Point of Law: Insurance is governed by doctrine of uberrima fidei. This postulates that there must be complete good faith on part of insured.

JUDGMENT :

The defendant in a suit for money is the appellant.

The claim is for the sum assured under a life insurance policy on the life of late P.I.Varkey, the husband of the plaintiff.

2. On 01.11.1993, Sri.P.I.Varkey submitted Ext.A4 proposal for insurance on own life to the defendant. Based on Ext.A4 proposal, Ext.A5 policy dated 14.02.1994 was issued in favour of Sri.P.I.Varkey. The sum assured was Rs.3 lakhs. On 10.07.1995, he died due to cardiac issues. On 04.09.1995, the plaintiff, who is the nominee under the policy claimed the sum assured. However, the claim was repudiated by the defendant alleging furnishing of false information and suppression of material facts by the assured in the proposal, regarding his health condition. It is thereupon that the suit has been instituted.

3. The defendants in their written statement reiterated their stand that the plaintiff is not entitled for any claim under the policy consequent on the suppression of material facts and furnishing of false information. It was contended that, in the proposal (Ext.P4), specific queries with regard to prior treatment and admission of the assured in the hospital, were wilfully and fraudulently answered in the negative and therefore, the defendants repudiated Ext.P4 policy.

4. The trial court though found that the assured- late P.I.Varkey had not furnished all true facts in Ext.A4 proposal, and proceeded to find that Ext.A4 proposal was filled up by the agent/employee of the defendant company and that the assured could not be held responsible for incorrect facts in Ext.A4 proposal. The suit was decreed for the policy amount and benefits thereunder. It is aggrieved thereby that the defendants have come up in appeal.

5. The points that arise for determination are :-

1) Did the proposer/assured furnish false information in Ext.A4, the proposal for policy?

2) Is it open for the claimant to contend that the proposal form was filled up not by the proposer/assured but by an employee/agent of the Insurance Company and hence mentioning of false information in the proposal cannot be attributed to the proposer?

6. I have heard Sri.R.S.Kalkura, the learned counsel for the appellant. There is no appearance for the respondent.

7. A contract of insurance is a contract uberrima fidei meaning, “of utmost good faith”. The law with regard to insurance contracts, the consequence of furnishing false information and suppression of material information by the assured at the time of availing the policy, is too well settled. All material facts within the knowledge of the proposer are matters to be disclosed while submitting the proposal. The health condition of the proposer/assured is a factor relevant for the insurer to decide upon whether to assure on the life or in arriving at the quantum of premium payable.

8. In Reliance Life Insurance Co. Ltd. and Ors. v. Rekhaben Nareshbhai Rathod (2019) 6 SCC 175, the Apex Court held:-

“The fundamental principle is that insurance is governed by the doctrine of uberrima fidei. This postulates that there must be complete good faith on the part of the insured. This principle has been formulated in MacGillivray on Insurance Law succinctly, thus :

Subject to certain qualifications considered below, the assured must disclose to the insurer all facts material to an insurer's appraisal of the risk which are known or deemed to be known by the assured but neither known or deemed to be known by the insurer. Breach of this duty by the assured entitles the insurer to avoid the contract of insurance so long as he can show that the non-disclosure induced the making of the contract on the relevant terms …

The relationship between an insurer and the insured is recognized as one where mutual obligations of trust and good faith are paramount.”

Decisions are umpteen explaining the law as above, and it may not be necessary to refer to any further authorities.

9. The information provided by a proposer/insured at the time of giving proposal are mostly matters within his