Summary
The Court upheld an insurance award for lost hydroelectric generation, finding no fraudulent suppression of hydrology data. The insured had disclosed the available information and the preceding policy, while the insurer had accepted similar terms with increased coverage. Cancellation followed inability to obtain reinsurance, rather than alleged fraud. Encashment of the refunded premium did not defeat a claim confined to the period when cover remained in force.
Issues
- Whether the insured suppressed material hydrology information so as to justify repudiation.
- Whether acceptance of a pro-rata premium refund defeated the claim for the covered period.
Held
- Material suppression was a factual question requiring assessment of the record. The insured disclosed available data and the earlier policy; unavailable historic data and its unavailability were known to the insurer. The insurer could have sought further information before accepting the contract. On these facts, fraud and non-disclosure were not established. (¶¶ 10, 11, 14, 15)
- The surveyor addressed matters irrelevant to assessing the insured hydrology loss. The insurer’s contemporaneous cancellation rested on inability to obtain reinsurance and the insured’s refusal to reduce cover, rather than suppression or fraud. (¶¶ 11, 12)
- Encashment of the pro-rata premium refund did not affect the claim because it related only to the period during which the policy remained operative. The precedent concerning false disclosure of a previous claim was distinguishable on the facts. (¶¶ 13, 15)
- The award of Rs.4,68,33,840 with six per cent annual interest from the complaint date was sustained. The insured could withdraw the deposited Rs.1.25 crore and accrued interest without security; the insurer had three months to pay the balance. (¶¶ 1, 16)
Result
Appeal dismissed. Consumer Commission award sustained; withdrawal of Rs.1.25 crore with accrued interest permitted without security, and balance directed to be paid within three months.