' This first appeal is directed against the judgment and decree ated 26th October, 1968 passed by the learned Civil Judge 1st Class, yderabad, in Suit No, 145/65.
' The brief facts leading to the filing of this appeal are that the respondent is the mot her and the legal heir of late Muhammad Jamil (hereinafter eferred to as the deceased insured) filed the above suit for the recovery f Rs, 45,275.79 in respect of two policies bearing Nos. 946349 (hereinafter eferred to as the first policy) and 946350 (hereinafter referred to as the econd policy) obtained by the deceased in 1955 for a sum of Rs, 25,000 ach. It seems that the deceased insured did not pay premium for the ears 1958-59 and 1960 in respect of the first policy and for the years 1959 and 1960 in respect of the second policy. It further seems that the appellants under the same forfeiture clause paid the above premium from he surrender value. However, on about 23rd September, 1961 the deceased insured again defaulted in payment of the premiums as the balance amounts under the surrender values of the two insurance policies in question, were not sufficient to pay off the premiums. Thereupon, on th November, 1961 and 11th November, 1961 the appellants wrote two letters to the deceased insured giving him option mentioned therein subject o the condition mentioned therein (Exhs, 49 and 50). It may be observed hat one of the conditions conveyed to the deceased limited was that he would have to give a declaration of good health, In response to the appellants' above letters, the deceased insured accepted terms contained herein and submitted the declaration of good health as was required and Iso paid the balance of premium after adjusting the surrender values s shown in the two lapsed policies. The health declarations are contained n Exh. 53 in respect of the above policies it also seems that the deceased 'insured again defaulted in payment of premiums on 23rd September, 1962 nd again the above policies had lapsed the amounts available under the surrender values for the reason that these were not sufficient to make payments of the premiums. It further- seems that the appellants by heir two letters both dated 16th November, 1962 Exhs. 54 and 55 again ave similar option to the deceased insured, which they had given through heir earlier aforesaid letters Exhs. 49 and 50, which inter alto included he condition that the deceased insured would have to give a declaration of good health in respect of each of the two policies. Thereupon, again he deceased insured gave the necessary good health declarations, Exh. 57 and also paid the balance of the premiums after adjuiting the surrender alues shown in the two insurance policies and on the basis of the above declarations and the payment of the premiums the two insurance policies were again revived.
(b) The insured died on 19th August, 1963 and, thereafter, the respondent made a claim against the above two insurance policies and forwarded a certificate of identification, a medical certificate of death, and the death certificate Exhs. 14, 15 and 16 respectively. After that the tespondent also produced the requisite succession certificate. The appellants 1fter receiving the above documents including the claim form etc. Wrote a letter to Dr. Muhammad Yakoob Khan on 28th August, 1964 Exh. 68 o enquring from him, as to whether he had attended the deceased and I so, for what ailments, and during what period. Dr. Muhammad Yakoo' sent a reply dated 14th September, 1964 Exh. 69 containing the necessar information. From the above reply of Dr. Yakoob, it transpired tha the deceased insured made false health declaration at the time of gettin, the two insurance policies revived twice after the same had lapsed. There upon, the appellants through their letter dated 1st October, 1964 Exh. 7 repudiated the respondent's claim. After some further correspondenc between the appellants and the respondent, the later filed the above sti. For the recovery of the aforesaid amount. The above suit was resiste and 8 issues were framed by the learned Civil Judge.
The respondent I support of the suit examined herself Exh.
31. Whereas the appellant examined for Drs. Namely. Dr. Muhammad Yakoob Khan Exh. 40 Dr. Muhammad Akhtar Khan Exh. 40 Dr. Sardar Ali Shaikh Exh.
4. And Dr. Ayoob Khan, and fifth witness Syed Muhammad Najmuddin, Executive Assistant in the appellants Company Exh.
44. It may observed that the learned Civil Judge, came to the conclusion that in fa the two policies had lapsed on account of non payment of the premiu and for want of sufficient balance amounts available under the surrend values and that the deceased insured made false health declaration fo obtaining the revival of the insurance policies, on both the occasions He also came to the conclusion that in fact the appellants had require the deceased insured to submit a good health declaration as a conditio for reviving the above policies. However, he was of the view that th above condition had not become part of the revived insurance policie and therefore, the appellants were not entitled to repudiate the tw insurance policies in question.
(r) The above case came up for hearing before me for arg ments oa 10th March, 1981, when nobody had appeared for t respondent. I purposely adjourned the above case to 11th Marc 1981 and requested Mr. Hanif, learned counsel for the appella to contact the learned counsel for the respondent on the telephoni at Hyderabad to inform him about the hearing of the above case. Mr. Hanif on the following day informed me that in tact could not contact the learned counsel for the respondent, but had convey a message through Mr. Aftab Shaikh, an Advocate of Hyderabad to t learned counsel for the respondent. From the postal acknowledgme receipt on the file, it seems that the notice for hearing of the above appe for 10th March, 1981 was received by the learned counsel for t respondent on 2nd March, 1981 but in spite of the fact that 1 adjourne the case from 10th March, 1981 to 11th March, 1981 and from 11th Marc' 1981 to 12th March, 1981 nobody has turned up for the respondent an' therefore, after having heard the learned counsel for the appellant, I ha dictated this judgment in the Court.
(2) (a) In support of the above appeal, it has been urged Mr. Hanif, learned counsel for the appellants that the learned Civil Jud after having come to the conclusion that in fact the deceased insured h obtained the revival of the two insurance policies on the basis of fal declarations of health erred in holding that the above declarations were n part of the two revived insurance policies. In support of the abo contention, he has referred to the well known Book of E. R. Hardy Iva on General Principles of Insurance Law, 4th Edition at page 272, Halsbuq, Law of England, 3rd Edition, Vol XXII, para. 488 at page 251, the case of Handler v. Mutual Reserve Fund Life Association (1) and the case of East and West Life Insurance Co. v. Kolla Venkish and others (2).
' It may be advantageous to quote the relevant passages from the above two books at pages 272 and 252, respectively, which read as follows :- "E. R. Hardy Ivamy.-A Policy which is not renewed at or before the expiration of the current period of insurance or of the days of grace, if any, is said to lapse, and the assured cannot enforce in respect of any claim arising afterwards. It may, however, be revived at any time by mutual consent, and the insurers may be precluded by their contract from relying upon its lapse."
"A request for the premium made by the insurers after lapse is an offer on their part to revive the policy, and the rayrnent of the premium by the assured is his acceptance of the offer ; hence, a refusal to pay the premium prevents any revival taking place. Similarly, a tender of the premium by the assured is an offer on his part to revive the contract and the receipt and retention of the premium by the insurers constitute their acceptance of the offer. Before agreeing to revive the policy, the insurers may impose fresh terms and conditions and, if they do so, there is no revival unless and until the terms and conditions imposed are accepted and performed by the assured."
"Halsbury, 488. Revival is new contract.-If there is a revival of a policy after the expiration of the preceding period, this operates as a new contract and the rights and liabilities of the parties, according to ordinary principles, do not begin until the new contract has started to run, Even if the revived policy is antedated to the expiration of the period previously covered this does not necessarily mean that a loss which has happened before the date of the revival has to be paid for by the insurers ; to achieve this result there must be clear evidence of the parties having intended to make the revival restrospective so as to cover even interim losses. There may, therefore, be a considerable difference in effect between a premium paid before the expiration of the period of grace. Which the insurers may have to accept even if a loss has already occurred, and a premium paid after the expiration of the period of grace, which will not commit the insurers to accepting loss which has already occurred unless it is clearly their intention, expressly or impliedy, to do so they may, however, make it plain that they are content to agree to a retrospective revival of the policy regardless of whether a loss has in the meantime, occurred or not. It is not unusual to find that fresh terms and conditions are laid down for the revival and, if this is done, there is no effective revival until the new terms and conditions are accepted and complied with. If, however, the original contract laid down the basis on which, in the event of revival being desired the insurers would grant this it is doubtful if the insurers can add further terms and conditions if and when revival is desired." {{FOOT NOTE}}
(1) 90 L T R 192 (2) AIR 1944 Mad. 559 {{FOOT NOTE}}
(e) Reverting to the case of Handler v. Mutual Reserve Fund Life Association, it may be observed that the facts of the above case were that in the above case also life insurance policy had lapsed because of the non-payment of the premium. The insurance company accepted the premium after the insurance policy had lapsed under a receipt, which contained certain printed conditions on its back, which inter alia included the following conditions :- "The conditions upon which the within payment (for which this receipt is given) is accepted, are as follows : First : That said member is now living, and of temperate habits, and is now and has been during the past twelve months in continuous good health and free from all disease, infirmity or weakness, otherwise said payment and this receipt and said policy shall be and is null and void, and the sum paid hereon shall be subject to the order of the within named person. Second : The receipt and acceptance of the within sum by the company shall not be held to waive forfeiture or expiration of membership, or to reinstate membership, or create any liability on the part of the company under said policy, except upon fulfilment of the first condition of this receipt. Third : The acceptance of the within sum after the same became due shall not establish a precedent for acceptance of future payments to the company, nor shall any subsequent payment upon said policy impair, waive, alter or change any of the conditi, is of this receipt or of said policy. Special Notice. On the first weekday of the months of February, April, June, August October, and December of each year mortuary calls will be made which must be paid within thirty days from the date of such call, or the policy will lapse. Members who desire can make payments annually or semi annually in advance."
' The insurance company after the death of the insured repudiated its, liability on the ground that there was a breach of the above condition in as much as the insured was in fact suffering from the illness mentioned in the condition. The above contention of the insurance company was upheld by the Court of Appeal of England and the judgment of the trial Court was set aside and it was held that the basis of the revival of the Insurance Policy was the condition contained on the reverse of the receipt for the payment of the premium after the lapse of insurance policy though according to the claimant the assured had not read the printed conditions on the back of the receipt for the premium.
(d) With reference to AIR 1944 Mad., it may be stated that in the above case also policy had lapsed and it was revived on the basis of a certificate given by the assured to the effect that he was not sick and that she was not attended upon by the physician. The insurance company upon the death of the assured repudiated its liability and tae High Court of Madras held that the above repudiation was legal. It may be noted that in the above Madras case the health declaration was in fact incorporated as a part of the revived insurance policy at the time of the revival of the same, whereas in the instant case it is not so.
3. The basic question which requires consideration in the instant case is, as to whether the good health declarations given by the deceased insured were the basis/condition upon which the appellants had revived the two above insurance policies in spite of the fact that the same had lapsed and that the appellants were not under any legal obligation to revive the same. It is an admitted position that it is also finding of the learned Civil Judge that the balance amounts available in the surrender values at the material time were not sufficient to pay off the premiums which were due and payable in respect to the two insurance policies. It may be pertinent to note hereinbelow the relevant findings from the judgment under appeal, which read as follows :- "When the premium for the year 1961 fell due for both the policies. The surrender values of the polices were not sufficient to advance full premium and because the insured had not paid premium within due time, these policies lapsed. The defendant thereafter gave different opitions vide Exh. 49 and Exh. 50 to the insured to revive these policies subject to the declaration of health to the satisfaction of the society. The insured in compliance thereof gave a declaration of health Exh.
53 on the basis of which defendants revived the policies. Then again when the premium for the year 1962 fell due on 23rd September, 19b2 the insured did not pay the premium and the surrender value under both the policies were again insufficient to advance full premium under Non-forfeiture Regulation, the policies again lapsed. Then again defendant-Society wrote to the insured informing him that the policies have lapsed and again gave him different option to revive them by giving declaration of health and the payment of the premium. The options were conveyed to the insured under letter Exh. 54 and Exh.
55. In compliance thereto, the insured again submitted declaration of health Exh. 57 and on the basis of which the policies were again revived uptil 23rd September, 1963. The insured died on 19th August, 1963.
' Before I proceed to deal with this aspect of the matter, I would like to mention here that declaration of health filed by the insured in pursuance of the question made by the defendant Society were apparently not true as borne out from record and this has therefore not been much disputed on behalf of the plaintiff but what he has disputed is whether the defendant Society could impose such a condition for the revival of the policy or could the defendant Society insist that unless a satisfactory declaration of health is given, the defendant would not revive the policy.-
4. From the above-quoted passages from the above two well-known books, as well as from the two cases cited and discussed hereinabove, it is evident that an insurance company can impose new conditions for the revival or reinstatement of a lapsed insurance policy. In this view of the matter the appellants were entitled to obtain good health declaration as a condition precedent to the reviving of the two lapsed insurance polices. Since the above two insurance polices were revived inter alia on the basis of the health declarations given by the deceased insured, which proved to be false according to the finding of the learned Civil Judge quoted herein-!A above, in my view the appellants were entitled to repudiate the two insurance policies on the above ground. The mere fact that the declarations were not incorporated as part of the lapsed insurance policies would not make any difference, once it is held that the lapsed insurance policies were revived inter alia on the submission of the good health declaration, which was a condition precedent to the reviving of the insurance policies in question. The above declaration was false to the knowledge of the deceased insured as per evidence on the record and finding of the learned Civil Judge. The contracts of insurance including that of life are of `ubrrima fider' i,e, of the utmost good faith. The special facts upon which the risk is to be estimated by an insurance company are normally within the knowledge of the insured only. He is required to disclose all information facts, which may persuade or dissuade an insurance company from accepting or not accepting the risk involved in the contract of insurance. Non disclosure or suppression of such information's/facts will constitute fraud rendering the issuance policy as void or entitling the insurance company to repudiate its liability. In a life insurance contract, the state of the insured health is a very material fact. No insurance company will enter into a contract of life insurance if it is told that the proposed insured is suffering from a serious ailment. The medical evidence on the record of the instant case clearly proves that the insured was suffering from serious ailment at the material time, which information he withheld from the appellant in order to obtain revival of the two lapsed insurance policies.
5. In view of the above discussion the judgment of the trial Court cannot be sustained and, therefore, it is set aside and the appeal is allowed with no order as to costs. The respondent's suit shall stand dismissed.