# Santosh Kumar v. Assistant Secretary/Deputy Secretary/Secretary Insurance Ombudsman, Lucknow & Ors

- **Citation:** (2025) 4 ILRA 298
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2025-04-29
- **Case number:** Writ C No. 21818 of 2023
- **Bench:** Shekhar B. Saraf
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/santosh-kumar-v-assistant-secretary-deputy-secretary-secretary-insurance-53118
- **Pages:** 18

## Headnote

Civil Law - Constitution of India,1950 -
Article 226 - Insurance Act, 1938 -
Section
45
-
Insurance
Ombudsman
Rules, 2017 - Rules 13(1), 14(1), 14(3),
14(5) & 17(3)(ii) - Indian Contract Act,
1872 - Section 37 - Writ of Certiorari - Life
Insurance Claim - Non-Disclosure of Previous
Policy - Principle of Uberrimae Fidei - Material
Fact - Contra Proferentem Rule - Burden of
Proof - Arbitrary Rejection.

Held:

The petitioner sought a writ of certiorari to
quash orders dated 23.03.2021 by the Life
Insurance Corporation (LIC) and 19.05.2023 by
the Insurance Ombudsman, rejecting a death
claim under policy no. 205602934 for Rs. 15
lakh, and to direct payment to the petitioner,
nominee of his deceased wife, Meera Devi. The
policy, issued on 16.08.2018, was repudiated for
non-disclosure of a previous LIC policy (no.
205601558, dated 28.05.2018) in the proposal
form, alleging fraudulent suppression. The
Ombudsman's
rejection
cited
procedural
grounds, including lack of written complaint,
pecuniary jurisdiction, and limitation. The Court
held that the non-disclosure was not fraudulent,
as the insured had disclosed prior policies to the
LIC agent, who advised that such details were
already in LIC's records, leaving column 9 blank.
Relying on *Manmohan Nanda v. United India
Assurance Co. Ltd., (2022) 4 SCC 582*, the
Court ruled that if an insurer accepts a premium
and issues a policy despite a blank column, it
waives the right to repudiate for non-disclosure
unless the omission is material and fraudulent.
The LIC failed to prove fraud under Section 45
of the Insurance Act, 1938, and the blank
column, linked to a policy within LIC's records,
was not a material suppression, especially as
the insured's death was due to a sudden heart
attack
unrelated
to
prior
ailments.
The
Ombudsman's order was arbitrary, lacking
merit-based
consideration.
Both
impugned
orders were quashed, and LIC was directed to
pay the insured sum within six weeks.

Writ petition allowed; impugned orders
quashed; LIC directed to pay insured sum
within six weeks.

Case Law Discussed:

## Text

_Characters 0–39,986 of 60,295. This is a partial read: ask again with offset=39986 for what follows._

298 INDIAN LAW REPORTS ALLAHABAD SERIES
revenue payable in respect of each such
division. The procedure pertaining to
division of holdings is provided under
Rules 107, 108 and 109 of the Rules, 2016
and in terms of Rule 109 (8) (c), it is
provided that at the stage of the final
decree, the Court concerned shall apportion
the land revenue payable by the parties.

23. Sub-section (4) of Section 80 of
the Code, 2006 contains a clear interdict
against any application, being moved by
any
co-bhumidhar
having
undivided
interest in the bhumidhari land, for a
declaration under sub-section (1) or subsection (2), unless the application is moved
by all co-bhumidhars of such bhumidhari
land. It further provides that in case only one
of the co-bhumidhars is desirous of getting a
declaration for his share in the land with joint
interest, then such an application shall be
entertained only after the respective shares of
the co-bhumidhars in the land are divided in
accordance with the provisions of law.

24. A plain reading of the aforesaid
provisions would make it clear that the
application, at the instance of a co-bhumidhar
having his share in t he land with joint
interest, would have to be preceded by the
determination of shares of the co-bhumidhars
in the land in question in accordance with the
provisions of law. This would mean that an
application for declaration under sub-section
(1) or sub-section (2) at the behest of any cobhumidhar, having undivided interest in the
bhumidhari land, would be maintainable only
upon fulfilment of the necessary precondition that the land in question had been
divided in accordance with the provisions of
law, i.e. as per the provisions contained under
Section 116 of the Code, 2006 and the
relevant Rules.
25. The argument which has been
raised on behalf of the petitioners that the
declaration under Section 80 (1) of the
Code, 2006 would necessarily mean that
the land in question had already been
divided, cannot be accepted for the reason
that as per the provisions contained in subsection (4) of Section 80 of the Code, 2006,
the
division
of
holding
and
the
determination
of
shares
of
the
cobhumidhars in a joint holding, is a precondition for seeking declaration under
sub-section (1) or sub-section (2) of Section
80 of the Code, 2006; however the reverse
implication cannot be inferred.

26. In the instant case, no document
has been placed on record to demonstrate that
the division of property in question had been
made between all the co-owners as per the
provisions contained in Section 116 of the
Code, 2006.

27. Having regard to the aforesaid
position, we do not find any material error or
illegality in the order impugned, so as to
interfere with the same in the extraordinary
jurisdiction of this Court under Article 226 of
the Constitution.

28. The writ petition lacks merit
and is, accordingly, dismissed.
----------
(2025) 4 ILRA 298
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 29.04.2025
BEFORE

THE HON'BLE SHEKHAR B. SARAF, J.

Writ C No. 21818 of 2023

Santosh Kumar ...Petitioner
Versus
Assistant
Secretary/Deputy
Secretary/Secretary
Insurance
Ombudsman, Lucknow & Ors.
 ...Respondent
4 All. Santosh Kumar Vs. Assistant Secretary/Deputy Secretary/Secretary Insurance Ombudsman,
 Lucknow & Ors.
299
Counsel for the Petitioners:
Mr. Hari Bans Singh

Counsel for the Respondents:
Ms. Shruti Malviya

Civil Law - Constitution of India,1950 -
Article 226 - Insurance Act, 1938 -
Section
45
-
Insurance
Ombudsman
Rules, 2017 - Rules 13(1), 14(1), 14(3),
14(5) & 17(3)(ii) - Indian Contract Act,
1872 - Section 37 - Writ of Certiorari - Life
Insurance Claim - Non-Disclosure of Previous
Policy - Principle of Uberrimae Fidei - Material
Fact - Contra Proferentem Rule - Burden of
Proof - Arbitrary Rejection.

Held:

The petitioner sought a writ of certiorari to
quash orders dated 23.03.2021 by the Life
Insurance Corporation (LIC) and 19.05.2023 by
the Insurance Ombudsman, rejecting a death
claim under policy no. 205602934 for Rs. 15
lakh, and to direct payment to the petitioner,
nominee of his deceased wife, Meera Devi. The
policy, issued on 16.08.2018, was repudiated for
non-disclosure of a previous LIC policy (no.
205601558, dated 28.05.2018) in the proposal
form, alleging fraudulent suppression. The
Ombudsman's
rejection
cited
procedural
grounds, including lack of written complaint,
pecuniary jurisdiction, and limitation. The Court
held that the non-disclosure was not fraudulent,
as the insured had disclosed prior policies to the
LIC agent, who advised that such details were
already in LIC's records, leaving column 9 blank.
Relying on *Manmohan Nanda v. United India
Assurance Co. Ltd., (2022) 4 SCC 582*, the
Court ruled that if an insurer accepts a premium
and issues a policy despite a blank column, it
waives the right to repudiate for non-disclosure
unless the omission is material and fraudulent.
The LIC failed to prove fraud under Section 45
of the Insurance Act, 1938, and the blank
column, linked to a policy within LIC's records,
was not a material suppression, especially as
the insured's death was due to a sudden heart
attack
unrelated
to
prior
ailments.
The
Ombudsman's order was arbitrary, lacking
merit-based
consideration.
Both
impugned
orders were quashed, and LIC was directed to
pay the insured sum within six weeks.

Writ petition allowed; impugned orders
quashed; LIC directed to pay insured sum
within six weeks.

Case Law Discussed:

1. *Reliance Life Insurance Co. Ltd. Vs
Rekhaben Nareshbhai Rathod, (2019) 6 SCC
175* - Non-disclosure of prior policies from
another
insurer
is
material,
justifying
repudiation.

2.
*Manmohan
Nanda
Vs
United
India
Assurance Co. Ltd., (2022) 4 SCC 582* -
Insurer must verify blank columns in proposal
forms; accepting premium waives repudiation
rights unless non-disclosure is material and
fraudulent.

3. *Mahakali Sujatha Vs Future Generali India
Life Insurance Co. Ltd., (2024) 8 SCC 712* -
Burden lies on insurer to prove fraudulent nondisclosure of material facts.

4. *Mahaveer Sharma Vs Exide Life Insurance
Co. Ltd., 2025 SCC OnLine SC 435* - Materiality
of non-disclosure assessed case-by-case; insurer
bears burden of proving fraud.

5. *Smt. Parul Agrawal Vs Life Insurance
Corporation of India, 2024:AHC:36063-DB* -
Supports insurer's duty to verify proposal form
details.

6. *Satwant Kaur Sandhu Vs New India
Assurance Co. Ltd., (2009) 8 SCC 316* -
Information sought in proposal form presumed
material.

7. *Canara Bank Vs United India Insurance Co.
Ltd., (2020) 3 SCC 455* - Blank column does
not constitute misdescription; insurer must
clarify ambiguities before issuing policy.

Observation:

The Court noted that the insured disclosed prior
policies to the LIC agent, who left column 9
blank, assuring that LIC's records contained the
300 INDIAN LAW REPORTS ALLAHABAD SERIES
details. LIC issued the policy bond after
accepting the premium, implying verification of
the
proposal
form
and
linked
financial
documents (Aadhar, PAN). The non-disclosed
policy was with LIC itself, and minimal due
diligence would have revealed it. The insured's
death from a heart attack was unrelated to prior
health issues, and LIC's failure to return
premiums suggested repudiation was not solely
for misstatement but implied fraud, which was
unproven. The Ombudsman's rejection on
procedural grounds was whimsical, ignoring the
petitioner's
compliance
with
submission
requirements.

(Delivered by Hon'ble Shekhar B. Saraf, J.)

1. This is a writ petition under Article
226 of the Constitution of India wherein the
petitioner prays for issuance of a writ of
certiorari quashing the impugned order
dated May 19, 2023 whereby Assistant
Secretary/Deputy
Secretary/Secretary,
Insurance
Ombudsman,
Lucknow
(hereinafter referred to as 'respondent
no.1') has dismissed the complaint filed by
the petitioner against rejection of life
insurance claim by the Senior Divisional
Manager, Life Insurance Corporation (LIC)
Division Office, Prayagraj (hereinafter
referred
to
as
'respondent
no.3')
concerning
policy
no.205602934
vide
impugned order dated March 23, 2021
which has also been challenged. The
petitioner further prays to command the
respondents to release the amount of
insurance claim of his deceased wife in
favour of petitioner.

FACTS

2. The factual matrix of the present writ
petition is delineated below:

 a. On August 16, 2018 the
petitioner's
wife,
Late
Meera
Devi
(hereinafter
referred to
as 'insured')
obtained a life insurance policy from Life
Insurance Corporation of India (hereinafter
referred to as 'LIC'), bearing Policy
No.205602934, for a sum assured Rs. 15
lakh through an LIC agent. The petitioner,
being the husband of the insured, was duly
nominated as the nominee in the said
policy. Upon deposit of the first premium
amounting to Rs.1,15,416/- the policy bond
was issued and delivered to the insured
through the LIC agent.
 b. While applying for the policy,
the insured allegedly furnished all the
requisite details in the application form in
accordance with terms and conditions
prescribed by LIC as instructed by the
agent. Moreover, it was affirmed that no
material information was concealed or
misrepresented.

c. Unfortunately, on July 8, 2019
the insured passed away due to a heart
attack.
Thereafter,
petitioner,
in
his
capacity as a nominee, submitted a
representation before the Branch Manager,
LIC, Phoolpur Branch, Prayagraj seeking
disbursement of the insurance claim arising
out of the death of his wife.

d.
As
per
the
terms
and
conditions of the LIC policy, upon the
death of the insured, the entire sum assured
becomes payable to the nominee. In the
present case, the petitioner, being the
nominee, became entitled to receive the
death claim benefits.

e. Accordingly, the petitioner
submitted
an
application
requesting
disbursement of the death claim under the
policy dated August 16, 2018. However,
vide impugned order dated March 23,
2021, respondent no.3 repudiated the
petitioner's claim, stating that insured had
withheld correct information regarding her
previous policy at the time of effecting the
present assurance, thereby, violating the
disclosure requirements. It was alleged that
4 All. Santosh Kumar Vs. Assistant Secretary/Deputy Secretary/Secretary Insurance Ombudsman,
 Lucknow & Ors.
301
non-disclosure of such material information
constituted concealment, and therefore, the
claim was held to be non payable. The
petitioner was however, granted liberty to
approach the Zonal Manager, Kanpur, in
case he was dissatisfied with the rejection
of claim.

f.
Thereafter,
the
petitioner
submitted an application on April 16, 2021
before the Regional Manager, LIC Kanpur
(hereinafter referred to as 'respondent
no.2'), requesting therein for release of the
death claim.

g.
The
petitioner
submitted
another representation dated July 20, 2021
before the Chairman of Yogkshem Jeevan
Beema,
Mumbai,
seeking
redressal
against the rejection of the insurance
claim pursuant to the order dated March
23, 2021 issued by the respondent no.3.

h. On August 13, 2021, the
insurance claim of petitioner's wife was
rejected by respondent no.2 on the
ground of non-disclosure of a previous
insurance policy. The said decision was
communicated to the petitioner by
respondent
no.3
vide
letter
dated
September 17, 2021. The petitioner was
granted
liberty
to
approach
the
Executive Director, LIC Central Office,
Mumbai in the event of dissatisfaction
with the aforesaid order.

i. Subsequently, on April 15,
2023
the
petitioner
once
again
submitted
a
comprehensive
representation before respondent no.1
against the rejection order dated March 23,
2021. In the said representation, the
petitioner reiterated that
no
material
concealment had been made by the insured
at the time of issuance of the policy, thus,
the basis for the rejection was erroneous.
He accordingly requested that the death
claim be released in his favour, being the
nominee.

j.
In
response
to
the
aforementioned representation, respondent
no.1 issued a letter dated April 21, 2023
demanding certain documents from the
petitioner for reconsideration of insurance
claim.

k. In compliance with the said
communication, the petitioner submitted a
fresh representation dated May 6, 2023,
along with all requisite documents by
registered post addressed to respondent
no.1.

l. Despite such compliance, the
petitioner's claim was once again rejected
vide impugned order dated May 19, 2023
passed by respondent no.1 on the following
grounds:

(i) that the petitioner has not
submitted a complaint in writing before
respondent no.1 in accordance with Rule
13(1), 14(1), 14(3), 14(5), 17(3)(ii) of
Insurance Ombudsman Rule, 2017.

(ii) that the complaint was not
addressed to the office of respondent no.1.

(iii) that the complaint was barred
by limitation.

(iv) that the complaint was
outside the pecuniary jurisdiction.

m. Aggrieved by the rejection
orders dated March 23, 2021 and May 19,
2023 the petitioner has approached this
Court seeking aforementioned relief.

n.
A
counter-affidavit
and
supplementary counter-affidavit has been
filed on behalf of respondent no.2 and 3
contending that the insurance claim was
rejected on account of non-disclosure of
previous policy bearing no.205601558 in
the proposal form. It is further asserted that
incorrect information was provided by the
insured in 'column 7a' and 'column 9' of
the proposal form, which had been duly
filled by the insured herself along with a
self-declaration affirming that no fact had
been suppressed.
302 INDIAN LAW REPORTS ALLAHABAD SERIES

o. The petitioner has filed a
rejoinder affidavit and supplementary
rejoinder affidavit, reiterating the stand
taken in the writ petition. The petitioner
has contended that the proposal form was
filled in accordance with instructions
provided by the LIC agent, and copies of
financial documents of the insured like
Aadhar
card
and
PAN
card
were
appended thereto. It is further submitted
that column 9 of the proposal form was
left blank upon the advice of the agent,
who had stated that the details of
previous
policy
would
already
be
available in the LIC's records.

CONTENTIONS
OF
THE
PETITIONER

3. The learned counsel appearing on
behalf of the petitioner has made the
following submissions:

a. Before obtaining the said
policy, the insured had provided all
necessary particulars and disclosed the
details of her existing LIC policies in the
application form furnished by the LIC
agent. No information was concealed, and
the omission of one previous policy was
based solely on the assurance by LIC
agent that such details were already
available in LIC's record. Accordingly,
the insured affixed her signature to the
proposal form in a routine manner,
relying on the instruction of the agent.

b. The respondents have failed
to furnish any documentary proof or
material indicating that the insured had
violated any terms and conditions. The
respondents
were
duty
bound
to
examine the entire records as per their
need and no specific question with regard
to disclosure of earlier policy was raised by
the respondents before issuing the said
policy.

c. Respondent no.3 rejected the
claim of the insured vide order dated March
23, 2021 on the ground of concealment of
previous policy, and again on May 19,
2023 citing lack of pecuniary jurisdiction.
The insured through her agent, had
disclosed all relevant details including
previous policy information and had made
the requisite declarations in the proposal
form.

d. The issuance of the policy
bond in favour of the insured upon receipt
of the first premium implies that the
proposal form was duly verified, scrutinize
and accepted by the competent authority.
The respondent authority is legally bound
to examine the proposal form before
issuing the bond. Even if the previous
policy details were not explicitly stated,
such information could have been retrieved
from LIC's internal records or digital
database. Had there been any discrepancy
or concealment, the policy bond would not
have been issued.

e. The death claim in the present
matter cannot be barred in view of Section
45 of Insurance Act, 1938.

f. Even if the insured by any
chance has not mentioned about the earlier
policy in the proposal form, then also on
the basis of said error the death claim
cannot be denied by the respondents.

g. The rejection order dated
March 23, 2021 passed by the respondent
no.3 as well as the subsequent rejection
order dated May 19, 2023 passed by the
respondent no.1 are arbitrary, unjust,
improper
and
against
the
statutory
provisions governing insurance law.

h. In the impugned order dated
March 23, 2021, the respondents objected
to not mentioning of only one previous
policy no. 205601558, although before
4 All. Santosh Kumar Vs. Assistant Secretary/Deputy Secretary/Secretary Insurance Ombudsman,
 Lucknow & Ors.
303
taking the present policy amounting to
Rs.15 lakh, the insured had already taken
three
earlier
policies
bearing
no.311496904, 314004138 and 205601558
amounting to Rs.50,000, Rs.50,000 and
Rs.3,70,000 respectively. All these policies
were disclosed to the agent at the time of
applying. The failure to include such
information in the proposal form was solely
due to the agent's assurance that the details
were already recorded in the LIC's
database. Hence, there was no wilful
concealment on the part of the insured.

i. To buttress his argument,
counsel has placed reliance on Mahaveer
Sharma v. Exide Life Insurance Co. Ltd.
reported in 2025 SCC OnLine SC 435.

CONTENTIONS
OF
THE
RESPONDENTS

4. The learned counsel appearing
on behalf of respondents has made the
following submissions:

 a. Before obtaining the policy, the
insured herself filled out the proposal form
in which she deliberately furnished the
incorrect information in column 7a, and
column 9 of the proposal form with regard
to previous policies.

b. Death of insured occurred on
July 8, 2019, and the rejection by
respondent no.2 dated August 13, 2021 was
intimated on September 17, 2021 but the
petitioner has made representation before
the Insurance Ombudsman on April 15,
2023, that is, within three years subsequent
to rejection in accordance with Section 45
of the Insurance Act, 1938.

c. Section 45 of the Insurance
Act, 1938 curtails the right of the insurer to
question the policy after three year from the
date of the policy, that is, from the date of
issuance
of
policy,
the
date
of
commencement of risk, the date of revival
of the policy, or the date of the policy's
rider, whichever is later. Petitioner's wife
took policy on August 16, 2018, died on
July 8, 2019 and policy was called in
question on ground of mis-statement vide
order dated March 23, 2021 by respondent
no.3 that is within three years. Hence, the
rejection order is in consonance with
Section 45 of the Insurance Act, 1938.

d. Respondent no.1 appositely
passed an order dated May 19, 2023, on the
ground of want of jurisdiction as Rule
17(3) (II) of Insurance Ombudsman
Rules, 2017 explicitly prohibits the
Ombudsman to award compensation
exceeding thirty lakhs.

e. The insured had made a selfdeclaration
in
the
proposal
form
affirming
the
accuracy
of
the
information provided, and the form was
also duly signed by her. As such, there
is no valid basis to disbelieve the
information given in the form in view
of Section 37 of the Indian Contract
Act, 1872.

f. It was the obligation on the
part of the insured to disclose all the
information
to
the
best
of
her
knowledge in the proposal form. An
Insurance policy is governed by the
principle of uberrimae fidei, meaning a
contract of utmost good faith requiring
the assured to make full and truthful
disclosure. When specific information
on a specific aspect is sought in a
proposal form, the insured is under a
solemn obligation to provide complete
and accurate details.

g.
The
previous
policy
no.205601558 commenced from May
28, 2018, whereas, policy under dispute
having
policy
no.
205602934
commenced from August 16, 2018 and
both the policies were purchased within
304 INDIAN LAW REPORTS ALLAHABAD SERIES
three months. Therefore, it is unreasonable
to believe that the petitioner was unaware
of the previous policy purchased by him.

h. To buttress her argument, she
has placed reliance upon a judgment of the
Apex Court in Reliance Life Insurance
Co.
Ltd.
v.
Rekhaben
Nareshbhai
Rathod reported in (2019) 6 SCC 175
The relevant paragraphs of the judgment
are quoted below:

"31. The finding of a material
misrepresentation
or
concealment
in
insurance has a significant effect upon both
the insured and the insurer in the event of a
dispute. The fact it would influence the
decision of a prudent insurer in deciding as
to whether or not to accept a risk is a
material fact. As this Court held in Satwant
Kaur [Satwant Kaur Sandhu v. New India
Assurance Co. Ltd., (2009) 8 SCC 316 :
(2009) 3 SCC (Civ) 366] "there is a clear
presumption that any information sought
for in the proposal form is material for the
purpose of entering into a contract of
insurance".
Each
representation
or
statement may be material to the risk. The
insurance
company
may
still
offer
insurance protection on altered terms.

32. In the present case, the
insurer had sought information with
respect to previous insurance policies
obtained by the assured. The duty of full
disclosure required that no information of
substance or of interest to the insurer be
omitted or concealed. Whether or not the
insurer would have issued a life insurance
cover despite the earlier cover of insurance
is a decision which was required to be
taken by the insurer after duly considering
all relevant facts and circumstances. The
disclosure of the earlier cover was material
to an assessment of the risk which was
being undertaken by the insurer. Prior to
undertaking the risk, this information could
potentially allow the insurer to question as
to why the insured had in such a short span
of time obtained two different life insurance
policies. Such a fact is sufficient to put the
insurer to enquiry.
***

34. We are not impressed with the
submission that the proposer was unaware
of the contents of the form that he was
required to fill up or that in assigning such
a response to a third party, he was
absolved of the consequence of appending
his signatures to the proposal. The
proposer duly appended his signature to
the proposal form and the grant of the
insurance cover was on the basis of the
statements contained in the proposal form.
Barely two months before the contract of
insurance was entered into with the
appellant,
the
insured
had
obtained
another insurance cover for his life in the
sum of Rs 11 lakhs. We are of the view that
the failure of the insured to disclose the
policy of insurance obtained earlier in the
proposal form entitled the insurer to
repudiate the claim under the policy.

i. To buttress her argument,
counsel has further placed reliance on Smt.
Parul
Agrawal
v.
Life
Insurance
Corporation of India and others in
Special Appeal Defective No. 782 of 2023
(Neutral Citation No.2024:AHC:36063DB).

ANALYSIS

5. We have considered the rival
submissions canvassed by both the sides
and have perused the materials placed on
record. It is necessary to preface our
analysis with reference to two issues firstly,
the nature of the disclosure made by the
insured in the proposal form and secondly,
the ground of repudiation of claim.
4 All. Santosh Kumar Vs. Assistant Secretary/Deputy Secretary/Secretary Insurance Ombudsman,
 Lucknow & Ors.
305
6. The learned counsel for the
petitioner has pleaded that the insurer has
illegally rejected the claim vide order dated
March 23, 2021 on the ground of nondisclosure of a previous policy. Insured had
taken the policy through an agent and she
had already given the information of the
previous policy to the agent before taking
policy but the agent assured her that the
earlier policy was already within the
knowledge of LIC, therefore, is not needed
to be mentioned in the proposal form. The
form was filled-up and the insured in a
routine manner had signed the same
without getting into details of the queries
mentioned in the proposal form. It is
further
contended
that
though
the
information has not been wilfully withheld,
the same should not deprive the petitioner
of his lawful right to claim insurance due to
fault of the agent of LIC.

7. Per contra, the learned counsel
for the respondents vehemently refutes the
submissions
of
the
learned
counsel
appearing on behalf of the petitioner and
submits that the information regarding
previous policy is pertinent for the insurer
to decide the claim and the same has been
mis-stated by the insured in the proposal
form by mentioning 'No' in 'column 7a'
and 'column 9' was left blank which
required
diligent
mentioning
of
the
previous policies (including surrendered or
lapsed policy) purchased during the past 3
years. Ergo, there is a breach of declaration
made at bottom of the proposal form,
making the policy liable to repudiation.

8. There is no dispute of the fact
that policy in dispute was taken on August
16, 2018, death of insured occurred on July
8, 2019 due to a heart attack and claim was
repudiated on March 23, 2021 by the
insurer. It is also undisputed that there was
one previous policy bearing no.205601558
issued in favour of Late Meera Devi (wife
of the petitioner) with its commencement
being dated May 28, 2018 and in addition
to that petitioner in its supplementary
rejoinder affidavit has also admitted two
other policies bearing no. 311496904 and
314004138. It is to be noted that the
previous three policies were paid by the
LIC.

9. The respondents have not raised
any concern with the two policies bearing
no.311496904 and 314004138 taken in the
year 2002 and 2010 respectively. The
dispute is only with the non-disclosure of
one previous policy bearing no. 205601558
(date of commencement on May 28, 2018)
in the proposal form as a ground of
repudiation by LIC in order dated March
23, 2021.

10. Upon perusal of copy of the
proposal form produced by respondents in
its counter affidavit, it is to be noted that
the query on which there was repudiation
of claim by the insurer was with regard to
'column 9' which was left blank by the
agent of LIC. The questions enquired in
'column 9' which was left blank in the
proposal form in verbatim is as follows:

 "9. Please give details of your
previous insurance taken from LIC as well
as from private insurers (including policies
surrendered/lapsed during last 3 years)"

11.
Moreover,
the
questions
enquired in 'column 7a' and 'column 8a' of
the proposal form and their corresponding
answers given by the insured in verbatim
are as follows:

 "7.a. Is your life now being
proposed for another assurance or an
306 INDIAN LAW REPORTS ALLAHABAD SERIES
application or revival of a policy on your
life
or
any
other
proposal
under
consideration
in
any
office
of
the
corporation or to any other insurer? If yes,
give detail:
Reply: No

8.a Has a proposal (or an
application of revival of a policy) on your
life made to any office of the Corporation
or to any other insurer ever been:
Reply: No"

12. It is to be further noted that
insured had also undergone a medical
examination on June 29, 2018 by the
insurer wherein her medical report also
substantiates her good health condition
which implies that there was nothing wrong
with her health condition.

13. We are cognizant and conscious
of the judgment of the Supreme Court in
Rekhaben Nareshbhai Rathod (Supra)
wherein the repudiation of the insurance
claim was due to complete failure to
disclose previous insurance claim as
availed by the insured. The present case is
different from the Rekhaben Nareshbhai
Rathod (Supra) as in the former case, the
reply was given in the negative and in the
present case the column was left blank. The
insured in the former case had taken
previous non-disclosed policy from a
different insurer unlike the present dispute
wherein both the policies are with the same
insurer.

14. It is pertinent to note that
basically there are two rejection orders
dated March 23, 2021 and May 19, 2023
passed by respondent no.3 and respondent
no.1 respectively. The rejection order dated
March 23, 2021 passed by respondent no.3
is on the ground of non-disclosure of a
previous policy no.205601558 but the
subsequent rejection order dated May 19,
2023 in continuation of the previous order,
passed
by
respondent
no.1/Insurance
Ombudsman on May 19, 2023 is on absurd
grounds, which is in verbatim delineated
below:

"Re:Policy No.: 205602934

We have received your letter
dated
08-MAY-2023
alongwith
the
enclosures

In this connection, we may inform
you that your complaint cannot be
considered by this office as the complaint is
not
within
the
scope
of
Insurance
Ombudsman Rules, 2017 (IO Rules) as
following -

1) As per Rule 14 (3) of IO Rules,
"no
complaint
to
the
Insurance
Ombudsman shall lie unless-

(a) the complainant makes a
written representation to the insurer
named in the complaint and

(i) either the insurer had rejected
the complaint; or

(ii) the complainant had not
received any reply within a period of one
month after the insurer received his
representation; or

(iii) the complainant is not
satisfied with the reply given to him by the
insurer".

Your complaint does not satisfy
this condition. You may please make a
written representation to the insurer.

2) According to Rule 13 (1) of 10
Rules -

"The Ombudsman shall receive (
and consider complaints or disputes
relating to-

(a) delay in settlement of claims,
beyond
the
time
specified
in
the
regulations, framed under the Insurance
Regulatory and Development Authority of
India Act, 1999;
4 All. Santosh Kumar Vs. Assistant Secretary/Deputy Secretary/Secretary Insurance Ombudsman,
 Lucknow & Ors.
307

(b)
any
partial
or
total
repudiation of claims by the life insurer,
General insurer or the health insurer;

(c) disputes over premium paid or
payable in terms of insurance policy;

(d) misrepresentation of policy
terms and conditions at any time in the
policy document or policy contract;

(e)
legal
construction
of
insurance policies in so far as the dispute
relates to claim;

(f)
policy
servicing
related
grievances against insurers and their
agents and intermediaries;

(g) issuance of life insurance
policy, general insurance policy including
health insurance policy which is not in
conformity
with
the
proposal
form
submitted by the proposer,

(h) non-issuance of insurance
policy after receipt of premium in life
insurance and general insurance including
health insurance; and
 (i) any other matter resulting
from the violation of provisions of the
Insurance Act, 1938 or the regulations,
circulars, guidelines or instructions issued
by the IRDAI from time to time or the terms
and conditions of the policy contract, in so
far as they relate to issues mentioned at
clauses (a) to (f)".

Your complaint is not related to
any of the points from point No. (a) to (i)
above.

3) As per Rule 14 (1) of IO Rules,
"any person who has a grievance against
an insurer, may himself or through his
legal heirs, nominee or assignee, make a
complaint in writing to the Insurance
Ombudsman".

Your complaint does not satisfy
this condition

In terms of Rule 14(5) of IO
Rules, "No complaint before the Insurance
Ombudsman shall be maintainable on the
same subject matter on which proceedings
are pending before or disposed of by any
court or consumer forum or abitrator.

Accordingly
your
complaint
cannot be considered by us.

5) The policy (under which you
have made the complaint) is not issued
under personal lines of insurance, group
insurance policies, policies issued to sole
proprietorship or micro enterprises in
terms of Rule 4 of the IO Rules. Therefore
your complaint cannot be considered by us.

6) As per Rule 17 (3)(ii) of IO
Rules, Insurance Ombudsman can "not
award compensation exceeding rupees
thirty lakhs (including relevant expenses, if
any)". You have claimed compensation of
more than Rs.30 lakhs; therefore your
complaint cannot be considered by us.

7) The complaint is not addressed
to this office.

8) Complaint is time barred."

15. A perusal of the order dated
May 19, 2023, reveals that the decision
passed by the Insurance Ombudsman lacks
consideration on merits and is entirely
vague. Despite the nominee of the insured
having submitted a written representation
dated April 15, 2023; the existence of a
rejection order dated March 23, 2021, from
the insurer repudiating the insurance claim;
with no proceedings pending before any
court or arbitrator; the insurance policy
issued
under
personal
lines;
the
complainant seeking an assured sum of
only Rs.15 lakhs; the complaint being duly
addressed to the office of Insurance
Ombudsman; and the complaint having
been filed within the time frame stipulated
in the Ombudsman's letter dated April 21,
2023 requesting certain documents; the
Insurance Ombudsman has arbitrarily,
capriciously and whimsically rejected the
complaint without any application of mind
308 INDIAN LAW REPORTS ALLAHABAD SERIES
by simpliciter quoting the rules for filing a
complaint
as
per
the
Insurance
Ombudsman, Rules 2017.

16. The repudiation in the present
case was within a period of three years
from the date of commencement of policy.
This assumes significance in view of the
provisions of Section 45 of the Insurance
Act, 1938. The said provision in verbatim
is as follows:

"45. Policy not be called in
question on ground of misstatement after
three years. -(1) No policy of life
insurance shall be called in question on
any ground whatsoever after the expiry of
three years from the date of the policy, i.e.,
from the date of issuance of the policy or
the date of commencement of risk or the
date of revival of the policy or the date of
the rider to the policy, whichever is later.

(2) A policy of life insurance may
be called in question at any time within
three years from the date of issuance of the
policy or the date of commencement of risk
or the date of revival of the policy or the
date of the rider to the policy, whichever is
later, on the ground of fraud:

Provided that the insurer shall
have to communicate in writing to the
insured or the legal representatives or
nominees or assignees of the insured the
grounds and materials on which such
decision is based.
 Explanation
I.
-For
the
purposes of this sub-section, the expression
"fraud" means any of the following acts
committed by the insured or by his agent,
with intent to deceive the insurer or to
induce the insurer to issue a life insurance
policy: -

(a) the suggestion, as a fact of
that which is not true and which the
insured does not believe to be true;

(b) the active concealment of a
fact by the insured having knowledge or
belief of the fact;

(c) any other act fitted to deceive;
and

(d) any such act or omission as
the law specially declares to be fraudulent.

Explanation II. -Mere silence as
to facts likely to affect the assessment of the
risk by the insurer is not fraud, unless the
circumstances of the case are such that
regard being had to them, it is the duty of
the insured or his agent keeping silence, to
speak, or unless his silence is, in itself,
equivalent to speak.

(3)
Notwithstanding
anything
contained in sub-section (2), no insurer
shall repudiate a life insurance policy on
the ground of fraud if the insured can prove
that the misstatement of or suppression of a
material fact was true to the best of his
knowledge and belief or that there was no
deliberate intention to suppress the fact or
that such misstatement of or suppression of
a material fact are within the knowledge of
the insurer:

Provided that in case of fraud,
the onus of disproving lies upon the
beneficiaries, in case the policyholder is
not alive.

Explanation. -A person who
solicits and negotiates a contract of
insurance shall be deemed for the purpose
of the formation of the contract, to be the
agent of the insurer.

(4) A policy of life insurance may
be called in question at any time within
three years from the date of issuance of the
policy or the date of commencement of risk
or the date of revival of the policy or the
date of the rider to the policy, whichever is
later, on the ground that any statement of
or suppression of a fact material to the
expectancy of the life of the insured was
incorrectly made in the proposal or other
4 All. Santosh Kumar Vs. Assistant Secretary/Deputy Secretary/Secretary Insurance Ombudsman,
 Lucknow & Ors.
309
document on the basis of which the policy
was issued or revived or rider issued:

Provided that the insurer shall
have to communicate in writing to the
insured or the legal representatives or
nominees or assignees of the insured the
grounds and materials on which such
decision to repudiate the policy of life
insurance is based:

Provided further that in case of
repudiation of the policy on the ground of
misstatement or suppression of a material
fact, and not on the ground of fraud, the
premiums collected on the policy till the
date of repudiation shall be paid to the
insured or the legal representatives or
nominees or assignees of the insured within
a period of ninety days from the date of
such repudiation.

Explanation. -For the purposes
of this sub-section, the misstatement of or
suppression of fact shall not be considered
material unless it has a direct bearing on
the risk undertaken by the insurer, the onus
is on the insurer to show that had the
insurer been aware of the said fact no life
insurance policy would have been issued to
the insured.

(5) Nothing in this section shall
prevent the insurer from calling for proof
of age at any time if he is entitled to do so,
and no policy shall be deemed to be called
in question merely because the terms of the
policy are adjusted on subsequent proof
that the age of the life insured was
incorrectly stated in the proposal. "

17. As per Section 45 of the
Insurance Act, 1938, the policy may be
called in question within three years mainly
on two grounds, firstly, on the ground of
fraud and secondly on the ground of misstatement or suppression of a material fact.
As per second proviso to sub-section (4) of
Section 45 of the Insurance Act, 1938 it is
clear that if the policy is being repudiated
on
the
ground
of
mis-statement
or
suppression of a material fact, and not on
the ground of fraud, the premiums collected
by the insurer are to be returned within a
period of ninety days from the date of such
repudiation. In the present case, the
respondent/Insurance Company has made
no
such
return
of
the
premiums.
Accordingly, it is clear from the action of
the respondents that the policy has been
repudiated on the ground of fraud.

18. As per sub-section (3) of
Section 45, the insurer cannot repudiate the
policy on the ground of fraud if, the insured
can prove that there was no deliberate
intention to suppress the material fact or
suppression of a material fact are within the
knowledge of the insurer. In case of
Mahaveer Sharma (Supra), the Apex
Court has held that the burden of proving
the repudiation on ground of fraud lies on
the insurer.

 "16.
In
Mahakali
Sujatha
(Supra), this Court observed that if a claim
was repudiated on the ground that the
policy holder has suppressed material facts
in his application form with respect to
existing life insurance policies from other
insurers, the burden is on the insurer to
prove the allegation of non-disclosure of
the material fact and that the nondisclosure was fraudulent."

19. In Manmohan Nanda v.
United India Assurance Co. Ltd. reported
in (2022) 4 SCC 582 the Apex Court has
held that principle of utmost good faith
imposes
meaningful
reciprocal
duties
owned by the insured to the insurer and
vice-versa.