In Brief
A hydro-power company (Malana Power) obtained a Special Contingency Insurance policy from Oriental Insurance covering loss of power generation due to poor hydrology. When a shortfall occurred and Malana claimed Rs. 4.68 crores, Oriental repudiated the policy, alleging the company had fraudulently suppressed hydrological data from the prior year. The National Consumer Commission allowed the claim. The Supreme Court dismissed Oriental's appeal, holding that no material non-disclosure occurred: Oriental knew of the prior policy's terms, never requested old hydrology data, and cancelled the policy for reinsurance reasons—not fraud. The insurer must prove suppression with clear evidence; mere commercial inability to reinsure does not support a fraud plea.
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