In Brief
The respondent sought life insurance cover and failed to disclose an existing life insurance policy of Rs 11 lakhs taken two months earlier. When the insured died, the insurer repudiated the claim citing non-disclosure. Consumer forums initially ruled against the insurer, but the Supreme Court reversed this decision. The Court held that disclosure of prior insurance policies is material information specifically sought in the proposal form. Although Section 45 of the Insurance Act provides stricter requirements after two years, the fundamental principle of utmost good faith requires complete disclosure of material facts even within the two-year period. The insured's failure to disclose the previous policy, when directly asked, entitled the insurer to repudiate the claim.
The lawyer headnote and full judgment text are available to registered users.