Non-disclosure of prior health conditions constitutes material suppression, justifying insurance claim rejection under the Insurance Act, emphasizing utmost good faith in contracts.

JUDGMENT :

Muralee Krishna S., J.

1. The respondents 1 and 2 in W.P(C)No.15902 of 2025 filed this writ appeal under Section 5(i) of the Kerala High Court Act, 1958, challenging the judgment dated 23.08.2025 passed by the learned Single Judge in that writ petition.

2. The 1^st respondent-writ petitioner, who has been working as an LIC agent, availed LIC Cancer Cover Policy bearing No.317279794 for Rs.10 lakhs issued on 31.03.2022. To obtain the aforesaid policy, she submitted Ext.R2(a) proposal form dated 31.03.2022 and in that proposal form, to the question as to whether she had undergone any investigation in last six months, like, Ultrasound (USG) body scan, MRI, CT scan, Cytology, Pap smear, Mammogram, Colonoscopy, Biopsy, Blood tests, Cancer/Tumor markers, she answered in negative. According to the 1^st respondent, she had undergone an Ultrasound Scan for kidney stones in February 2022 at Daya General Hospital & Speciality Surgical Centre, Thrissur, and she was under the bona fide belief that the scan for kidney stones was not relevant for a cancer policy, and accordingly she answered the aforesaid question in the negative. Ext.P2 Cancer Cover Policy was issued to the 1^st respondent with effect from 31.03.2022, along with the covering letter dated 07.04.2022. In May 2023, she again suffered abdominal pain and underwent a test at Daya General Hospital & Speciality Surgical Centre, Thrissur, and on 17.05.2023, she was diagnosed with cancer in the reproductive system, ovary. Immediately, she was shifted to Lissie Hospital, Ernakulam, for a second opinion and was confirmed with Carcinoma ovary-stage III C on 19.05.2023. She was admitted in the Lissie Hospital on 31.05.2023 and had undergone chemotherapy, PARPI maintenance therapy and surgery. After surgery, the 1^st respondent submitted a claim under Ext.P2 policy with all previous records, including medical records of the year 2022. But by Ext.P4 letter dated 28.07.2023, the 1^st appellant informed the 1^st respondent that her claim was rejected for the reason that she had suppressed the material facts while submitting the form, and the money received by the Corporation under the policy stands forfeited.

2.1. Aggrieved by Ext.P4 decision, the 1^st respondent approached the 2^nd respondent Insurance Ombudsman with Ext.P5 complaint dated 04.10.2023. As directed by the 2^nd respondent, the 1^st respondent submitted the details, such as the written consent, the details of the policy, and also Ext.P6 certificate dated 21.10.2023 issued by Dr.Jaisankar P., a Consultant Medical Oncologist, Lissie Hospital, Ernakulam. However, by Ext.P7 order dated 07.06.2024, the 2^nd respondent dismissed the complaint of the 1^st respondent, holding that the decision of the 1^st appellant rejecting her claim and holding the termination of the policy as unexceptionable and therefore unable to grant the relief sought. Being aggrieved, the 1^st respondent filed W.P.(C)No.15902 of 2025 before this Court under Article 226 of the Constitution of India, seeking the following reliefs:

“(i) Issue a writ of certiorari or any other writ, order or direction, calling for the records leading to, Exts.P4 and P7, and quash Exts.P4 and P7;

(ii) Declare that the petitioner is entitled to all the benefits under Ext.P2/policy;

(iii) Issue a writ of mandamus directing the 1^st respondent to provide all the benefits under Ext.P2/policy to the petitioner.”

3. In the writ petition, on behalf of the appellants, a counter affidavit dated 24.04.2025 was filed opposing the reliefs sought for and producing therewith Ext.R2(a) document. To that counter affidavit, the 1^st respondent-writ petit