Chapter: 3.1.9 Supreme Court on suppression of material facts

Supreme Court on suppression of material facts:

The Supreme Court in: MITHOOLAL NAYAK APPELLANT V/S.LIFE INSURANCE CORP. OF INDIA RESPONDENT:

Brief Facts:
A policy holder who had been treated a few months before submission of proposal for insurance of his life, for ailments such as anemia, shortness of breath and asthma not only failed to disclose in his answers to the questions put to him but also made a false statement to the effect that he had not been treated by any doctor for any such serious ailment.

HELD: JUDGED BY THE STANDARD LAID DOWN IN SECTION 17 OF CONTRACTS ACT, THE POLICY HOLDER WAS CLEARLY GUILTY OF FRAUDULENT SUPPRESSION OF MATERIAL FACTS WHEN HE MADE THESE STATEMENTS WHICH HE MUST HAVE KNOWN WERE DELIBERATELY FALSE AND HENCE THE POLICY ISSUED TO HIM RELYING ON THOSE STATEMENTS WAS VITIATED."

In a very emphatic and unequivocal order, National Commission, in NATIONAL INSURANCE CO. (APPELLANT) V/ S SURINDER LAL ARORA ( RESPONDENT) 1993 (3) CPR 452 (N.S.) held as follows:
"When the complainant suppressed material facts of his ailment in the proposal form while taking Mediclaim policy there is no deficiency in service in the insurance company repudiating the claim under the policy."