.05.1985 and 22.05.1 regarding his health on 985. Consequently, the revival of 03.05.1985 and 22.05.1985. Consequently, the revival of . It was further contended that the right to claim the policies was void ab initio. It was further contended that the right to claim . It was further contended that the right to claim the policies was interest on the amount due was not admitted. It was specifically alleged that the interest on the amount due was not admitted. It was specifically alleged that the interest on the amount due was not admitted. It was specifically alleged that the interest on the amount due was not admitted. It was specifically alleged that the plaintiffs were not entitled to any amount because of a condition in the policy that plaintiffs were not entitled to any amount because of a condition in the policy that plaintiffs were not entitled to any amount because of a condition in the policy that plaintiffs were not entitled to any amount because of a condition in the policy that or incorrect information on any material point was made by if any wrong statement or incorrect information on any material point was made by or incorrect information on any material point was made by if any wrong statement the insured, the defendant orporation would not be liable to pay any amount sured, the defendant-Corporation would not be liable to pay any amount orporation would not be liable to pay any amount under the policy. under the policy. 5. It was further pleaded that the plaintiffs had wrongly claimed It was further pleaded that the plaintiffs had wrongly claimed It was further pleaded that the plaintiffs had wrongly claimed It was further pleaded that the plaintiffs had wrongly claimed ₹75,000, whereas the actual contractual liability, if any, could only be for ₹75,000, whereas the actual ₹60,000, contractual liability, if any, could only be for ₹60,000, ₹10,000 and ₹50,000 respectively. being the sum assured under the two policies of ₹10,000 and ₹50,000 respectively. being the sum assured under the two policies of being the sum assured under the two policies of It was also alleged that the defendant orporation did not admit that the plaintiffs lso alleged that the defendant-Corporation did not admit that the plaintiffs orporation did not admit that the plaintiffs n and that the suit was liable to dismissal. had rightly sued the corporation and that the suit was liable to dismissal. had rightly sued the corporatio 6. From the pleadings of the parties, the following issues were framed: From the pleadings of the parties, the following issues were framed: From the pleadings of the parties, the following issues were framed: From the pleadings of the parties, the following issues were framed: 1. Whether the plaintiffs are minors and the suit has been rightly the plaintiffs are minors and the suit has been rightly filed by the next friend? OPP. 2. Whether the plaintiff is entitled to recov ₹75,000 from the entitled to recovery of ₹75,000 from the defendant? OPP. TRIPTI SAINI 2025.08.28 11:24 I attest to the accuracy and integrity of this document 1994 (O&M) RSA-2326-1994 (O&M) -3- 3. Whether the plaint does not disclose any cause of action? OPD. Whether the plaint does not disclose any cause of action? OPD. Whether the plaint does not disclose any cause of action? OPD. 4. Whether the defendant has not been properly sued? OPD. Whether the defendant has not been properly sued? OPD. 5. Whether the Civil Courts at Gurdaspur no jurisdiction to try Whether the Civil Courts at Gurdaspur has no jurisdiction to try this suit? OPD. 6. entitled to any interest on the suit amount Whether the plaintiff is entitled to any interest on the suit amount entitled to any interest on the suit amount from the defendant? OPP. 7. Whether the contract is rendered void ab initio because the Whether the contract is rendered void ab initio because the Whether the contract is rendered void ab initio because the insurer, Dr. Abnash Chand Sharm a, had made incorrect statement Chand Sharma, had made incorrect statement regarding his health on 03.05.1985 03.05.1985 and 22 May 1985? OPD. 8. Whether the revival of the policy was ? If Whether the revival of the policy was declared null and void? If so, what is its effect? OPD. 9. Whether there is no contractual liability on the part of the Whether there is no contractual liability on the part of the Whether there is no contractual liability on the part of the defendant regarding the suit amount? OPD. defendant regarding the suit amount? OPD. 10. Whether there is a condition in the polic 10. mis- Whether there is a condition in the policy that in case any mis there statement of fact or material information is made that event there statement of fact or material information is liability of the defendant? OPD. is no liability of the defendant? OPD. 11. Relief. 11. Findings of the Trial Court Findings of the Trial Court 7. The learned trial Court, after hearing the parties and considering the The learned trial Court, after hearing the parties and considering the The learned trial Court, after hearing the parties and considering the The learned trial Court, after hearing the parties and considering the evidence, held that misstatement of facts, incorrect statements, and the ailments evidence, held that misstatement of facts, incorrect statements, and the ailments evidence, held that misstatement of facts, incorrect statements, and the ailments evidence, held that misstatement of facts, incorrect statements, and the ailments Chand Sharma was suffering were not sufficient to discard from which Dr. Abnash Chand Sharma was suffering were not sufficient to discard Chand Sharma was suffering were not sufficient to discard from which Dr. iffs. This finding was based particularly on the admission of the claim of the plaintiffs. This finding was based particularly on the admission of iffs. This finding was based particularly on the admission of the claim of the plaint . D.K. Sharma, Divisional Manager of LIC of India, who had himself DW10, Sh. D.K. Sharma, Divisional Manager of LIC of India, who had himself . D.K. Sharma, Divisional Manager of LIC of India, who had himself . D.K. Sharma, Divisional Manager of LIC of India, who had himself investigated the case. He admitted that the insured was medically examined at the investigated the case. He admitted that the insured was medically examined at the investigated the case. He admitted that the insured was medically examined at the investigated the case. He admitted that the insured was medically examined at the TRIPTI SAINI 2025.08.28 11:24 I attest to the accuracy and integrity of this document 1994 (O&M) RSA-2326-1994 (O&M) -4- he medical officer who examined him before time when his life was insured, and the medical officer who examined him before he medical officer who examined him before time when his life was insured, and t insurance declared him fit and approved the case. insurance declared him fit and approved the case. insurance declared him fit and approved the case. 8. The Court observed that if Dr. Abnash The Court observed that if Dr. Chand Sharma was declared fit Abnash Chand Sharma was declared fit for insurance by the medical officer at the time of insurance of the policies for for insurance by the medical officer at the time of insurance of the policies for for insurance by the medical officer at the time of insurance of the policies for for insurance by the medical officer at the time of insurance of the policies for ₹50,000 (Exhibits D1 and D3), it was not understandable how the ₹10,000 and ₹50,000 (Exhibits D1 and D3), it was not understandable how the ₹50,000 (Exhibits D1 and D3), it was not understandable how the ₹50,000 (Exhibits D1 and D3), it was not understandable how the claim of the plaintiffs could later be repudiated in view of the admission of DW10. claim of the plaintiffs could later be repudiated in view of the admission of DW10. claim of the plaintiffs could later be repudiated in view of the admission of DW10. claim of the plaintiffs could later be repudiated in view of the admission of DW10. 9. It was further held that the insured was declared fit for insurance in It was further held that the insured was declared fit for insurance in It was further held that the insured was declared fit for insurance in It was further held that the insured was declared fit for insurance in spite of the fact that he was suffering from jaundice and pneumothorax. His case spite of the fact that he was suffering from jaundice and pneumothorax. His case spite of the fact that he was suffering from jaundice and pneumothorax. His case spite of the fact that he was suffering from jaundice and pneumothorax. His case was approved medically because jaundice is only a symptom and not a disease, as was approved medically because jaundice is only a symptom and not a disease, as was approved medically because jaundice is only a symptom and not a disease, as was approved medically because jaundice is only a symptom and not a disease, as erma. After discussing the evidence of all witnesses in admitted by DW9 Dr. S. Verma. After discussing the evidence of all witnesses in erma. After discussing the evidence of all witnesses in admitted by DW9 Dr. S. V detail, the trial Court decreed the suit of the plaintiffs. The judgment and decree detail, the trial Court decreed the suit of the plaintiffs. The judgment and decree detail, the trial Court decreed the suit of the plaintiffs. The judgment and decree detail, the trial Court decreed the suit of the plaintiffs. The judgment and decree 1992 by the learned Sub Judge First Class, Gurdaspur. were passed on 25.11.1992 by the learned Sub Judge First Class, Gurdaspur. were passed on Findings of the First Appellate Court Findings of the First Appellate Court 10. orporation filed an appeal, which was dismissed. The The defendant-Corporation filed an appeal, which was dismissed. The orporation filed an appeal, which was dismissed. The The defendant learned first appellate Court held that under Section 45 of the Insurance Act, 1938, learned first appellate Court held that under Section 45 of the Insurance Act, 1938, learned first appellate Court held that under Section 45 of the Insurance Act, 1938, learned first appellate Court held that under Section 45 of the Insurance Act, 1938, once the revival takes place, the original policy comes into operation and the bar of once the revival takes place, the original policy comes into operation and the bar of once the revival takes place, the original policy comes into operation and the bar of once the revival takes place, the original policy comes into operation and the bar of Section 45 of the Act is clearly attracted. Reliance was placed on the judgment of the Act, is clearly attracted. Reliance was placed on the judgment of is clearly attracted. Reliance was placed on the judgment of the Hon’ble Supreme Court in L.I.C of India, Bombay v. the Hon’ble Supreme Court in , AIR C of India, Bombay v. Vesai Bharathi, AIR , where it was held that once the revival takes place, the 1979 Andhra Pradesh 39, where it was held that once the revival takes place, the , where it was held that once the revival takes place, the 1979 Andhra Pradesh 39 original policy comes into op eration and Section 45 of the Act is clearly attracted comes into operation and Section 45 of the Act is clearly attracted eration and Section 45 of the Act is clearly attracted in which event the burden is on the Corporation to show that the requirement of in which event the burden is on the Corporation to show that the requirement of in which event the burden is on the Corporation to show that the requirement of in which event the burden is on the Corporation to show that the requirement of Section are satisfied before successfully repudiating the contract. Hence the Section are satisfied before successfully repudiating the contract. Hence the Section are satisfied before successfully repudiating the contract. Hence the Section are satisfied before successfully repudiating the contract. Hence the s’ period must be computed from the date finding on point No.1 is that the two years’ period must be computed from the date s’ period must be computed from the date finding on point No.1 is that the two year of the original policy and not from the date of the revival of the policy.” of the original policy and not from the date of the revival of the policy.” of the original policy and not from the date of the revival of the policy.” TRIPTI SAINI 2025.08.28 11:24 I attest to the accuracy and integrity of this document 1994 (O&M) RSA-2326-1994 (O&M) -5- 11. The appellate Court held that the two years’ period contemplated The appellate Court held that the two years’ period contemplated The appellate Court held that the two years’ period contemplated The appellate Court held that the two years’ period contemplated must be computed from the date of the original policy under Section 45 of the Act, must be computed from the date of the original policy must be computed from the date of the original policy under Section 45 and not from the date of revival. Consequently, the Court concluded that the and not from the date of revival. Consequently, the Court concluded that the and not from the date of revival. Consequently, the Court concluded that the and not from the date of revival. Consequently, the Court concluded that the Chand policies remained in force and on account of the death of Dr. Abnash Chand policies remained in force and on account of the death of Dr. policies remained in force and on account of the death of Dr. nder the policies. Sharma, the LIC was bound to pay the sum assured under the policies. Sharma, the LIC was bound to pay the sum assured u Sharma, the LIC was bound to pay the sum assured u Accordingly, the appeal was dismissed vide Accordingly, the appeal was dismissed judgment and decree dated vide judgment and decree dated 19.04.1994. 12. Feeling aggrieved by the concurrent judgments and decrees of the Feeling aggrieved by the concurrent judgments and decrees of the Feeling aggrieved by the concurrent judgments and decrees of the Feeling aggrieved by the concurrent judgments and decrees of the Courts below, the present Regular Second Appeal has been filed by the defendant– Courts below, the present Regular Second Appeal has been filed by the defendant Courts below, the present Regular Second Appeal has been filed by the defendant Courts below, the present Regular Second Appeal has been filed by the defendant Life Insurance Corporation of India nsurance Corporation of India. 13. No one had been Notice of the appeal was issued to the respondents. No one had been Notice of the appeal was issued to the respondents. Notice of the appeal was issued to the respondents. appearing on behalf of the respondents. Vide order dated 15.07.2025, an Amicus appearing on behalf of the respondents. Vide order dated 15.07.2025, an Amicus appearing on behalf of the respondents. Vide order dated 15.07.2025, an Amicus appearing on behalf of the respondents. Vide order dated 15.07.2025, an Amicus Curiae was appointed to address arguments on behalf of the respondents. Curiae was appointed to address arguments on behalf of the respondents. Curiae was appointed to address arguments on behalf of the respondents. Curiae was appointed to address arguments on behalf of the respondents. Submissions of Counsel for the Parties Submissions of Counsel for the Parties 14. It is argued by learned counsel for the appellant that both the Courts It is argued by learned counsel for the appellant that both the Courts It is argued by learned counsel for the appellant that both the Courts It is argued by learned counsel for the appellant that both the Courts Learned counsel for the appellant below erred in decreeing the suit of the plaintiffs. Learned counsel for the appellant below erred in decreeing the suit of the plaintiffs below erred in decreeing the suit of the plaintiffs ₹10,000 and ₹50,000 submitted that the initial life insurance policies for ₹10,000 and ₹50,000 submitted that the initial life insurance further submitted that the initial life insurance were obtained on the basis of proposal forms Ex. D1 and Ex. D6, which contained were obtained on the basis of proposal forms Ex. D1 and Ex. D6, which contained were obtained on the basis of proposal forms Ex. D1 and Ex. D6, which contained were obtained on the basis of proposal forms Ex. D1 and Ex. D6, which contained a clear declaration of the life assured that the statements and answers given by him a clear declaration of the life assured that the statements and answers given by him a clear declaration of the life assured that the statements and answers given by him a clear declaration of the life assured that the statements and answers given by him specifically declared that were true to the best of his knowledge and belief. It was specifically declared that were true to the best of his knowledge and belief. It was were true to the best of his knowledge and belief. It was in case the said declaration was found to contain any untrue statement, the contract in case the said declaration was found to contain any untrue statement, the contract in case the said declaration was found to contain any untrue statement, the contract in case the said declaration was found to contain any untrue statement, the contract of insurance would be null and void. On the basis of the said assurance, he of insurance would be null and void. On the basis of the said assurance, he of insurance would be null and void. On the basis of the said assurance, he of insurance would be null and void. On the basis of the said assurance, he ffered from any declared that his usual state of health was good, that he had not suffered from any declared that his usual state of health was good, that he had not su declared that his usual state of health was good, that he had not su disease, and that he had not consulted any medical practitioner within the disease, and that he had not consulted any medical practitioner within the disease, and that he had not consulted any medical practitioner within the disease, and that he had not consulted any medical practitioner within the preceding five years for any ailment. On that basis, the policies were issued. preceding five years for any ailment. On that basis, the policies were issued. preceding five years for any ailment. On that basis, the policies were issued. TRIPTI SAINI 2025.08.28 11:24 I attest to the accuracy and integrity of this document 1994 (O&M) RSA-2326-1994 (O&M) -6- 15.
Decision
Pending application(s), if any, also stand disposed off. Pending application(s), if any, also stand disposed of Pending application(s), if any, also stand disposed of 2025 August 25, 2025 tripti (MANDEEP PANNU) JUDGE Whether speaking/non-speaking : Speaking speaking : Speaking Whether speaking/non : Yes/No : Yes/No Whether reportable Whether reportable TRIPTI SAINI 2025.08.28 11:24 I attest to the accuracy and integrity of this document