LIFE INSURANCE CORPORATION OF INDIA AND ORS. versus SMT. ASHA GOEL AND ANR.

Citation: [2000] SUPP. 5 S.C.R. 646 · Decided: 13-12-2000 · Supreme Court of India · Bench: B.N. KIRPAL · Disposal: Disposed off

Judgment (excerpt)

A 
LIFE INSURANCE CORPORATION OF INDIA AND ORS. 
B 
v. 
SMT. ASHA GOEL AND ANR. 
DECEMBER 13, 2000 
[B.N. KIRPAL AND D.P. MOHAPATRA, JJ.] 
Constitution of India, 1950 : Article 226--- -Writ Jurisdiction of High 
Courts-Life insurance coverage for husband-Died of cardiac arrest a year 
C thereafter-Wife claiming the insured amount-LIC repudiating her claim on 
the ground that deceased withheld correct information regarding his health 
at the time of effecting insurance-Wife filing writ petition in the High Court 
for a direction of payment of the sum assured--Objection raised by the 
Corporation on maintainability of the writ petition-Single Judge allowed 
the writ petition holding that liability of the Corporation was statutory- -On 
D appeal, Division Bench of the High Court remanded case back to the Single 
Judge for a fresh trial-Observed that relief under the writ Jurisdiction to 
a policy holder could be granted very rarely-On appeal, Held : Extra-
ordinary jµrisdiction of the High Courts under Article 226 is very wide and 
expansive-Restriction imposed on this jurisdielion is self imposed-Ordinarily 
E a writ petition under Article 226 is not entertained for mere enforcement of 
a claim under a contract of insurance-Such relief cannot be denied where 
insured/nominee is refused relief merely on the ground that the relief relates 
to the contractual rights and long drawn litigation in the civil court will 
cause serious prejudice to the beneficiaries/claimants-Civil suit is the 
appropriate remedy where repudiation of claim raises serious doubts and the 
F Court finds the dispute to be bonafide requiring evidence for its determination. 
Insurance Act, 1928-Section 45--Repudiation of claim--Contracts of 
insurance including that of life assurance are uberrima fides- -Non-disclosure 
of material facts is a good ground for recession-Mere inaccuracy of falsity 
in respect of some recitals or items in the proposal is not sufficient-The 
G burden of proof to establish that the policy holder has deliberately suppressed 
material facts is on the insurer. 
Life Insurance Corporation of India Act, 1956-Section 30-Life 
Insurance Corporation of India having the exclusive privilege of carrying life 
insurance business in India-The said corporation, at present, is one of the 
H 
646 
,.. 
L.l.C. OF INDIA v. SMT. ASHA GOEL 
647 
largest public sector financial undertakings with crores of policy holders- · A 
Corporations approach in the matter of repudiation of a policy admittedly 
issued by it should be one of extreme care and not in a mechanical and 
routine manner. 
The husband of respondent No. l, in the year 1979, got issued a life 
insurance policy in his favour for sum of Rs. l,00,000. The said insured died B 
of acute Myocardial Infraction and cardiac arrest after a year i.e. in 1980, 
leaving behind his wife, a son and a daughter. Being a nominee of her late 
husband, the widow submitted her claim to the appellant for payment. 
Appellant-Corporation refused her claim on the ground that the deceased 
withheld correct information regarding his health at the time of effecting the C 
insurance. The deceased was said to have declared himself to be usually in a 
good state of health. He had also stated that he had not consulted a medical 
prcctitioner within the last five years for any ailment requiring treatment 
for more thot week and also that he had not remained absent from his place 
of work on the ground of health during the last five years. According to the 
appeD!nnt th~ above statements of the deceased were,£a1se. On the said rejection D 
of her claim, the widow filed a writ petition before the High Court seeking 
issuance of a writ of mandamus to the appellant for payment of the sum assured 
alongwith other cccruing benefits. The appellant opposed the writ petition on 
the ground of non-maintainability and in the alternative prayed for an 
opportunity to leiid evidence in support of its plea of repudiation of the claim. 
Single Judge held that the liability of the appellant Corporation was statutory 
and so the writ petition was maintainable. The Single Judge, holding that the 
instent ccse did not involve disputed questions of fact, refused leave to the 
appe!lant Corporation to lead evidence. On appeal, Division Bench of the High 
Court allowed the appeal by remitting the case back to the Single Judge for 
E 
a fresh trial and an opportunity to the appellant Corporation to lead evidence F 
and also produce witn

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