' KHAWAJA FAROOQ SAEED, J.---Through this R.F.A. The appellants have sought indulgence of this Court against the order, dated 3-11-2008 passed by Addl. District Judge in his capacity as Insurance Tribunal under Insurance Ordinance, 2000.
2. Brief facts of the case are that the mother of the respondent got herself insured through the appellant-company vide contract, dated 16-11-1991. The same later discontinued due to non- payment of the premium on 25-11-1997. It was revived on 20-2-2001 on payment of arrears by the said lady. The lady later died on 18-5-2003, which is almost after two years and three months from the restoration of the policy. The legal heir (nominee) filed claim which is disallowed by the insurance company by holding that at the time of revival of the policy, the fact with regard to the ailment of the mother was never brought to the knowledge of the appellant-company through the Exh.R2 and Exh.R3.
3. The respondent filed an application before the Insurance Tribunal which stands allowed vide order, dated 3-11-2008. It is said order which is now impugned before this Court in terms of section 124 of the Insurance Ordinance, 2000:
4. The only argument of the learned counsel for the appellant is that the insurer having concealed her ailment at the time of purchasing the policy her nominees are not entitled to the benefits. She was a known patient of Hypertension, Diabetes and mellitus. Further the appellant has not been allowed to get the statement of the doctor recorded under Order XVI read with section 151 of Cr.P.C.
For confirmation of the documents Mark R-1 to R-18 which prove the claim of the insurance company that she was a sick lady and her diseases were concealed.
5. The case of the respondent on the other hand is that the question as to whether the lady was fit enough to be insured or not having not been challenged at the time of selling the policy, no subsequent proof can now be allowed to be entertained. The contracts regarding issuance and revival of policy are between insurer and the company. The parties to a contract should satisfy themselves at the time of signing the contract and not subsequently. Section 80 of the Insurance Ordinance, 2000, deals with such matters.
6. In fact law does not permit such an inquiry after signing the agreement and its approval by the insurance company. In this regard the agreement is signed in 1991. Subsequent actions like deposit of the insurance premium, restoration of the policy etc., are continuation of the said contract. There is a specific bar on the insurance companies to challenge such a contract two years after the commencement of the policy which in the present case is 1991. The appellant was required to challenge the same in terms of section 80 of the said law within two years of its commencement.
The said section 80 reads as follows:-- "Section 80"
"Policy not to be called in question on ground of mis statement after two years.--Notwithstanding anything in section 79, no policy of the insurance effected before the commencement date of this Ordinance shall after the expiry of two years from the commencement date of this Ordinance and no policy of life insurance effected after the commencement date 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 policy-holder, 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 acts 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 benefits payable under the policy are adjusted on subsequent proof that the age of the life insured was incorrectly stated in the proposal."
7. Above mentioned provision of law is clear in its meanings. It is non abstained clause. It supersedes section 79 in totality. Furthermore, it inter alia holds that no policy shall be called in question after the expiry of two years from the date it was effected by saying that the statement of the policy holders or the report of a medical officer etc. Was later found to be as inaccurate. In the present case the same commenced in 1991. ' Its revival is obviously continuation of the same policy.
The provision, however, says that an insurer can challenge it if it was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policy holder. The emphasis, therefore, is firstly on material matter or alternatively the suppressed matters non-disclosure was with the intention to commit a fraud with the insurer. Besides, the statement given is false should be a matter of his knowledge at the time of diving the said statement.
8. In fact this Court has already decided this issue in R.F.A. No,5 of 2008 which is reported as (PLD 2008 Lahore 461) re: "State Life Insurance Corporation v. Mst. Sadaqat Bano". In this case it has been held that a policy cannot be called in question on the ground of mis-statement after two years of its effectiveness, within the contemplation of section 80 of the Insurance Ordinance, 2000. In the present case even if the said judgment is ignored the other facts of the case does not help the appellant. The death of the respondent is beyond the period of two years even' after the restoration of the policy, besides, the claim was filed in 2004, i,e, three years after the said restoration. The agreement of the appellant that the limitation provided in the said law should be calculated from revival, therefore, shall also not help him.
9. In fact the arguments from the respondent side are quite valid. Section 80 is very clear with regard to the time frame during which the insurance company can challenge the certificate provided in respect of health of an applicant. Further, the referred case has already clinched the issue in following manner:- "According to section 80, Insurance Ordinance, 2000, an Insurance Policy, cannot be called in question on the grounds of misrepresentation, false statement or suppression of material facts, after two years from the date when the Policy was originally effected. The period of two years even in cases where the Policy was revived and reviewed, would be counted from original date of the Policy in question. The application of provision of section 80 is contingent upon fulfilment of following conditions:--
(i) The inaccurate statement pertains to a matter which is material, or the facts which are suppressed, the disclosure thereof was material.
(ii) The suppression must be fraudulent and made by Policy-holder.
(iii) The Policy-holder, at the time of making the statement had known that statement was false and it was material to disclose the facts suppressed.
' Disclosure of material facts as to ones health is ,ticklish issue. What is material again depends upon the circumstances of each case. Good health means reasonably good health. A warranty of good health can never mean that a person has not in him the seeds of disorder. One is born with seeds of mortality in it. A person can be ignorant about his health or about the disease, which has its roots in him. A person has normally a general idea of his health. Then question arises as to when the contract of insurance becomes avoidable at the option of insurer.. Non-disclosure relates to the facts which are in the knowledge of the person making the statement A person who is himself unaware of his ill health, can make an innocent statement that he is not suffering from disease/illness. This statement cannot be used against such a person. A statement is fatal only when person making the statement deliberately and wilfully suppresses the material facts, knowing that disclosure of such facts was material and facts were fraudulently suppressed. Three conditions are essential and necessary for repudiation of insurance contract or to invoke provision of section 80 of the Insurance Ordinance (XXXIX of 2000)."
10. Even if one considers that the lady suffered from the ailment mentioned in the petition in terms of Hypertension Diabetes etc., it cannot be called as exceptional reasons. The majority of the people having these ailments by remaining more careful in their life time, live for decades. Some of them live E longer than people not having such diseases. Furthermore, if some one successfully conceals these diseases it cannot be said that it was done fraudulently. The insurer at the time of insurance must satisfy himself and should get the prospective buyer of the policy medically checked up to his satisfaction.
11. Regarding argument that the appellant has not been provided chance of adducing further evidence the same becomes un-necessary. Even if the appellant succeeds in establishing that she was unwell at the time of revival, the matter would remain that the cut of time of two years in which it could be challenged has already lapsed.
12. The outcome of the discussion is obvious. The R.F.A. Is dismissed.