1. The Petitioner is challenging Ext.P4 Award of the Permanent Lok Adalat, Ernakulam, dismissing O.P. No.26/2015 filed by her. The Petitioner is a widow. Her husband died on 30.06.2014. The Petitioner along with her husband had availed a loan of Rs.12,60,252/- from the Respondent No.2/Bank in the year 2013. The husband of the Petitioner had taken Ext.P1 Life Insurance Policy for an amount of Rs.6,30,126/- as required by the Respondent No.2 under the Master Policy taken by the Respondent No.2 from the Respondent No.1. On the death of her husband, the Petitioner claimed the sum assured under Ext.P1 as the nominee, to settle the loan liability. But the Respondent No.1 repudiated the claim alleging that Ext.P1 Policy was obtained by her husband suppressing the fact of diabetes. The Petitioner approached the Permanent Lok Adalat by filing O.P. No.26/2015 claiming that the reason for repudiation is false and illegal and the alleged suppression is immaterial which is having no nexus with the cause of death of her husband. Before the Permanent Lok Adalat, the Petitioner was examined as PW1 and Exts.P1 to P8 were marked in evidence from her side and the Officer of the Respondent No.1 was examined as RW1 and Exts.R1 to R16 were marked from the side of the Respondent No.1. The Medical records of the husband of the Petitioner summoned from Malankara Orthodox Syrian Church Medical College Hospital, Kolencherry were marked as Exts.X1 and X2.

2. The Permanent Lok Adalat found that the husband of the Petitioner committed suicide and that since there is ambiguity on the first part of Ext.P1, i.e., Clause 14 specifically provides that if the suicide is only within the period of one year, the Respondent No.1 can repudiate the claim, and so the repudiation of the claim by the Respondent No.1 is not acceptable. But the Permanent Lok Adalat rejected the claim of the Petitioner finding that the husband of the Petitioner had suppressed the fact that he had been suffering from diabetes mellitus while taking Ext.P1 Policy and relying on the decision of the Hon'ble Supreme Court in Satwant Kaur Sandhu v. New India Assurance Company Limited [(2009) 8 SCC 316] in which the Hon'ble Supreme Court concluded that in a Contract of Insurance, any fact which would influence the mind of an Insurer in deciding whether to accept or not to accept the risk is a ‘material fact’, and if the Proposer has knowledge of such fact, he is obliged to disclose it, particularly while answering the questions in the Proposal form, and that any inaccurate answer will entitle the Insurer to repudiate his liability. It is further found that the repudiation of the claim by the Respondent No.1 on the ground of suppression of material fact is legal and sustainable and cannot be interfered with.

3. The Respondent No.1 filed Counter Affidavit dated 08.02.2022 opposing the prayers in the Writ Petition and supporting Ext.P4 Award of the Permanent Lok Adalat.

4. I heard the learned Counsel for the Petitioner, Sri. P. Jinish Paul, the learned Counsel for the Respondent No.1, Sri. Jithin Saji Isaac, and Sri. S. Ambily, for the Respondent No.2.

5. The learned Counsel for the Respondent No.2 submitted that subsequent to the repudiation of the claim under Ext.P1 Policy by the Respondent No.1, the Respondent No.2 initiated recovery proceedings against the Petitioner and the Petitioner settled the loan by making a payment of Rs.10,37,832/- in February 2017 and hence the Respondent No.2 has no subsisting interest in the Writ Petition.

6. Learned Counsel for the Petitioner submitted that the repudiation of the Claim by the Respondent No.1 is illegal and unsustainable. The alleged suppression is not a material suppression. It was not having any nexus to the cause of death of the husband of the Petitioner. Ext.R1(a) Proposal would reveal that the Proposer answered in the negative with respect to a question regarding various diseases mentioned therein. There was no provision in the said question to make multiple answers for each of the diseases. In such case, the Proposer had the only option to answer in the negative when the applicants were not having serious diseases mentioned therein. At any rate, there is ambiguity in the answer provided by the Proposer in Ext.R1(a) and it happened only on account of the ambiguous question of the Respondent No.1. Insurance being a beneficial provision, any ambiguity in the conditions of the Policy ought to have been interpreted in favour of the Policyholder rather than avoiding the policy. The Permanent Lok Adalat found that the husband of the Petitioner committed suicide, and, if the suicide is committed after one year from the date of the policy, it is covered under the policy, and in such case, the Permanent Lok Adalat ought to have allowed the claim of the Petitioner. Learned Counsel contended that the issue is squarely covered by the decision of the Hon'ble Supreme Court in Sulbha Prakash Motegaonkar v. Life Insurance Corporation of India [(2021) 13 SCC 561]. In Sulbha Prakash (supra), the Hon'ble Supreme Court held that repudiation of a life insurance claim is not justified when the undisclosed ailment is not life-threatening and has no connection with the Insured's death, as such concealment is not material enough to disentitle the Insured from obtaining life insurance. Learned Counsel further cited the decision of the Madhya Pradesh High Court in Life Insurance Corporation of India v. Beni Bai [II (1998) BC 157 (MP) (DB)], the decision of the Rajasthan High Court in Life Insurance Corporation of India v. District Permanent Lok Adalat and Others [MANU/RH/0261/2004], the decisions of the Orissa High Court in Kuni Lata Sahoo v. Senior Divisional Manager, LIC of India, Cuttack and Another [AIR 2010 Orissa 19] and Anupama Behera and Others v. Divisional Manager, L.I.C. of India, Cuttack and Another [2010 KHC 6858] and the decision of the Madras High Court in Life Insurance Corporation of India v. Insurance Ombudsman and Another [(2010) 2 MLJ 222].

7. On the other hand, the learned Counsel for the Respondent No.1 contended that there occurred a substantial difference in the law on substitution of Section 45 of the Insurance Act, 1938, by the Amendment Act of 2015. After the introduction of the new Section 45 of the Insurance Act, it is permissible to contend that the suppression was not a material suppression for repudiating the claim. But as per the old Section 45, any inaccurate information in the Proposal would entitle the Insurance Company to repudiate the claim. Learned Counsel contended that the law with reference to the legal provision under old Section 45 of the Insurance Act is well settled, by the decisions of the Hon'ble Supreme Court in Reliance Life Insurance Company Limited and Another v. Rekhaben Nareshbhai Rathod [(2019) 6 SCC 175], Branch Manager, Bajaj Allianz Life Insurance Company Limited and Others v. Dalbir Kaur [(2021) 13 SCC 553], Manmohan Nanda v. United India Assurance Company Limited and Another [(2022) 4 SCC 582], Mahakali Sujatha v. Branch Manager, Future Generali India Life Insurance Company Limited and Another [(2024) 8 SCC 712] and Mahaveer Sharma v. Exide Life Insurance Company Limited and Another [2025 SCC OnLine SC 435]. Learned Counsel further cited the Division Bench Judgment of this Court in Life Insurance Corporation of India and Another v. Chandrika C.P. and Another [2026 SCC OnLine Ker 1360] in which most of the aforesaid decisions of the Hon'ble Supreme Court are considered.

8. I have considered the rival contentions with reference to the statutory provision and the precedents cited by either side.

9. It is clear from Ext.R1(a) Proposal form that as against the question whether the Proposer has been suffering from various diseases mentioned therein, including diabetes, the Proposer answered in the negative. It is clear from Ext.X2 marked in evidence before the Permanent Lok Adalat that the husband of the Petitioner was having diabetes since 2009. Ext.P1 Policy was taken in the year 2013. The husband of the Petitioner died not on account of any disease aggravated by diabetes. In such case, the question to be considered is whether the representation of the Proposer that he was not having diabetes at the time of taking Ext.P1 Policy is enough for the Respondent No.1 to repudiate the claim under Ext.P1 Policy. The question is to be analysed with reference to Section 45 of the Insurance Act and the precedents cited by both sides.

10. This is a case in which the claim under Ext.P1 Policy was repudiated by Respondent No.1 within a period of two years from the date of issuance of Ext.P1 Policy. Section 45 of the Insurance Act, 1938, was substituted by the Insurance Laws (Amendment) Act, 2015 (Act No.5 of 2015) with effect from 26.12.2014. Since Ext.P1 Policy and the repudiation of the claim were before the date of the Amendment coming into force, the old Section 45 of the Insurance Act, 1938, is applicable to the case on hand. The old Section 45 is extracted hereunder:

                  “45. Policy not to be called in question on ground of mis-statement after two years. – No policy of life insurance effected before the commencement of this Act shall after the expiry of two years from the date of the commencement of this Act and no policy of life insurance effected after the coming into force of this Act shall after the expiry of two years from the date on which it was effected, be called in question by an insurer on the ground that a statement made in the proposal for insurance or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the policy, was inaccurate or false, unless the insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policy-holder and that the policy-holder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose:

                  Provided that 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."

11. As per the old Section 45, the Insurer shall not question any policy of life insurance after the expiry of two years from the date on which it was effected, on the ground that a statement made in the Proposal for insurance or in any report of a medical officer, etc. was inaccurate or false unless the Insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policyholder and that the policyholder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose. It would show that the Policy can be questioned by the Insurer after the expiry of two years on the ground of inaccurate or false statement by the Proposer only if the Insurer proves the ingredients mentioned in the second part of Section 45. But with respect to the questioning of the policy within a period of two years, it is not subjected to any condition. In Chandrika C.P. (supra), the Division Bench of this Court considered almost all the Supreme Court decisions cited by the learned Counsel for the Respondent No.1 and it is found that in the light of the said Judgments, it can only be said that the suppression made by the policyholder regarding previous medical history is a material suppression that entitles the Appellant to reject the claim by repudiating the contract of insurance on the ground of fraud. In the said decision, this Court considered the new Section 45 of the Insurance Act, 1938. But in the decision of the Hon'ble Supreme Court in Rekhaben (supra), the Supreme Court considered the old Section 45 which is applicable to the case on hand. In that case also, the repudiation of the claim was within a period of two years from the commencement of the insurance coverage. The Hon'ble Supreme Court followed its own earlier decision in Satwant Kaur (supra), in which the decisions of the Hon’ble Supreme Court in United India Insurance Co. Ltd. v. M.K.J. Corporation [(1996) 6 SCC 428] and Modern Insulators Ltd. v. Oriental Insurance Co. Ltd. [(2000) 2 SCC 734] are relied upon.

12. In Satwant Kaur (supra), the Hon’ble Supreme Court was dealing with a mediclaim policy. It is held that a mediclaim policy is a non-life insurance policy meant to assure the Policyholder in respect of certain expenses pertaining to injury, accidents or hospitalizations; that nonetheless, it is a contract of insurance falling in the category of contract uberrimae fidei, meaning a contract of utmost good faith on the part of the assured; that 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; that it is not for the Proposer to determine whether the information sought for is material for the purpose of the policy or not; that the obligation to disclose extends only to facts which are known to the applicant and not to what he ought to have known; that the obligation to disclose necessarily depends upon the knowledge one possesses; and that his opinion of the materiality of that knowledge is of no moment. It is further held that the term "material fact" is not defined in the Insurance Act and, therefore, it has been understood and explained by the Courts in general terms to mean as any fact which would influence the judgment of a prudent Insurer in fixing the premium or determining whether he would like to accept the risk; that any fact which goes to the root of the Contract of Insurance and has a bearing on the risk involved would be "material"; and that there is clear presumption that any information sought for in the Proposal form is material for the purpose of entering into a contract of insurance.

13. The Hon'ble Supreme Court in Rekhaben (surpa) held that in a situation which was not governed by Section 45, the Supreme Court used to apply the fundamental tenet of insurance law, namely, utmost good faith; that contracts of insurance are governed by the principle of utmost good faith; that the duty of mutual fair dealing requires all parties to a contract to be fair and open with each other to create and maintain trust between them; that, in a contract of insurance, the insured can be expected to have information of which he has knowledge; and that this justifies the duty of good faith, leading to a positive duty of disclosure. The Hon’ble Supreme Court summarised its findings in Paragraphs Nos.30 and 31 in the said decision, which are extracted hereunder:

                  “30. It is standard practice for the Insurer to set out in the application a series of specific questions regarding the applicant's health history and other matters relevant to insurability. The object of the Proposal form is to gather information about a potential client, allowing the Insurer to get all information which is material to the Insurer to know in order to assess the risk and fix the premium for each potential client. Proposal forms are a significant part of the disclosure procedure and warrant accuracy of statements. Utmost care must be exercised in filling the Proposal form. In a Proposal form, the applicant declares that she / he warrants truth. The contractual duty so imposed is such that any suppression, untruth or inaccuracy in the statement in the Proposal form will be considered as a breach of the duty of good faith and will render the policy voidable by the Insurer. The system of adequate disclosure helps buyers and sellers of insurance policies to meet at a common point and narrow down the gap of information asymmetries. This allows the parties to serve their interests better and understand the true extent of the contractual agreement.

                  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 (supra), “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.”

14. The decision in Rekhaben (supra) is consistently followed by the Hon'ble Supreme Court in the subsequent decisions in Dalbir Kaur (supra), Manmohan Nanda (supra), Mahakali Sujatha (supra) and Mahaveer Sharma (supra). In Mahakali Sujatha (supra) also, the Hon'ble Supreme Court emphasised the importance of the application of the maxim of 'uberrimae fidei' in the case of insurance contracts. The decision cited by the learned Counsel for the Petitioner in Sulbha Prakash (supra) is considered and distinguished in Dalbir Kaur (supra) and Manmohan Nanda (supra). In Life Insurance Corporation v. Sunita and Others [SLP(C) No.15354/2020], the Hon'ble Supreme Court has held that the decision in Sulbha Prakash (supra) does not establish a general principle of law applicable to all cases of non-disclosure and that each case must be assessed based on its specific facts. The decision in Dalbir Kaur (supra) is rendered by a Bench of three Judges, whereas the decision in Sulbha Prakash (supra) is rendered by a Bench of two Judges and hence the decision in Dalbir Kaur (supra), following the decision in Rekhaben (supra), will prevail over the decision in Sulbha Prakash (supra). It is apposite to extract five out of the seven principles laid down by the Hon'ble Supreme Court in Paragraphs Nos.55.1, 55.2, 55.3, 55.6 & 55.7 in Manmohan Nanda (supra) :

                  “ 55.1. There is a duty or obligation of disclosure by the insured regarding any material fact at the time of making the Proposal. What constitutes a material fact would depend upon the nature of the insurance policy to be taken, the risk to be covered, as well as the queries that are raised in the Proposal form.

                  55.2. What may be a material fact in a case would also depend upon the health and medical condition of the proposer.

                  55.3. If specific queries are made in a Proposal form, then it is expected that specific answers are given by the insured who is bound by the duty to disclose all material facts.

                  xxx

                  55.6. The Insurer must be able to assess the likely risks that may arise from the status of health and existing disease, if any, disclosed by the insured in the Proposal form before issuing the insurance policy. Once the policy has been issued after assessing the medical condition of the insured, the Insurer cannot repudiate the claim by citing an existing medical condition which was disclosed by the insured in the Proposal form, which condition has led to a particular risk in respect of which the claim has been made by the insured.

                  55.7. In other words, a prudent Insurer has to gauge the possible risk that the policy would have to cover and accordingly decide to either accept the Proposal form and issue a policy or decline to do so. Such an exercise is dependent on the queries made in the Proposal form and the answer to the said queries given by the proposer.”

15. Since the issue involved in this case is well considered by the decisions of the Hon'ble Supreme Court, I am not considering the decisions of the High Court cited by the learned Counsel for the Petitioner.

16. In view of the settled proposition of law laid down in Rekhaben (supra), I am of the view that since the Respondent No.1 questioned Ext.P1 Policy within a period of two years, it is not bound to prove the various conditions laid down in the second part of the old Section 45 relating to the questioning of the Policy after the expiry of two years. The Respondent No.1 is entitled to repudiate the claim, if the Proposer had stated any inaccurate answer to the questions in the Proposal form. It is seen from Ext.R1(a) Proposal Form that, to the question of whether the Proposer is suffering from any diseases, including diabetes, the Proposer answered in the negative, whereas Ext.X2 Medical Records of the husband of the Petitioner summoned from the hospital where he was treated, would show that he was suffering from diabetes. Petitioner does not have a case that Ext.X2 is not the medical record of her husband. It is true that the husband of the Petitioner died not on account of any disease aggravated by diabetes. But going by the first part of old Section 45, it is only sufficient if the Proposer has knowingly made inaccurate information in the Proposal form. The Insurer assessed the risk appetite and fixed the insurance premium, etc., considering the various information furnished in the Proposal form. If any of the information furnished by the policyholder is later found to be false or inaccurate, it is well within the right of the Insurer to repudiate the claim. The question whether such inaccurate information is material or not, is not a relevant consideration in case the claim is repudiated within a period of two years.

17. Hence, I find that the Respondent No.1 was fully justified in repudiating the claim of the Petitioner under Ext.P1 Policy. The Permanent Lok Adalat rightly dismissed the Petition filed by the Petitioner as per Ext.P4 Order. I do not find any infirmity or illegality in Ext.P4 Order.

18. The Writ Petition fails and the same is accordingly dismissed.