Summary
The Supreme Court upheld repudiation of an excavator-insurance claim because the proposer suppressed an earlier substantial claim despite a specific proposal-form question. Enclosing the previous policy did not disclose its claims history or shift the burden to the new insurer to investigate. The insurer established material suppression through the proposal and other evidence. The consumer complaint was dismissed rather than allowed on a reduced-percentage basis.
Issues
- Whether enclosing an earlier policy discharged the duty to disclose previous claims.
- Whether the insurer had to discover omitted information through further inquiry.
- Whether material suppression justified repudiation.
Held
- Insurance requires full and truthful disclosure of known material facts. The insurer bears the burden of establishing misrepresentation or suppression, which was discharged here. The earlier settled excavator claim directly affected risk assessment and was specifically requested in the proposal. (¶ 11)
- An endorsement that the earlier policy was enclosed did not answer the separate claims-history question. The insurer was not required to compensate for inadequate disclosure by investigating the former insurer’s records; the intervening uninsured repair period was also material. (¶ 12–13)
- Reliance on the officer who completed the form did not remove the proposer’s obligation. Suppression of the earlier Rs 36.66 lakh settlement went to the root of the insurance contract and justified repudiation. (¶ 15–16)
Result
Insurer’s appeal allowed. National Commission order set aside and insured’s consumer complaint dismissed, without costs.