In Brief
An insurance company (Oriental Insurance) repudiated a claim for a burnt excavator on the ground that the policyholder failed to disclose a prior insurance claim lodged on the same machine. The lower courts had allowed the claim, reasoning that the prior policy was attached to the proposal form and the insurer could have enquired further. The Supreme Court reversed this, holding that the insured had a solemn duty under the principle of utmost good faith to fully and truthfully disclose material facts—including previous claims—in the proposal form. Mere attachment of a prior policy document does not discharge this disclosure obligation. The insurer is not required to conduct independent enquiries to remedy the insured's inadequate disclosure. The appeal was allowed and the claim dismissed.
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