JUSTICE J. M. MALIK

1. The learned counsel for the petitioner is present. The respondent was proceeded against exparte, vide order dated 13.12.2010. The respondent has been served for today. It appears that he is not interested to pursue this case. He be proceeded against exparte. The insured, Bapu Baburao Shirset, since deceased, obtained insurance policy under plan and term 75-20 for a sum assured of Rs. 50,000/- under Salary Saving Scheme. The proposal form was filled in on

28.12.1997. Unfortunately, the insured expired on 13.05.1998. Thereafter, the claim was made by his wife, Smt. Nirmala Babu Shirset. The LIC of India, opposite party made an investigation and it transpired that he had suppressed the pre-existing ailment.

2. Our attention was invited towards the certificate, issued by the Medical Officer, Cottage Hospital, Shirpura District, Dhula, where it was mentioned that on 11.07.1995, the insured was suffering from Bilateral Pulmonary Tuberclosis. He was advised rest for three months and his x-ray was also taken. In para no. 3, the District Forum has noted as hereunder:- -1-

According to the opponents, the husband of the complainant Bapu Shirsath has sent an insurance proposal dated 28.11.1997, the information given in clause 11, sub-clause A to E by the complainants husband was false and given with an intention to cheat the opponents. Bapu Shirsath was suffering from T.B. before he had sent insurance proposal.

3. It is thus clear that the petitioner has suppressed the fact and his wife is not entitled to get any compensation. The duty casts on this Commission is to winnow the truth from falsehood. If it is found that the insured did not tell the truth, therefore, his legal heirs cannot ask for any compensation. This view finds support from the judgment of the Honble Apex Court in Satwant wherein it was held, at Kaur Sandhu Vs. New India Assurance Co. Ltd., (2009) 8 SCC 316 , Paras 18, 19 and 21, as under :-

. 18 A mediclaim policy is a non-life insurance policy meant to assure the policy-holder in respect of certain expenses pertaining to injury, accidents or hospitalizations. Nonetheless, it is a contract of insurance falling in the category of contract uberrimae fide, 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, the 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.

19. In ., this Court has observed that United India Insurnace Co. Ltd. Vs. M.K.J. Corpn 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.

21. Over three centuries ago, in had succinctly Carter Vs. Boehm, Lord Mansfield summarized the principles necessitating a duty of disclosure by the assured in the following words : (All ER pp. 184 H-185 I) Insurance is a contract of speculation. The special facts upon which the contingent chance is to be computed lie most commonly in the knowledge of the assured only; the underwriter trusts his representation, and proceeds upon confidence that he does not keep back any circumstance in his knowledge to mislead the underwriter into a belief that the circumstance does not exist. The keeping back of such circumstance is a fraud, and therefore the policy is void. Although the suppression should happen through mistake, without any fraudulent intention, yet still the underwriter is deceived, and the policy is void; because the risqu run is really different from the risqu understood and intended to be run at the time of the agreement The policy would be equally void against the underwriter if he concealed God faith forbids either party, by concealing what he privately knows, to draw the other into a bargain from his ignorance of the fact, and his believing the contrary

.

4. Similar view was taken in , as P.C. Chacko & Anr. Vs. Chairman, LIC of India & Ors. reported in . (2008) 1 Supreme Court Cases, 321

5. It is made clear that it is not necessary that there must be nexus between the suppression of the disease and the cause of death and, therefore, had he told that he was suffering from T.B., the LIC either would have rejected the proposal or would have enhanced the premium. Consequently, we set aside the order, passed by both the fora and accept the revision petition and dismiss the complaint. The revision petition stands disposed of accordingly. ......................J J.M. MALIK PRESIDING MEMBER ...................... DR. B.C. GUPTA MEMBER